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Clean Line Energy Receives Another Blow: Missouri Public Service Commission Orders More Documentation

2/12/2015

The embattled Clean Line Energy project that proposes to transport energy from rural America to the heavily populated Eastern Seaboard has had a series of major setbacks.

In Missouri, the PSC's own staff, which is made up of engineers, utility economists, and attorneys advised the Commissioners to deny the application. In their Conclusions of Law brief they stated, "Grain Belt Express has not shown electricity delivered over its high-voltage transmission line and converter stations will be lower cost than alternatives for meeting renewable portfolio standards and general demand for clean energy because it overlooks significant costs affecting the integration of wind energy in its production cost modeling and its modeling inputs are insufficient to predict electricity prices at specific locations." They also recommended “The Commission finds that Grain Belt Express' HVDC transmission line project is not needed in Missouri."

On February 11th the commission took the unusual step of ordering Clean Line to submit a considerable amount of additional documentation after the final briefs were turned in. Among the many requirements: Grain Belt Express shall set forth the status of its efforts to obtain the assent of the county commissions required by Section 229.100, RSMo, in the eight counties crossed by the selected project route in Missouri and provide supporting documentation thereof, including any letters of assent from those eight county commissions.

Five of the eight impacted counties have rescinded support they had previously given Grain Belt. Given that the local sentiment against Grain Belt tends to be very high, and that nearly 2,000 people turned out at the eight public hearings opposed to the project, it seems unlikely that they would be able to secure the needed county assent.

Additionally, Clean Line is running into many roadblocks with its Plains and Eastern project in Oklahoma, Arkansas and Tennessee. Clean Line hopes to be the first company to utilize Section 1222 of the 2005 U.S. Energy Policy Act to obtain federal eminent domain after they were denied eminent domain authority by the state of Arkansas. This provision would authorize DoE to essentially act as a land agent for the private company and use the government's power of eminent domain to condemn the private property in its path.

Recently the Cherokee Nation and several county boards passed resolutions against Plains and Eastern Clean Line obtaining federal eminent domain authority. Earlier this week, the Arkansas House Joint Energy Committee unanimously passed a resolution to send a letter to the Department of Energy condemning Clean Line's use of Section 1222. Arkansas’ congressional delegation has also been seeking answers from the DOE in Washington, and were instrumental in extending the public comment deadline on the project’s federal environmental impact statement an additional 30 days.

Clean Line is also facing major problems for their Rock Island Project in Illinois and Iowa. The Illinois Commerce Commission voted unanimously to withhold eminent domain authority at this time. In Iowa, where Clean Line recently filed franchise applications, they have been met with fierce resistance and an organized opposition group who is taking their fight to the state capital building.

Jennifer Gatrel from Block Grain Belt Express Missouri states, "Overall the idea that a private company could seize privately-held agricultural land for its own private benefit is just wrong. Clean Line has brought together a vast group of very different individuals from around the country working united on the common goal of protecting landowner rights. This company has brought a major disruption to our community and much time and money has been lost. Clean Line’s proposals have also created an enormous, tightly-knit family formed in reaction to the crisis. We will not lose this fight!!"

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Did You Get a Good Deal in Potomac Edison/Mon Power Rate Settlement?

2/5/2015

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The West Virginia PSC has approved the settlement reached by the parties to FirstEnergy's request to increase rates, and your rates will go up 8% overall on February 25. Yeah, rate increases suck, but I think the bigger question here is... Did you get a better deal in the settlement than you would have if this case had gone through the full evidentiary hearing and been decided by the Commissioners?

I'm thinking... yes. And here's why:

Actual base rate increase requested: $95.7M (9.3%).
Actual base rate increase granted: $15M (1.45%).

Vegetation Management Surcharge requested: $48.4M
Vegetation Management Surcharge granted: $47.5M HOWEVER, something good happened here that is not reflected in the number. For the first time, FirstEnergy will have to account for every dollar spent on vegetation management and file semi-annual reports that true up its actual expenditures to actual rates collected. The vegetation management expenses must be reviewed for prudence. In the past, the company was simply handed a certain amount annually for "vegetation management." The company never had to account for how (or if!) the amount was actually spent on vegetation management. What happened is that the company wasn't doing adequate vegetation management, resulting in more severe and frequent outages, but was using the money to bulk up its balance sheet and share dividends. Now all the money collected for vegetation management must be spent actually maintaining vegetation. This is a very good thing!

Depreciation rate change increase requested: $17M
Depreciation rate change granted: None.

Requested increase in monthly customer charge: $1 (up to $6 from the existing $5)
Monthly customer charge granted: $5 (no change).

Deferred expense for 2012 storm restoration: $45.8M. The companies wanted to collect this with an annual return calculated on the balance. Instead, they will collect this over 5 years ($9M/yr.) WITHOUT any return (interest) being paid.

The company wanted to collect $60M in expense it incurred in closing its Albright, Willow Island and Rivesville generating plants. Instead, it will collect zero. However, the companies are permitted to defer this expense (hold it on their balance sheet) for the time being, and may request recovery of it at a later date. At that later date, you bet the recovery request will include years of "interest" accrued during the deferral. This bears watching!

The companies had requested a surcharge to pay for the cost of upgrading their generators to comply with EPA regulations. They withdrew their request in the settlement, however, the settlement simply kicks that can down the road, allowing the companies to create a regulatory asset (deferral) for those costs and to collect them during its next base rate case. In the meantime, the accumulating costs will earn 8.19% return (interest), which will be payable at the next rate increase.

But, it looks like the apportionment of rates between customer classes was adjusted to lower rates of the industrial users, while residential rates were increased. Remember, industrial users were a party to this settlement.

Do you think you might have gotten a better deal from the PSC Commissioners? I doubt it. They're used to giving FirstEnergy everything it wants. The Commissioners aren't really fighting for you, but the staff of the PSC, and our Consumer Advocate WERE fighting for you here and I think they engineered the best deal possible. There was never any chance that the PSC would simply deny the rate increase in its entirety. It was all about "how much." And you kept the pressure on by filing comments and speaking at the public hearings. Get educated, stay engaged!

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Internal Emails Reveal Utilities are Despicable

2/3/2015

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"Gotta read" post on UWUA Local 304's blog today. Utility’s “Cozy” Relationship With Regulators Questioned tells the story of Pacific Gas & Electric (PG&E), whose lack of maintenance was responsible for a massive gas line explosion in 2010 that leveled a neighborhood and killed or injured many.

But, wait, there's more!

The story may have stopped there, except for a consumer advocacy group’s efforts for utility reform. Their allegations kept the San Bruno disaster front and center by claiming PG&E knowingly pumped up their balance sheets and pocketed funds that should have went to the maintenance and upkeep of the aging natural gas system and that it was a relationship with the California Public Utilities Commission, that the group described as “cozy”, that let PG&E to get away with it.

Both the regulator in question and a PG&E Vice President have lost their positions, but recently released e-mails between the two seemed to confirm the allegations, and the fact that both have since lost their jobs also is a strong indicator that the charges were well founded (click here for a great story on this subject).

Discussed in the e-mails are, among other things, talk of vacations, chats with invitations to private meetings at remote and luxurious locales, and a general feeling of collusion between close friends rather than a more professional and business-like exchange between the regulator and the regulated. There are even some chat about PG&E meeting then Governor Jerry Brown and strategies to diffuse the events of San Bruno.

However, the most disturbing aspect revealed in the e-mails is the how the utility targeted the The Utility Reform Network (TURN), which was the advocacy group highlighting and investigating the events of San Bruno.

UWUA links to this story originally published in the San Francisco Chronicle.

Apparently the executive director of the California PUC and an "external affairs" schmoozer vice president were having a ton of fun making nasty jokes about the president of The Utility Reform Network (TURN), whose only crime was trying to protect customers and "reform" these dirty bastards.

The emails also detail the cozy relationship between PG&E and its regulators, as well as PG&E and elected officials. It was suggested by the president of the CPUC that PG&E should whine to Governor Jerry Brown about how the explosion disaster was hurting poor, poor pitiful PG&E stock prices, so he could "fix" things.

In January 2011, Peevey sent an e-mail to Cherry urging him to share with a Brown aide, former PG&E executive Nancy McFadden, a financial analyst’s views that the San Bruno case was hurting PG&E’s stock. The report credited Peevey for his “even-handed” approach in controlling the situation.

‘‘As I suggested before, this info should go to the governor’s office, probably best to Nancy McF,” Peevey wrote to Cherry. “Jerry has to be made aware that actions have consequences and the economy is best off with a stable utility sector.”

No, you're not reading a John Grisham novel. This stuff actually happened. In fact, I'm pretty certain this is not an isolated incident. This stuff happens all the time at just about any investor owned utility you can name.

UWUA finishes up their report with some very good advice:

The real news here is that when people stand together, no matter what derisive things business executives may say against them or how small they may view their fellow citizens, America is still America and people can still make a difference.

The story above is also a reminder that as Americans we have a responsibility to hold the people that serve the public interests in any capacity accountable, and by doing so, we can discourage such insular and covert “cozy” relationships from developing.

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There's No Such Thing as a "Federal Permitting Process" for Electric Transmission Lines

1/25/2015

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Clean Line President Michael Skelly recently told a Tulsa World reporter that his company is going through a federal permitting process for its Plains & Eastern Clean Line because the project wants to cross three states. (watch the video)

There's no such thing as a "federal permitting process" for high-voltage electric transmission lines!

Skelly calls the U.S. Department of Energy the "permitting agency." However, what he's referring to is Clean Line's application to have the U.S. DOE "participate" in its for-profit transmission venture undertaken outside the normal regional transmission planning process.

Section 1222 of the Energy Policy Act of 2005, Third Party Finance, allows federal power marketing agencies to "participate" in transmission projects that are built within their territories. As noted in the title of the statute, Sec. 1222 projects must be financed by third parties (in this case, Clean Line's private venture capitalists). Section 1222 does not give U.S. DOE authority to PERMIT or site transmission projects. It simply allows "participation." In Clean Line's case, the company is only interested in DOE's "participation" in order to anoint itself with the power marketing agency's federal eminent domain authority to condemn and take right of way from private landowners.

DOE and Southwestern understand and agree that their ability to acquire through condemnation proceedings property necessary for the development, construction and operation of the Project is one of the primary reasons for Clean Line’s interest in developing the Project with DOE and Southwestern and through the use of EPAct 2005 section 1222.
DOE and Southwestern agree that, if the Secretary of Energy ultimately decides upon the conclusion of such evaluation as DOE and Southwestern deem appropriate that (i) the Project complies with section 1222, and (ii) to participate in the Project’s development pursuant to section 1222, then, DOE and Southwestern will use their condemnation authority as may be necessary and appropriate for the timely, cost-effective and commercially reasonable development, construction and operation of the Project.

Section 1222 is not purposed to "permit" transmission lines when a state has denied a permit.

d) Relationship to other laws
Nothing in this section affects any requirement of--
(1) any Federal environmental law, including the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.);
(2) any Federal or State law relating to the siting of energy facilities; or
(3) any existing authorizing statutes.

It simply allows DOE to "participate" in designing, developing, constructing, operating, maintaining or owning transmission. It permits DOE to assume liability for the actions of a third party in order to utilize federal power marketing authority for benefit of transmission that is not part of or necessary to their systems.

The Secretary, acting through WAPA or SWPA, or both, may design, develop, construct, operate, maintain, or own, or participate with other entities in designing, developing, constructing, operating, maintaining, or owning, a new electric power transmission facility and related facilities (“Project”) located within any State in which WAPA or SWPA operates if the Secretary, in consultation with the applicable Administrator, determines that the proposed Project--
(1)(A) is located in an area designated under section 216(a) of the Federal Power Act [16 U.S.C. 824p(a)] and will reduce congestion of electric transmission in interstate commerce; or
(B) is necessary to accommodate an actual or projected increase in demand for electric transmission capacity;
(2) is consistent with--
(A) transmission needs identified, in a transmission expansion plan or otherwise, by the appropriate Transmission Organization (as defined in the Federal Power Act [16 U.S.C. 791a et seq.]) if any, or approved regional reliability organization; and
(B) efficient and reliable operation of the transmission grid;
(3) will be operated in conformance with prudent utility practice;
(4) will be operated by, or in conformance with the rules of, the appropriate (A) Transmission Organization, if any, or (B) if such an organization does not exist, regional reliability organization; and
(5) will not duplicate the functions of existing transmission facilities or proposed facilities which are the subject of ongoing or approved siting and related permitting proceedings.

There's simply nothing in Section 1222 that authorizes DOE to issue a "permit" for new transmission lines that have been denied by a state. If a state created laws requiring merchant transmission projects to receive a permit from the state before beginning construction, Section 1222 is a worthless exercise in federal usurpation of state authority. Transmission siting and permitting is state-jurisdictional. The federal government has no authority to override state laws.

Clean Line is currently trying to get the DOE to agree to accept liability for its actions and "participate" in its project. Before making a decision whether or not to "participate," DOE is undertaking an Environmental Impact Statement, which is required for any federal actions that affect the environment. In the video, Skelly encourages people to "weigh in" during the Draft EIS comment window (ends March 19). Skelly tells people to comment whether or not they like the project and where it should be routed. This is wrong. Comments should be directed around aspects of the draft EIS, which examines the environmental and social factors of the project. There will be a separate 45-day comment period for the public to "weigh in" on the DOE's decision whether or not to "participate" in the project, which will begin AFTER the EIS is completed. Skelly wants you to think that the EIS is your only avenue to comment on Section 1222. It's not, but you should comment on it nonetheless by going to this link.

Skelly also goes on about state and local property taxes, claiming that localities will benefit to the tune of $20K per mile, or half a million bucks a year. How did he do that math, considering each county has a different amount of proposed line mileage? He also forgets to mention that Clean Line has pursued and received tax abatement in a number of states and localities for periods of up to ten years. That will be 10 years of Clean Line using your local roads, infrastructure and services to construct and operate its project before you receive a dime of reimbursement for what it costs you to support it.

Skelly also tells the reporter that "the grid is maxed out" and Clean Line is "a vital piece of the puzzle to get wind online." Not so. The grid is not "maxed out." It is a carefully planned machine that is operated by regional transmission organizations and balancing authorities. These authorities undertake long-term planning that allows for needed expansion of our grid. If wind farms, or other generators, submit requests to interconnect to the grid, they get placed in a queue that allows the authority to consider new generation and how transmission may be needed and planned to move the generation to where it is needed in within the region.

Clean Line has bypassed this process and is proposing its project without any recognized need for the transmission or generation it proposes to bring online. Section 1222 requires that any project in which the DOE "participates" be consistent with, and not duplicative of, any regional plan.

IS CONSISTENT WITH: transmission needs identified, in a transmission expansion plan or otherwise, by the appropriate Transmission Organization (as defined in the Federal Power Act [16 U.S.C. 791a et seq.]) if any, or approved regional reliability organization; and (5) will not duplicate the functions of existing transmission facilities or proposed facilities which are the subject of ongoing or approved siting and related permitting proceedings.

Clean Line fails this very important stipulation in Sec. 1222. Needed transmission is already being undertaken by our regional authorities. Clean Line is unnecessary duplication intended to stimulate construction of generation purposed only to export power between regions. It also fails to present any evidence that there are buyers for this power in other regions. It's just not true that new generation cannot be built without Clean Line providing a way to get it to "market," considering there is no identified market. Clean Line is in a chicken/egg scenario, supposing if it builds its project that generation and customers will develop, however, Clean Line cannot build without generators and customers developing FIRST. So, which came first? Clean Line, or generators and customers? We'll probably never find out because I don't think Clean Line is ever going to happen.

Skelly says that in order to utilize Clean Line's maximum capacity of 4,000 MW, 3,000 new wind turbines will have to be constructed near the project's Oklahoma converter station. Each turbine requires 1/2 a square mile of land, so we're talking about covering 1,500 square miles of land with wind turbines. That's roughly an area comparable to the entire State of Rhode Island. Skelly also points out that his project will simply waste 5% of the energy it carries through line loss. By comparison, a renewable generator sited near or at the electric load wastes little to none of the energy generated. Taking huge tracts of land out of production to generate energy that is transported long distance to load is simply wasteful.

Skelly shares that he believes "energy is a big deal" and his long journey from idea to reality will be "worth it." Classic words from a guy using someone else's money to dream the impossible dream.

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Block Grain Belt Express-Illinois Group Forms

1/18/2015

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Grassroots citizens’ group Block Grain Belt Express Illinois (Block GBE IL) is poised to host outreach and educational meetings in affected counties across the state prior to a second round of open houses by Clean Line Energy Partners (CLEP) in early February. The group is opposed to CLEP’s plan to construct the Grain Belt Express, a 750-mile long high voltage direct current (HVDC) transmission line, which would impact landowners in nine counties across Illinois, along with thousands of others in Kansas, Missouri and Indiana. The organization is quickly gaining momentum after launching earlier this month in response to CLEP’s first round of open house meetings.

Greene County will be first to host an educational meeting on January 14th at the Carrollton KC Hall at 7pm. Meetings will follow in other counties to raise awareness about the project and provide landowners with important information.

Shelby County - Saturday, January 24th, 9am, Cowden Community Center

Clark and Cumberland Counties – Sunday, January 25th, 1pm, Greenup Municipal Building

Montgomery and Christian Counties – Thursday, January 29th, 6:30pm, Nokomis St. Louis Parish Center

Macoupin County – Tuesday, January 27th, 7pm, Modesto

Ashleigh Rockwell, the new Vice President of Block GBE IL, said “I encourage landowners and residents to unite and stand up for private property rights. It’s vital at this stage to get the information out there that GBE is not necessary or beneficial to Illinois, regardless of the final route chosen. We will spread the word and take action. Talk to your neighbors and get them to these meetings. Our support just keeps growing and we’re excited to get to each county to meet landowners and share information.”

Block GBE IL recently held a successful launch meeting with an impressive turnout of landowners from across the state, along with assistance from three other BLOCK groups opposing Clean Line projects from Missouri, Iowa, and northern Illinois. A citizens’ board was elected, and two Illinois State Representatives were in attendance, both of whom oppose the GBE. Several county board members were also present.

Megan Beeler, a Montgomery County board member, said, “Montgomery County has been offered what feels like “hush money” for awhile now, but as you can see, I’m not hushing!”

Jennifer Gatrel from Block Grain Belt Express Missouri stated, " It was very exciting to be part of the launch meeting. I was thrilled that delegations from three other Clean Line opposition groups spanning three states were able to attend to help get this new organization on its feet. A family has been formed in a 6 state region, and we’re thousands strong! Together, we can and will stop the precedent from being set that a private company can seize private land for its own financial gain. I am grateful to be part of such an impressive team and have been amazed at the speed with which Block GBE Illinois has organized."

A sub-group to represent landowners in the legal process at the Illinois Commerce Commission is already taking shape as well. Both groups will work in partnership to battle the GBE from all angles.

“We have the odds in our favor by learning from what other states have successfully accomplished, and repeating that success. But we have to act now and we have to stick together,” adds Rockwell.

For more information about any of the upcoming meetings or to learn more about Block GBE IL, please visit us on Facebook under Block Grain Belt Express Illinois or call 618-203-6909.

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Cherokee Nation Resolves to Oppose Clean Line

1/17/2015

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Despite Clean Line's song and dance about how it has consulted with all stakeholders about its projects, it somehow missed the Cherokee Nation.

Last week, The Cherokee Nation passed a Resolution “opposing the establishment of an energy line route by the Plains & Eastern Clean Line in Sequoyah County, Oklahoma located within the Cherokee Nation jurisdictional area.”

A RESOLUTION OPPOSING THE ESTABLISHMENT OF AN ENERGY LINE ROUTE BY THE PLAINS AND EASTERN CLEAN LINE IN SEQUOYAH COUNTY, OKLAHOMA LOCATED WITHIN THE CHEROKEE NATION JURISDICTIONAL AREA

WHEREAS, the Cherokee Nation since time immemorial has exercised the sovereign rights of self-government in behalf of the Cherokee people; and,

WHEREAS, the Cherokee Nation is a federally recognized Indian Nation with a historic and continual government to government relationship with the United States of America; and,

WHEREAS, The Plains and Eastern Clean Line organization is proposing an energy line route to go through Sequoyah County and Sequoyah County land owners do not want it. The towers will be at least 200 feet high and it appears that this energy line will be going across the Stokes Smith Ceremonial Grounds and also along the pathway where the Trail of Tears crossed in Sequoyah County where some historical markers are located; and,

WHEREAS, although the Cherokee Nation does support positive environmental activities, this activity does not appear positive, landowners do not want this and it could impact Cherokee Historical Areas and Ceremonial Grounds; and, the Council of the Cherokee Nation opposes the establishment of this energy line; and, therefore,

BE IT RESOLVED BY THE CHEROKEE NATION, that the Council of the Cherokee Nation, on behalf of its citizens and residents in the Sequoyah County area and due to concerns of the impact on the Tribal Historical and Ceremonial Grounds, hereby opposes the establishment of this energy line by Plains and Eastern Clean Line in Sequoyah County which is within the jurisdictional area of the Cherokee Nation.

Doesn't sound like the work of a Nation that's been working hand in glove with Clean Line and the DOE, does it? In fact, it sort of seems like the reaction of a Nation that has been blindsided by a project they knew nothing about.

Janelle Fulbright, deputy speaker of the of the Cherokee Nation Tribal Council, who sponsored the resolution said:

“There is no benefit to us in any way,” Fullbright said of the transmission line. “We’re just seen as the pass through for a monstrosity that will lower our property value. Even if the proposed routes didn’t go right along the Trail of Tears and through our ceremonial ground, I’d be against it because we like to live in the country and not see anything out our back door.”

Three Arkansas County Quorum Courts (the local county government system) have also passed Resolutions opposing Clean Line. More to come.

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Congressman Womack Demands Answers from DOE on Clean Line's Sec. 1222 "Partnership"

1/17/2015

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Arkansas Congressman Steve Womack seems to be tired of being put off by the U.S. Department of Energy. On Thursday, the Congressman sent a letter to Secretary of Energy Moniz, demanding a meeting to get the answers about Clean Line and Section 1222 of the Energy Policy Act that he has been denied on two previous occasions.

Secretary Moniz:

I have now written you in August 2013 and September 2014 regarding the Department of
Energy's (DOE's) consideration for a partnership with Clean Line Energy Partners through the Plains & Eastern transmission line project and have yet to receive a satisfactory answer to my questions.

Since the date of my previous inquiry, I understand that the Draft Environmental Impact Statement (EIS) has been released for public comment, at which point, in accordance with your latest response to my office, "DOE will consider questions such as those raised in [my] letter." Unfortunately, merely acknowledging this fact does not, in turn, answer the questions raised.

As you know, the path of the proposed transmission line runs directly through the Third District of Arkansas. Therefore, I am extremely concerned about Clean Line's authorization. Respectfully, I am also very frustrated by one of your Department's disingenuous responses to my letters that identified "public interest" as one of the considerations given to the Clean Line
application. There has been an astounding lack of assurance that my district - and the State of Arkansas- will have any interest in this project at all and no guarantee that Clean Line will supply power to my constituents and my state. I place further emphasis on this concern given the denial of a Certificate of Public Convenience and Necessity from the initial application Clean Line had submitted to the Arkansas Public Service Commission.

Section 1222 of the Energy Policy Act of 2005 has never been invoked for the approval of an
electric power transmission facility. In light of the uncertainty of this process and the Section
1222 application, in addition to a lack of assurance regarding the benefit for the state of Arkansas from such a transmission line, I must again ask the following:

• What guarantee might the citizens of the Third District be afforded when it comes to a
specific energy supply to our state rather than a highway for power to Tennessee?
• How does the Department of Energy determine its authority for partnership with a private entity and the application of supposed rights to eminent domain?
• What factor does the denial of Clean Line as a public utility in the State of Arkansas play
in the final decision by the Department of Energy?

The DOE has been less than forthright in providing answers to the legitimate questions raised regarding Clean Line. Therefore, at this time, I would like to request a formal meeting with you to not only discuss these questions, but also the unacceptable responses that have been sent to both my office and stakeholders within the Third District. I look forward to your prompt reply.

Congress created Sec. 1222, Congress can take it away.

Something fishy is going on here... maybe it's time to start an official investigation into the way DOE has been handling the Clean Line matter. I'd start by asking them why the "Management Committee" as described in section 8a of Contract No. 1 between Clean Line Energy and the DOE, the Advance Funding and Development
Agreement Plains and Eastern Clean Line Transmission Project, has not been meeting quarterly as stipulated in the agreement.

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Centralized Wind's Race to the Gold

1/17/2015

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Will the U.S. ever get an offshore wind industry started? One step forward, two steps back. Just when Cape Wind might finally lay oar to the water, the utilities that signed power purchase agreements to purchase it have canceled their contracts, saying that Cape Wind failed to meet its obligations under the contract. Cape Wind says the contracts are still valid, citing force majeure. The companies are further squawking because they were "forced" to sign the power purchase agreements to get the state of Massachusetts to approve their merger.

The article forgot to mention that the company has made a $40M investment in hundreds of miles of transmission lines for onshore wind since the power purchase agreement was signed in 2010. Did National Grid cancel its contract with Cape Wind in order to stifle competition to its investment in Midwest wind?

Offshore wind continues to struggle, while Midwest wind is trying to court the U.S. Department of Energy to invoke an as yet untested section of the Energy Policy Act to "participate" in the Clean Line projects in order to usurp state authority to site and permit them, and use federal eminent domain to take land Clean Line was denied by the states. Clean Line's projects have not been reviewed or approved in any regional transmission planning process under FERC's Order No. 1000's competitive transmission scheme. The proposed action of the DOE would not only put the federal government in the business of transmission planning, it would also actively interfere with electric markets, two areas where the DOE does not have jurisdiction or expertise.

Why is Midwest wind a bad idea? Because it's located too far away and building overland transmission simply to ship electricity to the east coast is expensive, time consuming, and unfair to landowners crossed, who will receive none of the benefits, but all of the burden.

Why is offshore wind a good idea?

Responsibly developed offshore wind power offers a golden opportunity to meet our coastal energy needs with a clean, local resource that will spur investments in local economies - creating unparalleled job growth and avoiding the need to export hard-earned energy dollars outside the region.

Or so says a mid-2014 report from the environmental community, Catching the Wind. But yet, some of the same groups who touted the benefits of offshore wind in this report were simultaneously intervening in Midwestern wind transmission line cases and telling state utility commissions that there's a "need" for Midwestern wind on the East coast. So, which is it?

Or is the Sierra Club just a bunch of hypocrites? I'm leaning toward that hypothesis, since the Sierra Club is all over the map on the issue of eminent domain for energy projects, as pointed out by an Arkansas landowner.

The eminent domain issue has become a key point of contention between Pilgrim and the Sierra Club. An attorney for the Sierra Club has said that Pilgrim has no rights of eminent domain because it is a private company and not formally designated as a utility by the Board of Public Utilities.

But yet, the Sierra Club thinks that Clean Line, a private company not formally designated as a public utility in Arkansas, should use eminent domain as "the middle ground" to take the rights of way it finds necessary through the state.

On the other side are landowners who see the power lines marching across their land as more big government intrusion into their lifestyles and even interfering with their livelihoods.

Additional arguments against construction of the lines are possible health effects, and the fact that the entities proposing the construction are private companies.

It seems strange an argument against private industry would be made. The United States to a very large degree operates that way. It’s capitalism, right?

Rights of way must be secured for these power line projects private or otherwise, just as any project in the public interest such as a toll road or a railway. Fair market price must be paid for any property taken for rights of way.

I think the Sierra Club is an opportunist, using whatever arguments it thinks will delay or alter energy plans it does not like (those involving fossil fuels). Sierra Club has no qualms about using landowners as pawns to further its environmental agenda and has shown it will jump on board even the worst energy projects, if they are only cloaked in "clean" labels. Sierra Club needs to develop a rational and coherent energy policy and stick with it because people are abandoning the club in droves. Maybe Sierra Club thinks that's okay, since it can more than make up for the members it loses with more grant money from big, mysterious, "environmental" funds. However, true grassroots integrity shall remain elusive.

Let's get on with the offshore wind, shall we? If the East coast wants "clean" power, they need to make it in their own backyard. Once they get over the initial direct cost shock (as opposed to the hidden incremental cost increase of building new transmission lines across the country -- they're not going to avoid the costs), they may realize that being clean and green and responsible for their own environmental footprint provides other social and economic benefits as well.

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Get Your Clean Line Plains & Eastern EIS Comments In!

1/17/2015

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In setting national environmental policy to improve and coordinate Federal plans, functions, and programs, Congress recognized that each person should enjoy a healthful environment and that each person has a responsibility to contribute to the preservation and enhancement of the environment.

The policies and goals of National Environmental Policy (42 U.S.C. § 4331, Congressional declaration of national environmental policy) are intended to:

(1) fulfill the responsibilities of each generation as trustee of the environment for succeeding generations;

(2) assure for all Americans safe, healthful, productive, and esthetically and culturally pleasing surroundings;

(3) attain the widest range of beneficial uses of the environment without degradation, risk to health or safety, or other undesirable and unintended consequences;

(4) preserve important historic, cultural, and natural aspects of our national heritage, and maintain, wherever possible, an environment which supports diversity and variety of individual choice;

(5) achieve a balance between population and resource use which will permit high standards of living and a wide sharing of life’s amenities; and

(6) enhance the quality of renewable resources and approach the maximum attainable recycling of depletable resources.

The intent of Congress seems to have been lost in the creation of the Plains & Eastern Draft Environmental Impact Statement. Consideration of these goals should be evident, but the closest the Statement comes to evaluating these issues is in Chapter 3, Section 3.5, Environmental Justice. However, that section simply consists of bureaucratic “box checking” with its tables of racial and economic statistics and finding of “no significant impacts.”

What our federal government failed to consider in its study are the very real impacts the Plains & Eastern project (P&E) will impose on one segment of society for the sole benefit of another. That the beneficiaries of the Plains & Eastern project are intended to be economically advantaged and politically influential eastern cities with a “green” conscience, and that the ones who must make the social and economic sacrifice to meet this need are rural landowners without political clout does not seem to have been of moment in the study.

Rural landowners and farmers have been fulfilling their responsibilities as trustees of the land that feeds us all for generations. P&E will interfere with their responsibilities. In addition, P&E will also interfere with their ability to make a living, bisecting small farms that provide income and/or real estate investment wealth to those who depend on their land for economic purposes.

P&E will preclude the ability of rural landowners in Oklahoma and Arkansas to live in safe, healthful, productive, and esthetically and culturally pleasing surroundings as unsightly, gigantic transmission lines may endanger their well-being and interfere with their productivity and sense of place.

P&E is not without environmental effect. Weighing the destruction of one part of the environment to benefit another is not a matter of simple trade offs when there are other options available that are not as damaging to the environment. P&E has not been determined needed to meet any identified public policy goal by any authority tasked with planning the electric grid. P&E has no customers. Other options exist for eastern cities, such as offshore wind, local solar, or other local and regional renewable energy projects that provide local jobs and economic stimulation. Americans are not being given a choice, where market forces determine their best option. Participation in P&E by the Department of Energy is a top-down, government-forced “solution” to a problem that does not exist.

P&E will affect the historic, cultural and natural aspects of the rural environment, causing rural landowners to sacrifice for the needs of eastern cities. There is no balance here, all the sacrifice is coming from one segment of society, while all the benefits flow to the other. What are eastern cities willing to sacrifice for their “green” conscience? Atlantic offshore wind has been struggling to be built for years, but rejected time and again for esthetic or cost reasons. When eastern cities are faced with having to live with the infrastructure that supports their habits, they reject it in favor of other solutions. When those solutions remove the sacrifice, but not the benefits, to rural landowners in other states, the intent of national environmental policy is forgotten. This paradigm has existed for decades, where Ohio Valley residents have sacrificed their health, environment and economic interests to mine and burn coal that is turned into electricity and transmitted to eastern cities. P&E is just more of the same sacrifice of one segment of society for the needs of another.

There is no balance to be found between population and resource when the needs of the many continually override the needs of the few. No Americans are disposable at the whim of others, no matter the color of their skin or their economic position. Wide sharing of life’s amenities requires that each person accept responsibility for their own needs. If eastern cities require cleaner energy, they have the ability to create it themselves, and in fact, many already are doing so. Top down government solutions, such as P&E, are inconsistent with individual choice.

Rural America is a finite resource that is fast disappearing and must receive careful consideration in DOE's EIS.

I believe the underlying mission of the federal government has been forgotten in the preparation of the EIS and, instead, a blinders-clad bureaucracy has simply proceeded through the motions of preparing it without considering its purpose. P&E is asking the federal government to wield the sledgehammer of eminent domain to force its project on a rural America that has rejected P&E. Integral to the big picture is the fact that P&E is nothing more than a business plan, an idea for profit, and does not fulfill any identified reliability, economic or public policy need. There is no amount of sacrifice that is acceptable for the pecuniary interests of private investors.

Don't forget to file your EIS comments here! Deadline is March 19!

2 Comments

Transmission Politics

1/8/2015

1 Comment

Coming across common themes over and over tells me something... maybe I should write about it?

I've seen a whole bunch lately about the politics of transmission line proposals, more precisely how politics affects the state public utility commission process.

This morning, I read something that pushed the issue into blog post status.

Iowa Governor Terry Branstad has warned his state legislature not to interfere in the business of the Iowa Utilities Board.

Branstad, who appoints the members of the utilities board, warned against "political interference" into the administrative review process by which a pipeline carrying Bakken crude oil and a transmission line transporting wind-generated electricity could be approved.

"It would be mistake to get politics into this," Branstad said. "We should abide by the processes that have been put in place."

Maybe Branstad doesn't understand those "processes?" Our government is separated into three branches: The Executive Branch carries out existing laws and recommends (but does not alone create) new ones. It administers our government. The Legislative Branch makes laws, at the will of the people it represents. The Judicial Branch interprets existing laws. Branstad is a member of the executive branch. The Iowa legislature is a member of the legislative branch. The IUB is a member of the judicial branch, although unlike a regular court, a utility board can make up copious rules about how they're going to carry out the laws made by the legislative branch. Trying to figure out which one is more powerful is an exercise in futility... and politics.

Branstad, as Governor, appoints the members of the IUB. This is a political process. A member of the executive branch will appoint those he believes will carry out his mission. Once appointed, IUB members are supposed to serve independently as they interpret utility laws, however, a crafty governor can control this process by allowing appointments to expire while the incumbents continue to serve at the daily whim of the governor, who can remove the incumbent and replace him at any time. I have no idea if this is the situation in Iowa, but I have seen just this situation perpetuate in several states. When it happens, the judicial branch comes under the thumb of the executive branch and can be easily influenced to make certain decisions on a political basis in order to remain in place.

The legislature makes the laws that direct the actions of an independent, quasi-judicial utility board. The judicial branch cannot create laws, but receives its marching orders from the legislative branch. If the legislature is displeased by the actions of the Board, it can make new laws to shape the decisions of the Board. In this way, the legislature can influence the judicial branch. However, there's more protection on this side of the coin, because the legislative branch is operating at the will of the people, and must obtain consensus from many to create new laws.

I don't know why Branstad believes it's not already "political." The state utility board process is about as political as it gets. While he warns the legislature not to get involved in a situation he controls, what the legislature eventually does will be political. It's all political!

So, if you want to influence your state utility board process, you must engage in politics. You can talk to your legislators to gain their support to make new laws that guide the decisions the utility board makes. You should probably talk to your governor about refraining from getting involved in the utility board processes. Branstad has it completely backwards!

Politics is described as:

the activities associated with the governance of a country or other area, esp. the debate or conflict among individuals or parties having or hoping to achieve power:

Companies proposing new transmission projects hope to influence the judicial process as much as individuals or groups opposing the transmission project. In order to do so, they push the legislative or executive branch to shape the judicial decision. Despite plenty of denial, the judicial processes of a utility board are heavily influenced by politics. It's the reason transmission developers spend so much lobbying your representatives to support their projects AGAINST YOUR WISHES!

Public opinion drives political decisions. A legislator is carrying out the will of the people. If enough people become involved in a utility board process, they can shape the process through their legislators, who may be more interested in their duty to the people than the free lunches and campaign contributions transmission corporations provide. The bigger the public push back, the better your chances.

Transmission developers also court other groups and individuals to take a position supporting their proposal. Sometimes a quid pro quo situation develops. This happens because a utility board is unlikely to approve even the best project if it is under political fire not to do so, therefore the transmission developer needs allies to create, at least, an appearance of support.

So, can a large, loud uprising of the people affect the decision of a utility board? You bet'cha! But don't get confused by the difference between public opinion and public comment.

Public opinion is an aggregate of public comment. The public comments citizens make to a utility board, in isolation, rarely drive the decision of the Board because they are typically not based on legal arguments about the laws the Board must follow in its findings.

Utility law guru Scott Hempling recently pondered the effectiveness of public comments in his monthly essay. This month, he featured several questions that he will use as projects for his utility law students. Here's one:

Engaging the public: Candor requires an admission: The lay citizenry's views do not count as "substantial evidence," required by courts to sustain agency orders. Does that fact make public hearings (i.e., the non-technical hearings) shams? If not, then what is the value of public participation? What are ways to create that value, at reasonable cost? Traditionally, agencies announced public hearings in the newspaper's "legal notices." How useful is that approach today? What are an agency's responsibilities to educate the public and seek its views?

The "substantial evidence" Hempling mentions must come through the legal process, either through an attorney or individuals acting pro se. While a utility board's decision is politically-driven, it must back up its decision on a legal basis. The utility provides its proposed legal basis for approval through the evidentiary hearing process. Opposition must therefore provide its own legal basis for denial in this same venue. The utility board, thus armed, can choose from whichever body of evidence it needs to to back up its decision (and hopefully make it stick.) It's pretty hard to make a decision that's not legally sound stick through appeals. It would be doubly-hard for a utility board to make a decision that denies evidence of future reliability issues coming from a supposedly independent third party, such as a regional transmission organization. Therefore, a utility or RTO may choose to find new information upon which to withdraw its proposal, instead of forcing a utility board into a denial. But, again, this is a political process that takes place that allows utilities to withdraw and save face (and money, but that's another story).

So while your own individual comment may not carry much legal weight, when combined with the comments of thousands of others, it is a very powerful, political tool!

If Branstad truly wants to keep "politics" out of utility board decisions in Iowa, he should start a little closer to home. The legislature, as the body tasked with making laws, can make any laws it chooses, whether Branstad likes them or not. Sure, he could veto a new law, but doing so to a new law widely supported by the people would come at his own political peril.

"Never doubt that a small group of thoughtful, committed citizens can change the world;
indeed, it's the only thing that ever has."
- Margaret Mead

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Transmission Politics

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