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Propaganda and Puffery: Need for Cardinal Hickory Creek Evaporates

12/13/2018

Really great article in the Wisconsin State Journal this week profiling the devastating effects the Cardinal Hickory Creek project will have on small businesses in its path. A farm operation that supplies beef to some of Wisconsin's best restaurants, an award-winning cheesemaker, and an event center are just some of the small businesses in the bullseye of a new transmission line whose need seems to have evaporated since it was cooked up in 2011. That's nearly 8 years ago! In the fast-paced world of electric transmission, that's a whole different era.

Interspersed with the interviews of business owners and community group representatives is the opinion of Cardinal Hickory Creek project owner ATC's spokeswoman.

The utility companies say the project, which they want operational by 2023, could provide Wisconsin customers with “net economic benefits” of between $23.5 million and $350 million over its expected 40-year life. The Midcontinent Independent System Operator, the regional electric grid operator, has endorsed the project as one of 17 across the region that will improve the reliability of the electric system, provide economic benefits to utilities and consumers, and support the use of renewable energy by delivering low-cost wind energy from Iowa to population centers where the power is needed.

“Those drivers have not changed for the project. Those have been consistent since the project was announced,” Freiman said.

But have they? Have they really? Here's something Freiman probably hopes you don't find out.

Transmission planning was a recent topic of discussion at a meeting of the Midcontinent Independent System Operator (MISO), the electric grid planner for the region, and creator of the 8-year old "need" for the project. RTO Insider's coverage of that meeting revealed that MISO members are questioning the "business case" for further transmission expansion in light of current system needs and increased transmission costs.

Multiple stakeholders said another possible crop of MVPs, if any, will need a new business case process, especially considering the fleet change that has occurred in the intervening years and the transmission cost allocation plan MISO will file at the end of the year.

By the time MISO has gotten to the end of its 2011 MVP portfolio of new transmission, the "need" for such projects has evaporated. It's time to jettison old ideas and concentrate on today's needs. Cardinal Hickory Creek isn't one of them. Utility regulators need to quit rubber stamping old ideas.

Opposition to MISO's MVP transmission project portfolio has also entered a new era. The people simply aren't going to stand for more unneeded transmission that destroys local communities.

“What if customers have had enough of transmission expansion? What if they’re tired of having transmission lines going across their farms, yards. … They have more options to bypass us completely. You can talk about MISO’s value until you’re blue in the face. What customers see is rising bills,” Madison Gas and Electric’s Megan Wisersky said.

She said customers might be better served by a reinforced distribution system than more transmission projects.

“We have to remember that these transmission lines do impose on communities,” said Coalition of Midwest Transmission Customers attorney Jim Dauphinais, who agreed that overbuilding transmission will result in more expensive bills.

That's right, customers have had enough! The revolt isn't just on the horizon, it's here now.

So, what do the people want?

Opponents say the line is not needed and would damage important conservation areas, disrupt the scenic beauty and harm agricultural businesses dotted along the routes. They argue Wisconsin consumers would be better served by energy efficiency and local renewable-energy projects. And they have no desire to advocate for one route at the expense of those along the other.

This message was also aired at the MISO meeting.

Alliant Energy’s Mitchell Myhre said he didn’t think MISO would need an entirely new transmission planning playbook but that it should analyze transmission project alternatives and engage in conversations about them. He said more analysis on transmission project alternatives may have lessened the late-stage disagreements over at least two projects in this year’s Transmission Expansion Plan. (See related story, MISO Board OKs Full MTEP 18 Over Stakeholder Complaints.)

“We ask that those conversations [about alternatives] happen at the front end of the process so they don’t come up in the back end of the process,” Myhre said.

Engage in conversations? What does that mean? Is it so MISO can say it considered alternatives and rejected them? Is this all about scheming up ways to plug the holes that developed in MISO's last MVP debacle?

“We think there needs to be a study; we think there needs to be a process” to see if a long-term regional transmission plan makes sense, Missouri Public Service Commissioner Daniel Hall agreed.

Sigh. This guy. The one who wants to toss Missouri taxpayers under the bus by giving the power of eminent domain to a wind generation company. He wants to concoct some malarkey "study" to back up MISO's transmission expansion aspirations. Many of the comments in the article supporting another MISO MVP portfolio are all about finding ways to make new projects seem needed. These interests include an effort to build infrastructure for Big Wind at the expense of MISO ratepayers. That's what this is all about, at its most basic level. It's about Big Wind proposing generation projects and stacking them in MISO's interconnection queue. When faced with new generators wanting to connect to its system, MISO wants to provide service. But how many of these new wind projects are intended for export outside MISO? And should MISO ratepayers fund the transmission infrastructure that enables big wind generation companies to get their product across the MISO region so that it may be used by others outside the region? If these were merchant projects, they'd have to demonstrate a commercial need before being financed and constructed, and only the committed customers would pay for them. Instead, MISO has expanded its transmission system based on where it believes Big Wind wants to build, without any consideration for who will ultimately purchase the electricity. And it has done it on the backs of ratepayers who will see little, if any, benefit and perhaps not even use the electricity transmitted. These are captive ratepayers, not free market customers.

MISO's planning director doesn't seem to want to pursue another MVP portfolio. He says the costs to connect every Big Wind project in the queue will be uneconomic.

MISO’s transmission queue contains 483 projects totaling about 80 GW. Executive Director of Resource Planning Patrick Brown said MISO may be reaching an economic “break point” where the costs of network upgrades render projects uneconomic, especially in the wind-heavy western portion of its footprint. “The general cost of network upgrades is going to drive them out,” Brown said.

I guess it's time to jettison this idea, not prolong the agony with bogus studies, business cases, and "need" scenarios. It's simply not cost effective, something the opposition has been saying for years.

However, Kevin Murray, representing the Coalition of Midwest Transmission Customers, said a strong business case can’t be built on a speculative information about where resources might be constructed.

“We need to avoid the ‘build it and they will come’ sentiment. And we’ve seen hints of that in the past,” Murray said. He said some transmission projects might be more appropriately funded by interconnection customers for planned generation.

It's way past time for MISO to put down the cape of climate hero Big Wind that it has been carrying for the past 8 years. The bleeding of MISO ratepayers for benefit of Big Wind profits has to end.

And it ends at Cardinal Hickory Creek's doorstep.

And what did Big Wind have to say for itself?

Clean Grid Alliance’s Beth Soholt said her company will continue to support the Cardinal Hickory Creek line project in Wisconsin, which she said had a “solid as ever” business case.

Soholt suggested that MTEP 15-year future scenarios should account for sustainability goals beyond renewable portfolio standards.

Hmm... that sounds eerily similar to what Kaya Frieman said in the State Journal article. You don't suppose Big Wind and ATC are in cahoots, do you?

Keep up the good work, CHC opposition! Big Wind's ball of string seems to have started to unravel...

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Utility Tries Insulting its Opposition

12/12/2018

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This can't end well.

A report in the Maine Times Record says that Central Maine Power (CMP) spokesman John Carroll called the opposition to the New England Clean Energy Connect project "bizarre" and "shameful."

CMP representative John Carroll called the opposition “bizarre” and “shameful,” lamenting that instead of seeing Hydro-Quebec as a leader in the clean energy movement, “we are immediately suspicious.”
The project would be “a great battery for the Northeast,” he said, adding that this line would help prevent the continued mass spillover of energy that Hydro-Quebec is currently unable to sell. The project is a simple step toward making the region and the nation less dependent on fossil fuels, Carroll argued.

Sigh.

Insulting your entrenched opposition is not, and has never been, a winning tactic. In fact, name-calling and ad hominem arguments only expand opposition and drive it deeper. It's even a no-no in most transmission developer "Code of Conduct" documents. The "Code of Conduct" is a fig leaf used by many developers to assure regulators and elected officials that landowners facing eminent domain for transmission rights-of-way will be treated fairly.

In this iteration, the Code of Conduct states:

Do not suggest that any person should be ashamed of or embarrassed by his or her opposition to the PATH Project or that such opposition is inappropriate.

Name calling is one of the seven common propaganda devices. It is used to create unacceptable groups who should be dismissed without an examination of the facts.

Apparently there is no code, moral or otherwise, for CMP... nor any tactic too low. It is truly bizarre that this company appears to simply not care how much of a bully it looks like. And they seem to believe Maine is a cheap date and its people mere sheep that can be cowed by suggestions that they should be ashamed of themselves. It is Central Maine Power who should be ashamed.

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How Much Does Opposition Cost?

12/6/2018

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Opposition to new aerial transmission lines is nothing new. It's been around almost as long as the transmission lines themselves. Nobody wants to live with these things, but in the past they may have been a necessary evil, and in the past it may have been easier to overwhelm small communities to force an involuntary sacrifice. The people were sacrificing their home, business, health, sense of place and peace of mind for benefit of other people who needed electricity. We electrified the country in the last century. Mission accomplished.

But today's transmission lines aren't needed for the same reasons. The vast majority of today's transmission proposals are for other reasons, such as cheaper prices for customers in other regions, or "cleaner" energy for other regions. It's no longer about bringing electricity to people without it, and it's not all about keeping the grid we have functioning and reliable. For today's transmission companies, it's also about profit. There's a fortune to be made constructing transmission and controlling new pathways to transport electricity further and further from its point of generation.

Today's transmission opposition has also undergone a vast sea change from the small, disconnected community groups of yore. Now it's easy for small groups to connect with others and tap the experience of successful opposition groups, thanks to the internet. We communicate differently in this century, and communication is oftentimes the secret sauce of success. While transmission companies haven't changed their "best practice" tactics in decades, opposition is fleet and malleable. The secret hierarchy of opposition groups makes them quick to adapt, and even quicker to deploy new, winning tactics. The opponents are fighting with their hearts, the industry is fighting from a stale, dog-eared "playbook." It's just a job for the industry warriors. Personally, the only thing they get out of victory is a pat on the head, or maybe a bonus or promotion. Opponents receive the opportunity to maintain the status quo, at least until the next transmission proposal invades. They don't get a bonus. In fact, the only return on their investment may be gazing out the window and not seeing an ugly transmission tower. The transmission employee merely moves on to the next job... he can't see those towers from his house! It's all about motivation, and transmission opposition groups are racking up an amazing list of victories. It's simply no longer true that the transmission company wins every time. In fact, they're probably closer to losing most of the time when faced with organized opposition. Opposition is costing transmission companies a lot of money and often outright cancellation or failure of transmission proposals.

This recent opinion piece from Transmission Developers Inc. (TDI) defends its project from the inaccurate characterization of its project from competing transmission company Central Maine Power (CMP). The two projects, both purposed to transmit hydropower from Quebec to Massachusetts, couldn't be more different. CMP proposes aerial lines and many miles of new right of way through the Maine wilderness. TDI, on the other hand, proposes new transmission that is underground and underwater, with no new overhead transmission lines. CMP is also a second attempt to build new aerial lines to satisfy Massachusetts' huge appetite for "clean" power generated elsewhere (Not In My Backyard, eh, Massachusetts?). Massachusetts' first choice was the ill-fated Northern Pass project through New Hampshire. When that project was rejected by New Hampshire, CMP was selected as the second choice. TDI gets no love from Massachusetts, who is only looking at the proposed cost, not the actual cost. TDI points out something very important in its letter:

TDI, from the very beginning, took important community, environmental and aesthetic considerations into account when designing and siting the NECPL. TDI carefully chose underground technology specifically to minimize impacts on the people, viewshed and environment of Vermont. We recognized that the additional expense related to underground construction for NECPL was worth the alleviation of a multitude of genuine community and environmental concerns, and that the cost of any project can’t only be measured in dollars.

But can it be measured in dollars? I think we can get pretty close! Opposition causes real expense.

1. Purchased advocacy. Transmission companies first knee-jerk reaction to organized opposition is to compete with it by purchasing advocacy. Front groups, advertising, and "donations" to advocate groups to win their favor cost money. How much? It sort of depends on how big a campaign the transmission company thinks it needs. It also depends on the size of the opposition. A bigger opposition requires larger expenditures to secure advocates. People who are willing to sell their community down river for benefit of an out-of-state intruder can be pretty pricey if they're likely to receive a lifetime of ostracized backlash from their neighbors. A transmission company can easily spend $10M or more on purchased advocacy. Cha-ching!

2. "Mitigation" payments to communities and community groups. This can be a huge expense! Transmission companies make agreements to "mitigate" their effect on local communities with monies paid to local governments, organizations, and business groups who are happy to push their community under the bus in exchange for cash. Local governments figure payments from transmission companies benefit the community as a whole, and some of them are amazingly cheap dates. Others not so much. Organizations and business groups are all about personal profit or concessions that benefit the group or organization, at the expense of the community. This is pure greed! A transmission company can shell out at least $100M in "mitigation" payments to governments and groups that drive a hard bargain. Cha-ching!

3. Increased regulatory costs. Opposition in the regulatory process costs money. A transmission company must spend more money on legal fees, experts, and bogus "studies" to be submitted as evidence in the regulatory process. A transmission company may also shell out a whole bunch of money to purchase the best political influence on the regulatory decision. We're talking hundreds of millions of dollars in this category alone. Cha-ching!

4. Permitting delays. Time is money, and good opposition can cause increased permitting delays. An uncontested application can sail through the regulatory process in record time. A contested application drags on and on and on. How much does delay cost? Over a month? Over a number of months? Over a year? Over a number of years? Opposition permitting delays are usually of the "years" category of delay. The cost of delay to the transmission company can vary. With a merchant project, the entire cost of the delay and value of the sunk investment is on the company. This is hugely expensive. With a ratepayer guaranteed, cost-allocated project it still costs just as much, however ratepayers are picking up the additional costs of delay, and paying the transmission company for the cost of its investment during the process. While the costs are the same, it's all about who pays. In the case of the merchant New England projects, the cost is on the company. Cha-ching!

5. Permitting failure. It's reasonable to plan that a merchant transmission project may fail entirely after shelling out the money noted in the four previous categories. In this case, the transmission company is left with nothing but a huge debt and some pretty angry investors. Example: The Clean Line merchant projects that spent over $200M in "development" costs and then failed to receive enough permits to build (and couldn't find any customers to pay for the projects, which was another huge factor in the failure). Cha-ching!

A transmission project buried on existing public or private rights of way (such as roads or railroads, or under large bodies of water) that doesn't cross privately owned land, and doesn't use eminent domain, doesn't create the same kind of expensive opposition. A project without opposition can avoid the expense of opposition, and as we've discussed, opposition costs money. Lots of money.

A buried project may cost more to build, but it provides the kind of regulatory and price certainty that transmission companies need. The odds are good that a buried project will be approved and built, whereas an aerial project with entrenched opposition will probably not be approved and will never be built. Any customer who looks solely at price when considering competing transmission proposals fails to realize that after the cost and risk of opposition is added, they're going to end up paying the same, or more. They may also experience the cost of failure.

Opposition is too expensive. Choose the buried option.

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Great Moments in Wasteful Government Workshops

11/28/2018

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Hey kids, what time is it?

It's U.S. Department of Energy Triennial Electric Transmission Congestion Study time!

The DOE continues to waste taxpayer funding on mandated (but sadly useless) studies of transmission congestion, and it's time for the 2019 episode! So, grab your gear and pull up a chair, it's another exciting energy party where transmission developers and renewable energy companies beg DOE to jump into their Section 1221 bulldozer and clear their path to incredible riches!

Right before Thanksgiving, DOE held a poorly noticed "workshop" to inform their study. I see the workshop was publicly noticed on DOE's website just 6 days before. It wasn't listed or linked on DOE's Congestion Study page. It's almost like you needed to be an insider to find out about it. Yay, you, DOE! I mean, it's not like DOE hasn't been spanked by the courts in the past for not allowing adequate public participation or anything. I see the new study is off to an auspicious start!

Anyone who didn't have the inside scoop is left with a list of links to workshop presentations without any explanation or context. It's almost like watching a silent movie. I love silent movies! I can make up my own dialogue to go along with the pictures. And since DOE's oh-so-generous opportunity to comment on the workshop was again only 6-days long and coincided with the Thanksgiving holidays, (and was only noticed on its website 1-day before comments were due), I'm just going to have to amuse myself here. Never fear, though, DOE promises to create a detailed meeting summary from its recording of the festivities. Oh, please, let there be a comment period for that! Of course, finding it will be the biggest hurdle. I'm still looking for the comments about the workshop DOE promised to post on its "congestion study website." The information on this "website" is thin and poorly coordinated. Heaven forbid DOE maintain an up-to-date, comprehensive, on-line record of its public participation process!

Let's first take a look at the agenda for this wondrous workshop.

Look, it's a panel on "Challenges to building transmission facilities where and when needed: Permitting/siting issues."

That's you, transmission opponents! Although, during DOE's "workshop" you were represented like this:

NIMBYs? Really? Aren't we, as a society, beyond the derogatory name calling? You'd think the government would have covered this in their sensitivity training. I'm hurt! Truly wounded to the core! But I guess this is why no transmission opponents were invited to the workshop to make presentations about the real problems with permitting and siting. If they were, the DOE and its industry and environmental group flunkies (oops, my bad, was that a bit derogatory? I'm about as sorry as Reese's.) couldn't continue to kid themselves about real solutions.

I'm only going to call out a few of these dreadful presentations, but be sure to read them all to get a large helping of information deficit, local government and special interest group schmoozing, along with ways to speed up permitting by neutralizing state authority. Same old, same old. These tactics haven't worked yet, but the industry does love them so, we might as well let them continue to bang their heads against a brick wall.

Since we've already peeked at National Grid's uninspired presentation, let's start there. Here's what National Grid thinks are siting and permitting challenges:

Increase in municipalities seeking "impact fees."
Competitive transmission projects offering more than previous regional projects.
"Pass-through" communities feeling overburdened by regional project.
Concern of added costs to municipalities from project.
Increase in community activism.
Lack of understanding of local benefit for regional project.
Trees, viewsheds.
Property values.
Increase in EMF concerns.
Business loss.
Increase in involvement by state legislators.

Yes, all of the above. It's what we do. So how are you going to "solve" it, National Grid?

Offer to fund (regulatory) employees to work on infrastructure projects.
Slide that appears to compare an overhead project to a buried project.
Dozens of meetings with public officials and creation of "agreements."
Offers to fund new, unrelated infrastructure.
Informational meetings with NIMBYs.
Fund "independent" EMF expert.

Any funding of "independent" employees to grease the project or lie to the public is an attempt to cheapen the regulatory process. It doesn't actually make transmission more acceptable. Buying off local government officials with cheap trinkets and back room deals likewise doesn't actually mitigate the project's impact on any affected landowner. Landowner still takes it in the shorts, and he will extract his revenge at the next election. By that time, National Grid will be long gone. All this adds up to a combination of information deficit and governmental schmoozing. What's information deficit? It's the presumption that opposition stems from lack of information, and that the dissemination of more information will ameliorate opposition. Oh no... it doesn't work. It hasn't worked for years! We're all tired of your one-way information fountain. It's self-interested and your information is lies and crap. Save your energy and money. Find a better solution.

But wait, that slide with the two different projects... what was that supposed to mean? We'll get to that later.

Next, let's take a look at Ecology & Environment's presentation. It compares the successful Great Northern Transmission Line process with the unsuccessful Northern Pass Transmission project. It seems to rely on information deficit. Lots of slides with little comment symbols. Whut? Yappita, yappita, yappita. I'm pretty sure this had nothing to do with GNTL's success. Next...

Richard Sedano of the Regulatory Assistance Project presented a bunch of slides from EWITS (no, I didn't actually say TWITS, but I can see the similarity). EWITS envisions a huge network of new HVDC projects stretching across the continental United States. This junk has been around for years, so there's no danger of it actually happening. Then there's a NREL study, MISO, Western Governors, and a slide from our friends at the Edison Electric Institute (utility lobbying group extraordinaire). Then there's this slide.

Ahh, I think I get it now. My silent movie dialogue goes like this... What do all these things have in common? FAILURE! And in the case of Plains & Eastern, it was a colossal failure in which DOE participated! All these slides are bad ideas for a bunch of long-distance transmission. Sedano finishes up by remarking that states are best positioned to site and permit, but sadly claims there isn't enough information "to overcome fundamental mistrust of institutions and motives." And there never will be enough.

Hold your nose and take a look at big wind cheerleader Rob Gramlich's presentation. He claims "it can be done." Unfortunately, he came after Sedano. Gramlich wants to socialize the cost of all this new transmission to serve wind as widely as possible, in ex ante fashion (based on concocted forecasts instead of actual results). He also wants to make permitting and siting a federal responsibility, and he wants DOE to help bulldoze the fly over states. Chance of this happening? Not.a.one.

Just to get that bad taste out of your mouth, finish up with a look at the presentation of Steven Naumann from ComEd. Naumann says:

Impact on Need for New Long-Distance High Voltage Transmission Reduced load growth estimates means transmission expansion needs to be focused locally based on specific load growth; need to consider off- peak energy usage (electric vehicle charging) in ratings for equipment

In areas like PJM, where a states are pursuing off-shore wind, need transmission to (1) interconnect off-shore wind; and (2) develop network to provide optionality to deliver future off-shore wind efficiently

Off-shore wind is alternative to very long distance transmission to deliver western wind, which are not part of public policy initiatives of states to which the western wind would be delivered

For example, if states in the east coast have public policies support off- shore wind, what is the need for long-distance transmission to deliver wind from the Great Plains?

Looking at the system as a whole, need to consider difficulties in transmission siting, i.e., nearby is better, takes less time, less siting issues

Exactly! But then again, ComEd isn't in the business of building inter-regional transmission lines for profit. I've read Naumann's testimony in one of the Clean Line cases and was duly impressed by his knowledge and opinion. This guy has been around for a long time and is extremely bright. He gets it.

What is there to get? Let's go back to that slide that compared two different projects. The NECEC project is an overhead transmission line. The Vermont Green Line is an underground, underwater project. The Vermont Green Line may be built. The NECEC will never be built.

Permitting and siting issues can be avoided entirely by building underground transmission on public rights of way. In other words, it's not us, it YOU! Building a better project that doesn't foment any opposition is the only guaranteed way to avoid permitting and siting issues. Any transmission opponent could have told you that.

If only you'd let us in the room...

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Whitewashing Greenwashers' Fence

10/24/2018

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Well, hey there, Corporate America! The companies that stand to profit from building more wind, solar and transmission projects want you to whitewash their fence!

Come one, come all, step right up and grab a paintbrush! Your regional transmission planning organization is ready to take your membership money and waste your time!

Honestly, the renewable energy industry has no shame. Their greed knows no bounds! They need to keep building renewable energy projects and new transmission to fill their pockets. Its a parade of trade groups and self-serving "organizations" who want to find someone, anyone, to champion their goals. They tell you that you must purchase more renewables from far off places, and that you need to pave the road to get them. And Corporate America is their latest target.

The recycled Wind Energy Foundation is now the Wind and Solar Alliance, and they want corporations to join regional transmission planning organizations and demand new transmission to fulfill corporate renewable energy goals. Except this idea is crap. Regional transmission planning organizations don't care about your corporate renewable energy goals. Sure, you can spend money joining, and then waste a bunch of time sitting through meeting after meeting, demanding new transmission, but it's a completely wasted effort. RTOs don't even listen to what states want, why should they listen to Corporate America?

I'm going to use PJM Interconnection as an example, since it's the RTO that manages my service area, and one I'm familiar with. Here's how PJM treats requests to build new transmission for renewable energy goals: the requester, or sponsor, must agree to pay for the entire cost of a transmission project it desires to have built to meet its renewable energy goals. In this instance, the requester may be a state with a renewable energy mandate or goal. One state may not visit its laws upon the citizens of another state that may have different goals. Just because, say, Maryland, has a legislative goal to procure more renewable energy does not mean that citizens of West Virginia, with considerably different (non-existent) renewable energy goals must pay a portion of the cost of a new transmission line to meet Maryland's law.

A corporate renewable energy policy may not visit the costs of meeting its goal upon electric ratepayers in any state. The ratepayers had no part in creating the corporate goal, and they shouldn't have to pay for it.

Why do corporations set renewable energy goals? It's nothing more than public relations fluff. "Buy our products because they are created with renewable energy!" It's a marketing ploy. Will consumers choose to buy a more expensive product because it supports the renewable energy business? Maybe, depending on the upcharge. A few pennies here and there may be something consumers are willing to give to the effort. A sizable price increase that comes from renewable energy purchases and new transmission lines supposedly needed to get the energy to end user is not something consumers will support. PR fluff is great when it's cheap, when someone else is paying the cost of creating it, but when it affects the corporate bottom line, even corporations cannot support it. Every dollar a corporation spends on marketing (and energy) must find its way into the cost of the product. Spending several billion dollars on a transmission line (even one cost shared by several corporations) will raise prices way past consumer tolerance. Joining RTOs and demanding new transmission lines is a dead end.

RTOs may consider need when planning transmission. But they're going to be looking at stuff like load, economics, and perhaps state laws. When a new transmission project is approved and ordered by an RTO, the costs of the project are allocated to the consumers served. Corporate energy goals serve corporations. The corporation receives the benefit of meeting its goal through public relations and increased sales. This cost simply cannot be allocated to all ratepayers in a region, who will not benefit from corporate goal fulfillment. Trying to create a scenario where consumers benefit from corporate public relations schemes is an exercise in futility. RTOs aren't going to fall for it, and neither is the agency that regulates them.

Even though the Wind & Solar Alliance has packaged up their fence painting scheme all pretty and created some bogus "report"* that says absolutely nothing, it appears that some big corporations aren't falling for it.

As global manager of renewable power for General Motors, Rob Threlkeld speaks often with both RTO and utility managers about transmission. When he depended primarily on power-purchase agreements with wind producers, “That would require a significant amount of transmission to be built.”
While he expects transmission to continue to be a challenge in meeting his company’s renewable energy goals, he is more focused now on green tariffs and sees a new resource on the horizon: the transmission capacity left in the wake of closing coal plants.
“As we shift the generation fleet,” he said, the question is, “How do you repurpose existing transmission?” Wind farms used to rely on all new transmission lines to bring the power to where it was needed, he said. But he sees that changing as coal plants close and reduce the load on parts of the transmission system.
“Don’t build new all the way; build new half the way,” he said. “Those are the types of discussions we have.”

I guess he must be thinking about his bottom line, perhaps GM only wants to pay for half a new transmission line to meet its goals? Or maybe he realizes there is no free lunch here. RTOs are never, and I do mean NEVER, going to plan for corporate energy goals and pass the costs off onto other electric consumers. Trying to "re-purpose" lines that have been paid for by electric consumers, in order to now serve corporations, is just another way to shift the cost of meeting corporate goals off onto others. Obviously Rob doesn't want to PAY to make GM greener.

If a corporation wants to polish its public image with greenwashing, it should be prepared to pay for it. Power purchase agreements are paid for by the corporation. If a corporation has to pretend that its actually using the energy it is paying for (as opposed to the fantasy REC product), then it may purchase capacity on merchant transmission. That's a much cheaper option than paying the entire cost of a new transmission line.

However, the merchant transmission that has been proposed takes too long to build (wahhhh!) That's merely because the merchant transmission that has been proposed in the past is THE WRONG KIND. It's the overhead across private property kind that faces fierce opposition from landowners and regulators. That kind of merchant project is never going to be built. In fact, at least one state has outlawed that kind of transmission, and others have found ways to put a stop to designating these projects as "public utilities" who may wield eminent domain authority. Maybe the corporates should support a different kind of transmission? How about new technology that doesn't require eminent domain and therefore doesn't foment opposition? It's a much better way to spend corporate funds, instead of wasting it supporting dead projects such as Clean Line. Wake up, Walmart, before the people who shop your stores in their jammies find out their prices are increasing because you choose to waste money joining RTOs and testifying in favor of overhead transmission projects before state regulators. They'd probably rather you spend your money paying your employees a living wage... so they can buy real clothes for their shopping expeditions.

The Wind & Solar Alliance is simply looking for someone to paint their fence. They've gotten nowhere lobbying RTOs for new transmission to serve renewable energy goals. Now they want Corporate America to do it for them. You're smarter than that, right?

*Let's play a game! How many typos can you find in the WSA's new "report?" Doesn't exactly inspire confidence, does it? I wonder who proofread that... was it this member of WSA's extended team? No, really, check it out. There's another little surprise waiting for you there.

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Michael Skelly Aspires to be Meaner

8/1/2018

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How much meaner could one be than to continue to attack people in 3 states with pie-in-the-sky promises to impede their businesses and take their land by eminent domain, when the likelihood of ever actually doing so is hovering near zero?

"We knew that if we were going to focus, we would need a leaner, meaner team."

Really, Michael Skelly, I can't help laughing at your feeble attempt to pretend you're some incredible go-getter who can suddenly make Grain Belt Express happen with a "leaner, meaner" approach.

Is "leaner" meant to cover the fact that there are no Clean Line employees anymore? I notice you suspiciously skirted around that issue in your ego-polishing interview with Houston Business Journal.

Though he declined to comment on the sale price of the assets Clean Line has sold or the company’s current, reduced headcount, Skelly did say he isn’t looking to move into a smaller office with the slimmed-down team.

Oh, c'mon! We know that ConnectGen has taken over Clean Line's former ugly orange office space on McKinney Street. When a person calls Clean Line's former phone number, it is answered "ConnectGen."

It looks like most of the management of the former Clean Line Energy Partners has reconstituted itself at ConnectGen, including the former Grain Belt Express project manager.

Leaner? So lean that there's no longer a need for a project manager? Who does still work there, and are they actually drawing a paycheck?

Houston-based Clean Line Energy Partners LLC has trimmed its portfolio down to one $2.3 billion project in the midwest called Grain Belt Express.

That left Clean Line with Grain Belt Express, a transmission project moving wind power from Kansas to as far east as Illinois. That’s what Skelly wants to hone in on, he said.

Grain Belt is still in the permitting phase, and it had been hung up in a Missouri Supreme Court case around who determines whether the project is in the public interest. The court ruled that the central Public Service Commission gets to decide, a favorable outcome for Clean Line, according to a July 26 press release.

The PSC has broad discretion in how it handles the decision going forward, so the timeline for the project could still change depending on what it does, Skelly said. But right now Grain Belt is looking at five or six years before it’s operational, he said. Clean Line should hear the PSC’s decision within the next several weeks, Skelly said.

Since its single remaining asset is still in development, Clean Line is not producing revenue right now.

Seems like Skelly forgot some parts. Clean Line will STILL need the assent of Missouri counties before it can begin construction on its line. While the court said the PSC can issue a permit before county assent, it must issue a conditional permit that is only good after county assent. It was completely an issue of timing, not authority. Skelly also forgot to mention that GBE's Illinois permit has been revoked by the Corporation Commission upon order of the Illinois Appellate Court. The court found GBE was not a utility, and even if it somehow manages to buy utility property and re-apply under the long process, there are unresolved issues at the Illinois Supreme Court in the RICL opinion regarding whether Clean Line's merchant business model prohibits it from being a public utility under Illinois law. Chances of building GBE are slim to none. But building GBE may not be what Skelly has in mind.

Clean Line’s founder and president, Michael Skelly, hasn’t yet decided what to do with Clean Line once it either sells or completes Grain Belt, he said. If it sells the project, it will have cash and a very small number of employees — a good position for the company, Skelly said. It’s still to be determined whether the company would make an exit from the market at that point or start working on a new project, he said.

Sell Grain Belt Express?

Why, who in their right mind would buy Grain Belt Express?

And is there some Failed Utility Ideas Gazette where one can take out a classified advertisement to sell used transmission project ideas?

It almost sounds like Michael Skelly is simply preening and polishing for the express purpose of trying to unload this turd on some unsuspecting mark with more money than brains.

So, here's a scenario that Michael Skelly didn't envision in the article. What if he fails to sell the doomed GBE project? Does he have the cash and expertise to complete it himself? How does one man with little to no cash build a transmission line more than 700 miles long? How far are we supposed to stretch belief here?

What if Michael Skelly fails to sell or complete GBE? With no cash and no employees, a bad position for Michael Skelly, will he finally become humbled enough to admit that Clean Line is defunct? Can he man up enough to release these landowners from his empty threats? Michael Skelly needs to quit wasting everyone's time and money!

1 Comment

U.S. EIA Publishes A Lie

7/14/2018

4 Comments

New from a government that brought you the legend of the $400 hammer is a "report" based on out of date information, useless rhetoric, and plain old false information. Yay, you, U.S. Department of Energy!

Okay, so it did make us laugh initially, but then it sort of makes a taxpayer angry that the federal government wasted a bunch of money paying a contractor to compile this "report." I'm talking about the U.S. DOE Energy Information Administration's "new" report entitled "Assessing HVDC Transmission for Impacts of Non-Dispatchable Generation." The report is dated June, 2018. Page down a bit and you'll see the actual "report" is a product of ICF dated March 2018. It took the EIA 3 months to add a cover page and summary and "publish" this garbage? Well, that's efficient. Not.

ICF describes itself as:

ICF is a global consulting services company with over 5,000 specialized experts, but we are not your typical consultants. At ICF, business analysts and policy specialists work together with digital strategists, data scientists and creatives. We combine unmatched industry expertise with cutting-edge engagement capabilities to help organizations solve their most complex challenges. Since 1969, public and private sector clients have worked with ICF to navigate change and shape the future.

Based on that description, I'm going to hypothesize that this "report" did not come cheap. Except after reading it, I think a junior high school science class could have done a better job. The report itself claims to be a simple compilation of information and articles it found on the subject matter. How many analysts, specialists, scientists and creatives did it take to do a google search, copy & paste, throw together a few summaries and make some graphs and charts to illustrate its "report." C'mon, this is the epitome of government waste!!

And now I'm going to tell you why.

This "report" provides a "case study" on the Plains & Eastern Clean Line, and opines:

Of all the projects in the region, we feel that most promising is the Clean Line HVDC Project. The Plains & Eastern Clean Line is an approximately 700‐mile DC transmission line that will deliver wind energy from the Oklahoma‐Texas Panhandle region to utilities and customers in the Mid‐South (MISO) and southeastern United States (TVA). The project also involves the construction of AC collector systems to collect and transport the energy generated by wind farms in the “wind alley” region of SPP. The project received DOE approval in early 2016 and construction commenced in late 2017 (Clean Line Energy Partners 2017b).

Construction of the Plains & Eastern Clean Line commenced in late 2017? Well, that's certainly news.

BECAUSE IT'S SIMPLY NOT TRUE!

The Plains & Eastern Clean Line no longer exists. The company sold the Oklahoma portion of its project assets (consisting of a plan and some partially paid-for rights-of-way) to another company in December 2017. Although Clean Line claims to still own assets in other states, there's nothing it can do with them. It doesn't have authority to build in Arkansas, and the U.S. DOE cancelled its "partnership" with Clean Line in March of this year. Looks like ICF didn't know that, although it was all over the news. ICF based its expensive "report" on information it gleaned from Clean Line's out-of-date website and didn't bother to verify any of it.

Considering the inaccuracy of ICF's reporting on its star project, how accurate do you think the rest of the information in this report is? I think it's suspect, and that's being generous.

This report blathers on and on saying stuff like most renewables are located far from load centers, that there are unnamed areas "with strong demand" for renewables, and that the only issues with a new HVDC transmission network are financial and technical. Well, now that we've uncovered the fact that Clean Line failed, no, I mean FAILED, perhaps ICF's next report should take a look at why.

Clean Line failed because it could not find any customers. There were no customers "with strong demand" for imported renewables from Oklahoma. That's because there are more cost effective renewables available to urban areas on the coasts. It's simply not true that all the renewables in the U.S. are concentrated in Midwest. Better renewables lie just offshore, less than 50 miles from coastal population centers "with a strong demand" for renewables. ICF's conclusions are based on blind myth. The coastal population centers do not want to SEE offshore renewables, therefore they don't exist. All renewables must come from someone else's backyard, somewhere off in wilderness of red states where nobody lives. Except people DO live there. That's where your food comes from. And the job of growing your food cannot continue in the middle of an industrial energy plant. The people who live in Clean Line's formerly proposed rights-of-way objected to having their lives and productivity impeded with an aerial HVDC transmission line. And they fought hard... a Herculean effort of time and expense, just to protect what was theirs from the taking of a for-profit merchant transmission company with grandiose plans to build transmission that nobody would ever use. And they won, in the regulatory realm and in the courts. Clean Line gave up and sold parts of its projects to others because it could not build them.

The human factor needs to be examined before our government wastes anymore time on useless reports about whether HVDC is technically or financially feasible. The fact is that NOBODY wants a high voltage transmission line on their property. This fact is compounded when the proposed transmission line is for the express purpose of supplying "cheap" or "clean" electricity for people thousands of miles away who not only don't acknowledge the sacrifice to be made, but openly mock and belittle the ones proposed to make this sacrifice. Regulators recognize this and they are hard-pressed to approve new transmission that merely "flies over" their states and provides no local benefit. A nationwide HVDC network will never happen and this is why.

The EIA states its purpose as:

The U.S. Energy Information Administration (EIA) collects, analyzes, and disseminates independent and impartial energy information to promote sound policymaking, efficient markets, and public understanding of energy and its interaction with the economy and the environment.

This report isn't information. It's misinformation. EIA needs to either correct the misinformation in its report, or can the entire thing. It's irresponsible for our government to disseminate misinformation and outright falsehoods. The Plains & Eastern Clean Line is not under construction. This fact was available a full 6 months before EIA published this report, and a full three months before ICF submitted the report to EIA. How many highly compensated managers and directors reviewed this piece of garbage and approved it before it was published? Maybe those folks should reimburse the taxpayers for the amount of money wasted on this garbage report. If this irritates you, let EIA know how you feel here. It claims you will receive a response within 3 business days.

And there's probably not a whole lot the federal government can do about this, but Clean Line needs to update its website, remove all the outdated misinformation contained there, and tell the truth for once. Clean Line is simply pretending at this point, and they're living a lie.

4 Comments

Praying for Profits

4/29/2018

1 Comment

"Living on a prayer" is how AEP CEO Nick Akins describes his company's Wind Catcher project. I will allow you a moment to wallow in 1986 now, when your pimply garage band may have created meaning for the rest of your teenage life.

So, this has been a normal quarter financially, but an outstanding quarter overall from an execution standpoint that sets the tone for 2018 and beyond with several rate case outcomes and settlements regarding Wind Catcher behind us, as Rush's classic rock song, Red Barchetta, which – Red Barchetta is a car, it's a two-seater Italian car – would say it's time to strip away the old debris, fire up the shiny Red Barchetta and respond with a roar. That's what I see in the excitement, the energy of our teams of employees at this company working on projects such as Wind Catcher and other technology advancements that will change the face of AEP's interaction with our customers.
To paraphrase one of the latest Rock and Roll Hall of Fame inductees, Bon Jovi, and I know this phrase will stick with you the rest of the day, we're halfway there, living on a prayer, take our hand and we'll make it, we swear. So, enjoy the ride with American Electric Power. Brian?

Oh, yes, please, Brian, save us from this glory days gibberish, won't you?

Corporate earnings calls are always amusing, but more so for regulated investor owned utilities, where the big executives sing and dance for analysts that they probably wouldn't waste their spit on if they saw them on fire and lying alongside a deserted road in a different scenario. The executives pretend they're profitable, and the analysts pretend they believe them. And the ordinary utility ratepayer sees a whole different side of their utility, who ordinarily likes to pretend it's working hard to provide value for customers in a tough regulated context; meanwhile behind customer and regulator backs the utility is bragging to analysts about how profitable it is and how regulators sit up and beg on utility leashes. The result is pure hilarity.

How about a little reality here, AEP? The vast majority of questions lobbed by analysts on last week's call were related to Wind Catcher. I'm sort of left with the thought that the analysts don't expect the project to actually happen. But no matter the question, Akins had a glorious and positive spin for it. But what was he really saying?

Greg Gordon - Evercore ISI
Good morning, guys. Several questions for you. I'll try to make them brief. First is congrats on the Wind Catcher settlement in Oklahoma. You have a couple parties on board, but you have many more that have not officially signed on. But can you give us some color around the negotiations there? And what, on the margin, you have conceded to give up in this settlement to give customer protections versus the prior deal? And what it might take to get more parties on board?
Nicholas K. Akins - American Electric Power Co., Inc.
Yeah, Greg. Obviously, a great question. We continue to try to get other parties on board. But as we said from the beginning, it was extremely important to get the industrials on board in Oklahoma. And I think by getting them on board, it certainly sets the predicate for the opportunity for the commissioners themselves to look at this and say, okay, we've got both the industrial customers and Walmart, and the customers have spoken.
Now, there are other parties, as you mentioned. And certainly, we're trying to get the Oklahoma staff engaged in this process and, certainly, the Attorney General – probably not likely to get the Attorney General on board. But others will continue to be open to that, including the Attorney General.
But at this point, though, I think it's framed up pretty well, because a lot of work's been done in the background. Our people have been working tirelessly with all these parties around the various jurisdictions to try to drive some consistency around what the risks were being taken. And a lot of it centered on the 10-year look-backs, the performance guarantees, certainly the force majeure-related provisions as well.
And it really – as we looked at it, and as I mentioned early on in our discussion, you have to – if you're going to do regulated renewables, then certainly we'll have to meet the market on what risks are being taken relative to regulated renewable investments. And we looked at it, looked at it in a lot of detail. We have a lot of, like – as I mentioned earlier, engineering and construction. We looked that in detail, the operational characteristics of particularly the generation tie (22:16), and we've come a long way in terms of the evaluation of those risks.
We were willing to take it, and the industrials were ultimately supportive. So, I think it just sets the tone for continued discussions. But as far as I'm concerned, we've put it in a very good place, and you'll note that those provisions are pretty consistent with the settlements that have been done previously by SPS over in New Mexico and Texas. And we're having discussions with the Texas parties now. So, you're starting to see, in my opinion, a coalition around what risk parameters, what the framework of a deal looks like, and I see that momentum gaining.

The analyst wants to know how AEP plans to get other parties in Oklahoma on board with its quasi-settlement with only two of the numerous parties to the case. What is AEP giving up to get the other parties to settle, and what are the chances of it actually happening?

Akins thinks having industrial customers on board "sets the predicate for the opportunity..." In other words, only big corporate customers matter to the commission? This is hogwash. Industrial customer coalitions negotiate for their own self-interest, not yours. Sometimes, industrials negotiate for rate perks that end up being paid by the other customers. Because they buy so much electricity, they're always looking for sweetheart deals that cut a price break for their companies. The utility oftentimes makes up the difference with rate increases for the other customers. Big corporate customers also have big corporate lobbyists who may apply political pressure to get big questionable deals approved by state authorities. Who's lobbying for all the residential and small business electric customers? Maybe the Attorney General, who is "probably not likely" to agree. Or perhaps the staff of the OCC, who maybe could be propped up to look like they represent the other customers. And what about all this "work" that's been done "in the background?" Does he mean "work" being done behind closed doors between lobbyists and government officials? Sure sounds a bit suspicious doesn't it? Don't bother looking for an answer about risk... it really is the mumbo jumbo nonsense it appears to be.

Bottom line: We're still working on a settlement in Oklahoma, but we haven't been too successful so far.
Analysts's response: "Well. Good luck with that."
Then he asks another question about AEP's flagging profits in Oklahoma. Akins answer is quite revealing about the purpose of Wind Catcher. If Wind Catcher gets approved, it will correct the Oklahoma rate problem and the profits will be secure for many years. And who is going to pay for those increased profits? Electric customers... and taxpayers nationwide who pay for those wind production tax credits AEP is using to supposedly lower electric rates.

Let's try another:

Steve Fleishman - Wolfe Research LLC
So, speaking of living on a prayer, I have a few Wind Catcher question. Sorry. I couldn't help. You asked for that one.
Yeah. Thank you for the Rush references, those are great. So just if I recall back last fall, you had talked about wanting decisions by April to make sure that you would have it online to get the full PTCs.
Is May-June going to be okay to be able to capture full PTCs? Like, what is the real deadline?
Nicholas K. Akins - American Electric Power Co., Inc.
Yeah, we'll be fine. Really, we have to get to a point of getting these orders in place, and then we'll cover it with our board, obviously, in our July meeting. And then once they approve it, we're off and running. So if we get it in that June timeframe, we get the orders in the May to June timeframe, we'll be in good shape.

Last time, Akins claimed he needed approvals in all states by April. Now, because that hasn't happened, he says May or June would be fine. If May or June is fine, why wasn't that the original deadline? If May or June doesn't happen, will a new deadline appear? Is there even a deadline at all?

And then the analyst again attempts to get a straight answer about risk. The risk is that AEP will dump too much money into trying to get this project done and be left with nothing but bills if it doesn't get approval, or perhaps AEP will give too much away in settlement and then the project won't be profitable. Where's the tipping point when AEP will put this project on a shelf? According to Akin's mumbo jumbo, there is no tipping point. The rewards will outweigh the risk, because AEP can "adjust." Oh, I see. "Adjustment" causes money to fall from the sky... or at least from ratepayer pockets.

Next....

Julien Dumoulin-Smith - Bank of America Merrill Lynch
Got it. Excellent. And then turning back to Wind Catcher real quickly, obviously, you're working every state front. To the extent to which, let's say, Texas and those negotiations aren't necessarily as fruitful here on the prescribed timeline that you just talked about, how confident are you about signing up alternatives like munis and co-ops just to be able to continue working on the project, notwithstanding clarity in Texas, shall we say?
Nicholas K. Akins - American Electric Power Co., Inc.
Julien, I really think we are going to get a result in Texas. And I think it'd be problematic during the pendency of something that's working to go sell somewhere else. So, we're feeling pretty good about the direction this all is taking and the timing of it.

The analyst poses the question of what could happen if AEP can't come up with a settlement in Texas. Instead of going for approval from the Public Utility Commission to involuntarily charge the cost of Wind Catcher to ratepayers, might AEP instead try to sell Wind Catcher's generation and transmission voluntarily to Texas cities and electric co-ops? This would use a merchant model in one of the states, something AEP has not considered. In fact, if AEP were doing this project on a merchant basis, state approvals would be a whole lot easier. What wouldn't be easier would be coercing electric distributors to shoulder the risk that this project would be cost effective. That's been a non-starter with other transmission/generation projects and it is unlikely that AEP could sell its project to voluntary customers. So, of course Akins doesn't want to even talk about that. He's so sure he'll get approval in Texas he doesn't want to muck up his chances by taking the merchant route. The reality is that a merchant route in Texas would probably knock the bottom out of rate settlements in the other jurisdictions as well. Why should ratepayers take a risk when it can be left on AEP's doorstep? If it can't pawn the risk off onto ratepayers, AEP doesn't want to play this game anymore.

Paul T. Ridzon - KeyBanc Capital Markets, Inc.
Two questions. Is there a statutory deadline in any of the Wind Catcher states, when this has to be done by?
Nicholas K. Akins - American Electric Power Co., Inc.
I don't think there's a statutory deadline, but certainly there's a business deadline. I mean, we've been very transparent about the timing necessary and the procedural schedules have been set up consistent with getting a decision on time. So, I think it's really more driven by, I guess, one of the previous questions sort of brought out, when is our drop-dead date and that kind of thing. But I can just tell you that May and June fits.

The analyst is probing to see if there is a drop dead date on this project, and when AEP is going to cut its losses and give up. Now it's May and June. Still no answer to the real question.

Paul T. Ridzon - KeyBanc Capital Markets, Inc.
And then some of the concessions you've made are around cost caps. Who's wearing that risk? Is it you or the contractors?
Nicholas K. Akins - American Electric Power Co., Inc.
Yeah. It's both. We have fixed-price contracts with the appropriate contingencies. And I think that that risk is being shared. And actually, this tells you a little bit about the commitment of the suppliers that we're working with. I mean, these are established suppliers that do a lot of business that we do a lot of business with. And I can guarantee a lot of homework's been done on what these operational provisions will look like, what the construction side will look like, what the supply will look like, what risks are being borne. And also even if route changes were to occur on the generation tie (38:02) that those have been discussed and (38:05) as well. So, we feel very good about where our suppliers sit at this point.

This analyst wants to know who is covering the cost caps on the project if it goes over budget. Is it the contractors? Or is it AEP, in which case cost overruns will cut into profits? The perfect mumbo jumbo answer is that it's both... and neither... and let's not even talk about cost overruns because those will never happen. Right.

And then other questions started to get a little hard for ol' Nick. But instead of answering them, he throws a delicious plum into the center of the room and reminds analysts that AEP will be looking for investors for its Wind Catcher project to the tune of $4.5B, and there's a lot of profit potential for good investors who stop asking so many hard questions.

Nicholas K. Akins - American Electric Power Co., Inc.
Yeah. So, we are in the middle of what I would call an M&A transaction without a premium. It's called the Wind Catcher. And so when we look at the strength of the balance sheet, certainly we'll be looking at the financing needs for Wind Catcher and that's a $4.5 billion transaction. So, that's where our thoughts are at this point.

Nice touch. But the questions come back...

Ali Agha - SunTrust Robinson Humphrey, Inc.
Thank you. Good morning. Nick, to clarify, as you're looking at the four states for approval in Wind Catcher, is it fair to say just given where we are that Oklahoma probably is the most challenged of the four? And related to that, could you theoretically complete the project if the other three states say yes and Oklahoma was to say no?
Nicholas K. Akins - American Electric Power Co., Inc.
Yes. So, on the first point, I would agree with you. Oklahoma has been the most challenging. And really, with the ALJ order there, it made even more of a challenge for the commissioners to really take a look at it from a positive standpoint. But I really believe they will at the end of the day and – because they obviously look at much broader issues. And so, with that said, I think as far as Wind Catcher is concerned, we intend on this project being for those four states and certainly the FERC customers. There's some FERC customers too that are involved. And if one were to fall out, we're really – as I said, I mean, I think we're at a good place in terms of the transition of getting this thing across the finish line. And at this point, we really aren't entertaining the notion of going forward with the project without one of the jurisdictions. I really don't see that happening.

The analyst wants to know if Oklahoma is really going to be the problem it appears, and how is AEP going to fix that? What's the plan if Oklahoma says no? Is there a Plan B?

There is no Plan B. If one of the states rejects AEP's plan, they're done. Of course, AEP once said it needed to get this project approved by April. Deadlines and decisions have a way of shifting because at some point they'll be too far down the pipe and must come up with a plan to recover their losses.

He sure seems confident that he can finagle this thing to get his way at four different regulatory commissions though, doesn't he? It's almost like he has some other way to get approval that we're all not seeing. Is it over confidence? Or does Nick know something we don't?

Paul Patterson - Glenrock Associates LLC
Just sort of quickly follow up here on Wind Catcher. Why is it that the – what are the key issues, I guess, sort of maybe stopping the OCC staff and others from coming on board?
Nicholas K. Akins - American Electric Power Co., Inc.
Your guess is as good as mine. I think, obviously, the ALJ looked at it from a procedural basis it seemed like to me. But we're pretty convinced we did file under the right provisions under Oklahoma law. But obviously, we'll continue with discussions with certainly the Oklahoma staff. And I think – I really do believe we put provisions in place with the industrials that should benefit that discussion with them. Obviously, to have that kind of company of the customers certainly would help from a policy side and from a staff side to really take a hard look at this. So, the verdict's still out on that and we'll continue those discussions.

Oh yes, those folks in Oklahoma are just silly for not agreeing. He seems to think that he can use the Oklahoma industrial customers as a stand-in for retail customers who disagree in order to get the OCC staff to acquiesce. Because, remember, only big corporate customers matter in Oklahoma. Nobody is fighting for the little guy... supposedly.

And what about the Oklahoma legislature's march toward ending state renewable energy credits?

Paul Patterson - Glenrock Associates LLC
Okay. And then, in Oklahoma, there's this tax issue on Wind. I guess we expect it's intertwined with school funding and there was something that passed the House yesterday. And I was just wondering how would that work with respect to the settlement or with respect to the project, or does it have any impact. Can you give us sort of a sense about that?
Nicholas K. Akins - American Electric Power Co., Inc.
Well, it won't have any impact on the project. And it got poured out of the legislature yesterday. So, we don't see that happening.
Paul Patterson - Glenrock Associates LLC
I mean, I thought it passed the House is what I just saw.
Nicholas K. Akins - American Electric Power Co., Inc.
No.
Paul Patterson - Glenrock Associates LLC
The provision for the tax credit, I thought it was removed. But we can talk about it later. But what you're saying is you don't see any activity on that whatsoever, is what you're...?
Nicholas K. Akins - American Electric Power Co., Inc.
No.
Paul Patterson - Glenrock Associates LLC
Okay. So if something like that did happen, though, since it's been sort of debated and what have you, and the school funding issue, in terms of the settlement, how would that – would that be something that you guys would absorb or would that be something that – how would that be treated if there was subsequently some sort of impact on wind generation in Oklahoma as a result of something that the state legislature may or may not do in the future?
Nicholas K. Akins - American Electric Power Co., Inc.
Yes. So, there is that risk, but not likely. And the state tax credit wasn't assumed in the Wind Catcher economics, to begin with. So if something were to occur, it wouldn't have any effect.

Can Akins be any more clueless? Deny. Deny. Deny. Oh, wait... that? Tut, tut, tut, it doesn't affect us. Is that just like AEP's fungible drop dead date? AEP seriously would not take a state tax credit it was eligible for, and didn't use that in its desperate cost figures? Sure, I believe you.

Let's sum this up: Despite its earlier admission that it must have Wind Catcher approved in four states by April, AEP has now moved its deadline ahead by two months because it's having trouble getting it approved. If approval isn't achieved by June, there is no Plan B, just perhaps new deadlines. And maybe some swearing. And praying. Lots and lots of praying.

1 Comment

Transource Economic Impact Study Flops

3/30/2018

4 Comments

What do you call an "economic impact study" for a transmission line that doesn't impress anyone?

FAILURE!

Worse yet, Transource wasted OUR money on this biased trash.

Who was this study supposed to impress? Local economic development folks, county government, maybe the state regulators?

Transource spokeswoman Abby Foster said "...the study was requested by Transource to provide the community answers for the benefit related to the company’s role in this project. If the study is requested by the PUC, Transource will provide it."

The community wasn't impressed with Transource's "answers" to a question that hasn't been asked.

Nobody's been asking about these trumped up "benefits." Instead they want to know about the electric bill savings Transource insists they're going to get. With more than 80% of the economic benefits going to the Washington, D.C. and Baltimore areas, there's not much left to go around "the community." How much exactly will each individual landowner in Franklin or York county receive in electric bill savings to balance out the huge sacrifice Transource proposes they make with their land, their heritage, their productivity, their financial security, their peace of mind?

Transource's economic impact study is not balanced. While it makes grandiose claims of jobs, tax payments, and economic riches, it recognizes absolutely no detriments that will come with the project. Land devalued by the transmission project will result in a decreased tax burden for the landowner (because, hey, landowners, Transource only wants an easement across your land, you still pay all the taxes for the land Transource uses!). Where is the lowered tax revenue produced by lower assessed values added into Transource's economic study to balance against the unsubstantiated claims of increased tax revenue? It's not! Soil compaction and construction work can impact crops for years to come. Less revenue from crops, less money the farmer has to spread around hiring help, purchasing new equipment, and spending in his own community. Where is this decreased local spending and fewer jobs added to the study to balance against Transource's claims of new jobs and local spending? It's not. Transource's economic impact study is a one-sided picture of how things could be if the detrimental economic impacts of the transmission line on the community were not considered. It's complete and utter crap.

Transource's press release said...

An independent economic impact analysis projects the Pennsylvania and Maryland counties involved in the Transource Independence Energy Connection (IEC) project will benefit from construction of the estimated $230 million project.

Independent? Hahaha ha ha. Surely you jest, Transource. There's nothing "independent" in a "study" you bought and paid for (with my money, I might add). You hired a company to produce a study that only included economic "benefits" without any of the known and substantial economic detriments. You're absurd!

If you can find the actual study, you can be informed that Brattle created it using IMPLAN software. What's IMPLAN?

NOW ANYONE CAN CALCULATE ECONOMIC IMPACTS

Oh, I get it now. Even a monkey could plug some numbers into your software and it would calculate some pre-programmed amount of "benefits." Like Brattle says, "The model estimates the direct, indirect and induced economic stimulus benefits associated with the planned transmission lines." Benefits, only benefits. This is garbage.

Since it has completely failed to convince the communities of anything, I guess Transource plans to use it on regulators. Except the regulators are looking for an actual need to construct the project. I mean a real need, not some made up "benefits" that the community doesn't "need." Do we build transmission because a community needs a certain number of jobs or a certain amount of tax revenue? No, we only build transmission when there is an electrical NEED for the project. Jobs and tax revenue don't create NEED for a transmission project.

Maybe there really wasn't a NEED for this economic impact study. But how else was Transource going to create a set-up to trot out the union guys? The union guys show up on every transmission project. They are a transmission company's "go to" to create false advocacy for a project. What occurred behind the scenes that suddenly inspired union guys to make videos shilling for this transmission project? Was there a project labor agreement? Did the union guys get some contract perk in exchange for their support? If not, they should. Other union guys have gotten these things in the past in exchange for their advocacy for a transmission project. Don't sell yourself short, union guys. You can make AEP pay dearly for your support.

Not that it does much good either. Because a short-term job for a union guy also isn't a need to build a transmission project. Are we supposed to build things we don't need just to create jobs? I admire people who work hard for a decent living, and I support union workers who band together to demand better working conditions from giant corporations. But this -- selling yourself out to support a giant corporation intent on destroying your neighbors and your community? Doesn't that go against everything you fight for on a daily basis?

And the sad part is that Transource will use one of a handful of specialized transmission construction contractors in the U.S. These construction companies have their own workers who will be imported to your community to fill the jobs that are created. Now maybe these workers are union, but does it provide local union guys with a job? Nope.

And one final word about all the "tax revenue" this project will supposedly create. Not that I believe your numbers at all, Transource, but who ultimately pays your taxes for you? I do. Every electric ratepayer who will get a bill for the cost of this project pays a share of any local "taxes" you pay. So it's not like you're actually paying the counties anything, you're merely proposing to redistribute the wealth of others.

Maybe this kind of idiocy works on other communities, but it doesn't work on the Transource Independence Energy Connection.

Quit wasting my money, Transource!

4 Comments

NJ Judge Denies FirstEnergy Transmission Plan

3/9/2018

3 Comments

Congratulations, RAGE! You did it!

Residents Against Giant Electric (RAGE) formed several years ago to fight FirstEnergy affiliate Jersey Central Power & Light's insane plan to construct a 10-mile, 230kV transmission line in a narrow commuter railroad right of way abutting dense residential development in Monmouth County. As the judge recognized in her decision handed down yesterday, "RAGE took up the predominant oar in mounting the opposition to the MCRP, understandably, in light of the fact that the Project is in the back yards of its members." This victory is yours, RAGErs! The citizens group was incredibly well-organized and managed and its members worked incredibly hard toward denial. The effort put forth was nothing less than stellar, but effort alone cannot always guarantee victory. RAGE also worked an incredible strategic game and left no stone unturned, no task undone, and no decision left to chance. They worked this case in an aggressive, take no prisoners fashion. They assured their own victory. Bravo, RAGE, well done!

JCP&L's response to having their ass handed to them whined:

"We strongly disagree that JCP&L failed to prove the need for the Monmouth County Reliability Project," the utility said. "The initial decision contradicts the findings made by the regional grid operator and industry experts."

Clearly, the judge did not feel that the regional grid operator and "industry experts" were credible. Is that going to be JCP&L's thing on exceptions to the BPU? That the judge who spent hours and hours evaluating testimony and exhibits failed to recognize the superiority of utility arguments? That the BPU should disregard her "in the trenches" view of the case and substitute their own judgment of whether or not JCP&L met their burden? That is truly unlikely. Judge Cookson was very thorough, carefully evaluated the evidence, and made a reasoned decision. JCP&L couldn't even point to an error she made, it simply whined that it didn't win.

PJM was not credible. RAGE presented evidence that JCP&L had begun working on this project, and its preferred route, months before PJM even found a "problem" for it to fix.

I FIND that the preponderance of credible evidence proves that JCP&L commenced studies to justify the MCRP as its preferred route months before any “problem” was even identified as needing a solution.

PJM and its utility members suffer from a serious case of chicken/egg. This isn't the first time a utility came up with a solution for a problem that PJM had not identified and then used PJM's planning process as a "vehicle" to advance a utility plan by finding a "problem" for it to fix.

Judge Cookson also recognized that failure to kowtow to PJM as an omnipotent grid planning oracle who must be obeyed isn't really a big deal at all.

During the hearings, PJM concurred that JCP&L will not suffer any financial penalties if the Board rejects the MCRP. Both PJM and JCP&L agree that if the MCRP is not approved, they will return to the planning stage and find another way to solve the P7 contingency.

Bravo! This is the first time a state has recognized that denial of a PJM transmission proposal won't make the lights go out. Such a simple thing, buried under mounds of rhetoric and projections of doom and gloom.

New Jersey can be a shining example in recognizing that states have the ultimate say in whether or not a RTO planned transmission project is constructed. Instead of cowering and simply accepting regional grid plans as beyond question, states can say "no." A regional grid authority was never intended to be the final arbiter of transmission plans. If it were, there would be no purpose to state transmission permitting authority. States need to stop acting like a rubber stamp and assert their authority under the law.

The judge also questioned the veracity of every RTO and utility's favorite word, "robust." Personally, I hate that word. It means nothing.

There were four alternative 230 kV lines into Red Bank on the narrowed list but apparently no technical studies were undertaken of them because they were considered by JCP&L to lack the appropriate level of “robustness.” Palermo could not find any definition for that term and was unfamiliar with its use generally in the transmission industry.

Let that term go back to the world of salad dressings.

Now let's talk about those "industry experts" JCP&L wants us to believe. Because I knew the outcome of this Order before I read it, I didn't have to skip to the ordering paragraphs first. I was able to start at the beginning and read through the synopsis of the evidence before getting to the judge's conclusions. There was some pretty ominous foreshadowing in the way the judge presented her statement of the evidence. And once I got to the findings, there were no surprises. As far as JCP&L's "expert," who found no effect on property values, the judge opined:

Applying these standards, I FIND that Dr. Moliver’s expert opinion is entitled to greater weight than that of McHale. I FIND that McHale’s credibility was undermined by his careless quotation of synopses of studies he never read. He utilized a general search engine that returned results for terms “effect of HVTL at 15 ft” and followed a link to a New Hampshire Siting Commission webpage, copied the summaries, and deleted the attribution footer from his reprint. As reluctant as I am to express this, in my opinion, such “scholarship” by a student would produce an “F” and subject one to claims of plagiarism. It is certainly not the work product of a professional entitled to much weight to count the number of supportive studies versus the number of unsupportive studies without regard for the study criteria and quality. The merits, depths, sampling size, and commonality must be taken into account before a study can be cited as persuasive to a novel setting. I also FIND that his opinion as an expert witness was blended with several lay perceptions that fell outside the scope of his presentation for the Company and were unverified.

The utilities need to quit using this guy. It sure appears that he put little effort into his testimony, but yet he most likely billed the utility thousands for his "work." Because utilities believe their expert's opinions are beyond question, apparently some of the "experts" believe likewise. JCP&L should ask for its money back. Of course, it's not really JCP&L's money... they paid this guy with funds they will recover from ratepayers.

While the judge did not make a finding on the EMF issue, I got the distinct impression that maybe she believed that the industry has influenced science and that "experts" like Dr. Bailey make a tidy living being utility "experts" and making the same denials over and over. Perhaps Bailey made a grave error by trying to make the opponent's witness look like a quack. The judge mentioned that she didn't find him "eccentric" at all. All those delicious ad hominem utility arguments tossed out to avoid any real debate of the EMF issue... wasted!

The best expert witness overall was clearly RAGE electrical engineer Jeffrey Palermo. It's obvious that he developed an early rapport with the judge that the other engineering witnesses just couldn't touch. The technical aspects of electric transmission are extremely difficult for laypeople. Utility witnesses are usually more about complicating things with unfamiliar words and technical terms in an effort to make the judge give up and simply just trust his opinion because they can't put everything together to devise their own. From reading this decision, I surmise that Palermo approached it differently and was able to explain the technicalities in a way the judge could understand and equip her to make an informed decision on the technical merits of "need." He also presented a workable alternative that could be much cheaper and less invasive to the community. And he clearly explained this alternative to the judge, who adopted it as a possible future solution. Well done!

JCP&L needs to take a look at its own failed regulatory strategy at this point. It didn't work on this judge. She saw right through it all.

The evaluation directed by JCP&L was both pre-emptive in the timeline of the “need” for the Project and created an unlevel playing field tipped in its obvious favor. This is not a close case of general public interest versus parochial interest, with a tie going to the public utility company. I CONCLUDE that JCP&L’s application for municipal waivers pursuant to N.J.S.A. 40:55D-19 must be denied because the Company has not supported its application by the preponderance of the relevant and admissible evidence. The MCRP is not a safe or reasonable response to the potential P7 violation.

Any transmission opposition group that seeks to have a transmission regulatory application denied has to show up and play ball. RAGE played hard, but more importantly it played smart. It gave the judge the tools to deny this application.

But the regulatory process isn't the only game transmission opponents need to play. Public opinion and politics also play a huge role in driving a denial. RAGE rocked this game as well. In her summary of the public hearings, the judge remarked:

The prepared summary of written statements indicates that eighty-three (83%) percent were opposed to the MCRP; and, seventeen (17%) percent in favor. Approximately twenty-five (25%) percent of the statements opposing the Project were form letters; and ninety-two (92%) percent of the statements in favor of the Project were form letters, of which eighty-eight (88%) percent were not from the impacted area.

And where did those 92% favorable form letters come from? The judge elaborated: "Those backing the MCRP primarily based that support on reliability and economic concerns, and were primarily from businesses not in the five impacted municipalities on a form letter prepared by the New Jersey Chamber of Commerce for its members."

The utility popularity contest was a flop in this instance. Regulatory public comment hearings are intended to give voice to the community. The utility's opportunity to make its opinions known comes during the hearing process. But yet utilities consistently attempt to intrude in the public's opportunity by coercing supportive statements from entities who care little about the project. It's strictly a numbers game to the utility -- how many supportive comments can they coerce, and how "important" are the supporters? RAGE completely drowned these shills out by showing up in record numbers and making honest, heartfelt, personal testimony opposing the project. Perhaps JCP&L had a hand in its own defeat here by enraging the community to counteract JCP&L's underhanded efforts to set up its numbers game. Utility efforts to coerce supportive comments from the community is a tactic that has backfired on more than one occasion and it needs to be jettisoned from the utility bag of tricks.

RAGE's victory should be celebrated and admired. They not only accomplished their goal, but they provided an example that will be studied over and over by transmission opponents on other projects (and dare I say utilities, if they ever pull their heads out of their own behinds long enough to recognize they have a serious problem with opposition groups).

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

Well done, RAGE! You changed the world!

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Propaganda and Puffery: Need for Cardinal Hickory Creek Evaporates

Utility Tries Insulting its Opposition

How Much Does Opposition Cost?

Great Moments in Wasteful Government Workshops

Whitewashing Greenwashers' Fence

Michael Skelly Aspires to be Meaner

U.S. EIA Publishes A Lie

Praying for Profits

Transource Economic Impact Study Flops

NJ Judge Denies FirstEnergy Transmission Plan

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