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Clean Line Wants Taxpayer Bailout for its Transmission Projects

6/30/2017

14 Comments

 
Building five ginormous transmission projects totaling thousands of miles of new merchant lines was a pipe dream.  Utility experts said it couldn't be done.  They were right, it can't.

Teetering on the brink of failure after spending more than $200M of investor cash on his impossible dream, Clean Line Energy Partners CEO Michael Skelly now suggests that the federal government bail out his investors.
The Trump administration could help by pushing for an infrastructure package that would see the government “buying down a portion of the capacity” on big transmission projects so they can enter construction more quickly, or perhaps through an investment tax credit, Skelly suggests.

“All the ideas come down to a temporary underwriting of the project so you can get these things over the top, or some sort of tax mechanism.”
Skelly has finally given voice to his frustration in an interview with Recharge News.
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Skelly suggests that the federal government should buy capacity on his transmission project in order to get it over some imaginary hump that will allow him to start construction.  The federal government isn't in the business of buying unnecessary transmission capacity in order to prop up commercial projects that cannot stand on their own two feet.  While federal power marketers do occasionally purchase needed transmission capacity, they are not forced to do so merely to support the building of bridges to nowhere.  And if the federal government legislated the purchase of transmission capacity by its federal power marketers, it would be creating captive customers to shoulder the risk of this speculative transmission idea that cannot get off the ground on its own merits.  As a merchant transmission project, Clean Line has pledged to the Federal Energy Regulatory Commission that its investors will shoulder all the risk for its projects and that it does not have a captive ratepayer stream of funding.  Merchant projects succeed or fail based on their economics.  If a merchant project is useful, customers will voluntarily purchase its capacity, and the project will come to fruition.  If there are no customers, a merchant project cannot succeed.  Suggesting that the federal government pour taxpayer money into Skelly's projects would create an artificial "need" and economic basis for the project.  Participation by a government customer would not be voluntary.  That's not how merchant transmission works.
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Clean Line has no customers.  Despite Skelly's claim:
Plains & Eastern is “pretty much fully developed at this point”, Skelly says. “We’re now in the commercialisation phase, matching chippers – that is wind developers – with utilities in the southeast.”
He turns around in his next breath and suggests that the federal government be forced into being a customer through legislation or executive mandate.  Obviously, Skelly's efforts to match his chippers with customers isn't working.  It's been 18 months since the U.S. DOE got involved in his project in an attempt to usurp state authority and claim federal eminent domain authority to site the Plains & Eastern Clean Line, and Skelly still doesn't have a customer.  When the DOE agreed to participate in the project in March, 2016, Skelly claimed that he would have his customer agreements sewn up in a matter of weeks, but that has not panned out.

Skelly's other taxpayer bailout idea is federal investment tax credits.  This would give a direct tax credit to project investors, which they could use as cash to pay down their own corporate tax debt.  Let's see... ultra rich 1% Democrats who invested in a renewable energy scheme supported by a Democratic White House want the current Congress to bail them out with tax credits.
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A tax credit is taxpayer-funded cash for its owner.  By eliminating its own corporate tax debt, the investor would have more cash to invest in Clean Line Energy Partners.  Essentially, it's free government money for Clean Line that the investors wouldn't spend otherwise.  It's a way to prop up Clean Line's failing business model with taxpayer funds.  Clean Line's investors pay less taxes?  You pay more to make up the difference.

Where does the federal government get its money?   Out of your pocket.  Every.last.dollar.  There's no such thing as "free" government money.

So Clean Line has been posturing to the Trump Administration for months now, suggesting it is a prime candidate for the President's great, great Infrastructure Plan.  Trump has posited that private investors can belly up to the bar and fund billions in new infrastructure projects in exchange for ownership that creates a revenue stream, or tax credits that allow publicly-owned projects to be built.
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Except Clean Line isn't a publicly-owned project.  Clean Line's rich investors will own the project and the revenue stream, and charge the public a fee to use it.  There's no benefit for the public.  It's nothing short of taxpayer-financed private industry, and it cannot be included in an infrastructure package designed to get infrastructure like roads and public works projects built.  And furthermore, Skelly wants the federal government to be the "private sector investor" who gets his project over the finish line!  I'm pretty certain that's not what Trump had in mind.

Once certain that his transmission projects would be marketable under a Democratic administration, Skelly now fantasizes about a Republican-led taxpayer bailout to prop up his failing company.
“It’s still a bit early to tell exactly what the administration will do to stimulate more infrastructure investment,” Skelly says. “But in terms of the things they’re talking about, with private-sector-led projects, it forms a pretty nice Venn diagram with transmission.”
What kind of a guy uses the words "Venn diagram" to prop up his unsuccessful ideas in the media?
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Is Skelly's dream even logical, or is the stress getting to him?  Why would the federal government fund an infrastructure project that's supposed to be "led by private investors?"

The idea that our current Congress will pour buckets of taxpayer dollars into a wind energy transmission project that has no customers in order to bail it out of its current financial crisis is insane.
14 Comments

Missouri Supreme Court Dashes Hope for Grain Belt Express

6/29/2017

1 Comment

 
The Missouri Landowners Alliance and Block Grain Belt Express are optimistic that the Public Service Commission must again deny Grain Belt’s application, in the wake of a Missouri Supreme Court decision yesterday. The Court denied a petition to review an opinion of the Western District Court of Appeals regarding county commission assent for new transmission lines to cross local roadways. The case, Neighbors United Against Ameren’s Power Line vs. Public Service Commission of Missouri and Ameren Transmission Company of Illinois, earlier this year vacated a conditional permit for Ameren’s Mark Twain Transmission Project that was issued by the PSC before Ameren had received the assent of counties crossed by the project.

Earlier this month, Grain Belt Express, and other supportive parties, had urged the PSC to issue a decision on its transmission line application after the Commission discussed putting the case on hold until the Ameren matter was cleared up by the courts. Grain Belt Express, like Ameren, has not produced county assents from the eight Missouri counties it proposed to cross. The Court of Appeals made it clear that county assent must be submitted to the PSC before a certificate of convenience and necessity may be issued. Without Supreme Court review, the Appeals Court decision is final.

“We celebrate with Neighbors United for their incredible victory for property rights. We would also like to thank all the County Commissioners who have stood with us in our battle for our way of life and against eminent domain abuse,” commented Jennifer Gatrel, spokesperson for Block Grain Belt Express-Missouri.


The citizens’ groups hope the PSC will now quickly proceed to dispose of the Grain Belt Express matter, allowing the people to resume their work and plans for the future, albeit a little lighter in the pockets than before the threat of Grain Belt Express reared its head. The three landowner’s organizations say they have spent approximately $350,000 altogether defending private property rights from the speculative transmission project.

Russ Pisciotta, President of Block Grain Belt Express-Missouri said, “The people impacted by the proposed line have repeatedly spoken out loudly and clearly against the ill-conceived, unnecessary interstate transmission line and now we are watching democracy in action and the system is working.”

Grain Belt Express had initially obtained assents from all eight counties before notifying landowners about its project, however, Caldwell County’s assent was later overturned in court because it violated the sunshine law. Five of the eight counties have also since rescinded their assents, and county commissions have remained steadfastly on the side of local property owners.


“I am very glad that the Missouri Supreme Court has upheld the Appeals Court Decision. This decision gives the County Commissions in our State the right to guard our communities and way of life,” said Wiley Hibbard, Ralls County Presiding Commissioner.
1 Comment

Missouri Sticks a Fork in Grain Belt Express

6/28/2017

6 Comments

 
Yesterday, the Missouri Supreme Court denied a petition to hear Neighbors United Against Ameren’s Power Line vs. Public Service Commission of Missouri and Ameren Transmission Company of Illinois.  The opinion of the Western District Court of Appeals is now final.
Grain Belt's last great hope in Missouri is dashed.

The company has been trying to convince the MO PSC that the Ameren decision wasn't final or binding while trying to extract a favorable decision to issue a permit without county assent.  Now, that just can't happen.

The controversy:  Missouri law requires a transmission company proposing a new line to acquire the assent of each county commission to cross county roads, and to submit those assents to the PSC before a permit may be issued.  That's the law.  In the case of Ameren's Mark Twain Transmission Project, the company had failed to acquire and submit the required county assents.  But the PSC issued a conditional permit that allowed the company to submit the assents later, before it began construction.  Transmission opposition group Neighbors United challenged the timing of the assents under Missouri law, contending that the assents must be obtained before the PSC can issue a permit.  The Western District Missouri Court of Appeals agreed with Neighbors United, and vacated the permit issued by the PSC.  The PSC and Ameren petitioned the Missouri Supreme Court to hear the case, and yesterday the Supreme Court declined to hear the case.  The opinion of the Western District Court is final.

Grain Belt Express finds itself in the same boat as Ameren.  It does not have all county assents needed for a permit.  Grain Belt Express first suggested that the PSC issue it a conditional permit, just like Ameren's, and it would acquire the assents before construction.  The PSC did not take the suggestion, and put the case on hold pending resolution of the Ameren matter in court.  GBE has also taken the position that its project is somehow different than Ameren's and that it does not need county assent.  It has been met with stony silence from the Commission.  The same arguments were made to the Missouri Supreme Court in the Ameren petition, and the Court didn't take the bait, so obviously those arguments aren't valid.

So, the MO PSC doesn't have a lot of options on Grain Belt Express.  It could issue a conditional permit based on GBE's faulty legal arguments, only to have that permit vacated in another expensive and time consuming court battle, or it could give Grain Belt Express a period of time to produce the county assents, and if they can't, dismiss the application.  Or it could yank off the bandaid and deny or dismiss the application right now.  None of these options are any good for Grain Belt Express. 

It is highly unlikely that GBE can obtain needed county assents, even if given eternity to perform the task.  The battle lines have been drawn and the majority of the county commissions have taken an entrenched position firmly behind their constituents.  Unless the constituents change their minds, the commissions aren't budging.

It's hopeless.

Maybe GBE wishes it had treated affected landowners with more respect.  Maybe GBE wishes it had given a little more deference to the county commissions.  But it was blinded by its own sheer arrogance that the people and local governments of Missouri didn't matter and that GBE could simply use state law and political clout to run right over Missourians. 

Alea iacta est... the die has been cast.
6 Comments

Columbia Missouri Should be Renamed NIMBY City

6/13/2017

3 Comments

 
When the irony is so thick you can cut it with a knife...

The City of Columbia, Missouri, made a big announcement earlier this month that it has reached an agreement to purchase wind energy from Kansas, but that the agreement was contingent upon the Missouri Public Service Commission approving a new transmission line cutting clear across the state.
The Columbia City Council approved an agreement with Missouri Joint Municipal Electric Utility Commission to purchase wind energy from Kansas-based Iron Star Wind, LLC during its Monday meeting, but the means of receiving the energy — a transmission line that still needs to be constructed — needs the OK from the Public Service Commission.

The Grain Belt Express project is a 780-mile transmission line that will start in southwestern Kansas and cut through Missouri and Illinois, providing energy to those states and Indiana. The direct-current line will go to Hannibal, where a substation will convert the direct current to alternating current, the type of current used by Columbia’s electric system, said John Conway, chairman of the Water and Light board.

The Grain Belt Express is asking the PSC for eminent domain authority to condemn and take land from resistant landowners in order to build its project.  The proposed route of the project travels through private property, and affected landowners say the lines run too close to homes and schools, and many fear adverse health effects from the electric lines overhead.

The City of Columbia supports the building of Grain Belt Express on rural properties outside of its own borders.

However, the City of Columbia has spent years opposing a new transmission line in its own city because, "the lines ran too close to homes and schools, and many feared adverse health effects from the electric lines overhead."

So, when a transmission project Columbia thinks it needs to fulfill its environmental goals is in someone else's backyard, it's okay to run it close to homes and schools, but don't try that in Columbia's own backyard.  In Columbia, a transmission line is unacceptable.  NIMBY = Not in my backyard.  Don't build a transmission line in Columbia's backyard, build it in someone else's backyard.

Hypocrites.

If Columbians don't want a new transmission line in their backyard, neither does any other Missourian.  You're really not that special, Columbia.  I think I shall rename you NIMBY City.

3 Comments

Trump's Infrastructure Plan:  Maybe Not What Clean Line Bargained For

5/24/2017

3 Comments

 
Who hasn't laughed over Michael Skelly's recent news show commentator appearances where he's tried to spin his projects as part of Trump's great (really great, believe me, the greatest of all time, it will be great) infrastructure plan?

Well, laugh some more, little Schadenfreuders,* because not only does Trump's plan not include a project list, it actively neuters Section 1222 of the Energy Policy Act.  For years, Clean Line has used Section 1222 as its trump card (heh, the jokes just won't stop here) to threaten states with losing jurisdiction over its projects if they fail to approve them.  Clean Line even went to far as to go all the way with the DOE on its Plains & Eastern project, spending millions of dollars to secure the "participation" of one of DOE's federal power marketers in that project, with the idea that would allow federal eminent domain authority where Arkansas failed to grant it.

Whoops.  Whoops.  Whoopsie!

Trump's budget includes a plan to sell the transmission assets of three of DOE's federal power marketers, the Bonneville Power Administration, the Western Area Power Administration, and, yes, the Southwestern Power Administration (SWPA). 
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SWPA is the federal power marketer that is supposed to "participate" in the Plains & Eastern project, and use its federal eminent domain authority to condemn and take property in Arkansas for transmission right of way.  In order to do that, SWPA must "own" the right of way and the project assets in Arkansas.

Except Trump wants to sell off all SWPA's transmission assets to private industry.  Setting aside the fact that Clean Line doesn't have the assets to buy its own project back from the government, once they are no longer owned by SWPA, there is no federal condemnation authority!

Section 1222 authorizes:
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...
Without WAPA and SWPA owning transmission facilities, any eminent domain authority the DOE currently thinks Section 1222 authorizes collapses.  Once PMA transmission assets are no longer held by the federal government, federal eminent domain authority ceases.

Is that what you thought being on some fake infrastructure list was going to buy you, Michael Skelly?  Seems to me that Trump's infrastructure plan only further complicates  Plains & Eastern.  Who would want to sign a contract to purchase capacity on a non-existent transmission project that is in danger of being sold to the highest bidder?  Trump's plan to sell PMA transmission assets makes Plains & Eastern more risky and uncertain than ever!

But, the idea to sell PMA transmission is unlikely to happen.  However, it could, hypothetically speaking.  The uncertainty is likely to stall PMA transmission plans for the foreseeable future.  It's not like the idea to divest PMA assets is new.  It's been floated several times in the past and been defeated.  Already, legislators and users of PMA transmission are up in arms about the proposal, and for good reason.  It's a really stupid idea.

But it's Trump's really great idea.  And it's going to cripple any PMA transmission projects for now.

I hope Clean Line didn't actually think getting on a list was going to solve its problems, or else someone is going to be crying himself to sleep tonight.  Boo.  Flipping.  Hoo.

Ding-Dong!  Karma calling!
*Making up new words is really great, believe me!
3 Comments

Iowa Law Prohibits Eminent Domain for Overhead Merchant Transmission Lines

5/19/2017

8 Comments

 
Third time's the charm for Iowans battling the Rock Island Clean Line merchant transmission project.  The Preservation of Rural Iowa Alliance has been working with legislators for the past three years to put meaningful legislation in place that would release them from the threat of eminent domain taking of their property by an overhead merchant transmission project.

PRIA recently announced:
Today is a day to celebrate!! It is a historic day for property rights!

Governor Branstad signed a bill into law forbidding merchant high voltage transmission lines such as RICL from having condemnation power to take private property by eminent domain.  Click here to read Senate File 516:  an Act relating to state and local finances by making appropriations providing for legal and regulatory responsibilities, concerning taxation, and providing for other properly related matters, and including effective date and retroactive applicability provisions.  This bill passed the Iowa House on April 21, 55-39 and the Iowa Senate on April 21, 27-13.  Read the lanquage related to merchant transmission lines beginning on page 18 of the bill.
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This means that even if RICL decides to try and come back into Iowa they CANNOT take your property by use of eminent domain.  This is a huge win.

A very dedicated and amazing board of directors donated their time, energy and talents to continue this mission for nearly 4 years.
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Many people across Iowa and outside the state spent endless volunteer hours and contributed money to assist PRIA legislators in making this possible.
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We need to also remember the leaders in private property rights in other states who provided leadership and guidance as they continue their fight!
The legislation prevents the use of eminent domain for overhead merchant transmission lines in the state of Iowa.  If Clean Line wants to construct its private purpose transmission line across the state, it's going to have to purchase easements in a free market, where the true cost of hosting a ginormous transmission line for the use of other states will be realized.

Third time was not the charm for RICL though.  The company has tried multiple times to get the Iowa Utilities Board to grant it public utility status and eminent domain authority ahead of any actual application for the project.  The IUB stood firm, however, and refused to allow a birfucation of its transmission application process that would coerce landowners to grant easements before the project application was even filed.  RICL tried to do this because filing requirements in Iowa require the company to produce a packet of information at the time of filing for each property it may take via eminent domain.  RICL complained that was too expensive, and too difficult, and wanted eminent domain authority to wield against landowners so that they would grant easements before application, saving RICL the trouble of creating the information packet for the majority of the properties.

Iowans refused to make it that easy for RICL.  They did something amazing instead... they stood together and refused to negotiate easements with RICL.  To stand together against a company waving their checkbook around is something that doesn't happen every time.  Iowans demonstrated the power of community by sticking together.  And they demonstrated backbone by continuing their fight, both at the IUB and in the legislature.  RICL was never about providing electricity to Iowa.  It was a one-way highway to ship electricity out of state for private profit.  That's not something that should be granted eminent domain authority.

And this is precisely the argument heard by the Illinois Supreme Court this week.  Why RICL continued trying to reverse the appeals court's decision to vacate their permit granted by the Illinois Commerce Commission, even after they were shut out of Iowa where their project was planned to begin, is anyone's guess.  Pretty pointless, but so is everything Clean Line does anymore.

A while ago, I compared Clean Line's permitting debacle to a game of whack-a-mole.  Every time the company wacked a mole and received a permit, more moles popped up as impediments to its projects.  And everyone knows how a game of whack-a-mole speeds up at the end, where it's impossible to whack all the moles that pop up, and then you lose.  Clean Line's whack-a-mole game is running double time.  Clean Line was shut out of Iowa before Illinois even heard its appeal.  What now, Clean Line?  What now?  RICL needs to be re-routed to another state, or abandoned altogether.  The project is dead.  Please just admit that.

Congratulations to PRIA and the Iowans who came together and fought so hard to protect their communities from out-of-state profiteers!  They are an example to emulate in other transmission battles.
8 Comments

A Good Day at the Illinois Supreme Court

5/18/2017

5 Comments

 
Landowner opponents of the Rock Island Clean Line transmission project hoped that the Supreme Court oral argument yesterday would be the last they will see of Clean Line Energy Partners.  They could be right.

Clean Line arrived overly confident, conflating the Court's desire to hear the case with a desire to reverse the decision of the Third District Appellate Court.
Hans Detweiler, vice president of Clean Line Energy Partners, Rock Island's Houston-based owner, said he's "encouraged" that Illinois' high court will review the case and hopes it "will recognize that privately funded infrastructure projects" like Rock Island "serve a public purpose."
But softball questions and encouraging smiles were not to be had from the Supreme Court Justices yesterday.  The Justices asked a plethora of questions regarding how RICL could legally be for "public use."

In response they got a whole bunch of complicated explanations on physics, Open Access Transmission Tariffs, and the idea that FERC's rules on a non-discriminatory auction process satisfied Illinois law regarding a utility's non-discriminatory service to the public.  It's quite unfortunate for RICL that they decided the ICC's attorney should go first with his argument that the ICC is entitled to deference in how it interpreted Illinois law.  The Justices didn't seem too interested in that, instead asking Matthew Harvey questions about how RICL could legally be a public utility.  Poor Mr. Harvey... his answers did not satisfy RICL's bevy of attorneys in the first few rows and drew skeptical faces and negative headshakes from them.  I was afraid that if Owen McBride's eyebrows knitted themselves any closer together whether he'd go cross-eyed.  Despite this superior attitude from RICL, I can't say RICL's attorney fared any better before the judges than Mr. Harvey.  RICL's attorney met the justices' questions with complicated circular answers and lots of smoke and mirrors that failed to shed any light on the issue.

When asked by a Justice if RICL's desire to be a public utility was for the sole purpose of acquiring eminent domain authority, RICL's counsel chose to deny it and blame the ICC for telling them they had to be a public utility.  Really, now?  I'm thinking that a straight up admission of how hard it is to build transmission without eminent domain authority would have served them much better than a ridiculous story nobody believed.

The appellees lead off with a strong argument defining "public use" that managed to answer all the Justices' questions that had remained basically unanswered after the appellants had their say.  Matthew Price, representing Com Ed, was positively brilliant compared to the bombastic, uninspired arguments of the ICC and RICL.  He explained public use so simply that it could be understood by anyone.  Public use is a utility's obligation to serve all who want service.  A public utility doesn't get to choose which customers it will serve in order to maximize its profit.  RICL will pick and choose its customers in a way that maximizes its profits.  A public utility must serve everyone, not just allow them to bid for service, or use service available when no one else is using it.

Mr. Price made it clear as a bell.  And the Justices pretty much stopped asking the questions about public use, so I guess their questions were answered by Mr. Price.  It's pretty clear to me that the merchant transmission business model doesn't comport with Illinois law.  Price said something about a FERC-land determination of non-discrimination does not satisfy a determination in the Land of Lincoln.  Right... because FERC is only looking at whether the auction process is fair.  It does not concern itself with whether the merchant transmission company is discriminating against members of the public by only providing service to select customers.  Just because FERC approves it does not mean it comports with Illinois law.

Mr. Price brought up the issue of RICL's refusal to expand capacity on its line if it gets more requests for service than it can provide.  RICL claims it has to stick with the original plan because that's the project in its application.  Maybe it could build another line if it had multiple requests, but why bother with that if it can increase its profits by limiting available capacity? 

Price brought up the idea that RICL could pro-rate its available capacity at the auction, with each bidder receiving a share, instead of trying to maximize its profits by selling only to the highest bidders.  And then the most humorous thing happened... in rebuttal, RICL's counsel decided it could pro-rate its capacity to auction bidders.  I've never heard anything about this from RICL before, and I'm pretty sure it wasn't in their FERC application for negotiated rate authority.  Nor was it in the Order of the ICC granting the CPCN.  So now the Court is supposed to believe RICL has fundamentally altered its auction process on a whim?  Way to admit you're wrong, RICL!

The ILA presented a short, cogent argument about how eminent domain is basically procedural once a CPCN is issued.  And got snotty looks and smirks from the RICL attorneys for their trouble, along with an arrogant rebuttal that attempted to minimize and disparage landowner concerns.  RICL showed the Court that it doesn't give any consideration whatsoever to the landowners it wants to get into perpetual easement partnerships with.

So, now we wait for the Court to issue its opinion.  Some people say that you can tell which way a court is leaning by the questions its judges ask during oral arguments.  Hans Detweiler better not count his chickens before they hatch.  He's no constitutional scholar.  Commerce Clause.  Heh.
5 Comments

Bending Physics to Make Money

5/14/2017

1 Comment

 
Is there no limit to the propaganda businessmen will spew in order to profit?

Now we've got Anbaric's Ed Krapels bending physics in order to pimp merchant transmission to... who exactly?  Who is supposed to read this krap and give Ed a bunch of money?

I recently stumbled across this:

Make America (Electrically) Great Again: An Electric Infrastructure Plan For The Trump Team

Because Trump is so inclined to take his "plans" from The Huffington Post.  Right.

This krappy opinion piece is so full of rhetorical buzzwords that a friend suggested we make a drinking game out of it, and other media in the same vein.  Balkanized?  Take a shot!  Green?  Take a shot!  Resilient?  Take a shot!  Modernize?  Take a shot!  Infrastructure?  Take a shot!

Drunk on the floor.  All.The.Time.

As if glittering generalities are the basis for planning and building the greatest machine of modern times -- the electric transmission grid. 

First of all, we need to recognize where krap like this comes from... it comes from the corporations and people who stand to make a profit from grid construction.  It comes from environmental group lawyers who have no electrical engineering experience.  And the worst part?  These people know better!  They know that the grid is planned and operated by federally monitored regional transmission and reliability organizations.  Our grid is constantly expanded and modernized by experienced engineers with an eye toward reliability and price.  It's not about favoring one resource over the other, or putting money in investor pockets.  So when you read krappy articles claiming our grid is costly, rickety, and unreliable, they're just not true.  We don't look to profit-seeking, or politically-motivated entities to plan a grid that puts the most money in someone's pockets, and we shouldn't start now.  Creating a grid based on the need to meet political goals, or put money in corporate pockets, is creating a grid that's not efficient, affordable, or reliable.

Another krappy opinion piece claims that big companies are simply greenwashing when they purchase renewable energy credits and then claim to be environmentally responsible.  I agree.  But I do not agree with the suggested krappy solution of building new transmission lines so that the company can actually use the electricity associated with the RECs it purchases, as if electricity is nothing more than water in a pipe that can be directed to flow to a certain customer.  The problem is the idea of RECs in the first place, not a lack of transmission.  A REC represents the social and environmental attributes of electricity generated.  A company can buy a REC, but that REC can be physically separated from the actual electricity produced.  A generator may sell the actual electricity to another user, and then market the REC to someone else.  That creates two revenue streams for the same electron.   Essentially, it is selling something twice to two different buyers.  It's a swindle of the highest order.

Options to solve that?
1.  Stop unbundling RECs from energy.
2.  Require companies to purchase transmission on the existing system to use the actual energy they purchase.  There ain't no such thing as "cheap" environmental footprint, unless the public believes the greenwashing.

And then there's the unnecessary -- building new private transmission lines just for companies who want to purchase unbundled RECs from far away places.  If we start down that path, with each company supporting its own private transmission line, we're soon going to find wires everywhere.  The more wires and connections added, the more complicated and unreliable the grid becomes.  There's also the problem of clearing a path for private transmission lines on private property owned by others.  That's not a public use.  That's not a public utility.  Eminent domain cannot be used for such an endeavor.

No matter how many buzzwords these grid profiteers use, their ultimate goal is clear:  to enable private companies to take from the public in order to increase their profits.
Congress should create legislative authority for siting major electricity transmission lines that follows the authority it has already granted to siting major gas lines.
In other words, let's let the federal government site and permit electric transmission to create a politically favored electric grid that everyone pays for.  Fly over states and politically disconnected areas will be forced to sacrifice for the needs of the economically advantaged and politically connected.  It's just not true that everyone benefits from every transmission line dreamed up to line corporate profits.  New transmission levelizes prices between generation regions and consumption regions.  While it may lower prices in consumption regions, it raises prices in formerly constrained generation regions, and the folks in the middle get nothing.  Zilch.  Zero.  That problem cannot be solved by federal authority, the only thing federal authority may do is exacerbate it.  Our current system that leaves siting and permitting authority to states is not broken. States do a much better job recognizing local priorities and concerns, and determining benefit to the state.  Any delays come from badly conceived transmission ideas that do not provide benefits to localities, or seek to use the eminent domain power of the state for private transmission projects that do not provide public benefit. 

Here's how to fix a long state permitting process:  Stop trying to use eminent domain to force private infrastructure!  I'm pretty sure Mr. Krapels is well aware that transmission that's sited underwater and underground on land of willing hosts can sail through the transmission permitting process in record time.  Mr. Krapels also probably has customers lined up for the projects he undertakes, and doesn't rely on "build it and they will come" as a business plan.

Stop trying to "fix" what's not broken just to make private utility projects cheaper or faster.  Instead, design better transmission projects with an eye toward making them acceptable to the communities they propose to impact.  The grid operators and regulators we already have do a fine job of vetting transmission proposals and only ordering the building of what's actually needed.  We don't need a bunch of profiteers creating their own private grid through our backyards.

The problem isn't us, it's you.  All the glittering generalities in the world just can't fix that.
1 Comment

Clean Line Energy Partners is not a Public Utility

4/15/2017

0 Comments

 
The best part about traveling is coming home and catching up on your reading.  Especially when it's a lot of reading of legal briefs on transmission line cases.  Reading a whole bunch of briefs on different Clean Line projects in different states, and in different stages of the legal process, made one thing abundantly clear.  Clean Line Energy Partners is not a public utility.  None of its projects are public utilities.  Nor can they ever be public utilities.

How else to explain finding the exact same arguments before both the Illinois Supreme Court, and the Missouri Public Service Commission?  Two different projects, two very different processes.

The Illinois Farm Bureau's brief at the Illinois Supreme Court cuts right to the chase:
"What Rock Island is asking the Commission to do is grant it a CPCN so it looks like a 'public utility' for purposes of condemning private property to build its line, while at the same time it plans to offer only a token percentage of that line's capacity for 'public use'. The transmission service that Rock Island plans to provide on its transmission line does not meet the public use standard under Section 3-105 of the PUA." (R.V27, C6629).
These are the words of the ICC Staff at the close of a five day evidentiary hearing at the
Commission on Rock Island's Verified Petition. Rock Island is not a public utility, and it does not commit to serve the public. Despite the express language of the PUA, Rock Island, as a non-utility startup company, sought a CPCN from the Commission for which it is not statutorily eligible. Rock Island's public policy arguments regarding an apparent desire for an expansion to the statutory definition of''public utility" should have been, and still can be, made to the legislature.
Clean Line is trying to shoehorn a square peg into a round hole.  It only wants to be a "public utility" so that it may be granted eminent domain authority.

The same basic argument shows up in the Initial Brief of Show Me Concerned Landowners before the Missouri Public Service Commission:

Grain Belt Express is a merchant transmission company. It is proposing to build a participant funded transmission line. As such, neither the applicant nor the proposed project embody the business characteristics the Legislature authorized this Commission to regulate.

The Court recognized that when a private business enters into special contracts upon its own terms and not at a regular rate, there is not only no need for the Commission to regulate, to do so would be a violation of the constitution. The purpose of regulation is to bring the power of government to bear on a common carrier service. Private initiatives not devoted to the public use of all do not justify the comprehensive regulations dictated by the Public Service Commission Law. Stated another way, when facilities are not devoted to a public use, there is no need for the Commission. That is the situation before the Commission in this Grain Belt Express case.

Two different cases.  Two different states.  Same basic precedent.

But wait... let's add a third state!  Because that's basically what Arkansas said when presented with Clean Line's Plains & Eastern project back in 2011.
The issues presented by this case are twofold: (1) whether Clean Line fits the statutory definition of an Arkansas “public utility” and is entitled to a CCN to provide public utility service in the state; and (2) if so, whether Clean Line is entitled to exemption from certain public utility statutes. For the reasons stated more fully below, the Commission finds that Clean Line does not meet the statutory definition of a public utility at this time.  The Commission’s ruling on the first issue moots the necessityof ruling on the second.
The Commission is a creature of the General Assembly, and it performs a legislative function in regulating all public utilities. Bryant u, Arkansas Pub. Sew. Comm‘n, 46 Ark. App. 88,877 S.W.2d 594 (1994); Sw. Bell Tel. Co. v. Ark. Pub. Serv. Comm’n, 267 Ark. 550, 593 S.W.2d 434 (1980).  The Commission’s statutory mandate extends to and includes “all matters pertaining to the regulation and operation of all ... electric lighting companies and other companies furnishing gas or electricity for light, heat, or power purposes.” Ark. Code Ann. 23-2-302.

The Commission’s decision in this case turns on the statutory definition of a “public utility” found in Ark. Code Ann,  23-1-101(9)(a) cited above. Although Clean Line’s presentation of its case was strong on policy considerations and certainly Clean Line worked hard to analogize its case to that of the SPP RTO, the Commission’s authority cannot exceed that which is delegated to it by the Arkansas General Assembly. The “public utility” definition requires “owning or operating in this state equipment or facilities for...transmitting...power to or for the public for compensation.” Ark. Code Ann. 23-1-101(9)(A).

The Parties’ legal filings and opening arguments at the December 7 hearing discussed to varying degrees what each of these key phrases means, but the Commission is not convinced the totality of the evidence satisfies this statutory threshold. Recognizing, as Clean Line pointed out, there is some circularity involved in the fact that Clean Line cannot own or operate regulated major utility facilities pursuant to Arkansas law in this state without first being declared a public utiliity, in isolation, this portion of the statute is not determinative of Clean Line’s utility status. However, read in tandem with the facts that the transmission of the power must also be “to or for the public for compensation’’ when Clean Line, to date, has no contracts for public utility service with any utility, including Arkansas utilities, and there also can be no transmission of power at this time, the Commission is not prepared to approve Clean Line’s CCN Application.
So Clean Line doesn't meet the definition of public utility in at least 3 states.  But nevertheless, Clean Line dolled itself up and presented as a public utility to numerous state regulatory agencies.  Even when a state is initially fooled by Clean Line's public utility costume, the courts have not been tricked.

I think we're on to something here...
If Clean Line Energy Partners is not a public utility, then the company can never use eminent domain to condemn land upon which to build its projects.  I think this is the simplicity we've all been searching for over the past five years to explain why CLEP is different from other transmission lines, and why it should never be granted eminent domain authority.

Sure, we've talked about the company being a private, for-profit enterprise, but so are other investor-owned utilities who build transmission.  We've talked about CLEP's failure to vet its plan at regional transmission organizations, but that in and of itself isn't necessary to build transmission.

There's absolutely nothing stopping CLEP from building its projects on voluntarily negotiated rights of way, or having voluntarily negotiated rights of way and committed customers in hand when applying for public utility status from any individual state regulatory authority.  Except CLEP can't do that.  CLEP won't do that.  CLEP has applied in various states to be granted public utility status with nothing but a business plan.  CLEP tells state regulatory commissions about its plans in the future tense.  Someday it will own utility property.  Someday it will have customers.  Someday it will negotiate rates with customers.  Someday it will get financing.  Someday it will hire employees with the expertise to build transmission lines.  Someday.  Someday.  Someday.  CLEP wants to be granted the rights of a public utility now without any of the responsibility that comes with it. 

CLEP needs the state regulatory process to grant it eminent domain authority to assemble rights of way.  But in order to be granted that authority, CLEP must be a public utility.  And it's not.
 CLEP is a merchant transmission company.  Its projects are extraneous transmission lines not needed for reliability, economic or public policy purposes.  The sole purpose of CLEP's projects are profit.  Merchant transmission projects aren't new.  There are several of them in existence.  However, those merchant transmission projects have customers.  They were proposed and built with certain customers in mind.  Clean Line is pure speculation... build it and they will come (well, maybe, but not so far).  Clean Line's business plan is unformed and unripe.  It doesn't work as proof of public utility status.

Clean Line's "merchant" business model does not comport with "public use" definitions under state law.  Negotiating rates for service with private parties does not make the service available to the public.  Neither does auctioning off small bits of service to the highest bidder at auction.  Merchant projects don't offer service to the public -- they offer service to private parties who can pay the most for service.

ComEd's brief before the Illinois Supreme Court describes how merchant projects like Clean Line fail the test of public use.
Rock Island’s plan offers the public the nondiscriminatory right to bid for transmission capacity. But it does not offer the public the nondiscriminatory right to use transmission capacity. Under well-settled authority dating back a century, Rock Island’s plan does not meet the “public use” requirement.

As a threshold matter, it is important to clarify what this means. As Rock Island’s witness makes clear in his testimony, the open season auction will be open to the public on non-discriminatory terms. In other words, any member of the public can bid. But there is a difference between being able to bid for a service through an auction and being able to actually use a service at a tariffed price. When Christie’s auctions a painting, any member of the public can bid on non-discriminatory terms; but only the winner takes the painting home.

The ICC points out that the open season will be “fair, transparent and non-discriminatory.” ICC Br. 25-26. ComEd agrees. But this simply means that the auction process will be fair, and that all bidders would have the same opportunity to bid. It does not mean that all members of the public can use the service on equal terms. Those who cannot pay the auction price are left with only the chance of receiving non-firm service and are expressly subordinated to anchor tenants and auction winners. Non-auction winners who do not, or who cannot use non-firm service, are left completely empty- handed.
A merchant transmission project with no customers does not meet the legal definition of public utility.

Show Me sums it all up in its brief:
Grain Belt Express is proposing a duplicate service to the existing, well-established transmission grid. It is seeking to provide discriminatory service to one particular customer to obtain this Commission’s approval. It is proposing as a merchant a service that is participant-funded. It wants to maintain that merchant status, free from the obligations imposed on an “electrical corporation” by the Missouri Public Service Commission Law. This unregulated utility will create many problems that the Missouri Public Service Commission Law was designed to thwart, such as destructive competition, damage to property from duplicative facilities, and the exercise of market power in a traditional monopoly service. Grain Belt is seeking the power of the state of Missouri granted by this CCN without any of the obligations imposed by the law. Show Me is concerned with one enterprise whose property is not devoted to the public service using the land (I think he meant to say "laws") of the state, particularly the eminent domain power of the state, for their own business interests. It is not just and it is not in the public interest of the state of Missouri.
Go away, Clean Line.  You're not a public utility.
0 Comments

Smells Like Broken Dreams and Bitter Lobbyist Tears

3/30/2017

6 Comments

 
I'm sure you know one... a member of the "Good Old Boys' Club."  I'm talking about a well-fed, middle-aged white guy who may actually use the phrase, "Do you know who I am?" on a regular basis.  He doesn't appear to be particularly bright or industrious, and has absolutely no self-awareness or empathy, but he's managed to claw his way into a position where he makes his living by being connected to other old white men and selling his influence to outsiders who want to make a buck.  What happens when that special, privileged world spits out its own?  Who doesn't love a little schadenfreude?

Remember the "Infrastructure List" that has been gushed over by members of the Good Old Boys' Club and their media lackeys for the past three months?  Turns out it's been kicked to the curb, along with the guys who prepared it, and a new crew of infrastructure critters has been let loose in the Washington Swamp.

No wonder Norman Anderson was having a public meltdown last month.  I think maybe he didn't appreciate being ignored by an administration he thought he had eating out of his hand.  Awww... life isn't fair, is it, Norman?  Let's sing together...
*sniff, sniff*  Could someone hand me a tissue?

The Charlotte Observer published an in-depth report covering the "Infrastructure List" and the shady way it was compiled and pushed by a group of guys who are now out of favor with the Trump administration.
When Donald Trump and Mike Pence met this month to discuss a promised $1 trillion infrastructure plan, the Cabinet Room was filled with half a dozen billionaire executives, from Tesla’s Elon Musk to Steve Roth, a New York developer and longtime friend to the president.

One person who wasn’t there? The man who worked for months to line up priority infrastructure projects for the Trump transition team.

Just a few weeks earlier, Dan Slane had been jetting around the country — on his own dime — to meet with governors, contractors, investors, labor union officials and others eager to influence Trump’s infrastructure plan. He developed a 50-project proposal filled with exactly the kind of “shovel-ready” investments the White House wanted – the kind that needed regulatory relief, not federal dollars.

But as Trump’s attention turns to infrastructure after suffering defeat on his first policy priority, the White House will not even acknowledge Slane, except to say he has “no official or unofficial role” in the administration. He says his infrastructure plan, and indeed his very connection to the president, has become the victim of a power struggle for control of this big-ticket infrastructure agenda between Peter Navarro, a Trump loyalist and economic populist who advised his campaign, and Gary Cohn, a former Goldman Sachs president who now runs the National Economic Council.
Who is Dan Slane?  A quick google search shows he's been working with Peter Navarro on a film called "Death by China."  Apparently these guys believe that trade with China is killing our economy.  Slane ought to know... apparently he moved his wood business to China to collect a 17% profit.  I guess that must have scarred his psyche (while fattening his bank account) so now Slane is anti-China.  Apparently the whole infrastructure thing stems from the fact that China has been investing in its infrastructure lately, and we gotta, you know, keep up with China.  But how does Dan Slane connect with Norman Anderson?  The Charlotte Observer reveals:
Anderson’s company had compiled a list of 100 top infrastructure projects with input from senior-level investors, engineers and developers. The list would have been offered to whichever presidential candidate had won in November, Anderson said.

A week after Trump’s unexpected win, Anderson found a white paper online that Navarro and now-Commerce Secretary Wilbur Ross had written for the Trump campaign. It proposed tax credits to fund infrastructure. He emailed Navarro, and offered some suggestions.

“Navarro asked Dan to talk to me the next day,” Anderson said.

Slane, who was working without a staff, asked Anderson to help him screen a list of projects Navarro wanted for the administration. Anderson in turn hired Boston Consulting Group to analyze how many direct and indirect jobs each project would create.
So, how did this list get presented to the media as a Trump administration list, and how did a project get on Slane/Anderson's list in the first place?  The Charlotte Observer explains how the Good Old Boys' Club gladhanding worked...
Playing the liaison

Leaders at the state and local level, and executives at the National Governors Association, thought they had been working with the White House, through Slane.

Paul Aucoin, executive director of the Southern Louisiana Port, said he assumed Slane was a shoo-in for a White House infrastructure job when he met him at Anderson’s offices in Washington in December.

Aucoin made the trip to DC to promote his port and try to secure federal assistance to dredge the mouth of the Mississippi River.

The meeting with Slane had been arranged for Aucoin by the public relations firm of Gary Meltz, a former aide to Democratic Rep. Eliot L. Engel of New York.

Slane introduced himself as a member of the Trump transition, and Aucoin made his pitch.

Slane promised to get the dredging project on the list he and Anderson were compiling for the transition.

“They were very receptive, they got it, they understood what I was saying, they asked all the right questions,” Aucoin said. “It wasn’t like I was talking to a wall. I was finally talking to some one who understood what I was trying to say.”

Later Slane would visit the port and meet with Louisiana Gov. John Bel Edwards. He reassured Edwards and Aucoin that congressional Republicans would pledge money to the project from the Harbor Maintenance Trust Fund. That promise that has yet to be fulfilled.

Aucoin said he’s since hired a lobbying firm in Washington that was working on getting him a meeting with Gribbin.

“It was a blow for us to lose Dan,” Aucoin said.
Let me get this straight... a PR firm with connections made introductions between an entity with a need for a project and some guys who presented themselves as part of Trump's team?

So when Clean Line's Mario Hurtado said:
"When the Trump campaign was looking at infrastructure, we thought it was a good thing to mention. We're just happy to be part of the conversation."
What he really meant was that Clean Line paid a PR firm to make the introductions between Clean Line, Slane, and Anderson, in order to "mention" putting the company's Plains & Eastern Clean Line project on the infrastructure list?  Mario actually did not bump into these guys in the grocery store.  :-(  It actually cost Clean Line money to buy their way onto the Slane/Anderson list.  Guess what, Clean Line?  Looks like you've maybe been taken, and you're really not on Trump's favored list after all.  Even the union's infrastructure wish list (where all three of CLEP's eastward bound projects showed up) was a Slane/Anderson product that Trump now seemingly wants nothing to do with.
Sean McGarvey, president of North America’s Building Trades Unions, said his organization consulted with Slane on his plan. His union delivered to the White House its own list of priority infrastructure projects in February, after meeting with Trump.

“The way Dan framed it was really good because Dan took projects that had all funding but lacked permitting or some who had permitting,” McGarvey said.

“He did a lot of thoughtful work on the initial ready-to-go, out-of-the gate stuff,” he said. “The projects that Dan was talking about really don’t require a new infrastructure bill. Those are ones that exist, that are both private and public, and have the three elements you need: the financing, the engineering, and permitting. And some of them will happen this year.”
Hey, Good Old Boys' Club, are you paying attention?  Pull up a desk and put on your listening ears.  You could learn something...

Clean Line projects don't have financing!
What they have is a plan to raise financing.  Clean Line's plan requires them to contract with future customers to create a revenue stream that Clean Line can use as evidence to secure financing.  Clean Line doesn't have customers.  Clean Line doesn't have a revenue stream that can support financing.  There is nothing a Trump administration (or the Good Old Boys' Club) can do to create captive customers for Clean Line's projects.

Clean Line doesn't have complete engineering!  What they have is a plan to complete engineering once permitting is complete.  Clean Line has no revenue.  None.  It's living high on investor development cash right now.  Engineering is a construction cost that happens after a project is fully permitted and financed.  There is nothing a Trump administration (or the Good Old Boys' Club) can do to finance final engineering for the Clean Line projects.  Federal money would invalidate the project's merchant transmission status with the Federal Energy Regulatory Commission that allows them to negotiate rates with willing customers (see financing, above).

Clean Line doesn't have permitting completed for any of its projects!  The Plains & Eastern project is the subject of a lawsuit in federal court where the U.S. DOE's preemption of state siting authority in Arkansas has been questioned.  The statute DOE used to run over Arkansas  plainly says it does not affect any requirement of state siting laws.  Although this case has yet to be decided by the court, it's not looking good for Clean Line.  Expect that Clean Line shall have to comply with Arkansas state siting laws for its project.  The Rock Island Clean Line project application for a permit has been withdrawn in Iowa.  Its permit in Illinois has been vacated by the Appellate Court.  It has no permits whatsoever right now.  The Grain Belt Express project's permit in Illinois is on appeal, and the project still needs a permit from the Missouri Public Service Commission.  A recent Missouri Court of Appeals decision prohibits the MO PSC from issuing a permit until Clean Line has the assent of each Missouri county it traverses.  GBE does not have all the county assents it needs and is unlikely to obtain them.  All of these permitting issues are STATE permitting issues.  There is nothing a Trump administration (or the Good Old Boys' Club) can do about state laws which govern state permitting, and if the administration tries to preempt state authority to site and permit electric transmission, it's going to have a hell of a fight on its hands, from the states and from the people.

None of the Clean Line projects are getting done this year.  They're not getting done.  Not now, not ever.  Take them off your list, assuming your list is supposed to be a real list, and not just some "pay to play" Good Old Boys' Club list of bridges to nowhere.

Cry me a river of bitter tears, fellas.  Karma's a real bitch.
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    About the Author

    Keryn Newman blogs here at StopPATH WV about energy issues, transmission policy, misguided regulation, our greedy energy companies and their corporate spin.
    In 2008, AEP & Allegheny Energy's PATH joint venture used their transmission line routing etch-a-sketch to draw a 765kV line across the street from her house. Oooops! And the rest is history.

    About
    StopPATH Blog

    StopPATH Blog began as a forum for information and opinion about the PATH transmission project.  The PATH project was abandoned in 2012, however, this blog was not.

    StopPATH Blog continues to bring you energy policy news and opinion from a consumer's point of view.  If it's sometimes snarky and oftentimes irreverent, just remember that the truth isn't pretty.  People come here because they want the truth, instead of the usual dreadful lies this industry continues to tell itself.  If you keep reading, I'll keep writing.


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