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More Missouri Municipality Misinformation

4/4/2020

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The Missouri Public Utility Alliance (MPUA) and the Kirkwood electric department don't know how government works.

MPUA's spokesman recently opined regarding a recent Missouri Supreme Court rejection of an appeal of the MO PSC's decision to issue a permit to Grain Belt Express.
This decision sends a strong signal to the state legislature that the project has the constitutional basis to proceed with a wind energy transmission line through Missouri,” according to Kincheloe.
And, according to Kirkwood's Petty:
“We would also hope that this helps convince legislators that we will prevail in the courts if they attempt to block the project. Clearly precedent is on our side on this one and this Supreme Court decision demonstrates it,” Petty said.
I'm going to guess these two guys failed basic government classes.  The legislative branch makes the laws.  The executive branch enforces the laws.  The judicial branch interprets the laws.
Separation of powers is a doctrine of constitutional law under which the three branches of government (executive, legislative, and judicial) are kept separate. This is also known as the system of checks and balances, because each branch is given certain powers so as to check and balance the other branches.
If the legislative branch makes a new law that clearly prohibits the use of eminent domain for merchant transmission projects, the judicial branch would interpret it in conjunction with other existing laws, and the executive branch would enforce it.  The courts do not make laws.  And the courts cannot prevent the legislators from making new laws.  These two yakkity-yaks are beyond confused.  They seem to think that the appeals court decision the Supreme Court refused to re-hear somehow prevents the making of new laws because making new laws would be "unconstitutional."

Let's stop and ponder this... the decision of the court is based on EXISTING law.  It's not based on hypotheticals of passing new laws.  When a court determines that an existing law does not do what the legislators want it to do, it is up to the legislators to make a new law.

And that's exactly what they plan to do as soon as the legislature goes back in session.
“Quite honestly, I’ve been focusing on keeping the power on in the wake of the coronavirus crisis,” said Petty. “I’m not sure where things are in the Senate. Hopefully, this Supreme Court ruling will be something they use as guidance.
Sure they will... guidance demonstrating the urgency for making new laws!

In the court decision, the standard of review was whether the PSC had the authority to approve the project under the existing statute.  The court found that it did.  The court also had to determine whether the PSC's action was reasonable; that is whether it was based on substantial evidence.  The court found that the PSC's decision was reasonable.  The court also found that GBE met the definitions of "electric corporation" and "public utility" under existing laws.  However, if the law changes, all that goes out the window.  If the law prohibits the PSC from issuing a permit to a certain entity (such as a merchant transmission project as defined by the law), then all those prior findings fail at their source... whether the PSC has the statutory authority to approve the project in the first place.  If the PSC has no authority to issue a permit, none of the rest of it matters.  There are no constitutional issues here.

Full steam ahead at the legislature!
Earlier this year, the Missouri House of Representatives passed by a 118-42 a bill sponsored by Rep. Jim Hansen, R-Frankfort. His bill will prohibit developers of the 4,000-megawatt high-level transmission project from forcing landowners to sell property.

“This bill protects the rights of landowners in Missouri,” Hansen has insisted in sponsoring the bill.

The Senate also is expected to support the bill along party lines. Petty has urged Kirkwood residents to contact legislators and express their concern over the statehouse blocking the new green energy source.
Looks like Missourians are in good shape at the legislature, once it's back in session.  If any residents of Kirkwood even bother to contact their legislators and plead their case to save a few cents on their electric bills, it is likely to fall on deaf ears.

This editorial masquerading as news is an untimely bit of propaganda based on a misreading of the law.  Legislators are not constrained in any way against the making of new laws.  Trying to convince them that they are is misinformation.

Be ready to go when the time is right, folks!  Defeat of GBE is still a very real possibility!
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Kansas Bill Requires KCC To Make New Considerations For Transmission Siting

2/27/2020

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Interesting news out of Kansas today.  A legislator has proposed, and the House passed, a bill requiring the Kansas Corporation Commission to consider asthetics, location, environment and population density when siting electric transmission lines.
The commission shall make its decision with respect to the necessity for and the   reasonableness of the location of the proposed electric transmission line or urban electric transmission line, taking into consideration: (1) The benefit to both consumers in Kansas and consumers outside the state and; (2) the economic development benefits in Kansas; and (3) the local aesthetics, location, environment and population density. The  commission shall issue or withhold the permit applied for and may condition such permit as the commission may deem just and reasonable and as may, in its judgment, best protect the rights of all  interested parties and those of the general public.
And what sparked this?  Evergy's placement of 105-ft. tall electric towers right in the front yards of a low-income Wichita neighborhood.  Read the article and see the pictures.  It's a horror show!  The giant metal poles set on huge concrete bases are literally right outside these people's homes.

Evergy must have thought it was better to beg forgiveness than to ask permission and has "apologized and donated $1.2 million to a community fund."  That's great, but those people STILL have these giant structures in their front yards that wreck their property values.  Apologies and donations to a community fund don't fix that.  Evergy should be forced to tear that crap down and re-route it underground along existing public rights of way.

And here's the real punch in the eye.

Property owners were paid several hundred dollars to a couple of thousand dollars by the utility company for easements.
That is simply outrageous! OUTRAGEOUS!
Rep. Gail Finney, D-Wichita, urged House colleagues to expand authority of the Kansas Corporation Commission to regulate placement of transmission lines in cities. It would require the KCC to take into account population density, location and aesthetics in siting decisions.

It wouldn’t alter reality faced by residents of about 75 homes in close proximity to the utility towers in Wichita, but it would create a form of due process for property owners by requiring a siting permit.

“It’s not going to do anything to help these people right now,” Finney said. “What I’m doing is trying to help people in the future. It could happen to any one of you.”

It also won't alter the reality faced by Kansans in rural areas, whose own homes and businesses are devalued by new transmission lines used to ship electricity produced in Kansas (or maybe Oklahoma, or Texas) out of state.

While the sentiment here is appreciated, it's sad that it took the trashing of a neighborhood in Wichita to get elected representatives to open their eyes to the reality of transmission siting.  A much better solution would be to narrow eminent domain authority and require new transmission to be buried when requested.  Of course, something like that might cost Evergy more than an apology and $1.2M.  But what do they care?  They recover every penny they spend from ratepayers, plus interest.

But all the best intentions in the world can't overcome the capture of the Kansas Corporation Commission by the utilities it regulates.  The KCC will "consider" all those new standards only as much as the utilities direct them to.

Maybe Kansas needs to fix its KCC first?
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Eminent Domain For Private Profit in Missouri

2/27/2020

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Senator Justin Brown has a great new piece in The Salem News this week regarding the use of eminent domain on Missouri property in order to increase corporate profits.

Private Property Before Profits thoroughly explains what is at risk if the legislature doesn't take action to rein in the use of eminent domain by private corporations.
Whether there are benefits to the project is a moot point to me, considering the freedom my constituents and residents of the entire state would have to give up. I’m concerned about private property rights and protecting Missouri residents from being displaced from their land to line the pockets of a corporation.

If an out-of-state developer can work its way across north Missouri for this project, what’s to stop the next developer from building another line across yours?
Senator Brown's analysis of the project points out the developer's original intent:
For the past six years or so, developers have been trying to build a giant power line across northern Missouri. The proposed Grain Belt Express line would carry 4,000 megawatts of wind-generated DC electricity from southwest Kansas to a converter station near the Illinois-Indiana border. From there, the electricity would be sold to retail customers on the East Coast. The massive power line – the largest ever built in Missouri – would cross eight counties and span the entire width of the state. As originally planned, the 800-mile power line was not actually supposed to provide electricity to a single end-use consumer in Missouri. It was just passing through.
Just passing through... except that didn't work.  GBE's original developer modified its plan to create a converter station in Missouri from which it could offload power from the line for sale to Missouri utilities that serve end-use customers.  The developer optioned a property in Ralls County on which to build this proposed converter station at a specific point where the regional grid operator said the existing transmission system was strong enough to support the injection of up to 500 MW of electricity.

Except somewhere in between Clean Line Energy Partner's ownership of the project and Invenergy's purchase, the property option in Ralls County was allowed to expire.  Invenergy now has no place to connect GBE in Missouri.  It's just passing through again.

But wait, Clean Line also signed an agreement with a handful of Missouri municipalities to provide transmission capacity to enable their purchase of wind power from another state.  Has that also been lost in the transition?  What good is a contract when there is no electrical outlet to plug in the electricity in Missouri?  Can Invenergy back out of its contract with the municipalities and leave them high and dry once it's done using them as a "benefits" shield?  Better read the fine print!

The project's original developer also planned to continue the project across Illinois in order to tap into the east coast transmission system.  However, it was ultimately not successful in gaining a permit from Illinois.  GBE currently has no connection point at Missouri's eastern border.  It's an extension cord not plugged into anything.  It has no end point stations to connect it to the existing transmission system, anywhere.

But, yet, Invenergy claims that it will soon be approaching landowners in Missouri to acquire easements for its project.  That's going to cost hundreds of millions of dollars.  What kind of a company spends hundreds of millions of dollars acquiring a route for a project that has no end point?  Not a smart one, that's for sure.  So, what does Invenergy have up its sleeve?  Obviously it has yet to reveal the truth of its intentions to Missouri.

How can Missouri protect itself from the less than transparent intentions of an out of state corporation?
Senate Bill 597, which I sponsored, will stop the taking of private property for the purpose of private profit. Simply put, this legislation denies the power of eminent domain to utilities that do not serve end-use customers in Missouri. In my opinion, a big corporation wanting to make money by selling Kansas wind power to East Coast consumers should not justify taking private property from Missouri landowners.
This important legislation pauses Invenergy's progress before its intentions are clear, while still allowing Missouri utilities to conduct their business.  It's better to be safe than sorry.  Smart thinking, Senator Brown!
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Grain Belt Express Is An Electric Toll Road

2/20/2020

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The legislative battle over eminent domain for private purpose projects continues to rage in Missouri.  There are several months left in the legislative session, and the battle is already half over, with the House overwhelmingly supporting new legislation to prohibit the use of eminent domain for merchant transmission projects.  Now all eyes are on the Senate, and the people of Missouri will support this legislation wholeheartedly. 

Fantastically well-written op eds are appearing in Missouri news outlets from Missouri Farm Bureau.  I particularly love Eric Bohl's comparison of GBE to a private purpose toll road.  It is a must read!
Imagine if Warren Buffett wanted to build a private toll road across northern Missouri. The billionaire would charge cars $100 apiece to race from his home city of Omaha, Nebraska, to Nashville, Tennessee, pocketing a huge chunk of profit on each trip. He might call it the “Music City Express.” Unfortunately, the toll road would have no exits in Missouri. Cars could only get on in Nebraska and exit in Tennessee. No local residents could use it at all.

Even though the Music City Express would make a fortune for Buffett, he would probably have trouble convincing every single landowner in his path to sell. The road would do them no good — it would just be a nuisance and take away their land. Surely a few holdouts would foil his plans. If only his project qualified as a “public use,” he could invoke the governmental power of eminent domain to force unwilling landowners to sell. But the project isn’t designed to benefit the public — it’s meant to enrich its owner.

And there's lots more, particularly about GBE (or Buffett) tossing money at cities in another part of the state in order to create a false "need" to toss the northern part of the state under the bus in order to benefit cities in the southern part.  You've got to read it!

Another fabulous op ed written by Blake Hurst is appearing in the St. Louis Post-Dispatch.  You can read that one here.  Hurst makes a very important point:
The promotional literature for the company touts the project as a “free market solution to meet the growing demand for sustainable energy.” Well, there is nothing in a “free market” that gives entities the right to condemn property owned by the residents of Missouri and taking it for a private business.
When normal utilities are granted the ability to use eminent domain, their electricity rates are regulated by the state of Missouri. In exchange for the convenience of siting their facilities and the money saved because sellers have no bargaining power, the PSC protects consumers and makes sure that the benefits of eminent domain are passed along to electricity consumers.

The benefits of using eminent domain for GBE go into the Chicago-based pockets of Invenergy CEO Michael Polsky.  They don't go to electric customers in Missouri.  Even the pie-in-the-sky savings of $12M in electric costs each year aren't drawn from eminent domain savings.  The Cities will save money either way because their contract price will not change if eminent domain is used.  They would still get the "benefit" if eminent domain for GBE is prohibited by law.

And then Hurst absolutely nails exactly what I was thinking after reading American Wind Energy Association's breathy, disconnected push for GBE that absolutely fails to resonate with Missourians.
Tom Kiernan, writing in favor of the project in the Feb. 12 Post-Dispatch, has made it clear that the project, part of a multi-state effort known as the Grain Belt Express, would be “difficult” to complete without eminent domain. But his op-ed piece seemed designed to avoid actually mentioning the words “eminent domain.” Why did he fail to mention the central issue driving this controversy?
I dunno.  Maybe he thinks the people of Missouri lack the gray matter necessary to make their own decisions about their own property?  How does anyone discuss GBE and completely avoid the words "eminent domain?"

It seems that Invenergy is fighting a losing battle.  Limiting the use of eminent domain is something every voter can support.  The only ones who seem to like it are the ones who think they can profit from its use.

And, hey, there's that broadband thing.  Just a couple more cheap trinkets for the natives.
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Hurst says:
As the Missouri Legislature enters its third year of debate over the project, Clean Line’s backers have started talking about fiber optics as well. Not only will electricity consumers receive a bonanza, but everybody in north Missouri will be able to watch Netflix.

Perhaps not as good as a toaster for opening a new account, but haven’t we all been asking for better rural broadband? Well, yes we have, but extending the fiber to homes, which is the most expensive part of providing rural broadband, is a much more difficult and expensive proposition than what Clean Line is offering.

And be sure to tune into This Week in Missouri Politics on Sunday, where you can hear more from Farm Bureau and the legislators involved in this important issue.

Maybe you'll even be inspired to write your own op ed?
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Eminent Domain Bill Clears Committee in Missouri Senate

1/29/2020

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Word is that the Missouri Senate Commerce, Consumer Protection, Energy and the Environment Committee voted the Senate's version of the eminent domain bill out of committee this afternoon by a vote of 6-5.

The bill, SB597 sponsored by Senator Brown, is identical to HB2033 that was passed by the Missouri House of Representatives earlier this week.

This is good news!  Hopefully the bill will be on the Senate floor soon for debate and vote.

Many thanks to all the committee members who supported this bill, especially Senator Riddle who stood strong for her constituents today!

This is Howard Cosell, signing off... until the next big game!

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Silly Cities Getting Desperate

1/28/2020

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The more desperate someone becomes, the further their arguments stray from the truth.  When the truth isn't working, the message gets embellished.

You'd think all Missourians were head over heels for Grain Belt Express after reading this.
...a project that will benefit so many small rural communities and save Missourians millions of dollars...
It's also a project that will destroy so many family farms and the rural economies they support.  Lower yields and higher costs to farm mean less income for farmers.  Less income for farmers equals less they have to put back into the agricultural economy in their own communities.  Not every rural community would "benefit" equally.

And let's talk about all those amazing savings, shall we?
Missourians do not like living paycheck to paycheck paying high utility bills and soon many won’t have to. The Grain Belt Express Transmission Line will lower the cost of utility bills to dozens of communities throughout the state.
Oh, c'mon!  This guy has no idea what it's like living paycheck to paycheck if he thinks that saving the price of a cup of coffee on your monthly electric bill will lift you into economic prosperity.  I think maybe he's spreading it on a little thick.

What are the savings?  And how accurate are they anymore?  How much is waiting around for GBE to be built costing municipal electricity customers?  The amazing savings claim is overblown.

I'm guessing this fella hasn't looked at the MJMEUC contract, or GBE's filings at the PSC.
In Missouri, the line will span eight counties delivering at least 500 megawatts of low-cost energy (and probably much more). 
GBE said it would make available 500 MW, a very small percentage of its 3,500 MW capacity.  MJMEUC only agreed to purchase up to 200 MW of the 500 offered.  The other 300 MW is going stale on the shelf because no one in Missouri wants to buy it.  Get it?  There's no need for GBE in Missouri!  If it was needed, there would be buyers willing to pay for it.
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And then there's all the jobs blather.  I'm sorry, but creating jobs is not a "public use" granted eminent domain authority.  No one's right to have a job trumps another's right to own and enjoy property.

We're currently experiencing a booming economy.  Unemployment is at record lows.  Justifying the use of eminent domain for some jacked up number of temporary jobs for workers from other areas completely falls flat.

But this... this is the ultimate piece of work...
In recent years, special interest groups have gathered in Jefferson City with the goal of preventing the project from moving forward. This legislative session, these special interest groups are at it once again, introducing legislation to block the project and hinder Missourians in rural communities, suburbs, and across our state.
Is your land a "special interest?"  Calling landowners, voters, citizens, engaged in a grassroots effort to protect their homes, businesses, and way of life "special interest groups" is the ultimate insult.  These are honest, hardworking people defending the taking of what's theirs from out-of-state "special interest group" Invenergy, who is seeking to make money from the taking.  The only "special interest groups" here are Invenergy, and a handful of municipalities who have bellied up to the buffet to gorge themselves on the loss of others.  (Except, hey, check the menu... it's really just granola bars and water, not the feast they promised you.)

I think it's Grain Belt Express that is "hindering Missourians in rural communities" across the state.  Landowners have been held in limbo for a decade while first Clean Line bumbled its way through years of unsuccessful permitting, and now Invenergy comes after them, even though it doesn't have enough customers to make the project economically feasible.  How many sleepless nights will the landowners endure while out-of-state corporations play their corporate money-making games?  How much of the landowners' hard-earned income is being siphoned away in an effort to protect their rights?  Landowners didn't ask for this, and to continue to hold them hostage while Invenergy plays energy games is shameful.  Let Invenergy play its games in a free market where no one is held hostage!  Invenergy could build its project underground, on existing rights-of-way, and not bother anyone, but it doesn't want to.  It must believe Missouri is its doormat, as much as the author of this op ed seems to.

When other Clean Line projects were defeated, better projects emerged.  Buried transmission on existing rights-of-way is really happening!  If this guy really cared about Missouri, he'd drop GBE like a hot potato and look to the future where a project that does no harm will emerge.

Is this guy convincing anyone with his pie-in-the sky, exaggerated claims of how wonderful GBE would be for Missouri?

Not me.

But, hey, there's one point where I can agree with him!
I encourage everyone who wants to see their family and neighbors benefit from this project to contact your legislator. As a constituent, taxpayer, and Missourian, your voice matters.
The only way anyone is going to benefit from this project is by leaving it in the dust and moving on to better ideas.  Contact your Senators, because your voice matters!  A quick email or phone call is all it takes!  Do it today!
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Caveat Emptor, Invenergy!

1/27/2020

3 Comments

 
Congratulations, Missouri!  This evening, the House of Representatives voted overwhelmingly in favor of HB 2033 that would prohibit the use of eminent domain by merchant transmission developers!

The bill is now on to the Senate.  Stay tuned for ways you can help ensure this very important new law is put into place.

But what about Invenergy?  Caveat Emptor, fellas!  You bought a used transmission project with a host of problems.  It's not just a little dog-eared, it's rode hard through a briar patch with stones in its shoes and put away wet lame. 

The people of Missouri have spoken through their elected representatives.  I think the message is loud and clear.
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NO NEED, NO GAIN, NO EMINENT DOMAIN!
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Crazy Transmission-Loving Front Group Wants Feds To "Hammer" States To Accept New Lines

1/22/2020

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"Americans for a Clean Energy Grid" is the work of big green dark money.  Use of the word "Americans" in its name connotes the image of patriotic citizen masses engaged in an effort to build a "clean energy grid", aka trillions of dollars of big, ugly, new electric transmission lines.  However, like most astroturf front groups, that's not reality.  Its members are corporations who would profit from building new transmission, and the big green groups who like to pretend it's all about saving the planet.  Toss in a little political theater, and it's just like any other front group... a corporate effort to appear as grassroots.  I could write a whole bunch about these pretenders, but that's not what this post is about...

The pretenders hold amusing webinars now and then and engage in political efforts to further their goals.  One such webinar was reported in RTO Insider recently as a "celebration" of 20 years of regional transmission organizations.  To make their "celebration" more authentic, they hired some former FERC Commissioners to make comments during the webinar.  And we're all supposed to
I wonder if there was cake?  Champagne?  Party favors?
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Apparently, the party got so lit that the guests started celebrating an idea to lobby Congress to give transmission siting and permitting authority to FERC. 
Former Chair Jon Wellinghoff (2009-13) said Congress, which gave FERC authority to enforce mandatory reliability standards in 2005, should now give the commission the power to create a national transmission policy to move renewable power to load centers.
“I think it’s now time for the Congress to give FERC direction about our climate crisis and how the transmission system is going to address that,” Wellinghoff said...
It's all fun and games until video surfaces of a reveler dancing around with a lampshade on their head...

Transmission siting and permitting is state jurisdictional.  That is, only states may site and permit new electric transmission.  FERC's current authority only covers transmission rates, and overseeing the regional transmission organizations who order new transmission.  States still have the final say over whether new transmission may be built within their borders.

It's not like Welllinghoff didn't try to change that during his tenure, though he was ultimately unsuccessful. (Wow, deja vu... that blog written 9 years ago has striking relevance for today.  I must be ahead of my time.)  Congress has wisely preferred to leave that authority with the states.

And then former Commissioner Pat Wood piped up to make sure their scheme was clear,
Wood said he’d like to see Congress give FERC “backstop” transmission siting authority, which the commission could use as a “hammer to get people to the [negotiating] table” on interregional transmission needed to deliver renewable power.
Hammer?  New authority for FERC to "backstop" state transmission permitting and siting is intended to be a hammer?  A hammer is a weapon, and holding a weapon changes the dynamic to one of coercion, or just plain old preemption.

"Do what we say or we'll beat you down with our hammer!"

In this scenario, if states don't knuckle under and site and permit new transmission, FERC would do it for them.  What's the point of states having authority to site and permit if they are usurped by FERC?

This scheme failed the first time FERC tried it, using "backstop" authority granted in Sec. 1221 of the Energy Policy Act of 2005.  A federal court ruled that backstop authority could not be used to overrule a state decision to deny a permit to new transmission within one year.  The only use for "backstop" power would be if a state could not issue a permit within one year, or choose not to consider the matter.  A state denial ends the application process and nullifies any "backstop" authority.  The court said that if a state considered a permit under state law and denied the permit within one year, there was no "backstop" authority that could overrule a state.  So, what makes these chuckleheads believe that they wouldn't get a similar result with new "backstop" authority?  It looks like they just want to remove state authority altogether and allow the federal government to make decisions on transmission at a national level.  If that happens, flyover states would be helpless ground zero for new transmission that does not benefit them in any way.  Essentially, they would be doormats for the wants and needs of other states, who maybe don't want to look at energy infrastructure in their own neighborhood, but sacrifice other areas for their own use.

Of course, this is unlikely to happen.  Even the moderator admitted as much.
Moderator Rob Gramlich:
But he acknowledged the “politics of this probably haven’t changed at the congressional level, so we’ve got to win their hearts.”

Like this?
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Electric transmission is not a warm and fuzzy thing.  Federal preemption of state authority isn't a cute teddy bear.  Any attempt to make it so will be met with swift, strong, and outspoken opposition from the thousands of actual Americans who oppose new transmission to serve the selfish wants of others with no skin in the game.

This isn't 2005.  We're fully woke now and we're watching you...
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The "Changing Rules" Myth

1/16/2020

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Here's another stupidity currently being recycled by Missouri municipalities in opposition to legislation that is currently working its way through...
Lawson wondered whether singling out one project should be a concern to anyone planning to develop large scale projects in the state. Lawson said, “What signal are we sending about our state’s desire for job creation and economic progress if we change the rules at the last minute?”
Different versions of the "changing rules" myth have been hanging around for years.  It's time to put them to rest.

The legislature isn't "changing the rules," it's changing the law.  That's what legislatures do.  It's a risk all transmission projects accept when developing a project.

Laws are not a stagnant thing.  Once they're made, they're often changed.  New laws are made.  Existing laws are amended.  It's what happens in a healthy, democratic society.  If we had to keep all laws stagnant for fear of "changing the rules" on someone, there are plenty of old laws that would still be hanging around, much to our detriment.  We change laws to make them work better, for the benefit of all citizens.

To answer Lawson's question about the "signal" it sends, let's look at Iowa.  In 2017, the Iowa legislature passed a new law that declared above-ground merchant transmission lines a private development purpose that may not be granted eminent domain authority.  The Clean Line project that inspired this legislation, the Rock Island Clean Line, was faced with a choice... to build its project without eminent domain authority, or to bury it.  Nothing the legislature did actually banned or stopped the project.  It was Clean Line's choice to abandon it.

The "signal?"  Transmission is still being built in Iowa, but not above-ground merchant lines.  Instead a better project has been proposed for basically the same purpose.  SOO Green Renewable Rail proposes an underground merchant transmission project built on existing rights-of-way.  It's a much better solution to the imagined problem.  It may be more expensive, with undergrounding costing roughly twice as much as above-ground lines, but that's okay because this is a market-based project.  The market for transmission capacity will dictate the prices customers will be willing to pay in a voluntary market, free from manipulation and outside influences.  The developers of SOO Green believe their project will be marketable, despite its cost.

This is the signal the Iowa legislature sent... that projects must do better to avoid impacts to Iowa citizens.  And they all lived happily ever after.

Arkansas also passed a law inspired by a different Clean Line project, the Plains and Eastern Clean Line.  That law prevented the use of eminent domain for a transmission project that was not directed or designated to be constructed by a regional transmission organization.  What happened?  Nothing.  There's still transmission and economic prosperity going on in Arkansas, and the lights are still on.

Legislatures can and do change laws all the time.  And the one in Missouri desperately needs updating!  Public utility and eminent domain law were developed at a time before merchant transmission was proposed in the state.  Multi-state merchant transmission without contracted customers is a relatively new thing everywhere, and other states have dealt with it in the recent past, as noted above.  Nothing disastrous happened. 

The law that gives a public utility eminent domain authority is premised on a belief that a public utility is constructing regulated infrastructure.  The cost of that infrastructure and the ones who pay for it is highly regulated, whether by state utility commissions, or the Federal Energy Regulatory Commission.

Enter speculative merchant, market-based, transmission.  Its rates aren't regulated in the same way.  Its rates are negotiated between willing buyers and willing sellers.  Nobody is forced to pay for anything they don't want to.  The regulators cannot say whether a rate is too low, or too high.  They rely on the market to do so.   If a price is too high, there will be no market interest.  Market rates police themselves (assuming they were negotiated in a fair manner without undue influence or preference).

Eminent domain is not a market based mechanism.  It is the government stepping in to effect the taking of private property at a "fair," not market-based price.  If the price paid for property was negotiated without any limit, that would be a market-based price between a willing buyer and a willing seller.  The sellers are unwilling in an eminent domain situation.

Using the market interference of eminent domain on a market-based transmission project is not only unfair to the unwilling seller, it unjustly enriches the transmission project owner, who is still operating in the realm of negotiated, market-based rates.  Its market isn't affected by the price it pays for property.  In fact, if it was truly market-based, the price of property necessary for the project should be based on the same voluntary, free market in which the project negotiates its rates.

It's a legal mismatch that uses the regulated utility's eminent domain authority to boost the earnings for a market-based project.  Many states, such as Iowa and Arkansas (and Illinois, too, although this happened at the state Supreme Court) have recognized this.  Missouri has also now realized it, and that's why its legislators want to remove eminent domain authority for market-based, merchant transmission projects.

It's not to "change the rules," it's to update the law to support new development while protecting the citizens of Missouri.  Grain Belt Express could still build its project.  It just would have to negotiate property prices in a market-based environment without the government-granted power of eminent domain to limit its acquisition costs, and GBE doesn't want to assume that responsibility or cost.

A project that is truly market-based has no need for eminent domain.  GBE and its supporters are simply complaining because legislators are intent on fixing the current legal loophole they slipped through.  With the loophole firmly closed, new transmission in Missouri will be better for ALL citizens, not just a few.
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House Bill To Limit Eminent Domain Clears Committee in Missouri

1/14/2020

2 Comments

 
Good news this morning!  Representative Jim Hansen's HB 2033 to limit eminent domain for merchant transmission sailed through a committee hearing yesterday and was approved to pass this morning.

We're on our way! 

Lots of stuff got brought up in the hearing yesterday, and two very different news articles were posted.  One was good, and one was biased opinion cloaked as news.  Do we call that "fake news" these days?  At any rate, it gives me an opportunity to clear up some misinformation that got spread yesterday.

The bad article can be found here.  Does the St. Louis Post-Dispatch have a bias in favor of the project?  I'd guess they do, after reading the article, or maybe the reporter himself is just uneducated or too lazy to get information first hand and relied too much on opinion instead of fact?

The article starts out with an apparent misunderstanding of the three branches of government.  This is something I think I learned in elementary school, and perhaps a refresher course is in order.
Although judges and state regulators have given it the go-ahead, Missouri lawmakers are still trying to unplug a controversial electric transmission line.
State regulators are part of the executive branch of government.  They carry out laws as they exist.  Judges are part of the judicial branch of government.  They interpret laws as they exist.  Legislators, on the other hand, are part of the legislative branch of government.  They MAKE laws exist.  The legislature can change laws, or make new laws, that are then carried out by the executive branch, or interpreted by the judicial branch.  It doesn't matter what judges or state regulators did with existing laws, the legislature is in the process of making a new law.  Once it does, the regulators and judges will follow the new law.  This ostensible "justification" for GBE makes no sense, because legislators can change the law.  Legislators are not beholden to the opinions of judges or regulators.  Only legislators make laws!

And now let's skip to the reported malarkey spewed by Invenergy at yesterday's hearing.
A spokeswoman for Chicago-based Invenergy, which is spearheading the project, said the power line project will have a significant economic impact in the state.

“This project will create thousands of jobs here in Missouri,” said Nicole Luckey.
In addition, she said the company is prepared to pay more for land than its fair market value.
“We are committed to compensating landowners fairly,” Luckey said.

Invenergy says its structures will take up less than 10 acres of land throughout Missouri, not including land underneath transmission wires.

Jobs, jobs, jobs!  We've all heard this baloney before and we know that job promises rarely come true.  Their numbers are based on extrapolated numbers in a computer program, not reality.  In addition, most of the jobs will be temporary and filled with trained professionals from out of state.  Quit trying to push the "benefits" thing, nobody believes it.

And let's examine that statement about paying more than fair market value.  Who determines "fair market value" if a taking isn't challenged in the courts?  Invenergy does!  Invenergy's land agent subcontractor works to get "market study" data from past land sales in each county.  There could be some picking and choosing going on there that skews the numbers.  Then an "average" market value for land in that county is developed.  Once that figure is arrived at, individual property characteristics can be applied to either raise or lower it to arrive at a "fair" cost per acre.

We are committed to compensating landowners fairly?  Is this the landowner's idea of fair, or is it Invenergy's idea of fair?  Of course, it's Invenergy's, because they currently hold the power of eminent domain to take a property, even if the owner does not agree the compensation is fair.  There's nothing fair about this!

And, which is it, Invenergy?  Fair market value... or more than fair market value?  How much more?  Those statements, taken together, make no sense, which leads me to think that maybe the whole thing is just made up baloney.

Speaking of baloney... less than 10 acres?  So is that all that will be compensated across the state?  Why would Invenergy pay for land not taken?  The truth is that Invenergy is planning to take a 200-foot wide strip of land clear across the state, and they have to compensate landowners for all of it.  This claim is ludicrous.

This seems to be the only thing the reporter managed to come away with to represent the bill's supporters yesterday.
Landowners in the path of the transmission lines argue that a private company should not be able to condemn land in order to build the project.

I'm pretty sure there was a lot more said on this topic that perhaps was just too complicated for this uneducated reporter to grasp.

The difference between merchant transmission and regionally ordered and cost allocated transmission was explained rather succinctly.  Here's my version:

Regionally ordered and cost allocated transmission comes from independent regional transmission system operators.  They order new transmission for purposes of reliability, economics, or public policy.  When transmission is ordered, the transmission organization also assigns cost responsibility for the project to regional customers based on their use of the transmission line.  Most importantly, those customers assigned cost responsibility for the project only pay for the cost of the project, plus regulated return to the owner of the transmission.

Now, the difference of merchant transmission, like GBE.  No transmission organization ever ordered GBE.  Its costs will not be collected from regional customers.  Instead, GBE has federal negotiated rate authority.  It collects its costs through rates it negotiates with voluntary customers.  Whatever price GBE can agree to with customers is the amount those customers pay, regardless of what the project costs to build.  These are what is known as "market rates," where the rate charged is supported by a free market where each party comes to the table and negotiates the price without undue influence.

Therefore, GBE's rates are independent from the cost of the project.  If GBE saves money on land acquisition due to the use of eminent domain, then that profit goes in GBE's pocket.  It won't change the rate it has negotiated with its voluntary customers.  On the other hand, when a project is cost allocated to regional customers, they only pay for what it costs to build.  If the owner saves money on land acquisition through the use of eminent domain, those savings go to the customers who pay for the transmission project.

Bottom line:  Eminent domain would increase GBE's profits beyond its cost of service.  If GBE cannot use eminent domain to keep land acquisition prices low and must depend on free market negotiation to acquire land to build its project, that eats into GBE's profits.  There are no savings that go back to customers if land acquisition costs are limited by eminent domain.  This is why merchant transmission should never be granted eminent domain authority.  And this is why the Missouri Legislature wants to change the law to exclude its use for merchant transmission.

This article about yesterday's hearing is much more balanced.  This reporter paid attention and didn't try to apply bias to sway reader's opinions.  You should read it to get a complete picture of what was said by both sides.

And here's what that Invenergy lady had to say in this report:
The company in charge of the project, Invenergy, said condemnation of properties under eminent domain is more of a last resort.

“We are not seeking ownership,” Nicole Luckey, director of regulatory affairs at Invenergy, said. “We are seeking an easement over folks’ land. Landowners will retain full ownership of the land in an easement. They can continue to use it for agricultural purposes.”

Luckey said landowners would be paid 110% of the market value in an easement, plus a structured payment that can be taken in a lump sum or in an annual payment, which would increase every year.

More of a last resort?  More of a last resort to paying a price for land that is negotiated in a free market?  Eminent domain isn't a part of fair negotiation.  It's coercion, plain and simple.  It was also reported, although not in this article, that she claimed that if a landowner didn't want to negotiate with Invenergy, the company would simply route its project around them.

So, in that case, GBE's route may look like this:
Picture
I'm not buying it.

Easement.  Sure, that's where another party has a right to use a portion of your land for their own purposes, even if you object.  Of course, you still "own" it and pay taxes and insurance on it.

Oh! 110% of market value?  Is that "fair?"  Once again, who determines market value?  Invenergy does.  They're going to pay landowners 10% more than the value they determine is fair.  Garbage in, garbage out!

A transmission company's hired land acquisition company spends several months creating a plan before they hit the streets.  They do the market studies, then create a database containing a range of values for each property.  The lowest "fair market value" in the range is what a landowner is originally offered.  The value can increase when a landowner resists, dependent upon approval from higher ups.  What's the highest value in the range for your property?  Of course, they're not going to tell you.

I heard that the Invenergy lady also told a lovely story about the company's plan to hire land agents.  It will be very selectively hiring agents in January, training the agents in February, and then sending them out to the field in March.  BALONEY!  Transmission owners don't hire individual land agents off the street and then train them.  They contract with land acquisition companies that already have teams of trained agents, such as this one, which is said to train their agents in psy ops in order to get resistant landowners to sign agreements.  What happened to the land acquisition company Clean Line was using in Missouri?  Is Invenergy going to just toss out that database and start fresh?  In that case, how could it know what a particular landowner was previously offered to make sure it's new offer was at least as much?

She also allegedly said that Invenergy would gladly deliver all the energy to Missouri, if it could.  Still can't find any customers, Invenergy?
Picture
Missouri's energy needs are met, without any part of GBE.

So, now we see where this bill wanders next.  A companion bill in the Senate is set for Committee hearing on Wednesday.  Off to a great start!

What can you do?  You could dash off a Letter to the Editor of one of the newspapers reporting on yesterday's committee hearing, just to set them straight.  Or you could send one to your local paper, or any other paper in Missouri.  Need help?  Just ask!
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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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