Big Transmission never did and never will make sense. Let’s look at a half-dozen reasons why: 1) the laws of physics, 2) higher reliability risk, 3) stricter contingency limits, 4) lumpiness and investment risk, 5) rigidity of source and sink, and 6) better alternatives.

It is difficult to apportion the demise of PATH among reduced load growth, the Mt. Storm-Doubs alternative, new generation, and sophisticated statelevel opposition. However, it is fair to observe that reduced load growth had only postponed PATH in the past (three times). What was different in 2010 was the emergence of the Mt. Storm-Doubs  alternative, and the focus of a state regulator on that alternative.

But certainly when Big Transmission is dependent upon market conditions the lumpiness and risk factors are all the more daunting. Big Transmission somehow needs to bring together generation resources and market demand – to the exclusion of alternatives – to forge a level of commitment that will last for many years. That’s a prerequisite for financing. So the entities at each end need to perceive such a compelling business proposition that they will forego other alternatives and cast their fate with Big Transmission. That’s a tough sell.

FERC requires that utilities interconnect all new generation. So a new generator is assured of being able to interconnect its project to the utility serving the territory it is located in; the issue is solely how much money and time it will take for the interconnection. Given this legally assured ability to access the grid through the resident utility, market-based Big Transmission is effectively competing with that utility and thus must offer substantial value added.

Liars overemphasize their truthfulness. “To tell you the truth…” “Honestly…” “I swear to you…” Oh, if only it were so! When people use these bolstering statements to emphasize their honesty, there’s a good chance they are hiding something. Learning to baseline someone’s normal behavior is important in situations such as this:  You want to listen for normal or harmless use of such phrases. There’s no need to add them if you really are telling the truth, so be on guard.

"The growth has been in some fits and starts, but we're at a point now where this is an essential project to continue to provide, really, the type of service, the level of service, that our customers expect from us," Fakult told the Asbury Park Press. "It reinforces the system in that area. It allows us to, again, provide better, more reliable, resilient service."

"The time is now," Fakult said. "It just needs to be done now."

Nearly 16 years ago, the utility scrapped plans for a 6.5-mile transmission line, to be run on 60-foot high steel poles, along the railroad tracks from Matawan to Middletown, after intense community opposition. Residents and some town officials, fearing a reduction in property values and worried about health risks, fought the project for a decade.

"To me, it is nothing but a resurrection of precisely the same plan that we fought and stopped," said state Assemblywoman Amy Handlin, R-Monmouth, a vocal opponent years ago. "It's the phoenix rising from the ashes, it's the ghost of battles past. It's not different."

This time, the utility proposes to run the wires atop slender single poles that average 140 feet tall rather than bulky towers used in the past, spokesman Ron Morano said.

The use of the NJ Transit corridor, which is already designated for public use and has existing electric infrastructure, as well as the slimmer monopoles, will help to minimize the disruption on the community, Fakult said.

Morano, the JCP&L spokesman, said the utility follows all safety and heath guidelines and will have an electromagnetic fields expert available at open house sessions. "We are successfully building transmission lines in other (areas) without any issues," she said.

PJM Interconnection, the organization that oversees the electric grid in 13 states and Washington D.C., has identified the Monmouth County Reliability Project as a necessary project to reduce the length and frequency of outages in Monmouth County, the utility said.

If not built, "over the long term, you start to see issues emerge," Fakult said. "When you start to see peaking conditions, you just don't have the contingencies that you need to run the system reliably."

As noted in the fact sheet, Energizing the Future is a transmission initiative through 2017 that involves upgrading and strengthening the grid to meet the future demands of customers and communities. Key factors driving that investment include enhancing system reliability by replacing existing equipment with advanced technologies; meeting projected load growth; and reinforcing the system in light of power plant deactivations, the fact sheet added.

The company plans to hold three open house events in neighborhoods near the proposed project to share information with the public and gather feedback. The company also is setting up a website at www.monmouthreliability.com.

To approve negotiated rates for a transmission project, the Commission must find that the rates are just and reasonable. To do so, the Commission must determine that the merchant transmission owner has assumed the full market risk for the cost of constructing its proposed transmission project.

Rock Island meets the definition of a merchant transmission owner because it assumes all market risk associated with the Project and has no captive customers. Rock Island has agreed to bear all the risk that the Project will succeed or fail based on whether a market exists for its services.

Rock Island also argues that wind generators, whose energy the Project will likely transmit, present numerous risks that transmission project developers and investors must overcome. For example, Rock Island states that wind energy projects are typically constructed with shorter lead times than other generators and are less willing to commit to large transmission projects well in advance of generator construction. Rock Island argues that pre-subscription of capacity with creditworthy anchor customers can reduce financing obstacles because lenders demand to see a secure source of revenue as a predicate to project financing.

Opponents used some of those arguments to successfully derail the Potomac-Appalachian Transmission Highline, a 290-mile line from Putnam County, W.Va., to Frederick County, Md., proposed by Allegheny Energy in 2008. The Greensburg company, acquired by FirstEnergy in 2011, suspended the project after it could not convince regulators the line was necessary.

PJM staff reviewed results of analyses showing reliability drivers no longer exist for the project throughout the 15-year planning cycle. The analyses incorporated the continued trends of decreasing customer load growth, increasing participation in demand response programs and the recent commitment of new generating capacity in eastern PJM.

While citizen groups have fought transmission projects — often successfully — by attacking the developer’s need to build them, the environmental regulations could usher in more projects and complicate opposition.

Changing drivers of transmission

Transmission companies see big potential for new projects, particularly from sparsely populated areas that generate wind energy to urban areas. “Just as trains carried cattle and other goods from the rural areas to urban centers, the Plains & Eastern Clean Line will carry renewable energy from the Plains of the Southwest,” states the website of one developer, Clean Line Energy of Houston, Texas.

Clean Line expects federal approval for its 700-mile Plains & Eastern Clean Line, designed to carry 4,000 megawatts of power from wind farms in the panhandle of Oklahoma. The line will terminate near Memphis, Tenn. Clean Line has four other projects in the pipeline.

“We anticipate a very busy 2016,” said company president Michael Skelly. 

...some wind mills and solar farms in areas with constant breeze and abundant sunshine

The mitigation proposal includes more than $52 million in funding for Jamestown Island, Hog Island and the Captain John Smith Historic Trail District. The money would fund projects such as seawall rehabilitation and replacement at Historic Jamestowne to help combat the impacts of sea-level rise and erosion, according to the draft mitigation plan obtained by the Virginia Gazette.

The mitigation plan proposal includes $15.5 million in funding for water quality improvement including erosion and sediment control in the James River. Battlefield and landscape conservation projects would get $12 million, including government and private lands associated with the Battle of Yorktown, according to the proposal. More than $4 million would go to protecting emergent marsh at the Hog Island Wildlife Management Area.

Electricity on the PJM grid normally flows from west to east. The major centers for electricity demand are the big metropolises along the Eastern Seaboard, at the eastern edge of the PJM system. There aren’t any power plants located in the Atlantic Ocean, therefore power that isn’t generated locally has to come from the west. As it happens, PJM’s western states have abundant, low-cost wind power — at night-time, wind power is so plentiful compared to demand that the price essentially falls to zero. The main factor limiting East Coast access to that cheap wind is the limited capacity of the transmission grid to carry it.

In the United States, 53% of the nation’s population lives in coastal areas, where energy costs and demands are high and land-based renewable energy resources are often limited. Abundant offshore wind resources have the potential to supply immense quantities of renewable energy to major U.S. coastal cities, such as New York City and Boston.  

Offshore winds tend to blow harder and more uniformly than on land.

GBX is asking for a back-up plan for its field of dreams approach to recovering costs, by coming back to the Commission to comply with the financing condition proposed in the Final Order.

As the Farm Bureau previously argued before this Commission, the denial of GBX’s Application by the MPSC, along with the recent Circuit Court of Caldwell County Order which held that GBX has no authority to construct the proposed line through Caldwell County, Missouri, there will be no construction in Illinois by GBX due to the denials in Missouri. This Commission should consider additional evidence on this issue which occurred after the close of the evidentiary hearings, as described in Exhibit A, the Affidavit of Paul A. Agathen, a Missouri attorney who represents the Missouri Landowners Alliance (“MLA”). The Final Order erred on this issue. Thus, the Commission should rehear this issue.

The record in this docket is devoid of any evidence that the Project would promote the convenience or necessity of anyone other than GBX and certain West Kansas wind developers who said they would use the Project if it ever gets built.

Boiled down, GBX merely asserts that a beneficial project like the Project is needed. Why is it needed? Because it is so beneficial. GBX’s argument that a need for the project exists based on a set of alleged benefits amounts to question-begging on a grand scale. GBX assumes what the Commission should require it to prove. Rather than focus on whether there is any need for the project, GBX jumps right into a show-and-tell on how beneficial the Project will be. The Commission concludes from this that a project with this many benefits must be needed.

Stated another way, the Commission fails to distinguish a benefit from a need. It merely accepts GBX’s catalog of purported benefits as proof of need. Under the Commission’s look-only-at-the-benefits logic, it could just as easily conclude that residents of Point Barrow, Alaska need Frigidaires.

...the Illinois RPS may be satisfied by buying RECs generated in GBX’s targeted west Kansas resource area, and those west Kansas-generated RECs can be purchased without having to build a $2,750,000,000 transmission line across four states.

...the GBX Project is “[l]ike that old 1970s song about Oz and the Tin Man, [because GBX] will give nothing to PJM that it doesn’t already have.”

While the Commission makes soothing noises that it takes seriously the landowners’ concerns about GBX’s ability to use the power of eminent domain against them, it immediately and blatantly contradicts itself by dismissing their concerns as unwarranted because GBX has not specifically requested eminent domain authority in this docket.  Less than a moment’s thought suffices to show the absurdity of the Commission’s position on this issue. If GBX is granted a CPCN it could ultimately use the power of eminent domain against landowners under Section 8-509.
Instead of coming to grips with the power of eminent domain as an integral component of public utility easement acquisitions, the Commission adopts the Pollyanna Principle and accepts at face value GBX’s well-oiled talking points about its voluntary “code of conduct” when dealing with landowners, its promises of respectful treatment, its commitment to negotiate reasonably, and so forth. For the Commission to completely discount the potential impact of eminent domain on landowners simply because GBX did not ask for it in this docket is arbitrary and capricious, and an utter abdication of the Commission’s duty to Illinois citizens.

The Commission’s attitude toward GBX is one of serene and nearly limitless benevolence: whatever GBX can’t do now, it can certainly do later. The Commission will grant GBX its CPCN here and now even though it can’t satisfy most of the requirements of Section 8-406.1 until some unknown point in the future.

But when the landowners raise the issue of GBX’s potential future use of the power of eminent domain against them, which the Commission knows full well inheres in every easement negotiation between GBX and a landowner, the Commission summarily dismisses their concerns as premature because GBX hasn’t asked for eminent domain power here and now, in this docket. In this the Commission subjects the landowners to an egregious double standard, and indulges itself in arbitrariness and caprice of the grossest sort.

GBX’s least cost argument thus rests entirely on its claim that it has no alternative but to be least cost because its entire corporate existence will be some kind of Darwinian
market struggle where only the fittest survive.

The unmistakable irony here is that GBX destroys its own claim to be least cost by asserting that it can exempt itself from those same inexorable free market forces if the going gets tough: GBX reserves to itself the right to seek cost allocation to ratepayers, and in so doing proves itself just another corporate dissembler trying to evade committing itself irrevocably to the ups and downs of the market. And if there are too many downs, the ratepayers can bail GBX out.

But in this docket GBX tells the Commission that it is a “merchant transmission owner” not because it has assumed the full market risk of the Project, but because it plans to earn revenues through discrete transmission services contracts with shippers. This definition of “merchant” transmission owner” appears nowhere in FERC’s orders. That’s because it is a definition concocted entirely by GBX itself, and it differs fundamentally from FERC’s.

Understanding the term “assumption of all market risk” does not require a degree in economics: an assumption of all market risk means exactly that, all market risk, come Hell or high water.

This Commission has no jurisdiction to determine whether or how much of an interstate transmission operator’s costs may be recovered from anyone. The rates, terms and conditions of service for interstate transmission are exclusively matters of federal jurisdiction.

...GBX has no power to confer on this Commission subject matter jurisdiction over the rates, terms and conditions of service on interstate transmission facilities.

If GBX were really a “merchant” transmission owner as defined by FERC, then there would be no questions concerning cost allocation,
and this entire discussion would be unnecessary. GBX simply wants to have it both ways, eating its free market cake while having its cost allocation too.

The purchase power agreement (PPA) [with Public Utilities Commission of Ohio] was the last missing piece: balance sheet shored up; equity overhang removed — we see no more surprises for investors.

"FirstEnergy’s proposal will put safeguards in place to protect our customers from increased price volatility that’s expected to occur in the years ahead," said Doug Colafella, a company spokesman.

... other utilities will want profit guarantees in Ohio and in neighboring states. This, in turn, will undermine a competitive market in which many companies do not have the resources to secure government help the way that FirstEnergy does.

Independent power companies competing against FirstEnergy for customers in Ohio and throughout the 13-state region where high-voltage transmission lines are controlled by PJM Interconnection are not asking for special deals like FirstEnergy is, said Glen Thomas, president of PJM Power Providers Group.

"Our members are competing to provide the most efficient and economic power to consumers in Ohio as possible. We oppose this deal.  We see it as destroying all the benefits Ohio has gained from competitive markets.

"By going down a road where you subsidize plants that are not able to compete economically with other plants, you crowd out these economic advantages as well as send a terrible signal to the market that the best way ... is not to operate at most efficient levels but to seek a bail out from the PUCO."

In March 2009, PJM followed the narrower approach, proposing to pay MLSA to all trades with paid transmission (physical or virtual). In response to that filing, no party suggested that UTC trading would be susceptible to the kind of perverse incentives that the Commission understood could apply to most virtual trades.

No party filed any comments rebutting this contention as to the narrow distribution method, and the Commission accepted it in September 2009. Black Oak Energy, LLC, et al. v. PJM Interconnection, L.L.C., 128 FERC ¶ 61,262 (2009).