Some people will do anything
for a little grant money!
Despite being soundly (and loudly!) rejected by groups representing the interests of thousands of landowners impacted by proposed transmission projects across the Midwest last year, the Center for Rural Affairs is back with another report that it claims will "creat[e] procedural and cost efficiencies, as well as promot[e] due process rights."
CFRA does not represent landowners, and has made absolutely no attempt to involve landowners in any of its reports. There are plenty of active transmission opposition landowner groups, however CFRA created another report recommending what it sees as "good" for landowners in complete isolation. It's silly, it's uninformed, it's not good for landowners. It's simply the environmental 1% telling the rest of America what to do and how to sacrifice their property to the Gods of Big Green.
The newest report was written by a young law student on a fellowship who has probably never owned property and recommends that landowners be subject to a new form of forced pooling, the "Transmission Corridor District." Under the concept of forced pooling, landowners can be forced to give up certain rights to their land if their neighbors want to sell. That's right... under the TCD, you can be forced into a group of landowners whose only purpose is to sell transmission rights of way across their land (and yours). You may not "opt out" of this forced pool -- either cooperate or you're getting their version of "fair market value" for your property. It's a fait accompli that you will sell your land for a proposed transmission project.
It also suggests that state PSCs take on the responsibility of assembling and administrating these districts. Tell me, who is going to pay for that? And what changes need to be made to the laws of each state to make it happen? And then there's this:
Landowners, a developer, or a governmental entity could initiate a TCD proceeding. The initiating party approaches the planning agency to determine if the transmission line promotes reliability, economic development, or public policy (e.g., a renewable energy portfolio standard). In this initial discussion with the planning agency, the initiating entity proposes a study area for the transmission corridor to the planning agency. Alternatively, the planning agency could determine that there is a need for a transmission project and initiate the TCD proceeding on its own.
For TCD proceedings, the planning agency would likely be a public utility commission (PUC). This is necessary because the placement and construction of power lines is almost always under the purview of the states, which then designate siting and approval responsibilities to the PUC or state equivalent. Alternatively, the planning agency could be a federal or regional entity to promote interstate development.
Upon approval from the planning agency, the initiating party and planning agency work together to educate the potentially affected
members of the public about the benefits and negative effects of the proposed project.
Planning agency, eh? Who do you think "plans" transmission projects? It's not the state PUCs. It's a regional transmission organization, or other utility-run group. What do a group of landowners know about planning transmission? Where are they supposed to get the "plan" they initially bring to "the planning agency?" Transmission projects are born at "the planning agency," not from landowners who want to make some money selling transmission rights-of-way that don't coincide with a project that "the planning agency" determines is needed for reliability, economic or public policy purposes. Alternatively, CFRA thinks "the planning agency" could initiate and administer the TCD proceeding. Again... who's going to pay for this, and what authority does "the planning agency" have to force landowners into groups, or pools? There's no logic here.
Each transmission project is geographically unique. Who does CFRA think is going to bid on these constructed land corridors when only one transmission developer is interested in the area for a specific project? One bidder does not create a fair market.
Further demonstration of the author's complete misunderstanding of transmission planning:
Additionally, FERC Orders 890 and 1000 encourage robust public participation. The orders accomplish this by requiring transmission planners to seek comment from customers and stakeholders in regional planning. Though the orders are silent in the context of assembling land for specific transmission lines, the wisdom of the orders should be applied to individual projects.
What? CFRA thinks that regional planning "stakeholders" include the public? While "the public" is certainly welcome at any planning meeting, "the public" doesn't have a vote when it comes to selecting plans. That's not what FERC meant, silly! Like FERC is going to issue orders based on the mistaken interpretation of its policies by some law student? Get real, CFRA!
He also makes the accusation that "the current eminent domain framework seems to violate Order 1000." Hahahahaaa!
CFRA's report also recommends that interstate cooperation create uniform state siting and condemnation laws... and herd cats. It also contends that forced pooling of landowners ameliorates opposition, and saves time and money. If CFRA thinks there's a problem with transmission opposition from landowners now, it ain't seen nothing yet! The surest way to delay something is to add additional layers of administrative process and a new legal framework that hasn't been tested in the courts. The report also recommends a robust public participation process just like the one transmission developers have been using for years, like it's some novel idea. Maybe the author needs to step inside a real transmission project, instead of an artificial, self-aggrandizing, media version of "public participation." Landowners are not satisfied with this model and it does not ameliorate opposition. It actually creates opposition by helping landowners to meet and organize.
In conclusion, CFRA's latest "report" is a worthless piece of busy work that does nothing to help get transmission built. You can't quell opposition unless you talk to them, sweet cheeks! (I can call you sweet cheeks, right Brandon? I mean I've probably got condiments in the back of the fridge that are older than you.)
Journalists are trained to be independent reporters of the facts. The readers are supposed to take those facts and form their own opinion. But what happens when a "journalist" tries to spin her opinion as "news?"
"Clean Line receives pocket approval from legislature."
On the heels of lawmakers voting to reject a House bill designed to stop the Grain Belt Express Clean Line project, Michael Skelly, President of Clean Line Energy, visited a Ralls County site of a Grain Belt Express Clean Line’s delivery station, a $100 million facility that proponents say will allow Missourians to receive low-cost, clean power from the Grain Belt Express Clean Line.
The Grain Belt Express Clean Line is a proposed electric power line that will deliver competitively-priced renewable energy to Missouri. The House Energy and Environment Committee voted down House Bill 1027, which would modify provisions relating to eminent domain powers of utilities, on April 28. The bill was sponsored by Rep. Jim Hansen, R-Frankford, who represents Monroe, Lincoln, Pike, and Ralls Counties.
“With the vote this morning, Missouri lawmakers have demonstrated that they stand behind market based solutions to bring low-cost, renewable energy to the state,” said Mark Lawlor, Director of Development for Clean Line Energy. “The Grain Belt Express Clean Line will deliver enough low-cost clean power to Missouri through a direct connection to the electric grid to power 200,000 Missouri homes. We look forward to continuing to work with landowners and community members to develop the project in Missouri in a collaborative way. This project is very important to Missouri’s energy future.”
At the hearing on the bill, supporters spoke of the benefits that the Grain Belt Express Clean Line project would bring to the state and asked legislators to block HB 1027.
According to the Legislative Drafter's Deskbook: A Practical Guide
, a "pocket approval" happens when the President does not sign a bill, but fails to return it to the legislature within 10 days. In that case, it becomes law through "pocket approval."
Is that what this reporter meant? That HB 1027 became law because the President failed to return it to the House? Or is this reporter just desperate to include the words "approval" and "Grain Belt Express" in a headline?
There was no "approval" for Grain Belt Express in Missouri. The legislature does not have authority to "approve" a transmission project. "Approval" can only come from the Missouri Public Service Commission, and the Staff of the MO PSC just last week reaffirmed their recommendation that the PSC DENY APPROVAL for Grain Belt Express.
This headline is simply the reporter's opinionated fantasy. The only thing that actually happened at the legislature is that Clean Line's expensive lobbyists managed to twist enough arms to prevent legislation supported by the people from passing. Big deal... there's always next year!
The reporter conveniently skips over the fact that GBE won't provide ANY energy to Missouri that is not purchased by an actual utility that serves electric load in the state. Evidence at the PSC indicates that there are no utilities stepping up to purchase electricity from GBE's Missouri converter station.
The article also claims: "Grain Belt Express project moves process forward, receiving public support."
Moves forward? Forward to where? GBE is still stuck in the Molasses Swamp waiting for a decision on its application from the MO PSC. It's not going anywhere.
And where's the proof that GBE has any "public support?" The evidence at hand indicates that GBE is receiving record public opposition. This is backed up by the fact that when "Mike" Skelly called a recent press conference at a field in Ralls County, the only "supporters" who showed up were brought in by GBE from many miles away. On the same day, the Ralls County Commission re-iterated its opposition to GBE, no matter how much of a company man their assessor wants to be in the media.
Here's Block GBE MO's press release that reflects what REALLY happened:
Two Counties Clarify Opposition to Grain Belt: Chariton and Ralls Legalize Letters of Rescission
Texas based Clean Line Energy, that hopes to build a 750 mile high voltage-transmission line across the state, just hit another snag. Five out of eight counties crossed have now officially rescinded permission for Grain Belt Express to access their county. In Missouri, each county and the Missouri Public Service Commission (PSC) must grant permission to erect any towers.
The staff of the Missouri PSC recommended denying Grain Belt last fall. They stated “Grain Belt Express has not shown it is needed, economically feasible, or promotes the public interest in Missouri”. They also stated, “Section 229.100 RS Mo precludes Grain Belt from building its proposed line without first obtaining the consent of the County Commission in each of the eight counties in northern Missouri where the line would be located.”
Grain Belt questioned the validity of the rescission letters from two counties that were written in the summer of 2014. They stated that Chariton County’s letter had not specifically withdrawn section 229.100 authority or permission to build.
They also stated that Ralls County had said they would consider granting franchise only after the commission approved Grain Belt. Because the county must give permission for the PSC to grant a certificate it created a chicken and egg situation. Grain Belt asked for the Certificate of Convenience and Necessity first and promises to get the consent of each of the counties afterwards.
In response, both Chariton and Ralls County submitted new letters to the PSC to reiterate that Grain Belt does not have permission to build transmission lines in their county.
Ralls County’s new letter reads, in part, “Accordingly, if our grant of authority of August 23rd, 2012 to Grain Belt Express was valid, the County Commission does hereby rescind and revoke any authority granted that date to Grain Belt Express."
Wiley Hibbard, Presiding Commissioner of Ralls County stated, “I, as well as the other two Commissioners in Ralls County, felt it was important that we should restate our opposition to GBE's application to the PSC.
"By pure coincidence, we chose to send our letter to the PSC on the same day GBE held a press conference in Ralls County. It is my understanding that no landowners from Ralls County attended. GBE had to bring a person in from a county many miles away to speak to the press. This will show Grain Belt and the PSC that landowner's rights are very important to the citizens of Ralls County.”
Jennifer Gatrel of Block Grain Belt Express Missouri stated, “We are delighted that five out of eight counties have withdrawn their permission. We are very hopeful that the Missouri PSC will quickly deny Grain Belt and allow landowners to resume our lives."
A reporter who purposely misstates the facts to promote a corporate agenda does so at the peril of her own reputation.
Remember when Change.org was all about the "little people" effecting change for the better? Yeah, scratch that. Now its being used as just another corporate toy where those with lots of money can promote their own corporate petitions to push products that stand to make the rich even richer.
So, now Change.org allows corporate accounts to create corporate petitions intended to influence the decisions of public officials from which the corporation can profit? That sounds suspiciously like LOBBYING to me... What do you call it when a corporation asks its employees, and their mommies, and little sisters, to pretend they're some sort of "grassroots" supporter in favor of the corporation's for-profit proposal?
I think I shall call it... stupidity.
Clean Line is not an advocacy "organization" allowed to create and promote petitions under Change.org's rules. It's a for-profit limited liability corporation. Shame on you, Clean Line!
How desperate is Clean Line, anyhow? How much trouble are they in on their Plains & Eastern transmission line's request to use the authority of the federal government to condemn and take land from thousands of "little people" across Oklahoma, Arkansas and Tennessee?
Do you think the decision of Secretary of Energy, Ernest Moniz, will hinge on Clean Line's petition signatures? I certainly hope not. That would be absurd.
Brace yourselves, Americans, Congress is tinkering with energy policy again! No good can come of this. And some idiot has introduced a whole new Sec. 216 (16 U.S.C. 824p)
aka Section 1221
of the Energy Policy Act of 2005 that's even worse than its first iteration.
The original, Section 1221, designated the Secretary of Energy to conduct an electric transmission "congestion study" and designate "National Interest Electric Transmission Corridors" (NIETCs) every three years. Transmission proposed in these designated corridors
was subject to "backstop" permitting by the Federal Energy Regulatory Commission (FERC) in the event a state withheld approval of an application for a permit for more than one year, or lacked the authority to permit the project.
Section 1221 was promptly deconstructed in two federal courts. When FERC proposed that "withholding approval" included a denial, and that meant it could override a state's denial of an application, the 4th Circuit determined that "withheld approval"
excludes a state's denial of an application, preserving state authority. In addition, the 9th Circuit determined
that DOE did not properly "consult with states" before designating NIETCs, and therefore it vacated the corridors DOE had set in 2009.
Last year, DOE made a half-hearted attempt to produce the 2012 "congestion study," but was resoundingly smacked down by a whole bunch of comments, and hasn't done a thing since.
In practice, Section 1221 has been an abject failure
However, the new Section 216, carried to Congress by Sen. Martin Heinrich (D-NM), attempts to fix all that by giving FERC authority to overrule a state denial of a transmission permit and use federal eminent domain authority to take private property. It also tosses NIETCs out the window as a means to identify worthy transmission projects and replaces them with an RTO/ISO finding that the project is "needed."
Good news: The new Sec. 216 does not apply to Clean Line in its current form.
Bad news: The new Sec. 216 will encourage a whole bunch of new transmission projects of questionable necessity, and landowners along existing corridors and/or those owning "open farmland" are always the first targets identified on the ol' transmission routing Etch-A-Sketch.
So, let's look at what the new Sec. 216 says:
(B) FEDERAL AUTHORITY.—The Commission may authorize, in accordance with subsection (d), construction of a high-priority regional transmission project that the Commission finds to be required by the present or future public convenience and necessity and in accordance with this section if--
“(i) a State--
“(I) fails to approve construction and authorize routing of a high-priority regional transmission project not later than 1 year after the date the applicant submits a completed application for authorization to the State;
“(II) rejects or denies the application for a high-priority regional transmission project;
“(III) authorizes the high-priority regional transmission project subject to conditions that unreasonably interfere with the development of a high-priority regional transmission project contrary to the purposes of this section; or
“(IV) does not have authority to approve the siting of the high-priority regional transmission project; or
“(ii) the developer seeking a certificate for construction under subsection (d) does not qualify to apply for State authorization to construct a high-priority regional transmission project because the developer does not serve end-users in the State.
So, FERC can "authorize" a transmission project if a state denies an application or conditions approval in a way the transmission developer doesn't like. That's not "backstop" or secondary authority, it's usurping state authority in its entirety. A state must approve, or else. So, why even bother with the fan dance of state applications at all? That's just a big waste of time and money.
Tell ya what... if FERC ends up with authority to overrule state transmission permitting decisions, there's going to be a lot more "turn-offs" for Commissioner Norman Bay, because the protestors will have moved "from pipelines to Order 1000." *Insert laughter here*
Second problem - how these "special" high-priority regional transmission projects are determined:
(1) HIGH-PRIORITY REGIONAL TRANSMISSION PROJECT.—The term ‘high-priority regional transmission project’ means an overhead, submarine, or underground transmission facility, including conductors or cables, towers, manhole duct systems, reactors, capacitors, circuit breakers, static VAR compensators, static synchronous compensators, power converters, transformers, synchronous condensers, braking resistors, and any ancillary facilities and equipment necessary for the proper operation of the facility, that is selected in a regional transmission plan for the purposes of cost allocation under Order Number 1000 of the Commission (or any successor order), including an interregional project selected under that plan.
That's it -- mere selection of and inclusion in a regional transmission plan makes a project "high-priority." Ummm... does Heinrich know that RTOs include hundreds of projects in their regional plans each year? "High-priority" over what? Transmission projects that aren't in a regional plan? Those are few and far between because they're nearly impossible to build (ain't that right, Clean Line?) So, every
project is going to be a "high-priority" project in this brave, new world?
It's quite obvious that S.1017 intends to "fix" everything that went wrong with the original Sec. 216, including the flawed NIETCs and the ability of a state to deny an application for a transmission project that did not serve its citizens. But, let's ask ourselves, does it really need fixing? State approvals aren't the problem with new transmission, it's federal approvals and studies that muck up and delay transmission plans. In addition, Congress has resolutely refused to make electric transmission siting and permitting a federal responsibility, and will most likely continue to do so.
There seemed to be little love for controversial legislation like S.1017 at Thursday's Senate Energy and Natural Resources Committee hearing. But, you know how Congress is... they get up to all sorts of hijinks if you don't keep your eye on them, so this bears a bit of babysitting.
One more thing before I wrap this up... where did this legislation come from?
The original Sec. 216 got its purpose from:
(4) In determining whether to designate a national interest electric transmission corridor under paragraph (2), the Secretary may consider whether--
(A) the economic vitality and development of the corridor, or the end markets served by the corridor, may be constrained by lack of adequate or reasonably priced electricity;
(i) economic growth in the corridor, or the end markets served by the corridor, may be jeopardized by reliance on limited sources of energy; and
(ii) a diversification of supply is warranted;
(C) the energy independence of the United States would be served by the designation;
(D) the designation would be in the interest of national energy policy; and
(E) the designation would enhance national defense and homeland security.
Nothing in there about renewable energy, right?
Now take a look at the purpose of the new Sec. 216:
(a) Policy.—It is the policy of the United States that the national interstate transmission system should be guided by the goal of maximizing the net benefits of the electricity system, taking into consideration--
“(1) support for the development of new, cleaner power generation capacity, including renewable energy generation located distant from load centers;
“(2) opportunities for reduced emissions from regional power production;
“(3) transmission needs driven by public policy requirements established by State or Federal laws (including regulations);
“(4) cost savings resulting from--
“(A) reduced transmission congestion;
“(B) enhanced opportunities for intraregional and interregional electricity trades;
“(C) reduced line losses;
“(D) generation resource-sharing; and
“(E) enhanced fuel diversity;
“(5) reliability benefits, including satisfying reliability standards and guidelines for resource adequacy and system security;
“(6) diversification of risk relating to events affecting fuel supply or generating resources in a particular region;
“(7) the enhancement of competition in electricity markets and mitigation of market power;
“(8) the ability to collocate facilities on existing rights-of-way;
“(9) competing land use priorities, including land protected under Federal or State law;
“(10) the requirements of section 217(b)(4); and
“(11) the contribution of demand side management (including energy efficiency and demand response), energy storage, distributed generation resources, and smart grid investments.
Great news out of Iowa yesterday! Legislation targeted to restrict the use of eminent domain by private companies not serving Iowans advanced as hundreds of landowners and other stakeholders gathered to speak out at a subcommittee meeting at the Capitol.
NPR has the story. Listen to the audio, it's better than the print version.
Several landowners spoke out about abusive practices of land agents attempting to secure right-of-way.
“I've heard this from other landowners being told the same thing,” Murray says. “Right-of-way agents are saying this is inevitable so you better take the easement deal before you.”
A spokesman for Bakken crude pipeline company Dakota Access said what the companies always say when faced with the transgressions of their shifty land agents:
“If anybody knows of anyone who’s been dealt with unfairly,” Boeyink says, “get the names to me and we will deal with it swiftly.”
Yada, yada, yada, we will fire any land agent who violates the "code of conduct." Tell me, if land agents were regularly subjected to firing for using abusively coercive tactics to secure easements, why does it still happen with such regularity? I don't think I believe it. I think it's merely window dressing for instances where a land agent is caught by a landowner in a pack of lies. I think that companies routinely look the other way when violations occur, as long as easement agreements are being filed. Because for every one unscrupulous land agent that gets reported in the media, there are probably hundreds of others that got away with it. I have heard numerous horror stories about transmission right-of-way land agents, continuing up until the present. Where there's this much smoke, there is certainly fire.
The Sierra Club seems to be backing off its hypocritical support of Clean Line transmission projects, while simultaneously opposing pipelines as an abuse of eminent domain.
Wally Taylor of Cedar Rapids, a lawyer for the Iowa chapter of the Sierra Club, said his organization is worried about an "extreme risk to property and the environment" if the pipeline project proceeds. There is no doubt that oil spills will occur and it will be many years before the land can be farmed again, he added.
It's also clear that if Bakken crude oil is transported through Iowa, it will be shipped from Illinois onto the world petroleum market via the Gulf of Mexico, Taylor said. "This is all about private property. It isn't about benefiting Iowa or the nation," he said. Similarly, the Rock Island Clean Line would not provide a way for Iowans to connect to the line or to obtain energy from the transmission facility, he added.
That's right, Sierra Club! Clean Line does not provide a way for pass-thru states to benefit from its projects! The projects also destroy the environment and economy of pass-thru states and won't actually shut down any coal plants. Not one! Sierra Club should really get its act together here and stop worshipping at the alter of grant funding and renewable energy make-believe.
Clean Line's spokesperson tried to get the committee to believe the company plans on acquiring more than 90% of the easements it needs voluntarily.
Paula Dierenfeld, representing Clean Line Energy Partners, said her company currently has obtained voluntary easements from about 15 to 20 percent of property owners and has a goal of obtaining "well in excess of 90 percent" voluntary easements. But she questioned the proposed requirement to obtain 75 percent voluntary sign-ups before eminent domain can be requested. She said a company could spend millions of dollars on obtaining easements without even knowing whether a project could move forward. She asked whether any businesses would support that idea.
Paula must be new. Clean Line has obtained all the voluntary easements it's going to get, even with the hard sell tactics reported by Mr. Murray. 15%. That's it. The rest is a fairy tale. The people of Iowa aren't buying what you're selling. You know, Paula, risk is a big, big part of being in the merchant transmission business when you don't have an order to construct the project from a regional transmission authority. Maybe you should ask your bosses at Clean Line why they're supporting the company spending millions of dollars on obtaining easements without even knowing whether their project could move forward?
Way to go, Iowa!
Knock, knock!Who's there?
Regional Transmission Organization!
Is it PJM?
Is it MISO?
Is it SPP?
Which Regional Transmission Organization is it?
It's merchant transmission wanna-be Clean Line Energy Partners!
Go away, Clean Line, you're not a Regional Transmission Organization!
The U.S. Department of Energy has finally published Clean Line's third "application" to have the DOE "participate" in its Plains & Eastern Clean Line transmission project in preparation for opening a new 45-day public comment period on non-NEPA issues. The only thing missing on this pile of make-believe is the golden binding.
This supplemental application is Clean Line's third chance to cure defects in its prior two applications, such as the fact that Sec. 1222 requires that an eligible project:
(2) is consistent with--
(A) transmission needs identified, in a transmission expansion plan or otherwise, by the appropriate Transmission Organization (as defined in the Federal Power Act [16 U.S.C. 791a et seq.]), if any, or approved regional reliability organization;
None of Clean Line's projects are included in a RTO/ISO plan. In fact, Clean Line hasn't even bothered submitting its projects into any regional planning process for consideration.
So, what did Clean Line do when the DOE asked that it prove its project met the statutory requirements under Sec. 1222? Clean Line pretends to be a Regional Transmission Organization!
2.2 The proposed Project must be consistent with transmission needs identified, in a transmission expansion plan or otherwise, by the appropriate Transmission Organization (as defined in the Federal Power Act, 16 U.S.C. 791a et seq.) if any, or approved regional
In establishing this criterion, Congress sought to ensure that projects undertaken through Section 1222 are appropriately planned to meet identified transmission needs. The Plains & Eastern Project meets this requirement. On an interregional basis, numerous planning
initiatives and reports have identified the need for new West-East transmission lines to move
wind power from the central United States to load centers. On a regional basis, SPP and MISO (the two RTOs with which the Project interconnects) have also identified the need for new transmission facilities to accommodate wind generation. Further the Project has been planned and developed in a manner that is consistent with ISO/RTO planning assessments. Namely, in planning and developing the Project, Clean Line performed a series of studies and evaluations that are consistent with how the ISOs and RTOs generally identify needs and solutions for transmission system development. A final measure by which Clean Line meets the statutory requirement is its consistency with reliability standards issued by the approved regional reliability organizations (“RRO”) as envisioned under Section 1222. In light of these multiple areas of consistency, further detailed below, Project meets the criterion for consistency with planning and identified transmission needs.
That's right. Clean Line says that it planned its project using the same studies that RTOs use to make regional transmission plans, therefore Clean Line's findings that its project meets identified transmission needs are just as good as any RTO determination.
Here's what it takes to be a Regional Transmission Organization:
(j) Required characteristics for a Regional Transmission Organization.
A Regional Transmission Organization must satisfy the following characteristics when it commences operation:
(1) Independence. The Regional Transmission Organization must be independent of any market participant. The Regional Transmission Organization must include, as part of its demonstration of independence, a demonstration that it meets the following:
(i) The Regional Transmission Organization, its employees, and any non-stakeholder directors must not have financial interests in any market participant.
(ii) The Regional Transmission Organization must have a decision making process that is independent of control by any market participant or class of participants.
(iii) The Regional Transmission Organization must have exclusive and independent authority under section 205 of the Federal Power Act (16 U.S.C. 824d), to propose rates, terms and conditions of transmission service provided over the facilities it operates.
Get it, Clean Line? You can't be a Regional Transmission Organization that identifies transmission needs as long as you have a PECUNIARY
interest in a project under consideration.
Clean Line is not a Regional Transmission Organization.
Just one more thing to fight about in federal court? Any determination by DOE that Clean Line's project(s) qualify under Section 1222 is sort of like one of those Monopoly "Go To Jail" cards. Go to Federal Court. Go Directly to Federal Court. Do Not Pass "Go." Do not collect... any money at all.
Do you suppose Clean Line is also going to be on the hook for DOE's legal bills, or is the American Taxpayer going to end up funding this courtroom showdown?
It's a good thing when it supports the public enjoyment of the arts, history, or nature. But where does the line get drawn between philanthropy and tossing money down the toilet?
Do you suppose that the Clean Line executives sing and dance for their investors? They ought to, since I believe that's all the investors are going to get in exchange for their philanthropy.
It's been a while since we've gotten a look at who's supplying the money that keeps this rickety boat afloat. During the ICC RICL hearings in December of 2013, we heard that Clean Line was going to be out of money by mid-2014.
But, here they still are... being a nuisance to Mayberry. Looks like National Grid had to up the ante and kick in another $15M. And since a 40% share seems to have increased in value, does this mean that other investors have also flushed some more money down the Clean Line potty? And what about Bank of America? Didn't one of Clean Line's spinners say the company was getting cash from Bank of America?
If we can believe Clean Line's Grain Belt Express application to the Illinois Commerce Commission, here's a listing of who's to blame for funding this fiasco:
GridAmerica Holdings (National Grid) has invested $55.7M and currently owns 40% of the company.
ZAM Ventures (Ziff brothers) has invested $73.8M and currently is the majority owner, with a 53% stake.
Michael Zilkha has a piddling $2.8M invested, which gives him a 2% ownership interest.
The remaining 5% (or $6.7M) is owned by "Clean Line Investment" which is some vague investment vehicle owned by "service providers and employees of Clean Line."
Total investment: Around $140M
That's a lot of green that is simply going to disappear when Clean Line's circus tent folds in the middle of the night and the company slips out of town. But that's okay, I'm sure these savvy investors wouldn't invest money they couldn't afford to lose.
$140M invested and the company still doesn't have even one of its projects fully permitted and ready to build.
In addition, all the interest in the project is coming from non-existent generators. It really doesn't matter how much Clean Line talks about how much its project is needed by other states in the east, without any contracts, Clean Line will fail.
Dance, Clean Line, dance!!!
Because transmission is such a long-term asset, we must be extremely mindful of
how new projects relate to each other to achieve comprehensive energy policy goals. If we continue to approach transmission as a hodgepodge, knee-jerk reaction to serve short-term goals and provide sustainable revenue streams to investor-owned utilities, we risk setting ourselves up for a possible future where a huge investment in transmission becomes the financial responsibility of a shrinking pool of ratepayers. Technological advances and affordability are making it possible for an increasing number of consumers to produce their own power and feed it into the local distribution grid by making their own smart, fuel-free, power producing investments. Energy efficiency and demand management gains continue to shatter future demand projections, further decreasing the need for billions of dollars of investment in new transmission infrastructure.
Nothing like a wake-up slap across the face, eh, EEI?
In September of 2012, EEI held a pow-wow to talk about how they were going to manage this strange, new world where their control of the electricity-consuming public was going to erode with alarming alacrity. Instead of approaching the problem honestly, EEI preferred to use its power, money and influence to try to find ways to kill distributed generation, instead of getting on the wagon and finding a way to turn it into a profitable business model.
In early 2013, EEI produced a white paper addressing what it termed "disruptive challenges" heralding doom and gloom for their stable of investor owned utilities.
And the battle lines were drawn.
Solar advocates have created their own issues, with polarized insistence that their use of the distribution system to sell their excess back to the utilities should be free, and that they provide so many benefits to the system that they should actually be paid more for avoided costs.
Because utilities are so bloated and focused on building more infrastructure from which they derive their profits, a shrinking pool of ratepayers increases the costs to the ones who don't install solar. Utilities crying about the burden placed on "the poor" is ludicrous and hard to stomach.
There has been no middle ground, and messaging on both sides is pretty ridiculous. Too much rhetoric causes increased polarization that stymies progress and the eventual realization of our energy future. Can't we get it together here, and effect a reasonable compromise?
Otherwise, the utilities can continue their self-destructive initiative to have it all, while solar advocates can disconnect from the public utility grid and build their own system to share their excess. Seems kinda silly, doesn't it? Where's King Solomon when you need him?
Clean Line President Michael Skelly recently told a Tulsa World reporter that his company is going through a federal permitting process for its Plains & Eastern Clean Line because the project wants to cross three states. (watch the video
There's no such thing as a "federal permitting process" for high-voltage electric transmission lines!
Skelly calls the U.S. Department of Energy the "permitting agency." However, what he's referring to is Clean Line's application to have the U.S. DOE "participate" in its for-profit transmission venture undertaken outside the normal regional transmission planning process.
Section 1222 of the Energy Policy Act of 2005, Third Party Finance, allows federal power marketing agencies to "participate" in transmission projects that are built within their territories. As noted in the title of the statute, Sec. 1222 projects must be financed by third parties (in this case, Clean Line's private venture capitalists). Section 1222 does not give U.S. DOE authority to PERMIT or site transmission projects. It simply allows "participation." In Clean Line's case, the company is only interested in DOE's "participation" in order to anoint itself with the power marketing agency's federal eminent domain authority to condemn and take right of way from private landowners.
DOE and Southwestern understand and agree that their ability to acquire through condemnation proceedings property necessary for the development, construction and operation of the Project is one of the primary reasons for Clean Line’s interest in developing the Project with DOE and Southwestern and through the use of EPAct 2005 section 1222.
DOE and Southwestern agree that, if the Secretary of Energy ultimately decides upon the conclusion of such evaluation as DOE and Southwestern deem appropriate that (i) the Project complies with section 1222, and (ii) to participate in the Project’s development pursuant to section 1222, then, DOE and Southwestern will use their condemnation authority as may be necessary and appropriate for the timely, cost-effective and commercially reasonable development, construction and operation of the Project.
Section 1222 is not purposed to "permit" transmission lines when a state has denied a permit.
d) Relationship to other laws
Nothing in this section affects any requirement of--
(1) any Federal environmental law, including the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.);
(2) any Federal or State law relating to the siting of energy facilities; or
(3) any existing authorizing statutes.
It simply allows DOE to "participate" in designing, developing, constructing, operating, maintaining or owning transmission. It permits DOE to assume liability for the actions of a third party in order to utilize federal power marketing authority for benefit of transmission that is not part of or necessary to their systems.
The Secretary, acting through WAPA or SWPA, or both, may design, develop, construct, operate, maintain, or own, or participate with other entities in designing, developing, constructing, operating, maintaining, or owning, a new electric power transmission facility and related facilities (“Project”) located within any State in which WAPA or SWPA operates if the Secretary, in consultation with the applicable Administrator, determines that the proposed Project--
(1)(A) is located in an area designated under section 216(a) of the Federal Power Act [16 U.S.C. 824p(a)] and will reduce congestion of electric transmission in interstate commerce; or
(B) is necessary to accommodate an actual or projected increase in demand for electric transmission capacity;
(2) is consistent with--
(A) transmission needs identified, in a transmission expansion plan or otherwise, by the appropriate Transmission Organization (as defined in the Federal Power Act [16 U.S.C. 791a et seq.]) if any, or approved regional reliability organization; and
(B) efficient and reliable operation of the transmission grid;
(3) will be operated in conformance with prudent utility practice;
(4) will be operated by, or in conformance with the rules of, the appropriate (A) Transmission Organization, if any, or (B) if such an organization does not exist, regional reliability organization; and
(5) will not duplicate the functions of existing transmission facilities or proposed facilities which are the subject of ongoing or approved siting and related permitting proceedings.
There's simply nothing in Section 1222 that authorizes DOE to issue a "permit" for new transmission lines that have been denied by a state. If a state created laws requiring merchant transmission projects to receive a permit from the state before beginning construction, Section 1222 is a worthless exercise in federal usurpation of state authority. Transmission siting and permitting is state-jurisdictional. The federal government has no authority to override state laws.
Clean Line is currently trying to get the DOE to agree to accept liability for its actions and "participate" in its project. Before making a decision whether or not to "participate," DOE is undertaking an Environmental Impact Statement, which is required for any federal actions that affect the environment. In the video, Skelly encourages people to "weigh in" during the Draft EIS comment window (ends March 19). Skelly tells people to comment whether or not they like the project and where it should be routed. This is wrong. Comments should be directed around aspects of the draft EIS, which examines the environmental and social factors of the project. There will be a separate 45-day comment period for the public to "weigh in" on the DOE's decision whether or not to "participate" in the project, which will begin AFTER the EIS is completed. Skelly wants you to think that the EIS is your only avenue to comment on Section 1222. It's not, but you should comment on it nonetheless by going to this link.
Skelly also goes on about state and local property taxes, claiming that localities will benefit to the tune of $20K per mile, or half a million bucks a year. How did he do that math, considering each county has a different amount of proposed line mileage? He also forgets to mention that Clean Line has pursued and received tax abatement in a number of states and localities for periods of up to ten years. That will be 10 years of Clean Line using your local roads, infrastructure and services to construct and operate its project before you receive a dime of reimbursement for what it costs you to support it.
Skelly also tells the reporter that "the grid is maxed out" and Clean Line is "a vital piece of the puzzle to get wind online." Not so. The grid is not "maxed out." It is a carefully planned machine that is operated by regional transmission organizations and balancing authorities. These authorities undertake long-term planning that allows for needed expansion of our grid. If wind farms, or other generators, submit requests to interconnect to the grid, they get placed in a queue that allows the authority to consider new generation and how transmission may be needed and planned to move the generation to where it is needed in within the region.
Clean Line has bypassed this process and is proposing its project without any recognized need for the transmission or generation it proposes to bring online. Section 1222 requires that any project in which the DOE "participates" be consistent with, and not duplicative of, any regional plan.
IS CONSISTENT WITH: transmission needs identified, in a transmission expansion plan or otherwise, by the appropriate Transmission Organization (as defined in the Federal Power Act [16 U.S.C. 791a et seq.]) if any, or approved regional reliability organization; and (5) will not duplicate the functions of existing transmission facilities or proposed facilities which are the subject of ongoing or approved siting and related permitting proceedings.
Clean Line fails this very important stipulation in Sec. 1222. Needed transmission is already being undertaken by our regional authorities. Clean Line is unnecessary duplication intended to stimulate construction of generation purposed only to export power between regions. It also fails to present any evidence that there are buyers for this power in other regions. It's just not true that new generation cannot be built without Clean Line providing a way to get it to "market," considering there is no identified market. Clean Line is in a chicken/egg scenario, supposing if it builds its project that generation and customers will develop, however, Clean Line cannot build without generators and customers developing FIRST. So, which came first? Clean Line, or generators and customers? We'll probably never find out because I don't think Clean Line is ever going to happen.
Skelly says that in order to utilize Clean Line's maximum capacity of 4,000 MW, 3,000 new wind turbines will have to be constructed near the project's Oklahoma converter station. Each turbine requires 1/2 a square mile of land, so we're talking about covering 1,500 square miles of land with wind turbines. That's roughly an area comparable to the entire State of Rhode Island. Skelly also points out that his project will simply waste 5% of the energy it carries through line loss. By comparison, a renewable generator sited near or at the electric load wastes little to none of the energy generated. Taking huge tracts of land out of production to generate energy that is transported long distance to load is simply wasteful.
Skelly shares that he believes "energy is a big deal" and his long journey from idea to reality will be "worth it." Classic words from a guy using someone else's money to dream the impossible dream.
The solicitation for commitments, expected to last about seven weeks, will be a gauge in determining the interest in using the line.
GBE is soliciting customers in accordance with the plan it filed with FERC last year to negotiate rates in a fair and non-discriminatory manner that results in just and reasonable rates.
Despite GBE's media push that FERC has "approved" its project, FERC has no jurisdiction to approve the siting and permitting of the project. What FERC does have an interest in is ensuring that the rates GBE charges to its customers are just and reasonable. FERC simply approved GBE's plan to undertake this process fairly. Once GBE completes the negotiation process and assigns capacity, it must make a compliance filing with FERC demonstrating that it complied with the plan as approved. That may be be the tricky part!
Who wants to make a contractual commitment to purchase capacity on a transmission line that may or may not be permitted, and may or may not be built? It could be generators, that Clean Line admits have not yet been built. It could also be utilities, who commit to purchase the capacity. Or it could be no one at all.
In the case of generators, the generators would need to have customers (utilities) that want to purchase their generation delivered to Indiana (and incur additional transmission costs on other systems to get the power to load). Since these generators have yet to be built, and the transmission to Indiana has yet to be built, committing to a purchase price for delivered power could be risky. Utilities hate risk. A utility seeking to add renewable generation to its portfolio has many options, including existing generators and transmission. Utilities plan their resources many years in advance as part of their obligation to provide a public service. They are obligated to seek the cheapest price. They want to know the resources they commit to purchase will actually be there when needed, not possibly unavailable at some later date, which would leave the utility scrambling to fill some hole in its plan at whatever price they can find. Utilities hate risk. Risk is costly.
In the case of utilities purchasing capacity directly... more risk! Purchase of capacity on a transmission line that may or may not be there when needed, connected to unnamed generators that may or may not be there when needed, is risky. Utilities hate risk.
I read an article long ago regarding Clean Line's business plan. Some panned the plan, saying there is no market for this kind of risk. So, I thought about it. If Clean Line's plan is such a sure thing, why aren't there hundreds of transmission companies building merchant lines outside the regional planning process? Utilities have transmission affiliates, and they like to make money, too. Maybe it's because experienced transmission developers know that there truly is no market for Clean Line's business plan?
Last year, Clean Line opened a different FERC-jurisdictional solicitation process for another of its projects, the Plains and Eastern Clean Line. Regarding that process, Clean Line recently claimed:
It was encouraged by the strong response to a solicitation of customers for another power line it plans to build to deliver wind energy from Oklahoma to Southern states.
Encouraged? Strong response? If the response was strong and encouraging, Clean Line should have negotiated contracts with the respondents and made its compliance filing at FERC and announced to the world that it had committed customers for that project, right? What happened?
From May through July of 2014, Clean Line conducted an open solicitation for transmission capacity on the Plains & Eastern Clean Line. 15 potential customers submitted more than 17,000 MW of requests for transmission service.
Clean Line's negotiated rate authority for Plains & Eastern requires the company to:
... make a compliance filing disclosing the results of the capacity allocation process within 30 days after the close of the open solicitation process, as discussed in the body of this order.
It's been 6 months. No compliance filing. No contracts. No customers. What happened? Is Clean Line still negotiating? Doesn't sound very strong and encouraging to me. What if the bids Clean Line received were unacceptably conditioned to manage risk, or not satisfactory to economically support the project? Remember, the bidding window has closed. Would Clean Line have to award capacity to the top bidders, no matter the conditions? If so, then perhaps it is busy evaluating the economic reality of its project.
Or is Clean Line planning to reject the first round of bidders and open a second solicitation window, hoping for better bids? Would that be fair in FERC's eyes?
Don't forget to get your bids in. ;-)
Utilities hate risk.