The authority to site and permit high-voltage transmission lines has historically rested with the states. However, the federal government has been trying to wrest this authority from the states for years.
The states consider local need and issues when evaluating a project. Affected stakeholders are afforded due process to participate in the debate at the state level. Occasionally, a state will deny an application for a transmission project that provides no benefit to the state. The feds, and the investor owned utilities who relentlessly lobby them, want to remove consideration of new transmission projects to Washington, DC, where due process will be smothered by national policy goals.
But it hasn't been smooth sailing for the feds. Congress has repeatedly declined to federalize transmission permitting and siting, preferring to leave authority with the states. But the feds and the utility lobbyists have found other ways to try to gain what they haven't been granted by Congress.
The Energy Policy Act of 2005 hid a few little wormholes for the feds to override states and claim eminent domain to site transmission under certain conditions. One was Section 1221, the creation of National Interest Electric Transmission Corridors and backstop siting authority for FERC to site transmission in these corridors in the event a state failed to act. That section has been neutralized by the courts.
But, a second federal eminent domain tool that has not yet attracted much attention is about to be deployed through Section 1222, Third-Party Finance, in order to execute one of the worse abuses of federal eminent domain authority in history. Section 1222 provides:
The states consider local need and issues when evaluating a project. Affected stakeholders are afforded due process to participate in the debate at the state level. Occasionally, a state will deny an application for a transmission project that provides no benefit to the state. The feds, and the investor owned utilities who relentlessly lobby them, want to remove consideration of new transmission projects to Washington, DC, where due process will be smothered by national policy goals.
But it hasn't been smooth sailing for the feds. Congress has repeatedly declined to federalize transmission permitting and siting, preferring to leave authority with the states. But the feds and the utility lobbyists have found other ways to try to gain what they haven't been granted by Congress.
The Energy Policy Act of 2005 hid a few little wormholes for the feds to override states and claim eminent domain to site transmission under certain conditions. One was Section 1221, the creation of National Interest Electric Transmission Corridors and backstop siting authority for FERC to site transmission in these corridors in the event a state failed to act. That section has been neutralized by the courts.
But, a second federal eminent domain tool that has not yet attracted much attention is about to be deployed through Section 1222, Third-Party Finance, in order to execute one of the worse abuses of federal eminent domain authority in history. Section 1222 provides:
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.
WAPA and SWPA are federal power marketing agencies set up to sell and deliver hydropower across central, western and southern states. WAPA and SWPA, as federal agencies, are endowed with federal eminent domain authority to take private property for use in their systems. Doesn't sound so bad, does it? However, Section 1222 allows the Secretary of Energy to utilize WAPA's & SWPA's eminent domain authority for benefit of third-party projects in the agencies' territories that are not connected or necessary to their systems. And this is where the slippery slope starts, friends. Congress tried to prevent this kind of bad behavior by including qualifying standards for third-party projects, such as being approved in a regional transmission plan or equivalent, which would prevent duplication of projects, and requiring a finding of increased demand necessitating such a project. Congress also put a cap on the amount of money WAPA and SWPA could accept from third parties.
(g) Maximum funding amount
The Secretary shall not accept and use more than $100,000,000 under subsection (c)(1) for the period encompassing fiscal years 2006 through 2015.
And Congress also stipulated that Section 1222 could not override existing state laws.
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.
But, personal relationships between DOE personnel and leadership of a private, for-profit corporation made things just so cozy that an RFP for Sec. 1222 projects was issued in 2010 that coincided with the development of this company's long-haul HVDC projects.
Jimmy Glotfelty – Executive Vice President of Clean Line Energy Partners
Mr. Glotfelty brings a wealth of public and private sector transmission experience to Clean Line. He is a well-known expert in electric transmission and distribution, generation, energy policy and energy
security. He most recently held the position of Vice President, Energy Markets, for ICF Consulting. Mr. Glotfelty served in the US Department of Energy where he was the Founder and Director of the Office
of Electric Transmission and Distribution, a $100 million per year electricity transmission and distribution research and development program. Mr. Glotfelty also was the lead US representative to
the joint US-Canadian Power System Outage Task Force investigating the Blackout of August 2003.
While at the Department of Energy, Mr. Glotfelty worked extensively with utility chief executive officers and senior management in the electric power and energy sectors. He led teams that focused on researching transmission and distribution technologies, gaining Presidential permits for cross-border transmission lines, studying the impacts of Regional Transmission Organizations, identifying major transmission bottlenecks, and securing the critical energy infrastructure of the United States.
And the next thing you know, Clean Line Energy Partners became the first and only transmission developer to respond to DOE's RFP for third-party financed projects under Sec. 1222. Clean Line submitted a voluminous application for its Plains & Eastern Clean Line merchant transmission project in July 2010. In its application, Clean Line made it clear that its only interest in participating under Sec. 1222 was the ability to have SWPA condemn land for its project:
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.
Clean Line Energy Partners is a privately held company owned by Michael Zilkha and ZAM Ventures that is proposing to build four HVDC merchant transmission projects originating in the midwest. A merchant transmission project is a for-profit venture that is paid for entirely by its owner. In exchange for investing billions, Clean Line's super-rich owners will earn a hefty return on their capital by selling transmission capacity on the transmission lines to both generators and load serving entities. Merchant transmission projects are speculative ventures that are proposed and built outside the regulated regional transmission planning process. Merchant lines proposed outside a planning process have not been determined to be needed by anyone other than their owners. If a transmission project is needed for reliability, economic or public policy reasons, it is approved by and included in the plan of a regional transmission operator. A merchant transmission project is the wildcatter of the transmission business.
Without Section 1222 and SWPA's ability to take land for Clean Line via eminent domain, the company would have to apply for and receive public utility status and the power to condemn private property for its private gain from each individual state that it crosses. This could prove onerous to the super-rich and muck up or delay their profit.
In exchange for stealing private property from citizens to be used for a private company's gain, SWPA could be granted a certain amount of transmission capacity on Clean Line's project, however, SWPA isn't in the wind business. But DOE can use authority it was granted under Sec. 1222 to pick winners and losers in the renewable energy business, and Clean Line's investors put together a team with strong DOE connections. Coincidence? Probably not.
So, does Clean Line's project meet the requirements of Sec. 1222?
(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;
Sec. 216(a) has been nullified by the courts, so (A) isn't even an option. Here's Clean Line's justification for qualifying for (B) from their application:
"In addition to the general demand for more transmission oriented to renewables, there is and will be a specific demand for transmission to address the following concerns:
Additional Transmission is Needed to Develop Wind Resources in the Southwest Power Pool;
Additional Transmission is Needed to Relieve Congestion in Western SPP;
Additional Export Capability is Needed from SPP; and
Additional Transmission is Needed to Import Power in the Southeast.
The Plains & Eastern Clean Line meets each of these needs."
No actual projected demand for the project from any official authority tasked with determining same was included. The company points to bits and pieces of out-of-date studies that it feels justifies its desire to build this project, along with studies privately commissioned by the company. I don't think this is the kind of "actual or projected increase in demand" that Congress had in mind. It's pure posturing of the worst kind.
Other requirements stipulate that the 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; 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's idea of compliance with this requirement?
"SPP repeatedly has identified the need to build additional transmission to fully develop wind potential in
the region and to export it to neighboring regions." Right, but SPP did not identify Clean Line as the solution in its transmission expansion plan, or otherwise determine its project was needed.
Clean Line also relies on:
"The Plains & Eastern Clean Line is consistent with transmission needs identified in the Joint Coordinated
System Plan 2008 (JCSP). The JCSP was the first inter-regional transmission planning effort in the
Eastern Interconnection. The JCSP was a collaborative effort and involved most of the major
transmission operators in the Eastern Interconnection, including, MISO, SPP, PJM Interconnection, TVA,
Mid-Continent Area Power Pool and several key members of SERC."
And this 5 year old plan has been scrapped. Also not what Congress had in mind for this requirement.
When DOE questioned Clean Line's eligibility under Sec. 1222, the company submitted an "updated application" that contained the same old lack of convincing evidence of qualification.
Nevertheless, DOE issued a letter entering into an agreement with Clean Line to move forward with the NEPA process. DOE has not completely committed to the project yet, but if it does:
"After the workshops, Clean Line will host public
open houses to gather feedback on the preferred and alternative routes from landowners and other
affected parties. These outreach efforts are designed to assure that relevant stakeholders have early and multiple opportunities to provide feedback..." except for landowners. Landowners are not considered "relevant stakeholders" by Clean Line.
DOE should think long and hard about making the federal government liable for the legal mistakes of a private company. Just because the feds were successful in asserting federal eminent domain in another dissimilar situation, does not mean that helping the rich get even richer at the expense of the common man is a good idea. How much money does Congress have budgeted for another federal court beatdown over eminent domain takings?
And DOE needs to take a good, hard, objective look at Clean Line's "qualifications" under Sec. 1222. The company doesn't qualify without torturing the language in the statute, and a finding that it does qualify is also likely to lead to a separate, but equally vicious, court showdown.
Sometimes, it's just not worth the risk to help your "friends" by overstepping your legal authority and bending federal law. Maybe the incoming Energy Secretary needs to do a little housekeeping before Congress does it for him, or he finds himself explaining DOE's taking of ordinary citizens' private property for use by super-rich investors. Congress has resolutely rejected federal transmission siting authority over and over again and will likely continue to do so.
Without Section 1222 and SWPA's ability to take land for Clean Line via eminent domain, the company would have to apply for and receive public utility status and the power to condemn private property for its private gain from each individual state that it crosses. This could prove onerous to the super-rich and muck up or delay their profit.
In exchange for stealing private property from citizens to be used for a private company's gain, SWPA could be granted a certain amount of transmission capacity on Clean Line's project, however, SWPA isn't in the wind business. But DOE can use authority it was granted under Sec. 1222 to pick winners and losers in the renewable energy business, and Clean Line's investors put together a team with strong DOE connections. Coincidence? Probably not.
So, does Clean Line's project meet the requirements of Sec. 1222?
(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;
Sec. 216(a) has been nullified by the courts, so (A) isn't even an option. Here's Clean Line's justification for qualifying for (B) from their application:
"In addition to the general demand for more transmission oriented to renewables, there is and will be a specific demand for transmission to address the following concerns:
Additional Transmission is Needed to Develop Wind Resources in the Southwest Power Pool;
Additional Transmission is Needed to Relieve Congestion in Western SPP;
Additional Export Capability is Needed from SPP; and
Additional Transmission is Needed to Import Power in the Southeast.
The Plains & Eastern Clean Line meets each of these needs."
No actual projected demand for the project from any official authority tasked with determining same was included. The company points to bits and pieces of out-of-date studies that it feels justifies its desire to build this project, along with studies privately commissioned by the company. I don't think this is the kind of "actual or projected increase in demand" that Congress had in mind. It's pure posturing of the worst kind.
Other requirements stipulate that the 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; 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's idea of compliance with this requirement?
"SPP repeatedly has identified the need to build additional transmission to fully develop wind potential in
the region and to export it to neighboring regions." Right, but SPP did not identify Clean Line as the solution in its transmission expansion plan, or otherwise determine its project was needed.
Clean Line also relies on:
"The Plains & Eastern Clean Line is consistent with transmission needs identified in the Joint Coordinated
System Plan 2008 (JCSP). The JCSP was the first inter-regional transmission planning effort in the
Eastern Interconnection. The JCSP was a collaborative effort and involved most of the major
transmission operators in the Eastern Interconnection, including, MISO, SPP, PJM Interconnection, TVA,
Mid-Continent Area Power Pool and several key members of SERC."
And this 5 year old plan has been scrapped. Also not what Congress had in mind for this requirement.
When DOE questioned Clean Line's eligibility under Sec. 1222, the company submitted an "updated application" that contained the same old lack of convincing evidence of qualification.
Nevertheless, DOE issued a letter entering into an agreement with Clean Line to move forward with the NEPA process. DOE has not completely committed to the project yet, but if it does:
- Clean Line will agree that eminent domain authority would be used only as a last resort after negotiations in good faith have concluded with all affected landowners;
- Clean Line will agree that the Department will retain the option to select and oversee any land acquisition company required for the Project.
"After the workshops, Clean Line will host public
open houses to gather feedback on the preferred and alternative routes from landowners and other
affected parties. These outreach efforts are designed to assure that relevant stakeholders have early and multiple opportunities to provide feedback..." except for landowners. Landowners are not considered "relevant stakeholders" by Clean Line.
DOE should think long and hard about making the federal government liable for the legal mistakes of a private company. Just because the feds were successful in asserting federal eminent domain in another dissimilar situation, does not mean that helping the rich get even richer at the expense of the common man is a good idea. How much money does Congress have budgeted for another federal court beatdown over eminent domain takings?
And DOE needs to take a good, hard, objective look at Clean Line's "qualifications" under Sec. 1222. The company doesn't qualify without torturing the language in the statute, and a finding that it does qualify is also likely to lead to a separate, but equally vicious, court showdown.
Sometimes, it's just not worth the risk to help your "friends" by overstepping your legal authority and bending federal law. Maybe the incoming Energy Secretary needs to do a little housekeeping before Congress does it for him, or he finds himself explaining DOE's taking of ordinary citizens' private property for use by super-rich investors. Congress has resolutely rejected federal transmission siting authority over and over again and will likely continue to do so.
RSS Feed