Energy markets aren't special.
They're just another product of the PJM cartel's enabling of its members profits.
Bowring said the process that RTOs use to create market rules is flawed because market players get to vote on those rules, and sometimes they block the passage of needed reforms because they are engaging in the behavior that a new rule would prohibit.
It's like attending goody-two-shoes-kindergarten if you want to participate in PJM's energy markets, and you're going to have to tattle on yourself if you make too much money:
Bowring said market participants also have a duty to inform market overseers of faulty rules and false arbitrage opportunities and to not engage in such behavior once they suspect it to be wrong. He said the "vast majority" of market players do just that, and that those who think "they're the smartest guys in the room" by figuring out how to exploit some rule loophole are usually not since others have also seen that opportunity but chose to do the right thing by not engaging in such behavior.
When is FERC going to "do the right thing" and get rid of its mysterious and dysfunctional energy markets?
They need to realize that they need outsiders to make their silly markets work. If outsiders aren’t allowed to make money playing by the market rules without suffering the occasional random sacrifice from their ranks to serve as an example of a "bad egg" and a demonstration of FERC's power, then perhaps they should just outlaw their participation altogether. Will the beatings continue until morale improves?
It’s like slopping a whole bunch of chum into the water and complaining when sharks show up instead of some pretty goldfish.
Thirty-seven dozen people showed up at the Fort Smith Convention Center in Fort Smith Arkansas last night to tell the U.S. Department of Energy what they think about the Plains & Eastern Clean Line. It was a madhouse (in a most literal sense!)
Arkansan Julie Morton summed it all up quite nicely:
“If you keep trampling on the rights of ‘we the people’ you may have another American Revolution on your hands!"
Clean Line's spokesman continued to blow smoke up everyone's ass by telling them that they shouldn't be concerned about possible health effects. I don't think anyone believed him, and judging from his body language, I'm not certain he even believed himself!
What is certain is that the people of Arkansas WILL NOT peaceably accept this transmission line.
It's time for DOE to fall on its sword and stop this travesty!
This just in...
Boozman, Cotton Introduce Bill Giving States Power to Reject Federal Electric Transmission Projects
U.S. Senators John Boozman (R-AR) and Tom Cotton (R-AR) today introduced legislation to restore the right of states to approve or disapprove of electric transmission projects before the federal government exercises its power to take private property.
The Assuring Private Property Rights Over Vast Access to Lands (APPROVAL) Act would require that the U.S. Department of Energy (DOE) receive the approval of both the governor and the public service commission of an affected state, before exercising the federal power of eminent domain to acquire property for Section 1222 transmission projects. For projects on tribal lands, DOE would have to receive the approval of the impacted tribal government.
“When a road, pipeline or power line is built the use of eminent domain is sadly unavoidable in some cases,” Boozman said. “However, this difficult decision should not be in the hands of Washington bureaucrats. If a project is not good for Arkansas, our governor or public service commission should have the power to say ‘no.’”
"Arkansans should have a say in any decision that affects our land,” Cotton said. “The APPROVAL act will rightly empower Arkansans and preserve the Founding Fathers vision of states’ rights."
In addition to allowing states the ability to reject the use of federal eminent domain for a project, the Boozman-Cotton legislation would ensure to the extent possible, that approved projects are placed on federal land rather than on private land. Specifically, for approved projects, DOE would be required (to the maximum extent possible) to site projects on existing rights-of-way and federal land managed by: (1) the Bureau of Land Management, (2) the U.S. Forest Service, (3) the Bureau of Reclamation, and (4) the U.S. Army Corps of Engineers.
The decision to permit electric transmission projects has long been the responsibility of the individual state. As noted in a 2011 report from the non-partisan Congressional Research Service, “The location and permitting of facilities used to transmit electricity to residential and commercial customers have been the province of the states (with limited exceptions) for virtually the entire history of the electricity industry.” The report says that state and local governments are “well positioned” to understand the concerns of the area and the factors for making a decision on these projects.
DOE is currently seeking public comments on one proposed Section 1222 project: the Plains & Eastern Clean Line Transmission Project, a high voltage direct current electric transmission system and associated facilities, which (if approved) would cross Arkansas. Interested citizens may provide comments through March 19, 2015, to DOE, either online at: http://www.plainsandeasterneis.com/nepa-process/public-involvement.html; by mail addressed to: Plains & Eastern EIS, 216 16th Street, Suite 1500, Denver, Colorado 80202; via email addressed to comments@PlainsandEasternEIS.com; or by fax to (303) 295–2818.
The APPROVAL Act has been referred to the Senate Energy and Natural Resources Committee for further review.
The embattled Clean Line Energy project that proposes to transport energy from rural America to the heavily populated Eastern Seaboard has had a series of major setbacks.
In Missouri, the PSC's own staff, which is made up of engineers, utility economists, and attorneys advised the Commissioners to deny the application. In their Conclusions of Law brief they stated, "Grain Belt Express has not shown electricity delivered over its high-voltage transmission line and converter stations will be lower cost than alternatives for meeting renewable portfolio standards and general demand for clean energy because it overlooks significant costs affecting the integration of wind energy in its production cost modeling and its modeling inputs are insufficient to predict electricity prices at specific locations." They also recommended “The Commission finds that Grain Belt Express' HVDC transmission line project is not needed in Missouri."
On February 11th the commission took the unusual step of ordering Clean Line to submit a considerable amount of additional documentation
after the final briefs were turned in. Among the many requirements: Grain Belt Express shall set forth the status of its efforts to obtain the assent of the county commissions required by Section 229.100, RSMo, in the eight counties crossed by the selected project route in Missouri and provide supporting documentation thereof, including any letters of assent from those eight county commissions.
Five of the eight impacted counties have rescinded support they had previously given Grain Belt. Given that the local sentiment against Grain Belt tends to be very high, and that nearly 2,000 people turned out at the eight public hearings opposed to the project, it seems unlikely that they would be able to secure the needed county assent.
Additionally, Clean Line is running into many roadblocks with its Plains and Eastern project in Oklahoma, Arkansas and Tennessee. Clean Line hopes to be the first company to utilize Section 1222 of the 2005 U.S. Energy Policy Act to obtain federal eminent domain after they were denied eminent domain authority by the state of Arkansas. This provision would authorize DoE to essentially act as a land agent for the private company and use the government's power of eminent domain to condemn the private property in its path.
Recently the Cherokee Nation and several county boards passed resolutions against Plains and Eastern Clean Line obtaining federal eminent domain authority. Earlier this week, the Arkansas House Joint Energy Committee unanimously passed a resolution to send a letter
to the Department of Energy condemning Clean Line's use of Section 1222. Arkansas’ congressional delegation has also been seeking answers from the DOE in Washington, and were instrumental in extending the public comment deadline on the project’s federal environmental impact statement an additional 30 days.
Clean Line is also facing major problems for their Rock Island Project in Illinois and Iowa. The Illinois Commerce Commission voted unanimously to withhold eminent domain authority at this time. In Iowa, where Clean Line recently filed franchise applications, they have been met with fierce resistance and an organized opposition group who is taking their fight to the state capital building.
Jennifer Gatrel from Block Grain Belt Express Missouri states, "Overall the idea that a private company could seize privately-held agricultural land for its own private benefit is just wrong. Clean Line has brought together a vast group of very different individuals from around the country working united on the common goal of protecting landowner rights. This company has brought a major disruption to our community and much time and money has been lost. Clean Line’s proposals have also created an enormous, tightly-knit family formed in reaction to the crisis. We will not lose this fight!!"
Below is a press release from Powhatan Energy Fund. Why mess with perfection? Here goes:------------
West Chester, PA - Last week, PJM Interconnection stated that Powhatan Energy Fund's response to FERC’s order to show cause illustrates our “failure to appreciate the unique legal and regulatory framework governing organized wholesale electricity markets.” Yeah, perhaps we do not understand this “uniqueness” – we were under the impression that constitutional protections applied to all regulated markets in this country, including theirs. We’ve raised our voice against the bullying tactics that FERC has employed in this investigation as they have completely ignored these protections, including our rights to due process and fair notice. Powhatan is in the news and people feel compelled to respond to us because we’re not unique – a lot of people know there’s a fundamental problem here.
The industry struggles to understand the rules and the laws under which they can operate their businesses. PJM’s recent statements add to their confusion. PJM’s pronouncement that FERC’s regulatory mission “to protect consumers and other market participants” is held to a “higher standard” than the SEC’s mission to protect investors is simply wrong. We do not believe PJM could cite any authority to support this claim. The SEC’s mission to protect investors is every bit as stringent and important as FERC’s. FERC has even stated that its market manipulation rule is modeled after the SEC’s 10b-5 precedent.
We wish PJM would stop pretending that this investigation has anything to do with “just and reasonable prices” for power, as they put it. There is no allegation that we increased power prices. As a matter of fact, Alan’s trading had no negative effect on prices or on the power markets at all. If PJM wants to argue, we suggest they find a different straw man.
PJM made the rules, and Alan traded under those rules. Our activities were perfectly legal. And the thing is – PJM knows it. Even after August 2, 2010, when Alan stopped trading, PJM continued to wire funds to us for the very trades that are the subject of the investigation. If they really thought there was anything illegal about the trades, we wonder why they repeatedly sent us money.
We suspect that every single UTC trader made money in the summer of 2010. Instead of vilifying us in the press, PJM should thank us for identifying the goose that was laying these golden eggs. If PJM feels compelled to run any more simulations, Powhatan suggests they quantify how much money the big utilities would have “lost” the last five years had PJM continued to pay UTC traders to take transmission service out of the system. It will show the big utilities are better today, in part, because of Alan’s trading.
Throughout this five-year investigation, we’ve been very cooperative. Over the last year, we’ve been very open. The analysis of our experts, the interactions we’ve had with the FERC, and even our legal correspondence are available to the leadership team at PJM, who can see it all at www.ferclitigation.com
. We encourage a visit.
If Clean Line's "Code of Conduct for Land Agents" was any more than window dressing, landowner reports of harassment by Clean Line land agents wouldn't keep happening. It's nothing but a piece of paper Clean Line uses as a fig leaf to cover its transgressions.
Who enforces the "Code?" Clean Line says it does. How is this enforcement undertaken? Nobody knows. Despite continual public statements that Clean Line doesn't condone the kind of behavior that has been reported by landowners over and over again, there's never any obvious "enforcement," and the company's agents simply continue harassing landowners.
In a recent letter to the editor, Ms. Mary Adair Horsechief stated that “a representative of Plains & Eastern Clean Line recently dropped by” her home and he told her she “had no recourse but to let them take our land for their use.” Clean Line takes these assertions seriously and we do not condone or endorse statements like the one Ms. Horsechief claims was made on our behalf. Clean Line is committed to treating every landowner with consideration and respect. We require our representatives to follow a Code of Conduct that can be downloaded from our website. We strive to maintain long-lasting relationships with landowners by working in a respectful and collaborative manner. If you have information on interactions you have had with a Clean Line representative that goes against this code, we would like to know. Please contact us at 1-877-573-2851 or firstname.lastname@example.org and someone will respond to you in a timely fashion.
Read Mary Horsechief's entire Letter to the Editor here.
This isn't the first report of heavy-handed Clean Line land agent tactics, and I doubt it will be the last. There's something wrong with the company doing Clean Line's land acquisitions. They're not abiding by the Code of Conduct. What's the punishment? Judging from the continuation of this behavior... there is no punishment.
If you had contracted a company to do a job, given them a set of rules, and then the company systematically violated those rules and caused your company bad will in the community that could ultimately derail your entire project, would you fire them? I would.
Instead, Clean Line keeps making excuses for this kind of behavior and pretending it's doing something about it. Oh, poppycock, Mario! Actions speak louder than words!
However, the "Land Agent Code of Conduct" is an old transmission owner trick that has been recycled again and again. In fact, Clean Line's "code" was plagiarized nearly word for word from previous "Codes of Conduct" used by Allegheny Energy for its TrAIL and PATH projects. In its original form on the TrAIL project, the "Code" was enforceable by the court. The very idea that the company responsible for these transgressions would police itself is ludicrous!
In addition, Mario goes on and on disseminating his "facts" about how his project won't have health effects and will provide "opportunities" for landowners. He's preaching to the choir. No matter how many times Clean Line repeats this mantra, nobody believes it. A company selling the benefits of its own project is ALWAYS suspected of dishonesty and bias from its public. There is no amount of "information" from the company that's going to turn public opinion. It's just not going to happen.
Here's what's actually happening... a fantastically researched and fairly presented story about Clean Line from NPR, Big Wind Blowing Through North Arkansas. Give it a listen.
The jig is up, Clean Line!
"Gotta read" post on UWUA Local 304's blog today. Utility’s “Cozy” Relationship With Regulators Questioned
tells the story of Pacific Gas & Electric (PG&E), whose lack of maintenance was responsible for a massive gas line explosion in 2010 that leveled a neighborhood and killed or injured many.
But, wait, there's more!
The story may have stopped there, except for a consumer advocacy group’s efforts for utility reform. Their allegations kept the San Bruno disaster front and center by claiming PG&E knowingly pumped up their balance sheets and pocketed funds that should have went to the maintenance and upkeep of the aging natural gas system and that it was a relationship with the California Public Utilities Commission, that the group described as “cozy”, that let PG&E to get away with it.
Both the regulator in question and a PG&E Vice President have lost their positions, but recently released e-mails between the two seemed to confirm the allegations, and the fact that both have since lost their jobs also is a strong indicator that the charges were well founded (click here for a great story on this subject).
Discussed in the e-mails are, among other things, talk of vacations, chats with invitations to private meetings at remote and luxurious locales, and a general feeling of collusion between close friends rather than a more professional and business-like exchange between the regulator and the regulated. There are even some chat about PG&E meeting then Governor Jerry Brown and strategies to diffuse the events of San Bruno.
However, the most disturbing aspect revealed in the e-mails is the how the utility targeted the The Utility Reform Network (TURN), which was the advocacy group highlighting and investigating the events of San Bruno.
UWUA links to this story originally published in the San Francisco Chronicle
Apparently the executive director of the California PUC and an "external affairs" schmoozer vice president were having a ton of fun making nasty jokes about the president of The Utility Reform Network (TURN), whose only crime was trying to protect customers and "reform" these dirty bastards.
The emails also detail the cozy relationship between PG&E and its regulators, as well as PG&E and elected officials. It was suggested by the president of the CPUC that PG&E should whine to Governor Jerry Brown about how the explosion disaster was hurting poor, poor pitiful PG&E stock prices, so he could "fix" things.
In January 2011, Peevey sent an e-mail to Cherry urging him to share with a Brown aide, former PG&E executive Nancy McFadden, a financial analyst’s views that the San Bruno case was hurting PG&E’s stock. The report credited Peevey for his “even-handed” approach in controlling the situation.
‘‘As I suggested before, this info should go to the governor’s office, probably best to Nancy McF,” Peevey wrote to Cherry. “Jerry has to be made aware that actions have consequences and the economy is best off with a stable utility sector.”
No, you're not reading a John Grisham novel. This stuff actually happened. In fact, I'm pretty certain this is not an isolated incident. This stuff happens all the time at just about any investor owned utility you can name.
UWUA finishes up their report with some very good advice:
The real news here is that when people stand together, no matter what derisive things business executives may say against them or how small they may view their fellow citizens, America is still America and people can still make a difference.
The story above is also a reminder that as Americans we have a responsibility to hold the people that serve the public interests in any capacity accountable, and by doing so, we can discourage such insular and covert “cozy” relationships from developing.
RTO Insider reports
that FERC has issued a proposed policy statement regarding "hold harmless" commitments made during utility mergers.
The policy is intended to further define merger costs and how they are accounted for, as well as proposed accounting mechanisms to track them.
As if it's about some accounting "confusion," and not about utilities willfully violating the commitments they make as a condition of approval for their merger. But, hey, FERC has to start somewhere, I suppose. Maybe some proactive monitoring of utility financial filings could begin to put a damper on the merger cost recovery free-for-all. But then will the utilities just find more creative ways to improperly recover their merger costs? How about some penalties for utilities found to have improperly recovered merger costs? I think maybe a $30M fine for each occurrence would be appropriate.
On that tape, Dr. Bowring says that the trades did not violate the rules, that he understands why the traders engaged in them, and that the rules need to be changed to remove the incentives that drove the trading. He also says that he would not refer the trading conduct to Enforcement if the traders stopped the trading in question.
Powhatan says that accused trader Alan Chen had a similar conversation with Bowring, but did not record it.
The problem here stems from OE's failure to turn over the recording when it was asked to produce exculpatory evidence, i.e. to disclose all evidence that is "favorable to an accused" or "would tend to exculpate him or reduce the penalty."
This seems to be a bit of a double standard, since FERC is relying on the statements of a different trader to make its case to the Commission.
Powhatan also points out that Bowring is obligated to refer trading that he thinks might be market manipulation to FERC's Office of Enforcement. I wonder how many little phone calls he's made to traders over the years, instead of fixing all the flaws in his "markets?"
How is anyone supposed to know what's allowed and what's prohibited? Or do those rules reside only in Bowring's head? So, keep that recorder handy, just in case... unless you've got $30M or so laying around and don't mind parting with it.
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.