Words of warning to out-of-state billionaires looking to strike it rich on Kansas soil, and also to the Kansas Corporation Commission, who has so far bent over backwards to allow it to happen.
In 2011, a Texas-based (but Delaware-registered) corporation applied to the Kansas Corporation Commission for a "Limited Certificate of Public Convenience and Necessity to Site, Construct, Own, Operate and Maintain Bulk Electric Transmission Facilities located in the State of Kansas." At a lawful hearing, the company presented a contested settlement (S&A) to the Commission, and the Commission eventually approved it, after determining that it was in the public interest. In order to make such a determination, the KCC evaluated the following factors:
1. Has each party had an opportunity to be heard on its reasons for opposing the settlement?
2. Whether the S&A is supported by substantial competent evidence?
3. Whether the S&A conforms with applicable law?
4. Whether the S&A results in just and reasonable rates?
5. Whether the results of the S&A are in the public interest, including the interest of those parties not consenting to the agreement?
6. Whether the S&A will result in unnecessary duplication of utility service?
7. The impact on wholesale competition?
8. The effect of the S&A on the Commission's jurisdiction to effectively regulate and audit public utility operations and transmission operations, including the effect of the S&A on ongoing authority to regulate, review, and oversee the Applicants' transmission operations in Kansas?
9. Whether the proposed transaction will be beneficial on an overall basis to state and local economies and to communities in the area affected by the resulting public utility operations in the state?
10. The effect of the transaction on reliability of service?
11. Whether the S&A will promote adequate and efficient service?
12. Whether the S&A reduces the possibility of
13. What impact, if any, the S&A has on the public safety?
14. The effect of the transaction on customers?
15. The effect of the transaction on the environment? 16. The effect of the transaction on public utility shareholders?
17. Whether the transaction maximizes the use of Kansas energy resources?
Parties to the settlement included:
1. Citizens' Utility Ratepayer Board (CURB) - representing the financial interests of ratepayers
2. Westar Energy, Inc. and Kansas Gas and Electric
3. lTC Great Plains, LLC (lTC Great Plains)
4. Mid-Kansas Electric Company, LLC (MKEC)
5. Sunflower Electric Power Corporation (Sunflower)
6. Energy for Generations, LLC (E4G) - representing the interests of wind developers
Who was representing the interests of the landowners who would be asked to sacrifice their land and their livelihood to provide a new 200 foot wide right-of-way for this monstrous, new transmission line across their homes and businesses? Nobody.
This is because the "community outreach" business model of Grain Belt Express relies on secret, closed door meetings with elected officials, economic interests, and others in non-public venues far in advance of notification of affected landowners. In this way, Grain Belt Express hopes to buy the loyalty of local officials and business interests with pie-in-the-sky promises of economic riches that will never materialize. Grain Belt Express hopes that their private schmoozing will be enough to cause these officials to run roughshod over the citizens who elected them. As well, when Grain Belt Express is allowed to frame the argument, opposition must work twice as hard to dispel misinformation and bring truth to the forefront.
Even though it did not consider the impact of the transmission line on landowners in its own state, the KCC so kindly considered the needs of other states and allowed their rights to trump those of its own citizens:
"The Commission has also stated that it should consider the impact of a transmission line on neighboring states, due to the regional nature of the transmission system."
In finding that Grain Belt Express should be granted a certificate, the KCC found the following "benefits" flowing from the project, but failed to consider any costs to its citizens:
"...there are significant and substantial economic benefits that the project will provide to Kansas. As noted, the benefits include royalties to landowners who contract with generators, new jobs associated with construction and operation of both the lines and wind generating facilities, and additional tax revenue. As laid out fully in Clean Line's Application and supporting testimony, these economic benefits will provide a tremendous stimulus to the United States economy by facilitating a great deal of new investment in renewable energy projects that would not be possible if the Project did not occur."
The KCC simply rubber-stamped the claims Grain Belt Express made in its application, without examining them too closely. After all, no one was objecting or providing the KCC with any contradictory information, and that's simply because no one who might object knew about the project!
The only "public" comments provided to the KCC were those harvested by Grain Belt Express during its closed door meetings with elected officials and business interests, therefore:
"The Commission finds that the need for long-distance, multi-state transmission projects such as the Grain Belt Express proposed by Clean Line in this proceeding will promote the development of wind generation facilities in Kansas, which will provide benefits to Kansas and other areas of the country. These benefits are certainly in the public's interest and Kansas' interest, especially since Clean Line's merchant model for cost recovery does not charge Kansas ratepayers to execute the proposed Project. Public comments indicate significant support for the approval of Clean Line's Application, to help connect Kansas' wind energy to larger markets farther east, to generate more jobs and greater revenues to local jurisdictions, and to strengthen Kansas' reputation as an attractive place to do business."
However, those "other areas of the country" don't want what Kansas is selling. East coast load centers are developing their own renewables, and keeping the economic benefits of doing so within their borders. Offshore wind is proceeding rapidly to reality. In addition, the bottom has dropped out of PJM's electricity market, making expensive, imported wind from Kansas uncompetitive. Kansas may very well be supporting the "line to nowhere" by the time this winds its way through approvals, and those responsible for supporting GBE and
denying the property rights of Kansans are long since voted out of office.
After receiving their Certificate, GBE spent the next year continuing to build its political and business contacts in Kansas. Finally, in early 2013, the company held a few public meetings to gather public feedback. This was the first glimpse any affected landowner had of the project. In July, GBE filed an application to site its project with the KCC. Only at this time was legal notice to landowners effected.
And what did the GBE-written and KCC approved notice to landowners say about an affected landowner's right to participate?
"State law requires the Commission to conduct a public hearing on siting applications and that landowners of record be notified by certified mail of the filing of such applications and the related public hearing."
GBE also told landowners:
"The Commission will conduct a technical hearing concerning the proposed transmission project. The technical hearing is open to the public and scheduled to begin October 8, 2013, at 9:00 a.m. in the first floor hearing room at the Commission, 1500 SW Arrowhead Road, Topeka, KS. At this hearing the Commission Staff, Grain Belt Express representatives, and other official intervenors will present their respective positions to the Commission."
Landowners were led to believe that their only avenue to protect their property interests was through a public hearing and that the technical hearing was for Grain Belt Express representatives and "other official intervenors." Nowhere were landowners informed that they had a right to intervene and become an "official intervenor" themselves, with the right to legally protect their property interests. The KCC also set a deadline for petitions to intervene of August 30. While KCC is legally permitted to do this, it is not a usual occurrence and interested parties may normally intervene up to 3 days before a hearing begins.
When a landowner questioned KCC staff about pro se (without an attorney, "on that party's own behalf") intervention, she was told "An attorney must represent an intervener and file the petition to intervene on their behalf."
When the landowner further questioned KCC staff about filing pro se, and asked to see relevant sections of Kansas code prohibiting pro se participation in a siting case, the landowner was informed that she had been previously misinformed, given relevant code sections, and dismissed to figure it out on her own.
With a looming deadline and spreading misinformation from the KCC, many landowners were simply shut out of the case. Now their right to own property is in the hands of KCC. Will the Commissioners do the right thing?
Already, Grain Belt Express is unhappy with KCC staff's proposed restrictions on the granting of the proposed route.
In the rebuttal testimony of Mark Lawlor, Grain Belt Express asks to have three conditions modified. First, they ask that they be permitted 5 years to begin their project, instead of the 4 recommended by staff. Apparently it's going to take longer to get this thing approved in the other three states (Missouri, Illinois & Indiana) than originally planned.
And speaking of those other approvals, KCC staff recommends that its own permit be contingent upon GBE receiving approvals from the public utility commissions in the other states. GBE says it has other plans for preempting the permitting process in other states:
"First, there is a possibility that approvals from all three states will not be necessary. Although receiving siting approvals from those states is the most likely scenario for the Project to move forward to construction and operation, transmission line siting regulations or policy could evolve at the state or federal level, or through multi-state siting collaboration, or Grain Belt Express could use other transmission siting authority currently in place for other states through which the transmission line crosses. We do not want to rule out the possibility that the construction of the line in some areas might be allowed based on a law, regulation or approval that is
distinct from what is currently proposed by Grain Belt Express or available today."
And last, but by all means not least, GBE wants the KCC staff to change the wording of the cost allocation stipulation so that it may seek cost allocation for its project from ratepayers in other states. The staff recommended that the permit issued to Grain Belt Express be conditioned on the Project being "a merchant transmission line only and not subject to funding under the SPP Open Access Transmission Tariff." Apparently Grain Belt Express no longer plans to do business as a merchant transmission line (100% privately funded), and requests that the staff's condition be modified to read: "the cost of the Project and any AC Collector System owned by Clean Line will not be recovered through the SPP cost allocation process or from Kansas ratepayers."
Obviously, Clean Line intends to abandon its merchant transmission model and seek cost recovery for Grain Belt Express from ratepayers in other states in other regions. Chances of this being approved are slim to none, therefore, where is the money to complete this project going to come from? Will Kansas ratepayers be asked to pony up on a half-completed project, or will the project simply be abandoned when the money runs out?
The KCC should be stepping up to protect Kansans right now, not bowing to the political machinations of the Governor or the Texas wildcatters wooing his favor. The duty of the KCC is to protect the public interest. Let's hope they begin now.