In Kansas, the project is estimated to result in 2,340 jobs annually during the three-year construction period, and an estimated 135 jobs to operate and maintain the project on an ongoing basis. Additionally, construction of the associated wind facilities in Kansas is estimated to generate between 15,542 and 19,656 Kansas jobs, while operating and maintaining the wind farms is expected to generate 528 Kansas jobs.
And that's just the problem here, folks. KCC's approval was based on the unsubstantiated claims of the applicant. Unrealistic claims and biased "studies" are a part of every transmission line application. The applicant attempts to show its project is needed and will provide some benefit. However, in states with knowledgeable and professional regulators, the information provided with the application is subjected to some expert scrutiny to verify its truthfulness. Professionally regulated states will hire their own subject matter experts to study the application and provide testimony. In addition, in professionally regulated states, other parties to the case will hire their own experts to review the information and file testimony. Only in this way are exaggerated and untruthful claims weeded out to allow the truth to emerge and be considered by the regulators making the decision.
But, the KCC relied completely on two members of its own staff to provide "expert" opinion on subjects ranging from health problems related to EMF exposure to the reasonableness of the route. Both staff members are electrical engineers. Their expertise is in electrical engineering, not health, routing, farming impacts, oil operations, jobs, PJM and MISO electricity markets, renewable portfolio standards of eastern states, or any of the other myriad topics upon which Tweedledum and Tweedledee provided "expert" verification of the applicant's claims. In its Order approving the project, the KCC claims:
However, there was no competing
evidence in the record to suggest that consumers would not benefit in some manner.
The KCC claims that it based its decision on the "necessity and reasonableness of the location of the proposed electric transmission line, taking into consideration the benefit to consumers in and outside Kansas as well as economic development benefits in Kansas."
Here's how KCC "considered" consumers inside and outside Kansas:
BENEFITS TO CONSUMERS INSIDE AND OUTSIDE OF KANSAS
Grain Belt's Executive Vice President of Strategy and Finance, David Barry, sponsored a study of the benefits of the project to consumers in and outside of Kansas. The general approach taken was to develop a simulation model of electric demand in the MISO and PJM states, to make assumptions about future demand in those states in 2019, and to simulate how the sale of Kansas wind energy into these markets would affect aggregate electric generation costs (which drive the prices consumers pay) and emissions levels of various pollutants (which affect health). Four future scenarios were assumed for the analysis:
Business As Usual - Energy demand grows under a moderate economic recovery with no
major changes to existing environmental policy, generating technologies, fuel commodity prices, or other key energy market assumptions.
Slow Growth - Continuation of depressed economic conditions characterized by slow demand growth, continued low fuel commodity prices, and minimal transmission/generation expansion.
Robust Economy - Strong recovery in economic activity characterized by accelerated growth in electrical demand, higher fuel prices and emission allowances prices, and increased
activity in new generation and transmission projects.
Green Economy - Expansion in environmental policy including carbon regulation and a
federal renewable portfolio standard under robust economic conditions including high
demand growth, an increase in fuel prices, and increased activity in new generation and transmission projects.
Using PRODMOD software, the impacts of selling Kansas wind energy into the PJM and
MISO markets were simulated and the following results were reported:
Thus, Grain Belt's analysis of consumer benefits is that consumers-largely in the PJM
and MISO states-benefit by reducing the cost of electric power ranging between $354 million annually to $546 million annually depending on the assumption one makes about demand levels in 2019. Grain Belt also asserts that consumers also benefit by reductions in emissions levels.
The Commission is not an environmental regulator and estimating the economic benefits with any precision based on assumptions six years from now over many states included in the PJM and MISO footprints seems questionable to me. However, there was no competing evidence in the record to suggest that consumers would not benefit in some manner. Certainly, the simulation model does provide some indication of the range and magnitude of benefits. At a conceptual level, Grain Belt does not have the power to force anyone to purchase its power. Thus, if utilities in the MISO and PJM markets purchase power from Grain Belt, they must believe that the purchase makes them better off in some manner--either by reducing emissions mandates, meeting a state renewable portfolio standard, or reducing costs. In my view, if there is a viable market for Kansas wind energy in eastern states-the business premise
upon which this project is based - then there must be some benefit to be gained in eastern states.
The KCC even rolled over and failed to condition the permit in any effective way. The staff had recommended that the permit be conditioned upon GBE obtaining approval to construct the project from the other three states in which it is sited. GBE objected, claiming that "federal siting approvals" could be substituted for state permission. The KCC rolled over and adopted this condition, clearing the way for GBE to thumb their noses at the other three states, instead of "considering consumers outside Kansas." I don't know about you, but I'm certainly not looking for Kansas to protect my interests, no matter what state statutes they adopt.
The second recommended condition included a requirement that GBE remain a "merchant transmission project." GBE objected, most likely because it is looking to submit its project for regional cost allocation (ratepayer funding) in PJM and/or MISO (neither of which include Kansas, which is located in SPP). Once again, the KCC rolled over and worded the condition to simply prohibit recovery of project costs from Kansas ratepayers.
Approval of Grain Belt Express in Kansas is a travesty of justice. The KCC will now become the laughing stock of other state regulators. But the battle now shifts to other states with strong regulators, like Illinois and Missouri, who perform their jobs with a little more professionalism, and perhaps to a fateful battle at the Department of Energy, Congress and federal court over federal eminent domain taking of private property in order to facilitate the profits of a private entity. We're only just getting started...