In the case of its Plains & Eastern Clean Line, a recent article tells us "TVA still has no deal to buy Clean Line's wind energy." The article makes an important distinction that Clean Line hopes everyone will ignore:
TVA is in final negotiations to allow a proposed $2 billion transmission line carrying wind power 700 miles from Oklahoma to connect to TVA's grid near Millington.
However, it will be another issue entirely whether Texas-based Plains & Eastern Clean Line LLC can send its wind-generated electricity into the TVA system, TVA spokesman Chris Stanley said Tuesday.
TVA policy requires the federal utility, which supplies electricity to MLGW in Memphis, only buy power priced competitively with other energy sources.
No consumer prices have been disclosed by the Houston firm.
"Inter-connectivity just allows Clean Line, in this case, to connect to our grid," Stanley said. "They do not, however, have the ability to inject any power into our system."
TVA is now waiting on Clean Line to request a "transmission study," he said.
"We had to do studies and make sure we have system reliability. That's all happened and we're in final negotiations with them about what that looks like going forward,'' Stanley said.
After the interconnection study is completed, a the transmission-service study will look at sending wind power into the electric grid.
Clean Line has been pulling this same scheme with all of its transmission projects by pretending that there are some potential customers in "desperate need" of power supplied by the project, or that a regional grid operator, or federal entity like the TVA, has "approved" its project or contracts to purchase the electricity. Nothing could be further from the truth! The interconnection studies simply determine whether or not Clean Line would compromise system reliability if they interconnected, and also determine what alterations need to be made to the system to accommodate Clean Line's interconnection. Clean Line is responsible for the costs of the studies and any system upgrades determined to be needed in the studies.
Clean Line is in a catch-22. They can't negotiate prices for their transmission capacity until they have completed all permitting, siting, land acquisition, engineering, contracting, etc., and know exactly how much their project will cost to build. The cost of the project will inform the amount of the capacity charge. The capacity charge will be added to the price of the wind (or other) generation and then a power purchase agreement will be negotiated between the generator and the utility buying the power. The generators don't exist. The customers don't exist. The transmission project doesn't exist. Clean Line is nothing more than an overly-ambitious and fantastical business plan. I don't believe it will ever happen.
But as long as Clean Line's "patient" investors want to continue to dump money down this rat hole, entities like TVA will continue to take their money and produce "studies".... because they have to. State utility commissions also have to entertain Clean Line's permit applications, but they don't have to approve them. And they certainly don't have to grant such a speculative venture utility status and its attendant power of eminent domain.
The TVA is currently working on its integrated resource plan (IRP). An IRP is a long-range plan by a utility to determine the proper mix of resources that will serve its customers reliably and economically in the future. The IRP will determine whether TVA will purchase huge quantities of wind from Oklahoma. TVA's IRP won't be completed until 2015. Although one of the stakeholder participants in the process recently asked the question, "Would it be appropriate to consider a scenario around grid/transmission expansion - for example, an HVDC line is built from the Midwest making lower cost wind energy available to the TVA?" it looks like this question was batted aside by the group think of the TVA's IRP process.
Maybe Clean Line needs to do a little reading on the Delphi Technique?
It looks like Clean Line's business plan is nothing but a house of cards, and a big wind is starting to blow.