A settlement has been approved by the Federal Energy Regulatory Commission in the matter of recovery of costs of PJM's failed Mid-Atlantic Power Pathway (MAPP) project.
MAPP was one of four unnecessary transmission projects proposed by PJM in their Project Mountaineer initiative to increase the use of coal-fired resources by shipping 5,000MW of coal-fired electricity from the Ohio Valley to the East coast. Of these 4 projects (MAPP, PATH, TrAIL and Susquehanna Roseland), two have been cancelled, one has been completed, and one is under construction. The only difference between them is timing and execution by their owners.
All four of these projects took advantage of newly-minted transmission project incentives available from FERC, brought to you by the Energy Policy Act of 2005. One of the incentives granted to these projects was the guaranteed recovery of prudently-incurred project investment in the event the project was abandoned and not built through no fault of the owner.
Therefore, once MAPP was abandoned, its owner, Pepco, filed with FERC for permission to recover its investment in the unbuilt project. Unrecovered investment included capital expense "construction work in progress" costs, which is roughly defined as all expenses for electric projects under construction, including such items as land purchased, labor, engineering and regulatory costs. The amount Pepco filed to recover was $87.5M.
Because some parties intervened and protested the recovery, FERC set the matter for settlement and hearing. A settlement was reached and recently approved by the Commission.
The settlement allows Pepco to recover $80.5M in abandonment costs over a three year period, and allows the company to maintain ownership of all land and land rights purchased as part of the project. However, Pepco must remove the land from its rate base (capital account) that earns a yearly return paid by all electric consumers in the PJM region.
In its cost recovery filing, Pepco valued its land acquisition activities at $38.1M, although actual land values would most likely be much less. So, how much land did Pepco buy for MAPP that the company now owns free and clear?
Converter station sites in Calvert and Wicomico County, MD and Sussex
County, DE were acquired;
Takeoff points into and out of the Chesapeake Bay were acquired;
Transition station locations in Dorchester County were acquired; and
Transmission line right-of-way for entire length was acquired, except for one property in Dorchester County where negotiation was pending. Looks like Pepco has enough land to concoct another unnecessary transmission project at ratepayer expense, and it looks like Pepco still holds these landowners' lives in limbo under the threat of building a transmission line across their properties. Let this be a lesson to you... do NOT sign right-of-way agreements early in the process, before a project is approved and receives a permit from all states through which it is routed.
Ratepayers in 14 states will remember PJM's failed Project Mountaineer as they pay off Pepco's unbuilt MAPP debt in their electric bills for the next three years. Thanks, PJM!
From the train wreck files... the pieces of information you try to drive by without looking closely, but inevitably you turn around and drive by again for another look:
An article on Risk.net entitled Power trading firm blasts Ferc over manipulation probe tells an interesting tale.
In an unorthodox move, a little-known power trading firm has disclosed that it is under investigation by the US Federal Energy Regulatory Commission (Ferc) for market manipulation, mounting a vigorous public defence of its activities and arguing that Ferc has overreached in going after its trader. The company has put together a website with a bunch of case documents I don't have time or inclination to read, videos, and opinions that support its position that it's being picked on by FERC.
The Risk article describes the issue this way:
Chen's trades made use of an obscure type of PJM transaction called 'up-to-congestion' (UTC) trades, which involve the scheduling of electricity flows across the border between PJM and one of its neighbouring wholesale power markets, such as the one operated by the Midcontinent Independent System Operator (Miso). When carrying out a UTC trade, a market participant can specify the maximum level of congestion costs that he or she is willing to pay to move power across a particular path. For instance, if the threshold of the UTC trade is set at $50 per megawatt-hour (/MWh), then PJM will schedule the flow, as long as the congestion cost between the two specified nodes stays below $50/MWh. If the cost of congestion along that path rises above that level, the trade gets knocked out and no electricity flow is scheduled.
Powhatan – like other financial trading firms operating in US power markets – trades only 'virtual' power. In other words, whenever it schedules any electricity flows in the day-ahead market, it cancels them out in the real-time market, so no physical power actually flows. Such traders essentially act as arbitrageurs between the day-ahead and real-time power market.
Chen's trading strategy involved pairs of UTC trades, with two legs that ran in opposite directions along the same path — for instance, from the Miso border to a node in PJM, and back from that node to the Miso border. According to the documents posted on FercLitigation.com, Chen discovered a profitable trading strategy in which he could enter such paired UTC transactions and then collect money from transmission loss credits (TLCs) – a type of rebate payment that PJM makes to market participants that use its transmission lines. Until September 2010, when PJM implemented its rule change, it was possible for virtual traders such as Powhatan to collect TLCs from UTC transactions, even though they were not actually sending physical power through the grid. The article notes that FERC approved an after-the-fact change to PJM's market rules to prevent further use of this trading strategy.
Our friends at RTO Insider also have an article about this issue that provides more information and made me think that FERC might be behaving like a bully. But, I'm still having a hard time mustering up any real, personal sympathy for anybody involved in this case. It just doesn't tug my heart strings like senior citizens who can't pay their outrageous electric bill because there's so much nonsense added to the actual cost of service. Call me jaded.
So, is this the kind of aggressive FERC we would see under the leadership of Norman Bay, who was nominated for the Chairman position in January, after the big green failure of the Binz nomination late last year?
Bay will have to go through the same confirmation process that raked Binz over the coals, and no stone will be left unturned to pick him apart before the Senate Energy Committee.
Meanwhile, I think I'll go organize my record collection.
Regulation vs. deregulation debates pop up from time-to-time. I think the last one I participated in was presented as a way to "fix" Potomac Edison's billing & meter reading transgressions through competition. Of course, deregulation doesn't change your local electric company that meters and bills your service, it simply changes your generation supplier, so deregulation is, once again, useless as a solution.
I've had people swear to me that deregulation saves consumers money, but my research has actually revealed the opposite. Deregulation, an invention of our friends at Enron, actually costs consumers money. Deregulation inserts a middleman between you and the generator, and that middle man wants to get paid. While some may argue that the middleman can insert competition into a monopoly situation to result in savings, that's unlikely to happen. The monopoly is prohibited by regulation from the kind of usurious rate gouging that goes on in deregulated markets. Being from West Virginia I say this with a smirk on my face, because I am also unconvinced that our regulators actually have consumer interests in mind, and believe they will look the other way, or even encourage, regulated rip-offs of captive customers by out-of-state electric conglomerates.
Electric consumers in Pennsylvania's deregulated electricity market are up in arms because the state's regulators have not protected them from signing open ended variable rate contracts. What did they think "deregulated" meant? My experience has been that the average electric consumer is uneducated about his electric bill, the electric rates he pays, and the regulatory process, and he LIKES it that way! It is only when a bill shows up that seems to be higher than normal that average electric Joe gets upset and demands that "someone" do something to lower his bill!
Pennsylvanians who signed variable rate contracts with deregulated electric suppliers got slammed by PJM's markets during this year's "polar vortex." Customers received bills hundreds of dollars higher than normal because their middleman may have been locked into power purchase contracts that didn't adequately protect against price spikes caused by generator outages and high demand for natural gas to generate electricity. And, it's probably going to get worse. At its earnings call last week, FirstEnergy made it clear that the company's future power purchase contracts will contain language that passes this volatility through to customers:
Steve Fleishman - Wolfe
And in the future, do most of your contracts have that clause, so new ones do or not older ones or vice versa?
Leila Vespoli - EVP, Markets, and Chief Legal Officer
I think it would be safe to say that we are going to be adding that language where we can in the future. Neither the generator, nor the middleman, wants to absorb the cost of PJM's market failure so it will always be passed on to the deregulated customer because no one is protecting average electric Joe in a deregulated environmment. FERC and PJM fail to realize that those poor, persecuted generators who were required to operate at a loss for a few hours or days due to the price cap are making money hand over fist every other day of the year. Pay to play, little generators!
FERC compounded the problem by allowing these greedy corporate entities to further game PJM's malfunctioning markets. FERC has allowed generators to charge whatever they want, and is in denial about any "harm" that may result:
FERC said PJM's proposal met the commission's criteria for approving waivers, as doing so would remedy a "concrete problem," would not harm third parties and would be limited in scope. Maybe affected customers in Pennsylvania should send FERC a copy of their outrageous "concrete problem" bills so they can make note of the harm PJM's markets have caused to real people.
Deregulation sounds great in theory, but it rarely saves the consumer money in the real world.
"Big green" has been hoodwinked into operating under a misguided premise by "big wind." Environmental groups that support certain transmission lines simply because they have been told the lines are "carrying wind power and clean renewable energy" have defined themselves as the biggest hypocrites.
When asked about transmission in a recent interview by E&E, the Environmental Law & Policy Center's Howard Lerner panned transmission lines "for coal," while promoting lines "for wind."
From an environmental group perspective we're very interested and supportive of those lines if they're carrying wind power and clean renewable energy, as some of them are saying that they're doing. Lerner knows quite well that transmission must be "open access" for all types of generation. Transmission lines can't segregate "green" electrons from "brown" ones. There is no such thing as a transmission line "for wind."
To add to the hypocrisy, Lerner later talks up distributed generation:
Distributed generation, particularly solar, plays a vital role in terms of reliability, cleaning up the air and saving money for consumers. The efficiencies of solar panels are going up, the costs are coming down, and those entities that are getting behind it I think will be in good shape. People who are trying to stop the progress technologically when it comes to solar are going to be like the utilities that had landline telephones that tried to stop wireless telecommunications. It almost never works to stand in the way of technological progress.
Environmental groups that support new long distance transmission "for wind" are trying to stop the progress of distributed generation technology. Of course, this effort to thwart technology won't be effective. What if we poured all the money currently being wasted on centralized generation and transmission lines "for wind" into distributed solar instead? How reliable and cost effective would that be?
Howard also demonstrates how hookwinked he is about the cost to ratepayers of new transmission "for wind."
Well, renewable energy wind power can bring costs down. Building new transmission of course passes costs on to consumers. Some of the transmissions being used for renewables, some of that transmission is being used for coal. So what you have to do is not look at it as one size fits all, but look at particular transmission lines and really say, No. 1, are the costs justified? Are the benefits greater than the costs, and therefore you can build a line? Or had the world changed in which a particular transmission line, and there are a number of lines that are being challenged on this basis, given the demand has gone down is there less need for the lines, they shouldn't be built? Secondly the question is is the line carrying renewable energy like wind power, or is it carrying coal and natural gas? The premise of what the Midwest independent system operator did is that these transmission lines, they call them the MVP lines, are supposed to be carrying wind power. Some of them do, some of them don't very much. And that's going to be an issue both before the regional commissions and also an issue before FERC. So, in Howard's world, the cost argument is secondary only to determining if a transmission line is being used for renewables or for coal? How does he make this determination? Do his transmission developer friends tell him which ones are which?
I don't think Howard cares how much transmission costs as long as someone tells him it is "for wind." Environmental groups are not very good advocates for consumer prices, so maybe they should stop trying to influence transmission development to meet their environmental goals. I'd feel a lot more comfortable if transmission was planned by grid planners, and not environmentalists, or politicians. Let the grid planners plan the grid guided by what the users of the grid want, not by what is environmentally desirable, politically expedient, or profitable for private investors.
But being seen as hypocritical by the consumers who pay for it all doesn't seem to bother these folks, as I saw demonstrated during a recent "webinar" by Big Wind's Big Front group. During the webinar, both the representative from regional grid planner PJM Interconnection, and the representative from the Rocky Mountain Institute, pointed out that the decision has not been made whether to pursue a big, new grid build out "for wind," or whether a localized, distributed generation future that does not require a whole bunch of new transmission would be more prudent. In fact, their presentations proffered information that a distributed generation future is highly likely, and more cost effective. But, never to allow reality to intrude on their fantasies, the environmental group and the "clean" transmission developer plowed presumptively right ahead with their "for wind" presentations, like the decision had already been made.
But, that's okay. The ones who actually make the decisions don't listen to the environmental groups or the transmission developers, they just pat them on the head and carry on with business. I think it might be pretty frustrating for the poor, little cleaniacs.
In the end, technology cannot be stopped by the financial wants of developers, or the pipe dreams of environmental idealists. Hold the line, transmission opponents, the future is bright!
The PSC General Investigation of Potomac Edison and Mon Power's Billing, Meter Reading and Customer Service practices is now awaiting a decision from the West Virginia Public Service Commissioners.
Reply briefs were filed on Monday that pretty much wrap up the participatory phase. The only thing left to do is for the Commissioners to issue an Order demonstrating that they take their responsibility to protect West Virginians seriously.
The Consumer Advocate Division's reply brief continues to call for the companies to read every meter every month for one year in order to expunge accumulated "bad data" upon which future estimates are based. The CAD notes that the EPRI study does not even mention incorrect historical data being used as the basis for the estimate.
I note that EPRI used a set of "good data" to set up its billing estimate experiment.
But, everything you need to know can be found in PSC Staff's short and sweet reply:
Staff has reviewed the initial briefs filed in this matter and finds it has very little to
respond to. Actually, the initial brief of the Companies and the most recently filed
monthly statistical report confirms many of Staffs fears. The Companies are still
providing a lot of excuses without many answers. They continue to point the finger at the Derecho and Super Storm Sandy, when the truth of the matter is those two storms did not cause this problem, but simply exposed the problems within the Companies that were
destined to arise and will do so again if changes aren’t made.* Further, a review of the February monthly statistical report shows an increase in consecutive reads due to weather related causes, just as Staff suspected. That will continue to be a problem as long as there is weather. Also, as Staff suspected, the Companies cannot or are not willing to seek a modification to its billing system to allow manual changes to a customer’s account when it is shown the estimation routine is inaccurate for that customer. These are just a few examples of many where Staff fears have been confirmed.
Also, Staff finds it odd that the Companies dedicate such a large portion of its
brief arguing why the Commission should not impose the “penalty” provision for missed
meter reads when they claim this problem has been solved. If the problem has indeed
been solved and given the concessions Staff made for reasonable circumstances to avoid the penalty, these penalties should seldom come into play if at all. Again, it is important
to remember the Companies are required to read every meter bi-monthly, absent exigent
circumstances, not just the ones that are convenient at the time. Further, the Commission has approved similar service based performance credits in the past, specifically in the settlement in the Verizon quality of service case, Case No. 08-0761-T-GI. This circumstance is almost unprecedented in West Virginia and calls for bold action. This penalty provision is just that action, a stick in order to incentivize the Companies to make better decisions in the future to the benefit of their customers instead of to the benefit of the Companies.
*In their Initial Brief, the Companies state they have had no problems in Pennsylvania as evidence that the Derecho and Super Storm Sandy were the root causes of these problems. Staff has learned that on February 4, 2014, a complaint was filed by the Utility Workers Union of America against Penelec on behalf of its workers and individual customers for failure to properly staff the meter reading section and for failure to obtain meter readings, leading to three, four, five consecutive estimated readings. In its defense, FirstEnergy continues to maintain that it has done nothing wrong and that it only needs to read your meter once a year, if it wants to. Blah, blah, blah, whiiiiiiiiine.
It would be nice if the Commission issued a quick decision holding the company accountable for its transgressions. However, if the Commission waits to see how many new complaints are filed in the month of February, I'm okay with that too. It seems that something went horribly awry with the companies' January estimates that resulted in substantial underestimation. This problem was compounded by the prolonged period of cold weather, and has resulted in February bills that are hundreds of dollars higher than normal when an actual meter reading is performed.
Ut-oh. When do the service shutoffs begin this year? Deja vu.
Another quarter, another FirstEnergy earnings call.
Heavy sigh.
They sounded like they were all on some sort of doggie downer while reading their scripts for the first half of the call. It was only when the line was thrown open to questions that the party started.
Stupid business buzz word for this quarter: "glide path." Ex. FirstEnergy sees its glide path to riches dotted with the corpses of its customers.
It seems that FirstEnergy is about to take one in the shorts because much of its generation was offline during the polar vortex and it had to purchase power. Very expensive power. FirstEnergy also expects to be hit with a bundle of PJM charges resulting from the vortex, but that's okay, the company expects to either drop them on regulated customer doorsteps, stick it to competitive customers through contracts, or simply whine to PJM and FERC about the unfairness of it all. When asked (repeatedly) to put a ballpark number on this, Tony the Trickster avoided the question.
Heavy sigh.
FirstEnergy expects 80% of its earnings to come from its regulated business in the future. That includes FirstEnergy's new found love of transmission upgrades. Once again, FirstEnergy puts all its eggs in one basket. Ooooh! Shiny object! Transmission spend!
Does anyone but FirstEnergy really think that milking regulated customers for transmission upgrades of questionable necessity isn't going to run into a regulatory buzz saw? My Magic 8 Ball tells me "it is certain." Maybe Tony needs to get a Magic 8 Ball to help him run the company?
Heavy sigh.
FirstEnergy is all ticked off about PJM's markets not working. What they mean is that the markets are not working to make FirstEnergy a bundle of money. But, FirstEnergy seem intent on making a regulatory nuisance of itself.
Heavy sigh.
One more thing before I go....
This is a vocabulary lesson for Leila:
The word you were searching for is exacerbate.
exacerbate |igˈzasərˌbāt|
verb [ with obj. ]
make (a problem, bad situation, or negative feeling) worse: the forest fire was exacerbated by the lack of rain.
Here's a link where you can hear the word pronounced.
The word is not pronounced "exasperate." These are examples of incorrect usage:
"The situation with market power prices in January was a product of base load generation that was stretched to its limit and exasperated by gas units that were impacted by constrain gas transmission and high spot trading prices."
"The fact that JCP already has the lowest rate in the state of New Jersey, which again further exasperates the consequence of that."
Leila's misuse of exacerbate exasperates me.
Heavy sigh.
A mysterious, new group advocating for "more ways to send Iowa's wind power out of state" appeared on TV screens all across Iowa on Monday. The mysterious group claims it includes "wind power activists, vendors and industry leaders" and that is it "neutral" about the Rock Island Clean Line. How could a group advocating for transmission lines in Iowa not be for RICL? The Rock Island Clean Line is one for-profit company proposing to ship wind power produced in western Iowa to the outskirts of Chicago. None of that power would stay in Iowa and a number of landowners along the proposed 500-mile-long transmission line route have opposed the plan. Some owners and farmers have expressed concerns about potential damage to land from transmission tower construction and the threat of eminent domain to push a route if enough willing sellers aren’t found.
But Lang, and Mike Prior, interim director of the Iowa Wind Energy Association, hope the new organization could serve as a “go-between” to bridge some of the disagreements between land owners and the Clean Line developers.
"Neutral," my eye!
A front group is an organization that purports to represent one agenda while in reality it serves some other party or interest whose sponsorship is hidden or rarely mentioned. [or denied!] The front group is perhaps the most easily recognized use of the third party propaganda technique. Larson Shannahan Slifka Group (LS2group) is a bipartisan public relations, public affairs, and marketing firm that guides its practices with one goal in mind: what others may do, we strive to do better. We offer clients an unparalleled commitment to excellence and take pride in our consistent delivery of successful outcomes. Our strength lies in the diversity of our team and its determination to apply creative solutions and unique perspectives to clients' needs. We see possibilities others cannot and have a track record of helping our clients reach their goals. Right. I'm sure other public relations companies cannot "see" the wheels coming off the front groups they set up for their clients at roll out. But, that's neither here nor there.
Who are LS2Group's clients?
"LS2group has a thorough understanding of our needs and responds quickly to our requests, coupled with a vast network of strong relationships with key officials."
- Cary K., Director of Development, Rock Island Clean Line Who are LS2Group's employees? I saw this one minding the Clean Line information table at the first Mendota public hearing. Others have reported seeing her at other Illinois and Iowa public events. This same LS2Group employee is also the named company contact on a recent press release about the Rock Island Clean Line project.
The claims that Windward Iowa is not advocating for Clean Line's RICL project, and has nothing to do with the company, are beyond credible belief.
Windward Iowa incorporated as a non-profit Iowa corporation on December 12, 2013. According to its Articles of Incorporation, its purpose is:
to promote social welfare by seeking to educate and encourage landowners to become familiar with wind energy production and transmission, and expand the wind industry in the state of Iowa to further the common good and general welfare of the people of Iowa and the Midwest. According to its Articles:
no substantial part of the activities of the corporation shall be the carrying on of propaganda, or otherwise attempting to influence legislation, and the corporation shall not participate in, or intervene in (including the publishing or publication of statements) any political campaign on behalf of or in opposition to any candidate for public office and must abide by the laws for a 501(c)4 corporation as determined by the Internal Revenue Service. This also means that donations to this corporation are not tax deductible.
Donations? Yes, that's one of the ways you can "get involved" with this group, in addition to "submitting a letter to the editor or opinion editorial; commenting online through Facebook, Twitter or LinkedIn, or on an article; commenting to the Iowa Utility Board; or contacting your legislator or local government official." Hey, wait a tick, doesn't that last one violate the Articles' prohibition on attempts to influence legislation? That's some pretty thin ice!
I also wonder what the legal implications are of this corporation involving itself in negotiations with property owners that eventually result in eminent domain takings? Windward Iowa's Facebook page contains numerous links to stories about RICL. Windward Iowa's website makes sweeping statements that it does not back up, such as: "Experts predict the U.S. will soon be in the midst of a transmission crisis. It is important to be proactive in addressing the issue and developing new infrastructure. We cannot afford to wait another 60 years for wind energy development.
The country’s electric grid is outdated and in need of attention and upgrades. Projects that bring wind energy through new avenues are part of the solution to providing clean, dependable, and renewable power." Who are these "experts" and where have they made these statements? Or did the public relations firm just make it up out of whole cloth? Compare this information to the signs of a front group here: 1. The group does not report who they are really working for, who their members are, or the source of their funding. The idea that three individuals spontaneously decided to start an advocacy group managed by a pricey lawyer and a public relations group defies belief. 2. There is no physical address or list of staff on the website. 3. The group claims neutrality on some hot button issue and appears to be making general arguments about a topic only marginally related to the issue, and yet they mainly focus on a “secondary” issue (RICL). This is all so classic. I've had experience uncovering and reporting on transmission company front groups in the past, and my opinion is that Windward Iowa is a front group being paid for by Clean Line Energy Partners. Because RICL and Clean Line Energy Partners are no longer viewed as an impartial and trustworthy source of information in Iowa, the company and its public relations contractor have created a supposedly "neutral" third-party entity that will continue to advocate for its project under another name. If you wouldn't believe a word RICL says, then don't believe anything the company tells you when it is wearing its "Windward Iowa" mask. Windward Iowa only has the same amount of credibility as RICL, and should be treated accordingly by opposition, elected officials, and the media. It's very disappointing that none of the reporters attending the group's "launch" yesterday had the curiosity to ask where this group is getting its funding. That's the literal "million dollar question."
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. Looks like Clean Line's much ballyhooed Memorandum of Understanding with TVA isn't proof that the TVA is willing to buy power from the project after all.
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.
But some people don't like the project, which is why the bill came forward. Landowners who are wary of eminent domain powers are speaking up against the project. In large part it has become an issue pitting pro-business groups and legislators against people who carry the NIMBY, or Not in My Backyard, mindframe. Propagandists use the name-calling technique to incite fears or arouse positive prejudices with the intent that invoked fear (based on fearmongering tactics) or trust will encourage those that read, see or hear propaganda to construct a negative opinion, in respect to the former, or a positive opinion, with respect to the latter, about a person, group, or set of beliefs or ideas that the propagandist would wish the recipients to believe. The method is intended to provoke conclusions and actions about a matter apart from an impartial examinations of the facts of the matter. When this tactic is used instead of an argument, name-calling is thus a substitute for rational, fact-based arguments against an idea or belief, based upon its own merits, and becomes an argumentum ad hominem. Clean Line is so frightened by the righteous concerns of landowners being asked to make a sacrifice for the pecuniary aspirations of a company from Texas, that they have resorted to cheap party tricks like "NIMBY."
News Flash: Use of the "NIMBY" name in transmission battles is passe and ineffective. The Alliance has already overcome that stereotype quite effectively.
And why shouldn't landowners be concerned or, as the editorial puts it, "not like the project." The project is asking them to sacrifice their property, their business, their peace of mind and their physical well-being for the needs of some phantom others in "states farther east." Who wouldn't resist it? Would you resist a similar attack on your own home, income and way of life?
In addition, the "project" isn't even needed for reliability or economic reasons. It's a scheme to make a lot of money supplanting existing generation in "states farther east" that have no desire for the power in the first place.
While the financial windfalls may be shared with a handful of politically-connected landowners in NW Iowa who voluntarily host turbines, the buck stops there. The Alliance landowners are being forced to take a one-time "market value" payment, not share in the wealth. Their contribution to the effort is not being fairly recognized or compensated.
While Clean Line's lobbyists hyperventilate that the legislation will "shut down this project as well as kill jobs,” the proposed legislation merely removed the company's threat of eminent domain against landowners who refused to go along. As the Illinois Farm Bureau said in its Illinois Commerce Commission brief:
"In addition, if granted § 8-503 relief, what Rock Island characterizes as “voluntary” easement negotiations with farmers will actually sound something like “Rock Island has been directed by the Commission to construct a transmission line on an approve[d] route, which crosses your land.” Characterizing the easement negotiations as voluntary under these facts is kind of like giving someone the option of jumping off of a cliff before you push them."
If RICL is a viable and economic project, it shouldn't have any trouble compensating landowners to their satisfaction, and would not need the threat of eminent domain. The use of eminent domain for private gain is the issue here, not jobs or economic development. At what point does a person's right to own and enjoy property become less than another individual's desire to confiscate that property for his or her own pecuniary goals? If you believe this is okay, as long as it's in someone else's back yard and you're sharing in the wealth, you're heading down a very slippery slope. Because if you think it's okay in someone else's back yard, you are also saying it's okay in your own, and some day, the chickens are going to come home to roost and then you will be the "NIMBY."
Why is Clean Line so scared? Think about it.
FirstEnergy finally filed a public copy of its Electric Power Research Institute (EPRI) report on its West Virginia billing problems. The report can only be described as a grammatical HOT MESS.
The general gist of the report tells FirstEnergy to stop screwing around with its estimation algorithm because it works well, except that it overestimates customer usage an average of 14%.
EPRI tells us that when the meter is read every other month, both monthly kwh values are a forecast or estimate, because the first month is estimated and the second or "actual" month is actually a result of actual use plus any true-up amount from the first estimated month. In other words... you never get a monthly bill for the actual amount you use. Customers whose bill is read every month have accurate bills, but not you.
The report goes wrong in the first paragraph:
The focus of this assessment is to evaluate the BE protocols’ performance where bi-monthly
meter reading is the standard. The General Investigation was not triggered by the inaccuracy of FirstEnergy's estimation algorithm. It was triggered by a huge outcry by customers whose electric meters had not been read as required by FirstEnergy's tariff. FirstEnergy made it about its algorithm by focusing on that during the investigation and hearing. By asking the wrong question, FirstEnergy shifts the focus off its willful disregard of its own tariff and the injury it caused (and continues to cause!) to its customers.
"If they can get you asking the wrong questions, they don't have to worry about the answers." - Thomas Pynchon And, therefore, this hot mess should be tucked away in File 13 and forgotten. It's not relevant to the investigation.
Besides, it's the hardest read I've come across in a long time. Yes, it's hopelessly technical, but it seems that FirstEnergy also ran it through the Gibberish translator before approving its final content. This thing is chock-a-block full of typographical errors, missing words, extraneous words, incorrect words, and incomplete sentences, to the point that the reader is constantly stopping to reach for their secret Gibberish decoder ring. Here's just one of the hundreds of sentences that gave me pause. What does this mean?
When the values are designated as actual, then BSE assumes that they are actual meter reads and treats when according to the
protocols employees in levelization. Here are a few quotes from sentences that didn't need decoding:
Note: "BE" stands for "Bill Estimation." Just think, if EPRI had named it the "Bill Simulator" instead, we could have been treated to a report full of "BS." Oh, wait, I think that happened anyhow...
As the number of consecutive estimates increases, the BE performance deteriorates. ...ascertain if using the Prior Period should not be considered for the Base Period if the Prior Period was estimated, and especially if there are indications that there was a large but unwarranted reconciliation. In the case of scenario 10b (Figure 7-13), which imposed two months of 33%
underestimation followed by a large reconciliation, the performance was not quite as good. The R-value distribution became less compacted around R = 1.0, and the
percentage extreme R-value increased to 8%, four time that of scenario 1b. This might
result because underestimation of usage results in systematically poorer performance of the BE in situations where the estimated month’s usage and the reconciliation amount is large. More testing is called for to verify this result before changes are made to the BE
protocols to mitigate this apparent bias. Missed scheduled meter reads resulted in a modest increase in the extent of
overestimation measured by the mean R-value, but more importantly more individual
customer R-values are in the extreme tails. Blah, blah, blah, who cares? But if you can manage to get through nearly 100 pages of this Gibberish, there's a treat at the end for you. It's a 12 slide deck of FirstEnergy's "response" to the EPRI report. Why did FirstEnergy need a slide deck? Maybe it's because:
EPRl was asked to perform objective statistical testing of our estimation processes. While we (FirstEnergy) agree with EPRl that the estimation algorithm performs well for most customers we also believe that performance can be improved.
As such we recognize the need to mitigate any unintended impact to customers in the interim and will as proposed in the settlement:
Bill message customers who received a bill varying by more than 25% from previous year following multiple estimates to remind of
payment options (February 2014);
Exception customers whose current estimate vary by more than 25% from their previous year’s bill for manual review (May 2014). Settlement? What settlement? Is the Commission going to allow FirstEnergy to skip out with a slap on the wrist in a settlement?
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