Blog Archives

Who's a NIMBY?

4/21/2016

Depends on who you ask. Corporations hoping to profit from building infrastructure on private property say that any one who opposes their plan in a "NIMBY" (Not In My Backyard). It's nothing more than a stupid attempt at name-calling by the propagandist in order to paint anyone who stands in the way of corporate profits as selfish, uninformed and unacceptable in order to have others disregard their opinion quite apart from the facts of the matter.

The NIMBY label is nothing new.

What is new is the degrees of NIMBY-ism. One of the arguments against NIMBY-ism is that the NIMBY will benefit from the infrastructure. But what happens when infrastructure is proposed for the backyard of someone who does not benefit from it? Are they still a NIMBY?

And what happens when a NIMBY who will benefit from the infrastructure objects, but insists on still receiving the benefits?

Enter the silliest academic "study" I've read in a long, long time. Dr. Sanja Lutzeyer and Dr. Laura Taylor of NCSU, along with Dr. Daniel Phaneuf of the University of Wisconsin, recently released study called “The Amenity Costs of Offshore Wind Farms: Evidence from a Choice Experiment."

The study is the result of a survey of North Carolina beach vacationers. It asked them if they would pay more to rent a beach house with a view of offshore wind farms. No, they would not. In fact, most of the beach tourists wanted a discount on their rental if they had to look at offshore wind farms, especially at night when they are lit up with red, blinking lights. The study concludes that building wind farms off the shore of North Carolina will destroy its tourism industry.

The study also shared that the respondents generally supported wind energy, but Not In My Ocean View.

Where do these folks think wind energy they want to benefit from gets generated? Is it supposed to be generated by wind farms in someone else's back yard who won't benefit from it? Are others supposed to have their views, their night time skyline, their farm business, and their tourism destroyed so that these beach goers can have wind energy produced by wind farms that they don't have to look at?

I'm sure this same attitude (or worse) would also be applied to huge, honking, new transmission lines proposed to transmit far away wind energy to the North Carolina beaches. But, of course, nobody is stupid enough to propose a gigantic HVDC transmission line along North Carolina's coast.

But someone has been stupid enough to propose several enormous transmission lines on virgin land (known as "green field" projects) stretching through the back yards and working farms of thousands of folks in the Midwest for the benefit of those in Carolina beach shacks.

Here's the take away... if you like wind energy, put it in your own back yard. If that costs a little more, then that's the price you pay to be "green." Don't expect a whole bunch of folks who will receive no benefit to make a sacrifice for you.

Who's the ultimate NIMBY?

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Fantasy and Reality in Oklahoma

4/16/2016

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The media fantasy about Clean Line being spun in Oklahoma has officially jumped the shark.

News outlet KJRH says that Claremore company, Pelco Industrial, LLC, "will produce the massive transmission line." You mean they're going to make all the parts for the line? Because that's what you said, KJRH.

Pelco makes steel utility poles. That's all they make. They don't make lattice towers, which may be used for portions of the line, especially where the project turns from a straight line (angle structures), makes a long span, or crosses rugged terrain. They don't make conductor (the wire attached to the poles). They don't make insulators. They don't make any of the other thousand parts that are required to build a transmission line. The truth is that Pelco may only manufacture any steel utility poles used by the project.

May. Pelco and Clean Line describe their partnership as a MOU designating Pelco as a "preferred supplier." I've seen nothing about a definitive contract awarding Pelco the work. The truth is there's always the possibility that this work may be snatched out from under Pelco at a later point in the project.

Here's how real utilities source transmission line components: They issue a Request for Proposals for needed components. Then they evaluate the responses on the basis of price, suitability, quality, deliverability, and other factors. Then they award the contract to the best candidate. Real utilities don't award component contracts years before they know what they'll actually need in order to butter up a state or community to support their transmission project. Real utilities have a budget for their transmission project. Real utilities set up their project financing based on their realistic and detailed budget. Everything they purchase has to fit within their budget. Cost overruns may not be financed, depending on how much over budget it runs, and the financial institution may question whether the borrower is making sound financial decisions in spending its loot. A half-finished project that runs out of money doesn't produce any revenue with which to repay the loan.

So, while being a "preferred supplier" sounds good, the rubber will meet the road when it comes time to sign an actual contract.

KJRH says:

Thursday, Houston's Clean Line Energy learned more about Claremore – the community chosen to build their project from the ground up.

But wait a tick... Clean Line has been claiming to be BFFs with Pelco and Claremore for years, according to a 2013 radio show.

And, Phil, did I read in the bio that you had a little challenge getting the folks in Houston on board with you?

You know, we did. I’m going to tell you that I read about the Clean Line project when Jimmy Glotfelty came to Tulsa...

...and appeared at the Tulsa Press Club. And I immediately contacted them and very, very interested in the project because this is the kind of thing we do.

And they welcomed us, quite frankly, with open arms. But it took a little while to get them excited about what we do and how we do it. I’m going to tell you, no magic on my part. It was a good match and I think, quite frankly, the folks in Houston would say the same thing. We’ve have a good working relationship through the regulatory approval, through the design phase, through the open houses that Phil Teel talked about earlier, but most importantly, a real partnership in terms of providing a solution for infrastructure hardening.

So, this is the first time these BFFs got together in Claremore? Or is that just the "made for TV" version?

KJRH says Clean Line will produce "hundreds of permanent jobs" for Oklahomans. Where are these jobs? Clean Line is a transmission line. Transmission lines are built by highly skilled labor. Clean Line won't be picking up day labor at the K-Mart parking lot to get the job done. Only a handful of companies in the U.S. are skilled to accomplish the actual construction of a transmission line, and these companies perform the work on location with their own workers. Once the line is constructed, the jobs disappear. It takes little labor to operate or maintain a transmission line once it's completed. Where and what are the "hundreds of permanent jobs?" The transmission line will be remotely operated from the control room of a regional transmission organization in another state. Even maintenance is a hit or miss, occasional occupation. If a brand new transmission line needs "hundreds" of people to maintain it on a daily basis, maybe it's not such a quality product you'd want taking up space in your community.

Pelco says the transmission project will bring nearly 200 jobs to the area.

“We’re running three shifts right now, but we will double and these will be permanent jobs,” said PELCO President Phil Albert.

So manufacturing steel transmission poles for one transmission project is going to be a permanent occupation for 200 people in Claremore? Will the poles need to be continually replaced? At some point, won't Pelco have manufactured all the steel poles needed for Clean Line's project? This claim really doesn't make sense to me. How about you?

And here's the reality about Clean Line pumping money into Oklahoma's economy. All the "economic development" will take place in Claremore and at the source end of the project, if new wind farms are constructed (and remember, Clean Line is only a transmission company, they don't build or operate wind farms). Neither place will shoulder the burden of the actual transmission line. Claremore is not on the transmission line route, and neither is the potential wind farm area. While these areas may temporarily prosper, there's a huge patch of Oklahoma in between that will make an economic sacrifice by hosting a transmission line that provides no benefit to them. No landowners forced to sell easements for the transmission line will economically benefit from it. Easement payments only attempt to compensate for loss, not reward landowners for their sacrifice. The few in Claremore profit at the expense of the many along the transmission route. Nobody in Oklahoma will be allowed to use, or benefit from, the electricity transmitted on a Clean Line.

Radio Host: And you know, we’ve talked about this -- these transmission lines. You’re going to power those regions. How much is Oklahoma going to benefit from that resource as far as getting the electricity off those wind farms?

Clean Line: In the concept of the project, we did not want the serve load. We didn’t want the utilities that are in place now that serve the repair to look at us as competitors.

The transcript gets a few words wrong, but the intent is clear. Clean Line says they designed their projects so they wouldn't compete with local utilities.

Hahahaaaaaaaa!

That's the hokiest reason to export natural resources out of state for profit that I've ever heard! Let's see... don't "compete" with local electric providers to produce lower electricity prices for Oklahomans, but instead export Oklahoma's natural resources out-of-state and "compete" with local electric suppliers in the Southeast to provide lower electric rates for their customers? And make a huge profit doing so? Perhaps Oklahomans should consider how exporting their natural resources for the short-term gain of a select few precludes any long-term benefit they could receive from providing lower electric rates for Oklahomans. Using Oklahoma's natural resources to produce lower electric rates in-state could draw all sorts of new energy-intensive businesses to Oklahoma. And those new businesses would provide hundreds, or thousands, of real permanent jobs for Oklahomans. Instead, Oklahoma's leadership is cutting off its long term prosperity in exchange for the temporary gain of just a few, and allowing businesses to develop and prosper in other parts of the country using Oklahoma's natural resources.

Reality can be cruel. Think about it.

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Another "Clean" Lie Bites the Dust

4/14/2016

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What is it Clean Line Energy Partners says about the necessity for its transmission projects?

[C]ontinued growth of the wind energy industry depends on the expansion of the U.S. electric transmission grid. The United States has some of the best renewable resources in the world, but they are predominantly located far from large population centers. The challenge lies in connecting these rich resources to communities that need the power—a challenge Clean Line Energy is working to address.

Clean Line continually spins the yarn that wind energy will not develop in its "resource areas" without the construction of its "Clean" lines.

Here's a map of the "resource area" for Clean Line's Grain Belt Express project.

GBE's "resource area" roughly includes Ford and Clark Counties, Kansas.

Clean Line says no wind will develop there without a "Clean" Line to transmit it to population centers.

But it did.

Last Friday, a huge press conference was held to announce that the Cimarron Bend wind farm was fully subscribed and under construction in Clark County Kansas, just south of Ford County.

On its website, the developer initially proposed that Cimarron Bend is a "candidate" in GBE's resource area that may "connect" with GBE.

What transmission line does the project connect with?
Cimarron Bend Wind Project is expected to interconnect to the new ITC 345kV Clark County Substation located just a few miles north of the Cimarron Bend project boundary. The project is also a candidate to tie into a proposed Clean Line Energy DC transmission line that would export Kansas wind energy to the east.

However, GBE is still bumping along trying to get permitted in Missouri, after being denied last summer. The developers of Cimarron Bend, however, moved on.

Customers of Cimarron Bend are the Kansas City, Kansas, Board of Public Works (200 MW) and Google (200 MW), who both signed bundled power purchase agreements for Cimarron Bend's 400 MW capacity. Cimarron Bend didn't need GBE in order to be developed at all. There's plenty of existing transmission to move the power to Kansas City and wherever Google plans to use it, and the project is expected to come online in early 2017.

Kansas wind energy from the GBE resource area CAN be developed without GBE after all. And more importantly, it will be consumed by Kansans. Grain Belt Express proposes to export 4,000 MW of wind energy from the resource area out-of-state, with none available for use by Kansans, who also like lower bills and cleaner energy.

But more importantly, he said the price BPU is paying over the course of its 20-year contract will make wind energy from Cimarron Bend nearly the cheapest electricity that BPU buys, almost equal to the price of energy from its own coal-fired power plant.

"When they told me the price, I just about fell out of my chair," Gray said. "I didn't realize that in this fairly short time period that the economics of obtaining wind energy is really showing itself. ... It's going to be one of the lowest-cost energy resources that we have in our generation mix."

Good for BPU, good for Kansas City, good for Kansans.

But not so good for GBE, whose resource area is going to be further developed for use by Kansans while the company remains stuck in permit hell. The world doesn't wait for Clean Line, and every day that passes lessens the company's relevance.

So, why did Cimarron Bend initially think its project was a candidate for GBE, when plenty of opportunity to sell its energy to Kansans existed? Because

The power produced from Cimarron Bend Wind Project is being marketed to Kansas electric utility companies, other utility companies located within the Southwest Power Pool regional transmission area, and also to customers in states further east.

Cimarron Bend needed GBE to market itself to a wider pool of customers, in order to maximize its profit. "States further east" are participants in other, higher-priced electric markets, and GBE was convenient to get it there. Of course, GBE also makes a profit by doing so.

GBE is nothing but a profit-making enterprise designed to profit off wind farms, who maximize their own profits by selling into higher priced markets. GBE is not "necessary" to develop wind resources in Kansas, or anywhere else. It's only necessary to increase wind energy profits for a select group of investors.

And utilities in those "states further east" aren't signing up to purchase expensive, imported wind power. At a Transmission Summit earlier this month, Southern Company's Vice President of Energy Policy had this to say:

Edelston said the planning process isn’t the reason for the lack of interregional transmission projects.

“It’s whether there’s somebody who is benefiting from that line who’s willing to pay for it. … There are very few interregional lines that are going to be economic when you look at the alternatives available to the purchasing region — the region that would be receiving the renewable energy. They often have local alternatives or closer alternatives that don’t require transmission fixes, and these long distance interregional lines can be very, very expensive — and as we’re seeing with the Clean Line Energy Partners lines up in Illinois — very, very difficult to build.”

“In our case, with the price of solar having come down so far, it turns out to be much more economic to build utility-scale solar within our service area than it is to build long-distance transmission to access wind in the Midwest. And I think that’s true for a lot of East Coast load centers. You also have the opportunity these days to buy RECs — or renewable energy certificates — to meet any renewable portfolio standards that you have.”

So, congratulations to Tradewind Energy for successfully developing its Cimarron Bend wind project for benefit of Kansans!

Just one more nail in Clean Line's coffin.

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Truth In Media

4/13/2016

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Perhaps one of the most satisfying articles about the U.S. Department of Energy's decision to "participate" in the Plains and Eastern Clean Line came from something called The Covington (Tennessee) Leader. Perhaps an editor or reporter was having an "off" day, or perhaps an editor or reporter wasn't fooled by the bullshit in Clean Line's press release and simply decided to tell the truth. This is a rare opportunity to see what goes on in today's modern newsroom.

Opposed project gets federal green light begins by revealing that The Leader received an "email blast" and press release from a prominent public relations firm.

The public relations firm WestRogers sent out an e-mail blast on March 25 with a press release touting a federal decision that appears to clear the way for a $2.5 billion transmission line that would bring wind power from Oklahoma, through Arkansas and southwestern Tipton County, and into Shelby County.

West Rogers is a branding, advertising and public relations firm who will "analyze your goals and develop a communications strategy that meets them." In other words, West Rogers will create whatever reality you need in order to accomplish your goals. On its website, West Rogers shares one of its communication strategies to accomplish your goals:

This Grass Looks Real

In grassroots organizing you drum up broad-based support for your issue. A grasstops effort is more narrow, focusing on business, community or government leaders. But what if you could create the appearance of citizen interest and get decision-makers to take notice? It's called astroturf organizing, where you fake grassroots support. Tactics include phone banks, "citizen" front groups, press release blitzes or rent-a-demonstrators. Politicians are catching on to this latest turf war, so practitioners are looking for more subtle ways to simulate citizen concern.

The Public Relations Society of America says astroturfing is often associated with unethical front group activities. And they say it constitutes improper conduct and malpractice under their Code of Ethics and should be avoided. Maybe West Rogers isn't a member of the PRSA, but The Covington Leader seems to be familiar with ethical public relations, and they don't seem to like West Rogers very much. And The Covington Leader proceeded to tear West Rogers' press release apart as only a seasoned public relations professional can:

In the release, there is ubiquitous use of buzz words like "jobs," "clean," "low-cost" and "renewable," classic public relations language.

Despite the flowery language in the release, there is plenty of opposition to the project.

The Leader is talking about "glittering generalities," which are one of the Seven Common Propaganda Devices. And the Leader wasn't fooled by them.

The Covington Leader reported the truth.

Reporting the truth is in short supply these days. When newspapers were better funded through advertising, they had more reporters. The reporters would investigate the press releases they received from companies like West Rogers, hear both sides of the story, and separate fact from fiction. They would then report the facts. However, in this day and age of shrinking newspaper advertising revenue, newspapers have fewer reporters, and they pay them less. Today's reporter, especially at a small-town paper, does the work of 10 reporters of the past. The modern reporter no longer has the luxury of time to investigate press releases. The reporter may only have minutes to turn a press release into a story. As a result, many press releases are simply re-written as "news" and the investigation process doesn't happen.

This is why I'm a huge advocate of opposition groups writing and issuing their own, competing press releases. While good press releases are a bit of an art, it's nothing a transmission opposition group can't learn with lots of practice. A concise, well-written press release works, where bombarding a reporter with helpful links and things to read doesn't. A reporter simply doesn't have time these days to read, analyze, and investigate the reams of technical and other material that are generated by a specific issue. A short press release is often their only view of the other side of the issue.

Newspapers like The Covington Leader are very rare these days. Learning today's public relations game is a transmission opponent's responsibility, if they want to help generate fair press. Otherwise, only one side of the story gets told.

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Reporter Suspects Not All Transmission Proposals Are Created Equally

4/12/2016

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A lowly reporter for the St. Louis Post-Dispatch is beginning to suspect that not all transmission proposals are created equally because of the distinctly different way the Missouri Public Service Commission has treated applications for two separate proposals.

In PSC sees Ameren, Grain Belt transmission lines differently, the reporter has discovered a difference between what he dubs "traditional" utility projects and "non-traditional" utility projects. But, apparently, that's as far as his curiosity extends, implying that the decisional factor for the PSC is rooted on the "traditional" appearance of the utility applying for the project.

Two transmission line projects that promoters say are needed to connect wind generation to the electric grid could get different treatment from Missouri regulators.

But who are the "promoters?" That's the key. In the case of the Mark Twain project, the "promoter" is the Midcontinent Independent System Operator, a federally regulated transmission grid planner/operator. MISO says that line is "necessary." MISO, as its name implies, is independent of any pecuniary interest in projects it evaluates and orders to be built. MISO has a huge wealth of expertise in determining "necessary" transmission projects. A state PSC is unlikely to substitute its own, or intervenor parties', expertise for that of MISO. MISO's heavy-hitter witnesses will generally prevail when technical expertise is weighed.

The "promoter" of Grain Belt Express is a company with a pecuniary interest in building the project. Grain Belt Express did not participate in the MISO planning process to independently determine if its project is "necessary." GBE's bought and paid for witnesses say what they're paid to say and are given equal weight to any intervenor-funded witnesses by a PSC. No independent party tasked with planning the transmission grid has found GBE to be "necessary."

Therefore it shouldn't be puzzling or surprising that:

At least three of five Missouri Public Service Commissioners indicated this week they thought the project met its criteria for a certificate of convenience and necessity, which would give the utility the right to use eminent domain if it has to. A final vote will be in the coming weeks.

A "traditional" RTO-sponsored project must provide benefits to the ratepayers in the region who pay for it. In contrast, a "non-traditional," or merchant, project may not provide any benefits to the local region, especially when its stated purpose is to export electricity to other regions. While regional electric customers must financially support new transmission from which they benefit, they do not have to financially support transmission intended for the benefit of other regions. While ratepayers must pay for regionally-approved projects that are built, a merchant project does not have any captive ratepayers to finance its project. Financing a merchant project is voluntary, and in the case of GBE, it presumes its volunteers will come from other regions far, far from Missouri. But GBE does not yet have any volunteer customers. Anywhere.

There is little a PSC can do to force a merchant project to alter its plans to create a more beneficial project, or to look at other solutions to the merchant's stated problem, such as building renewables in other regions the merchant intends to serve. A merchant project is "take it or leave it," and the MO PSC chose to leave it. Conversely, an RTO will look at multiple solutions to an identified problem to come up with the best solution, and then has the muscle to make the best solution happen.

Regionally approved projects are weighed against other alternatives by the RTO and found to be the most efficient and cost effective solution to a recognized reliability, economic, or public policy problem. In contrast, GBE has proposed no alternatives to its own project, and there is no recognized regional problem the project attempts to solve.

This is how our "traditional" transmission planning/approval system works. The regional planning/operator system is ruled by existing federal laws and regulations. Under this traditional system, any person can propose a transmission project to a state PSC without going through the "traditional" process, but only if they accept all market risk and pay for it themselves. So the "traditional" system also covers merchant transmission, like GBE. What is new, or "non-traditional" is a brand new attempt by the U.S. Department of Energy to use a loophole in an old law to override state authority over transmission permitting and siting. This new "non-traditional" method of using political clout to build transmission despite state objection has never been used before and will be tested in the courts. "Non-traditional" has little legal basis, while "traditional" has existed for years and has the support of a whole library of precedent.

The MO PSC found GBE's claims that it would provide benefit to Missouri ratepayers unfounded, and when compared with burden on Missouri landowners, GBE did not pass muster. Lawlor's claims that GBE will prove benefits in a second attempt are all wet. Without an independent RTO order that a transmission project provides benefits to a region, convincing regulators there is a benefit is an exercise in futility. In addition, his threats that Missouri must approve GBE so as not to lose its "authority" are nothing but a lame attempt at coercion. Lawlor played that card the last time... and lost.

GBE has successfully clouded the issue of "need" for a transmission project. Everyone should understand what the MO PSC understands... "need" is determined by a RTO. GBE has no RTO-backing.

PSC Commissioner Bill Kenney, who voted against Grain Belt, noted the difference in a discussion of Ameren’s Mark Twain line during a webcast of a meeting Wednesday.

“I was one of three commissioners here who voted against the Clean Line Grain Belt Express because I felt it did not benefit Missouri customers,” he said. “I think this does benefit the ratepayers.”

Commissioner Stephen Stoll acknowledged opposition around Kirksville and Palmyra to Ameren’s 100-mile line. But Stoll, who opposed Grain Belt, said he saw the projects differently.

“I do feel for the property owners,” he said. “I know people don’t necessarily want these, but for the reasons I voted against Clean Line, I think in this case (Ameren) had gone through the requisite issues and came to us with a clear plan and that’s why I think they met the standards and I support it.”

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Utilities Always Win In Current Regulatory System

4/9/2016

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Odd little bit of filler in a NW Arkansas newspaper this week. Bloomberg's In East, power costs fall, bills rise, tells Arkansans about utility hijinks in another part of the country. But these hijinks aren't local only to the east, they're as old as the utility business itself.

When regulation or markets find savings for ratepayers, utilities raise rates elsewhere to make up for it. Utilities, for the most part, are afraid of change. They refuse to make themselves relevant in a brave, new consumer-driven world. Instead of offering products and services that consumers actually want, utilities continue to force consumers to accept the products and services the utility wants to provide. At some point, utilities are going to make themselves irrelevant, because a consumer-driven world is here and it's not going away.

Ohio's utility tedious twins, American Electric Power and FirstEnergy, epitomize utility hijinks to ward off this brave, new world. While being all for deregulation of generation in Ohio when it was profitable, FirstEnergy has changed its tune and wants its generation to be regulated again. In West Virginia, FirstEnergy "sold" generators owned by its competitive affiliate to its distribution affiliate. The problem?

Spot power traded in the market run by PJM Interconnection LLC has averaged about $31 a megawatt-hour this year. That's less than half the $84.55 average in 2008.

Suddenly, competitive plants that were making a profit for the utility were not longer profitable. PJM's "market" had worked so well that older plants that are more expensive to run (such as antique coal plants) were no longer profitable. In a market situation, these plants would close and be replaced by cheaper alternatives, such as natural gas plants. Instead of changing though, the tedious twins sought out ways to make consumers pick up the costs of their plants so they could remain open and "competitive" in PJM's "markets."

After stashing their West Virginia plants in the state's regulated system, the twins came up with an idea to thwart Ohio's supposedly "competitive" generation system by selling the plants' generation into the state's regulated distribution system. The companies concocted power purchase agreements, whereby all regulated distribution system customers would make up any market shortfalls by purchasing the "competitive" generation at the company's cost. In turn, the company would sell the generation into PJM's "market" and leave consumers with any balance the "market" didn't cover. That's the definition of anti-competitive. No other generators in Ohio have the option of having regulated distribution customers pick up the cost of anti-competitive plants. If other plants aren't profitable, they close. That's how the "market" works.

But these utility schemes aren't long term commitments, no matter what the utility promises to score regulatory approval. The minute these schemes aren't profitable, the utility will propose a new scheme to make sure the profits continue. Does anyone actually believe that AEP and FirstEnergy will honor these PPAs in later years if they actually do begin to pay consumer returns at the expense of the company? Hell no. If that ever happens, the utility will find a way to get out of them and return them to a "competitive" business model. The utility never loses in our current regulatory system. The consumers are the perpetual losers.

Another utility scheme is to make up for losses on the competitive generation side by increasing profits on the regulated business side. Regulated transmission pays great returns and can earn additional financial incentives through federally regulated rates. It's not like we "need" a whole bunch of new transmission, it's that utilities need a way to make money. All of a sudden the transmission system, long neglected, has become rickety and failing and must be replaced. Serendipity! If a utility can earn double-digit returns building or rebuilding its transmission, then that's what they do. Utilities with stated rates are paid a set amount for maintenance of their transmission assets. But what happens if they don't spend all that money? It's added to share holder dividends. So, if a utility is hurting and looking for ways to increase share holder returns, the first thing they may do is cut maintenance spending. A look at any utility's quarterly calls with investors demonstrates that cuts to maintenance happen all the time in order to boost share holder dividends. But what happens to the transmission assets that aren't maintained? They become rickety and begin to fail. Serendipity! At that time, the utility determines that the transmission line needs to be completely rebuilt and earns a double-digit return on its "investment."

The transmission investment smorgasbord is why rates have increased, despite falling generation prices:

As the price of electricity in the region fell by half over the past decade, utilities raised monthly bills for residential customers by 26 percent, according to government data. Consumer advocates say the power companies are using falling electricity costs as cover to raise other charges. Utilities counter that they are passing on billions of dollars' worth of government-mandated improvements to long-neglected infrastructure.

Consumer advocates say this scheme isn't "fair" to consumers. But no end to the transmission feeding frenzy is in sight. While utilities spend their cash on profitable transmission investments, less profitable investments in the distribution system suffer. When state-regulated distribution investments pay an equal or better return than federally-regulated transmission investments, perhaps we'd see some attention paid to our rickety and failing distribution system.

Here's the lesson: The utility always wins because regulators have been conditioned to care about the utility's well-being over that of the consumer. After all, the utility is a constant in the regulatory realm, while consumers rarely show up. Only when regulators force better solutions will consumers benefit. Perhaps that's when utilities will realize they need to make themselves relevant to consumers by offering products and services consumers want, instead of force-feeding them the products and services the utility wants to offer.

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And Not A Single Wart Was Found!

4/7/2016

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Bob Stevenson's search for Clean Line warts has come to an end. And not a single wart was found!

In Bob's first weekly Clean Line column, he promised, "to shar[e] all we know about the company, the offer, the risks and rewards, warts and all." Except in the seven weeks since, he hasn't shared one wart. Not one. In Bob's view, Clean Line has no warts. Week after week, Bob sang Clean Line's praises.

Bob thinks that his columns helped Hannibal "form an educated opinion." But I think Bob is the one who got the education here. Last week, Bob got publicly educated by Missouri electric cooperatives, who corrected some misinformation in one of his columns. And every week, Hannibal ratepayers educated him about other misinformation. Bob got educated about regional transmission organizations, electric resource planning, renewable energy certificates, Hannibal's laws about procurement, what was actually in Clean Line's presentation to the City, the MO PSC Order Denying Clean Line a Certificate, Clean Line's business plan, and other topics. Good times! So, let's put this baby to bed for now, because these glowing Clean Line sales pitches are getting tiring.

Bob shares that "sometime in the next few weeks we expect to see a more definitive offer from Clean Line with or without other Municipal electric cities." And this will be made public, Bob? Or will you simply start the circus over from the beginning? Let's hope Bob will use his new education to make impartial decisions in the best interests of Hannibal's electric ratepayers.

Bob says, "I have tried to dispel the notion the Clean Line project is dependent on our approval or partnership." Whose notion is that, Bob? I've never heard that notion. Clean Line wants to use Hannibal as "a good witness" in a possible future PSC case. Does Bob think his testimony will make or break it for Clean Line? He certainly can't have the notion that Hannibal's puny 25 MW purchase of Clean Line's 4,000 MW capacity will make or break the company's success, can he? That might just overestimate Hannibal's importance as the attractive Clean Line capital of the free world.

Your opinion about the terrible things that may happen if the Federal government got involved in Grain Belt Express is misinformed. What makes you think Federal involvement would "leave Hannibal out of the deal entirely?" This demonstrates how little Bob knows about the Clean Line projects, but yet he is quick to offer his misinformed opinion.

Bob wants you to answer some questions, such as: "Are the possible savings on our bills worth the possible ill feelings from our neighbors?" What possible savings? Remember, Bob, Clean Line's presentation didn't show any savings over other wind options. Your reason for steadfast allegiance to one company, a company that may not be there when you need a wind resource in the future, is a secret everyone would like to see revealed at this point. I guess Bob has one more deep, dark secret after all.

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Legislators Work To Protect Constituents

4/7/2016

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All too often our elected representatives head off to our state capitol, where they're surrounded by paid corporate lobbyists every day, and they forget all about us.

Not so in Iowa and Missouri, where legislators are working hard to protect the interests of the ones who elected them.

A bipartisan Iowa House yesterday passed HF 2448, an act relating to the construction, erection, maintenance and operation, or sale of specified electric transmission lines. The bill:

Prohibits bifurcation.
The sale or transfer of a merchant line shall not carry with it the transfer of the franchise (permit).
A company has 3 years from the first informational meeting (required as part of the application process) or its application shall be rejected. A company shall not file another application for the same, or a substantially similar project, for 60 months.
The IUB shall not grant a petition that involves the taking of property by eminent domain unless 75% of the necessary easements have been obtained voluntarily.
In an application that involves eminent domain, "public" shall be interpreted to be limited to the consumers located in Iowa.

The bill now moves on to the Iowa Senate.

The bill's sponsor, Representative Bobby Kaufmann, said, “Every day I, in this body, am going to be loyal to the landowners rather than the pocketbooks of the Rock Island Clean Line.”

Opponents of the bill said it wasn't "fair" to Texas-based Rock Island Clean Line.

Kaufmann said Rock Island Clean Line developers have kept property owners hanging for too long.

“Whose fairness right are we going to choose: property owners or an out-of-state corporation?” Kaufmann asked.

Read more about the remarkable grassroots efforts in Iowa on the website of the Preservation of Rural Iowa Alliance.

And in Missouri, a House committee hearing was held on HB 2418, a bill modifying provisions related to eminent domain power of utilities. The bill adds the following provisions:

4. Notwithstanding any other provision of law to the contrary, the power of eminent domain shall not be exercised for any electric transmission line project if any of the following apply:
(1) Such project is proposed and built outside a regulated regional transmission planning process;
(2) Such project is not eligible for recovery of costs under a regional transmission operator or independent system operator tariff for transmission service it provides;
(3) Such project is constructed entirely with private funds and users of the line pay for the transmission line;
(4) Such project primarily involves construction of a high-voltage direct current transmission line.
5. Subsection 4 of this section shall not apply to a transmission line, wire, or cable that primarily provides electricity through alternating current and is used by:
(1) Rate-regulated electric utilities, municipal electric utilities, or rural electric cooperatives; or
(2) Electric transmission owners to provide electric service, for compensation, to the public or any entity described under subdivision (1) of this subsection.

Read more about this legislation here.

Block GBE Missouri reports that the hearing went well, with six witnesses testifying in favor of the bill.

Now that's representation of the people!

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Congress Launches Investigation Of DOE's Clean Line Decision

4/2/2016

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The honeymoon is over!

Senator John Boozeman has announced an investigation:

I have asked legal experts and Congressional investigators to carefully review the Department’s decision. We are studying several related documents released by the Department, including the 22-page "Record of Decision" on the environmental review, a 73- page “Summary of Findings,” and a 210-page “Participation Agreement” between the Department of Energy and Clean Line. We will also require the Department to answer a series of questions related to its decision and provide all related documents and evidence.

Boozeman also reiterated his intention to pass legislation to limit the DOE's authority on Section 1222:

Last year, in an effort to clarify the law and restore rights to Arkansans, I introduced the Assuring Private Property Rights Over Vast Access to Land (APPROVAL) Act. Congressman Steve Womack (AR-03) introduced the same bill in the House. The legislation is supported by the entire Arkansas delegation. In October, Congressman Womack and I highlighted the need for this legislation during a House Committee on Natural Resources hearing. Our bill would make it crystal clear that these kinds of projects must receive state approval.

Senator Boozeman has pledged to take measures to stop DOE's overreach.

Thankfully, the Obama Administration’s plan for this power line still faces hurdles. This is not a done deal. The Department must be able to legally defend its decision, and there are big gaps between what the law requires and the decision the Department reached. The plan also faces strong opposition by many in Congress.

It's not a done deal. Read more here!

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The Department of Energy's "Landowner Benefits" Ruse

4/2/2016

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The U.S. DOE claimed in a press release

Through its rigorous review and lengthy negotiations to build in protections for landowners and the local communities, the processes insisted upon by the Department go well beyond the provisions established by Congress in Section 1222.

And if you believe that ruse, I've got a bridge in Brooklyn to sell you.

The reality is that the DOE is planning to coerce landowners to sign survey and easement agreements under threat of condemnation and taking of their land by the Federal government. It's all there in the "Participation Agreement" signed by the DOE and Clean Line. Every affected landowner should take a look. No landowners were party to the "lengthy negotiations" that took place at the DOE to "build in protections for landowners," so you may question whether anything in this agreement actually protects your interests. DOE doesn't even know what your interests are!

Earlier this week, Clean Line stated that it wanted to "share its revenues" with landowners.

Clean Line Energy executive vice president Mario Hurtado, said via email. “We have created a market-leading compensation package that allows landowners to share in the revenues earned by the project and an easement acquisition process that provides important protections so that landowners are treated fairly.”

Bridge. Brooklyn. You know what Clean Line is willing to do? Exactly what is in the Participation Agreement, and nothing more. Nothing at all. Clean Line will do the minimum required under the agreement and then turn the remainder over the the DOE for condemnation. And there is no "share in the wealth" provisions for landowners in the Participation Agreement.

The Participation Agreement states,

No Clean Line Entity shall engage in any coercive action with respect to any Landowner, Curative Party or tenant in respect of the undertakings required hereby.

And then just steps from the starting gate, Clean Line engages in a lie by telling landowners that they will "share in the revenues earned by the project," when this is not part of the Participation Agreement's "protections" for landowners. What is coercion?

The practice of persuading someone to do something by using force or threats.

It's perfectly okay with the DOE if Clean Line lies to landowners in order to get their foot in the door, but threats of condemnation are out of line. Remember this!

Don't be afraid of scary words like "condemnation," or "eminent domain." The DOE doesn't want to engage in it anymore than you do. It's costly and time consuming. Once, a government wanted to take my land to build a gated community and high-end shops. They offered a pittance. I refused. The closer and closer we got to a condemnation hearing, the higher the offers from the government became. The offer made to my attorney, literally on the steps of the court house just before the condemnation hearing, was six times the original offer. I'm not an attorney, and none of this is intended as legal advice. It's just a sharing my own personal experiences, and it's been my experience that the first landowners to sign get the least amount of money. There's always more money available and a "final offer" is often not final. I received much more than the other landowners because I was the last one to sign, not the first one.

Get yourself a competent, local attorney. Beware large out-of-state "eminent domain specialists" whose payday is dependent upon you signing an agreement with the company. You'd get better advice from an attorney who is billing you by the hour. His payday isn't dependent upon you signing an easement agreement.

So, what's in the Participation Agreement "protecting" landowners from Clean Line's easement acquisition actions?

First of all, Clean Line needs to "locate the landowner." They can do so by "using a private investigator to conduct a search for such Landowner, inquiries with
relatives, neighbors or other individuals that could reasonably be likely to know the location of
such Landowner." This is "protection?" Sounds like intimidation to me.

Next, Clean Line is supposed to give the landowner an "initial notice and landowner materials," consisting of:

(i) a proposed form of easement and/or other applicable documentation relating to the conveyance of the proposed Project Real Estate Right;
(ii) a payment calculation sheet or other documentation in respect of any compensation proposed to be paid to such Landowner in connection with the applicable Project Real Estate Right; provided, however, that with respect to any parcel that is not a Waiver Parcel, such payment calculation sheet or other documentation shall only be provided after the appraisal has been performed;
(iii) a sketch identifying the boundaries and the nature of the applicable Project Real Estate Right;
(iv) a construction questionnaire designed to gather necessary information in respect of conditions at the location of the applicable Project Real Estate Right;
(v) a copy of the Clean Line Entities’ Codes of Conduct for acquisitions of Project Real Estate Rights (which is attached as Schedule 12 to
this Agreement);
(vi) a request for permission to conduct a survey of the applicable Project Real Estate Right; and
(vii) in respect of any Project Real Estate Right located in Oklahoma, a copy of the Private Rights Settlement Agreement, dated January 14, 2011 (the “Private Rights Settlement Agreement”), and the Order from the OCC, dated October 28, 2011, approving the PECL OK’s application to conduct business as a
public utility in Oklahoma.

Landowners are "protected" by being offered a legal document written by Clean Line, in its own best interest, that they are encouraged to sign without legal representation of their own. When you sell real estate in an open market, both parties are represented at settlement by their own legal counsel. Nobody ever sells their property to a stranger who comes knocking on their door with a prepared legal document. So, why should you? Land agent promises mean nothing unless they are written into the signed legal document, before you sign. Everything you will receive must be set out in the easement agreement, in writing. You'd be much better off with an easement agreement written by your own counsel, instead of accepting Clean Line's terms. Clean Line is writing these agreements in their own interest, not yours. Not all desired terms of easement agreements revolve around money. In fact, money should be the least of your worries when you are legally bound to a transmission company for decades. Read the paper linked here to find important provisions to include in your own easement agreement.

Although samples of many of the documents are included as attachments to the Participation Agreement, the easement agreement is not one of them. What's in the easement agreement that can't stand public scrutiny? Doesn't sound like a "protection" for landowners to keep the easement agreement hidden until presented to the landowner in person by Clean Line, and urging him to sign immediately, without advice of counsel.

A "payment calculation sheet" prepared by Clean Line's property value appraisers "protects" you from receiving an offer below market value. The payment calculation sheet becomes part of your easement agreement, once you sign. Whatever is on this paper is a legal part of your easement agreement. Clean Line's "market values" are determined by a company located in another state that uses prior sales in your county to calculate a value for your particular property. It's all very high level, and prior sales can be cherry picked to come up with the value the company wants to assign to your property. No appraiser may visit your property to discover its unique features. Clean Line, at its own discretion, may deem your parcel a "waiver parcel," meaning it will refuse to have your property individually appraised before determining a value. Even if Clean Line offers to have your property appraised, the appraisal shall be performed by Clean Line's contracted appraiser. This appraiser performs all Clean Line's appraisals in your area under a contract. You are not allowed to have your own appraisal performed by an appraiser of your choosing. Or, better yet, to have the value determined by averaging the values determined by three appraisals -- one performed by Clean Line's appraiser, one performed by the landowner's appraiser, and one performed by an appraiser agreed to by both parties. This may be small "protection" but it is the kind of value determination required by a state PSC approval of a transmission line. DOE's "protections" don't even go that far. And, one more thing about appraisals... if Clean Line doesn't like the appraisal its contractor produces, it can act as follows:
(a) The Appraisal will be sent back to the original Appraiser for revisions based on the appraisal review and then resubmitted through the review process as outlined
above; or
(b) A meeting will be held between the Appraiser and Review Appraiser to gather more facts regarding the subject parcel to formalize a joint appraisal analysis.

Clean Line's contracted appraiser had better toe the "clean" line or risk having their arm twisted. But you can trust this appraiser because it's one of DOE's "protections" for landowners!

A sample of the Payment (or Easement) Calculation Sheet is included as an appendix to the Participation Agreement. As you can see from this sample, your total easement consideration (payment) consists of the value of your land. There's no line item for "revenue sharing," structure payments, damages or anything else. It's a straight up calculation of the value of your acreage. Also take note that this is more aptly considered an Option for easement, because you're not getting your payment all at once. You'll get 30% of the agreed value when you sign. You'll get the balance when they show up with the bulldozer. If that doesn't happen before December 31, 2017, then Clean Line can pay you another 10% of the agreed price to extend the contract for another year. If the bulldozer still hasn't shown up by December 31, 2018, then Clean Line will dispense another 10%. At this point, you'll have 50% of the agreed upon value in your pocket. And guess what? Clean Line can back out of this easement agreement at any time it likes by failing to pay you the additional amounts. You can never back out of this easement agreement. It's permanent. And remember, any percentage of value payments made along the way are deducted from the final amount you will receive. They are NOT in addition to the value determined.

Although the Participation Agreement requires Clean Line to pay for: (iii) any damage to any crops, timber, livestock, structures or improvements of the Landowner that are reasonably likely to arise as a result of the conveyance of the applicable Project Real Estate Right and the Project...
There's no line item for this on the Payment Calculation Sheet. How is the landowner "protected" here? Is the landowner supposed to hope that Clean Line pays whatever they request after the damages have occurred? Or does the landowner have to go through the courts to be reimbursed if they don't agree with Clean Line's assessment of the damages? Determine damages, and a method for fairly assessing their cost, in advance and add it to your Payment Calculation Sheet and/or easement agreement. Don't get stuck taking a pittance from Clean Line, or spending years in court, for the damages it caused.

And now let's talk about Clean Line's "Code of Conduct" for acquisition of your real estate. As I've written before, this "code" was plagiarized from another transmission project where land agents actually did the things set out as prohibited by the "code." These prohibited actions are standard operating procedures for land agents. They actually happened. The problem with this "code," is that there is no enforcement mechanism. There are no penalties for violation. There are no "code police" to call when a violation occurs. Is DOE going to enforce this "code?" There's nothing in the Participation Agreement about enforcement of this "code" or how a landowner shall report infractions. This "code" doesn't protect landowners. It's only so much window dressing. Landowners should document all contact with land agents. Record all meetings and telephone conversations with land agents. If a land agent is abiding by the code, they should have no problem with you recording the meeting. If they object, however, you can decide if their intentions are genuine, and whether to meet with them at all.

Regarding "Construction Questionnaire" or "Survey Permission" forms -- you don't have to fill these out or sign them. Clean Line has no authority to make you do so. You participate in these activities of your own free will in order to help Clean Line with engineering of its transmission line. A survey could damage your property. There is no compensation offered by the company in exchange for allowing a survey. In fact, the "Survey Permission" and "Construction Questionnaire" forms are not included as examples in the Participation Agreement. Who knows what's in them, or whether there is adequate protection for the landowner? Have your own counsel review them, if you're considering signing them.

Another point in the Participation Agreement... at the landowner's request, Clean Line must "submit" to "binding arbitration" if the landowner and Clean Line cannot agree to a price. Arbitration is a quasi-legal process intended to settle disputes through the decision of an impartial third party. Binding arbitration means you give up your right to disagree with the decision made. You don't have to submit to arbitration. If you do, you give up your rights to have the form of your easement agreement and the value you receive for your land reviewed by a court. Arbitration is a cheaper process that strips you of your due process rights. I would much rather have my issues decided by a court, where I may appeal a verdict I didn't agree with. Arbitration is giving up your legal rights.

In addition, the Participation Agreement stipulates:

The Clean Line Entities shall develop a standard script of talking points (subject to DOE’s approval) describing DOE’s participation in the Project and DOE’s obligations in connection with any acquisition of Project Real Estate Rights, which standard script shall be applied and followed by each Clean Line Entity and its contractors in material respects in all communications and correspondence with any Landowner, Curative Party or tenant.

Of course, the "script" is not included in the Participation Agreement, so nobody knows what's in it. Ask to see a copy of the approved "script" before talking to a land agent. And, just like the "code," there's no enforcement mechanism or penalty for failing to abide by this stipulation.

The Participation Agreement also provides a mechanism whereby Clean Line "assigns" acquiring a particular easement to DOE. That's because Clean Line does not have the ability to condemn any property and take it by eminent domain. Only the DOE can do this. Don't be afraid of any threats from Clean Line that their offer is "final" and if you don't accept it they will turn your case over to DOE. Once DOE gets your case from Clean Line, it, too, must attempt to engage and negotiate with you before condemning the property. Only DOE can proceed with condemnation.

Do yourself a favor and read the Participation Agreement in its entirety. It's long, but not nearly as long as "perpetuity" will be if you sign something that doesn't protect your interests. The DOE isn't looking out for you here, they only negotiated with Clean Line to come up with this agreement. Protect yourself.

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Who's a NIMBY?

Fantasy and Reality in Oklahoma

Another "Clean" Lie Bites the Dust

Truth In Media

Reporter Suspects Not All Transmission Proposals Are Created Equally

Utilities Always Win In Current Regulatory System

And Not A Single Wart Was Found!

Legislators Work To Protect Constituents

Congress Launches Investigation Of DOE's Clean Line Decision

The Department of Energy's "Landowner Benefits" Ruse

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