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22 Transmission Ideas + Free Government Cheese = Rat Infestation

4/30/2021

4 Comments

 
He's back!  Thought you were done with Michael Skelly for good when his Clean Line Energy Partners went belly up after wasting $200M of investors' money?  Sorry.  The smell of free government cheese was apparently too much for him.  He's back... as a "founder" of Grid United.  Grid United LLC was just created a couple weeks ago and registered in Delaware.  Gosh, where have we seen all this before?
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Isn't this the way the Clean Line money burner started?  I wonder if he's called up Jimmy and Jayshree to join him again?  So... what sparked this sudden interest to join the transmission world again after such a spectacular failure?

Free government cheese!  If you put out the cheese, the rats will come!

It appears that the people and corporations who will make enormous profits from overbuilding new transmission, along with "big green" non-governmental organizations who seek to fatten their own bottom line and reach their own political goals, have been elected to the White House.  It's no coincidence that the cabals seeking political power and riches beyond imagination have taken control of U.S. energy policy.  It's also no coincidence that the White House announced new actions to "upgrade America's power infrastructure" at the very same time that one of the cabals announced a new list of 22 "shovel ready" transmission projects.  It's quite clear who is in control here.  It's corporate interests.  The swamp has been rewatered and the creatures are multiplying.

Along with the 22 "shovel ready" transmission projects, the White House announced more than $8B of federal loan guarantees for "innovative" transmission projects.
“DOE is making financing available for projects that improve resilience and expand transmission capacity across the electrical grid, so we can reliably move clean energy from places where it’s produced to places where it’s needed most,” said Secretary of Energy Jennifer M. Granholm.
Holy Solyndra, Batman!  Gosh, what if Skelly could get his hands on $8B of free government cheese to spend on a new suite of Clean Line... err... Grid United... transmission ideas?  Since no private investor would be likely to give him another penny for his transmission ideas, it's up to the federal government to give OUR money away for Skelly to play with.  And where are those "places where it's needed most?"  I've been trying to get this meaningless platitude defined for years now without success.  I think it means turning rural America into an industrial power plant for urban needs.  For some reason, urban needs are "most" and rural needs are sacrificed.  Environmental justice?  No, just a bunch of hypocrites of the highest order who intend to place their energy infrastructure on precious farmland and through the backyards of hundreds of thousands of rural residents, even though these "peasants" won't get any benefit from it.  The DOE pretends that its free government cheese is only for "innovative" transmission projects, however the list of 22 "shovel ready" transmission projects includes mostly old technology  projects that have been bumping along unsuccessfully for decades.  There's nothing innovative here... overhead wires and hulking lattice structures hundreds of feet tall are something that Thomas Edison would recognize!  There are only a handful of quasi-innovative projects on the list -- those that are buried underwater or along existing rights of way.  And even then, they are based on the century-old idea of centralized generation and miles of transmission wire.  What's truly innovative?  This!  Distributed generation, making power where it's used, is our future however there is no free government cheese for this truly innovative new energy idea.

What projects are on the list?  Of course, Grain Belt Express makes the list, but it's not the project Invenergy is trying to build.  The project on the list includes the leg through Illinois, although Invenergy has announced that it only wants to build the portion through Kansas and Missouri.  It seems the "list" only includes Skelly's version of it.  Is he going to buy it back from Polsky?  Stab him in the back this time?  Completing Skelly's dream is the Plains and Eastern project.  It's on the list, although it was abandoned more than 4 years ago!  Is Skelly going to buy that one back from NextEra?  Adding to the mystery is the "new" Plains and Eastern's route.  It ends abruptly at the Arkansas border.  It does not continue through Arkansas to make the connection at Memphis that Skelly originally envisioned.  In fact, Skelly never envisioned a connection point at the Arkansas border.  What's there?  Is that a strong connection point where a gigantic 4,000 MW converter station can be built?  Nobody knows... it all seems like simple artwork fantasy.
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Observing the report’s map, Skelly said, “If you squint a little bit, you can see the beginnings of what would be a nationally connected system. Obviously, there are plenty of gaps here, but … if these lines get done, then we have the beginnings of a something” that could “grow organically into a national grid.”
Ahh, geez, if you squint a bit you can also see an infestation of fat rats swarming the cheese.  A squinting transmission plan and free government cheese?  Is this what now passes for national energy policy?  Stop the crazy!  But wait, there's more...
Among the projects are a few originally proposed by Michael Skelly’s defunct Clean Line Energy Partners, including the Grain Belt Express and the Plains & Eastern Clean Line.

“The reason we put these projects on the list is because they’re sited, and they’ve got interconnect agreements, and they’ve got studies; they’re ready to go,” said Skelly, now a senior adviser at Lazard, who joined ACEG Executive Director Rob Gramlich and several representatives of the listed projects’ developers in presenting the report.
Say what?  These projects have interconnection agreements?  That is a BIG FAT LIE.  Neither of these projects have signed interconnection agreements for both ends of the extension cord.  In fact, Grain Belt Express seems to be hedging its bets about where it will interconnect lately.  Will it be Ralls County?  Will it be Randolph County?  Will it be Indiana?  Invenergy says it has no idea.  No idea at all.  In addition, nobody knows what NextEra intends to do with the Oklahoma portion of Plains and Eastern that it purchased.  It's done nothing to make a new project out of the ashes of the old one.  However, Skelly's new cabal has some more policies it wants to put in place using its new perch at the White House.

Given the scale of transmission need discussed above, other policies to enable large-scale expansion of transmission over the longer-term are also needed.

Anchor Tenant

Legislation could be enacted to direct the federal government to directly invest in new transmission lines as an “anchor tenant” customer, and then re-sell that contracted transmission capacity to renewable developers and others seeking to use the transmission line. This would help provide the certainty needed to move transmission projects to construction and overcome what is called the “chicken-and-the-egg problem,” in which renewable developers and transmission developers are each waiting for the other to go first due to the mismatch in the length of time it takes each to complete construction.

FERC Transmission Planning and Cost Allocation Reform
The Federal Energy Regulatory Commission (FERC) has authority over how transmission is planned and paid for. FERC can use that authority to break the transmission planning and cost allocation logjams that are preventing large regional and inter-regional lines from being built. Legislation to direct FERC to use that authority could also be helpful.

Streamlined Permitting
While most authority for permitting transmission lines is held by states, federal agencies have authority over lines that cross federal lands. Steps can be taken to streamline and expedite that process, which can currently take a decade or more.

Hey, remember why Plains and Eastern failed in the first place?  It was because the TVA (federal power marketer) refused to sign on as an anchor tenant and be Clean Line's customer.  Skelly aims to fix that by requiring that the federal government hold the hot potato of transmission capacity nobody wants or needs.  The government would pay Skelly for his project and then maybe re-sell capacity to someone else as a middle man.  And if the government is as unsuccessful as Skelly at selling transmission capacity to a utility that wants it?  Well, then, no harm done.  The government can just continue to fund unneeded transmission that nobody uses... forever.  This is absurd, uneconomic and just plain stupid.

There's so much free government cheese here it makes my head spin!

Free transmission tax credits.
Free government loan guarantees.
Guaranteed purchase of new capacity.
New federal government siting and permitting.
Wider cost allocation so consumers don't notice how expensive it is.
New rate incentives for transmission.
New federal planning to increase transmission expansion.

It's like different branches of the federal government are trying to out-do each other by providing layer upon layer upon layer of new cheese handouts for transmission developers.  None of it is coordinated and designed to work together.  It's a buffet line of government handouts for transmission.  A tax credit here, a loan there, a customer contract on the side, a handful of new federal permitting authority, a bowl of new rate incentives.  This is the epitome of bloated, ubiquitous government controlling your life and your wallet.  Nose to the grindstone, little serf, we've got lots of big government to pay for!!

Let's take a sanity break for just a moment, shall we?  Nearly all of the 22 transmission projects on the "shovel ready" list are merchant transmission projects.  What are merchant transmission projects?  Merchant transmission projects are distinguished from those planned by traditional public utilities in that such projects assume all the market risks, and have no captive pool of customers from which to recoup the project's costs.  Merchant projects assume ALL market risk!  They pay for themselves.  They do not have any guaranteed stream of revenue from any captive customers.  Because they have no captive customers, they are not regulated.  Transmission with captive customers (such as the proposed federal government anchor customers, or perhaps the taxpayers who are paying for all the free cheese being handed out) must be regulated because the regulation serves as stand-in for competition in a free market.  You cannot allow these monopoly constructs to charge as much as they want when there is no competition.  But, yet, that is exactly what the federal government is now proposing.  It is proposing to make itself a captive customer of an unregulated monopoly.  It is proposing to make U.S. taxpayers captive customers of an unregulated monopoly.  If we're going to start handing cash and guarantees to merchant transmission developers, THEY MUST BE FULLY REGULATED!  When they are regulated they can no longer charge negotiated rates, and they must pass cost/benefit tests that guarantee consumers will receive more benefit than the project costs to build.  There must be a fully vetted reason to build them, aside from corporate profit.  You cannot hand public money to unregulated monopolies!

And let's end, for the time being, with a little irony, shall we?  After he flamed out in the world of transmission, Michael Skelly became an activist against highway expansion in his own hometown of Houston.  Let's take a look at his comments in a recent news article about the highway project:
Community opponents of the highway expansion said TxDOT’s only solution to ease traffic problems and congestion is to build more highways, which, besides allowing more cars on the road, also covers more city area with asphalt and concrete. This has considerably increased flooding in areas surrounding highways, many of which have suffered disproportionately since Hurricane Harvey in August 2017, they said.
Michael Skelly, a local activist with the Make I-45 Better Coalition, said TxDOT has consistently ignored residents’ input on project design despite several public hearings. “In 2015, a few of us residents got together and submitted our comments to TxDOT on a 2017 draft project,” he said. “It soon became clear they were not going to commit to anything.”

4 Comments

Will The Public Actually Get To Participate At FERC?

1/10/2021

0 Comments

 
If you don't know "WTF" FERC does, should you participate in its proceedings?

Not knowing "WTF" FERC does hasn't stopped self-appointed "consumer advocates" like Public Citizen from weighing in at FERC on numerous proceedings in recent memory... and losing.

Now Public Citizen is all excited that Congress has directed FERC to submit a report with a plan for an Office of Public Participation.  Let's hope Public Citizen is first in line to learn exactly "WTF" FERC does so that it could do better in the future and quit wasting FERC's time with complaints that go no where.  But it seems more like Public Citizen is more excited about being first in line to score some public funding for its bleary and uninspired FERC filings.  They sure do spend a lot of time talking about funding in this article.  And they've sure spent a lot of time talking about the funding in the past.

But what has Congress done?  If you search for "Office of Public Participation" in the actual legislation, you get nada.  It's only in the "Explanatory Statement" that the office arises.  It says:
FERC is directed to submit to the Committees on Appropriations of both Houses of Congress not later than 180 days after enactment of this Act a report detailing how it will establish and operate the Office of Public Participation required under section 319 of the Federal Power Act, beginning in fiscal year 2022. As part of the report, FERC shall provide an organizational structure and budget for the office sufficient to carry out its statutory obligations. The report shall assume that funding for the Office of Public Participation will be derived through annual charges and filing fees as authorized by the Federal Power Act and the Omnibus Budget Reconciliation Act of 1986.
Oh, a report.  It doesn't actually establish the office.  That was done back in 1978, but it never happened because there was no funding.  Now Congress says FERC should assume the funding will be provided by charging fees to the entities it regulates, which is where FERC gets all its funding.  FERC's annual budget is recovered from the entities it regulates through fees.  FERC actually costs taxpayers nothing.  So, if additional funding is needed for this office, the fees must increase, or other spending must be decreased.  How much bellyaching is there going to be about funding?

And what exactly is an "explanatory statement" and why does it matter?
The intent of an “Explanatory Statement,” sometimes called “Report Language” is to emphasize, or clarify “Legislative Language.” All Divisions shall comply with the directives, reporting requirements, instructions and allocations within the specified time frames unless specifically addressed to the contrary in their particular Division “Explanatory Statement.” The Executive Branch of the Government could choose to ignore Directives. Rarely do Government Agencies fail to comply as they may face substantial repercussions.

So there is no new legislation.  The legislation remains as it was in 1978.
(a)
(1) There shall be an office in the Commission to be known as the Office of Public Participation (hereinafter in this section referred to as the “Office”).
(2)
(A) The Office shall be administered by a Director. The Director shall be appointed by the Chairman with the approval of the Commission. The Director may be removed during his term of office by the Chairman, with the approval of the Commission, only for inefficiency, neglect of duty, or malfeasance in office.
(B) The term of office of the Director shall be 4 years. The Director shall be responsible for the discharge of the functions and duties of the Office. He shall be appointed and compensated at a rate not in excess of the maximum rate prescribed for GS–18 of the General Schedule under section 5332 of title 5.
(3) The Director may appoint, and assign the duties of, employees of such Office, and with the concurrence of the Commission he may fix the compensation of such employees and procure temporary and intermittent services to the same extent as is authorized under section 3109 of title 5.
(b)
(1) The Director shall coordinate assistance to the public with respect to authorities exercised by the Commission. The Director shall also coordinate assistance available to persons intervening or participating or proposing to intervene or participate in proceedings before the Commission.
(2) The Commission may, under rules promulgated by it, provide compensation for reasonable attorney’s fees, expert witness fees, and other costs of intervening or participating in any proceeding before the Commission to any person whose intervention or participation substantially contributed to the approval, in whole or in part, of a position advocated by such person. Such compensation may be paid only if the Commission has determined that--
(A) the proceeding is significant, and
(B) such person’s intervention or participation in such proceeding without receipt of compensation constitutes a significant financial hardship to him.
(3) Nothing in this subsection affects or restricts any rights of any intervenor or participant under any other applicable law or rule of law.
(4) There are authorized to be appropriated to the Secretary of Energy to be used by the Office for purposes of compensation of persons under the provisions of this subsection not to exceed $500,000 for the fiscal year 1978, not to exceed $2,000,000 for the fiscal year 1979, not to exceed $2,200,000 for the fiscal year 1980, and not to exceed $2,400,000 for the fiscal year 1981.
It's not really a cash register for public participation.  Here's the thing... in order to be compensated, you have to win, and you have to substantially contribute to that win.  However, you'd have to spend the money up front without knowing whether or not you'd win.  Then you'd have to make a case why your participation was a hardship AFTER you'd spent the money to participate.  I can understand why a landowner affected by an energy project would be able to make that case, but some public interest group would not.  Therefore, it's NOT a fountain of funding for groups like Public Citizen.  But I kind of get the feeling that these groups are going to whine and cavort until they get their piece of the pie.

Public funding for intervenors sounds like a really good thing.  However, it rarely is, in practice.  Friends in Wisconsin tell me that the available public funding for intervention at the state Public Service Commission is regularly scooped up by various "public interest groups" who participate in the case TO SUPPORT THE UTILITY!  Landowners affected by the proposed energy project rarely receive funding for their efforts.  This isn't an opportunity to give affected people a voice in the process, it's a cash cow for sophisticated groups who have experience scoring grants and other free cash available for those who know how to write applications for free cash.

My expectations for FERC's Office of Public Participation?  If it ever gets off the ground, it will serve funding-savvy public interest groups, and not the disenfranchised folks on the front lines of the energy war.  They will still not know "WTF" FERC does, and will have no recourse but to continue their efforts to simply shout at FERC and disrupt its meetings.  What a complete waste of time and money.
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Schemers Plan To Preempt State Authority To Permit and Site Electric Transmission

12/17/2020

4 Comments

 
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The Joebama administration hasn't even started yet and already the political schemers are planning to usurp state authority to site and permit electric transmission.  Should you worry?  Yes!  As much as you may disagree with your state utility commission, it's the only thing standing between your right to own property and having a new high-voltage transmission line in your backyard that is serving the "needs" of others in far-off cities.

The giddy scheming has reached a fevered pitch, and now the "Center on Global Energy Policy" is advising that greedy transmission developers simply run right over state authority and private property rights by using questionable federal transmission siting and permitting authority to build as much new transmission as they can, as fast as they can.

What's the "Center on Global Energy Policy"?  Don't be fooled by its association with Columbia University and the NYU School of Law.  If you look at this organization's website, you can see it's funded by energy companies, mainly oil and gas.  Why would the oil and gas industry be interested in building a bunch of new electric transmission?  Is it so that we can put more electric cars on the road?  Seems kinda counterintuitive, doesn't it?  Oh, keep going on the "partners" list.  Under "sustaining annual circle" you'll find ACORE -- American Council on Renewable Energy.  These schemers have been pushing for tripling the amount of long-distance electric transmission for months now.  Who funds ACORE?  There you'll find all the usual suspects:  companies who stand to profit from building new renewables that want you to pay to ship their product around the country, such as Pattern, Invenergy, Avangrid, Next Era, Berkshire Hathaway.  Joining them in this well-financed effort is a bunch of investment firms, law firms, and wind turbine manufacturers.  All in, these companies stand to make a mountain of cash building a bunch of utility scale renewables far from load centers.  Now we know why they're doing this!  It's not for "green" energy... it's for GREEN DOLLARS!

This is an entirely created "crisis."  The only "crisis" at hand is that alternatives to geographically remote renewables, such as offshore wind, will soon be here.  The companies behind this initiative want to continue to make money building remote renewables.  They don't want better, cheaper solutions that make sense for consumers.  The economics of making resource decisions are not on their side.  If someone wants to build a new power generator, there's a lot of figuring that goes into whether or not it is beneficial for customers.  Not all new generators are beneficial, and there are choices to be made between generator options.  The cost of the generator + operating costs + delivery costs.  That's what the consumer would pay.  All these different costs need to be put into the equation.  When you compare onshore wind with offshore wind, for instance, offshore wind may be more expensive to build, but it doesn't require as much long distance transmission, therefore it may actually end up being cheaper when all costs are considered.  That's probably what scares these companies the most... remote renewables are too expensive for consumers when compared to more local, distributed options.  They demand that the federal government force remote renewables on everyone.  This sentence explains it better than I ever could.  An 82-page report... one sentence!

Second, increasing access to renewables benefits customers otherwise unable to fulfill a preference for a low-emission fuel source and sometimes lowers electricity prices.

Sometimes?  But not when you add in the cost of trillions of dollars of new transmission, right?

And take a look, a really good look, at some of the rhetoric in this "report."  Although it's complicated reading for folks who haven't been riding the transmission train for years, the bald arrogance of these schemers is plain to see.  It's practically oozing out all over the floor!  Contempt for landowners and affected communities is combined with haughty condescension to state utility commissions.  They don't even try to hide it.  It's all about using the federal government and federal eminent domain to thwart opposition.  The people who would be forced to live with all this new transmission don't matter one whit to these greedy schemers.  It's all about their profits, not your little life, private property, or well-being.  They want to cut states out of the transmission siting picture because they may have been responsive to the plight of people.  People don't matter here... only company profits.  This is top down corporate take over of the federal government in order to use federal authority to steal from people and give to corporations.  There is no consumer "need" for any of this.  The corporations are the only ones saying it's needed.  The people are not saying they need it.  Actually, they're quite agnostic if their bill doesn't go up or the government doesn't show up to take their private property.  Pretending to want "green energy" is nothing more than virtue signaling at its finest.  In the interest of "environmental justice" they just want to shift the hurt somewhere else so they can feel good about their own neighborhood.  Nobody should have to live with unwanted energy infrastructure in their backyard.

So, what is it they're planning to do now?  Way back in 2005, Congress passed a sweeping new energy policy act.  This Act was supposedly in response to the Northeast blackout of 2003.  It wasn't about renewable energy.  Within that act were two new sections, Section 1221 and Section 1222.  Section 1221 tasked the U.S. Dept. of Energy with performing triennial transmission "congestion studies" to designate "National Interest Electric Transmission Corridors" (NIETCs) in areas that were "congested" and causing higher energy prices due to lack of adequate transmission.  Once a NIETC was designated, the Federal Energy Regulatory Commission could step in to permit new transmission in a NIETC if a state could not permit it, failed to act on the project, or imposed unnecessary conditions on a permit that tanked the project.

DOE quickly designated two NIETCs, one along the mid-Atlantic between the Ohio Valley and the coastal cities, and one in the Southwest between Arizona and California.  The NIETCs were vast, and DOE failed to properly consult with affected states as required by the Act.  Once the NIETCs were in place, FERC engaged in rulemaking to set regulations for its role in siting and permitting transmission in a NIETC.  FERC decided that it could site and permit transmission in any instance... that it could effectively preempt state authority in its entirety, even if a state rightly denied a permit for new transmission.

All this preemption got some folks hopping mad.  Ironically, some of the environmental groups challenged these decisions in court because they presumed all this new transmission would increase the use of fossil fuels.  However, it wasn't only them.  A number of states also got into the action.  If you tell a state that you're going to preempt their authority to set their own energy policy, you're going to get pushback.  And so the courts eventually handed down two decisions that reined in the transmission schemers.

In the 9th Circuit, California Wilderness Coalition v. U.S. DOE vacated the NIETCs designated by the DOE for a failure to consult with affected states.  Bam!  NIETCs gone!  Ever since, DOE has only played at conducting its "congestion studies", with numerous delays in actually getting it done combined with silly attempts at data collection and reporting.  It's most recent "study" completed this year did not recommend designating any corridors or find any congestion worth worrying about.  It should be three years before their next attempt.  However, the schemers are pushing DOE to amend its report and designate new corridors.  The idea is to only designate "narrow" corridors that correspond to project ideas.  Essentially, if a company wants to build transmission, just let DOE know and they will designate a corridor for you based on future congestion that does not actually exist.  And then they expect the designation will be re-litigated.

As a result of FERC's rulemaking that interpreted the Act to allow them to preempt a state denial of new transmission, the 4th Circuit in Piedmont Environmental Council v. FERC found that the Act does not contemplate FERC preempting a state's outright denial.  This decision effectively stopped FERC's preemption, and combined with the 9th Circuit decision, knocked all the teeth out of Section 1221.  It was no longer useful for overriding state authority to site and permit transmission and stepping in with federal permitting and eminent domain.  However, the schemers are now pushing FERC to do a new rulemaking to promulgate regulations for siting and permitting new transmission in new corridors and using federal eminent domain in the event that a state denies a new transmission project.  The logic here is even worse... the schemers say that the 4th Circuit decision only applies to the 4th Circuit, and therefore FERC should carry on with using its authority in other states not part of the 4th Circuit.  The 4th Circuit covers the states of Maryland, North Carolina, South Carolina, Virginia, and West Virginia.  If you live there, you are safe from FERC's preemption... for now.  But the schemers suggest that FERC and transmission builders steam right ahead and re-litigate this issue in the other Circuits and hope for a different decision.  Seems unlikely, but I suppose it could happen with the right activist judges.  Then I suppose they'd try to re-litigate in the 4th Circuit, or bump it to the Supreme Court, to make their preemption complete coast-to-coast.

Also in the Energy Policy Act of 2005 was Section 1222, Third Party Finance.  This Section allows the U.S. DOE to "partner" with third parties to build new electric transmission in certain federal power marketing territories (WAPA and SWPA).  The transmission would be "owned" by the federal government so that it could use federal eminent domain and avoid state permitting, but it would be paid for and constructed by a third party.  Interestingly enough, this third party was also supposed to keep all the profits generated by the transmission line "owned" by the federal government.  The U.S. DOE tried to use this part of the Act to "partner" with Clean Line on its Plains and Eastern project.  However, even with Section 1222 "partnership" the project failed because it did not attract any commercial interest.  There's been a whole bunch of whining about exactly why Clean Line failed, and some hero-worshipping reporter wrote a book about it that tried to cover up the real reason.  Nobody wanted to buy remotely generated renewables shipped via new long-distance transmission lines because they would rather develop and own their own renewables in their own regions/communities.  Developing local renewables keeps energy dollars working within the community.  It also provides energy independence and the security of smaller systems not subject to failure along a remote route thousands of miles long.  As well, remote renewables cause local economic destruction with the closing of local power generators.  Like 'em or not, power plants provide good paying jobs and tax payments.  Remote renewables cause reliability issues.  The reasons are many, not just "political" as the biased book author claimed.

The schemers want DOE to issue a new RFP for transmission projects to "participate" in under Sec. 1222.  They say DOE should litigate whether Sec. 1222 gives it eminent domain authority, since the court left this question on the table when Arkansas landowners sued over the use of Sec. 1222.  The schemers say that DOE can use "contributed funds" to make the project less likely to be opposed by making payments in lieu of taxes (remember, the federal government, as "owner" would not pay any state or local taxes for the transmission project).  They also suggest paying bribes to local communities if they don't object.  If the peons don't have any bread, let them eat cake, right?  With all this gushing about how Sec. 1222 ameliorates opposition, the schemers fail to say how this wonderful idea ended up being challenged in court.  I thought Sec. 1222 made landowners love transmission?

The schemers say they need to plow ahead using the existing, but toothless, Sections 1221 and 1222.  However, where are they going to find transmission companies and investors willing to put their capital on the line to pursue such a risky endeavor?  There are other options!  Smaller, more widely distributed renewables are a cheaper, more reliable option.  As well, offshore wind is becoming reality, and it's located within 10 miles of the coastal load centers.  It makes no financial sense to build renewables in the middle of the country and then ship the electricity thousands of miles to load centers.  It's also a gigantic safety risk, making huge swaths of the country dependent upon concentrated, new transmission stretching for thousands of miles.

It's also going to foment new opposition of record proportions.  If they're going to triple the amount of transmission, they're going to intersect with hundreds of thousands of new landowners and communities who object to sacrificing their land and safety in order to make a new pathway for city dwellers to use renewables they don't want sited in their own neighborhoods.  Yes, it's just more rural v. urban, Republican v. Democrat, middle class v. elite, division for this country.  It's almost like the elite Democratic cities simply EXPECT that rural America should be trashed to provide for urban "needs."  There are better solutions!

However, these schemers have about a thousand preposterous excuses for why other solutions can't work and why state preemption is necessary.  I'm not buying any of them.  You shouldn't either.  Get ready, folks, the battle royale is on the horizon.  If the schemers think transmission opposition is hard now, they haven't seen anything yet.  They believe their schemes to preempt state authority will take away all the tools in the transmission opposition toolbox and render landowners and rural communities nothing more than helpless advocates for their money-making schemes.  If there's one thing I've learned over the past decade it's adaptability.  When a door closes, transmission opposition opens a window.  When one tool breaks, we find another.  There's simply too much at stake for people whose homes and livelihoods are at risk.  We demand better solutions!
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A New Chapter:  Fearless Girls Forge Ahead

7/27/2020

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Once upon a time, Keryn and Ali met at a PATH Opposition Strategy session in West Virginia.  It's been ten long years since then, and we're still challenging and supporting each other to reach our joint goal.

Ever met someone who just makes you better?  Someone so fearless that you just can't help being fearless right along with her?  It's been like Transmission Thelma and Louise, only without the cliff.  Until recently...

Guess where we're going?
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No, not there.  Been there, done that.  Time for a change of scenery.
Don't tell us we can't do something.  Don't tell us we don't matter.  Don't tell us we're powerless.  When the door shuts in our faces, we open a window.

Fearless.
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A Transmission Line In Every Back Yard:  The Democratic Vision For Overbuilding Electric Transmission

7/11/2020

1 Comment

 
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Our federal government is completely dysfunctional.  The two houses of Congress don't agree on anything and neither one is willing to give an inch.  As a result, nothing gets done except through Executive Order.

The Democrat-controlled House of Representatives is wasting its time creating, on paper, their own utopian vision of how our country should be, even though the legislation they produce is about as useful as a screen door on a submarine.  It's completely pointless, except as a roadmap for how things *could* be if the Democrats controlled both houses of Congress and the Presidency.  Their little committees have been hard at work, and their "House Select Committee on the CLIMATE CRISIS" (all caps because they're shouting, I guess) has just released a "report" entitled "Solving the Climate Crisis, The Congressional Action Plan for a Clean Energy Economy and a Healthy, Resilient and Just America."

Really?  The very small section on electric transmission that I read seemed more like a plan for an unjust, poor, and dark America.  I'm not quite sure how they crammed so much bad into just 6 pages.  Reads more like a renewable energy company lobbyist's wish list than a just and effective plan for electric transmission.  See for yourself -- and you only need read pages 51 - 57 of the report.

First, this section is premised on things that just aren't true.  It states that the cost of wind and solar have fallen dramatically, but they fail to mention how much federal production tax and investment tax credits have subsidized the cost of renewable energy.  What does it really cost without taxpayer handouts?  Not so cheap anymore, is it?  Nevertheless, these swamp creatures think we need to build some sort of "National Supergrid" (Macrogrid, anyone?) to act like the world's largest Energizer battery, to suck up renewable generation and deposit it thousands of miles away, just like magic.  Very expensive magic.  We'd get along just fine if we built renewables near load, and all loads have their own unique sources of renewable energy.  There is no place without renewable energy resources.

First thing the Democrats want to do is "modernize" the National Interest Electric Transmission Corridors (NIETCs) that were part of the Energy Policy Act of 2005.  These corridors, dreamed up by energy industry lobbyists as a "fix" for the poor maintenance and operation of the existing grid that caused a major blackout, were not designed for renewable energy transmission lines.  As if there even is such a thing... because the electric grid is a un-sortable mix of both "clean" and "dirty" electrons.  Once a transmission line is connected to the existing grid, it is "open access" to all generators who want to use it.  There is no such thing as a "clean" line.  And speaking of Clean Line...
To meet its climate goals, the country needs to build cross-state High Voltage Direct Current (HVDC) transmission lines to significantly ramp up renewable electricity generation. The five HVDC transmission lines Clean Line Energy Partners unsuccessfully tried to develop to deliver renewable energy across the country are high-profile examples of these challenges.
This ridiculous report then had the audacity to footnote that with a reference to Russell Gold's hero-worship fantasy story about a failed energy idea (the whole book!).  The "challenge" that killed Clean Line Energy Partners had nothing to do with planning, permitting, or siting.  Clean Line Energy Partners could not find any customers to pay for service on its lines.  No customers, no revenue, no transmission line.  It's as simple as that (there, I saved you from reading a really awful book).

The report admits that NIETCs have been a miserable failure due to two separate federal court opinions that completely neutralized their use, hence the new brainfart to "modernize" them.  NIETCs, as currently written, task the U.S. Dept. of Energy with designating corridors for new transmission to connect areas rich in energy generation with areas of high population.  One of the corridors so designated once upon a time covered a long swath of the Mid-Atlantic and was designed to connect the Ohio Valley coal generation plants with the east coast cities.  Once a corridor is designated, the Federal Energy Regulatory Commission (FERC) is anointed with "backstop siting authority" for a transmission line proposed for the corridor, in the event a state does not have authority to issue a permit for a new line in a corridor.  Except states do have authority to site and permit, and the court decided that a state's denial was the end of the road.  FERC could not preempt state authority in the event of a denial.

Changes to NIETCs include taking DOE out of the loop and allowing FERC to designate corridors that it will then have permitting and siting authority within.  This does away with any "checks and balances" that exist within the current split authority system.  In addition, FERC can only designate corridors that coincide with transmission projects proposed by energy companies.  This way, energy companies drive the entire NIETC program and may use it to ram through their transmission wish lists.  The Democrats think it works best like this.
... requiring DOE to designate broad areas as corridors before project proponents have developed specific, narrow proposals can strain relationships with landowners and communities. Allowing project proponents to apply for corridor designation after having laid the groundwork with landowners and communities may be better.
In what universe?  Project proponents are horrible at "laying the groundwork" with landowners and communities.  Nothing foments entrenched opposition to new transmission like an energy company telling them that they "need" a new transmission line through their home.  Instead, project proponents want to wield the authority of the federal government to designate corridors as a sledge hammer to beat down developing opposition.  This can't end well.

The NIETCs also have a new goal.  It's not just about transmission in general anymore... "the goals of the National Interest Electric Transmission Corridors program are to help achieve national climate goals, including enhancing the development, supply, or delivery of onshore and offshore renewable energy."

The new NIETCs are also about usurping the authority of states to site and permit electric transmission.
Consistent with requirements under NEPA, Congress should amend the Federal Power Act to clarify that FERC may exercise backstop siting authority for an interstate electric transmission facility within a National Interest Electric Transmission Corridor if one or more states have approved the project, but one or more states have denied the proposed project or have withheld approval for more than two years.
Under the new rules, if even one state approves a multi-state transmission project, then FERC may step in and take control of the siting and permitting process.  Other states crossed by the project would have no say in it and their authority would be preempted by FERC.  In this way, the Democrats want transmission siting and permitting to be a federal process, which removes the current state authority to site and permit.

Why would any state give up its transmission siting and permitting authority?  The new NIETCs are nothing more than heavy handed preemption of current state authority to allow project proponents to run roughshod over any state that resists their proposal.

Just in case the crushing new authority scenario doesn't work for you, the Democrats also want to create a new federal slush fund using your tax dollars so DOE can  bribe state, local, and tribal authorities to approve new transmission lines.  DOE could provide "economic development incentives" to entities that agree to approve the new transmission line within two years.  A host of federal acronym agencies will "offer" their expertise to review the transmission application for the local governments, and help to pay for the review.  It won't cost you a thing... except your soul.  Seriously though, this is merely a way to bribe your local government to throw you under the bus in exchange for cash for them.  The landowner doesn't benefit from these bribes, but local governments will be encouraged to sacrifice landowners in exchange for cash.  The biggest insult may be that this is YOUR cash the federal government is bribing your local government with!  The government doesn't have any money of its own... all its money comes from your pocket!

In keeping with the new federal theme, Democrats want FERC to develop a "National Policy on Transmission."  This "policy" is intended to "guide the decision-making of government officials at all levels as well as reviewing courts, the private sector, advocacy groups, and the general public."

As if the general public is going to be "guided" by some rent-seeking corporate transmission policy.  Not sure who the "advocacy groups" are supposed to be, but let's assume it's the big green NGOs whose private financiers have their own agenda to control your life.  The real scary one here, though, is the idea that some corporate lobbyist's self-serving "policy" is supposed to drive the judiciary.  The courts are our safety net against an overbearing and unjust government.  The courts guide the policymakers to keep their policies within the law and the limits of the Constitution, not the other way around.  The Democrats have lost all sense of democracy in their eagerness to "guide" the courts.  Our government is split into three branches for a reason just like this!

What do the Democrats think is in "the public interest?"
Congress should establish a National Transmission Policy to provide guidance to state and local officials and reviewing courts to clarify that it is in the public interest to expand transmission to facilitate a decarbonized electricity supply and enable greenhouse gas emissions. The policy statement should also encourage broad allocation of costs. Congress should amend Section 111(d) of PURPA to require consideration of the national benefits outlined in the National Policy on Transmission in any proceeding to review an application to site bulk electric transmission system facilities.

First, let's get the comedy out of the way...  Democrats want to "enable greenhouse gas emissions."  Well, gosh, fellas, then let's start mining more coal!  *can't even produce a report without serious typos*

Now, let's think about how this mandate of federal considerations conflicts with existing state laws.  Each state with transmission permitting and siting authority is doing so in accordance with their own state laws.  It is up to the states to decide if they want to make federal policy part of their transmission application considerations.  This idea doesn't work.

And, hey, look what they tossed in this section... The policy statement should also encourage broad allocation of costs.  This idea is sprinkled liberally (haha) throughout the report.  Democrats want to spread the cost of new transmission over a broader pool of captive electric ratepayers.  Currently, transmission is paid for by its beneficiaries.  Benefits are pretty concrete, such as lower costs, needed reliability, or state public policy requirements (and within this subset, only the citizens of a state are responsible for its public policy transmission cost -- a state cannot shift the cost of its public policy requirements onto citizens of another state).

But what's the real reason for broader cost allocation?  It's because building all this new transmission is going to be astronomically expensive!  If they left current cost allocation practices in place, people would notice a huge increase in their electric bills.  They would notice how much all this new transmission costs.  However, if they can spread it around to more people by inventing new "benefits" for everyone, then it's less likely to be noticed.

Once the Democrats have diluted the costs by spreading them among more consumers, they also plan to increase the costs by allocating the cost of connecting new generators to consumers.  Currently, FERC's policy assigns not only the cost of interconnecting the generator to the system, but also the costs of upgrades needed in the regional network caused by the interconnection, to the new generator.  It's been this way for a long time.  When someone builds a new electric generator, it's a commercial enterprise to sell electricity for a profit.  It's up to the generator to pay its cost to connect to the system, and also for any upgrades to the system it causes to be necessary.  It would be like building a new widget factory -- the factory pays for its costs to build the factory and any private driveways it needs to connect to the public road system.  If the factory has so much traffic that the public road needs to be widened, the factory would have to pay for that, too.  The public shouldn't have to pay for a private corporation's burden on their road system when the corporation is making money by having that connection.  The same is true of electric generators.  But now the Democrats want the public to pay for grid upgrades made necessary by new generators making a profit selling electricity.  The current policy ensures that new generators are sited in the most economic places, instead of willy-nilly all over the place.  If a generator has to consider the cost of upgrades it may make necessary, perhaps it would site its new generator in a different spot near existing strong connections to minimize its upgrade costs.  The Democrats want to do away with this important safeguard so that new generators can be built anywhere without any economic considerations because consumers are paying the cost of the upgrades.  This is bad policy and will result in higher electricity costs.

The Democrats also want government incentives to increase the capacity of existing transmission lines.  This isn't necessarily a bad thing, it's just bad execution.  The Democrats' idea is based on a fallacy... "Over the last few years, the costs caused by transmission congestion have been increasing."  This isn't universally true.  In fact, in the PJM Interconnection region, congestion costs have been decreasing over the past few years.  In addition, the Democrats want to create a "shared savings" incentive whereby the transmission owner keeps a share of the "savings" created by increasing the capacity of existing lines.  Sounds reasonable, until you realize that their share is based on the projected savings, not the actual savings.  So, a transmission owner could tell you its project would save ten hundred bajillion dollars and then charge you its share of that amount.  There will be no measurement to verify that consumers actually saved a dime.  Why not just write these fellas a blank check from the Electric Consumer Savings and Loan?

Another bad Democratic idea is mandating interregional planning of new transmission lines.  Currently, each interconnection region plans transmission that serves needs within its own region.  That's what they're supposed to do.  FERC has also tried to get them to plan for joint projects that bring benefits to more than one region, but it hasn't worked in practice.  Why?  Because nobody needs interregional transmission lines, and nobody wants to pay for them.  Interregional transmission lines don't benefit both regions equally.  One region's consumers receive the energy (benefits!) while one region's consumers receive nothing (exporting energy is only a benefit to energy corporations, not consumers).

The Democrats' plan is so bad that they want regional grid planners to develop plans that "proactively plan transmission lines in anticipation of renewable energy development."  It's not about building transmission lines that are needed, it's about building transmission lines that are not currently needed with the hope that someday they will be needed.  What the everliving spit would we do that for?  Transmission is not only incredibly expensive, it also takes private property using eminent domain and violates the sanctity of people's homes.  Why would we do that for transmission that's not even needed?  Sounds like some Congressional Committee got a little too big for their britches, doesn't it?

But wait, they're not done yet!
Congress should provide financial support for priority HVDC transmission lines, such as through an ITC. Congress should provide an option for direct pay for the tax credit.
Democrats want to use taxpayer funds to pay money to transmission developers for building new lines.  Wait... who thought this was a good idea?  The current tax credits for renewable energy generators are costing taxpayers billions.  Is there some money fountain spewing in Washington, D.C., that we don't know about?  In addition, all of the long-distance HVDC transmission lines that have been proposed to date have been merchant transmission projects.  That means that all the risk of building them goes to their owners and investors.  A transmission project with a mandated public revenue stream cannot be a merchant transmission project because that would shift risk from the project to the ones who pay that revenue stream (taxpayers).  This idea just doesn't work.

The Democrats also want to create a national RTO/ISO to manage its new "national grid."  We already pay billions of dollars in our electric bills to support our regional RTO/ISOs.  This would add a whole new layer of costs to consumer electric bills.

What does this all add up to?  YOU CAN'T AFFORD IT!

And if you think you will somehow benefit from this federal effort to usurp state authority, you'll be thinking differently when these clowns propose a new transmission line across your property and your only venue to be heard is in Washington, D.C. 

If this is the Democrats' plan for electric transmission if we elect them to office in November, I won't be voting for them.  Think hard before you vote.  The electric bill and back yard you save just might be your own.
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URGENT transmission EMERGENCY!

5/6/2020

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The American Manufacturers (industrial consumers) had the nerve to ask FERC to extend the comment date for its NOPR on transmission incentives to 60 days after the national emergency is over, or Oct. 1, whichever comes first.  The American Public Power Association and a transmission users group supported the extension.

Investor Owned Utility front man Edison Electric Institute objected because delaying the comment deadline could eventually cause the economy to fail to recover and the lights to go out.  WIRES, transmission's trade group, agrees.  Just adding a couple months onto the time frame of instituting more profitable incentives creates an URGENT transmission EMERGENCY!

Here's your soundtrack for this post.  Turn it on.  Volume up!
You're not shy, you get around
You wanna fly, don't want your feet on the ground
You stay up, you won't come down
You wanna live, you wanna move to the sound
Picture
Got fire in your veins
Burnin' hot but you don't feel the pain
Your desire is insane
You can't stop until you do it again
Picture
But sometimes I wonder as I look in your eyes
Maybe you're thinking of some other guy
But I know, yes I know, how to treat you right
That's why you call me in the middle of the night
Picture
You say it's urgent
So urgent, so oh oh urgent
Just wait and see
How urgent my love can be
It's urgent
Picture
You play tricks on my mind
You're everywhere but you're so hard to find
You're not warm or sentimental
You're so extreme, you can be so temperamental
Picture
But I'm not looking for a love that will last
I know what I need and I need it fast
Yeah, there's one thing in common that we both share
That's a need for for each other anytime, anywhere
Picture
It gets so urgent
So urgent
You know it's urgent
I wanna tell you it's the same for me
So oh oh urgent
Just you wait and see
How urgent our love can be
It's urgent
Picture
You say it's urgent
Make it fast, make it urgent
Do it quick, do it urgent
Gotta rush, make it urgent
Picture
Want it quick
Urgent, urgent, emergency
Urgent, urgent, emergency
Urgent, urgent, emergency
Urgent, urgent, emergency
So urgent, emergency
Emer emer emer
It's urgent
Picture
0 Comments

Flamboyant FERCery

4/28/2020

0 Comments

 
When playing FERC comment games, it can be beneficial to be either the first, or last, filer.  The last filer ensures that other filers that come after him cannot besmirch anything he said in their own comments.  But he also risks getting lost in the crowd because every white shoe DC energy firm wants to be last.  The crowd is so thick at the last minute that sometimes you just don't get noticed.  However, the early filer stands alone, eager to be noticed by one and all because he has no competition while he stands there fluttering his feathers and preening pretentiously.  Some people just want to be noticed.

FERC's recent NOPR on transmission incentives has a comment deadline of July 1.  That's right, more than 2 months away (and we've all recently learned that 2 months can seem like a really, really, really, really long time).  I was a bit surprised to see the first comment filed on the NOPR yesterday.  But then I read it... and now I just can't stop laughing!  Sometimes the blogs just about write themselves...

The comment was filed by something called Schulte Associates LLC.  We'll just call them Schulte Ass. for short, because some things are just better abbreviated, as you'll shortly see. Schulte Ass. says it has a website here:  www.schulteassocaites.com  What's an assocaite?  Who spells the name of their own company wrong and misdirects people to a dead weblink?  Must be an Ass-o-caite.

It seems Schulte Ass. thought this was an opportune moment to make comment on the NOPR because an article written by the principals had just been published online.  Quick, to the FERC filing portal before someone else submits your article for FERC's consideration!  Relax, fellas, I'm pretty sure that won't happen (but feel free to refer back to the first paragraph of this blog to find out what happens to early birds at FERC).

Okay... so Schulte Ass. just wanted to clap its industrious little hands in congratulation to FERC on its NOPR for "recognizing that current approaches need to change in order to realize the significant, indeed massive, additional transmission development necessary
to accomplish public policy goals including but not limited to large increases in renewable energy supplies..."  Huh?  Was Schulte Ass. reading the same NOPR I read?  I'm thinking maybe they got an alternative version, because their article (so conveniently attached for FERC's reading pleasure) says:  "The idea is to offer additional incremental allowed return on equity for investments in qualifying transmission projects that meet certain criteria including fulfilling public policy goals (Example: enhancing renewable energy development)..."  I'm pretty sure that wasn't the idea.  Take a look around, Schulte Ass., these commissioners don't look like they want to enhance renewable energy development.  Or did Schulte Ass. think that if it put the suggestion into the Commissioners' empty little heads that they'd adopt it as their own idea, sort of like Tom Sawyer getting his fence painted?  Tom Sawyer was a fictional character.  Unfortunately, Schulte Ass. is real.

And what's this about the NOPR being part of the answer to the challenges of developing "needed" transmission?  Your submitted article concludes:  "Some form of non-utility entity that is not bound by individual utility service territories and purely state-based regulatory considerations, and has a global scope and vision, is necessary to provide leadership. Such an entity would not be FERC."

So how would FERC's NOPR fix this problem?  Is this really about fixing a problem?

Schulte Ass. talks about its "Power from the Prairie" project in its article.  Schulte Ass. abbreviates its project as "PftP".  Is that pronounced like this?
Or is it more like this?
However you want to pronounce "PftP", it sounds like an absolutely horrid idea.
Power from the Prairie (PftP)
It would consist of a nominal 4000 MW HVDC line starting from the wind energy fields of Southeastern Wyoming, crossing either South Dakota or Nebraska to the wind energy fields of Northwest Iowa When interconnected with other proposed high capacity HVDC lines from Wyoming to California (e.g., the Anschutz
“TransWest Express” or Duke-ATC “Zephyr” lines as well as an existing HVDC line currently associated with the coal-fired Intermountain Power Plant in Utah scheduled to be retired in 2025 and connected to the Los Angeles Department of Water & Power (LADWP) and California Independent System Operator (CAISO) systems), and the proposed Soo Green HVDC line from Northwest Iowa to Chicago and the PJM Interconnection (“PJM”), it would enable a bi-directional renewable
energy superhighway connection between Southern California and Chicago/PJM.
It's supposed to look like this when it's finished.
Picture
(Note an earlier version used the Rock Island Clean Line to make the eastern link to PJM).

Schulte Ass. came up with its own idea of how to make its plan work by studying other transmission projects "...proposed by non-utility, independent transmission companies."  You mean merchant transmission developers, such as Clean Line Energy Partners, right?  Schulte Ass. observed that these companies:
1 They often have an excellent financial background.
2 They are good at promoting.
3 They are good at securing right-of-way.
4 However, they are as-yet generally unable to secure utility off-takers for their project. After all, they need the commitment of eventual customers to make their projects financeable.
They're not good at securing right-of-way.  They are good at pissing off thousands of landowners along the proposed route, who in turn make their state permitting processes extra contentious.  Landowners also refuse to sell right-of-way early or cheap. 

And, of course, Clean Line was infamous for not being able to find any customers.  But Schulte Ass. thought they had that problem solved.  "...the authors first sought to secure utilities’ interest and participation as
potential off-takers of the transmission developments..."

Turns out they were wrong.  It didn't work.  States didn't get on board, and utilities were afraid to participate because they didn't think they could get cost recovery for interregional transmission.

There's a couple of big pieces missing out of Schulte Ass.'s puzzle.  States are parochial by their very nature, and they, alone, have jurisdiction to site and permit new transmission.  If there's no benefit to the state, new transmission isn't happening.  And about that cost recovery thing...  rates may be FERC jurisdictional, but the project itself is state jurisdictional.  Say one of those nervous utilities wanted to recover its cost of an interregional transmission line to serve other states in its rates... the state could not stop them from doing so.  However, the state could prevent the utility from building the transmission project by refusing to permit it in the first place.  No transmission line, no costs!  It's like magic!

PftP seems to still be going nowhere.  Never fear though, Schulte Ass has some new ideas to get PftP off the ground.
Some form of non-utility entity that is not bound by individual utility service territories and purely state-based regulatory considerations, and has a global scope and vision, is necessary to provide leadership.

And who might such an entity be?

• The federal government would have the appropriate multi-region scope and hopefully broad national energy policy purview. However, as recent experience with DOE and the Seam Study would attest, this is not a likely outcome. In fact, the federal government has not led such development since the Colorado River Storage Project which began over 60 years ago.
• The federal government could encourage such development as part of a nationwide infrastructure program as an economic stimulus package. Not only would such projects support clean energy development
and lower consumer costs, they represent thousands of well-paid jobs.
• One or more states (several states in coordination would be best), acting in their own self-interest as coalitions in their efforts to achieve high levels of carbon-free energy. For example, we are already seeing such governor-led, multi-state coalitions forming to
plan processes for transitioning out of current coronavirus social distancing orders.
• An independent project developer with a profit motive. With IOUs apparently discouraged for prospects of state retail cost recovery for such interregional projects, and public power utilities without a profit motive, it is this group that may be productively encouraged by the FERC NOPR.

  • The federal government has no authority to site or permit new transmission.
  • Why would the federal government want to pay for (and own) new transmission?  Last time I checked the fed was trying to sell the transmission it already owns (or thinks it does).  That transmission was paid for by the ratepayers who use it.  That's how we pay for transmission.  I mean, Schulte Ass. can't be suggesting that the federal government pay to build new transmission and then give ownership of it to private entities, could they?
  • States don't "act in coalitions" to promote their own self-interests.  A multi-state coalition is all about surrendering your own self interests in the interest of the whole.  And you might as well try to herd cats.  Any states whose citizens would benefit from new transmission to import renewables are not the same states that the transmission line would "fly over" to get there.  Those states would have to site and permit the project, and they're getting bupkis.  This has been a problem and will continue to be one.  The comparison to coronavirus is a bit perplexing.  States are only working together because the virus isn't flying over any states, like transmission does.
  • An independent project developer with a profit motive.  You mean a merchant transmission developer, right?  Wow, deja vu... we're back where we began!  Didn't you already say merchants were failures?  Merchant transmission developers are not eligible for transmission incentives.  They don't have captive customers from whom to recover the incentive rates.  Merchant transmission is sold using negotiated rates, and FERC does not set those rates.  They are negotiated with the customer.  FERC cannot grant incentives to a merchant transmission developer.  There is no one to pay the incentives.
I don't feel enlightened.  I was sort of expecting a showboating, glorious peacock to show me something breathtaking.
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Battle of the Special Interests Masquerading as Consumer Advocates

4/22/2020

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In this corner we have the "shadowy" and "secretive" New England Ratepayers Association, which describes itself as "...established to give a larger voice for the families and businesses that are served by regulated utilities," and "NERA will advocate on behalf of ratepayers across a wide range of issues in every state in New England."  However, the media has kind of described NERA as an industry front group.  Nobody knows where NERA gets its funding.
NERA includes 12 company members and received $245,000 in total revenue in 2018, Public Citizen pointed out in its testimony. Contributions make up the entirety of the group's revenue, according to its 990 tax forms, averaging approximately $20,000 per member. 

"A $20,000 financial contribution to become a 'member' of the New England Ratepayers Association orients its membership more in line [with] a corporate trade association," Public Citizen wrote in its comments.

NERA describes itself as "an independent non-profit" that was "established to give a larger voice for the families and businesses that are served by regulated utilities." NERA's Brown did not respond to multiple Utility Dive questions about its funding and membership.

"NERA isn't some rag tag bunch of dreamers. They are a well financed corporate front group pursuing a smart, aggressive playbook," said Slocum.
And in the opposite corner is Public Citizen, who describes itself as "a nonprofit consumer advocacy organization that champions the public interest in the halls of power," and claims "we don’t participate in partisan political activities."  However Influence Watch claims Public Citizen is a "liberal lobbying and advocacy organization created by left-wing activist and former Green Party presidential candidate Ralph Nader. The organization supports a broad liberal policy agenda focused on opposing to the free-market interests of American business owners."  Public Citizen gets a lot of its funding through shadowy and secretive grants and "gifts" from private environmental "funds".  No consumers are guiding its energy work.

The referee for this match is the Federal Energy Regulatory Commission, who has recently embarked on a campaign to reverse the past decade of energy policy set by earlier Commissioners and remake the agency into a partisan political stooge for the industry it regulates.  You might call it a new era of regulatory capture.

The prize for this fight is net metering, a subject that was thoroughly adjudicated nearly a decade ago and firmly decided as not within FERC's jurisdiction.  However, NERA now says that it IS FERC jurisdictional and that the Commission should regulate excess energy production that feeds back to the grid and set its price as the utility's avoided cost.  All this has been thoroughly picked over and decided long ago, but NERA believes it can now get a different result from the new FERC.

Public Citizen wants to make this a slugfest over who actually represents consumers and who represents special interests.  Somehow they believe having this sideshow argument is going to derail NERA's petition.  NERA is probably laughing themselves silly while they wave their red cape at Public Citizen.

Who will win?  It doesn't matter, because we all lose.
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PATH Zombie Using Your Money to Fund Appeal at DC Circuit Court

3/31/2020

1 Comment

 
Three things are certain in life... death, taxes, and PATH continuing to cost ratepayers money.
Picture
Last week, PATH filed an appeal of FERC Opinion No. 554-A at the United States Court of Appeals for the District of Columbia Circuit.  In this new battle, PATH asks a court to give it the last few things that FERC denied.  Why not?  After all, ratepayers are still picking up the tab for all PATH's legal fees and court costs.

Did you think PATH was over in 2011?  Or maybe 2012?  It wasn't.  There's still a charge in your electric bill every month to pay to keep the zombie alive so it can keep trying to collect even more money from ratepayers.

We got really close to closing the ratepayer ATM For Zombie Projects once, but FERC recently decided to keep it running for a while longer.  And this is how they get repaid for their generosity with our money.

PATH bites.

Ratepayers pay.

And pay.

And pay.

And pay.

And pay.
1 Comment

FERC Proposes New and Increased Transmission Incentives

3/27/2020

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Well, hey, just what we need during an economic crisis, right?  Let's increase the electric bills consumers pay in order to enrich the utilities!  I'm thinking that utilities are going to emerge from this clusterferc as better investments than ever.  Where else could you get a double digit, guaranteed return on your investment during a recession?  Maybe FERC's timing is just a bit off, but that's not going to stop the utilities from bellying up to the consumer money bar and gorging themselves comatose.

I note that in its recently issued Rulemaking FERC fails to provide any evidence that transmission incentives are needed.  They just think they are.
While transmission infrastructure development has remained generally robust at an aggregate level, the types of transmission projects that are needed, and the use of rate treatments to incent them, must evolve to reflect the changes in market fundamentals.
This is garbage, plain and simple.  Where's the proof that transmission needs incentives to attract investors?  There is none.  However, FERC feels it is mandated to provide incentives by Sec. 219 of the FPA.
FPA section 219(a) requires that the Commission provide incentive-based rates for
electric transmission for the purpose of benefitting consumers by ensuring reliability and reducing the cost of delivered power by reducing transmission congestion. While we are encouraged by the investment in transmission infrastructure to date, our evaluation of the Commission’s incentives policy indicates that additional reform may be necessary to continue to satisfy our obligations under FPA section 219 in this new transmission planning landscape.
Well, hey there, we should all be happy that FERC can finally read the statute correctly (reliability AND reduced costs).  Except they forgot how to read a couple sections down from this one.

So, FERC is going to "benefit" consumers with its new take on transmission incentives.  It's going to toss out its current "risks and challenges" test and replace it with a consumer benefits test.  This test is going to consist of comparing a proposed transmission project's cost/benefit ratio to a "national average" of transmission project cost/benefit ratios that is compiled by hunting through regional transmission organization transmission plans to harvest the ones with a cost/benefit ratio that fits into the scenario FERC (or maybe it's the transmission owner?) wants to create.  Here's an example.
Picture
First they will separate transmission into greater or less than $25M.  Any project that hits the 75th percentile of the average benefit-cost ratio will receive a 50 bonus point ROE adder.  Any project that hits the 90th percentile after the project is completed is entitled to add another 50 points.  This whole thing is floating on top of the "average" benefit cost ratios that someone is going to create.  It's not really clear who is going to create these, and how much bias is going to go into the creation.  For example, the transmission projects selected for the PJM Region seem to use the ones with the highest ratios.  While rebuilds associated with the Transource IEC project made it into the equation, the IEC itself was not used to create the data.  With picking and choosing like this, benefit thresholds are as flimsy as wiping your hands on your pants to prevent infection.

What if a project is awarded that initial 50 points, but in the completed construction phase its ratio falls below the 75th percentile?  Should its incentive be cancelled?  Well, of course not.  I don't see that proposed.  It's all about handing out consumer cash for "estimated" benefits.

Next FERC proposes a "reliability benefit" incentive of an additional 50 points.  Somehow FERC's reading of Sec. 219 to provide reliability AND reduced rates gets forgotten here.  FERC proposes to award bonus points for "reliability" enhancements that go above and beyond NERC standards.  NERC's job is to ensure the transmission system remains reliable.  FERC's job is to regulate transmission rates.  But suddenly FERC thinks it knows more about reliability than NERC does and is in a position to decide which NERC standards need to be gold-plated.  Hogwash.  It's just a handout.  It doesn't benefit consumers.

The next part is just plain funny (and expensive).  All rates must be just and reasonable.  FERC has established a "zone of reasonableness" standard for transmission ROEs in order to ensure they are reasonable.  The current incentives scheme caps incentive bonus points at the top of the zone of reasonableness.  That is a utility's ROE, inclusive of incentive bonus points, cannot exceed the top of the zone.  Now FERC wants to toss that out in favor of a flat 250 bonus point cap.  So, even if a utility's base ROE is already near the top of the zone, it can still add 250 bonus points and exceed the zone of reasonableness.  And still be "reasonable."  Uh huh.  Right.  Transmission incentives don't have to be reasonable.  They're something else entirely.  Except Sec. 219 says they must be reasonable.  FERC's approach here makes no sense.

Non-ROE incentives are proposed to remain basically the same, except the abandonment incentive (if awarded) will become retroactive to the date an RTO approved the transmission project.  This closes the current gap between RTO project approval and Commission abandonment approval where the utility may have to *gasp* spend its own money!  I thought incentives were supposed to benefit consumers?  What happened to all that happy stuff about Sec. 219's purpose?  There is no "benefit" to consumers who pay for RTO mistakes such as transmission ideas that are never actually built.  There is no benefit here.

FERC tosses the transco incentive.  Good enough.

However, FERC proposes to INCREASE the RTO membership incentive from 50 bonus points to 100 bonus points added to a utility's ROE.  Ya know, based on the prior comment period that lead up to this rulemaking, I could have sworn that the case was made that the RTO membership incentive should be phased out.  Looks like FERC just ignored all of those comments and did what it wanted to do from the beginning, which was to increase this incentive.  Sec. 219 requires FERC to “provide for incentives to each transmitting utility or electric utility that joins a Transmission Organization.”  It does not specify the form of the incentive... it could just as easily be a little, plastic participation trophy as ROE bonus points.  There's also the issue about whether Congress meant to reward utilities who joined an RTO or continually reward them for remaining as members.  This whole thing is a joke.  What if states began a mass exodus from RTOs in order to avoid the consumer burden of this increased incentive?  Who would pay it?  Could utilities still charge consumers for their RTO membership if the consumers were no longer members?  And how likely may a state be to approve new transmission projects for a company with a huge incentive cost?  If they don't approve the transmission project to be built, the incentives mean absolutely nothing.  (Hey, maybe that's why there was that risks and challenges test?)  I'm thinking we may find the answers to these questions once FERC just goes merrily on its way of making new transmission incentives rules and ignoring all the comments it receives about better ideas.

FERC also proposes an incentive of 100 bonus points on the costs of "transmission technologies" as well as allowing the cost of operating them to be a regulatory asset for 5 years (to earn a return on the operating costs).  Transmission technologies improve the operation of existing transmission assets without building entirely new transmission lines.  We should be doing more of this and less building of new transmission on new rights of way.  But what does FERC care?  They're giving utilities full cost recovery + return for whatever transmission projects they want to try to build.  It doesn't matter whether they ever get built or not.... and I'm thinking NOT.  It's harder than ever to build new greenfield transmission.  It might be a better use of consumer funds (ya know, "benefit" consumers) to improve the existing transmission system before building new lines.

So, that's the basics.  It's an awful wolf dressed in "consumer benefits" clothing.  It does nothing but increase costs for consumers who pay transmission rates.  Just another giveaway to the utilities by the ones who are supposed to be protecting us from utility greed.

If you want to bang your head against the wall writing comments that nobody at FERC will read, please participate in this rulemaking.  Otherwise, just stand back and open your wallet.  Choices, choices.
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    About the Author

    Keryn Newman blogs here at StopPATH WV about energy issues, transmission policy, misguided regulation, our greedy energy companies and their corporate spin.
    In 2008, AEP & Allegheny Energy's PATH joint venture used their transmission line routing etch-a-sketch to draw a 765kV line across the street from her house. Oooops! And the rest is history.

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    StopPATH Blog

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