In 2012, the developers of a proposed transmission line between West Virginia and Maryland sought to recover $121.5 million the company had spent before grid operators decided the $2.1 billion project was no longer needed.
FERC later told the utilities they were ineligible for at least $7 million of the $121.5 million requested, including $6.2 million in advocacy, advertising and lobbying expenses.

There is significant uncertainty and risk to the Project due to its scope, size and long lead times, and because the Project requires approval from Iowa, Wisconsin and multiple federal agencies. In particular, there is a risk that the federal agencies may select a different river crossing than that authorized by the IUB or the PSCW. If this occurs, there is a risk of additional delay that may threaten the ability of the Project to move forward.
The Project also involves multiple owners which requires coordination. In addition, the Project may face challenges and objections in the easement acquisition process in Iowa.

These approvals and permits are not guaranteed to be granted, and the Project could be delayed or terminated, or the final route changed, if ATC is unable to obtain any of these approvals or permits. In particular, the federal agencies may select a different Mississippi River crossing than that authorized by the IUB or the PSCW, which could delay or result in termination of the Project.

The scope, size, cost, long-lead times and participation by multiple owners pose  inherent risks for the Project. As my description of the Project makes clear, the size, scope and complexity of the Project – involving approximately 102- to 120-miles of new 345 kV transmission line and a new substation and related facilities, spanning multiple states and jurisdictions, crossing the Mississippi River, with multiple owners for a cost of approximately $492 Million to $543 Million – is significant. Further, the easement acquisition process may be contentious, resulting in delays or increased costs.

We find discrepancies between the General Advertising amounts reclassified by PATH in its Compliance Filings compared to the General Advertising amounts the Commission required PATH to reclassify in Opinion No. 554.

On compliance, PATH must eliminate all General Advertising costs from its recoverable amounts, or else specifically justify each item in light of Opinion No. 554.  In making the compliance filing, PATH must provide the journal entries to reflect the adjustments, and workpapers necessary to explain the accounting corrections for that FERC Form No. 1 input that references back to the journal entries; and the revised/corrected draft Form No. 1 inputs.

Did you make a compliance filing, PATH?

No!  We don't need to!  We made an informational filing!

Are you sure you don't need to make a compliance filing, PATH?

No!  FERC meant an informational filing, not a compliance filing!

Where's our $70M?

PATH must submit a compliance filing with the Commission describing either:  (1) its plan for ending its operations and a timeline for when it intends to file a notice of cancellation of its transmission formula rates, or (2) the type of “transmission or sale of electric energy” that requires its rates to stay in effect.  We direct PATH to submit this compliance filing within 30 days of the date of this order.  To the extent that PATH intends to unwind, PATH must make the appropriate filings under FPA section 205, as necessary, to implement this action.  PATH shall notify the Commission within 10 days of the date that the closing out of business is complete.

The CAD takes no prisoners in its attempt to “advise” the Commission of its responsibilities. In its Reply Brief, the CAD emphasizes the gravity of the situation by stating that, if this Transaction is approved, “the harm that redounds to West Virginia captive ratepayers will be a legacy of this Commission.”

Additionally,the Companies will not accept the conditions included in the Commission Order that would result in Mon Power assuming exposure and significant commodity risk, which is inconsistent with FirstEnergy’s announced corporate strategy.

The design principles and practices that create energy resilience (or, as the Secre­tary calls it, resiliency) were first framed for the Penta­gon in 1981, and still broadly guide DoD doctrine for resilient power supplies to military bases and other facilities critical to national security. These principles do not include continued or enhanced reli­ance on inherently vulnerable powerlines hauling electric­ity hundreds of miles from remote central power stations—a system rife with single points and modes of failure re­quir­ing costly redundancies but still not fully effective, as these comments elaborate. Such grid-dependence is the largest factor preventing electric resilience.

Rather, resilient design logically starts at the customer and works back up the supply chain, seeking to make that chain as short as possible and each of its links robust, redundant, with graceful failure and quick rerouting or repair. As a lay summary of Brittle Power explained, a resilient system “has many relatively small, dis­­persed elements, each having a low cost of failure. These substitutable compo­nents are interconnected not at a central hub but by many short, robust links. This configura­tion is analogous to a tree’s many leaves, and each leaf’s many veins, which prevent the random nibblings of insects from disrupting the flow of vital nutrients.”

Thus the NOPR’s obsession with continuity of fuel supply to generators—even if 2.1–2.4’s rebuttals below were invalid—ignores the grid. Yet any rational treat­ment of electric reliability and resilience must focus primarily on the grid.
 
The Electric Power Research Institute long ago estimated, and modern data agree, that roughly 98–99% of power failures originate in the grid, and ~90–95% of those in the distribution grid. As the NOPR’s §II(A) rightly notes, Ameri­ca’s grid compris­es 707,000 miles of high-voltage transmission lines, 55,800 substations, and 6.5 million miles of local distri­bu­tion lines. All are interruptible by high winds, lightning, ice storms, tree limbs, cars crashing into power poles, squirrels, birds, operator errors, fires, solar storms, electro­magnetic pulses, cyberattacks, or rifle bullets.
 
As I write this, about three million Puerto Rican American citizens face months of further blackout, with only 16% returned to service after three weeks, because a hurricane destroyed their grid, even though their 98%-fossil-fueled utility has ample and available generating capacity with adequate fuel on hand. The NOPR is irrelevant to them and to the other Americans blacked out in Texas by Harvey, Florida by Irma, the Virgin Islands by Irma and Maria, etc. Hurricane Maria’s grid destruction in Puerto Rico alone has already about doubled in 2017 the total outage cus­tomer-hours experienced nationwide in 2016.
 
Yet the NOPR says and does nothing about the brittle grid connecting power plants to customers—only the virtual non-problem of how big a pile of coal sits at each plant. The NOPR does vigorously seek to prevent and reverse the competitive mar­ket exit of outdated plants typically sited half to several states away from cus­tom­ers, hence inherently vulnerable to grid failure. The NOPR’s effort to reverse the market-driven decentralization and diversification of historic grid depen­dence would weak­en national security: since grid failures dominate total failures, any electricity strate­gy that perpetuates and increases reliance on remote central power plants, no mat­ter how reliable they are, will increase vulnerability and reduce resilience.

The current market design in ERCOT primarily places the responsibility for system costs on ERCOT customers. This docket has revealed that the Southern Cross DC tie will result in additional costs to ERCOT, which include extraordinary costs that arise specifically from the Southern Cross DC tie, the Garland line, and the Garland or Oncor substations. Because the customers of exported power are not ERCOT customers, under the current market design and rules, they will not bear any responsibility for the extraordinary costs specific to the Southern Cross DC tie, Garland line, and Garland or Oncor substations that they impose on the ERCOT system. Southern Cross believes that those customers—and therefore Southern Cross—should get a free ride as to these extraordinary costs. The Commission disagrees and determines that the public interest demands that ERCOT ratepayers should not bear any of the costs associated with the Garland line, the Oncor substation, the Garland substation, or the Southern Cross DC tie that are properly borne by others.
The costs that a user of the ERCOT system causes cannot be determined simply by focusing on the costs of the facilities on the last forty miles of a multi-thousand-mile network. There is little doubt that additional facilities will be required in ERCOT because of the electricity flowing over the Southern Cross DC tie. Southern Cross believes that the costs of those facilities should be borne by customers in ERCOT, not the out-of-ERCOT customers that cause those costs.  And Southern Cross opposed even an investigation into whether revisions to the current ERCOT cost-allocation method were needed. Southern Cross attempts to justify this free-ride position based on theoretical benefits that this project will provide to ERCOT.

The Commission agrees, however, that no party met the burden of proof to prove what benefits, if any, Texas ratepayers will enjoy as a result of the Garland line and the Southern Cross DC tie and concurs with the ALJs that any benefits are questionable.  This is one of the issues that will be evaluated by ERCOT and if subsequent investigations show any benefits, then any such benefits could be reflected in the new market-design rules. The record in this case does not justify a free ride for these questionable benefits.  Texans are in the process of paying billions of dollars for the newly constructed CREZ transmission lines, and for substantial other facilities, that are integral to transmitting electricity to the Garland line and the Southern Cross DC tie. As proposed by Southern Cross Transmission, the Garland line would simply interconnect with these CREZ lines and reap benefits without paying its fair share of costs.

Further, Southern Cross argues that the DC tie will not cause a substantial increase in ancillary services needed in ERCOT, and that no change in the current manner that ancillary costs are assigned is necessary.  Southern Cross argues that the DC tie should get a free ride on these extraordinary costs also. The Commission agrees that this is a highly technical question and has requested ERCOT to evaluate this matter. The Commission also agrees, however, with ERCOT and other parties that additional ancillary services will likely be required to support the operation of the DC tie, and at certain levels, that requirement may be significant.  And, as with the other extraordinary costs discussed in this Order, it is appropriate that the cost causer be responsible for the costs, not for ERCOT customers to bear the costs of others. The Commission does note that Southern Cross softened its position some by agreeing that it could and would provide reactive-power service through the DC tie.

One benefit offered by Southern Cross is the lowering of the price of electricity in ERCOT during high-load periods.  However, Southern Cross Transmission's analysis does not appropriately account for the effect on the ERCOT energy market, which sends market signals through scarcity pricing when electricity resources are becoming scarce. Distortions to ERCOT's market signals could prevent the energy-only market from appropriately responding to shortages, leading to inadequate resources in this market. This risk to ERCOT's market structure and the grid's reliability must be assessed and addressed through recommended changes.

Each Commission-approved independent system operator or regional transmission organization shall establish a tariff that provides a just and reasonable rate for the (A) purchase of electric energy from an eligible reliability and resiliency resource and (B) recovery of costs and a return on equity for such resource dispatched during grid operations. The just and reasonable rate shall include pricing to ensure that each eligible resource is fully compensated for the benefits and services it provides to grid operations, including reliability, resiliency, and on-site fuel assurance, and that each eligible resource recovers its fully allocated costs and a fair return on equity.

The developer of the Grain Belt Express line, Clean Line Energy Partners, is now considering its options, including going back to FERC and getting federal approval for the project.  FERC has previously granted the Grain Belt Express line authority to charge negotiated rates more than three years ago.

Burns said some of the negative feedback is based on misinformation about the project. “There’s a lot of confusion and a lot of things being said that aren’t accurate,” Burns said.

“Burying lines causes problems,” Burns said. “If a line fails and it’s underground, it can’t be located and fixed immediately. That’s what happened recently on the Outer Banks.
“The environmental disturbance is greater to trench and bury a line than to run it overhead. And it’s ten-times more costly to do it underground.”

“I’ve heard people are concerned about land use and whether they will be able to use their properties,” Burns said. “People will still be able to work under the power lines, although obviously there would be a limit on building underneath them. The land is still useable.”
Burns said property owners would be compensated for the easements through their land. “We’re going to be acquiring easements from the landowners and compensate them for it. They will retain the rights to certain activities,” Burns said.
He said property-owners shouldn’t be worried about the threat of eminent domain. “Our approach is we negotiate fair market value for anything that has to be acquired,” he explained. “We use eminent domain less than three percent of the time.”

Burns said he is confident the Independence Energy Connection will save customers money not just in the greater metropolitan areas south of here, but locally. “The driver is to give customers in this area access to lower costs,” he said. He said it is too early to estimate what the cost savings might be, or whether local, independent energy companies will pass the savings on to customers. “They may have other initiatives that will affect your bill,” Burns said.

Despite the many negative comments exchanged from person to person around the packed community center, Transource officials said there was also positive feedback.
“We found in this area, people understand the greater need for infrastructure,” said Abby Foster, community affairs representative for Transource Energy. “Everyone here benefits from something being on someone’s property.”
Foster said the positive comments she heard came from residents who see the financial benefits of easements on their properties as well as the benefits of costs savings on energy bills.
She said some residents don’t like the exact location of the proposed line across their properties but are willing to have it shifted to a different location on their properties.
“There’s a lot that has shifted because of public input,” Foster said.

“We’ll look at a route that strikes the best balance,” Burns said, mentioning recreational activities, historic value and land use concerns. “You rarely come up with one that’s gonna satisfy all those things. Ultimately, it will be at the state level to decide where it goes.”