Another year, another attempt by privately-owned Chicago company Invenergy to completely mischaracterize Missouri legislation to prevent passage into law.  Who controls Missouri elected representatives?  Is it the citizens of Missouri?  Or is it the profits of a super-rich out-of-state utility conglomerate?

HB 2005 was approved by the Missouri House and passed to the Senate, where a committee hearing will be held today.  Right on cue, Invenergy, its special interest groups and biased media step right up to spin a web of lies about the legislation designed to prevent its passage.

What is HB 2005?  In the interest of truth, perhaps you should actually READ it to find out what it does and what it does not do.  You cannot rely on the media, who replaces actual quotes from the bill's language with alarmist rhetoric.

The actual bill does these things:

What does Invenergy and an alarmist media think this bill does?

Of course, the actual language of the bill does none of that.  This is just generalized rhetoric trying to prevent any real reading or consideration of the legislation by Missouri senators.  Kill the messenger and you don't have to read the message!  What does the bill do?  What the bill does, and no more. 

And speaking of screechy rhetoric, let's look at some of the over-the-top claims and objections by Invenergy and its special interest supporters.

My, my, what timely nonsense!  Now GBE is about the war in Ukraine and Russian oil?  If you ever thought that Invenergy's public relations spinners are just making crap up to fit the politics du jour, here's your proof.

And look... there's the predictable "unconstitutional" claim.  This is so completely dog eared and worn that it actually dates back to Clean Line Energy Partners.  Constitutionality can only be determined by a court.  Invenergy, its supporters, the media, and even the Missouri legislature are not a court.  Their claims of unconstitutionality are nothing more than one-sided opinion.  It is the legislature's job to make laws.  It is the court's job to interpret them.  No court has ever deemed this legislation unconstitutional, therefore it is constitutional until a court says it is not.  If legislators are so scared of "unconstitutionality" that they fail to make new laws, then what's to prevent every special interest lobbyist from claiming a law it doesn't like is unconstitutional?   See how that works?  Claims of unconstitutionality by special interests should be ignored by the legislature while it goes about doing the people's work.

Here's another recycled claim that holds no water.  As explained already, the Court interprets the law.  Under the law currently in effect, the court said GBE was a public utility.  However, that law was not written to knowingly grant a private profit corporation eminent domain authority to use Missourian's private property for its own gain.  If the law changes, then the Court's opinion will change.  The Court interprets existing law.  It does not make law.  Making laws is the job of the legislature.  If the legislature defines public utility to exclude merchant transmission that does not serve Missourians and only takes their property for its own private profit, then the Court shall find that GBE is not a public utility.

Another blast from the past.  Senator White claims the bill is "unconstitutional" before even reading it.  As if a Court would operate the same way?  Perhaps Senator White should spend more time investigating all the new electric transmission projects proposed by MISO to cross his district before he pans legislation designed to limit eminent domain and give landowners a fair shake.  Senator White's constituents are not being served here, just an out-of-state corporation.  Who does Senator White work for?

So, labor unions think GBE will provide 1,500 jobs?  That's ridiculous, computer generated garbage.  GBE will actually COST Missouri jobs in agriculture and in local power production.  "American made energy" is another fluffy political talking point.  ALL electricity used in Missouri is "made in America."  If GBE is not built, it will still be made in America, and actually closer to home, right in Missouri itself.   So much propaganda piled on here it insults the intelligence of the average reader.

As far as the Sierra Club goes... there is no such thing as "wind energy transmission."  Electrons are not color coded and electrons from all sources are mixed together on transmission lines.  There is nothing preventing GBE from carrying electricity from any source and in fact it must offer its project to any generator who will pay its price.

About those dozen communities?  There are 955 municipalities in Missouri.  A dozen is not 50%.  As well, the $12M savings is completely out of date and was based on municipal contracts that have since expired.  Since the municipalities have replaced the very expensive Prairie State contract that expired last year with something cheaper, there is no longer any legitimacy whatsoever to the $12M figure.  It may be less, it may be more.  In fact, GBE may actually be MORE EXPENSIVE than current contracts.  Of course, nobody knows because GBE and the municipalities refuse to do the math.  What are they hiding?

Broadband?  Does Missouri even need this?  And where is the guarantee that it must be provided as a condition of building the line?  Who will pay for the last mile of line?  Can Missouri even afford to finish this?  And what about newer sources for internet service, such as satellite internet?  Might that end up being cheaper?  Why pour money into antiquated technology like broadband and overhead transmission on lattice towers?  Invenergy isn't in the broadband business, but it is in the business of making empty promises to Missouri.

Buyer beware.

How do you know when Grain Belt Express has jumped the shark?  When the arguments for it turn into a politics du jour soup that make absolutely no sense.

Case in point... this op ed in the extremely biased Missouri Times (still operating in a darkened bar?).

The author drones on about energy security, energy independence and energy affordability, but I'm not sure he even understands the terms.

Energy independence means producing your own energy instead of relying on someone else to produce it and import it for your use.  Grain Belt Express is not an example of energy independence.  It's an effort to make Missouri reliant on imported energy from western Kansas and the Oklahoma panhandle.  If Missouri replaces its local energy generators with energy imported from hundreds of miles away that depends on just one overhead transmission line across severe weather prone territory, how is that independent?  It is the epitome of dependence on far away generators that cannot produce energy when called that is reliant on exposed and fragile wires.

Energy security?  Ditto.  The most secure energy system is one where power is produced where it is used.  Relying on an 800 mile transmission line is the epitome of insecurity.  Energy security also means that power is there when you need it, 24/7, not reliant on the vagaries of weather.

And then there's energy affordability.  The Missouri Times uses some really out of date figures to assert that Missouri municipalities will save $12.8M per year if GBE is built.  Those figures are more than 5 years out of date and relied on some numbers that no longer exist.  GBE would only produce a "savings" if it replaced some existing municipal energy contracts.  One of those was the outrageously expensive Prairie State contract that the municipalities signed in haste and repented at leisure until the contract expired last year.  Did Prairie State actually get replaced with GBE?  Nope... it couldn't.  GBE still hasn't been fully permitted or built.  Therefore the municipalities had to find another option for replacing that contract.  No word about who, where, or how much, but I hope it wasn't as expensive as Prairie State.  And, if it was not, then the $12.8M savings number collapses.  When is MJMEUC going to do an up-to-date savings calculation using current costs?  For all we know, using GBE to import energy from hundreds of miles away may be MORE EXPENSIVE than MJMEUC's current contract.  Just the fact that the supposed "savings" have not been updated in more than 5 years tells you all you need to know about how affordable GBE will be.  If it's such a great bargain, show me!

Missouri landowners cannot afford to have their productive farmland burdened with new rights of way taken using eminent domain.  Missouri landowners cannot afford to have permanent impediments constructed in the middle of their businesses.  Missouri landowners cannot afford to make a sacrifice so that an out-of-state energy company can make billions trying to sell power thousands of miles away to distribution utilities who don't want to purchase it.

And why should they when it's now possible to bury high voltage direct current transmission in existing rail and transportation rights of way and not have to cut new rights of way or take property using eminent domain?

There's a better solution on the horizon.  It's time to retire the old technology of fly-over electric transmission.  And it's high time to update Missouri eminent domain laws so that they are only used for a public use, not private profit.

Well, would you look at that?  Another state legislative leader gets indicted on charges that he engineered the success of utility profits through legislation in exchange for financial favors from the utility.

What are the odds that two powerful investor owned utilities participated in schemes to provide financial favors to state legislative leaders in exchange for legislation that financially benefited the utility in two different states?  Are these two unrelated and isolated incidents that just so happened to be uncovered around the same time.... or is there a bigger scandal waiting to be uncovered?

FirstEnergy was outed in Ohio, and then it was ComEd's turn in Illinois.  ComEd has been accused of providing jobs for people directed by Michael Madigan.  How much of the money ComEd paid to these people in exchange for little to no work came out of the pockets of struggling electric consumers?  In the case of FirstEnergy, it was millions that "accidentally" (or on purpose) got accounted for wrong and recovered through electric rates.  ComEd is accused of funneling money through lobbying firms (which would not be recovered from ratepayers if ComEd accounted for it without "accident"), but also for paying a law firm for legal work that never occurred, hiring numerous paid interns, and appointing a ComEd board member that the company didn't really have a use for.  All of those payments probably came out of the common man's pocket through electric rates.

When is FERC going to treat their rate cheaters like the criminals they are?  When it is discovered through audit that the utility recovered expenditures it was not entitled to, FERC gives them a slap on the wrist and makes them give back the money they stole.  There are no penalties or punishment whatsoever.  The utility is free to go forth and commit the same errors again.  Maybe they're caught at it in the future, or maybe they simply get away with it because nobody is paying attention.

But what happens when FERC detects market manipulation by an outsider, like an energy trader?  These accused violators are hounded to the ends of the earth and assessed outrageous fines in the millions of dollars.

There's no equity here.  FERC's utility pets are given free rein to steal as much as they want from electric consumers, while electric market traders are prosecuted for things that aren't even against FERC's rules, because the trader "should have known" that making money in electric markets was somehow wrong.  How does this protect electric ratepayers?  FERC's inequitable treatment of entities that steal from ratepayers needs to be fixed.

And there's probably plenty of stealing going on.  What are the chances that if two totally separate utilities in two different states were caught bribing state officials for financial benefit that EVERY utility does the same, in some form or other?  Of course they do.  Despite flowery corporate ethics policies, making money trumps everything.  Handing out money and favors is how utility profits are made.  They all do it.

Time to crack down...

Where do you suppose Sierra Club got their talking points for testimony opposing Missouri HB 1876?  Was there an illogical talking points sale sometime last year?  These talking points are not only dated, they're one-sided... and silly.  Let's look.

HB 1876 is designed to stop merchant transmission lines from using eminent domain without local community buy in.  If GBE was a regionally ordered, cost allocated transmission line like Ameren, Evergy and Empire build, it wouldn't be stopped from using eminent domain or building GBE.  It's not about GBE, it's about speculative merchant transmission vs. transmission found to be needed for reliability or economic reasons.

This isn't about wind energy, either.  It's about merchant transmission.  BTW, Sierra Club, there is no such thing as "wind energy transmission."  Electricity is agnostic as to fuel source.  All the electrons are the same color.  You cannot segregate the "wind" ones from the "coal" ones on a transmission line.  First of all, Grain Belt Express doesn't sell electricity, second of all, there is absolutely no evidence anywhere that taking service on GBE is "cheaper" than taking service on another transmission line.  Transmission costs are constantly rising.  The cost of electricity is something completely different.  The "all in" cost of wind PLUS government subsidies is actually more expensive than coal-fired generation.  In addition, the shorter the transmission distance, the cheaper the transmission.  Wind energy from Southwest Kansas needs to travel farther to get to Missouri than coal-fired power generated in Missouri.

Cities across Missouri signed an agreement to purchase capacity on Grain Belt Express because GBE offered the capacity at a loss leader price.  It costs GBE more to provide the service than the cities are paying for it.  GBE plans to make up the difference with other customers.  Except it doesn't have any other customers.

No, Sierra Club.  GBE said it would deliver "up to" 500 MW.  Not "at least."  There's a big difference.  MJMEUC, on behalf of a bunch of cities it sources power for, signed up for only 200 MW of capacity.  No other customers have signed up for the other 300 MW of available capacity.  It's just transmission capacity, there's no actual energy involved.  In fact, if you think GBE is so wonderful, why don't you put your money where your mouth is and buy the other 300 MW, Sierra Club?  You can plan to re-sell it to someone else later... because you think it's going to be used and useful.  But if you're stuck paying for a worthless contract for the next 40 years because you can't unload it, don't blame us.

About that $12M savings... it's at least 5 years out of date.  It was based on high-priced contracts with Prairie State and other bad deals the cities got locked into years ago.  However, those contracts have all since expired and been replaced with new ones.  It's high time that the "savings" for the cities be recalculated using today's figures and contracts.  You might just find that GBE is MORE EXPENSIVE than other options.  What's the harm?  Or are you not so sure GBE is even a good deal anymore?  Do you expect that $12M to collapse?  Is that good stewardship on behalf of the cities' ratepayers to bury your head in the sand about electricity prices for purely political reasons?

Sorry, Sierra Club!  That was just some smoke GBE was blowing before it made new, unconstitutional laws in Illinois that are supposed to grease the skids for GBE to cross that state and connect to PJM.  GBE no longer wants to sell more than half its capacity in Missouri because it can get more money for it by connecting with PJM.  That idea is now off the table.  Go ahead, ask them.

Except when that wind energy is produced in another state, like Kansas, and shuts out coal-fired energy production in Missouri.  In that instance, Missourians who are currently paid very well to operate those power plants will be out of work.  GBE would actually cause Missouri to lose a lot of high wage jobs.  GBE will not create any new, permanent, energy generation jobs in Missouri.

Except burning that coal actually creates Missouri jobs.  Building a transmission line like GBE uses specialized labor from certain contractors across the country.  The workers with these skills are shipped around the country to build transmission.  It's rare that transmission in your state is built by local workers.  GBE won't be picking up day labor in the K-Mart parking lot.  Any manufacturing jobs are also for supplying transmission components on a nationwide level.  However, many transmission components are manufactured overseas in places like China.  Is there any guarantee GBE would use 100% U.S. components?  Of course not.  They will build this project from the cheapest components they can source because cost of building comes directly out of company profits.  The less it costs, the bigger the profit!  If GBE isn't built, no jobs will be lost.  Hubbell will still be manufacturing for other projects.  This isn't about jobs though.  Everyone knows the jobs numbers are manufactured by a computer program and never resemble reality.

First of all, you haven't proven the lower electricity costs.  The increase in property taxes will be ameliorated by lower property values.  Besides, the tax payments are not guaranteed and utilities are notorious at cutting deals for lower taxes.  Don't count your millions before they hatch.  $7.2M in 8 counties.  That's less than a million per county.  How much would having GBE in the county cost?  Increased  road maintenance, first responder time and equipment are just some of the local budget increases.  Are the counties really getting something here, or is it more like a handful of colorful beads?

The broadband promises are pie in the sky and most likely won't happen.  That was just something GBE said to try to make the people of Missouri like them, much like buying cows and pies at the fair.  There's nothing requiring GBE to provide broadband.  But, even if it did, putting broadband capability on GBE doesn't bring service to your home.  It's the "last mile" costs that keep you from having broadband, not the cost of building the backbone.  You need a connection to the service.  It's not wireless magic.

Payments to landowners are compensation for something that is taken from them.  It is not a windfall or benefit.

So, that's it for Sierra Club.  I'm left wondering why they even bothered?  The committee isn't fooled by that outdated puffery.  Sierra Club needs to do some REAL fact-finding and stop simply regurgitating last year's talking points.  That's not helpful.

And speaking of not helpful... try to get through the testimony of Renew Missouri Advocates representative James Owen without laughing.  I'm just going to wonder... how many bottles of wine were consumed by the end of that 2-page rant?  It started out sort of coherent but the further you get, the more error-ridden and senseless it actually is.  Did James just find out about "electrons colliding on transmission lines"?  He explains it like a third-grader with a new toy.  Hardly convincing.

Seems like Invenergy is hardly playing the game this year.  It's like they don't even have to try.  Why do you suppose that is?

The people of Missouri are still trying to set practical and reasonable boundaries for the use of eminent domain by merchant electric transmission companies.

A hearing was held on Rep. Haffner's HB 1876 on Wednesday.  Affected landowners once again showed up to protect their interests.  It takes a lot for busy farmers to take an entire day out of their work to travel to the state capitol.  It's not like they're paid lobbyists, company employees, or clueless environmental advocates spewing nonsense (more on that later!) that someone is paying to show up and make impossible claims about constitutionality, or benefits, or savings, or maybe that Grain Belt Express invented farming.  I dunno.  Landowners come because they are being affected by a private, for-profit company's eminent domain suits that seek to conscript their land for corporate profit.

Invenergy's corporate talking point for all the Grain Belt supporters seemed to be that the legislation is unconstitutional.  The same nonsense they spewed last year.  Did you know that the only body with jurisdiction to determine constitutionality is a court?  Legislators don't have to be judges.  They don't even have to be lawyers.  Legislators make the laws supported and needed by the people who elect them.  Legislators are there to carry water for out-of-state corporate interests with lots of money to throw around.  Those corporations don't vote in Missouri, and campaign donations don't necessarily buy votes.  Once legislatures make laws, courts may use their expertise to judge their constitutionality, if challenged.  Only a judge can make that determination!  Corporate lawyers, lobbyists, and know-nothing advocates are not in a position to judge the constitutionality of proposed legislation.  Their opinion on the constitutionality of legislation that their employer doesn't like doesn't mean a thing.  You might as well quiz a kindergartner about rocket science.  GBE's claims of unconstitutionality are overblown and worthless.

But what about Invenergy's Illinois legislation?  Was that constitutional?  Does the Illinois legislature have the authority to grant eminent domain to a particular merchant transmission project?  Does it have the authority to tell the Illinois Commerce Commission what evidence it shall take?  Does it have the authority to tell the ICC what it shall find in any case before the application is even filed?  The ICC is supposed to be an independent body.  Once Commissioners are appointed, they are supposed to have the liberty to make decisions unhinged from politics and corporate influence.  I don't think the legislature can tell the ICC what they must find, and how they may take evidence to satisfy other statutory criteria.  This legislation is the epitome of unconstitutional and most likely will be challenged in court.  Only a judge could decide whether or not it is.

But here's the thing... Invenergy lobbied FOR this legislation (which only benefits Invenergy) even though it is likely unconstitutional.  Invenergy didn't have any concerns about constitutionality when the unconstitutionality benefited its bottom line.  Therefore, Invenergy's bluster about the constitutionality of proposed legislation in Missouri should be completely ignored.  Invenergy doesn't care about the Constitution.  It cares about its own profits.  That was made clear as a bell in Illinois last year.

GBE attorney Peggy Whipple also had a choice insult for Missourians to go along with her opening statement about constitutionality.  She called landowners "recalcitrant."

She thinks Invenergy is some "authority" that Missouri landowners have to obey?  Why, that's just the problem that HB 1876 proposes to solve!  Peggy should have squeezed the Charmin instead of Missouri landowners.

HB 1876 is about reasonable bounds for merchant transmission eminent domain authority.  It has nothing to do with "clean energy."  Merchant transmission is an entirely different animal than transmission built by regulated public utilities and states must end treating it the same when it comes to eminent domain.

See more about the difference between merchant and publicly needed transmission, and why states need to make new eminent domain laws to reflect the difference between these two distinctly different types of electric transmission in order to protect the citizens.

That's a lot more relevant education on this topic than any that Invenergy's paid sycophants dramatized at Wednesday's public hearing.

One last thought on the hearing... some news coverage was wildly inaccurate.  A group of radio stations misattributed a comment made by one of the "environmental" guys to Caldwell County Commissioner Jonathan Abbott.  Commissioner Abbott did not say the legislation was unconstitutional, nor that it would stop progress.  He actually brought out the deceit of Invenergy, said it was unlawful, and quoted Statute 570.410.  Some of the radio stations that played this misattributed clip have corrected it, and some, as the link shows, have not.

We'll all be watching this legislation as it works its way through this year.  Your support is crucial!

Special interests have successfully pushed through their plan to make two important changes to federal law regarding transmission.  The "Infrastructure" bill is chock full of lots of stuff, but I'm only going to concentrate on two things that are going to waste an enormous amount of time and a whole bunch of taxpayer funds trying to build electric transmission roads to nowhere and usurp state authority to site and permit new transmission.

Let's look at the second issue first.  Congress amended Section 216(a) of the Federal Power Act (16 U.S.C. 824p) to give the Federal Energy Regulatory Commission authority to issue a permit for a transmission project for which a state "has denied an application seeking approval pursuant to applicable law."  See the law that was amended here.  See the amendments to the law here in Section 40105.

But there's a whole bunch more to it that's going to practically guarantee more than a decade of process and court battles.

In order for FERC to exercise its newfound authority, the transmission project must be sited in a National Interest Electric Transmission Corridor (NIETC).  These corridors may be designated by the U.S. Department of Energy after it performs a "study of electric transmission congestion."  The law was amended to add that "the designation would enhance the ability of facilities that generate or transmit firm or intermittent energy to connect to the electric grid."  Looks like it's not limited to renewables, although why should we designate corridors that would take private property to transmit "intermittent energy"?  Only if we want our electricity to work "intermittently"?  Also, "the designation would result in a reduction in the cost to purchase electric energy for consumers."  Must result in cheaper energy.  Renewables, with all costs included, are not cheaper.  But never fear, our heroes in Congress have included a protective guardrail for landowners whose private property would be taken by a new FERC permit...  "...in the determination of the Commission, the permit holder has made good faith efforts to engage with landowners and other stakeholders early in the applicable permitting process..."  There, that solves everything.  As long as transmission company land agents begin pestering you with incessant phone calls and by showing up at your property unannounced at their own whim early in the process, you're protected.  This is just so much undefined garbage that it does absolutely nothing to protect landowners.

However, the congestion study and NIETC designation would take years to accomplish at DOE, where well-fed bureaucrats stumble lackadaisically through their work days.  And then guess what?  Any designation is a federal action that requires an Environmental Impact Study under NEPA.  That can take perhaps 5 years... because bureaucrats, you know.  After that, it's a surety that any corridor designation would be challenged in federal court.  Add at least one year, possibly two.  Also, these DOE congestion studies are only performed every 3 years (although DOE has never delivered like there is any deadline whatsoever).  The last one was performed in 2020.  It remains to be seen whether shifting political winds will cue up another study before the three-year deadline is up.  It also requires that, in order for FERC to "permit" a transmission project, the project must first go through a state permitting proceeding and be denied.  That will take another year or more.

So, let's put this on a timeline:  2023 - congestion study.  Perhaps a designation a year later, after "consulting" with states and Indian tribes - 2024.  Add EIS - 2029.  Add court challenges - 2031.  Meanwhile, the transmission project must first seek state approval.  It remains to be seen whether this will occur before or after they try to establish a corridor.  Most likely, the corridor designation will precede state application because what good is having FERC backstop authority if you can't threaten state utility commissions with losing jurisdiction if they deny?  So, let's add another year for state permitting, and then how many years do you think it may take FERC to site and permit if it decides to use its new authority?  I'm going to estimate at least three, because first FERC has to come up with regulations for its permitting process, which means a rulemaking and then possible court challenge on the rulemaking.  And even if it manages to jump all these hurdles, FERC's permit and siting can still be, once again, appealed in federal court.  Add another year.  I think we're up to like 2036 now, but who's counting?  Yup, this is REALLY going to help with immediate building of transmission for renewables.  You morons!  You've tied yourself up with new layers of Big Government process that's going to take at least 15 years to untangle. This is going to be a colossal waste of time and resources.

And then let's get down to basics... is this move to usurp state authority to site and permit new transmission even Constitutional?  The Tenth Amendment to the Constitution provides that the “Powers not delegated to the United States by the Constitution, nor prohibited to it by the States, are reserved to the States respectively, or to the people.”  Can the federal government simply mandate a takeover of state power to site and permit electric transmission like that?  This is going to be an interesting slog through the federal court system.

Think that new law is stupid?  You ain't seen nothing yet!  Congress also added a new section creating a "Transmission Facilitation Program."  (See Section 40106 of the new law linked above).  In a nutshell, this is a federal effort to use our tax dollars to build transmission roads to nowhere.  Lots of our tax dollars!

This new provision establishes a "fund" of $2.5 Billion for the Secretary of Energy to "enter into a capacity contract with respect to an eligible project prior to the date on which the eligible project is completed."  What's a capacity contract?  It's a contract to purchase capacity (use) of a new transmission project.  A merchant transmission project is a market-based project.  Although there is no regulated "need" for new transmission, an investor may propose to build one at his own expense with the hope of selling capacity to a voluntary market.  If there are no volunteers to buy the capacity, then there is no market need for the transmission project and no one will use it.  In that instance, the project is not built and the investor eats the cost of his own failure to attract market interest.  However, this stupid new law props up unneeded projects using your tax dollars!  If a proposed merchant project cannot attract any voluntary customers to pay for and use its project, then the federal government could buy the capacity, even though it is not going to use it.  Because the federal government is underwriting this private profit project with your tax dollars, the merchant can go ahead and build, even though it has no customers of its own.

A transmission road to nowhere with no customers, paid for by you.  We're going to build unneeded electric transmission across your property using eminent domain, and then let it sit there and rot because nobody is using it.  Have we reached the pinnacle of stupidity yet?

Oh, but wait, the federal government has a solution... it can only "enter into capacity contracts that will encourage other entities to enter into contracts for the transmission capacity of the eligible project... for not more than 50 percent of the total proposed transmission capacity of the applicable eligible project."  So, it's sort of like painting Tom Sawyer's fence.  The federal government thinks that if it underwrites the cost of a transmission project that nobody wants to use or pay for, that will somehow "encourage" those customer to change their mind?  If it wasn't economically attractive in the first instance before the government stepped in and added a bunch of additional costs and interest to the cost of capacity, it certainly won't be attractive to customers at an increased price.  Did these folks fail elementary school math?  A transmission project that did not attract any customers when it was first offered it not going to magically attract interest after the Secretary of Energy starts painting Tom Sawyer's fence using your tax dollars.

So, what's going to happen when the customers aren't "encouraged?"  The federal government will continue to prop up the transmission road to nowhere that nobody uses "for a term of not more than 40 years".  

How much of our money might the Secretary pay for this capacity that it isn't going to use?

It's going to buy 50% of the project's capacity at a rate that will support 100% of the project's construction.  There's nothing "fair market value" about that calculation.  The federal government is going to underwrite the entire cost of unneeded transmission roads to nowhere and then try to sell capacity to a third party that didn't want to buy it in the first place.  It doesn't matter if anyone is ever encouraged to buy the capacity from the federal government.  That unused transmission line is going to sit there rotting for 40 years... or maybe forever.   And what happens if the Secretary doesn't manage to sell the capacity to anyone else over that 40 year contract?  It simply forgives the entire amount it paid to the private party over the life of the transmission road to nowhere to be used by nobody.  What does the government care?  It's not their money... it's yours.

There must be a need for every transmission project.  We can't just build them because we think they're pretty, or they provide jobs, or maybe someone might want to use them someday.  Need is determined either by a regional planning organization or a market need for the project demonstrated by signed capacity contracts.  The federal government can't create a "need" by signing fake contracts for capacity that may never be used.

This craziness tap dances all over the current rate model of merchant transmission.  FERC may grant a merchant transmission project the authority to negotiate rates with voluntary customers in order to pay for its project.  The negotiation process must be fair and is subject to regulatory scrutiny.  In addition, there may be no captive customers for a negotiated rate project.  All participation is voluntary.  When the federal government starts signing capacity contracts without any market competition that would serve to keep contract prices at fair market value, it is no longer a market-based process.  In addition, when the federal government starts trying to resell unwanted capacity it has purchased, it would have to meet the same scrutiny as the original project owner.  Not sure that can even happen without a whole bunch of new rules.  FERC is going to have to have a huge, regulatory reckoning with its negotiated rate authority process and precedent before any of this nonsense happens.  So, another time consuming, money-wasting dead end.

Also, a state may deny to approve a government-funded merchant project.  Then they'd have to go back to square one designating a NIETC corridor.  Round and round the regulatory revolving door they go!

Never let advocacy groups make new laws.  They're not smart enough not to harm themselves and others.

The only drawback here is that fighting all these battles is also going to be time-consuming and expensive for affected landowners.  But we never give up!  Game on!

This article is about the citizens' referendum in Maine that killed the New England Clean Energy Connect... or is it?  Although ostensibly about the adventures of Massachusetts to get "clean energy" at the expense of neighboring states, it has a broader lesson.

Two words:  Merchant Transmission.

The article says:

Merchant transmission is an entirely different animal than transmission built by regulated public utilities and states must end treating it the same when it comes to eminent domain.  Although the regulators who approve these projects know the difference, hardly anyone else does, including legislators, local governments, the media, and sometimes even the landowners affected by it.  It's up to you to educate these people and work to update your state's eminent domain laws to protect the people of your state from speculative energy projects without a public purpose.

First, let's talk about regulated public utility transmission.  It's something most people are familiar with.  For this kind of transmission line, there is a public purpose.  Numerous independent regional electric grid planners across the country study the system's needs to determine whether new transmission is needed to keep the lights on.  When a need is found, the grid planner approves a new project, which is then sent to the appropriate state utility commission(s) where the line would be built for subsequent approval.  All transmission must be approved according to the state's laws governing transmission before it may be built.  If a state also finds the project needed, it grants a permit and eminent domain authority to the utility in accordance with the state's law.  This allows the public utility to condemn land for the project, if necessary.  However, regulated public utilities use this power sparingly and prefer to coerce landowners to sign voluntarily.  A public utility historically uses its eminent domain authority on less than 5% of the needed easements.  Public utilities are heavily regulated, and the rates they charge for public purpose transmission are what's known as "cost of service" rates.  As you might have guessed, the public utility can only charge electric consumers for its cost of the project, plus a return (profit) set by regulators.  The return allows the public utility to recover a reasonable profit on its investment in the project, which is slowly paid for by electric consumers over its useful life, usually 40 years.

While not ideal for affected landowners, who must sacrifice their property for the general public good, it's what was historically developed to allow for electrification of our country in the last century.  But the historical public purpose for condemnation has been reimagined in the past 20 years, and state laws granting eminent domain authority to public utilities have not kept up with these changes.

It's time for change!

The biggest reason for change is the development of merchant transmission.  Merchant transmission is, at its most basic, a speculative transmission line proposed solely for investor profit.  The idea behind it is that there is a market need for additional transmission beyond that needed for a public purpose.  A group of investors may determine that there is a market for one of these supplemental projects, although there is no public purpose for it.  If a merchant proposes a new transmission project, it must find voluntary customers to pay for it.  Because there is no public purpose, the cost of a merchant line cannot be involuntarily allocated to captive electric consumers.  Investors put their own money up for the project and hope that they can attract enough voluntary customers to pay for the line, plus an attractive profit.  A merchant is granted authority to fairly negotiate rates with prospective customers.  If the merchant charges too much, it won't have enough customers.  The rates it can negotiate are set by the market for transmission capacity.  If a potential customer believes the rate it has negotiated is economic and will supply a need for its customers, in turn, then a contract is signed and the customer is on the hook to pay the contracted rate.  The need here is a market need, not a public purpose need.  The lights will still stay on for everyone if the merchant project is not built.  The merchant takes a risk that a supplemental market for its project will develop.  If it does not, then the merchant will not build the project because there is nobody to pay for it.  A merchant cannot get a loan to build a transmission line without a guaranteed stream of revenue that comes with negotiated rate contracts with its customers.

And let's talk about merchant transmission rate contracts.  A merchant cannot charge more than its voluntary customers are willing to pay.  A merchant rate is set by market, not its cost of service plus regulated, reasonable profit.  Whatever the market is willing to pay determines the profit.  If a merchant can build its project for less than the market rate, then whatever amount leftover above its cost of service is pure profit for the merchant.  There is no reasonable cap on its profit.  As the linked article above points out, a merchant profit can be enormous, which makes these kind of speculative transmission projects so attractive to investors.  But keep in mind, if the profit that remains after contracts are negotiated with voluntary customers is not enough for the investors, they are not committed to building the  project and can simply fold while absorbing the loss for money spent to date.  Losing a small investment is better than losing a larger amount of money over time selling a service that costs more than the market will pay for it.

So, why are merchant projects a problem when it comes to eminent domain law?

Because states are in a position to either approve or reject the project based on speculation.  If a state approves a merchant project, it must grant it public utility status under current laws.  Public utility status determines that the project serves a public need and grants the utility eminent domain authority.  Not such a problem for a regulated transmission project ordered to serve a public need.  The public utility is under orders to build the project if approved.  It can't decide afterwards that there is not enough profit in it and cancel its plans.  If approved, the project will meet a public need, and any land acquired using eminent domain is only used for a public need.  But public utility status is a problem when granted to merchants.  Because the merchant has the option to cancel the project at any time, it may never serve a public purpose.  But a private investor in the project may have still acquired land "for a public purpose" using eminent domain.  There's no provision requiring a merchant to actually use the land it has acquired for a public purpose.  In that case, the land will have been acquired through eminent domain without the required public use, or public purpose.  Our Constitution prevents the acquisition of land by private parties for a private use.

The tragedy currently unfolding in Missouri illustrates why public utility status and eminent domain authority for speculative merchant transmission projects must end through modernization of state eminent domain laws.

The Grain Belt Express merchant transmission project owned by private investor Invenergy has been approved by Missouri regulators and granted public utility status and eminent domain authority.  But it still doesn't have the approval it needs in Illinois, and its Kansas approval is tied to future approval in Illinois.  The only state where GBE currently has the authority to condemn property is Missouri.  The entirety of the project has not been approved in other states, and it does not have enough voluntary customers to pay for the project.  It's only known customer is a small group of Missouri municipalities who signed a contract to pay an amount less than it would cost GBE to provide the service.  This "loss leader" contract was only signed so that GBE could tell the Missouri utility commission that it was providing "benefit" to Missouri in order to schmooze its way to approval.  GBE has still not reached the point in its development where it has enough customers and permits to build.  GBE is still only a SPECULATIVE transmission project.  There is no guarantee that it will ever be built.

But GBE has been asking Missouri landowners to willingly sign over their land now for a project that may never be built or used for a public purpose.  The landowners who resist are being threatened with eminent domain, and GBE has made good in its threat against one landowner in Buchanan County.  It has made a court filing to take this person's property using eminent domain.  In the event that GBE is successful, then it will own property for a project that it may never build.  What happens to that property if GBE does not find enough customers, or is denied the additional permits it needs to build the project?  GBE will still own an interest in that landowner's property, an interest it has acquired that may never serve the public.

Until GBE has signed enough customers, received all its necessary permits, and committed to build the project, there is no "public use" or "public purpose" for the speculative taking of private property.  Our Constitution does not allow the taking of private property without public use, but that's exactly what's happening in Missouri.  Right now.  GBE is threatening condemnation on more than 50% of the property it *could* need for its speculative project.  Remember, regulated public utilities typically condemn less than 5% of the easements, and only then when construction is imminent.  Regulated public utilities only use eminent domain as a last resort on a project that they are committed to build.  GBE is condemning NOW the majority of the property it *could* need later, when it may have customers and permits necessary to complete the project.  There is no "public need" to condemn property now for a speculative project.

State utility commission conditions that attempt to prevent a speculative merchant from hurting landowners by beginning construction before they have customers and permits for the entire project do not work.  Missouri requires GBE to have funding for the complete project before beginning construction, but not before using eminent domain.  Kansas, too, prevents construction until all permits have been granted, but it doesn't prevent eminent domain.  State eminent domain law needs to be updated to rein in eminent domain authority for speculative merchant projects.  Updates to state law to prevent the granting of eminent domain for merchant projects until they have necessary permits, customers, and have legally committed to building the project are  desperately needed to protect citizens.  If you haven't yet been put in the position to have your land condemned for a speculative private profit purpose, count yourself lucky... and hurry down to your legislator's office to make sure it doesn't happen.  Congressional "infrastructure" legislation will light a fire in investor circles to propose more merchant transmission in exchange for taxpayer-funded financial reward.  Missouri is teaching the lesson right now and should be first to protect its citizens from eminent domain abuse.

Only one state has updated its laws to deal with merchant transmission.  Several years ago, Iowa passed legislation that prevented above-ground merchant transmission.  Think that ended merchant transmission?  It did not!  Another speculative merchant transmission project is in the works that complies with the new law.  SOO Green Renewable Rail is proposing a merchant transmission project that is buried on existing rail rights-of-way.  Changing state law to rein in merchant transmission did not make Iowa undesirable for merchant projects.  It did not scare anyone away.  It simply ensured that future merchant projects are less invasive for the state's citizens. 

Why doesn't Missouri require GBE to be buried on existing easements like the SOO Green project?  Doing so won't make the project impossible.  But what it would do is cut into Invenergy's enormous profits.  Building underground is more expensive, which siphons off some of Invenergy's profit.  Invenergy wants to build the cheapest project it can so that its profit is bigger.  The negotiated market rates for a merchant project won't change if the project is buried, or uses eminent domain to acquire land cheaper.  GBE's rates would still be set by market.  But if SOO Green is risking its money betting that even a buried project will create a profit, then it is possible, even for GBE.

Ask your legislators what will happen to the easements GBE condemns now, if the project is cancelled later due to rejected permits and lack of customers?  Will GBE have to restore the land and return the easements?  There's nothing requiring that.  GBE can keep the land it condemned without a public use, and then use it for any private purpose it likes.  What good is a linear easement across 200 miles of Missouri?  It could be used for a number of things such as  a pipeline of some sorts, including one of the new-fangled and extremely dangerous CO2 pipelines.  It could be used for a private toll road.  It could be a private railroad.  It could be sold at a huge profit to someone else for any of these projects, and more.  There is no guarantee that it will be used for a public purpose.  And our Constitution states: "nor shall private property be taken for public use, without just compensation."  There is no provision that allows the taking of private property for a private use, but that is exactly what Missouri is allowing to occur today.

GBE's use of eminent domain is UNCONSTITUTIONAL.

Did this guy think everyone would cheer for his reasons to pass the Bipartisan Energy Bill?

Here's what's there when all the polish and generalities are are wiped off.

So how will the Bipartisan Bill fix that?

Shocking as that is, it's simply not enough for the environmental snob set (and the transmission builders who stroke their enormous egos).

Because FERC's siting and permitting authority over buried gas lines has worked out so swell, hasn't it?  I mean, nobody is complaining about how FERC has handled that process, right?  Do these folks realize how very hypocritical they actually are?

And what about that transmission facilitation thing?

But what if the customers never show up?  What if these speculative transmission projects are built in the wrong places?  What if they never become operational?  How would they justify the taking of private property in order to build a bridge to nowhere using taxpayer funds?

Any transmission project that needs customers before being built is a merchant, or market-based,  transmission project.  It is only built if there is enough market need to financially support it.  Mandating that the federal government artificially skew the market only ensures unnecessary and unneeded transmission that nobody wants to use.  This has to be the absolutely dumbest idea in the whole stinking thing.

One last thing... this clown starts off with a totally incorrect premise.

First of all, there's absolutely no proof that building transmission willy nilly will stop heat waves, cold snaps, wildfires, and droughts.  In fact, I can guarantee that those things will continue unabated.  Except now we'll be completely dependent upon transmission to ship our electricity from far, far away because we have no local sources of energy, and those transmission lines will be subject to failure from weather and wildfire.

Because buried transmission on existing rights of way is the future.  In fact, it's happening right now!!!  We no longer need long wires on tall towers.

When did our universities turn into cesspools of political idiocy?

If you haven't yet signed the petition or written to your senator, get busy! 

Dear Michael Skelly:

The people you've been harassing with your failed transmission projects for well over a decade now still have their eye on you.  You pretty much can't get away with anything anymore.  It's not like last time where "the farmers" didn't know you existed and the threat you posed to their lives.  You know what they say... once bitten, twice shy...

This is a recently published land sale for Loudon County, Tennessee.

Did Michael Skelly buy some lovely retirement property  southwest of Knoxville in east central Tennessee?

Nope.  It appears that he bought a backdrop for updated vanity photos that resemble this old pose.

That's right... it appears that Skelly has bought his very own vacant lot right next to an existing high voltage electric substation.

Who wouldn't want this backdrop for new "Our Team" pictures?

But wouldn't that also make a dandy spot for a new DC/AC converter station? 

It's not in Memphis this time... but about 400 miles further east.  However, it could follow the same path as the last one between Tennessee and Oklahoma.

What is Michael Skelly up to?  And why did he purchase this property in his own name, and not the name of his "early-stage transmission development company"?  Did he think nobody would find out?

Well, at least not before he "fixed" the reason that Plains and Eastern Clean Line ultimately failed.  It had no customers.  Nobody wanted to purchase any service on the "clean line."  However, the new "bipartisan energy bill" includes a provision that would require the Secretary of Energy to purchase transmission capacity for up to 40 years from new transmission projects that have no customers.  Read it for yourself.

Kind of reminds me of growing up in a small town, like Mayberry.  You can't get away with anything because someone is always watching.

Keep your eye on this.

Just like unsupervised children, our elected representatives get up to all sorts of hijinks when left unsupervised in Washington, D.C.  What have they been doing lately that you should care about?

A "bi-partisan" energy bill was reported out of the Senate Energy and Natural Resources Committee yesterday.  This proposed legislation, hundreds of pages long, does two things that may affect you personally.

Ranking Senator John Barrasso took issue with these two provisions.  His statement is available here.  Bravo, Senator!

Title I, Section 1005, allows the Federal Energy Regulatory Commission to site and permit an electric transmission project in the event that a State Utility Commission rejects or denies an application.  It usurps state authority to make the decision.  Just like the dreaded eminent domain authority, it demands that a state "voluntarily" approve the project, or else FERC will do it for them.

On this provision, Barrasso stated:

Sen. Roger Marshall from Kansas proposed striking this offensive provision, but his amendment failed on a party line vote.

Also, Title I, Section 1007, requires that the Secretary of Energy to enter into capacity contracts for service on transmission lines.  It's not that the Secretary is going to use this capacity for delivery of energy, it's that the Secretary is going to pay for the capacity and then try to resell it to others.  The Secretary is going to use your money to financially support transmission projects that are so unnecessary that they cannot find any customers to use them. 

Say what?  If an entity wanted to enter into a contract, it would do so.  It doesn't need "encouragement" from the Secretary of Energy to take a white elephant off its hands.  The legislation presumes everyone will step up to want a contract after the Secretary gets one.  Sorry, transmission capacity is not Tom Sawyer's fence.  What happens when no one is "encouraged?"  Well, looks like the Secretary is stuck holding the hot potato... for 40 years... paying for transmission capacity nobody uses.  Yes, it's as dumb as it sounds.

Senator Barrasso's take:

Au contraire, Senator.  There's 200 million reasons for this stupid, expensive and pointless provision.  One reason for every investor dollar Michael Skelly* wasted on his Clean Line projects that failed because he couldn't find any customers to buy capacity.  Skelly solves that problem by requiring the Secretary to buy his unneeded transmission capacity so that his unnecessary transmission projects can financially support themselves on the taxpayer dole.  It's pure subsidy for absolutely no reason at all.  A merchant transmission project, like Skelly wanted to build, is a market based project.  If there is market for a project, it will find customers, and the amount of its profits are set by the market.  Creating artificial market demand through captive, taxpayer-funded contracts does not create an actual market.  It only creates the proverbial "bridge to nowhere" while filling Skelly's pockets.

Sen. James Lankford from Oklahoma proposed striking this ridiculous provision from the legislation, but his amendment also failed on a party line vote.

If you like these provisions and their effect that could ram a transmission line down your throat and across your property, you need do nothing.  If, however, you object, get vocal.  Contact your Senators.  Contact Senators Barasso, Lankford and Marshall.  Contact NARUC.  Contact your state public utility commission.  Let them know these provisions are completely unacceptable, and why.  These people/organizations would probably agree with you.  Please let them know you are standing by to take further action and ask them how you can help.  This legislation must be defeated!