This video will touch your heart.
For more information and to support these folks, please visit Stop Transource in Pennsylvania and Maryland's website.
What time is it, kids? No, it's not Howdy Doody time, but there will be a clown. Lots of them, in fact! It's time for the annual EUCI Best Practices in Public Participation for Transmission Projects!
This means it's time for transmission opponents to laugh, snicker and giggle over the way the utility industry thinks it's "managing" us all the way to permit denial. That's right, boys and girls, once every winter, the transmission industry gathers in some place warm to discuss "public participation" for transmission siting! Every year a different bunch of knuckle heads gets up and tells their own personal war stories about how they "managed" transmission opposition by "participating" with "the public." It's supposed to be instructional, as if these losers have somehow found the key to stop opposition to badly planned and executed transmission projects.
They haven't. Not once.
Sometimes, they even let guys get up and speak about how successful they are, even though their project has not been built. And then the project fails. I'm guessing they weren't very successful in "participating with the public" if opposition crashed their project.
Like about how they "leveraged lessons learned" and "American Electric Power and Allegheny Energy are applying best practices to help gain approvals for the Potomac-Appalachian Transmission Highline (PATH), a 765-kV project extending 275 miles through West Virginia, Virginia, and Maryland. Learn how the two companies are working together to apply successful strategies for grassroots outreach, community involvement, and public education while contending with project delays, entrenched opposition, and the economic downturn." Not only was the PATH project cancelled just a month or so later, but the costs of all the activities these weasels advised their compatriots to undertake were later found not to be recoverable from ratepayers in a regulatory proceeding. Nice work, fellas! And, BTW, if you read the linked blog post and are wondering if my pals ever sent me a copy of their power point presentation, the answer is yes. It came in a packet of data responses during an administrative hearing at FERC. It really wasn't all that. Borrrrring!
And then there was the year EUCI added a public participation website contest to the festivities. Yes, they actually sent StopPATH's entry to their judges, and the judges did their duty. I am missing the evaluation comments or scoring sheet though, but I do have a very vivid imagination! And, again, if you read the linked blog post you'll be happy to know that I did present an award to BlockRICL at a transmission opposition convention shortly thereafter. What? Transmission opponents have their own gatherings? Sure! The utility guys would learn way more stuff there, but we don't invite them. Nor let them in when we see them at the windows with their noses pressed to the glass.
And then there was the year they advertised their conference as helpful for "community group representatives." That's a euphemism for you. They actually thought opposition leaders were going to show up for their conference. I guess all that pretending success among themselves was getting sorta boring, and nothing livens the place up like transmission opponents bearing torches and pitchforks.
Except no opponents showed up. We didn't have any ratepayer funding for the trip and we were too busy using our own money to fight transmission companies.
So what's on the agenda for this year's Best Practices in Public Participation for Transmission Siting conference? More bluff and bluster about how "effective" these buffoons have been at "participating with the public." There's several presentations about transmission projects in Wisconsin and how the companies practiced "media relations and messaging in the face of public opposition" to get their project approved. I'm pretty sure it wasn't "public participation" that bagged that trophy. It was more likely "private participation" the company may have engaged in behind closed doors.
These transmission companies think they're "building trust" with the public. Who "trusts" a transmission company that has its eye on your property for one of their profit-making schemes? Do you really think these guys are telling you the truth? Because part of the program includes calling you a liar.
Emotional challenges to a project can cause projects sponsors to respond with facts, but those facts are often drowned out if the parties are unwilling to compromise. In this presentation, we will have an in-depth analysis of how to respond to exaggerated or false claims and how to manage project opposition explained with real-life case study/scenarios.
Hey, fellas, we simply don't believe you. No matter what you say. We don't trust you.
And then there's a bunch more clueless expounding about "what are stakeholders' concerns?" Transmission companies don't know what your concerns are, because they don't listen to (or much care) what you think. They brush away your every concern as nothing to be concerned about. I'm guessing NONE of the participants of this conference have ever been a transmission opponent, nor do they take anything transmission opponents say seriously. Quit pretending you know how we think, okay?
American Electric Power (parent company of Transource) will be making a presentation about their effective communication strategy that "can neutralize opposition and gain acceptance of transmission line projects." So, the question is, when are they going to start utilizing that amazing strategy on their own Transource project? Transource opposition is strong and building. It's not being "neutralized." And when you say stuff like that, it only makes the opposition more determined to kill your project than ever. "Base to AEP: Communication strategy FUBAR. Failure imminent. Disengage. Retreat. Over."
And don't miss the Public Outreach Executive Forum, where Transource's own Todd Burns will join a panel instructing his peers on how to "shape organizational culture, policies and practice in a public centered organization." It sorta sounds like he thinks you're made out of silly putty. But I'm betting, in the end, Todd's the one who's going to be bent out of shape. Although, maybe Todd can pick up a few pointers at this conference? I mean, his strategy is obviously not working on the Transource project.
It's just another gathering of the clueless in their self-congratulatory echo chamber of failure.
Rock on, transmission opponents, rock on!
Transource hit the media up with its proposed routes for its Independence Energy Connection early this week. Transource included lots of propaganda designed to pacify the opposition beast as well. I don't think it's working. The route announcement only served to incite even more opposition, as people who maybe thought they were safe, or hadn't paid much attention to the problem before, came out of the woodwork to voice their opposition.
What was it Transource said about its project?
The goal is to alleviate congestion on the high-voltage electric grid, and benefit customers in the region, including parts of Pennsylvania and Maryland, Transource said in a news release.
But who exactly will benefit from the project, and to what extent?
Regional grid operator PJM Interconnection has already done the math and assigned project cost commensurate with benefit. 80.5% of the project costs will be paid by ratepayers of Baltimore Gas & Electric, PEPCO, and Dominion, therefore 80.5% of the benefit will be realized by those ratepayers. However, 100% of project impacts will be realized by landowners in communities in Pennsylvania and Maryland that will receive just 6% or less of the project's benefit. Although Transource continually attempts to gloss over this fact, it doesn't change the math. Communities along the proposed route are not receiving benefit commensurate with their sacrifice.
New transmission projects dreamed up by PJM to "alleviate congestion" and promote the increased use of certain types of power generators have a long track record of failure. "Congestion" is a fleeting economic concept used to justify building more transmission for export across the region. You'd think PJM might have learned its lesson about manipulating markets from the crashing failure of its Project Mountaineer initiative, but obviously that's not the case. After retreating to its lair and licking its wounds for 10 years, PJM is at it again. And the victims of its latest scheme are having none of that.
Transource also says:
Abby Foster, a community affairs representative for the company, said typical farming practices in both counties will be able to continue in the rights-of-way. She also said that based on the feedback from the community, Transource will use a monopole structure for the towers, instead of the lattice structure which was in the original proposal.
Abby Foster is a public relations spinner employed by The Bravo Group, under contract to Transource to put a nice face on its transmission proposal. Abby says: "My experience and strengths include targeting audiences with well-crafted messaging using both traditional and new media to gain exposure, persuade and motivate. Whether it be a product, campaign, event or reputation management and exposure, I can develop the campaign from strategy, to content and graphics, to launch. I will work with you to set benchmarks, track progress and achieve your campaign goals." What does Abby Foster know about "typical farming practices"? Any farmer who relies on Abby Foster to educate them about "typical farming practices" may find themselves in a bit of a bind. And what about that "feedback" she received about monopoles? I don't know of anyone who opposes this project whose opposition would be ameliorated by the use of monopoles. In fact, I haven't heard one opponent even mention a preference for monopoles. The preference for monopoles is parent company AEP's preference, touting what it characterizes as its revolutionary "BOLD" design, a rather flaccid attempt to make people believe everyone else loves smartly designed transmission structures. How can Abby say that they're making some accommodation towards the public when those people have not indicated a preference? It's like asking people how they want to ingest poison... would you like to drink it or chew it?
Todd Burns is another poison purveyor who tells the community how they were included in the decision making, but that's not entirely honest. The community doesn't just want to be "included" in the siting of the project, the community wants to be included in the decision to build this project in the first place. That's where community involvement should have begun. Instead, Todd asks the community how it would like to ingest its poison, without asking them if they would like to be poisoned in the first place.
Transource must think the communities are really gullible, pretending to make concessions so that the company appears reasonable. Transource's concessions are imaginary and not what the community asked for at the "Open House" meetings. I'm pretty sure the communities asked for no transmission project at all, not one with monopoles that encourages the community to fight with itself over placement. The monopoles and "community inclusion" are nothing but a smoke screen.
Then Abby asks the community to get into the Kool Aid line:
Foster added that over the next couple of weeks the company will contact landowners with property on the proposed route. She said during this time, owners can raise issues like potential crop loss during construction or access roads that need to be built, and negotiate compensation.
Maybe landowners don't want to talk to land agents this early in the game. After all, this project isn't a sure thing until it's been carefully examined and approved by state regulators. Chances are that one or both states will deny the application, or simply delay it until the project collapses underneath the weight of its own hubris. Why purchase easements when a route has not been approved? Because Transource is guaranteed to collect its sunk costs, even if the project is later cancelled. And if it is cancelled, who wants to be left with an open easement across their property that can then be used for some other project? Landowners should also consider how easements are typically purchased for transmission line projects. A company may pay up to 10% of the purchase price at signing, with future small payments made over time as indicated in the contract, with the balance paid at the time construction begins. Once signed, a landowner (or his heirs) must honor the contract until the easement is released. This project could be tied up by regulators and courts for years.
Any landowner who even considers talking to a Transource land agent should first consult with an attorney. Although Transource will tell you that you don't need an attorney, remember that the contract the land agent presents to you was written by Transource's attorney, for the benefit of the company. Don't you think you should protect your interests, too?
Transource seems to be in an all-fired hurry to get folks "managed" to go along with its project. It's your land, it's your choice.
It's a noun, not a verb.
When Transource was faced with the reality that its Independence Energy Connection (also known as "Projects b2743 & b2752" and "Market Efficiency Project 9A" in PJM parlance) did not provide much benefit to the geographic area sacrificed for the new transmission lines, it re-wrote its project "Fact Sheet" to gloss over this shortcoming.
Transource now says:
Who benefits from the project? For this project, PJM projects $622 million in cost savings for consumers in 10 power zones. Those zones are listed below and displayed on the map to the right. Generally speaking, when low-cost electricity is introduced into the market, it helps drive the overall competitiveness of the electric grid for all power zones.
And here is the power zone map supplied by Transource.
Transource wants the public affected by this project to believe that benefits will be spread evenly over all power zones.
But that is not the case. Transource must have run out of room because it did not also supply the Cost Responsibility percentages for the power zones on its map. Or maybe they purposely didn't include it because it did not support their propaganda narrative.
One of the most basic rules of assigning cost responsibility for new transmission projects is that cost must be commensurate with benefit. Therefore, the first step to assigning costs to certain zones is to determine benefit for each zone. PJM did that analysis and posted its cost responsibility assignments here.
Since cost is directly proportional to benefit, you may interpret this chart to show the percentage of benefit to each power zone.
If you add up the BGE (Baltimore Gas & Electric), Dominion (Northern Virginia) and PEPCO (Washington, DC) zones, you will get 80.52%. That means that 80.52% of the benefits of this project will be confined to those zones. Baltimore, Northern Virginia and Washington, DC, will receive more than 80% of the benefit from this project.
There will be no new transmission lines in Baltimore, Northern Virginia or Washington, DC (oh, the horrors, the horrors!). If PJM tried to build new transmission in these urban areas, even to lower prices by a few cents per year, the pushback would be enormous. Instead, PJM (and Transource) have moved the burden of new transmission lines into the APS zone (8.73% of project benefit) and Metropolitan Edison Co. zone (ZERO percent of project benefit). The APS zone will receive just 8% of the $622M benefit, but it will shoulder 100% of the project burden. In the case of MetEd, the people will shoulder 100% of project burden in exchange for... NO BENEFIT WHATSOEVER.
So, when Transource says that everyone benefits, that's just not true. Some benefit more than others. And the ones receiving the lion's share of benefit from this project are people who have sacrificed absolutely nothing in exchange for saving a few pennies on their electric bill.
As well, "generally speaking" providing new pathways for power exports from a constrained area serves to raise prices for the previously constrained area. If an area is flooded with cheap power that has no where else to go, competition is at work to keep prices at the lowest possible. Once the area is no longer constrained, the area must now compete for pricing with new areas where power is more expensive. If a generator can sell its power at double the price in Baltimore, it has no incentive to compete with other suppliers to keep prices low in the previously constrained area. Instead, power prices in the previously constrained area will rise, becoming competitive with prices in Baltimore. Market efficiency transmission projects perform a leveling of prices across certain regions between source (generation) and sink (power users). Transource forgot to tell you this, as well.
Baltimore, Northern Virginia and Washington, DC, will receive more than 80% of the power savings from this project. Transource has lied through omission.
Hmm... maybe it is a verb after all.
No, that's not a riddle. Maryland really is suing neighboring "upwind" states who foul its air with their fossil fuel burning electric generators. According to The Baltimore Sun:
The lawsuit seeks to require 36 generating units at 19 plants in upwind states to install the same scrubbers and other air-cleaning technology that Maryland requires plants within its borders to install.
Maryland produces little of the electric energy it consumes. How little?
Maryland's electricity consumption exceeds its net generation. Almost half of the power consumed in the state comes from the PJM Interconnection, the Mid-Atlantic regional electricity transmission grid.
...according to the U.S. Energy Administration. Maryland is an energy leech, sucking "dirty" fossil fuel electricity from neighboring states. And now Maryland is suing those states to demand they clean up their cheap, dirty generators.
Also in the works is the Independence Energy Connection, a set of new transmission lines intended to funnel more dirty Pennsylvania electricity to Maryland. Grid planner PJM Interconnection says that the project will produce lower electric costs for Marylanders, especially in the Baltimore metro area.
But what if Maryland's lawsuit is successful and those cheap and dirty Pennsylvania generators PJM is counting on are required by court order to install new scrubbers and air cleaners? The cost of that equipment is going to increase the cost to produce that dirty power to be shipped to Maryland by IEC in the future. I'm going to make a wild guess here that the increased cost of power produced in Pennsylvania is going to change the projected economics of the IEC significantly, negating any benefit at all. No benefits, no need to construct IEC.
Maryland has also recently outlawed shale gas fracking. Maryland doesn't want to compromise its own environment to produce cheap shale gas, but yet it has no problem helping itself to cheap shale gas electricity produced in the fracking state of Pennsylvania.
Maryland, you're a big, fat hypocrite. How about you stop depending on dirty fossil fuel generators in other states and step up to produce your own clean electricity? You've got an ocean of offshore wind opportunities just off your shore. Offshore wind is so clean it produces no emissions at all. Start walking your talk, Maryland!
But wait, clean electricity is more expensive! And Maryland doesn't want to pay more for electricity. It wants to pay less by supporting the construction of new transmission lines from dirty Pennsylvania generators.
You can't have both, Maryland. What's it going to be? Cheap electricity? Or clean air? Or you could just shut off the lights.
Ut-oh, Transource! Or, let's be real here... Ut-oh, AEP! Your Transource shell company is in big, big trouble!
I traveled to York County, Pennsylvania, last week to attend an informational meeting about AEP's "Independence Energy Connection" put on by the York County Farm Bureau. The meeting was held at 1:00 p.m. on a Thursday afternoon, and it was packed. Two hundred people took time out of the middle of their day and reserved a spot to attend this meeting. And only pre-registered attendees were allowed in, it wasn't an open meeting for Transource and its advocates to undertake "opposition research." Attendance required forethought and determination.
The York Dispatch sent a videographer, who created a couple of excellent videos of the event here and here. The speakers were knowledgeable and interesting and provided excellent information for landowners and others interested in participating in the case (or forced to participate after finding themselves in Transource's siting bulls eye).
The land is beautiful, the area bucolic, the citizens informed, determined, and forthright. These are not people who are going to meekly accept this transmission line plowing its way through their community in order to make power cheaper for people in Washington, DC. It's not like these landowners don't already make a sacrifice to serve the needs of large cities to the south. They've been feeding the urban areas for generations, as well as living with large power generation stations that produce more power than the local area uses. Independence Energy Connection is just one transmission line, one sacrifice, too far.
PJM Interconnection and AEP made a grave error in evaluating the "constructibility" of this project. It's not sited on "undeveloped land" that no one cares about. This land is fully developed to its highest and best use and its owners, and the community surrounding them, are completely committed to keeping the land in its current "undeveloped" state. In its current state, the land is highly productive as a food factory for urban areas, where patio tomato plants are considered "farming."
We're talking 15 miles of new greenfield transmission rights of way for this section in York County. But yet the number of people opposed to this project numbers in the hundreds or thousands, only two months after being announced to the public. It's a run away freight train of vocal, organized opposition that cannot be turned around, no matter how much money AEP spends on big city public relations firms with "crisis communications" and "grassroots organizing" capabilities.
Stop wasting time and money on this project, AEP. You just can't win this one. Remember, there is no such thing as "undeveloped land" in the eastern interconnect. All land is used and useful to its owner and its development density is not an indicator of whether or not a transmission project may succeed.
Ut-oh, AEP! You're done for this time!
It's one or the other. Let's contemplate this...
When I asked Todd Burns what his company's return on equity was, he appeared confused. He didn't know what a return on equity was. It was only after I explained what it was that he finally remembered that Transource's return on equity for this project is "10 to 11 percent" something like that. FACT: Transource has applied to the Federal Energy Regulatory Commission for a 10.9% ROE. The matter is currently in settlement discussions, with an administrative hearing possible if a settlement is not reached.
I met a handful of the Transource guys and gals the other night. Most attempted to be personable and avoid direct lies while trying to answer my increasingly hard questions. And then I worked my way up to Todd Burns.
He also had trouble admitting that Transource has received an incentive from the Federal Energy Regulatory Commission that allows the company to file to recover all its sunk costs from ratepayers in the event that PJM decides to abandon this project.
So, do the lawyers and bean counters at "Transource" (really utility giant AEP, because Transource has no employees of its own) not share basic information, such as return on equity and who pays if the project is abandoned, with Todd Burns? Todd needs to hustle home to Columbus with great alacrity and find out about all this stuff! Otherwise, he looks rather stupid to a public who does know about it. Or maybe he looks like a liar who was pretending to be uninformed so he could avoid the question? As if that could happen.
Todd Burns also seemed to be confused about a lot of other facts during an interview with the Waynesboro Herald Record. Despite that, the reporter managed to write a great, balanced article. The Herald Record has the best coverage of this issue that I've seen (other media take note!) What was it that Burns said?
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.
I blame you, Todd. I think most of the "misinformation" is coming from you. Please, allow me to demonstrate...
“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.
It is NOT "ten times more costly" to underground lines. In fact, it's only twice as costly, roughly. AEP has been claiming undergrounding is "ten times more costly" for years, along with a whole bunch of other excuses for taking the cheaper and easier option of aerial lines. And the technology does exist to determine where a fault is on an underground line. And you probably can mark an underground line to prevent all by the biggest idiots from pile driving onto it. I'm not buying the environmental disturbance thing, either. I've seen what transmission companies do to rights of way when building overhead lines. So, let's update these excuses, because they sort of sound like a lie to me.
As well, who cares how much it costs to underground lines? If the landowners require undergrounding, then that is the cost of fixing this "bottleneck." Are you saying that unless you can build this cheaply that all the savings for the DC-Baltimore elite will evaporate? A more expensive project doesn't clear a cost-benefit analysis? Then, obviously, this project isn't worth doing. It is not incumbent upon Pennsylvania and Maryland landowners to sacrifice by allowing the cheapest project you can build in order to move cheaper power to the city. If you want them to sacrifice for the cities, then the landowners need to have input into how the final project looks on their property. And by having input, I mean actually making the determination -- I don't mean having an opportunity to toss comments down a black hole at Transource where they are completely ignored. The only way a landowner can have effective input is when eminent domain is not an option. Anything else is coercion, not negotiation. Which brings us to...
“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.”
If you want to see how landowners can still work under high voltage transmission lines, carefully watch the AEP videos on this page. Nuisance shocks, EMF, and big brother monitoring your activities on your own land? What's not to like? But wait, there's more... like aerial spraying of the right of way with chemicals to keep growth down, or power line workers coming on your property for maintenance or repairs and leaving gates open, driving large equipment through your fields, and disturbing the soil. The truth is that you will have picked up a parasitic tenant on your land... in perpetuity.
"Compensation" for property taken may be less than you'd expect. After all it is a value created by an out of state company, that will never even lay eyes on your place, from market studies of similar land sales of property in your county. It is Transource's idea of the value of your property, not yours. As well, you may only be paid for the property in the right of way, when the right of way itself devalues the rest of the parcel. Payments for damages will be argued over in court for years... at your expense, if you don't accept what the company wants to give you.
I'm pretty sure Transource land agents will use the threat of eminent domain 100% of the time in order to coerce the landowner to sign on the dotted line. That isn't negotiation, that's coercion.
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.
Perhaps Burns needs to talk to his underlings, who have readily admitted that the lion's share of the savings is for customers in the DC/Baltimore area. And PJM agrees with that. That's why 80.52% of the cost of this project will be paid for by DC, Baltimore and Northern Virginia Customers.
Those who receive the benefits (in this instance cheaper power) pay the costs. That's how PJM works. Any savings for the project area (benefits) are not commensurate with the cost to the community and the individual landowners. Their costs are much greater than any benefit they may receive.
And I hate to let Burns know, but one of his underlings actually confirmed that market efficiency projects perform a leveling of costs across the region. If power is cheaper in the cities, the cost of it must rise somewhere else. All that cheap power "bottlenecked" in PA and MD and unable to reach the cities? Those are the prices that are going to go up once the "bottleneck" is removed.
And then Burns admits he has no hard evidence of how (or even if) this project will lower local electric bills. Then he supposes that local electric companies may keep any savings that develop for themselves. Of course... always thinking ahead, that Todd, to explain now why bills will never go down after this project is built.
Todd is not telling the truth about project benefit. But he may not be the only one with a penchant for prevarication. Transource spokeswoman Abby Foster made up a whole bunch of satisfied and happy landowners out of thin air.
Despite the many negative comments exchanged from person to person around the packed community center, Transource officials said there was also positive feedback.
Why are there no quotes from these people? Why didn't the reporter talk to any of them? Is that because they don't exist? These must be the mysterious folks who have requested monopoles, because those people are just as elusive. What it seems more like is that Transource is making up a mythical landowner who is pleased because Transource is altering its plans to suit Mr. Mythical. A company that presented its public image as "take it or leave it" would be seen as unfavorable by the public. One that pretends it is bending to the will of the people may curry more favor. But when there are no happy people in reality, it's all an illusion. Nobody wants this transmission line on their property.
And as far as that “everyone here benefits from something being on someone’s property” line, puh-leeze. I heard that from one of the Transource people at the open house. It was the tagline of the night. And it sucks. It doesn't work on the public, just so you know, Transource. Other companies have tried it before you. It is met with anger and confusion. It has no relevance for affected landowners. Just because we use eminent domain and rights of way to take property for public use does not mean that everyone should gladly sacrifice for the selfish needs of others. And that's what this is... rural sacrifice for urban benefit. This project isn't needed to keep the lights on. It's only "need," according to PJM, is to make power cheaper in the cities to the south. Those cities like to keep their pretty skylines lit up all night long. There's no reason at all to keep an office tower lit inside all night. Maybe if the cities quit wasting so much electricity, they wouldn't need to call older, more expensive plants to generate during peak load a few days out of the year. And then we wouldn't "need" gigantic transmission towers in Pennsylvania.
Let's wrap up with this...
“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.”
It is up to the state to decide WHETHER it goes, not just where. Opposition to this project is huge and gathering mass every minute. Loud, forthright opposition kills transmission projects. Todd Burns is going to need to get himself educated quickly! Or else quit lying. He's not very good at it.
PJM Interconnection has set the project alarm clock for transmission company Transource to get its Independence Energy Connection built. Can the company really get this project permitted and built amidst formidable opposition and beat the clock?
The DESIGNATED ENTITY AGREEMENT Between PJM Interconnection, L.L.C. And Transource Energy, LLC, for itself and on behalf of Transource Maryland, LLC and Transource Pennsylvania, LLC sets certain milestones the company must meet:
Getting applications filed with state utility commissions is no big deal. Any transmission monkey can do that. But acquiring the permits is a different story. It can take years to successfully acquire permits, in fact, Transource parent company AEP likes to whine about how it took sixteen (16) long years to get one of its multi-state transmission projects approved (when it's convenient to whine about such, of course). PJM's schedule says the project must be fully permitted a mere two and a half years from now. If there's anything certain about a regulatory permitting process, it's delay. Any opposition to a company's application for a permit mucks up the process and causes delay, and it would be rare indeed if Transource's regulatory applications were unopposed.
And here's another goodie -- Transource must purchase and have all major electrical components on site by the permit deadline. This means that the company must spend money engineering the project and purchasing very expensive components, even before it receives a permit. What happens if the company spends millions purchasing components for a project that is eventually denied by a public utility commission? No worries, the company has received a guarantee from the federal government that it may recover the cost of those components from you in your electric bill, even if the project is later abandoned and the components are never used! Now that's some pretty arrogant assuming -- assuming a permit must be issued because the ratepayers are on the hook to pay for the project, might as well construct it. And a mere month after receiving its permit, the company must have at least 20% of the project constructed. And then a mere 6 months later, the project must be completed and delivering energy. Obviously there's a timing issue here and PJM expects the company to secure its permits well before the December 1, 2019 deadline in the agreement. If Transource doesn't get its permits until December of 2019 (and remember, it can't build anything or condemn any right of way until it has its permits), there's just no way it can meet the construction deadlines. Tick tock!
So, what happens if Transource can't meet these milestones?
Designated Entity shall meet the milestone dates set forth in the Development Schedule in Schedule C of this Agreement. Milestone dates set forth in Schedule C only may be extended by Transmission Provider in writing. Failure to meet any of the milestone dates specified in Schedule C, or as extended as described in this Section 4.1.0 or Section 4.3 .0 of this Agreement, shall constitute a Breach of this Agreement. Transmission Provider reasonably may extend any such milestone date, in the event of delays not caused by the Designated Entity that could not be remedied by the Designated Entity through the exercise of due diligence, or if an extension will not delay the Required Project In-Service Date specified in Schedule C of this Agreement;
PJM, the "transmission provider" can extend the milestones as long as such extension doesn't delay the in-service date of the project (the date the project is operational - June 2020). Failure to meet milestones that are not extended results in breach.
Except as otherwise provided in Article 10, a Breach of this Agreement shall include:
In the event the breach isn't cured:
In the event that a breaching Party does not cure a Breach in accordance with Section 7.3 of this Agreement, Transmission Provider shall conduct a re-evaluation pursuant to Section 1.5.8(k) of Schedule 6 of the Operating Agreement. If based on such re-evaluation, the Project is retained in the Regional Transmission Expansion Plan and the Designated Entity's designation for the Project also is retained, the Parties shall modify this Agreement, including Schedules, as necessary. In all other events, Designated Entity shall be considered in Default of this Agreement, and this Agreement shall terminate in accordance with Section 8.1 of this Agreement.
So, when Transource fails to meet project milestones, PJM will "re-evaluate" this project and could decide it's no longer needed. No harm, no foul, no skin off their nose, the ratepayers are on the hook to pay for it whether it's constructed or not. Just one, big, expensive "oops" by transmission planners who should be held to higher standards.
In fact, PJM can re-evaluate and cancel this project at any time, milestones or no milestones:
In the event that: (i) pursuant to Section 1.5.8(k) of Schedule 6 of the Operating Agreement, Transmission Provider determines to remove the Project from the Regional Transmission Expansion Plan and/or not to retain Designated Entity's status for the Project; (ii) Transmission Provider otherwise determines pursuant to Regional Transmission Expansion Planning Protocol in Schedule 6 of the Operating Agreement that the Project is no longer required to address the specific need for which the Project was included in the Regional Transmission Expansion Plan; or (iii) an event of force majeure, as defined in section 10.0 of this Attachment KK, or other
Considering that this is a market efficiency project, chances of it still being needed several years down the road are slim to none. PJM recognizes any "need" for this project has a very short shelf life, judging by its own project schedule.
A market efficiency project is intended merely to increase transmission capacity to a certain area in order to allow cheaper power to reach the area and lower electricity prices for the lucky recipients. The cost of a transmission project is assigned to certain areas that use or receive benefit from the project. More than 80% of the Transource project cost is assigned to electric ratepayers in the Baltimore Gas & Electric, PEPCO, and Dominion service areas. This includes Baltimore, Washington, DC, and its suburbs, and northern Virginia. That's who's going to receive more than 80% of the benefit and the cheaper electricity. This project is nothing more than the idea that cheap gas-fired electric generation in Pennsylvania can be piped to the big eastern cities. Benefits to the citizens in the bullseye of this project who are expected to play host to new high-voltage transmission lines will be minimal.
The concept of electric transmission "congestion" is a constantly shifting problem. While Pennsylvanians can currently get plenty of cheap power generated in their state, it bottle necks before it can flow to the eastern cities. Once the bottle neck is removed, Pennsylvanians must compete with the big cities for the same supply of electricity, which tends to levelize prices between the two areas. While the price of electricity in the expensive cities may fall, the price of electricity in Pennsylvania may rise. It's simple supply and demand. However, electricity generation isn't static -- new generators come online, and old generators go offline. If the Transource project isn't built, perhaps the big cities will build their own new, cheap gas-fired generators. The lights won't go out. How much of PJM's transmission plan is sheer market manipulation that would solve itself without intervention?
The schedule is tight, the stakes are high. Transource has to beat its early milestones in order to meet its later ones. Opposition causes delay. Can Transource beat the clock? Tick tock.
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.