Grain Belt Express is a merchant transmission project. Merchant transmission is different from traditional transmission projects built by utilities and approved by regulators on a cost-plus, rate-of-return basis. Utilities have captive customer bases, and new transmission necessary to serve their customers is paid for by the customers. This is not a voluntary or elective action. The customers are "captive" and must pay for the transmission as part of their service. On the other hand, merchant transmission does not have a captive customer base. Its customers are voluntary, and the rates they pay are freely negotiated between the customer and the merchant transmission owner. The idea is that merchant transmission cannot impose its costs onto any person who does not voluntarily participate in its project.
Merchant transmission should not be granted eminent domain authority. Eminent domain authority allows the involuntary condemnation of private property. It allows the authority to impose involuntary costs on landowners who choose not to participate in the transmission project. The landowner's property value is not freely negotiated between buyer and seller when the transmission company has eminent domain authority. The price is capped at whatever the transmission company wants to pay. If the owner doesn't accept the offer, the property is taken through eminent domain and the price paid is set by a court (or mediation).
Merchant transmission uses eminent domain to keep its land acquisition costs low, although it is not charging its customers on a cost-plus basis. The benefits of acquiring land cheaply aren't flowing to the customers, they're flowing into the pockets of the merchant transmission owner.
Just in case you need to see this concept in action, take a look at the minutes of a February 5, 2020 meeting of the City of Columbia, Missouri Water and Light Advisory Board.
Merchant transmission should not be granted eminent domain authority. Eminent domain authority allows the involuntary condemnation of private property. It allows the authority to impose involuntary costs on landowners who choose not to participate in the transmission project. The landowner's property value is not freely negotiated between buyer and seller when the transmission company has eminent domain authority. The price is capped at whatever the transmission company wants to pay. If the owner doesn't accept the offer, the property is taken through eminent domain and the price paid is set by a court (or mediation).
Merchant transmission uses eminent domain to keep its land acquisition costs low, although it is not charging its customers on a cost-plus basis. The benefits of acquiring land cheaply aren't flowing to the customers, they're flowing into the pockets of the merchant transmission owner.
Just in case you need to see this concept in action, take a look at the minutes of a February 5, 2020 meeting of the City of Columbia, Missouri Water and Light Advisory Board.
Property rights could drive up the cost of Grain Belt Express. But what does Columbia care? Its negotiated rate cost through MPUA is fixed by a contract signed years ago. Property rights will not increase Columbia's cost of electricity. Respecting private property rights will only increase Invenergy's cost to build the project. If Invenergy's costs to build the project go up, and its rates charged to Columbia stay the same, private property rights come out of Invenergy's profits, not Columbia's pockets.
Invenergy is the only one who benefits from eminent domain.
Eminent domain should NEVER be authorized for merchant transmission. It does not benefit the customers or landowners. It only benefits the for-profit transmission owner, Invenergy.
Invenergy is the only one who benefits from eminent domain.
Eminent domain should NEVER be authorized for merchant transmission. It does not benefit the customers or landowners. It only benefits the for-profit transmission owner, Invenergy.
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