It's Pretty Windy in Hannibal These Days

The Herald-Whig reports:

The Hannibal Board of Public Works wants to install a wind farm in Hannibal, and on Wednesday it signed a draft contract indicating its support for a future wind farm.

The Missouri Public Service Commission would ultimately grant approval for construction of the wind farm.

Where could the reporter have gotten an idea like that?  She must have been positively blown over by the over blown hot air generated at a recent meeting of the Hannibal Board of Public Works and the windy enthusiasm displayed by General Manager Bob Stevenson for windy things.  Can't fault that... we've all been there before.

No, a wind farm isn't being constructed in Hannibal.  That would probably make too much sense for Hannibal to get its energy from local sources.  Hannibal seems more interested in importing energy and running over hundreds of Missouri landowners to get it there.  And since the wind farm won't be installed in Hannibal (or anywhere else in the State of Missouri), the MO PSC wouldn't have to approve it.

Hannibal Courier-Post reporter Danny Henley may have been surprised to learn that energy is not included in the cost of transmission capacity on the Grain Belt Express, but he's still trying really hard to tie the two together unnecessarily:

After expressing public interest for months in securing low-cost wind energy, the Hannibal Board of Public Works Board took the next step Wednesday by approving a draft power purchase agreement to get wind energy from an an as of yet unapproved transmission line.

A power purchase agreement is for power (energy).  A transmission capacity contract is not necessary to purchase energy.  Except Stevenson pretended Grain Belt Express was necessary to get that energy to Hannibal.  It's not.  Hannibal can purchase energy from anywhere and use the existing transmission system to get it to Hannibal.  That's what Hannibal does today, and plans to do for 80% of its future energy, according to the article.

But Bob loves Clean Line Energy Partners.  And the harder he loves on CLEP, the more bizarre this whole drama becomes.

Bob made a big show of the BPW board signing a "draft" power purchase agreement with the mysterious "Kansas Wind Farm."  Bob says it's not a tentative agreement because the word "tentative" is not in the agreement.

"The word tentative is not in the agreement. This is a real commitment to us. That's how we intend to pursue it," he said. "But we all realize that things can happen yet through rulings or studies where we might find a show-stopper type of condition. We reserve the right to go back and re-think (the situation). If nothing changes of any significance they would expect us to sign this deal and live by it."

So, it's a draft agreement that has no legal effect, and the BPW can go back and change it at any time?  That's a draft tentative option to purchase power.

tentative |ˈten(t)ədiv| adjective
not certain or fixed; provisional: a tentative conclusion.
done without confidence; hesitant.

Tentative.

But yet, Bob told the assembled audience that this tentative draft option would have some legal significance at the PSC.

The HBPW Board was asked to sign the draft agreement as a show of support for both the Missouri Joint Municipal Electric Utility Commission (MJMEUC) and Clean Line Energy as they prepare their testimony to the Missouri Public Service Commission seeking approval to construct the Grain Belt Express transmission line from wind farms in western Kansas, across Missouri, to the Hannibal area.

Among the blanks on the contract is the price Hannibal will be paying for the wind-generated power.

"The initial price for the energy and transmission service is still confidential. Those prices will be revealed to the public during Public Service Commission testimony. We are satisfied they are going to be in the $21 a megawatt (MW) range when they are finally revealed, or less," said Stevenson.

Let me get this straight -- despite GBE's current argument that contract drafts have no relevance to the issues at hand, in order to keep drafts of a prior "contract" out of the hands of the opposition, GBE is going to present Bob's ceremoniously-signed draft PPA as evidence, along with testimony about this new issue, to the PSC during surrebuttal?

Ha hahahahahaha!

How many things are wrong with that picture?  Surrebuttal is the only round of testimony yet to be filed.  Surrebuttal testimony must relate to issues raised in prior rebuttal testimony.  I didn't read anything about Hannibal, Bob, or his CLEP infatuation in rebuttal.  Different rounds of testimony act sort of like a funnel to whittle down and refine issues to be litigated.  Direct testimony is the company's story.  Rebuttal is the response of the other parties to the company's story.  Surrebuttal is the response of the company to the other parties' story, and the response of the other parties to each other's story.  New issues cannot be brought up in surrebuttal.

And while Bob says the price is "confidential," he turns around and claims it's going to be $21/MW.  Whoopsie!  Loose lips sink ships (and derail trains), Bob!

Ceremonious draft option agreements have no legal relevance.

Sorry.

Bob claims the City has "committed" to purchase power.  Not with a draft option agreement, it hasn't.

He also says there is real risk to the City from this draft option agreement.

Stevenson did acknowledge there is one "point of risk for the city."

"In the event that the transmission line is completed and the wind generators are for some reason late and can't deliver energy, this contract obliges us to start paying for the transmission service anyway," he said.

And then he says

Stevenson is not losing sleep over that possibility.

"The odds of the particular generators that would be assigned to us being late are very low," he said.

A liquidated damages clause is written into the contract to pay those transmission charges should the wind generators be late.

So, someone else would pay the transmission charges in the event that the generators would be late.  Risk?  This is risky for the City how?

And Bob seems to forget how much the City's buying into Prairie State has cost because the project ran late and over budget.  Now THAT was risky.

I don't know about you, but I'm calling Hollywood.  The risk of not turning this into a major made-for-TV drama is just too much for me!  Imagine the scene... modern city utility manager makes a brave and daring move to escape from the shackles of an "all in" energy management contract to provide energy and capacity for the city's needs.  Will he end up the hero behind a celebratory community energy faire where the city utility pays citizens to consume its cheap clean energy? Or will he end up the unfortunate villain who gets mired in complicated energy disasters that end with the municipality risking it all by playing roulette with rate increases and blackouts?  Stay tuned, Hannibal, stay tuned!

If Bob and his draft PPA show up in the witness chair at the PSC hearings next month, I'm going to be popping some corn in preparation for the pure entertainment that will ensue!  I'm pretty sure the Clean Line attorneys will break out their special "Expert Twitness Shock Collar" and make Bob wear it.  I can't wait!