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Knock, Knock, Kansas!  The Trojan Horse Is At Your Gate

1/6/2019

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What's the difference between Clean Line Energy Partners and Invenergy?  CLEP's business was only transmission.  Invenergy's says it "...owns and operates large-scale renewable and other clean energy generation."  Invenergy is primarily a generation company, although it owns a small number of generation tie lines that connect its generation to open access transmission lines for public use.

Clean Line
wanted to build merchant transmission for sale under FERC's negotiated rate authority, and its plan to negotiate rates without any undue preference for its own generation affiliates was approved.  Clean Line does not own any generation, making this factor a non-issue in its FERC application.  But now Invenergy seeks to purchase the Grain Belt Express project.  This changes the circumstances of GBE's FERC negotiated rate authority considerably.  But yet... Clean Line and Invenergy claimed during testimony at the Missouri PSC that there's nothing they need to do to transfer GBE's negotiated rate authority to a new upstream owner with generation interests.

I simply don't believe you.  In fact, I wonder if Invenergy doesn't plan to sell transmission capacity at all?  Perhaps Invenergy plans to operate Grain Belt Express as the longest generation tie line in the U.S., where it will enjoy protection from transmission service requests of others under FERC's Interconnection Customer’s Interconnection Facilities (ICIF) rules?

Invenergy has applied to the Kansas Corporation Commission for expedited approval of its proposed transaction to purchase Grain Belt Express.  In actuality, Invenergy simply wants the KCC to approve its assumption of GBE's public utility status and siting permit.  These approvals were issued years ago based on Clean Line's ownership and business plan.  Invenergy says, "Invenergy is highly qualified to become the owner of GBE, and operate the GBE Project."  But is it qualified to be a public utility in Kansas, and is it qualified to wield the power of eminent domain to take private property for its own use? 

That's the real question before the KCC.  If Invenergy is granted public utility status, does that mean that it can condemn and take any property in Kansas for its use, such as to build new wind farms and other generation assets?  Or could the KCC somehow limit Invenergy's eminent domain authority to its transmission subsidiary, in which case Invenergy would have authority to condemn and take property for any new transmission line it intended to build, including generation tie lines that aren't for public use?  The Kansas Corporation Commission needs to think long and hard here about welcoming the trojan horse Invenergy has towed up to its gate.  I really hope they're capable of independent thought in the best interest of Kansas and don't become distracted by secret meetings and brimming bowls of vanilla panna cotta.

How about this for some distraction:

Expedited approval of the Transaction is warranted here because the Transaction does not involve the merger of two public utilities that are rate-regulated by the Commission; rather, it involves a transaction at the holding company level of GBE, a public utility that is not rate-regulated by the Commission, that will improve the capability of GBE to complete the Project. Therefore, many of the traditional state and local concerns with regard to public utility mergers are not implicated by the Transaction.
Concentrate, concentrate, KCC, on the merger of public utilities issue (it looks like a horse) and fail to notice the words "public utility" that are mentioned no less than three times in one short paragraph (and may indicate an army hiding somewhere).

What makes a "public utility" in Kansas?  According to KSA 66-101a, "Electric public utility" means any public utility, as defined in K.S.A. 66-104, and amendments thereto, which generates or sells electricity."  Hmm... GBE doesn't plan to generate or sell electricity.  KSA 66-104 vaguely mentions the furnishing of light, heat, or power... but GBE will do none of these things in Kansas.  And KSA 66-104(g) says
For purposes of the authority to appropriate property through eminent domain, the term "public utility" shall not include any activity for the siting or placement of wind powered electrical generators or turbines, including the towers.
It sure looks like Kansas statute prevents the use of eminent domain for activity related to wind powered electrical generators or turbines, including the towers.  Towers?  Like transmission towers?  Like generation tie lines?  Like transmission lines for export that don't intend to furnish light, heat or power to Kansans?  Do you mean that, Kansas?  It's not clear at all that Clean Line, much less Invenergy, is a legal public utility in Kansas.  In fact, it appears that the determination that GBE is a public utility in Kansas was made in a settlement, therefore there was no actual legal finding by the KCC that GBE is a public utility.  Parties to a settlement could agree that the sky is purple, if it suited them.  Settlements don't set precedent.

Therefore, the circular logic of Invenergy's Kris Zadlo does not make Invenergy a public utility if it buys Grain Belt Express.
The proposed Transaction will benefit consumers by improving the ability of GBE to complete the Project. In granting GBE a certificate to operate as a public utility, the Commission found that completion of the Project would be in the public interest.
So, will the real public utilities in Kansas intervene in this docket and shed some light on the Trojan Horse at the gate?  It seems some of them objected last time around, with ITC Great Plains getting its panties in a wad over the use of eminent domain for the unidentified "AC Collector System" proposed as part of GBE.  How many Kansas utilities are going to in a bind if a wind generation company begins wielding eminent domain authority in the state?  Or building transmission that the public utilities are not allowed to use?

Or perhaps a sneak attack is going to come from one of Invenergy's competitors, such as, oh I dunno... maybe NextEra?  Or maybe it will be Tradewind Energy?  Or Enel North America?  EDP?  Why should Invenergy get to use eminent domain to acquire property in Kansas when their own companies are prohibited from doing so under KSA 66-104(g)?

The mystery will continue until "at least three days before the hearing", which is the deadline to intervene under KSA 82-1-225.

Meanwhile, perhaps KCC staff will enjoy watching this video.
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    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.

    About
    StopPATH Blog

    StopPATH Blog began as a forum for information and opinion about the PATH transmission project.  The PATH project was abandoned in 2012, however, this blog was not.

    StopPATH Blog continues to bring you energy policy news and opinion from a consumer's point of view.  If it's sometimes snarky and oftentimes irreverent, just remember that the truth isn't pretty.  People come here because they want the truth, instead of the usual dreadful lies this industry continues to tell itself.  If you keep reading, I'll keep writing.


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