Landowner Says Clean Line is Armed Robbery

Here we go again with the Clean Line news articles full of misinformation.  This time, the lies are about the company's Plains & Eastern Clean Line project in Oklahoma, Arkansas and Tennessee.

Hiding amid the lies and half-truths is one nugget of news, however.  Clean Line is now purporting that it will build a $100M HVDC converter station in Arkansas in an attempt to provide some "benefit" for the state.  In 2011, the Arkansas PSC denied Clean Line's application to become a public utility in the state so that it could use eminent domain to take land for its project against the owners' will.  The APSC based its denial on the lack of benefits to the state from the transmission line, that Clean Line proposed would begin and end in other states like a highway with no on or off ramps for local use.

Claims that the company will build a converter station for local use seem to be sprouting like weeds.  But, what guarantee does any state have that Clean Line would actually build one?  If it receives a permit, Clean Line could once again change its plans, taking the local converter station off the table, laughing all the way to the bank.

The midpoint converter stations are very expensive and only plan to make available a miniscule portion of the project's capacity.  For the 3500 MW Grain Belt Express, the converter station is being touted as making "up to" 500 MW available.  For the Plains & Eastern project, this article says the converter station will make available "up to" 250 MW of the project's 3500 MW capacity.  The rest of the capacity is slated to be made available to eastern states where electricity commands a higher price.  And that's how Clean Line intends to make its money -- selling electricity in richer markets that have certain minimal renewable energy purchase requirements.  These "public policy" renewable portfolio standards require load serving entities in eastern states to generate or purchase a certain percentage of renewable energy, no matter the cost.  This is the market Clean Line is desperately trying to reach. 

So, let's think about that.  Clean Line is pretending it will "make available" miniscule amounts of its capacity in pass-through states in exchange for the ability to take private property from the state's citizens.  "Make available" means exactly that -- make available for purchase by load serving entities in states like Arkansas or Missouri.  However, if local LSEs can purchase lower cost power, they must do so.  Clean Line is priced for the east coast, not Missouri or Arkansas.  While the wind power generated in the Midwest may be "cheap" by east coast standards, building a "Clean" Line to transport it more than doubles the delivered price of the electricity.  Chances are no local load serving entities will contract to purchase ANY of this power, obviating the need for any mid-point converter stations after permits are granted.  Don't be fooled!

Don't be fooled by the article's misinformation either.  Here's where the reporter (or the president of Clean Line) got the information wrong:

The project, called the Plains & Eastern Clean Line, won’t break ground until 2016, but the company behind it — Clean Line Energy Partners — announced this month that it would build a $100 million convertor station along the line’s route, somewhere in central Arkansas.

But as initially planned, the project would have had little effect on Arkansans beyond creating some jobs through the construction period. The line traveled from Oklahoma east through Arkansas, but Clean Line’s electricity wouldn’t have stopped in Arkansas along the way.

This was the basis of the Arkansas Public Service Commission’s 2011 denial of Clean Line’s attempt to be recognized as a utility in the state. Becoming a utility would have meant the company could have used eminent domain in creating the route for its new lines.

However, that changed when Skelly announced the convertor station at this month’s Little Rock Sustainability Summit at the Clinton Presidential Library.

This project won't "break ground" until it is fully permitted, and obtaining permits is still highly speculative.  Just because Clean Line has tried to create a smokescreen of "benefit" for Arkansas does not automatically buy them a permit.

A spokesman for the company said the station “was a significant change in the scope of the project” that was “not initially intended” for it, noting that it was expressly requested by the PSC and by landowners.

WTF, Clean Line?  No landowner ever requested a converter station in Arkansas.  The few landowners who knew about your project rejected it in totality.

Clean Line is a private transmission company in Houston. It develops projects that connect renewable generation points between states.

The Plains & Eastern project is one of five Clean Line transmission projects underway in the country, and the only one that passes through Arkansas.

The new line would mean many new customers for the company.

Clean Line only exists on paper.  This start-up has never built anything and probably never will.  It has no customers... at all.  The company has signed an agreement to allow its biggest investor, European transmission giant National Grid, to purchase the entire collection of projects in the pre-construction phase.  If Clean Line can spin enough lies to get a handful of permits, it absconds with a bundle of cash and a new company takes over ownership of any projects.  Research on Clean Line's principals reveals a history of exactly this kind of behavior.  Many of Clean Line's management, who have personally invested in the company, have a history of building wind energy companies and then flipping them for huge profit.  They probably should have stayed in their own area of expertise because they're in way over their heads playing transmission company.

It has been in the works for the past half-decade and will build two lines intended to connect the Midwest’s wind resources to surrounding areas with less potential to generate wind, such as Missouri and southern Indiana. About 7,000 megawatts of power in Oklahoma would become available to surrounding states.

Actually, that 7,000 MW plan for two lines got scrapped several years ago as overly ambitious.  Or, did it?

“Because this is an interstate project, it has to go through the federal permitting process,” Skelly said. “We’re in the middle of that [process]. What it basically does is look at a series of routes, and we take all that information which our different stakeholders use to come up with a route.”

There is no requirement for federal permitting just because a project is "interstate."  Transmission permitting is state jurisdictional.  A project must receive a permit from every state through which it passes.  Except when a state denies a permit... then a transmission owner can attempt to preempt local authority to take advantage of a couple of arcane loopholes in the 2005 Energy Policy Act.  It is only then that federal permitting becomes necessary.  And still, the federal authority Clean Line is attempting to acquire only gives it the power of eminent domain.  It does not anoint Clean Line with state utility status to build a project.  We'll just assume that the U.S. Department of Energy is going to take on the role of transmission builder for this project and then re-sell it back to Clean Line after it's constructed, right?

A lot of the job, he said, is getting the word out about the job to county officials, state agencies and environmental groups to determine the route of the line.

“Because this is an interstate project, it has to go through the federal permitting process,” Skelly said. “We’re in the middle of that [process]. What it basically does is look at a series of routes, and we take all that information which our different stakeholders use to come up with a route.”

Currently, the U.S. Department of Energy is working with states and local agencies to gather input on the line’s proposed route.

The permitting process overall, Skelly said, is expected to conclude in spring 2015.

“We hope to break ground in a year after that — at some point in 2016,” he said. “This is like any large infrastructure project. It takes a long time to work through the issues and come up with a proper design and take into account the stakeholders’ interests. These things take a long time. As things go, we’re moving at a reasonable pace.”

So, when is Clean Line planning to consult the landowners about the route of its line?  Because landowners, in Clean Line's world, aren't stakeholders.  They're just the folks who have to sacrifice their properties for Clean Line's profit.

No matter.  The landowners aren't waiting to be invited.  As my friend Joel says in the article's comments:

"Clean" Line is intent upon getting eminent domain authority. That's why their plan has changed to include the central Arkansas converter station. The company wants to force Arkansas landowners and homeowners to allow huge transmission towers on their property. This is a private venture, backed by a few out-of-state billionaires. They refuse to acknowledge that these towers will lower the property value of the landowners and homeowners. Anyone with an ounce of common sense would know that property values will plummet where a 200' steel lattice tower is constructed. So the out-of-state billionaires make huge profits while Arkansas landowners and homeowners lose real estate equity. It can't happen without state or federal eminent domain authority. I think of it like armed robbery, but in this case the robbers don't have to hold the guns. They will have state or federal law enforcement holding the gun to the heads of Arkansas landowners and homeowners.