Any entity that releases important information mid-day on Good Friday is up to no good. It's a cowardly and underhanded way to release bad news that you don't want the media to see. But see it they did. And since Moniz was probably busy stuffing his piehole with farm-fresh Easter goodies, nobody was available to answer questions from the media. So the media made crap up.
The DOE ought to be as ashamed of itself for its cowardly media release as it apparently is of its decision to "participate" in the Clean Line project. But now that we all know how ashamed they are, and terrified of the truth getting out, we'll be sure to spread the word. ;-)
Here are some of the worst lies that showed up in the media:
- The New York Times wins the award for stupidest lie with this: "Energy officials have been urging significant extensions and upgrades to the nation’s transmission system for years but there has been little new construction since the 1980s." What? The same Energy Policy Act that brought us this travesty also tasked FERC with handing out incentives to build transmission. Since the incentives started in 2007, more than $100B of "transmission spend" has been plunked down into the world's sweetest investment account where it earns double-digit returns on equity, even when the project is abandoned and never built! The NYT simply made up the fact that little new transmission construction has occurred since the 1980s. It's just not true! The Times also thinks, "The development, led by Clean Line Energy Partners, had been delayed because of resistance from state lawmakers,..." State lawmakers (as in legislators, right?) have nothing to do with state public utility commission approval of a transmission project. State PUCs are the ones who examine applications to build transmission projects and issue or deny permits. And the reporter tells us, "The decision also signals that the Obama administration remains committed to encouraging the spread of renewable energy, seen as a major component of reaching national goals on stemming climate change." So, transmission projects are built as part of a political agenda now? There's no planning involved in operating the world's largest machine? Political decisions will create a hodge podge of transmission lines and we're supposed to cross our fingers and hope the lights stay on? That's not how it works. Generation and transmission planning is an engineering issue, not a political one, but I can see how this reporter got confused due to DOE's choice to step into transmission planning to push a political agenda. DOE is now profiting from building its own politically-motivated electric grid. That frightens me.
- E&E Publishing warped time with its made up set of facts involving Clean Line's application to the DOE. "Clean Line's decision to seek federal participation in the project follows failure to win approval from utility regulators in Arkansas five years ago." DOE issued an RFP for Section 1222 projects and Clean Line was the only company to submit applications in 2010. Your story gets the date of the Arkansas Public Service Commission's rejection of Clean Line correct as 2011. How did the 2011 rejection happen before the 2010 application to the DOE? Lies! Dirty lies! Clean Line and the DOE were already in cahoots long before the Arkansas PSC rejected the project. Of course, can we blame E&E when they got their lie directly from the drippy lips of Clean Line President Michael Skelly? "In an interview with EnergyWire, Skelly said the company decided to seek approval under Section 1222 of the Energy Policy Act rather than lobby to change the decades-old definition of a public utility in Arkansas. 'Changing laws is quite a Herculean task,' he said." No, no, no... Skelly decided to seek "approval" for DOE to issue an RFP for his projects long before he'd even applied to be a public utility in Arkansas! And while he was on a roll, Skelly had some more lies to tell about the Federal government's role in electric transmission permitting and siting. Skelly, however, downplayed the significance of the federal government's role in interstate transmission projects:
"The federal government is involved in transmission and infrastructure siting around the country," he said, citing the government's role in siting and approving interstate natural gas pipelines.
The federal government played a big part in developing the bulk power grid across large swaths of the rural West.
"I think it's a mistaken notion that the federal government isn't involved in transmission," Skelly said. "The notion that this is unprecedented doesn't square up with the way the grid has been built and the way it will be built." Pipeline permitting and siting is a federal responsibility, while electric transmission permitting and siting is a state responsibility. Congress has long rejected a switch to Federal electric transmission siting and permitting. The closest it's ever gotten was these stupid loopholes in the '05 Energy Policy Act (Section 1222 and 1221) that don't stand up to judicial review. Skelly is the one "mistaken" about the federal government's role in transmission, in his desperate attempt to normalize the charlie foxtrot the DOE has just created. It is unprecedented.
- Sierra Club still owns the hypocrite award for its rather puzzling condemnation of the use of eminent domain for other regionally planned transmission projects it believes support fossil fuels, while supporting eminent domain use for the merchant Clean Line project. Sierra Club demonstrates just how little it knows about what it supports with this statement, "The decision comes after five years of review by DOE, and means the federal government will step in to help secure the transmission route, if and only if the developer can’t reach agreement with a state (Oklahoma and Tennessee have already endorsed the project)." This isn't about agreement with a state -- the DOE and Clean Line basically told the State of Arkansas to go blow and used Section 1222 to usurp the state's authority to site and permit a transmission project. And the use of 1222 to change the delicate state/federal balance is what has Arkansas and its Congressional delegation hopping mad. I have a feeling fallout will be swift and cutting. Sierra Club also demonstrates that it has no earthly idea how the grid (or merchant transmission) works by claiming Clean Line will exclusively deliver renewable energy and shut down fossil fueled generation plants. All transmission lines (all of them!) must abide by Federal open access rules, which means that all forms of generation must have equal opportunity to use them. The grid cannot separate "clean" from "dirty" electrons -- they all look and work the same. As well, nobody (and that means nobody) will be using Clean Line's capacity unless they pay for it. So, it's just not true that Clean Line will meander through Arkansas "dropping off" clean electrons for use by citizens in that state. It will only "drop off" mixed electricity if an Arkansas utility pays for the energy and transmission capacity. Ditto for other states in the "south and mid-south" Clean Line claims it will serve. Nobody gets anything unless they contract and pay for it. And Clean Line and the DOE cannot force any utility to buy capacity on a Clean Line. They can build it, but nobody may come. Therefore, there are no guarantees that "Clean Line Entities shall use all commercially reasonable efforts to ensure that at least 75% of the total Electrical Capacity covered by all Transmission Services Agreement that are then in effect to be covered by Transmission Services Agreements used for the transmission of renewable energy resources." (From DOE/Clean Line Participation Agreement). All this happy clean energy talk is just that... nothing but talk. And most of it is not true.
- Transmission and Distribution World makes up an alternate reality for the purpose of Section 1222 and the contents of DOE's political agenda set forth in the 2015 Quadrennial Energy Review. "This marks the first use of Congressional authority conferred to DOE as part of Section 1222 of the Energy Policy Act of 2005 with the objective of promoting transmission development. Congress passed this provision when it was becoming clear that our nation’s transmission infrastructure was beginning to show its age and needed modernization. Congress recognized the need for a modern and resilient grid that could accommodate increasing demands for power with newly available resources. Based on our thorough review of the Clean Line project, it satisfies the goals for which Congress established DOE’s authority. The project will, if built, address infrastructure challenges outlined in the 2015 Quadrennial Energy Review (QER), which focused on Energy Transmission, Storage and Distribution Infrastructure. The QER acknowledged the importance of establishing transmission lines to facilitate remote generation development of renewable energy. The QER found that new long-distance transmission capacity like Clean Line has the potential to enable lower-carbon electricity, enhance system reliability and operate at a reasonable cost to consumers." The 2005 Energy Policy Act was a political agenda developed by the energy industry to increase the use of fossil fuels and build more energy infrastructure from which energy industry profits are derived. Remember Cheney's Secret Energy Task Force? Yup, that was it. The QER, a facet of Obama's political agenda, not Congressional action, made no mention of Section 1222 or forcing new centralized transmission infrastructure like Clean Line. T&D World simply made it all up.
- American Wind Energy Association chief executive officer Tom Kiernan believes he knows what rural America wants and needs. “The DoE’s decision is a critical milestone that will open up the spigots for billions of dollars in private investment, economic opportunity in rural areas that need it most and potential savings for American consumers.” I don't believe Kiernan speaks for rural America. He speaks for wind energy developers who make money off rural America's sacrifice. What an arrogant thing to say, Tom!
- Bloomberg (whose "Philanthropies" division gave $50M to Sierra Club's Beyond Coal Campaign) pretends that "U.S. regulators" have been "pushing to clear" a Clean Line. "The approval highlights a potential workaround for some U.S. transmission developers who have for years dealt with regulatory delays and roadblocks at the state level while trying to site new power lines. The statute gave the Energy Department authority to clear interstate projects co-sponsored by either of two of its four public power agencies. It’s just the latest twist in the battle over transmission siting between state and federal agencies as U.S. regulators push for stronger, multi-state lines capable of moving renewable power to where it’s needed." Not true! DOE is not a "regulator," and its involvement in transmission is political, not regulatory. The regulatory side of transmission (which deals with planning and rates only, not siting or permitting) is handled by the Federal Energy Regulatory Commission. What does "clear" mean? It means nothing! The word that Bloomberg wanted to put in there is "permit," but that would be untrue. What the DOE's decision does is force its federal power marketer, Southwestern Power Authority, to own the transmission project for the express purpose of avoiding state regulatory review. As a Federal agency, SWPA is not subject to state transmission or eminent domain laws. It's simple avoidance, not permitting, or "clearing." In addition, Bloomberg fails to acknowledge DOE's inclusion of an "Acquisition Option" in the Participation Agreement whereby Clean Line and DOE may enter into a deal to allow Clean Line to acquire DOE's ownership in the project, once it's built. If that happens, this entire Participation Agreement and its requirements disappear forever. "7.2 Acquisition Option.
(a) After the Effective Date, Holdings and DOE shall discuss and determine whether, under Applicable Law, DOE may grant to Holdings (or its nominee, assignee ordesignee) an option to acquire from DOE the DOE Acquired Real Property and AR
Facilities after the Termination Date (the “Acquisition Option”). To the extent DOE
determines that such an Acquisition Option may be granted under Applicable Law, DOE and Holdings shall cooperate in good faith to enter into an agreement to set forth all ofthe terms, conditions and procedures under which such an Acquisition Option may be exercised by Holdings (or its nominee, assignee or designee)." *cough* no intention of ever owning the project *cough*
- SNL also has a time warp failure, insisting that Section 1222 of the 2005 Energy Policy Act was Obama's invention. "Plains and Eastern is now the first transmission project to partner with the DOE under Section 1222 of the Energy Policy Act of 2005, an obscure provision that the Obama administration hoped would spur big expansions in the nation's electric grid." SNL also either spills some proprietary beans, or makes up other bidders under DOE's Section 1222 RFP. "But although the DOE talked to several developers interested in Section 1222, Plains and Eastern ended up as the only application under DOE review." As far as the information DOE has made public, Clean Line was the ONLY company to submit projects in response to DOE's cozy RFP. SNL also reports that Skelly believes he can obtain the majority of needed right of way through voluntary negotiations, despite entrenched landowner opposition all along the line's proposed route. "While Clean Line has said it would only use eminent domain as a last resort and that the vast majority of the line's right-of-way would come through voluntary negotiation with landowners, in many of the states where Clean Line has proposed to build transmission lines it has faced strident opposition from landowner groups and local politicians who accuse the developer of attempting to trample on property rights." Don't count your chickens before they hatch, Clean Line, and don't expect that any landowners believe a word you say at this point. Based on my conversations with affected landowners, you're probably going to be seeing some major and widespread Bundy Ranch before the Feds build your project on privately held land.
- Jobs fiction. Depending on the article, thousands of jobs will be created by this project. What they mean are fictional supply chain job numbers created by spreadsheets fed by number crunchers. These aren't actual jobs constructing the project. They're economic development fiction, where an investment of a certain dollar figure theoretically creates a "trickle down" of jobs. It includes things as insignificant as an increased number of fast food lunches purchased by transient skilled workers. Constructing transmission lines is a highly skilled and specialized occupation which is accomplished by a small number of companies whose workers travel from job to job. These aren't long-term jobs for local people. You locals get to sell the extra Big Macs and clean the cheap hotel rooms transient workers dirty.
- Clean Energy fiction. All the articles, in one way or another, presented the fiction that this project is restricted to delivering renewable energy. It's not. Clean Line is a transmission line. Transmission lines are subject to open access regulations. Any generator can use any transmission line -- there is no such thing as a "clean energy only" transmission line. In addition, the grid does not recognize the difference between "clean" and "dirty" electrons. They're all the same color once they enter the transmission system. All sorts of dirty electrons are going to sneak onto a "clean" line. Even though DOE's Participation Agreement stipulates: "8.27 Renewable Energy Transmission. At any time during which any Transmission Services Agreements are in effect, the Clean Line Entities shall use all commercially reasonable efforts to ensure that at least 75% of the total Electrical Capacity covered by all Transmission Services Agreement that are then in effect to be covered by Transmission Services Agreements used for the transmission of renewable energy resources..." DOE also recognizes it can't enforce this stipulation, "...provided that, to the extent the
transmission of energy from non-renewable resources is required by Applicable Law (including
pursuant to any open access tariff rules), such events would not render the underlying
Transmission Services Agreement from being disqualified toward the 75% threshold." Therefore, non-renewable energy will be counted as renewable energy for purposes of ensuring that 75% of the energy is renewable. Wow! Just wait until the fossil fuel industry hears about this magic trick for turning "dirty" energy into "clean" energy with the stroke of a pen! *cough* fig leaf *cough*
- Low-cost energy! Skelly and the DOE like to pretend that energy delivered by the project will be "low-cost." But the generators who will use the line have yet to be priced or built. In addition, the Federal Production Tax Credit that currently reduces wind generation costs by 2.3 cents per kwh is being phased out beginning in 2017. Unless the wind industry can get all these wind farms built before the end of this year, the tax credit will begin being phased out through credit reductions. All credit reductions will be added to the cost of generation. Low-cost? Nobody knows! And the firm cost of buying energy via Clean Line is going to make or break any deals for firm Transmission Service Agreements that Clean Line needs before moving forward. The proof will be in the pudding, and the pudding isn't done yet.
- Reliability. Both Skelly and Moniz made statements in the media that this project will increase reliability by connecting three transmission regions. Use of the word "reliability" should make your blood run cold, if you pay an electric bill. Clean Line has previously made comments at regional transmission organizations purporting that because its lines could increase reliability, all ratepayers in the region should pay for them (instead of Clean Line using the "merchant" model where only users of the lines pay for them). It's not that the regions have reliability problems that need to be solved by Clean Line projects, but that its projects will increase reliability simply by existing, and that all ratepayers in the region would benefit from increased reliability, therefore all ratepayers should pay for the Clean Line projects. While it remains to be seen whether Clean Line will resurrect its arguments in an attempt to have ratepayers in SPP, MISO, and SERC cover its cost of building this line, the possibility is on the table.
- Protections for landowners, taxpayers and ratepayers. DOE thinks that its Participation Agreement provides protections? I don't think so. In fact, I've seen better protections in lines approved by state regulators. In a future blog post, I'll review the landowner "protections" the DOE included. Don't hold your breath. It's another fig leaf.
- DOE held 15 public meetings and numerous opportunities for written comments from stakeholders. DOE wants to take more than 700 miles of right of way from private landowners and it held only 15 public meetings? It also failed to notify many affected landowners that the meetings were being held. This is a travesty of "public participation" and certainly nothing to brag about.
- DOE says eminent domain will be used "only as a last resort." But if it's the last resort, it's also the first resort when attempting to coerce landowners to sign voluntarily. There is no such thing as a completely voluntary agreement when the specter of eminent domain is on the table. All negotiations would be held with that elephant in the room, a hammer hanging over the landowner's head if they don't agree. This is the definition of coercion, even though the Participation Agreement stipulates that "Land Agents will not use coercive action to
induce an agreement on price or terms." *cough* window dressing *cough*
- DOE says the Arkansas converter station was included in response to public input. Except I never saw one public comment that asked for an Arkansas converter station. In fact, no Arkansas utilities expressed a desire to purchase any of Clean Line's capacity, so why would they request an Arkansas converter station? The Arkansas converter station is a creation of Clean Line and DOE used to pretend that there's a benefit to Arkansas and it's not merely a "fly over" state. It is a flyover state, and no Clean Line capacity will be used by Arkansans unless an Arkansas utility signs a contract to purchase it. That may never happen. What then? Will the plans for an Arkansas converter station disappear? Why build a converter station that nobody is using?