Supplemental to the Order on Remand FERC issued last Friday, two of the Commissioners also issued statements explaining their decision.
Commissioner Norris's statement was a basic agreement with the Order and a hope that FERC's decision won't be used as a model for Order No. 1000 cost allocation methods.
However, Commissioner Moeller preferred to explain how western PJM will "benefit" from Project Mountaineer transmission lines that were intended to transport 5,000 MW of "cheap" coal-fired electricity from the Ohio Valley to eastern markets and lower high electricity prices on the east coast.
"Long-distance transmission lines are constructed because they greatly reduce the cost of electricity in comparison to the alternatives. Without long-distance transmission lines, energy consumers would need to construct enough local generating plants to ensure the availability of power. The cost of building smaller and local generating plants can be overwhelming in comparison to the cost of building a new transmission line. The cost can be especially high when local requirements make the construction of a generating plant effectively impossible."
That's only true when the cost of the transmission line is shared by the entire region, whereas the cost of local generation is paid by those who would benefit from it.
"In addition to the often overwhelming benefits of building a network of long-distance transmission lines, energy consumers at both ends of a transmission line often receive substantial benefits from the line. Even when a transmission line is directional, in the sense that power on the line tends to flow from regions where power is less costly to regions where power is more costly, energy consumers receive benefits on both ends of the transmission line. These benefits on both ends of the line derive generally from economies of scale and the efficiency of sharing the power that can be produced by generating plants. For example, the linkage of two cities by a transmission line can result in lower power prices in both cities due to the lower costs associated with the need to have fewer generating plants “spinning” as a reserve, but prices can also be reduced by building larger generating plants and by expanding the options for locating plants, so that plants can be located and sized at lowest cost. "
That's how it used to work, however, things have changed. West Virginia exports something like 80% of the electricity produced in the state, and 99% of the electricity produced in West Virginia comes from burning coal. Our rates used to be low because of the sale of exports, but a huge sea change is occurring. Demand is decreasing in traditional export markets due to implementation of demand management, increased efficiency and the availability of local renewables. West Virginia's former electric purchasers don't want our dirty, coal-fired power any longer and they aren't buying it. In addition, the price of coal has skyrocketed, while the cost of natural gas has fallen, making the east coast's gas-fired plants a cheaper option for purchasing power. As a result of this, West Virginians are being required to pick up the slack and make up for power sale losses through huge rate increases. More transmission lines from West Virginia to the east coast are NOT needed!
"Even under an assumption that prices to some energy consumers will rise as a result of a new transmission line, the FERC, as a regulator concerned with interstate commerce, cannot favor prices in one state at the expense of the region. Plus, it is difficult to raise prices merely by increasing the ability of the power grid to transfer energy."
But that's exactly what you are doing in your order! You are favoring the east coast with lower prices by building transmission lines intended to reduce economic "congestion" at the expense of the entire region.
"Using a simple example in a different market, strawberries are not more expensive in California because strawberries can also be shipped to New York. Rather, strawberry farmers will grow fewer strawberries if they cannot sell strawberries to New York. But even assuming that local power prices are higher when markets expand, lower power prices are not the only benefit associated with transmission. Arguably the most important benefit of the transmission network is not the access to markets, but the increase in the reliability of the entire network. As stated above, the benefits of avoiding one blackout can far exceed the entire cost of a transmission line. While strawberries need to be consumed quickly or they become worthless, electricity differs in that it must be used instantly due to constraints imposed by physics. Also, while preparing land and acquiring water rights for strawberry farming can be capital intensive and requires advance planning, power plants involve substantial risk in that they require extensive capital investment long before revenues can be recovered."
Perhaps Commissioner Moeller is unfamiliar with West Virginia's "strawberry farm." These are the "benefits" West Virginia reaps from it's production of "strawberries."
Environmental Effects of Coal Mining
Coal Impoundments
Political/Social Effects of Coal Mining
The Dirty Truth About Coal
And don't forget those transmission lines which transport all that sweet, juicy, "strawberry" goodness to Washington, D.C. and other markets, such as these transmission corridors through Jefferson County, West Virginia.
Commissioner Norris's statement was a basic agreement with the Order and a hope that FERC's decision won't be used as a model for Order No. 1000 cost allocation methods.
However, Commissioner Moeller preferred to explain how western PJM will "benefit" from Project Mountaineer transmission lines that were intended to transport 5,000 MW of "cheap" coal-fired electricity from the Ohio Valley to eastern markets and lower high electricity prices on the east coast.
"Long-distance transmission lines are constructed because they greatly reduce the cost of electricity in comparison to the alternatives. Without long-distance transmission lines, energy consumers would need to construct enough local generating plants to ensure the availability of power. The cost of building smaller and local generating plants can be overwhelming in comparison to the cost of building a new transmission line. The cost can be especially high when local requirements make the construction of a generating plant effectively impossible."
That's only true when the cost of the transmission line is shared by the entire region, whereas the cost of local generation is paid by those who would benefit from it.
"In addition to the often overwhelming benefits of building a network of long-distance transmission lines, energy consumers at both ends of a transmission line often receive substantial benefits from the line. Even when a transmission line is directional, in the sense that power on the line tends to flow from regions where power is less costly to regions where power is more costly, energy consumers receive benefits on both ends of the transmission line. These benefits on both ends of the line derive generally from economies of scale and the efficiency of sharing the power that can be produced by generating plants. For example, the linkage of two cities by a transmission line can result in lower power prices in both cities due to the lower costs associated with the need to have fewer generating plants “spinning” as a reserve, but prices can also be reduced by building larger generating plants and by expanding the options for locating plants, so that plants can be located and sized at lowest cost. "
That's how it used to work, however, things have changed. West Virginia exports something like 80% of the electricity produced in the state, and 99% of the electricity produced in West Virginia comes from burning coal. Our rates used to be low because of the sale of exports, but a huge sea change is occurring. Demand is decreasing in traditional export markets due to implementation of demand management, increased efficiency and the availability of local renewables. West Virginia's former electric purchasers don't want our dirty, coal-fired power any longer and they aren't buying it. In addition, the price of coal has skyrocketed, while the cost of natural gas has fallen, making the east coast's gas-fired plants a cheaper option for purchasing power. As a result of this, West Virginians are being required to pick up the slack and make up for power sale losses through huge rate increases. More transmission lines from West Virginia to the east coast are NOT needed!
"Even under an assumption that prices to some energy consumers will rise as a result of a new transmission line, the FERC, as a regulator concerned with interstate commerce, cannot favor prices in one state at the expense of the region. Plus, it is difficult to raise prices merely by increasing the ability of the power grid to transfer energy."
But that's exactly what you are doing in your order! You are favoring the east coast with lower prices by building transmission lines intended to reduce economic "congestion" at the expense of the entire region.
"Using a simple example in a different market, strawberries are not more expensive in California because strawberries can also be shipped to New York. Rather, strawberry farmers will grow fewer strawberries if they cannot sell strawberries to New York. But even assuming that local power prices are higher when markets expand, lower power prices are not the only benefit associated with transmission. Arguably the most important benefit of the transmission network is not the access to markets, but the increase in the reliability of the entire network. As stated above, the benefits of avoiding one blackout can far exceed the entire cost of a transmission line. While strawberries need to be consumed quickly or they become worthless, electricity differs in that it must be used instantly due to constraints imposed by physics. Also, while preparing land and acquiring water rights for strawberry farming can be capital intensive and requires advance planning, power plants involve substantial risk in that they require extensive capital investment long before revenues can be recovered."
Perhaps Commissioner Moeller is unfamiliar with West Virginia's "strawberry farm." These are the "benefits" West Virginia reaps from it's production of "strawberries."
Environmental Effects of Coal Mining
Coal Impoundments
Political/Social Effects of Coal Mining
The Dirty Truth About Coal
And don't forget those transmission lines which transport all that sweet, juicy, "strawberry" goodness to Washington, D.C. and other markets, such as these transmission corridors through Jefferson County, West Virginia.
And these are just the existing 50 year old (or older) transmission lines. Project Mountaineer aims to add an additional, larger line (PATH) parallel to the existing corridor, expanding it another 200 feet, right on top of many of the homes shown in the photos.
Project Mountaineer's TrAIL project gave West Virginia a taste of "fresh strawberries," demonstrating what construction of new transmission lines will mean for the people and environment.
Maybe the people of West Virginia (not including paid-off politicians and the greedy, out-of-state corporations who own West Virginia generation and transmission) are tired of "farming strawberries" in exchange for "benefits" like those shown above.
Perhaps Commissioner Moeller should take a tour of The Mountain State, while we still have a few mountains left, and find out exactly how his "strawberries" are farmed and transported to market.
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