Rock Island Clean Line Could Lock Chicago Area Residents into Paying More for Dirty Energy

That's the headline the Chicago Sun Times should have used on its recent article about Clean Line's Rock Island project.  Instead, the Sun Times reporter took the lazy way out by printing the unverified and grandiose claims of RICL developer Hans Detweiler as if they were facts.

The correct information was right there for the reporter's perusal on the Illinois Commerce Commission docket, or she could have looked at some of the testimony quotes on BlockRICL's website.  BlockRICL doesn't have to rely on spurious sound bites to spin the media, only the truth of the testimony at the ICC.

So, let's take a look at where the Sun Times reporter resorted to lazy "journalism":

Within three years, some Chicago area residents could be saving money on their electric bills, thanks to power generated 500 miles away.

Adding wind energy to the grid should push wholesale electricity prices down, Detweiler said. He thinks Illinois consumers could save about $320 million after the line’s first year.

“Wind is stranded because of a lack of transmission lines,” said David Kolata, executive director of the Citizens Utility Board, which represents the interests of utility customers in Illinois.

The Clean Line, he added, “has the potential to bring in a lot of low-cost power.”

The savings suggested by Detweiler are an estimate, but “there’s no question that it would reduce prices in Illinois,” Kolata said.

Rock Island Clean Line has no generators and no contracts.  There's absolutely nothing to back up all these statements about "low-cost power."  None of the people quoted have any idea how much the electricity RICL proposes to import to Chicago will cost.  The only thing that's certain is that the power will have the cost of building the transmission line added to its price.  RICL has estimated that its line will add $25 MWh to the delivered generation cost at its proposed injection point south of Chicago.  Additional transmission charges will be added from that point to ultimate end users.  RICL doesn't care if its delivered price is higher than other available sources in the Chicago market because that market isn't RICL's real target.  RICL is aiming to be competitive in east coast electricity markets, where electricity is much more expensive than in either Illinois or Iowa.

When there is a glut of power in a constrained market, prices remain low because generators must compete with each other to serve a smaller load.  However, when new pipelines are opened from the cheap, constrained market for power to flow to higher priced markets, it has the effect of levelizing prices between the two markets.  While the recipients of RICL's load on the east coast could see a reduction (and even that is doubtful), the markets on the source side of the transmission lines will see their energy prices go up as local load must now compete with the higher priced markets to the east.  RICL will absolutely increase electricity prices that would exist in Iowa without the project, and since Chicago is not RICL's intended market, but only a pit stop to inject power into the PJM grid, RICL will also raise prices in Illinois.

Note also that the Citizens Utility Board guy isn't even a party to the RICL case at the ICC.  His "unquestionable" claims about prices aren't based on evidence.  The actual ICC evidence shredded Detweiler's cost savings claims.

The $2 billion Rock Island Clean Line would take 3,500 megawatts of power created by thousands of wind turbines in Iowa and deliver it to Illinois. The project could be completed by 2017.

“As a nation [we] are moving toward renewable energy resources. We need a grid that reflects where those energy sources are found,” said Hans Detweiler, director of development for the project.

Wind-generated electricity could help Illinois meet renewable energy standards. By law, one-fourth of the energy used in Illinois must come from renewable sources by 2025.

And there is demand for renewable energy sources. Some Chicago suburbs seek out green energy through a process called “aggregation,” in which the suburb buys green energy in bulk for the community and passes along the savings, if any.

In Evanston, aggregation saved the average household $264 in its first year, said Jonathan Nieuwsma, vice president of Citizens for Greener Evanston.

There is no guarantee that RICL will deliver even one electron of renewable power.  Under federal open access transmission rules, RICL must offer capacity on its transmission line to all generators.  RICL is assuming that wind generation will be built in the resource area, and in such quantities that wind generation can supply a constant 3500 MW of energy.  RICL plans to sell capacity on its line to wind generators, who may only use a fraction of their purchased capacity due to the variable output of wind generators.  This will create a secondary market for transmission capacity that may be purchased by steadier, base load fossil fuel-generated electricity, even if RICL sells all available capacity to these as yet unbuilt wind farms.  Will these wind farms actually get built?  Without government subsidies, who knows?  Every time the PTC expires, so does the desire to build a wind farm.

Clean Line's claims that its project will deliver renewable electricity are just as spurious as their claims that the project will lower prices.  In fact, Clean Line's renewable power fan dance is under protest at FERC.

The reporter did no analysis on whether or not RICL is needed to meet Illinois renewable portfolio standards, nor whether it is the cheapest renewable resource available.  In fact, Clean Line is looking hungrily at RPS in east coast states, where it believes its product may be cost competitive.  While Clean Line may have played with the numbers to make it look like this was true several years ago, the reality is that more renewables are coming online in the east, and renewable prices are falling.  And what happens if RICL is no longer economic when it comes time to sign power purchase agreements?  The company won't build it.  But yet, the company is asking Illinois regulators to ORDER it to build the project so that it may take land from the people of Illinois at cheap prices.  The cheaper RICL's land purchases, the lower its delivered price will be.  RICL is asking the state to take from its citizens in order to make a private investment company profitable.  That's not the intent of eminent domain authority for utilities.

Aggregation is just a fancy word for deregulated electricity markets, where political subdivisions can use their collective buying power to negotiate lower prices from competitive suppliers.  Aggregation may have saved consumers money overall, but more expensive renewable energy had nothing to do with that.

The Sun Times article also contrasts the opinions of two landowners who will be affected by the project... without ever using the words "eminent domain."  And that's the biggest sticking point of this proposed project.  It intends to keep its development cost low by taking land through eminent domain at ultra-low prices.  One landowner "thinks" he will be treated fairly, but he hasn't seen "the numbers" yet.  While visions of dollar bills dance in that landowner's head, hundreds of others have instead become educated and have fully participated in opposing the project at the ICC, such as landowner Paul Marshall. 

Marshall and the Illinois Landowners Alliance have chosen to make their case in the proper legal venue, while RICL seems to prefer to try its case in the court of public opinion, hoping against hope that its misinformation will be enough to fool the ICC into approving its project.  The Sun Times ought to be embarrassed at how they were used by fast-talking wind lobbyists.