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So You Want To Be An Electric Resource Planner?

3/17/2016

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Where are the warts, Bob?  Where are the warts?  Another week, another glowing review of the Grain Belt Express project from Bob Stevenson, where he tells people that GBE has no warts.  Those are "beauty marks," right?  In his first weekly testimonial, Bob promised to tell the people of Hannibal the truth about GBE "warts and all."  When someone promises that, and then finds absolutely no warts to expose at all, it makes me suspicious that everything might be less than truthful.

This week's offering talks about resource planning.  Well, sort of.  Bob talks about his great opportunity to cut the city's ties to "full requirements" contracts and replace them with what looks like some sort of amateur integrated resource plan where price (or is it a "potential" price?) is the most important factor, followed by having tons of resource diversity to lessen the effects of any one bad choice.

Does Hannibal have a professionally developed integrated resource plan?  Doesn't sound like it to me.  Bob says the BPW has relied on full requirements contracts with Ameren, who currently performs this function for them.  An integrated resource plan is a long range plan that looks at need and available options in order to determine the most cost effective and reliable plan to supply the need.  However, like a brand new college student, Hannibal will soon be released from all the rules and oversight it had previously been forced to live under.  Bob shares that now Hannibal can do whatever it wants -- buy however much power it wants from whoever it wants to buy it from.  Who needs a plan?

Bob explains that Hannibal has already put 56% of its eggs in the Prairie State basket.  Ameren didn't obligate Hannibal to buy that.  Hannibal thought it was a good idea, so they did it.  And Prairie State has been a financial disaster.  Even Bob admits Prairie State's prices haven't meet expectations and it "is the most expensive power in Hannibal's portfolio today."  That means that Hannibal's first attempt to independently purchase a resource was a financial and planning failure. 

He also shares that BPW made a much more economical recent purchase for summer peak power through a competitive bidding process.  Let's hope it doesn't develop any Prairie State warts.  What are the chances?

The remainder of Hannibal's power will be purchased through MISO's power market, and turns out to be the lowest-priced option in Bob's little portfolio.  Why is that?  Because MISO's market is professionally run and managed, and power markets are at historic lows right now.  MISO does the hard work to supply the most economical options for purchase by Hannibal.

Bob compares his little "integrated resource plan" to retirement investing.  It's so easy, anyone can do it!  Who needs a professional investment planner?  And why would Hannibal need a professional integrated resource planner, when they have Bob?  Bob is a registered professional engineer with over 15 years of experience.  Except engineers aren't financial planners, are they?

At the end of this week's column, Bob starts talking about how GBE "holds the potential to connect us to a very low cost future energy source."  My bedroom held the potential for flying fuschia elephants over the weekend, too.  But then I realized I wasn't being told the truth by the 104 degree fever and influenza particles who'd recently shown up on my doorstep promising me the most amazing adventure.  The elephants weren't real, but they were way more fun to watch than anything on television.  GBE is nothing but a "potential" future energy highway for a "potential" future energy source.  Two layers of potential there. And GBE has proposed that Hannibal invest $12.5M of its ratepayers' money in its "potential" energy highway.  If the "potential" energy source or energy highway doesn't happen, Hannibal's money disappears completely.  All of it.  Why would Hannibal want to pay millions for a "potential" energy source?  "Potential" doesn't turn the lights on.

Bob loves Kansas wind generators!  He relates that they are currently signing 25-year contracts with purchasers for less than 2 cents/kwh!  But Bob is completely wrong when he says, "this energy is not available to us due to limitations of the existing high voltage transmission system."  If Bob wanted to sign up to purchase Kansas wind, he certainly could.  These generators are currently signing contracts with customers, right, Bob?  How is that happening if the existing high voltage transmission system is so limited, Bob?  This doesn't sound like a fact.  It sounds like something Bob made up to try to create a "need" for Clean Line.  In fact, Clean Line presented Bob with a "wind option" for Hannibal that included Kansas wind, delivered over the existing transmission system, for 3.27 cents/kwh (or less)!  Is Bob not paying attention?

And where's the competitive process, Bob?  After sharing that his most recent contract purchase was the result of a competitive bid process, Bob wants to sign a contract with GBE without any competitive process at all.  This should never happen.  A power option that can't stand up to competition is one that isn't worth purchasing.

And don't miss next week's column... Bob will be discussing the potential benefits of Hannibal becoming a  customer and advocate for Clean Line Energy.  Becoming an advocate?  You mean that hasn't already happened?  Will advocacy for Clean Line keep Hannibal homes warm next winter?

Bob's only fooling himself.  There's warts all over this thing.
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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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