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Refocusing Eminent Domain Authority

8/26/2016

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The country is on fire over eminent domain.  And it's because for-profit companies posing as "public service" utilities are abusing what we have come to accept as a utility's traditional ability to use eminent domain to serve its customers.

In the traditional sense, public utilities have exercised eminent domain to electrify or otherwise power our country.  The property taken was used to provide basic service to the utility's customers.  Everyone has electricity.  Hallejuah!

But, over time, as utilities got built out to serve everyone, eminent domain was no longer needed for that purpose.  Then utilities used it to enhance their systems and make them more reliable.

And then the slippery slope started.

Utilities expanded their systems in order to wheel power over larger areas and interconnect with other utilities.  The idea now is that all power produced must be available for use by anyone... anywhere.  This is no longer about reliability, but about economics.  Eminent domain is now routinely used to build transmission intended to ship "cheaper" power to customers near expensive sources of generation.  Some transmission is even built to ship "greener" power to customers who haven't built their own "greener" generators.  Regulators may believe that if the cost of building transmission is less than the anticipated savings, then it's in the public interest.

But the public isn't benefiting equally.  Transmission may only reduce prices for one specific geographic area, although the actual line and property taken via eminent domain is routed through a different geographic area that receives no benefit.  Regulators tie themselves up in knots in order to create trumped up "benefits" for affected regions, although the benefits are never spread equally.

The country exploded in the wake of the Supreme Court's ruling on Kelo v. New London.  In that case, the City was permitted to use eminent domain to take property for "economic development" purposes.  Essentially, if private property could generate more tax revenue and job opportunities if owned by someone else, then that was reason enough for the taking.  Nobody liked it.  It was in the news for a long time.  Much was written about it.  Many states reacted by revising their eminent domain statutes to protect their citizens.  Even now, just about everyone agrees that economic development isn't reason enough for eminent domain.  Everyone's house would provide more jobs and tax revenue if it was a Walmart.  It affects us all.

A new assault has begun.  Corporations posing as "public service" utilities want to use eminent domain to build pipelines, transmission lines, and other "public utility" infrastructure that actually serves only their bottom line.  It's not about serving "the public" when the pretend utility doesn't even have any customers.  Instead of presenting their "line to nowhere" as the economic development project it truly is, these shysters pretend it's a "public service" utility in the hope of fooling regulators to grant it a utility's eminent domain authority.

Let's take the Dakota Access Pipeline, for example, since it's in the news so much (well, at least the non-mainstream news).
In fact, very much like what happened in Nebraska, the resistance in Iowa against the Dakota Access pipeline is led by ranchers furious at what they see as the state's complicity in a private land-grab. Earlier this week, a judge denied a stay on construction of the pipeline, kicking the decision over to the Iowa utility board. The plaintiffs in that case accused Energy Partners of blackjacking them into granting easements by threatening to have their land condemned, a charge that the company's lawyers denied, but one that is more than familiar to the people in Nebraska who fought TransCanada.

"This has been the slow erosion of property rights," said Kleeb. "This is the only way that pipelines will be stopped. Construction companies will find ways to get around permits and other obstacles. That has to be brought through the courts."

There are other problems as well. On Wednesday, The Des Moines Register ran a story in which farmers who were paid to allow an easement through their property along the pipeline's route in Iowa complained that the pipeline company had reneged on promises to restore the land once the pipeline got buried.

Instead, he's got a scar running across his soybean fields where the dark, fertile topsoil is being stacked on top of several feet of hard clay mixed with clay loam. The result, Goebel fears, will be soil less suited for growing crops—and much less valuable.

"Nature separated those soils for a reason, that's the way I feel," said Goebel, who runs a 164-acre century farm in Sioux County. "If nature put it there, they should put it back the way it was." His complaint is one of several popping up across Iowa as work ramps up on the pipeline that will stretch from the Bakken oil fields in North Dakota across Iowa to Patoka, IIl."

A pipeline meant to carry Bakken oil from North Dakota to Illinois doesn't have any benefit for the flyover state of Iowa.  All the benefit goes to the corporations.  But Iowans are facing eminent domain for benefit of for-profit corporations who may contribute to "the public benefit" somewhere down the line.  Certainly no one is going to pull their truck up to the processing facility in Illinois and say "fill 'er up with regular."  It's a straight up private to private transfer of a commodity that can't serve the public in its present state.  For their trouble, Iowans are being pelted with economic development arguments... the project will bring jobs and taxes if built.  Isn't that the same argument the City of New London made?  And haven't we generally rejected the argument that economic development is reason enough for eminent domain?  Dakota Access is an economic development scheme masquerading as a "public utility" in order to utilize the eminent domain it would not be awarded as an economic development, private to private transfer, project.

Likewise Clean Line Energy Partners and its many electric transmission projects.  Clean Line wants eminent domain authority so it can effect the transfer of electricity between private parties.  None of the electricity produced by privately-owned generators will be directly available for purchase by "the public."  And Clean Line also attempts to justify its projects with claims of "economic development" jobs and tax arguments.  Clean Line is nothing more than a profit-making scheme.  Clean Line has no "public utility" customers.  The projects are not needed for grid reliability.  They're nothing more than a private road between generators and hypothetical "customers" who have yet to develop.  Clean Line is another economic development, private to private transfer, project.  It's not a public utility serving "the public."

It's high time we start looking at these for-profit "utility" companies under the eminent domain for economic development lens created by Kelo v. City of New London, instead of the needed public utility infrastructure lens of traditional utility eminent domain for public service.  Projects like this serve no one except their corporate owners.
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You Can't Trust a Utility CEO

8/18/2016

1 Comment

 
U.S. Attorney Josh Minkler said:
“CEOs hold positions of special trust and authority, not only in the companies they serve but as leaders in society. We expect them to act with integrity,” Minkler said in a press release. “Exploiting that special trust for personal gain is an egregious crime, especially when those defrauded are friends and neighbors in a community that the CEO was hired to serve.
While I can agree with his sentiment on the egregious nature of the crime committed, I just can't believe that utility CEOs should ever be trusted.  I don't expect them to act with integrity.  I expect them to do whatever they want in pursuit of the almighty dollar, and if that action was somehow illegal or shady, to cover it up.  I'm so not surprised by what Donnis Mizelle did.

Mizelle, once the CEO of an Indiana electric cooperative, has agreed to plead guilty to fraud after an investigation revealed he had collected over half a million bucks in personal expenses from the cooperative since 2009, while claiming they were "business expenses."
Mizelle allegedly siphoned funds from the company’s expense account for his own personal use on a routine basis, according to Minkler.

As CEO, Mizelle was permitted to seek reimbursement for legitimate business expenses. Since at least 2009, however, Mizelle submitted dozens of fraudulent expense reports that disguised personal expenses as business expenses, Minkler said.

For instance, on an April 2009 expense report, Mizelle claimed approximately $650 for business entertainment. According to the federal charges, however, he actually bought a black sapphire bracelet and Mont Blanc pen from a local jewelry store for his own use.

On an October 2014 expense report, Mizelle claimed $1,250 for sponsoring a business-related dinner event. According to the charges, Mizelle had actually purchased a Eurail train pass for a family vacation in Europe.  

His fraudulent claims allegedly resulted in reimbursement checks not only for personal vacations and jewelry, but also for iPhones and iPads, tickets to sporting events, clothing, meals, and even groceries.

No amount was too small. According to the charges, in January 2012 Mizelle claimed $20 for a business lunch that actually went toward the purchase of a pizza delivery to his home.

Does this shock you? 

Do you know what the CEO of your electric utility, cooperative or municipally-run electric supplier claimed on his or her expense reports last year?  Probably not.

What if your CEO also bought a black sapphire bracelet,  but then presented it to a business associate as a trinket of company appreciation?  Would it then be a business expense?  What if your CEO joined an exclusive social club, and then invited business associates there for "meetings?"  Would that membership then be a business expense?  What if your CEO had a clause in his employment contract that allowed him and his family to use the corporate jet for personal travel?  Would that still be a business expense?  It's all in how you package it.  I guess Mizelle wasn't very good at the "ratepayers pay for everything" game.

The article doesn't explain how Mizelle's issues came to light.  How did a cooperative accountant continue to process these "business expenses" month after month for at least 6 years and never once think something was amiss?

If you think you're safe because regulators or "the government" is watching out for you, you're just kidding yourself.  CEO excess is the rule, rather than the exception.   Shame on Mizelle... for getting caught.
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Full Steam Ahead for the Clean Line Crazy Train

8/16/2016

8 Comments

 
So, this happened yesterday.
Two groups representing landowners are suing to block an electric transmission line planned for delivering wind-generated power across Arkansas from Oklahoma to Tennessee.

The federal lawsuit, filed Monday in U.S. District Court in Jonesboro by Golden Bridge LLC and Downwind LLC, the two landowner organizations, will test the legality of a decision by the U.S. Department of Energy to aid construction of the Plains & Eastern Clean Line through provisions of the Energy Policy Act of 2005.

The landowner groups are represented by Christopher L. Travis and Jordan P. Wimpy, both of the Gill Ragon Owen firm in Little Rock. The complaint lists as defendants the Energy Department and Ernest Moniz, the U.S. secretary of energy, as well as the Southwestern Power Administration and its administrator, Scott Carpenter.

The lawsuit questions the Energy Department's authority to approve the construction of one of the nation's largest electric lines without seeking state-level review. It also challenges its power to exercise the federal right of eminent domain to condemn and acquire private property under the Energy Policy Act. Landowners, it says, should have played a bigger role in the Energy Department's review of the project, which is being carried out by Clean Line Energy Partners of Houston.

You can read the lawsuit here.
In response, Clean Line says:
CLEAN LINE OFFICIALS SAY ‘FULL STEAM AHEAD’

Late Monday evening, Clean Line officials said they had not seen the legal complaint against the DOE regarding their project and would not be able to provide specific comment. However, a Clean Line executive reiterated the company’s ongoing refrain that the Houston-based venture group has already invested nearly $100 million of private capital to develop the project and anticipates making more than $30 million in payments to Arkansas landowners for easements and upfront transmission structure payments.

In addition, Clean Line will pay Arkansas counties that host the electric transmission project a total of approximately $140 million in voluntary payments over the first 40 years of operation, which will support local schools, fire departments and other community services.

“It’s no secret that the United States suffers from an infrastructure deficit and that we must push through gridlock to move the country forward. Unfortunately,
it is not uncommon to see legal complaints filed against the most important infrastructure projects,” said Mario Hurtado, Clean Line’s executive vice president of development. “In order to modernize the grid, enable the delivery of low-cost energy, create new jobs and enhance our energy security, the private and public sectors must come together to bring new infrastructure projects to fruition.”

Hurtado, who recently told Talk Business & Politics that the multibillion dollar project is expected to get underway in early 2017, added: “The Plains & Eastern Clean Line is the largest clean energy transmission project in America and is moving full steam ahead.”
"The Plains & Eastern Clean Line is a pro-jobs, pro-consumer, pro-environment public energy infrastructure project," said Mario Hurtado, executive vice president for development.
One person conditioned to rule and control
The media sells it and you live the role

Mental wounds still screaming
Driving me insane
I'm goin' off the rails on a crazy train
I'm goin' off the rails on a crazy train

I know that things are going wrong for me
You gotta listen to my words, yeah, yeah

Full steam ahead?  Did you call up Ernie on your special "Coordination Committee" Hotline last night to get that comment approved, Mario?  Because Clean Line can't drive this train all by itself.
DOE executed the Participation Agreement, which creates a "Coordination Committee," which "shall be composed of two (2) representatives from Holdings and two (2)
representatives from DOE." One of Holdings' representatives is the chair of the Coordination Committee. Unless Clean Line has defaulted, the Coordination Committee requires a representative of both Holding and DOE to have a quorum. The Coordination Committee can only make "public announcements relating to DOE's involvement in the Project" if such public disclosure is approved by "one (1)
representative of each of Holdings and DOE on the Coordination Committee.
"
But Mario made a comment anyhow, so let's see what desperation looks like.

"...a Clean Line executive reiterated the company’s ongoing refrain that the Houston-based venture group has already invested nearly $100 million of private capital to develop the project..."

Since the complaint specifically states that DOE "violated Plaintiffs' and the public's due process rights," are you saying that your investors $100 million is more important than due process rights?  It sure sounds like it.  In fact, it sounds like you think rich people are more entitled to get a return on their investment than regular people are to the right to due process under the law.  That's pretty disgusting.  And un-American.

Your blather about jobs and taxes also doesn't dispense with the people's right to due process.  Are you saying that you can break the law as long as you create a few jobs and pay some taxes?  And another thing... jobs and taxes are not a basis for eminent domain.  If that were the case, I'm sure YOUR house would provide more jobs and pay more taxes if it were a Walmart.  How would you like that, Mario?

“It’s no secret that the United States suffers from an infrastructure deficit..."  What?  What infrastructure deficit?  I haven't seen any identified infrastructure deficit that requires thousands of miles of HVDC transmission to be solved.  Sounds like you're making crap up.  In fact, plenty of infrastructure is being built.  It's just not infrastructure that puts a buck in Mario's pocket.  Clean Line is not the be all and end all for keeping the lights on.  It's not part of any grid plan.

"...it is not uncommon to see legal complaints filed against the most important infrastructure projects..."  No, it's just common to see them filed against destructive and unnecessary projects.  A legal complaint does not make an infrastructure project "important" any more than being charged with a crime makes the crime "important."  I guess Mario thinks this legal complaint makes him and his project "important."  *sigh*

“In order to modernize the grid, enable the delivery of low-cost energy, create new jobs and enhance our energy security, the private and public sectors must come together to bring new infrastructure projects to fruition.”  Clean Line isn't "modernizing the grid."  Clean Line is creating a separate grid operated solely for corporate profit  that only serves people who can afford to pay for it.  As well, Clean Line cannot guarantee "low cost energy."  Clean Line has no role in the price of energy that could be transmitted over its line, and none of the proposed generators currently exist.  You cannot price a commodity that doesn't exist and that you do not control.  Enhance our energy security?  What kind of jargon is that?  Did Mario think that sounded good?  How would a 700 mile transmission line "enhance energy security?"  The most secure energy system is one where generation and load are located at the same place.  A transmission line adds insecurity to that system because it's just one more piece that may fail.

"The Plains & Eastern Clean Line is a pro-jobs, pro-consumer, pro-environment public energy infrastructure project..."  Oh, puhleeze.  If you say that enough times, will you start to believe it?  Jobs, consumer prices, and the environment is not an excuse to do away with due process.

It's not a political or policy argument at this point.  Judges don't make policy.  They interpret the law.

So, do enjoy your ride on the crazy train, Mario.  While it lasts.
8 Comments

Clean Line Whack-a-Mole

8/12/2016

1 Comment

 
In the game of whack-a-mole, the moles begin popping out slowly and are easy to whack.  But as the game speeds up, so do the moles, making it virtually impossible to hit them all at the same time, and then you lose.
Clean Line has been playing permitting whack-a-mole for years, and the game is speeding up.  As soon as they whack a particular jurisdiction's mole, another mole pops up somewhere else.  And now the moles previously whacked are popping up again, too.

On Monday, Clean Line thought it had whacked the Iowa mole for its RICL project when the IUB issued an Order setting a procedural schedule.  With a permit for RICL from Illinois in hand, the only thing Clean Line needed to build RICL was a permit from Iowa. 

But on Wednesday, the Illinois mole popped back up, not easily whacked and disposed of.
The Illinois Third District Appellate Court issued an opinion that disposed of the Illinois permit Clean Line thought it had in hand.  The Court found that RICL was not a public utility and therefore the Illinois Commerce Commission could not issue it a permit.  Clean Line is back to square one in Illinois, without a permit, although now its Iowa case is now running along at full speed (and expense).  Clean Line has no options in Illinois but to appeal the appeal, a time-consuming and expensive prospect with no guarantee of success.

And if RICL cannot be an Illinois utility, neither can Clean Line's Grain Belt Express project, whose permit mole is currently on appeal in another Illinois district.  Meanwhile, Clean Line is busily engaged in trying to whack the GBE mole in Missouri, and is expected to file another application for a permit at the end of this month.

Why bother spending time and money whacking moles in Iowa and Missouri, when the Illinois moles refuse to stay whacked?  Clean Line cannot build any project unless it has whacked all that particular project's moles, and they actually stay whacked.

So, let's add this up:
  1. State permitting process in Iowa underway which will require quick deployment of land agents and expensive exhibits, in addition to legal and expert fees.  The IUB also added engineering consultant fees to Clean Line's bill in order to evaluate the project according to Clean Line's foot-dragging schedule.
  2. RICL appeal process in Illinois.  Lots of legal fees.
  3. State permitting process in Missouri soon to be underway, which will require legal and expert fees, along with various SWAG paid to garner political  support for its project.
  4. GBE appeal process in Illinois, with very little chance for success.  Lots of legal fees.
  5. Trying to engineer, site, and acquire land in three other states for its Plains & Eastern project.
  6. Other projects in western states Clean Line is currently trying to "develop."
Cha-ching!!!  That adds up to millions of dollars every month, and Clean Line doesn't have a dime of revenue.  It's getting more and more expensive to be Clean Line and try to whack moles.  Where does Clean Line get its money?  Investors.  At what point will the investors close their wallets and post a loss on the ol' balance sheet?  Are Clean Line's prospects to win the Whack-a-Mole game getting better the longer it plays?  Nope.  It's getting harder to hit all the moles and make them stay whacked.  Eventually, investors are going to reach the tipping point where they stop throwing good money after bad.

Clean Line created a bigger mole field than it could handle when it decided it needed to "develop" multiple projects at the same time.  A smart company may have concentrated on just one project to begin with, to see how viable the Clean Line business model actually was.  But not Clean Line... it was so certain of its success, that it began dumping investor money into multiple projects at the same time.  And now, 7 years later, they're still whacking an increasing amount of moles, and need an increasing amount of cash to do so.  Will the company tighten its belt and start abandoning the least likely projects, in order to concentrate its resources on the most likely?  What if none of the Clean Line projects are very likely at all?  What if the investors finally acknowledge just how hopeless Clean Line actually is?

Game over.
1 Comment

Illinois Appeal Voids Transmission Project Permit

8/11/2016

1 Comment

 
Court determines Rock Island Clean Line is not a public utility and orders Illinois Commerce Commission (ICC)
to reverse its Order granting Certificate of Public Convenience and Necessity (CPCN)

 In an Opinion handed down August 10, the Illinois Third District Court of Appeals reversed the Order of the Illinois Commerce Commission that granted a certificate of public convenience and necessity to the Rock Island Clean Line, and remanded the cause to the Commission with directions to enter an order consistent with its decision.
 
This is a major setback for the project, which was granted a CPCN by the ICC in 2014.  In its decision, the Court found that Rock Island failed to meet two requirements for being a public utility because it does not own, control, operate, or manage assets within the State; and that the proposed transmission line is not for public use without discrimination.  Because Rock Island is not a public utility, the Court said, the ICC lacked authority to issue a CPCN in the first place.
 
“We are thrilled with the Court’s decision,” said Block RICL spokeswoman Mary Mauch.  “We have worked very hard to protect our private property rights from a speculative business venture looking to cash in on our heritage for their own financial gain.  This decision to void RICL’s permit makes all that hard work worthwhile!”
 
Rock Island Clean Line is a 500-mile high-voltage direct current electric transmission line proposed to run from northwestern Iowa to northeast Illinois.  It is owned by Clean Line Energy Partners of Houston, Texas, who is also developing at least two other transmission projects to capitalize on moving energy from the Midwest into expensive eastern electric markets.  Clean Line is currently supported by financial contributions from private investors while it struggles to get any one of its projects off the planning table to begin generating revenue.
 
The Court’s Opinion can be viewed here.
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Constructability Calamities

8/10/2016

1 Comment

 
Who comes up with the "constructability" summaries for PJM's transmission projects?  Do they hire a professional blackjack player to study the odds of approved projects pissing off the wrong people?  Where's the surety in spinning the wheel to determine whether a project is "problematic," when actual results depend entirely on circumstances beyond PJM's control?  The human factor is going to get them every time.

So, PJM's eternal Artificial Island project has been "suspended."  It's ever-changing scope and price tag have affected its "constructability."  The states of Maryland and Delaware were outraged that PJM's cost allocation assigned the majority of the project's costs to them, when they would receive little benefit.  "Suck it up, buttercup, we'll do better next time," said PJM.

Oddly enough, PJM's suspension of Artificial Island didn't even mention the cost allocation issue.  But nevertheless, the states are claiming victory.

Lesson:  With enough opposition, even PJM can change its mind.  And as the Delaware Public Advocate reminded PJM, this isn't the first time.
The DPA is not asking PJM to do something it has never done before. PJM has reevaluated
projects in the past. After reconsideration, PJM canceled the Mid-Atlantic Power Pathway ("MAPP") and the Pennsylvania-Allegheny Transmission Highway ("PATH") projects.

While the reasons for cancellation may be different in this case, the fact of the matter is that simply because PJM has approved a project does not mean that it gets done come what may. In cancelling the MAPP and PATH projects, PJM acknowledged that changed circumstances had caused it to reevaluate the projects; unfortunately, however, ratepayers are paying significant abandonment costs. We ask PJM to re-evaluate this Project before LS Power and PSE&G incur costs that will ultimately be recovered from ratepayers of all PJM members.

The DPA asks PJM to remember that end-use customers are ultimately the ones that pay
for projects such as this. Indeed, neither PJM nor its member companies would exist if not for customers. And those customers are not a wallet from which PJM and its member utilities can obtain unlimited funds.

Stop making poor "constructability" choices, PJM!

Speaking of... PJM approved a bunch of new projects yesterday.  Among them is a scheme to construct two new greenfield transmission projects across the Maryland/Pennsylvania border.
Picture
Sorry, but the PJM-supplied project map really is that crappy and devoid of recognizable locations.  PJM's world revolves around a map of substations and transmission lines.  Ringgold is really a place though, so that narrows down the approximate location of the western line.  Furnace Run is a town in western Pennsylvania, but the eastern line on this map begins south of York and Lancaster and probably ends somewhere near Towson, Maryland.  But don't worry about the lack of any recognizable places, because PJM's constructability summary has determined this project "is located on undeveloped land" and therefore the only likely obstacles may be bats, acquiring easements on Pennsylvania state land, and a few permitting hurdles.  No human factors acknowledged.

But I'm pretty sure people own that "undeveloped land," and those people probably will mind having a transmission line constructed on their property.  What remains to be seen is how big a squawk they can make about it.  Because, as PJM has demonstrated numerous times already, its planning isn't infallible, and when approved projects run into a buzzsaw of opposition, PJM has no choice but to go back to the drawing board and come up with a better project.

1 Comment

FirstEnergy Scheme to Pass Risk to West Virginians

8/6/2016

1 Comment

 
It's a risk hot potato.  While some states have deregulated electricity generation, others have not.  This makes for two different economic schemes for power plants.  In the deregulated scenario, plants compete with each other to sell power in electric markets.  A deregulated plant's income is derived from what it earns.  Earnings minus the cost of producing power equals profit.  But a regulated plant comes with a guaranteed profit.  Regulation takes the place of a competitive market to guarantee a generator a fair return (but no more).  A regulated plant is guaranteed to collect its cost of producing power, plus a fair return, to generate a set amount of profit.

When power market prices are high, deregulated plants earn more, because there is no regulated cap on the amount they can earn.  However, when power market prices are low, regulated plants earn more, because they are guaranteed to earn a certain amount over their cost of service.

A deregulated plant must cover its own operation costs, everything it earns above its cost to produce power is profit.  The owner of the plant shoulders all the risk of operating a plant that doesn't produce adequate profit.  If a plant cannot produce adequate profit, it fails economically and will likely close.

A regulated plant's operation costs are covered by ratepayers.  If the plant fails to produce an adequate profit margin, it can continue to operate because it is guaranteed to collect its operating costs and a small profit from ratepayers.  The ratepayers shoulder all risk of operating a plant that doesn't produce adequate profit.  It cannot fail economically because the ratepayers are there to make up any shortfalls between the cost to produce power, and the market price of that power.

It's all about who shoulders the economic risk. 

FirstEnergy used to love deregulated plants when power prices were high.  FirstEnergy made huge profits.  But then power prices started falling because generators that were cheaper to operate entered the market.  FirstEnergy's plants use coal for fuel.  New plants use cheaper natural gas for fuel.  Suddenly, FirstEnergy's deregulated coal-fired plants weren't economic any longer and couldn't cover their operating costs and still generate a profit.  In a pure market situation, these plants would close.  However, FirstEnergy has been looking for ways to transfer their deregulated plants into a regulated system, so they can continue to operate at a loss, courtesy of electric ratepayers.  FirstEnergy wants to transfer its risk from the company to ratepayers.
“We cannot put investors and our company at risk.”
So said FirstEnergy CEO Chatty Chuck Jones during a conference with the company's stockholders.  The company is planning to transfer its unprofitable Pleasants coal-fired plant into West Virginia's regulated system so that the company no longer has any risk associated with owning it.

If it's too risky for FirstEnergy's shareholders, it's too risky for West Virginia consumers.  We simply cannot afford to shoulder more risk for the Ohio power conglomerate.  Several years ago, FirstEnergy was successful in transferring its failing Harrison Power Station into West Virginia's regulated system.  West Virginians are now paying above-market prices to operate it, and sell excess power into the regional market.  Electric bills increased to cover the cost of owning and operating the plant (and paying for a whole bunch of maintenance on the plant that FirstEnergy deferred because the plant was losing money), plus a guaranteed profit for FirstEnergy.

Late last year, FirstEnergy filed its Integrated Resource Plan with the WV Public Service Commission.  The IRP is a long-range plan by the company detailing how it plans to acquire the generation resources necessary to meet the needs of West Virginia customers.  In its plan, it contended that buying another coal-fired power plant from its parent company was the best option for the customers.  Other parties intervened to argue against it, but the Commission ultimately approved the plan, noting that actually buying the coal-fired plant would necessitate another filing and review by the Commission and parties could argue against it at that time.

However, during the last coal-fired power plant purchase case for Harrison, the company contended that there wasn't time to issue a request for proposals to solicit power supply contracts from other generators that may compete with Harrison to produce the lowest cost for West Virginia ratepayers.  Therefore, Harrison stood alone as the only "solution."

Since the PSC neglected to require the company to solicit competitive bids for supply as part of its IRP, when is an RFP supposed to happen?  It can't happen during the IRP, because it's too early in the process.  But yet it can't happen when supply is needed, because it's too late in the process.

The Staff of the PSC and the West Virginia Consumer Advocate say the time is now.  They have jointly filed a request that the company be required to file RFPs for all future capacity and energy requirements above a certain threshold.  If West Virginians deserve to pay the cheapest prices for the power they need, then the company should be required to solicit competitive bids.

But the company doesn't want to.  FirstEnergy wants to sell its Pleasants power station to West Virginians without any competition.  That's not fair, or in the best interests of West Virginia ratepayers.  FirstEnergy is whining that it shouldn't have to bear the risk of its unprofitable Pleasants plant, because it still has "life left in it."
“Is it frustrating that we’re shutting down tens of thousands of megawatts of generation in our country that’s got life left in it because of the way this market is working?” Jones said. “That is very frustrating to me.”
While the plant may still have physical "life" in it, it doesn't have any economic "life" left.

West Virginia can't afford to bail FirstEnergy out of its bad economic decisions any longer.  Subsidizing FirstEnergy is "frustrating" to West Virginians, too, who sometimes have to make a choice between paying their electric bill and buying food.  Go peddle your lemon somewhere else, FirstEnergy.
1 Comment

Transmission Myths Often Mistakenly Believed and Then Utilized to Support Unsuccessful Practices

8/5/2016

1 Comment

 
The EUCI industry echo chamber is at it again.

Congratulations, Midwesterners, you now have your very own special EUCI conference!  Dealing with you has become a specialized practice area for the transmission industry.  What is it about you that makes you special?  Is it your attachment to your land?  Your love of uncluttered, wide-open spaces?  Your appreciation for peaceful, non-industrial landscapes?  Your honesty?  Your sense of justice and fair play?  Your mistrust of outsiders who want to take something from you?  The transmission industry sure would love to figure out what makes you tick!

That's why they will be gathering to discuss you at Transmission Expansion in the Midwest this coming October.  Attendees believe they will:
...explore the specifics of how to develop and maintain positive landowner relationships while negotiating in good faith for pipeline, electric transmission, wind and solar, rail and public sector projects. This would include whether pursuing site leasing, site purchase, easements, right of ways and/or workspace, and whether coming from the perspective of project management, design engineering, environmental, appraising, permitting, survey, right of way, inspections, construction, operations, and others, this presentation is a must in helping ensure a successful project, on time and on budget with happy landowners.
That just can't happen.  No landowner is ever "happy" when electric transmission is sited on their property.  Never.

But EUCI bravely soldiers on, putting together these industry echo chambers where industry speakers hide their failure in order to pretend they're successful. Whatever... they're only fooling themselves.  The reality is that it's getting harder and harder to permit, site, and build transmission in the face of record-breaking opposition.  Opposition is bigger.  Opposition is faster.  Opposition is more sophisticated and successful than ever before.  So, what do EUCI's speakers know about the opposition that delays, alters and flat-out cancels even the most carefully planned transmission projects?  Not much.  Not only are the industry critters lacking perspective, they absolutely have no idea what motivates opposition.  Why?  Because they've never been an opponent!  And they don't want to learn from any opposition heathens.  Wouldn't these classes be better taught by the opposition?  Instead, you get this:
Recognize and understand landowner’s perspectives and the importance of dealing with unique differences in various landowners, their personalities and their needs/concerns.
Who's going to help you understand landowner perspectives?  A landowner?  No, a land agent, the arch nemesis of a landowner.  If I really wanted to understand someone, I'd like to talk with that person, not their enemy.

And then there's this:
Beyond the historical considerations of zoning, environmental, special use, conservation and damages determination, communities are becoming more and more vocal in their requirements in infrastructure development.  As social media and cyber-activism have become the norm (even for landowners not impacted by a project), companies need to become social-savvy in route planning, outreach and negotiations.  More often than not, whether in the electric industry or in other related industries, projects are successful or fail spectacularly due to communication issues, lack of messaging and poor understanding of the locale impacted.
Would this presentation be helped by a local opposition perspective?  Definitely.  However, you're not going to get that at EUCI.  Again, this is presented by a land agent who isn't from the community where transmission is located.  The land agent has no experience presenting successful social media campaigns that draw in opponents and keep them active and engaged throughout the process.  Transmission company ideas of social media campaigns consist of cherry-picked and carefully wrapped one-way communications directed at communities.  There's nothing interactive about it if you don't agree with the company position presented.  Companies, ever afraid of legal missteps, cannot and will not communicate with opponents in an informal, down-to-earth manner.  Company social media campaigns are a complete waste of time.

KURT ALERT!!!!  Of course a Midwestern Transmission Expansion conference wouldn't be complete without some fantasy from Clean Line Energy Partners!  Except Clean Line's presentations are always the same.  No creativity there!
Case Study: Delivering Wind Energy to Market

The United States possesses some of the best renewable energy resources in the world. However, continued growth of the renewable energy industry in the U.S. faces a serious challenge: the lack of transmission. Clean Line Energy is developing a series of long-haul direct current transmission lines to deliver low-cost renewable energy to communities that have a strong demand for clean power.

This presentation will focus on the Grain Belt Express Clean Line, which will deliver wind energy from Kansas into Missouri, Illinois and Indiana. The project has received its regulatory approvals in Kansas, Illinois and Indiana and is currently working through the final state approval process in Missouri. The presentation will provide an update on the regulatory, routing, and other milestones accomplished with a focus on the benefits this project will bring to Missouri.

Amy Kurt, Director of Development, Clean Line Energy Partners
Benefits?  Pretend jobs and tax revenue?  Economic development isn't the basis for eminent domain.

And that's just the problem.  Eminent domain.  As long as eminent domain is on the table, there will be no "happy" landowners.  It's not about "communication" or psychological manipulation of landowners, it's not about siting, it's not about getting to know the community values, it's not about made-up "benefits," it's not about purchased "support" for transmission projects.  It's about the eminent domain.

No matter how much smoke and mirrors this industry generates in its echo chamber, it will continue to face increasingly effective opposition and transmission projects will fail.

Checkmate.
1 Comment

Too Arrogant to Sacrifice

8/4/2016

8 Comments

 
There was a really great op-ed published in various outlets the other day penned by Missouri Farm Bureau President Blake Hurst.  The Farm Bureau (and Hurst) object to the Grain Belt Express Clean Line, which is proposed to cross the state and affect over 500 Missouri landowners.  Hurst had this to say about Clean Line's proposal to use eminent domain to acquire land:
Backers of the project are frustrated with landowners for their reluctance to host the transmission line. Climate Change!  Renewable Energy! How can landowners be so stubborn as to hold up what is so clearly progress? Landowners along the planned route are being drafted into the war on Climate Change without their consent. If the fight against climate change can only be won if Missouri is crossed by this unsightly collection of wires and poles, then the costs should be more widely borne. The company can negotiate those easements with willing sellers along the route, and they can pass the increased costs along to millions of electricity users in the eastern United States, instead of imposing all of the costs of saving the planet on 500 small landowners in Missouri.
 What's climate change worth to the folks along the urbanized coasts who are the proposed beneficiaries of the condemnation of land in the Midwest to transmit "cleaner" energy for their use?  Obviously not much, if Clean Line needs to use eminent domain to acquire property cheaply in order to make its project profitable.  City dwellers want "cleaner" energy, but they don't want to pay a penny more for it.  It's high time for these folks to either fend for themselves in their own communities, or open their wallets.

Why should 500 Missouri landowners make a sacrifice to pump "clean" energy to cities, so that they may waste as much as they want, without any climate change guilt?

Waste?  Of course.  If climate change is such an all-fired emergency that Missouri must make the ultimate sacrifice to stop it, why are cities allowed to accelerate climate change by lighting up their buildings and landmarks at night to create a pretty skyline?  If climate change requires sacrifice, how about the cities go dark from sunset to sunrise?  Los Angeles recently did.  But it was only for one hour.  And it only darkened a few of their landmarks and buildings.  Go ahead, watch the video in this news story, because it really showcases how clueless and arrogant city folks are about wasting energy.
Perhaps if more cities turned their wasteful "landmarks" off at night, rural landowners wouldn't have to make any sacrifice for new transmission lines.  (Don't worry, power generator-types clutching your chest right about now, it will never happen, these folks are much too selfish to do anything so drastic.)  But yet these folks think they "need" to keep their cities lit up all night.  And they "need" to do it with "clean" electricity.  And therefore Missouri landowners "need" to allow the hulking infrastructure required to get it there to clutter up their personal landscapes and interfere with the way they make their living.  The arrogance is stunning.

And speaking of stunning arrogance, how about that Democratic party platform?  I rarely get political here, but someone pointed me to a portion of the platform making the media rounds here in West Virginia that really frosted my cupcake:
The fight against climate change must not leave any community out or behind -- including the coal communities who kept America's lights on for generations.  Democrats will fight to make sure these workers and their families get the benefits they have earned and respect they deserve, and we will make new investments in energy-producing communities to help create jobs and build a brighter and more resilient economic future.  We will also oppose threats to the public health of these communities from harmful and dangerous extraction practices, like mountaintop removal mining operations.
Yup, we're very, very, sorry, Appalachia, that we rode you like a rented mule for the past 100 years to power our cities, but now we're going to come in and improve your communities for you!  We're going to "respect" those who sacrifice to produce the energy our cities use by creating more sacrifice in another geographic region in order to produce new "clean and green" wind powered electricity and ship it in for us to waste!

And no community will be left behind in the fight for climate change!!!  Except those 500 landowners in Missouri.  Who will miss them?
Hypocrites.
8 Comments

    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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