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Illinois Commerce Commission Advises Grain Belt Express Public Hearings Are For Directly Affected Citizens

7/20/2015

The ICC's press release about the upcoming Grain Belt Express public hearings makes clear who should attend the hearings:

The hearings are set in communities in the western, central and eastern portions of the state in order to reach out to Illinoisans who would be directly affected by the proposed transmission line. As proposed, the line would run through Pike, Scott, Greene, Macoupin, Montgomery, Christian, Shelby, Cumberland and Clark counties.

Hear that, Clean Line? The hearings are for ILLINOISANS WHO ARE DIRECTLY AFFECTED BY THE TRANSMISSION LINES. They are not for bussed in, hungry, college students (which are at a premium during the summer months anyhow), and they are not for flown in company executives who stand to profit from supplying components for the project. They're probably not even for vans full of out-of-work union guys who have no specialized skills in building HVDC transmission lines.

So, there will be none of this:

And certainly none of this:

So, for those folks who ARE ILLINOISANS DIRECTLY AFFECTED BY THE TRANSMISSION LINES, this hearing "forum" is for you!

The forums will have two parts; the first part of the forum will be an opportunity for the public to provide oral and/or written comments into the record. This portion will last for 90 minutes and each speaker will have a 3-minute time limit. After the public comment portion, ICC staff will conduct an informal question and answer session.
The dates, times and location for the Public Forums are:
Tuesday, July 28 at 5 p.m. at the Pike/Scott County Farm Bureau office at 1301 East Washington in Pittsfield.
Wednesday, July 29 at 9:30 a.m. in the Pana Junior High Auditorium, 203 W. 8th Street in Pana.
Wednesday, July 29 at 4 p.m. at the Gerald R. Forsythe Performing Arts Center, Marshall Junior High School, 806 N. 6th Street in Marshall.

Don't let Clean Line steal YOUR seat at the forum! Arrive early, sign in with the clerk if you wish to speak, and take a seat.

Note to Clean Line: Don't embarrass yourself again. Just.Don't.Do.It.

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Energizing FirstEnergy's Balance Sheet With Transmission Spend

7/20/2015

8 Comments

Well, isn't that cute? FirstEnergy has mated with itself and given birth to MAIT, Mid-Atlantic Interstate Transmission, LLC. Who thinks up these stupid names? This one rolls off the tongue with as much excitement and pleasure as the phrase "hand over your wallet and nobody gets hurt," or perhaps the descriptive "hot turd."

So, FirstEnergy needs to create another "independent" transco in order to energize its balance sheet by creating the world's sweetest investment account that will pay lucrative double-digit returns for many decades to come? Well, that's good for everyone, right? No, it's not.

FirstEnergy proposes that its "eastern" retail distribution companies "sell" their transmission assets to the newly formed "MAIT" in exchange for a backseat interest in the company and annual "lease" payments for right-of-way and other real estate interests that the retail companies will continue to own (along with the tax liability). Will the "lease payments" be enough to cover all the liabilities of owning the real estate? Or will the retail distribution customers end up financing a portion of that to make the "lease" cheaper for MAIT? Who's going to be supervising that to make sure it's an arm's length transaction?

FirstEnergy says they need to do this because it is consistent with the public interest. You know, you "public" are supposed to benefit from it. So, what are the benefits?

MAIT will not result in cross-subsidization of a non-utility associate company or the pledge or encumbrance of utility assets for the benefit of an associate company.

It supposedly won't have an adverse impact on competition, rates, or regulation.

FirstEnergy commits to hold customers harmless from transaction costs. (oh, like they did in the FirstEnergy/Allegheny Energy merger?)

So, "the public" won't be harmed? Even if we believe that, it's not a "benefit." It's "do no harm."

But, wait, there's more!!
MAIT results in the creation of a stand-alone transmission company, which provides a number of
benefits to customers and the PJM region!

Tell us more, Rod Roddy....

FirstEnergy is in the midst of a major investment cycle in transmission infrastructure. In 2014, FirstEnergy commenced its EtF initiative, which is intended to identify the need for, and facilitate the investment in, improvements to the security, resiliency, efficiency, and operational   flexibility of its transmission systems. EtF projects include building and re-conductoring transmission lines; building and enhancing substations; modernizing transmission
communication infrastructure; and installing dynamic reactive resources to regulate system
voltage. In all, FirstEnergy plans to invest approximately $2.5 to $3 billion in the FirstEnergy East Operating Companies’ service territories through this program over the next five to ten years.
FET formed MAIT in preparation for this significant planned investment. As Mr. Staub
explains in his testimony, utilities face significant challenges in their efforts to simultaneously meet the service requirements of retail customers while also making   sustained investments in their transmission assets. A utility’s investment in transmission infrastructure competes with other business lines of the utility for capital, and transmission investments “can be deferred in favor of more immediate or emergency investments in distribution” facilities. The singleminded
focus as a transmission-only entity will enable MAIT to commit to addressing the significant investment needs of the transmission system.
This stand-alone structure also will allow MAIT to attract capital on more commercially reasonable terms. Mr. Staub explains that lenders view stand-alone transmission companies favorably due to their transparent and easy-to-assess risk profile. The Commission has also observed that stand-alone transmission companies typically enjoy an enhanced ability to respond to transmission needs and have a superior track record of investing in new infrastructure.
MAIT’s improved access to capital will increase the likelihood that the planned investments are carried out and completed in a timely fashion and at a lower cost. Moreover, MAIT will incur debt in its own name, without a parent guarantee. Any debt MAIT incurs to finance new transmission projects, therefore, will not affect the financial condition and credit ratings of the FirstEnergy East Operating Companies. Hence, the migration to a stand-alone transmission model not only better supports the sustained level of   transmission investment needed at MAIT but also preserves and enhances the FirstEnergy East Operating Companies’ capacity to issue debt for their respective retail and distribution needs.

Oh bull...oney, FirstEnergy! You forgot to mention FERC's extra special .5% ROE adder for transmission only companies, or "transcos." And, hey, if MAIT joins PJM, you can get another .5%!! You also forgot to mention in that breath that you do plan to immediately make a section 205 filing to set up a formula rate for MAIT that provides a lot of financial goodies that you can't get through a stated rate. Are you also going to be applying for all the other FERC transmission incentives? I bet you are, you coy little company!

So the real benefits here are for FirstEnergy, not "the public." Since the public is not receiving a benefit, and if we believe FirstEnergy that this won't increase rates (and profits), then why in the hell would FirstEnergy want to do this and shell out the "transaction costs" it can't pass to ratepayers? Do you really expect us to believe there's nothing in it for Y-O-U, FirstEnergy? I mean, you guys are kind of stupid, but I didn't think you were complete idiots.

And I do believe you are attempting to remove a whole bunch of transmission from state regulatory oversight so that you can plow your "transmission spend" into making "investments" of questionable worth in your lower voltage transmission lines that aren't part of any PJM transmission plan.

So, does anyone care? Apparently not much. The only parties to intervene in this docket are competitor PSEG and FERC settlement gadflies AMP and ODEC.

Remember, these companies are regulated to protect you. Except there's nobody minding the store on your behalf.

8 Comments

Clean Line and DOE Crank It Up A Notch

7/16/2015

2 Comments

A little birdie told me that the U.S. Department of Energy is shopping for experienced legal counsel from the world of white shoe, D.C. energy firms to "help" them with their statutory review of Section 1222 of the Energy Policy Act and their review of Clean Line's application.

The successful contractor shall:

Provide specialized legal advice and expertise in the following practice areas: corporate;
debt financings, including construction, secured project finance and/or corporate finance; equity finance; project development; public-private partnerships; contracts, including contracts specific to transmission projects such as power purchase agreements
transmission service agreements, and engineering, procurement and construction
contracts; bankruptcy involving energy-related insolvencies; real estate and land use, including multi-state, high-voltage electric transmission infrastructure siting; mortgages
and lending; energy law, focusing on multi-state, high-voltage electric transmission
infrastructure projects; environmental law; procurement, including procurements under the Federal Acquisition Regulations and familiarity with federal-specific contract terms
and concepts (such as “Buy American” provisions, prohibition on binding arbitration,
etc.); federal fiscal law, including the Anti-Deficiency Act; and employment and labor, including the Davis-Bacon Act and project labor agreements.

This work shall be under the supervision of:

Partner – Project Manager. This individual is an expert in project finance and development and related issues with special expertise in multi-state, high voltage electric transmission matters. This individual must have experience representing clients in public private
partnerships.
The Project Manager will have overall responsibility for managing work under the contract and for reporting to the COR. This individual must have the ability to: 1) coordinate and direct work of others
under the contract; 2) efficiently and quickly form and communicate legal opinions and strategies regarding implementation of the Section 1222 program; and 3) represent DOE in negotiations.
This individual must have extensive experience in the practice of law, with at least fifteen years of experience in transmission project finance and development.
This individual should have experience working with organizations within the federal government, and be knowledgeable about the special administrative and public policy responsibilities of such organizations.
Candidate must possess a Juris Doctor Degree from an accredited law school and an active bar membership.

No, you shouldn't all rush to bid. The response date came and went back at the beginning of June. Looks like the DOE had this plan in the works much earlier, perhaps when they announced the statutory review period back in April. How come nobody knew about this?

So, what does this mean? It means that the DOE is intending to smoke any challenges to its authority from country bumpkins and legal counsel from outside the beltway. The DC energy legal community is quite adept at creating any reality that its paying client desires. If you're not one of them, good luck to ya! Does this mean that challengers to DOE's authority need to secure their own seat inside the DC legal fence? Probably. It's going to get complicated.

But what I really want to know is... who's paying for this? Is Clean Line going to get the bill? Or, since it's all about making Section 1222 legally bullet-proof, and any utility can technically apply under the statute, will the U.S. taxpayers end up financing it? How much is this going to cost when these types of lawyers can come with price tags of $1000/hr., not to mention the cost of all their associates and underlings who do the real work.

So, we can probably look forward to some high-level legal buggery, such as use of CITIZENS AND LANDOWNERS AGAINST THE MILES CITY/NEW UNDERWOOD POWERLINE v. DOE, where the 8th Circuit found that the complaint of the landowners and their organization is barred by the doctrine of laches and that, contrary to the contentions of the Commission, the appellees need not obtain a state permit to construct the powerline. The Court also found that "contrary to the contentions of the Commission, the appellees need not obtain a state permit as required by the South Dakota siting law." I'm not going to spend any more time analyzing this, other than to mention it's a case that has yet to rear its ugly head in any legal arguments related to Sec. 1222. Go read it and do your own analysis.

I wonder if DOE's counsel will recognize that under 42 U.S. Code § 7191(b), if the Secretary determines that a substantial issue of fact or law exists or that such rule, regulation, or order is likely to have a substantial impact on the Nation’s economy or large numbers of individuals or businesses, an opportunity for oral presentation of views, data, and arguments shall be provided? Or would it even matter, since nobody has "made a showing pursuant to paragraph 2" i.e. "Any person, who would be adversely affected by the implementation of any proposed rule, regulation, or order who desires an opportunity for oral presentation of views, data, and arguments, may submit material supporting the existence of such substantial issues or such impact." Only those inside the federal fence seem to recognize such things...

It's going to get interesting. Really interesting.

And expensive. Really, really expensive.

And ugly. Really, really, really ugly.

2 Comments

Sprouse Brothers v. Ziff Brothers

7/2/2015

8 Comments

... and this one goes to Sprouse!

We're still living in America, where money apparently can't buy everything. And that's a cheery thought!

The Kansas City Star continues its excellent coverage of the Grain Belt Express debacle in the wake of yesterday's denial of the project by the Missouri Public Service Commission.

The Star focuses on impacted Missouri landowner Loren Sprouse, who, along with his brothers, operates a farm in Caldwell County. Read the article and watch the video here.

A week before the vote, Loren Sprouse — along with two brothers, he farms land in Caldwell County that’s been in the family since 1919 — said of Grain Belt: “This is a giant land grab by a huge company. They (Clean Line) are a private, for-profit company trying to masquerade as a public utility.”

After Wednesday’s vote, Sprouse said: “Now we can get back to the important business of feeding America.”

The Missouri PSC's Order denying Grain Belt's application mentioned:

Clean Line Investor Corp. is a subsidiary of ZAM Ventures, L.P., which is one
of the principal investment vehicles for ZBI Ventures, LLC. ZAM Ventures, L.P. has a consolidated net worth of $500 million based on U.S. GAAP measurements. ZBI Ventures,
LLC is owned by Ziff Brothers, a multi-billion dollar family investment fund.

The Order stopped short of revealing how much of this particular $500M chunk their multi-billion dollar fortune the Ziffs have invested in Clean Line's struggling projects, but Clean Line's recent application to the Illinois Commerce Commission revealed it's in the neighborhood of $70M. That's nearly 1/5 of ZAM's fortune tied up in Clean Line with no hope of recovery if the projects fail. Maybe this will give the Ziffs some empathy for the Sprouse brothers, who stand to lose a huge chunk of their investment if the project is built.

And let's think about that for a second... how much potential profit is in these projects for the Ziffs if they're willing to invest such a huge chunk of their fortune? Will they recoup their entire investment if only one of Clean Line's five projects gets built?

So, who watched the Missouri PSC meeting yesterday? It was lovely of Mike Skelly and Mark Lawlor to choose seats that put them within range of the streaming video camera. Everyone got to watch them lose! Here's what it looked like:

Schadenfreude? You betcha!

Skelly originally took his classic "arms folded" defiant pose while Lawlor awkwardly stood in the doorway with a hang dog expression. I guess someone told them that their body language was unbecoming for the occasion, because Skelly switched to the "hands tightly clasped between his knees" pose and Lawlor sat down to take notes. Although, in this shot, it looks like Lawlor is about to bolt from his seat and run screaming from the room.

So, what did Clean Line have to say afterwards? It took forever for them to issue a press release (because the victory one they probably had prepared ended up in the shredder). Clean Line says:

...there appears to be some confusion at the Missouri Public Service Commission about how the project will benefit Missourians.

Confusion? Hardly. The MO PSC's Order was clear as a bell. It weighed the evidence and made a decision that actual benefits to the general public from the Project are outweighed by the burdens on affected landowners.

Who does that Clean Line? Who calls a state regulatory board "confused" when they don't get their way? This isn't boding well for another application down the road...

The profit-seeking needs of the Ziff Brothers were outweighed by the burden the project proposed to the Sprouse Brothers.

What a great thought as we celebrate America this weekend!

And let's end with a final photo of Mike and Mark, who finally managed to have a word with each other as the meeting was ending. What do you suppose they said?

8 Comments

Grain Belt Express Runs Off the Rails

7/1/2015

0 Comments

At a meeting today, the Missouri Public Service Commission issued an order finding that Grain Belt Express has failed to meet, by a preponderance of the evidence, its burden of proof to demonstrate that the project is necessary or convenient for the public service. The Commission therefore denied Grain Belt's application to construct a high voltage direct current electric transmission line across the state of Missouri to serve eastern electric markets.

Block Grain Belt Express-MO is pleased that their pleas to the Missouri PSC were heard by the Commissioners, who found that any actual benefits to the general public from the Project would be outweighed by the burdens on affected landowners.

Blake Hurst from Missouri Farm Bureau stated, "Farm Bureau is extremely pleased with the action the Public Service Commission took today denying Clean Line Energy's request to build a transmission line across northern Missouri. Property owners and members of our organization in the area affected by the line - the line going through their farms - talked about the difficulty of farming around the lines and talked about the importance of private property rights. They strongly oppose the granting of eminent domain for a private project. The Public Service Commission heard their concerns, understands the importance of private property rights, and protected Missouri landowners with their decision today."

"Now we can get back to the important business of feeding America," said impacted farm operator Loren Sprouse.

Block GBE has maintained that the project is not economically feasible and that the impacts to affected landowners were not given adequate consideration by the project's backer, Clean Line Energy Partners.

"This is democracy in action," said Jennifer Gatrel, Block GBE-MO Vice President, who has spent the past several years speaking out against the project and keeping others informed. "You can stand up to corporate interests and protect your property rights," she added.

But the work of Block GBE-MO is not over yet. Clean Line may still revive its application to the U.S. Department of Energy in an attempt to have federal power marketer Southwestern Power Administration "participate" in its project in order to wield its power of federal eminent domain and overrule Missouri authorities on the project.

"It's going to be a long and expensive process if Grain Belt Express chooses to go the federal route," said Russ Pisciotta, President of Block GBE. "We're in it for the long-haul."

The grassroots group of landowners and citizens will continue their efforts to foster sensible energy policy and projects that move our country toward a sustainable energy future.

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An Energy History Lesson

6/28/2015

1 Comment

Federal energy agencies are a puzzle to most people. FERC and DOE? What's the difference? Is there a difference? What do these agencies do, and how can you participate in their processes?

It's helpful to start at the beginning, with the creation of these agencies. The Department of Energy Organization Act of 1977 reorganized a hodge podge of federal energy departments to separate energy policy from energy regulation to prevent too much coziness and to create a national energy program.

The U.S. Department of Energy was established as a cabinet-level department to deal with energy policy. Within the DOE hierarchy, Congress also created an independent energy regulatory Commission known as the Federal Energy Regulatory Commission, or FERC. The DOE organizational chart looks like this.

FERC was given jurisdiction over narrow and specific energy issues. FERC is NOT a national appeals court for state energy decisions you don't like. FERC does NOT have jurisdiction over the actions of DOE, or any other agency over which it is not specifically granted jurisdiction by Congress. Sometimes the DOE can delegate specific authority to independent agencies like FERC, in order to work cooperatively with them to develop rules or policy over which DOE has jurisdiction.

Here's a simple list of what FERC does and what FERC does not. If you think you have an issue that FERC should do something about, please check the list before wasting time and resources filing frivolous complaints or petitions with FERC. If you don't understand this list, or need more information, please ask someone who does know or do some research before running to DC with your pop gun loaded with blanks. Not only do you look silly, but you waste incredible amounts of time and resources and damage your reputation. Federal energy regulation and policy is not a game of flinging poop on the wall to see which pieces stick. Get educated, get your game plan organized, and target your requests with efficiency for best results.

FERC has its own set of rules that apply to matters under FERC's jurisdiction. If your issue isn't within FERC's jurisdiction, FERC's rules don't apply.

Unless operating under the rules of a different agency that has some jurisdiction in one of its actions, the DOE operates under 5 U.S. Code Chapter 5, Subchapter II - ADMINISTRATIVE PROCEDURE.

If you want something, you have to legally support what you're asking for. Remember, only monkeys throw poop.

1 Comment

Captured WV PSC Will Continue to Increase Utility Rates Like a Rubber Stamp

6/28/2015

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The Beckley Register-Herald published a spot on editorial last week regarding the captive West Virginia PSC's continual rubber stamping of utility rate increases.

CHA-CHING!

The editorial lambasted the PSC for not even bothering to act like they care to listen to public commentary.

At a hearing last week in Beckley, one citizen clearly believed the PSC acts more as a rubber stamp for the utilities than an advocate for the people. His notion was not hindered by a PSC staffer who was perceived to be texting or playing with her phone throughout the meeting.

The editorial points out that at some point, the continued advancement of utility bill increases are going to meet the immovable object of consumer ability to pay.

In the past, the PSC has shown little concern about consumers, except to scam them with "consumer rate relief bonds" designed to simply hide huge rate increases with slick PR campaigns and additional financing fees.

The WV PSC must balance the interests of consumers with those of utilities. Simply denying a rate increase needed to keep the utility solvent isn't an option.

What's a regulator to do?

Break those utility chains that bind you, Commissioners! Instead of being lead around by the utilities like a monkey on a leash, how about leading for a change? We're only going to get a handle on utility rate increases when regulators start acting like regulators and stop acting like utility sycophants.

Only when regulators use their authority to lead utilities can true balance happen. Perhaps our Governor should start appointing Commissioners with the proper skills, instead of appointing his cronies to the PSC as political favors.

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Clean Line's Skelly Says He's Thinking About Abandoning Grain Belt Express Project

6/28/2015

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It's about time!

Clean Line President Michael Skelly told a reporter the other day:

“There’s also a chance we might abandon the project,” he said.

Do it! Do it! Do it! Do it! Do it!

Let's all encourage Skelly to finally do the right thing.

ABANDON GRAIN BELT EXPRESS!

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PATH Rate Challenge and Abandonment Recovery Briefs Filed at FERC

6/26/2015

2 Comments

Did you think I've been on vacation for the past couple of weeks? Hardly. But I've been having so much fun it sort of felt like a vacation.

Today was the filing deadline for initial briefs in the consolidated FERC proceeding dealing with the formal challenges to PATH's 2009, 2010 and 2011 rates and the recovery of PATH's capital investment in the cancelled PATH project.

The briefs summarize the evidence and positions of the parties.

You can download them here:

Newman-Haverty Initial Brief
(deals with formal challenge only)
66 pages

FERC Trial Staff Initial Brief
(deals with formal challenge and abandonment)
99 pages

Joint Consumer Advocates Brief
(deals with abandonment only)
268 pages

PATH Brief
(deals with formal challenge and abandonment)
168 pages

Happy reading! They're much shorter than War and Peace. I think.

Why do they call them briefs? Is this some sort of sick joke?

2 Comments

Grain Belt Express Wants MO PSC to Toll its Application

6/13/2015

0 Comments

Holding this proceeding in abeyance and allowing the Company to obtain such additional information and to work with Staff to develop additional production cost models would prejudice no one.

They also claim it would be "in the public interest" to allow the application to languish in limbo until Grain Belt Express can actually provide the information the Commission asked for back in February.

"The public" has been inconvenienced and financially harmed by Grain Belt Express every day of the past 2 years this thing has been an active threat to their lives and livelihood. Targeted landowners have been living in stasis, afraid to invest in their properties, unable to sell their properties without disclosing the possible intrusion of a gigantic power line that will lower its value. Thousands have been spent legally defending their rights. There has been many a sleepless night, an uneaten meal, and way too much family time foregone in favor of meetings, hearings, and other related events. These folks have been put through the wringer, but they have persevered.

Now, when denial of Clean Line's application is imminent, the company suddenly wants the Commission to slow down, after urging it to hurry up all these months it thought it was on the way to victory.

The Commission has given GBE way too many chances already. A full evidentiary hearing was held. The record was closed. But, the Commission gave GBE a second chance to supplement the record months after the record had closed. Clean Line couldn't be bothered to provide the necessary information or evidence. Now GBE wants a third chance to get it right, and for thousands of affected landowners to continue to live in suspended animation for however long it takes GBE to get its act together.

Obviously Lawlor's threats to march right to the U.S. DOE to revive his application for federal eminent domain authority under Sec. 1222 of the U.S. Energy Policy Act was a big, fat bluff. He's not going anywhere, except to drop to his knees right there in Missouri and beg for a third chance.

"Do overs" are best left on the playground. Release the landowners from this corporate game-playing purgatory. Deny the application.

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<<Previous

Forward>>

Illinois Commerce Commission Advises Grain Belt Express Public Hearings Are For Directly Affected Citizens

Energizing FirstEnergy's Balance Sheet With Transmission Spend

Clean Line and DOE Crank It Up A Notch

Sprouse Brothers v. Ziff Brothers

Grain Belt Express Runs Off the Rails

An Energy History Lesson

Captured WV PSC Will Continue to Increase Utility Rates Like a Rubber Stamp

Clean Line's Skelly Says He's Thinking About Abandoning Grain Belt Express Project

PATH Rate Challenge and Abandonment Recovery Briefs Filed at FERC

Grain Belt Express Wants MO PSC to Toll its Application

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