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Clean Line's Big Top Begins to Fall

12/26/2017

9 Comments

 
Look out below, everyone!  The Clean Line circus tent is beginning to collapse.  Any clowns remaining in the ring are in grave danger!  Abandon circus, abandon circus!
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In the center ring, the Plains & Eastern Clean Line has been butchered and the tastiest cuts have been sold to NextEra Energy for an undisclosed sum.  It remains to be seen what NextEra will cook up with the piece it has purchased or whether there actually is a market for a huge amount of wind energy in eastern Oklahoma.  A NextEra spokesman commented, "...we have more work to do commercially before construction begins...".  Right.  Just like Clean Line, there are no customers.  I hope NextEra's Big Top is a little sturdier (and its pockets a bit deeper) than Clean Line's.

So, Clean Line wants to pretend that because NextEra only bought the Oklahoma portion of the project that the remainder still held by Clean Line will someday become valuable.  That crap isn't even fit for sausage.  There is no value because there are no customers who want to buy at the TVA interconnection.  In fact, it looks like Clean Line's TVA interconnection queue position has been withdrawn.  That means Clean Line no longer wants to inject energy into the TVA region.  Over.  Done.  Maybe NextEra has enough cash to speculate on the Oklahoma portion someday being viable, but even they don't think the portion from the Oklahoma border to Memphis is worth the risk.

And over in the ring to my left, the Rock Island Clean Line has fallen off the trapeze and broken every bone in its body.  The clowns have been pantomiming continuing life support, but the audience knows it's a goner.

Over in the last ring, the Grain Belt Express lies gasping while the clowns are bringing in a string of potential buyers for pieces of its carcass in their cute, little cars.  How many transmission executives can you fit into a garishly-painted VW beetle?  And what portion of GBE does anyone think is viable?

Clean Line Energy's circus is all but over.

9 Comments

Clean Line Begs Utility Giant AEP to Open an Escape Hatch

12/13/2017

7 Comments

 
UPDATE!
Is AEP just being taken for a ride in Oklahoma?
Will AEP end up stabbed in the back and dumped in a ditch?
Click here

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Things seem to be winding down at Clean Line Energy Partners over the last month or so.  The rats continue to abandon the mothership.  Take a look at Clean Line's "Leadership" page and notice that a couple former executives are now missing.  It looks to me like maybe the transmission folks are leaving, with only the wind energy people still on investor Bluescape's leash.  I wonder if Bluescape is trying to salvage something out of its investment in Clean Line by jettisoning the loser transmission projects and focusing on more wind farms like Mesa Canyons?

The Rock Island Clean Line is dead.  It can't use eminent domain in Iowa or Illinois.

The Grain Belt Express is on life support.  Despite Clean Line's desperate attempt to get the Missouri Supreme Court to hear its case, there has been no response and the case has been scheduled to be heard in the Appeals Court next year.  And, on the off chance that GBE succeeds on appeal, the Illinois courts must kill it because the Illinois Supreme Court already ruled in the RICL case that Clean Line isn't a public utility.  Checkmate.

The Plains & Eastern Clean Line is a zombie.  Despite the "participation" of the U.S. Department of Energy in that project, customers have stubbornly failed to materialize.  It's been nearly two years since the DOE issued its "Record of Decision" that Clean Line thinks gives its project the okay to build.  And still no customers in sight.  According to E&E News:
While not yet ready to begin construction, Hurtado said the next big milestone isn't far off, and Clean Line has turned its focus to finding key customers.

"We've been at it for a while, and we're very close to the finish line," he said.

Clean Line has yet to announce any firm agreements with Southeast utilities for transmission. Meanwhile, the clock is ticking.

"We think that there's a time-sensitive opportunity," Hurtado said. "I'm not comfortable waiting too much longer. The sooner we can get this done, the better. There are always risks, and you want to manage that really prudently. We're already in pre-construction. The sooner we get into full-fledged construction, the better."

"Obviously, the trick is to make sure that you have capacity at the right price to the people that are actually winning the contracts in the Southeast," Hurtado said. "There's direct commercial discussions that are going on that are confidential. There are RFPs [requests for proposals], and that's still moving forward. It's part of our overall commercial discussions that we've got that are sort of focused, but they're all sort of in the works."


One potential customer, the Tennessee Valley Authority, so far hasn't shown an interest in taking transmission service from the Plains and Eastern.

TVA signed a memorandum of understanding with Clean Line in 2011, but the utility currently has no need for more energy on its system as its long-range plans show no demand growth for the next decade, said spokesman Scott Brooks.

And any older power plants being shut down by TVA are generally being replaced with natural-gas-fired generation, Brooks said.
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But wait!  A real utility has proposed a new transmission project across Oklahoma.  American Electric Power wants to buy a ginormous wind farm and build a 765kV alternating current transmission line across the state and distribute the energy to its customers.  And AEP wants ratepayers in four states where it serves customers to pay for its project.  That's right, AEP wants state utility commissions in Oklahoma and other states AEP serves to allocate the cost of their project to ratepayers.  AEP is not building a merchant transmission project, where the  utility finances the project construction and then negotiates rates with voluntary customers.  AEP will only build its project if its cost will be covered by ratepayers, along with a hefty return on equity to AEP.

A look at the Oklahoma Commerce Commission's docket (Case No. 201700267) for AEP's filing doesn't look promising.  It seems most of the parties are against it, either because they don't want to shoulder the cost, or because there was no competition in selecting the wind generator.  And AEP is trying to rush this through with only a cursory examination because it must latch onto the government teat known as the Production Tax Credit before it expires in order to bring "savings" to ratepayers.  If this project only provides "savings" from tax subsidies, then it's just not worth doing.  But AEP stands to make a bundle on its investment in a new wind farm and transmission line.  Whoever owns the assets makes the profits.

And wouldn't you know it, Clean Line intervened in AEP's project docket to support this "laudable" project.  But only if AEP uses Plains & Eastern instead of building its own transmission line.  Or maybe AEP can partner with Clean Line?  Or invest in Clean Line?  Or AEP can completely redesign the project and change its route?  Or perhaps buy the Plains & Eastern Clean Line?  Or perhaps scrape Clean Line off the underside of a park bench with a putty knife, chew it up, and spit it out?  It seems that Mario Hurtado is pretty much open to anything that would monetize his fruitless efforts to build the Plains & Eastern Clean Line for the past eight years.  Sounds like Plains & Eastern is begging AEP to open an escape hatch so they can get this cash cow off the books.
Plains and Eastern is open to PSO or other utilities customers owning all or a portion of the transmission line, commensurate with their transmission needs. In addition, Plains and Eastern is open to PSO or other utilities managing part or all of the Plains & Eastern Project's construction.

If there is a demand for Oklahoma Panhandle wind in eastern Oklahoma, the Project's first phase could be built solely in Oklahoma. Subsequent phases could be built at a later date if market demands warranted such action.

While Plains and Eastern's efforts have been focused on HVDC transmission, other technical
solutions could be constructed in the Project's right-of-way, such as 345kV AC or 765kV AC. Plains and Eastern is open to modifying the
Project to a different technology or voltage level if it offers the best value to customers.

The Project begins near Wind Catcher's generation position in the Panhandle and the route runs within 50 miles of PSO's Tulsa North substation, the proposed interconnection point for the Wind Catcher line.  In eastern Oklahoma, there are also other potential interconnection points in PSO's service territory that are even closer to the Plains & Eastern Project's route than the Tulsa North substation and could be utilized to serve PSO load and other loads.
Clean Line wastes a lot of ink touting its "approved route" and purchased easements for its project as a sure thing that will save AEP time and money.  Except Plains & Eastern's route is nowhere near AEP's proposed route and does not connect with AEP's substations.  Somehow, finding a new route to connect P&E's proposed route with AEP's proposed route gets glossed over.  Why would AEP want to take some circuitous route across the state and build many more miles of transmission than it actually needs?  But like a polished used car salesman, Clean Line tries to sell its route and "relationships" with landowners as a sure thing.  Clean Line seems to take the position that is is somehow superior to AEP in the transmission building game and can do it better.
Furthermore, the Plains and Eastern team has received many questions from landowners and other stakeholders in Oklahoma about the Wind Catcher project. The team has been asked if Plains and Eastern can be involved or assist in the Wind Catcher project given that Plains and Eastern has a construction-ready, long-haul transmission project that runs from the Oklahoma Panhandle to the east and has acquired easements on more than 750 parcels in Oklahoma.
Said no one ever?  Who are these people?  Do they have names?  Why in the world would anyone want a company that has never built anything or realized a dime of revenue to "assist" a public utility that has been around for more than 100 years?
After being approached by representatives of PSO, Oklahoma landowners have asked the Plains and Eastern team if they should work with PSO even though they have already signed an easement with Plains and Eastern.
And what was the "team's" response, Mario, do tell?  Did you say, "Transmission lines are like Lays Potato Chips, you can never have just one?"  Or did you tell the landowners to slam the door in the face of any PSO (AEP) land agent?  Or maybe you told them to try to sell your project to AEP so you'd have enough cash to make the next payment on your easement option contracts?

All of a sudden, Clean Line has changed the focus of its Plains & Eastern project.  It's no longer about bringing wind power to "states farther east."  It's about bringing wind power to eastern Oklahoma now.  Ahhh... desperation, the mother of invention...
The power markets have evolved substantially since Plains and Eastern received its order from this Commission in the past eight years and eastern Oklahoma is now a strong delivery point for the Plains & Eastern Project. The Project could be utilized to accommodate high-voltage either direct current ("HVDC") and alternating current ("AC") transmission solutions to accomplish this interconnection in eastern Oklahoma and Plains and Eastern is willing to engage to consider either option. Mr. Hurtado stated that he would explain that Plains and Eastern is open to building a first
phase of the Project that is located solely in Oklahoma.
And then Mario comes out with this gem.
SPP has no plans to build new transmission
lines in the next decade, making independent transmission necessary to enable large amounts of new wind farms to be built in the Oklahoma Panhandle.
SPP plans and orders built all transmission necessary for reliability and economic reasons within its region.  Oklahoma is in the SPP region.  If SPP doesn't order it built, it's not "necessary."

And then Clean Line says its project is fully approved.
Plains and Eastern has also secured all key regulatory approvals necessary for construction on that route.
Except the "approval" Clean Line has is for a merchant project that must first secure enough customers to finance its construction.  Clean Line does not have "approval" to build a cost allocated line paid for by ratepayers in Oklahoma and other states.  It's like using an apple when your recipe calls for an orange.  As well, Clean Line's "approval" by the U.S. DOE is currently being challenged in federal court and could very likely simply evaporate when the court rules.  And until Clean Line has enough customers to finance its project, it cannot be built.  How long is AEP supposed to wait for Clean Line to find enough customers to build the line?

Clean Line says that DOE's routing of its project "approved" a preferred route.
The DOE independently analyzed the proposed route and several alternative routes in its
EIS and ultimately approved a preferred route through its Record of Decision.
But DOE does not have statutory authority to site a transmission route, therefore it cannot "approve" a preferred route.  Section 1222 of the Energy Policy Act reserves siting for the impacted states.  This point is also part of the ongoing federal lawsuit.

Clean Line says landowners in Oklahoma love them.
Plains and Eastern's careful and open approach to landowner interaction and easement acquisition established the company as a solid partner and good neighbor in Oklahoma
Gosh, that's funny.  The landowners in Oklahoma that I've talked to despise Clean Line and have vowed to NEVER sign a voluntary easement.  Perhaps all Clean Line's Oklahoma friends could be characterized as "low hanging fruit," the easy sells.  Anybody with a checkbook could acquire these easement rights.  It's the difficult ones (according to Mario's testimony more than 40%) that can delay a project for years.  I'm thinking that AEP has never built a transmission project that required eminent domain takings for more than 40% of its route.
Many landowner conversations are on-going, and Plains and Eastern is highly confident that all right-of-way necessary to start construction could be completed in time to allow for construction to start in 2018 and an on-line date in 2020.
Also hard to believe, since Clean Line is depending on the federal government to effect all eminent domain takings for its route, and the U.S. DOJ's attorney absolutely would not commit to the takings during recent oral arguments before a federal judge in Arkansas.

Does Clean Line think AEP has been in business for over 100 years because it's gullible and easily swayed by a fast-talking salesman?  AEP may be a bunch of jerks, but they're not stupid.  AEP knows a Fifty Foot Car when it sees one.

Or is this just the first act in a poorly presented regulatory Kabuki theater where AEP buys up the Plains & Eastern project and systematically cannibalizes it to extract only those land easements that work with its preferred route?  If so, Plains & Eastern is dead.    If AEP wanted to build merchant transmission, it would have proposed its own project as a merchant and wouldn't have any opposition at the Oklahoma Corporation Commission.  Instead, AEP wants to build a captive ratepayer funded transmission project completely within the state of Oklahoma.  Clean Line's expensive dance with the DOE is completely useless, in that case.  But what about Clean Line's agreement to pay the U.S. DOE 2% of its quarterly profits?  Would AEP have to pay DOE 2% of its quarterly profits if it bought Plains & Eastern and used DOE's "approved" route?  I'm sure that will keep a lot of lawyers busy for a long, long time.

AEP says it will respond to Clean Line's filing by the December 22 deadline.  And, hey, Merry Christmas, Clean Line! 
7 Comments

Eminent Domain is Costly and Painful for Landowners, So CFRA Wants You to Give In and Avoid It

11/12/2017

2 Comments

 
I was going to headline this "they're at it again" but why go general when CFRA gives you something so ridiculous to work with?

I was recently made aware of a Des Moines FM podcast on transmission line eminent domain in Iowa starring the usual cast of characters from the Center for Rural Affairs (CFRA).  And they're saying basically the same old things.  Over the past several years, CFRA has popped up from time to time with a "report" or other half-baked ideas designed to convince landowners to knuckle under and simply accept new electric transmission across their land.  Remember the Special Purpose Development Corporation idea?  That was special, no doubt about it.  Every time CFRA pops up with another idea, landowners shout it down, and CFRA goes back to the drawing board to create another great idea or "report."  Now CFRA is threatening to release another "report" on a "survey" of landowners with opinions of electric transmission projects.  I'm just guessing here, but I suspect that none of the landowners who successfully derailed the Rock Island Clean Line were contacted to participate in this "survey."

So, what's in the 26 minute interview?  CFRA wants landowners to know how PAINFUL and EXPENSIVE eminent domain for transmission can be.  Is CFRA scaring you yet?  According to CFRA, landowners should avoid eminent domain.  Well, hey, that sounds like a plan!  Except that's where landowners and CFRA part ways.  Landowners avoid eminent domain by refusing to negotiate voluntary rights of way and by participating in the regulatory process through objections to the transmission project.  They also contact their legislators and work to pass important new laws that protect the landowners from unneeded transmission projects.  CFRA's way to avoid eminent domain?  Give in.  Negotiate with developers.  Allow developers to "have use of a certain area of your land" (remember, it's not a sale, it's just use of your land, according to CFRA -- except it IS a sale, it's an encumbrance on your title that allows use and control of your land by someone else in perpetuity).  According to CFRA, landowners are supposed to make sure they're being compensated fairly, and "work with developers" to negotiate an easement on a part of their land where they "don't mind if there's an easement on it."  CFRA's ultimate goal is for you to have a voluntary transmission easement across your land that you are "happy with."  And you're supposed to do all this without the assistance of a lawyer.  CFRA says it's not normal for landowners to seek legal counsel before signing legal agreements for the sale of an easement.  Even when questioned by the host, CFRA advised that "usually" only a landowner and the transmission developer are involved.  But sometimes landowners can get "uncomfortable" when a developer is pissing on their leg and telling them it's raining.  If that happens to you, you could get a lawyer, or you can always ask CFRA for help.  Hmmm.... wait a tick... CFRA is the one who said you didn't need a lawyer in the first place.  How much help do you think they'll be?

And that's the problem.  CFRA is no help.  In fact, they're a grant-funded transmission cheerleader.  While CFRA originally came into existence on the government dole to stand up for small family farmers, it was defunded a long, long time ago.  But CFRA has continued to exist on grants from private "funds" and "foundations."  While government grants, like all grants, have some strings and deliverables, private entity grants have massive, thick ropes instead of strings.  They're not always for the good of the people.  And organizations like CFRA must perform all sorts of things in order to unlock the funding that keeps them going.

Such as this:
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That's right, CFRA was granted $160,000 "to build, activate, and mobilize a rural voice supportive of clean energy transmission..."

And telling landowners to roll over and allow new transmission across their land is how they "deliver" to their funders.

Except it's not working.  Despite CFRA's best efforts to convince Iowans to accept the Rock Island Clean Line, the only "voice" that developed was the resounding roar of opposition that killed that project for good.  RICL has failed.  CFRA has failed.  The "rural voice" does not support new transmission across their land, for any reason.  It's not true that "more public engagement" and "encouraging landowners to talk to developers" is going to change any landowner's mind.  It's only making CFRA more and more irrelevant to rural America.

No landowner is ever "happy" with a transmission easement across his land.  Ever.  There's only degrees of unhappiness.  And landowners are stepping up in increasing numbers and refusing to be unhappy at all.  They're dedicated to stopping transmission projects altogether, and they're winning.

Hey, maybe we can take up a collection to fund a new grant that CFRA can apply for?  I'll call it the Transmission Opposition Grant, and it will require the recipient to build, activate, and mobilize a rural voice supportive of landowner rights.  I've put a nickel on the table.  Who's in?
2 Comments

Southern Cross Transmission Wants a Free Ride From Texas Ratepayers

10/11/2017

1 Comment

 
That seems to be the conclusion of the Public Utility Commission of Texas (PUCT) in its most recent Order regarding the Rusk to Panola transmission connection that will move cheap electricity out of Texas as part of the Southern Cross Transmission project.

Southern Cross is another merchant transmission project supposedly "for wind" that wants to export cheap Texas power into Southeastern states via a new 400-mile HVDC transmission connection.  A "merchant" project is one for which investors shoulder the risk because it doesn't have a guaranteed ratepayer-financed revenue stream.  Merchant projects are not found needed for reliability, economic, or public policy purposes, therefore ratepayers shall not be forced to finance them.  Merchant projects generally negotiate rates with willing customers to finance their projects.

Southern Cross had to jump an additional hurdle that other Midwestern merchant projects did not.  Southern Cross proposes to export wind generated transmission from the Electric Reliability Council of Texas (ERCOT) into another electric region.  ERCOT is its own little one-state electric region island in order to escape the jurisdiction of the Federal Energy Regulatory Commission (FERC) that applies to other multi-state electric regions.  In order to connect ERCOT resources to another region, Southern Cross went through a process at FERC that allowed the connection without compromising ERCOT's independence.  Part of that deal required a connection from within ERCOT to another portion of Texas that was not within ERCOT.  This is the proposed Rusk to Panola project, a double-circuit 345kV line.  Southern Cross's transmission project would then connect to this project and move the electricity further across Louisiana and Mississippi, and connect with the grid in Alabama.  Rusk to Panola (known as RPTP by Southern Cross) is only necessary to provide electricity to Southern Cross.  RPTP needs the permission of the PUCT to build the project.  While PUCT acknowledges that it must approve the project, it may do so with conditions.  And the conditions PUCT placed on its approval have been met with resistance by Southern Cross.

Holy shell companies, Batman!  RPTP is supposedly owned by the City of Garland, Texas, but will be paid for by some entity known as Rusk Interconnection, LLC.  Just like peeling an onion... layer after layer after layer... but back to the main event...

PUCT has directed that any costs caused by the RPTP be assigned to Southern Cross Transmission, and not ERCOT ratepayers.  ERCOT ratepayers are already shouldering the burden of ERCOT's CREZ projects, a series of new transmission lines intended to move wind-generated electricity from western Texas to load centers in the eastern part of the state.  CREZ hasn't come cheap for ratepayers, and it looks like Texas may have overdone it, supplying so much "cheap" wind power that there is a surplus.  Southern Cross proposes to alleviate that surplus by exporting it to other states.  But yet, Southern Cross doesn't want to pay the full cost of its project's effect on the ERCOT system, instead purporting that ERCOT ratepayers would receive some "benefit" from Southern Cross and must therefore pay for that "benefit."  Except these aren't "benefits" that ERCOT ratepayers need.  At best, they are "benefits" that ERCOT ratepayers don't need or want, "benefits" that are foisted upon them because of Southern Cross's project.  Who wants to pay for "benefits" they don't need?

PUCT says:
The current market design in ERCOT primarily places the responsibility for system costs on ERCOT customers. This docket has revealed that the Southern Cross DC tie will result in additional costs to ERCOT, which include extraordinary costs that arise specifically from the Southern Cross DC tie, the Garland line, and the Garland or Oncor substations. Because the customers of exported power are not ERCOT customers, under the current market design and rules, they will not bear any responsibility for the extraordinary costs specific to the Southern Cross DC tie, Garland line, and Garland or Oncor substations that they impose on the ERCOT system. Southern Cross believes that those customers—and therefore Southern Cross—should get a free ride as to these extraordinary costs. The Commission disagrees and determines that the public interest demands that ERCOT ratepayers should not bear any of the costs associated with the Garland line, the Oncor substation, the Garland substation, or the Southern Cross DC tie that are properly borne by others.
The costs that a user of the ERCOT system causes cannot be determined simply by focusing on the costs of the facilities on the last forty miles of a multi-thousand-mile network. There is little doubt that additional facilities will be required in ERCOT because of the electricity flowing over the Southern Cross DC tie. Southern Cross believes that the costs of those facilities should be borne by customers in ERCOT, not the out-of-ERCOT customers that cause those costs.  And Southern Cross opposed even an investigation into whether revisions to the current ERCOT cost-allocation method were needed. Southern Cross attempts to justify this free-ride position based on theoretical benefits that this project will provide to ERCOT.

The Commission agrees, however, that no party met the burden of proof to prove what benefits, if any, Texas ratepayers will enjoy as a result of the Garland line and the Southern Cross DC tie and concurs with the ALJs that any benefits are questionable.  This is one of the issues that will be evaluated by ERCOT and if subsequent investigations show any benefits, then any such benefits could be reflected in the new market-design rules. The record in this case does not justify a free ride for these questionable benefits.  Texans are in the process of paying billions of dollars for the newly constructed CREZ transmission lines, and for substantial other facilities, that are integral to transmitting electricity to the Garland line and the Southern Cross DC tie. As proposed by Southern Cross Transmission, the Garland line would simply interconnect with these CREZ lines and reap benefits without paying its fair share of costs.

Further, Southern Cross argues that the DC tie will not cause a substantial increase in ancillary services needed in ERCOT, and that no change in the current manner that ancillary costs are assigned is necessary.  Southern Cross argues that the DC tie should get a free ride on these extraordinary costs also. The Commission agrees that this is a highly technical question and has requested ERCOT to evaluate this matter. The Commission also agrees, however, with ERCOT and other parties that additional ancillary services will likely be required to support the operation of the DC tie, and at certain levels, that requirement may be significant.  And, as with the other extraordinary costs discussed in this Order, it is appropriate that the cost causer be responsible for the costs, not for ERCOT customers to bear the costs of others. The Commission does note that Southern Cross softened its position some by agreeing that it could and would provide reactive-power service through the DC tie.

One benefit offered by Southern Cross is the lowering of the price of electricity in ERCOT during high-load periods.  However, Southern Cross Transmission's analysis does not appropriately account for the effect on the ERCOT energy market, which sends market signals through scarcity pricing when electricity resources are becoming scarce. Distortions to ERCOT's market signals could prevent the energy-only market from appropriately responding to shortages, leading to inadequate resources in this market. This risk to ERCOT's market structure and the grid's reliability must be assessed and addressed through recommended changes.

PUCT did a great job fishing out the "but for" costs of the project, that is those costs that would not occur "but for" the construction of RPTP.  Other states could take a lesson from this Order.

Southern Cross has asked for another rehearing on this matter by PUCT.  Just paying their own way doesn't seem to be an option for Southern Cross.  Is that because the project is not profitable unless it is subsidized by ERCOT ratepayers?

Meanwhile, Southern Cross doesn't seem to be very popular in Mississippi, where numerous landowners have intervened in the permitting process at the Mississippi Public Service Commission.  Bravo, landowners!  To see the Mississippi docket, go here and search for Case Year 2017, Case Type UA, and Case No. 079.

Southern Cross seems to have at least as many problems as the Clean Line projects proposed to its north.  It's a fact:  Landowners in fly-over states object vociferously to the use of eminent domain on their property to benefit electric ratepayers in other states and financially support private enterprise that wants to make a killing speculating in the electric power markets.  Multi-state transmission projects "for wind" are money pits on regulatory minefields that will never succeed.
1 Comment

Grain Belt Express Was...

10/9/2017

3 Comments

 
This needs no explanation.  Just watch.
3 Comments

Doom and Gloom for Grain Belt Express

10/8/2017

0 Comments

 
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I keep hoping that Clean Line Energy Partners will invest in some media training for "director of development" Mark Lawlor.  When this guy gets stressed out by reporters he says the dumbest things!  When interviewed recently about the Illinois Supreme Court's opinion that Clean Line's RICL project is not a public utility, and how that might impact the Grain Belt Express project, Lawlor said:
“Anytime you have legal clouds pending, you’re not going to spend a lot of time with that uncertainty,” said Lawlor. “We’ll see how the decisions play out before we put a lot of people to work building the project.”
Legal clouds?  A decision by the Illinois Supreme Court is just a "legal cloud" that could blow away any day now?  Not hardly.  But more interesting is Lawlor's admission that he's "not going to spend a lot of time with that uncertainty."

Wack-a-mole, Waldo?  No matter how many moles you whack, more are going to pop up somewhere else, you know... sort of like I've been telling you for years.  So why bother spending all that money on an appeal in Missouri (not to mention your very expensive political spokespuppet, Jay Nixon), when Illinois has determined your projects cannot be public utilities until sometime down the road after they're built?

Because this finally gets pretty close to the truth... it's not about simply purchasing some land.  It's about Clean Line not being able to use eminent domain to condemn land for its projects in Illinois.  Without eminent domain, Clean Line would have to negotiate with each and every landowner to purchase right of way.  No sweat, Clean Line has been telling the public that it wasn't applying for eminent domain for years and that it planned to negotiate fairly with each and every landowner to secure right of way.  So, what happens now when Clean Line has to actually do it?  It's legal clouds, uncertainty, and doom and gloom for the project.  That's because Clean Line wasn't being honest about eminent domain all along... what Clean Line meant was that it wanted to negotiate fairly with each and every landowners to secure right of way, but only when it was holding the sledgehammer of eminent domain behind its back.  That's not fair negotiation.  That's coercion.  Now all of a sudden, when the sledgehammer isn't a tool, Clean Line can't negotiate at all.  Clean Line only wanted to pretend to negotiate, but what it really wanted to do was threaten landowners with eminent domain condemnation if they didn't agree with Clean Line's terms and price.  The Court called this one spot on!

So, let's look at the last stupid thing Lawlor said...“We’ll see how the decisions play out before we put a lot of people to work building the project.”  What?  You were ready to "put a lot of people to work building the project" before the Illinois Supreme Court ruled?  How were people going to build the Grain Belt Express without state approvals from all affected states?  How were people going to build the Grain Belt Express without rights of way across the route?  Without contracts?  Without financing?  Without money?  Without customers?  Sounds like you were ready to put people to work in the same way you were willing to negotiate fairly with landowners.   As in... not at all.

What a thoughtless and stupid thing to say!

Lawlor also whines about Illinois by saying the same stupid things he said about Missouri:

The ruling, Clean Line director of development Mark Lawlor said last week, would discourage renewable energy development in Illinois.
“It is clearly a setback, and a signal not only to our investors, but to other developers, on the tremendous amount of legal barriers in Illinois,” said Lawlor. “It goes beyond Rock Island. It goes beyond Grain Belt.”

Hey, guess what?  Other developers aren't buying your cries of "wolf, wolf, wooooolffffff!"  If no "clean lines" are ever built in Illinois, it will not affect the development of renewable energy in Illinois, because none of the Clean Line projects were ever proposed to move renewable energy produced in Illinois.  No, they were just one way highways through the state for energy produced in other states, with no on or off ramps for local use.  And people care even less about your investors and their signals.  These filthy rich, silver spoon brats invested in your company with their eyes wide open, and besides, they'll hardly miss the millions they're going to be out when Clean Line folds.  They'll probably just write it off their taxes and push the tax burden off onto working class taxpayers anyhow.

It's probably only a matter of time before the investors buy Mark his own wind farm, like they did for RICL's former development director, Hans Detweiler.  Buh-bye!

Rock Island Clean Line is dead.
Grain Belt Express is dead.
0 Comments

Perhaps the DOE Should Start in its Own Backyard

10/4/2017

2 Comments

 
Rick Perry's Notice of Proposed Rulemaking... oh, the opportunities for blog fodder.  One more post before I stop (for now).

So, Rick Perry thinks that we need to stop the untimely retirement of baseload generation resources, namely coal and nuclear in order to preserve "resiliency."

He could start in his own backyard.

The DOE's "participation" in the Plains & Eastern Clean Line project is supposed to facilitate the development of renewable energy (and therefore the closing of coal-fired generators it would displace), and the DOE's Record of Decision supporting participation in the Plains & Eastern project used this justification for its decision to support the project.
The already-strong demand for imports of low-cost wind energy into the mid-South and Southeast would likely increase if and when states in the region are subject to regulations limiting greenhouse gas emissions from power plants. EPA’s Clean Power Plan, published in October 2015 and scheduled to mandate compliance beginning in 2022, aims to “continue progress already underway in the U.S. to reduce CO2 emissions from the utility power sector” and is part of a suite of air quality improvements sought by other national environmental regulations. These improvements could be accomplished through retrofitting of older generation plants, plant retirements, and an increasing reliance on local or imported low-carbon generation including renewables. The Department’s Energy Information Administration (EIA) estimates that the Clean Power Plan would result in strong growth in renewable generation, particularly in regions currently lacking robust renewable portfolio standards such as the Southeast. Implementation of the Clean Power Plan would also shift the regional fuel mix away from baseload capacity with on-site fuel supplies (such as coal, nuclear, hydroelectricity, and oil) towards capacity that tends to utilize real-time fuel delivery (wind, solar, and natural gas).  Overall, wind generation is projected to play a major role and become increasingly economically competitive. Although the EIA’s analysis did not look at the degree to which such a fuel mix would be imported to the Southeast or conduct a detailed model of the transmission system, it did find that “[c]ompliance with the proposed rule could necessitate significant investment in electric transmission system infrastructure to integrate renewables from remote areas.”

The Clean Power Plan is dead, smothered under its own hubris.  But yet DOE is still puttering merrily down the road supporting the Clean Power Plan through legacy "decisions" made by the previous administration to participate in an impossible transmission project with no customers intended to facilitate renewable competition for baseload generators in the Southeast.
In fact, the DOE was so hung up on facilitating the development of renewable energy, that it illegally added that extra-statutory factor to its RFP for Sec. 1222 projects, and used it a basis for its decision to "participate" in the project.
To be sure, wind power delivered by the Project will compete with other sources of renewable energy in markets in the mid-South and Southeast. But such competition is healthy, and ultimately benefits consumers and the renewable energy sector as a whole. Indeed, new transmission links such as the Project create value through their ability to foster healthy competition among generators. As the Commission has observed: “New interconnections and transmission service generally meet the public interest by increasing power supply options and improving competition.” The Commission has also explained that “as a general matter, the availability of transmission service enhances competition in power markets by increasing power supply options of buyers and sales options of sellers, [resulting in] lower costs to consumers.”
Right.... healthy competition, but renewables wouldn't be the only competitors.  Baseload generation would also be competing against imported renewables, and perhaps that sort of competition could cause the closure of baseload resources in the Southeast.

In addition, DOE's Environmental Impact Statement gushed on and on about the tons of carbon a Clean Line would save from entering the atmosphere.  I don't have the time and patience to dig that up, so you'll have to accept my paraphrasing here.  A "clean" line couldn't remove carbon from the atmosphere by itself, therefore it could only accomplish this through displacement of existing generators that produce carbon.  Therefore, Clean Line is intended as a vehicle to close existing baseload generators that produce carbon.

So, get with the program, Rick!  Instead of trying to put your thumb on the scale at FERC, why not start a little closer to home by extricating the DOE from its "participation" in the Plains & Eastern Clean Line?  It would probably be a whole lot easier to change policy in your own department than it would be to demand an independent regulatory agency act as your minion on some impossible time line.  Clean up DOE's own backyard first!
2 Comments

Missing Buyer Syndrome

9/5/2017

5 Comments

 
Say what?  "Missing buyer syndrome?"  That's not a "syndrome," that's a capitalism fail.  If someone offers a product or service that nobody wants to buy, it's not a "syndrome" that can or should be cured.  It simply means that the product or service offered is not marketable, not needed, and not beneficial to targeted customers.

Except what if the seller wants to force the purchase of its product or service because it sees an opportunity to make a lot of money if someone buys the product or service?  Then it's a "syndrome" that must be cured through government intervention.  That's absurd.  Why don't we call it what it is... government-facilitated corporate greed?

"Missing buyer syndrome" is the bastard child of greedy corporations who want to make a bundle of money building new wind farms in the Midwest and huge new transmission lines to move the electricity generated to population centers.
The proposed Chokecherry Sierra Madre wind energy project could face challenges selling power in the desert southwest, officials told lawmakers in Casper last week.

The energy generated from the proposed 1,000-turbine site will be carried along a high power transmission line to California and the desert southwest.

California, however, is being difficult.

“We have a huge issue in California in that Californians would like to keep all of the development and buy all of their power from within their borders,” she said.

“We call it the missing buyer syndrome. The need is still there … we believe the market is there, but we are right now caught in a limbo.”

Ah, sweetcheeks, if your buyer is "missing" then there is no market.  There is no need.  There is no "limbo."  It's simple supply and demand.  Economics 101.  It's not up to Wyoming, or Chokecherry Sierra Madre Wind, to determine what energy suppliers in other states buy.  Nobody cares what you think, especially because you're driven by greed.

And here's another "missing buyer" for a greedy company that also found there was no demand for its service.
Clean Line Energy Partners, a Houston-based company that proposes to bring wind-generated power from Oklahoma and Texas to the Southeast along a $2.5 billion transmission line, says it could deliver power to TVA at less than 2 cents per kilowatt-hour.

But the utility has yet to commit to buying any of the 3,500 megawatts of wind-generated power Clean Line Energy will bring to the western edge of TVA's territory along its 720-mile transmission line from near Diamond, Okla. TVA said it doesn't need more power generation because of the stagnant demand for electricity in its seven-state region, and Johnson said TVA still would have to maintain or build other generation capacity to make up for the Clean Line energy when the wind doesn't blow.

"The price [from Clean Line Power], in and of itself, is a good price for wind," Johnson said. "But it actually costs us a lot more to import it and to make sure we have gas plants running or capable of running in case the wind doesn't show up."

Johnson estimates having the additional capacity to make up for when the wind doesn't blow or the sun doesn't shine typically adds at least 2 cents per kilowatt-hour to the quoted price of such renewable energy.

"At the moment, we have yet to conclude that [buying power from Clean Line Energy] is the right fit for what we are doing," he said.

"But I am mostly pro consumer, so we want what is the best price, the most reliable and the cleanest power for the consumer," he said. "Given our demand projections, we actually don't need any additional generating capacity at this time."

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But yet environmental groups continue to sing and dance at each quarterly TVA board meeting, and certain news outlets continue to eat it up and present it to the public as if environmentalists are better at planning and running the TVA system than the slate of professional economists and engineers employed by TVA.  Unlike urban environmentalists, TVA professionals plan its resources based on need and economics, not some pie in the sky environmental goals.  TVA is "pro consumer."  Environmentalists are "pro environment," no matter the cost.  Clean Line and other wanna be transmission developers are "pro profits."  The only one in this menage a trois who is looking out for consumers is the TVA.
And how do these greedy corporations think they can cure "missing buyer syndrome?"
The Trump administration could help by pushing for an infrastructure package that would see the government “buying down a portion of the capacity” on big transmission projects so they can enter construction more quickly, or perhaps through an investment tax credit, Skelly suggests.

“All the ideas come down to a temporary underwriting of the project so you can get these things over the top, or some sort of tax mechanism.”
This one wants to force the federal government to take the place of the "missing buyer."  And if the federal government became the "missing buyer" then its customers would be forced to shoulder economic risk and financially support corporate greed through higher electric rates.

The Anschutz Corp. wants state governments to force "missing buyers" to purchase its product and service through legal mandates.  It's all the same corporate greed looking for a government bailout for bad investments in renewable energy and electric transmission.

While these investors thought they saw a financial opportunity to use government tax credits to build something that's only needed through forced mandates, their gamble has not paid off.  The government mandates are shifting and there's a new call to keep energy local.  While the industrial wind industry thought it could exploit windy states to produce energy for export, the target importing states have a greed of their own to keep their energy dollars in state.  This creates the mythical "missing customer."

If a state can choose between local economic development and sending those same dollars out of state to develop the economy elsewhere, the choice is simple.  But what about those states that think they can develop their own economy becoming an exporter?  They're selling themselves short.  Instead of becoming an industrial wasteland in exchange for a few jobs and tax dollars, those states should be marketing themselves as a cheap energy mecca.  Instead of exporting energy, perhaps they should try importing energy-intensive businesses?

And what about all those "fly over" states caught between states that want to export renewable energy and their "missing customers?"  They're getting nothing in the deal and they're not going along with it.
Dozens of developers are competing to offer Massachusetts the best price for long-term contracts to supply clean energy to hundreds of thousands of homes. But many of the projects face a challenge: convincing residents of northern New England that it's in their interest to host the Bay State's extension cord.
I think it's pretty clear.  Those corporations who gambled that they could make a lot of money developing remote generators and transmission lines to connect the generators to demand centers made a bad investment.  It was a bad idea fueled by greed.  We've all made bad investments in our lives, from  huge market-crashing bad deals to the weekly waste of buying lottery tickets that never win.  But when we lose, we realize we can't demand a government bailout to save us from our own bad decisions.  And that's the difference between us regular folk and the one percent, who aren't used to taking responsibility for their own losses.  Nobody cares how many millions Philip Anschutz, National Grid, or the Ziff brothers have poured into these bad renewable energy ideas.  They made a bad decision and they no more deserve a government bailout than the guy on the corner who is holding a worthless lottery ticket.

Remote renewables are dead.  Stop throwing good money after bad.  Local renewables are on the rise.  Quit wasting the remaining years of the production tax credit on bad ideas.  Here's the next great thing:
Offshore wind is still a relatively costly technology, but here's one advantage: You can build ocean-based windmills pretty close to the demand centers, and avoid all those long transmission lines.
Because aerial transmission lines on private property are the problem.  There would be no need to "work closely" with regulators, governments, or landowners if you were creating partnerships and providing value for customers.  "Working closely" is another euphemism that needs to go.  "Working closely" means "we're lobbying them intensely but they're not buying our bullshit."

Instead of trying to beat everyone into submission, perhaps you should offer a product or service that people like, want, and need?  That would turn your "missing customer" into "eager customer."  Unless you just really like swimming upstream, against the current. There are smarter and easier ways to make money.  Some days I wonder how you rich people got that way in the first place...
5 Comments

DOE's Very Vanilla Energy Markets and Reliability Report

8/29/2017

1 Comment

 
Remember back in April when the new Secretary of Energy issued a memo calling for a report "including an assessment of the reliability and resilience of the electric grid and an overview of the evolution of electricity markets"?  Environmental groups and Trump-haters panicked and screamed about the report being the first step to reviving coal.

Sigh.

And these fools blared on and on for months about the people working on the report, and what it would say.  Someone "leaked" a draft of the report before it was released.
The Sierra Club wasted time and resources suing DOE before the study was even released.

And guess what?  The report didn't do any of the things these prognosticators whined about.

So, the report was released last week.  In its wake, every special interest group claimed how the report provided support for their agenda.

DOE Throws Down Red Flags on Unreliable Wind and Solar

Top Three Takeaways From DOE's Grid Study - AWEA

What to Watch in the Wake of the DOE Grid Study

Energy Groups Push FERC to Make Changes Recommended in Grid Study

Could anyone write an impartial article that could serve as CliffsNotes in lieu of reading the whole boring study?  Give a gal a break?  Sorry, no.  I had to read it myself.  Warning... don't attempt in the evening, it's a real snooze fest.  Best tackled bright and early with lots of coffee.  Lots.

Just like everyone else who read the study (and even some reporters and talking heads who only pretended to read it before trying to write about it), I'm only going to concentrate on the parts that interest me.  Because just like a tub of vanilla ice cream, this "Grid Study" is so blah that you could make anything you want out of it if you sprinkle in your favorite ingredients.  Therefore, I proclaim that this report cautions against building a gigantic new electric grid to support remote renewable development.  Don't like that?  Go read the report and write your own article about it.

And here's how I support my opinion.

The report used a quote from NERC, made when the Clean Power Plan was a thing:

"Because the system was designed with large, central-station generation as the primary source of electricity, significant amounts of new transmission may be needed to support renewable resources located far from load centers.216"
But then the report said:
The studies (see Appendix B) that look into the distant future are exploratory only and represent initial investigations into how to implement high levels of VRE. They do not look into all the operational aspects of reliability due to the needed complex and computationally challenging modeling. Typical assumptions (sometimes implicit) include successful siting of (at times long multistate) transmission lines and new generation, sufficient new and existing economically viable conventional generation and other resources to support the VRE, institutional and market changes, and relevant grid modernization-type spending at both the transmission and distribution level. One study, for the ease of modeling, even assumes the nation’s 66 balancing authorities, including their governing boards and member states, would agree to one national joint dispatch). Some of these assumptions are non-trivial. These studies recognize that given enough time and money, power system engineers can make any resource and configuration reliable, as long as the laws of physics are not violated; whether the changes needed are indeed affordable, doable, and desirable may be a different question. Also, affordability was typically not in the scope of these studies.
So, yes, engineers can make things work.  That's what they do.  They're great problem solvers.  But making "VRE" (code for distant renewables) work is likely not going to be affordable.  So why aren't distant renewables affordable?
Most of the contiguous United States’ wind power plants are installed in the center of the Nation, which has the best wind resources.

Technical and economic factors may drive power plant operators to run generators even when power supply outstrips demand. For example:
For technical and cost recovery reasons, nuclear plant operators try to continuously operate at full power.
Eligible generators can take a 2.2¢/kWh or $22/MWh[yyy] production tax credit (PTC) on electricity sold. This means that some generators may be willing to sell their output for as low as -$22/MWh to continue producing power. Typically, wind generators are the largest such group in any region.
There are maintenance and fuel-cost penalties when operators shut down and start up large steam turbine (usually fossil-fueled) plants as demand varies over a day or a week. These costs may be avoided if the generator sells at a loss to attract a buyer when demand is low.

As EIA notes, the PTC can create an incentive for wind generators to bid at negative prices. If other generators located at nodes in the areas affected by negative prices are unable or unwilling to reduce output, they will have to pay the negative price for their output. That scenario has unfolded on some buses in PJM, as outlined in comments to DOE from PJM staff:
Tax and subsidy policies have had an impact on the economics of certain types of generation. The Renewable Energy Production Tax Credit and renewable energy mandates have had the most significant impact on nuclear generation. Specifically, the nuclear and wind generation are competing to clear in the market during off-peak hours when wind resources are the strongest and load is reduced. In those off-peak hours, the production tax credit has created an incentive for renewable resources to bid negative prices as they must run in order to receive their payment from the federal treasury. Since 2014, PJM has seen prices go negative at nuclear unit buses in approximately 2,176 hours—representing 14 percent of off-peak hours.

RPS compliance costs were found to total $2.6 billion in 2014, averaging $12/MWh for VRE and equating to 1.3 percent of average retail electricity bills.ffff 451 The actual effects of zero-marginal cost electricity on consumers’ bills is situational, and growth in VRE can drive additional costs, including transmission and integration costs.452 453 Because many utility-scale VRE plants are built in locations distant from load centers, they sometimes require major transmission additions to connect the remote generation to the rest of the grid and to load centers. Over the past five years, a portion of the 24,000 miles of new transmission built (about twice the number of miles added from 2006–2010) and $102 billion invested to strengthen the grid and interconnect new generation has been made to interconnect VRE.454 455 Transmission investments (regulated or merchant) can increase bulk power costs and therefore increase customers’ retail bills to the extent that they are not offset by savings attributable to access to lower-cost generation or reduced congestion costs.

Studies on RPS compliance costs do not fully capture the “all-in” costs that the ratepayer (and taxpayers) ultimately bear. These other costs are harder to measure, but may not be insignificant. They may be harder to quantify for many reasons, such as having multiple drivers behind those investments and various distribution-level grid modernization investments (e.g., smart meters and others that are touted to aid VRE integration). New transmission (other than the direct transmission interconnection charged to the renewable generation project and thus reflected in their PPA), as well as effects of VRE variability on the dispatchable fleet, are other examples of costs often not included in grid integration cost studies. Costs of various tax and other subsidies are also not counted.

Numerous technical studies on electricity systems in most regions of the Nation have concluded that significantly higher levels of VRE can be successfully integrated without compromising resource adequacy.hhhh Demonstrating resource adequacy is essenti
al, but achieving the modeled levels of VRE penetration requires a full consideration of “all-in” costs, land use, siting, and other environmental impacts; sustainable economics for non-wind and solar resources; for some studies, required changes at the distribution level; wholesale market design and organizational changes; spending on relevant transmission and distribution grid modernization activities; and ensuring all aspects of operational reliability.iiii These caveats are non-trivial, as they would be for any substantial major changes in the electric power system. However, these studies (particularly those examining high VRE levels) may often assume (or ignore) modeled conditions that could be difficult and/or costly to achieve in practice, such as a large transmission buildout that may face siting or other obstacles, ability of non-wind and solar plants to remain financially viable and thus available, institutional changes, or, for one study, synchronization of all three interconnections.
There's also problems with permitting and siting new transmission for renewables (wind).
The challenge for building transmission continues to revolve around the three traditional steps involved, each of which can be time-consuming, involved, and complex: (1) demonstrating a need for the transmission project, also known as transmission planning, (2) determining who pays for the transmission project, also called cost allocation, and (3) state and Federal agency siting and permitting. FERC has taken steps to help with the first two, with reforms such as Order No. 1000, which remains a work in progress.258 259 260 261 262 Transmission planning entities, as well as regional state-based groups, are also contributing to improving these three necessary process steps. The current and past administrations, aided by various new Federal laws, have issued various Executive Orders and other initiatives to improve the processes involved in siting and permitting of transmission when Federal lands or waters are involved.
All three transmission building steps can be time-intensive and complex; in particular, siting and permitting for large networks or long multi-state lines is challenging. 263 264 265 The second necessary step of cost-allocation can be time-consuming as well. For example, large overlay networks now being built in MISO (“Multi-Value Projects”)266 and SPP (“Highway/Byway Plan”)267 required several years of sensitive negotiations among states brokered by the respective Organization of MISO States and SPP Regional State Committee to determine the cost allocation of each large transmission buildout.268 269

That's right, there's nothing a federal agency can do about state jurisdictional transmission permitting and siting.  I'm a bit puzzled by DOE's footnote referencing this vomitrocious opinion piece from Public Utilities Fortnightly.  Umm... this is only an industry opinion, not science, engineering or any other "data source."  Don't be fooled by this guy's use of his former job to try to pretend his opinion holds any weight.  He's a shill for WIRES, and WIRES is a trade organization for transmission owners, builders and suppliers.  Of course they want to build lots of transmission right now, that's where their paychecks come from!

So, are renewables causing baseload generators to retire?  This is where the vanilla gets flavored.  On the one hand, no, coal's economic problem is caused by low shale gas prices.  On the other hand, yes.
Fuel neutrality is essential for both monopoly-utility resource planning and competitive markets to manage risk and achieve reliability efficiently. Interventions to promote specific fuel types—such as bailouts for coal and nuclear or mandates and subsidies for renewables—skew investment risk and can undermine incentives for reliability-enhancing behavior (e.g., a public intervention to finance pipeline expansion removes incentives for the private sector to invest in fuel security). Fuel-specific subsidies and mandates replace individual choice with collective choice. This one-size-fits-all approach to risk mitigation ignores variances in individuals’ risk tolerances, results in high-cost risk mitigation, and creates perverse incentives for market participants by transferring risk and costs from the private to the public sector.

New technologies with very low marginal costs, i.e. VRE, reduce wholesale prices, independent of— and in addition to—the effects of low natural gas prices. To the extent that additional development of such resources is driven by subsidies and mandates, their price suppressive effect might place undue economic pressure on revenues for traditional baseload (as well as non-baseload) resources and could require changes in market design.

On modeling capacity factors for renewables: Each ISO and RTO calculates the on-peak contribution of renewable resources as a function of historic resource performance. Land-based wind plants are assumed to deliver four to 14 percent of nameplate capacity during peak summer afternoon periods, and solar resources are assumed to deliver between 10 percent and 80 percent of nameplate capacity. Note, however, that as the level of PV penetration increases, the cumulative amount of PV generation on summer afternoons is moving net load peak hour later.

Market designs may be inadequate given potential future challenges. VRE—with near-zero marginal costs and if at high penetrations—will lower wholesale energy prices independent of effects of the current low natural gas prices. This would put additional economic pressure on revenues for traditional baseload (as well as non-baseload) resources, requiring careful consideration of continued market evolutions.

And speaking of natural gas, the report attempts to pit the "no gas pipeline" folks against the "no electric transmission line" folks.  Personally, if I had to have one or the other, I'd go with the gas line.  Once constructed, it's buried (but hopefully not forgotten).  And pipelines are easier to build because they are not state-jurisdictional.  There's a lesson here for transmission opponents... never let the Feds usurp state electric transmission siting and permitting authority.
Natural gas-fired generation has grown nearly continuously since the late 1980s (see Figure 3.19) for several key reasons. These plants have low capital costs and are, in general, relatively less expensive than some competing technologies.108 They are also much less land-intensive than many other types of generation, and thus often can be more easily sited in urban areas near electric demand.109 Similarly, natural gas pipelines can be built more quickly than electric transmission lines (in most states) because they have a comparatively streamlined permitting process, which often has made it easier for a plant developer to build a new gas-fired plant near a large electric load than to build a power plant farther away and transmit its electricity to large load centers by wire.dd

Interstate natural gas pipelines can often be built more quickly than transmission lines because the pipeline owners, once granted a FERC-issued certificate of public convenience and necessity, have eminent domain power under section 7(h) of the Nat
ural Gas Act and the procedures set forth under the Federal Rules of Civil Procedure (Rule 71A). By contrast, electric transmission developers are dependent on states to grant eminent domain authorization.
And let's hear from another former FERC Commissioner who isn't a spokespuppet for the industry and trying to line his own pockets:
Former FERC Commissioner Tony Clark summarizes today’s changing demands on centrally-organized markets: “Affordable power was the goal when markets were created. The current markets are still procuring affordable power, but many state public policy makers no longer see that as the only goal [...] other public policy goals [include...] incenting in-state jobs, promoting ‘green’ energy or other politically favored resources, preserving carbon-free resources, and retaining substantial tax revenues to state and local government.” Clark goes on to say, “[Markets] were never designed for job creation, tax preservation, politically popular generation, or anything other than reliable, affordable electricity.”
States that use public policy goals to determine whether or not a transmission project should be permitted are using the wrong numbers, and that's screwing with electricity markets and making electricity too expensive.

Therefore, states should stop relying on public policy goals like jobs, taxes and economic development, as well as freebies like new transmission headquarters or below cost transmission contracts, to justify approving huge new transmission projects that will only increase the cost of electricity in the long run.

And while we're at it perhaps DOE could start closer to home and take a fresh look at its decision to "participate" in the Plains & Eastern Clean Line under Section 1222 of the Energy Policy Act.  The decision to "participate" relied wholly on public policy goals and the desire to play resource favorites and promote a certain type of new generation (wind).  But will the DOE take its own advice?

You need to let them know that you've reviewed their report and that their own recommendations say DOE should end its troubled participation in the Clean Line projects as soon as possible. 

The DOE wants to hear your comments.  No, they really, really, really do!  Submit your comments here. 

Do it now!


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1 Comment

Clean Line's Sugary Empty Threats

8/18/2017

3 Comments

 
Any good grandparent knows what happens when you fill a toddler with sugary snacks and drinks... they turn into short-attention span race cars... zooming through your house at breakneck speed, harassing the cat, jumping on the bed, and dumping out every puzzle and game in the house in 30 seconds flat.

That's sort of what happened with Clean Line's Mark Lawlor after the Missouri PSC denied Grain Belt's application.

It took a while for Clean Line to stiffen its upper lip and say anything.  The first words were Michael Skelly casting aspersions on Missouri, its institutions, its government, its people.  And then he said:
“We will review the order in detail to determine next steps for the project,” adds Skelly. “We are currently assessing all existing authorities available to move the Grain Belt Express project forward, including but not limited to legal appeals.”
Clean Line executives said Wednesday that they were weighing their options for the Grain Belt Express power line, though they acknowledged that the “legal and regulatory conundrum” could add many months or years to the project if they decide to keep trying.
Right, vague talk about appeals.  Blah, blah, blah.  Sort of sounds like a whipped puppy, doesn't he?  *snort*  *sniffle* *wahhhhhh*  Have a lick or two of Clean Line's delicious lollipop and dry your tears...

And remember, GBE's attorney promised the PSC that a dismissal would mean the project is dead and that a separate but ineffective favorable opinion would only be used to convince the counties to grant assent.  Unfortunately, some of the PSC Commissioners took him at his word.

Sometime later Wednesday afternoon Mark Lawlor got ahold of that lollipop and went on a sugar-fueled romp among the media, supposing all sorts of things he could do to move a dead and denied GBE project forward.  Each comment got more outrageous until Mark's pinnacle with a Fox News station out of Illinois, where he said,
"So, the Grain Belt Project will deliver enough power for over a million homes, and will do so at costs that are extremely competitive with wind energy that is clean and renewable.”
No, really, that's exactly what he said, listen to the recording on the video here.  What is it that Clean Line will be delivering that will be extremely competitive with clean wind power?  It can't be clean wind power, so it must be dirty coal power?  Gas?  Nuclear?  All of the above?  I think the sugar was running amok by that time and Mark's brain and mouth were running in different time zones.

What other stupid things did he say?
“We absolutely want to do the project,” said Mark Lawlor, development director for Grain Belt Express. But he added: “Unfortunately, the message that we’re getting from Missouri is that investments of these kind might be better spent in other places.”

Lawlor said the four commissioners’ belief that the project was worthwhile but not approvable under state law “makes for an interesting argument” if Clean Line decides to instead seek federal permission to proceed.

Clean Line director of development Mark Lawlor said another hearing would be sought, but that the company also was exploring legal options.

He added that Clean Line would push ahead with the project, despite the setback in Missouri.

“This is a Missouri problem, it’s not just a Grain Belt problem. This says any transmission line looking to build in Missouri cannot set foot on the commission’s doorstep until there’s permission from counties for a road permit,” said Lawlor.

“It’s too important to our country, and to our energy future, to just walk away,” said Lawlor. “This project is just as valuable today as when we started and probably more so.”

The project’s developers and other supporters harshly criticized Wednesday’s PSC ruling.

“It’s going to apply to future infrastructure projects — not just ours, but anyone who wants to come to Missouri and build transmission lines or pipelines, they’re gonna pay attention to this,” said Mark Lawlor, vice president at Clean Line. “It sends a bad signal to the marketplace.”

He argued that Grain Belt Express and projects of statewide significance should be decided by the PSC.

“It’s certainly not what the legislature intended,” Lawlor said. “It’s certainly not how the commission has worked in its 113-year history, but that’s somehow where we found ourselves today.”

Lawlor said Clean Line would need time to determine its next course of action.

A lawyer representing clean-energy interests said that another appeal is a near-certainty. Mark Lawlor, Clean Line’s vice president for development, wasn’t quite as definite.

“I think it’s sort of placed the burden on Clean Line to go ask the courts to sort this out,” he said. “Because of this legal quagmire, the project can’t move forward. It’s a broken system. It’s a problem for Missouri.”

Lawlor said there are a few options that he and his staff are evaluating. One is to essentially take the case back to the state appeals court – the same body that took the position that in part has led to this “quagmire,” as Lawlor called it.

There is actually a chance that the same court that ruled against Clean Line’s interests could see things differently, according to Renew Missouri’s James Owen.

“There are aspects of this that haven’t been presented before,” he said. “We can point out things that haven’t been thought about.”

The legislature is another avenue, according to Lawlor. He suggested they might want to study the pertinent law and ask themselves, “Is this what we meant to do here? Is this what we want, to have county commissions decide which infrastructure moves forward in the state?

“It would be in legislature’s interests to sort this out.”

There is also a federal avenue through which Lawlor said private developers can partner with the Department of Energy to develop infrastructure.

But Lawlor claims that the issue goes beyond Clean Line’s desire to build a high-voltage transmission line across Missouri. The new administration of Gov. Eric Greitens “has made a point of saying, ‘Missouri is open for business, we want investment in our state.’

“This decision runs counter to that.” As it now stands, he predicted that, “Other investors are going to look at Missouri and this will enter into their decision as to whether this is a good place to invest money.”
Wow, that was pretty impressive, for a company that seems to be out of money.

Lawlor's false bravado seems to have rubbed off on Clean Line president Michael Skelly the next day.  Skelly says:
“It’s impossible if you’re building a multi-state transmission line to get agreements from all 30 counties that you might cross,” said Michael Skelly, the president of Houston-based Clean Line, which is planning about $9 billion of power lines across the Great Plains, Midwest and the Southwest. 

Clean Line has at least three options it is considering, according to Skelly. It can appeal the decision, seek a change of state law or bypass the state by asking the U.S. Energy Department to approve it.

“If none of those three work, we’re toast,” Skelly said in an interview Wednesday.
And then he passes the lollipop to Clean Line's PR lady:
Clean Line’s other options, said spokesperson Sarah Bray, include asking the PSC for a rehearing, working with the state’s legislature to revise pertinent laws or seeking U.S. Energy Department approval under Section 1222 of the 2005 Energy Policy Act. The latter would authorize the department to take part in “designing, developing, constructing, operating, maintaining or owning” new transmission.

“The project is certainly not dead,” Bray said.

Bray told RTO Insider that Clean Line was “encouraged by the PSC’s determination that the project is in the public interest and will benefit the State of Missouri.”
That sugary lollipop the PSC handed them has done nothing but fuel delusions of grandeur that the company can't accomplish.  And it's going to waste a bunch more time and money.  Instead of being "toast," like it promised, the company wants to add years to its project schedule pursuing the impossible dream.

And what are Clean Line's options?
  1. Seek rehearing.  Will the PSC suddenly change its mind and do something the courts said was illegal and issue GBE a permit?  No, that's not realistic.  But a request for rehearing is prerequisite to appeal.
  2. Appeal the PSC's denial to the Missouri courts.  Is the Western District Court of Appeals going to reverse itself?  There are no new arguments on this issue.  It's all been said and done before and the appeals court and the Missouri Supreme Court rejected them all.  What makes Clean Line think it's different or special at this point in time?  The law is the law.  The courts follow the law.
  3. Repeal or replace Sec. 229-100 of Missouri law that says a transmission project must have the assent of the county commissions through which it passes.  Read this carefully.  Is Missouri really going to give up local control to have its fate dictated to by out-of-state companies with foreign investors?  This statute has been in effect for years.  It's not realistic to think it can be legislated away at the request of some Texas company in a big fat hurry.  This is unlikely to happen, even if Clean Line spends years buying support to repeal it.
  4. Ask the U.S. DOE to partner on this project under Sec. 1222 of the Energy Policy Act.  Does Clean Line have $100M lying around to fund another 1222 process?  Even if it did, the federal government wants to sell the power marketing authorities that would partner under Sec. 1222.  Once sold, the PMAs would no longer have any government authority, but would be owned by private entities that have to adhere to state law.  And let's be realistic here... even with Sec. 1222 being used on Clean Line's Plains & Eastern project to usurp state authority, that project is going nowhere.  It's dead.  No activity.  Sitting in limbo.  Has no customers to fund it.
None of these sound like workable options.  They would add years and hundreds of millions of dollars to the project.  Clean Line doesn't have years.  The big wind farm building boom is waning with the federal production tax credits that will sunset in just 3 years.  When the PTC goes, so goes any economic advantage for big wind.  Because the PSC denied Grain Belt's application the other day, all those contracts between GBE, MJMEUC and Infinity Wind are void.  The contracts were contingent upon PSC approval.  All that would have to be rehashed at a later date.  Pricing would change without the PTC.  Any opportunity and savings attached to those contracts during the recent PSC application will have to be completely re-done.  And that's the thing, unless appeal is granted (highly unlikely) Clean Line will have to prosecute a fourth application before the MO PSC with no guarantee of a favorable result.  The MO PSC swings wildly from side to side.

And then let's talk about Illinois, where the Supreme Court has taken up the issue of whether or not Clean Line is a public utility that should be granted eminent domain authority.  Even if Clean Line spends all this money trying to bust through Missouri's brick wall, eventually the Illinois Supreme Court is going to issue a ruling that can nullify it.  All of it.  It doesn't matter what Missouri thinks if the Illinois permit is vacated.  Why waste a bunch of time and money in Missouri when it can all be for naught once Illinois rules?  I thought Clean Line put spending money in Iowa on hold pending the Illinois outcome.  But yet they want to do that exact thing in Missouri?

Honestly, these guys are dumber than a box of rocks.  It sounds to me like they're just spewing out a bunch of empty threats and big talk that they can't accomplish.  Perhaps they'll come down off their sugar high soon?  Because Clean Line is dead.  Go away, Clean Line.  You will never succeed.
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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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