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Randy Dowdy Teach Big Lesson

3/16/2017

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Randy Dowdy used to grow big corn.  But in the aftermath of a natural gas pipeline's crossing of his farm, he seems to nowadays be growing the public's attention to how landowners are routinely disrespected by the builders of new energy projects.

Dowdy's story is shocking.  It's awful.  It's infuriating.  His once extremely productive farm has been destroyed.  The company refuses to pay him for repairs.  Promises made were not promises kept.

Sadly, Randy Dowdy's story isn't unique.  Its a common story told over and over by landowners who are unfortunate enough to find themselves in the middle of a linear energy infrastructure project, whether pipeline or electric transmission line.

Lesson #1

Don't believe verbal promises from the company.
When Sabal Trail approached him, Dowdy agreed to a negotiated fee for the right-of-way and estimated crop loss because he knew if he balked, the government would help the company take it anyway. He agreed in good faith, as well. Sabal Trail promised that Dowdy’s land would be returned to its original state by early January, in time for the new planting season.

And this is where the dispute begins.

“I was assured that Sabal would adhere to Georgia Soil and Water provisions,” says Dowdy, “that they would adhere to guidelines for segregated top soil and sub soil…rebuild my terracing to insure erosion wouldn’t occur…and put everything back in pre-construction condition. They said they would do…in their words…everything it takes.”
Lesson #2

Companies will hide behind construction management plans approved by regulators.
Andrea Grover, Director of Stakeholder Communications for Sabal Trail, says the company “followed specific protocols in place for construction which include storm water, erosion and sediment control plans which all require best management practices or “BMPs.”

“Our representatives have worked with individual landowners over the course of the past 3 ½ years to address concerns as related to the project and its impact to agriculture,” Grover explains. “The Federal Energy Regulatory Commission (“FERC”) is the lead agency which approves pipeline projects, and Sabal Trail’s work is limited to only the FERC approved areas and conditions for construction. Project inspection personnel and our contractors all have the appropriate level of certifications for storm water controls inspection in Georgia.”
Lesson #3

Landowner complaints are ignored.
While Sabal Trail management promised that Dowdy’s farm would be back in business by the first week in January, and ensured that the project right-of-way would be “restored to its previous condition and contours,” that wasn’t the case. Repairs continued into February—and, worse, were still in progress when a major late January storm hit the state.

“I had already reached out to Sabal Trail management at least five times in December to say I was seeing erosion issues,” recalls Dowdy. “They promised to fix it immediately, but they never did, so when the storm came, we were completely unprotected.”
Lesson #4

Your only remedy for a dispute over damage is through civil court, at your own expense.
Dowdy thought he had made some headway with Sabal Trail when the company, in an attempt to make peace with an unhappy landowner, offered to pay Dowdy to make additional repairs to his land.

“They asked me to put together an estimate for attempting to repair the land, including an acceptable value I placed on my wetlands, and additional future yield loss,” says Dowdy. “We made a verbal agreement and I began repairs as instructed. Sabal knew the costs and agreed to pay for the estimated costs of repair.”

“When it came time for them to pay though, they introduced a condition—in order to get my reimbursement, I would have to sign a document releasing Sabal from future long-term yield loss, wetland violations and compensation. Here I was repairing what they messed up at my own expense and then they want more.”

Dowdy says his lawyer advised him not to sign and, thus far, he has not signed nor has he received a penny of the promised reimbursement from Sabal Trail.

Next Step…Litigation?
Lesson #5

Despite having access to approved construction management plans, personnel actually completing the work have little knowledge of the plans and are apt to take shortcuts or plain ol' ignore the plans in order to get the job done easier and faster.  The people doing the actual construction work don't care about your property the way you do.
Dowdy’s laundry list of what wasn’t completed correctly by Sabal Trail is long.

“Sediment barriers were placed wrong, no hay was spread, there were no temporary terraces or berms…water was moving off my land at a 10% grade and sediment was going right into the surrounding wetlands and waterways. If Sabal had been in compliance with BMPs, I wouldn’t have been replacing 15,000 cubic yards of topsoil as I am having to do after the storm.”

Grover says Sabal Trail did return to Dowdy’s farm, and others impacted by pipeline construction, after the late January storm event, to “inspect the construction areas to ensure soil erosion devices installed according to the BMPs are working properly or repaired if necessary.”

But by then, says Dewey Lee, UGA Professor and Extension Agronomist, even though Sabal Trail installed additional BMPs after the storm damage was discovered, it was too late.

Lee who has worked with Dowdy on conditioning his farmland for a decade, says, “In the restoration that Sabal did, it appears they did not follow regulatory protocols perfectly. It appears that the crew handling the reconstruction did not have a full understanding of what their responsibilities were. This ultimately caused erosion down Randy’s waterways and across his field.”

Like Lee, irrigation specialist, Rance Harrod, knows well Dowdy’s attention to detail when it comes to his land. Dowdy and Lee’s suspicions that co-mingling of the top and sub soils in the fields was confirmed just last week after an irrigation supply line to the pivot began leaking. It was Harrod, along with Dowdy and a Sabal Trail employee, who worked on the fix.

Dowdy says as soon as Harrod began digging, it was apparent that the Sabal Trail repair crew had paid little attention to BMPs when it came to replacing the soil.

“Sabal has created tremendous soil loss and erosion resulting in offsite movement into the wetlands, no question about that. Randy’s damages are almost incalculable,” Lee adds.
Lesson #6

The regulators who approve construction management plans don't enforce them.  They expect that the company will police itself.  Company inspectors work for the company, not the landowners.  The fox cannot guard the hen house.
“I shared pictures of the problems I was seeing with the Georgia Environmental Protection Department to show them things weren’t being done to regulations, hoping that they would take it up with Sabal,” says Dowdy. “But they said they needed to see it at the time it happened…that a later complaint wasn’t enough.”

Dowdy recalls he asked the agent “well where were you when it needed to be inspected?” He says the agent told him they didn’t have enough manpower to be everywhere along a 500-mile pipeline at all times.

“The only people inspecting what Sabal was doing to my land was Sabal,” says Dowdy. “The way I see it, it was like the proverbial fox guarding the hen house.”
Energy companies and regulators talk big about construction plans that protect landowners.  Reality is often far different.

Construction management, environmental protection, and agricultural impact mitigation plans are just that... plans.  They offer no real protection for landowners.  They're just pieces of paper.  Don't be fooled.
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Where's The Customers, Clean Line?

3/8/2017

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The entire Arkansas Congressional delegation launched a new, two-pronged defense against  greedy Houston entrepreneur Clean Line Energy's federal plans for Arkansas this week.  The delegation announced that it was re-introducing its APPROVAL legislation, and sent a letter to new Energy Secretary Rick Perry asking that he take another look at the agency's participation in the Plains & Eastern Clean Line project under Section 1222 of the Energy Policy Act.
Like many policies that were proposed by the Obama Administration, the DOE/Clean Line agreement is currently tied up in the courts.  DOE is involved in a lawsuit, forcing the agency to address the lingering doubts regarding the legal justification for the department’s decision.

If these concerns are ignored and the project is allowed to move forward, not only are Arkansans facing the prospect of losing their property due to a decision by the federal government, but your department risks codifying into law the practice of federal eminent domain seizures.  This dangerous precedent is antithetical to your distinguished record as a champion for states’ rights in the face of federal overreach.

Throughout your career you have been a champion of states’ rights.  This Administration has promised to give a voice back to its citizens.  This is a good way to show that commitment.

We will continue working to halt the project, not only because it violates property rights of Arkansans, but also because it violates the rights of all Americans to have their voices heard at the state and local level.  We hope you can appreciate our concerns and work with us to fight against this lingering overreach of the Obama Administration.
So much for Clean Line's desperate pretension that the new administration won't change its prospects in Washington.  Clean Line has only been kidding itself.  Looks like the real poo has hit the fan.

And what did Clean Line have to say for itself?  Prepare to be amused...
In a statement provided Monday to the media, Clean Line officials said the APPROVAL Act “creates more red tape and kills jobs by attempting to pull back approvals the project has already received.” The Clean Line statement also included a note of support from a large national union.

Clean Line Founder and President Michael Skelly said much consideration was given to the project before it was approved.

“We are very confident in the nearly decade long process undertaken by the U.S. Department of Energy in order to decide to participate in the project under Section 1222 of the 2005 Energy Policy Act. This law was passed with bipartisan support, including then-Congressman John Boozman’s, and signed by President George W. Bush,” Skelly said in the statement. “The Plains & Eastern Clean Line is a pro-jobs, pro-consumer, pro-environment public energy infrastructure project that will help to create a secure energy future for the country, and we are ready to get to work.”

Red tape?  As if this project's efforts to bypass the Arkansas regulatory process and misuse an untested federal statute to force its way through the state wasn't already red tape enough.  But the real problem here seems to be the possibility that the DOE could "pull back approvals the project has already received."  That could happen.  In fact, the chances of it happening are escalating quite alarmingly.  But that's what Clean Line signed up for when it decided to attempt a merchant transmission line across multiple states.  Clean Line assumed all risk for the project.
Plains and Eastern state that they will assume all market risk associated with the development and construction of the Project and that there will be no captive customers.
Risk includes the possibility that laws and politics can and will change and "approvals" may be "pulled back."  That's the kind of risk that Clean Line signed up for.  But when real risk actually develops, Clean Line whines that it shouldn't have to face any risk.  Sorry, Clean Line, risk is your middle name.  Pull up your big boy pants and deal with it.  Risk just got real.

You've been trying to convince everyone that your project is "pro-jobs, pro-consumer, pro-environment" for months now, but it's just not working. 

How does one kill a job that doesn't exist?
“At the same time that our country is focused on creating opportunities for American workers, Arkansas Congressmen introduced a bill that will kill thousands of American jobs and, specifically, hundreds of Arkansas jobs,” said Lonnie Stephenson, International President of the International Brotherhood of Electrical Workers (IBEW). “Whether the infrastructure project be a pipeline or an electric transmission line, the IBEW strongly disapproves of politics getting in the way of American job creation.”
Hahahaha.  The unions thrive on politics!  Politics is the only reason Clean Line is using the union as its spokesmodel.  Building things we don't need in order to create make-work jobs for very specialized labor isn't a solution to America's economic woes.  The right to a temporary job for a union worker shouldn't have to be weighed against the right of an individual to own and enjoy real property.  You'd think unions would have other, more important, things to worry about these days instead of getting involved in political posturing in support of building a bridge to nowhere.  Clean Line has never even gotten close to building anything, anywhere.  The jobs don't exist.

The claim that Clean Line is "pro-consumer" is empty.  No consumers have supported the Clean Line projects.  Clean Line claims that its projects will result in lower electric rates are pure fantasy.  Clean Line doesn't exist, and neither do the "cheap, clean wind energy" generators it proposes will develop.

The pro-environment claim is also empty.  How does one preserve the environment by unsustainably plowing through three states with a gigantic, scorched earth obstruction?  And let's be real here... Clean Line has been marketing its project as an "arbitrage opportunity" to ship fossil fuel electricity between regions to take advantage of market price differentials.  There's no such thing as a "clean" line.  All electrons are the same color and transmission cannot discriminate between generation sources.  The only ones fooled by Clean Line's environmental claims are the sadly blind environmental groups, who refuse to peel back the propaganda and actually examine the project.

And there's nothing "secure" about an unneeded electric transmission line hundreds of miles long.  Clean Line does nothing to ensure grid reliability... if it did it would have been ordered by a regional transmission authority and the risk of building it would have passed to electric consumers.  But it didn't.  It's simply an extraneous bridge to nowhere designed for profit.

Now let's examine the REAL issue hiding behind Clean Line's carefully crafted smoke and mirrors...

The Plains and Eastern Clean Line has no customers!  That's right, nobody has signed a contract to use (and pay for) the transmission line.  Customers must voluntarily commit to purchase transmission capacity from Clean Line in order to create a future revenue stream.  Without a revenue stream, Clean Line cannot finance its project.  Without billions of dollars of financing, Clean Line cannot build its ginormous project.
Picture
It's all about the customers.

When is the media going to start asking the important questions, instead of simply fawning over the propaganda Clean Line feeds them?  Take Arkansas Business reporter Kyle Massey, for instance.  (Please?  Nyuck, nyuck, nyuck.)  Massey "reported" that President Trump loves infrastructure and eminent domain and therefore the Arkansas delegation "have opened an ideological battle that puts the all-Republican Arkansas congressional delegation in Washington at odds with the new infrastructure-friendly mindset of President Donald J. Trump."  Really, Kyle?  Is that what good Republican Michael Skelly told you?  That whole infrastructure thing is concocted wishful thinking designed to misdirect "reporters" like Kyle from the real issue... Where's the customers, Clean Line?  Because politics and "approvals" aside Clean Line cannot be built without customers.  Kyle also gushes that Clean Line's "construction effort" is scheduled to begin in the second half of this year.  That's 3 months away... and Clean Line has no customers... and no financing, and cannot meet the conditions DOE placed on their "approval" last year.  Without satisfying the DOE's conditions, DOE will not "participate" in the project in order to unlawfully condemn property for the part of the project it proposes to "own."  I doubt Clean Line will be building anything this year... or ever!

So what really happened this week?  Clean Line's risk just got real.  In addition to having no customers, Clean Line now risks that its "approval" by former Energy Secretary Ernest Moniz will "be pulled" by new Energy Secretary Rick Perry.  It also is at risk that the law will change to require Section 1222 projects to receive the approval of a state's governor and PSC chairman, and for a federal project to be sited on federal property as much as possible.  How is Clean Line supposed to find willing customers with this much additional risk on its plate?  Doubtful.

Where's the customers, Clean Line?
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Illinois Appellate Court Hears Grain Belt Express Arguments

3/3/2017

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The appeal of the Illinois Commerce Commission's decision to grant a CPCN to Grain Belt Express under the state's "expedited" review process was heard by the Illinois Fifth District Appellate Court this week.

You can listen to the oral argument here.  The recording is only 48 minutes long -- oral arguments have time limits.  Extensive briefing on all the issues has already happened.  Oral argument is for a condensed version of important points, and a chance for the judges to ask questions of the parties regarding their arguments.

Chuck Davis, representing the Illinois Farm Bureau, presented the argument of the appellants (the parties who want the court to reverse the ICC's decision).  It was a pretty simple argument -- Grain Belt Express is not eligible to apply under the expedited process because it is not a public utility, and its attempt to do so was likened to "a square peg trying to force itself into a round hole." 

Davis pointed out the difference between two different permitting processes available in Illinois.  The expedited process used by GBE begins with the words, "A public utility may...".  GBE is not a public utility, therefore it could not apply under that process.  GBE's application admitted that it  "will be" a public utility -- in the future tense -- but not that it was -- in the present tense -- when application was made.

It's as simple as that.

And why is this important?  Because there are two different procedural routes for obtaining a permit from the ICC. The longer, traditional process is for new entrants who are not public utilities.  The expedited process is reserved for public utilities.

By using the expedited process improperly, GBE rushed inexperienced landowners through the permitting process in an amount of time "less than a baseball season."  It also automatically granted GBE a finding under a different section of statute that allows the company to proceed quicker with eminent domain takings.  Clean Line's Rock Island project was denied a finding under that section when it used the longer process to secure a CPCN for an identical project.  RICL must go back before the ICC to gain the finding that was automatically granted to GBE through the expedited process.

I sort of wish someone had asked Clean Line's attorney why the company applied under different processes for identical projects.  What made GBE different from RICL so it could use the expedited process?

The ICC's attorney made a few revelations during his tired argument that the two different processes are actually the same, before giving a preview of his future argument before the Illinois Supreme Court that really wasn't relevant to this case.  At 24:40 he said GBE is for interstate transmission of electricity through Illinois to be used by the public within the MISO and PJM wholesale electricity market regions.  He followed that up by clarifying at 30:27 that the Grain Belt Express project is an interstate transmission line for electricity "merely passing through Illinois."

Well, I'm glad that cat's been let out of the bag, after years of listening to Clean Line claim that the line would provide electricity to Illinois.

At 32:30 one of the judges asks whether GBE was a public utility prior to the ICC's findings under the expedited process.

Of course it wasn't.

Later, GBE's attorney began listing all the things the ICC found regarding the company's ability to construct and finance the project.  But the same judge interrupted him at 40:33 to query whether all those things were speculative.  There's no evidence that GBE was doing those things, only evidence that GBE could do them.  Listen very carefully as this testy exchange goes on between the judge and GBE's attorney, with the judge trying to make his point, only to be interrupted by GBE's attorney to say that "we are" hiring contractors and proceeding to continue his list of what the ICC found GBE capable of doing in the future.  The judge finally reasserts control to say that he understands what the ICC found the company capable of... but GBE doesn't have any past record of actually doing those things.  "As a company, GBE has never done it."  GBE's attorney meekly agrees... and suddenly he's done.

The judges had no questions for the appellant attorneys.

And now we wait for the court to issue a decision.

I'd say this went very well for the appellants.
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Another County Rescinds Support of Grain Belt Express

3/3/2017

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The Moberly Monitor-Index reports that the Randolph County, Missouri, Commission has rescinded its prior letter of support to allow Grain Belt Express to cross county road rights of way.  This makes Randolph the sixth county to rescind its support of the project.

Grain Belt Express approached each of the eight counties crossed by its project in 2011, long before affected landowners learned about the project.  Clean Line's Skelly has said that going to local governments for support before landowners find out about his projects is a strategic move, because the first place upset landowners go is to their local governments.  Skelly believes that if he has already gained local government support, these upset landowners will have nowhere to go with their opposition.  It really doesn't work that way.  When local voters approach local governments, the interests of some foreign corporation don't hold up, and actions taken in their favor may be rescinded.  That's what's happened in Missouri.

Randolph County has gone from supporter to neutral.
The withdrawal of official support also comes not long after John Hobbs was voted in as a commissioner for Randolph County. Hobbs has been a vocal opponent of the Grain Belt Express.

Hobbs confirmed that the commission had rescinded the letter of support but declined to comment further on the matter.

Truesdell clarified that, although the commission has rescinded its official support for the wind energy transmission line, the attitude hasn't changed. The commission assumed a neutral stance on the matter around two years ago.

"The only thing that prompted action is that our legal counsel said that, if we wanted to be truly neutral, we should draft a letter to rescind the prior document," Truesdell said.


The move was meant to solidify the neutral stance of the commission, setting aside personal views the commissioners might hold, Truesdell said.
Such as the avid support of Randolph Co. Commissioner Wayne Wilcox, who talked quite a bit about Randolph County's support of Grain Belt Express in his testimony to the PSC supporting the project.  He even submitted the county's letter of support as evidence to back up his claims.

The Moberly Monitor reports:
Randolph County Commissioner Wayne Wilcox said he was not present for the commission's vote to rescind the letter of support for the Grain Belt Express.
There is an indication that the company would need to earn the approval of individual county commissions to allow the line to cross roads within the counties before a permit is issued.

The MO PSC Staff's report stated
As was its position in Case No. EA-2015-0146, it is still Staff Counsel’s position that, not only must Grain Belt have the consent from each of the Missouri county commissions for its transmission line to cross the public roads and highways in their respective county before a Commission certificate for the line is effective, Grain Belt must have those consents before the Commission can lawfully issue the certificate, i.e., those consents are prerequisites to the certificate.
So the rescission of county support is a big deal right now.  Instead of gaining support, Grain Belt Express is losing support going into the PSC evidentiary hearings later this month.

And since I didn't see anything about Hannibal's draft power purchase agreement in surrebuttal, I guess I'm going to have to pop my corn for the cross examination of another witness, now that Bob won't get his chance at 15 minutes of fame in the witness chair.  Clean Line's counsel might have to snap their "Expert Twitness Shock Collar" on someone else. 
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What Happens When a PJM Project Fails to Meet Milestones?

2/26/2017

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Grassroots group Residents Against Giant Electric (RAGE) continues its outstanding work against FirstEnergy's Monmouth County Reliability Project (MCRP) in urban New Jersey. 
In a recent article (and video) former NJ Transit vice-chairman Bruce Meisel vehemently opposed the MCRP, calling it "... a money grab project that puts the interests of JCP&L over the residents and ratepayers of Monmouth County.”

The significance of Meisel's opposition stems from MCRP's proposal to use New Jersey Transit's right of way for its project.  Without the approval of the NJT board, this project isn't happening.

The article says Meisel was most affected by the number of signs and the people opposing the project across the area when he took a tour of the area late last year.  That's directly attributable to the work of RAGE, who have been very effective winning the hearts and minds of the community and local governments.

If FirstEnergy thinks it can shout down this kind of opposition with a few well-paid business or labor advocates, its got another think coming.  There's nothing FirstEnergy can do to stem the tide of opposition to its project.  It's over.  MCRP lost.  Projects with this kind of political opposition never get approved.  Time for Plan B.

In recent press, FirstEnergy has been turning with increased frequency to what it may feel is its most powerful weapon... PJM Interconnection.
JCP&L has been consistent on the project’s need, which stems from a decision made by PJM Interconnection, a regional grid operator that oversees 13 states and the District of Columbia – New Jersey being one of those 13. PJM has stated that a 2011 review found that Monmouth County’s electrical system violates reliability criteria.
FirstEnergy has quickly gotten to the bottom of its bag of tricks and pulled out what it may feel is its trump card.  PJM says it's needed and therefore there is nothing anyone can do about it.  FirstEnergy wants its opposition to believe that PJM's approval of the project is the final word and that there are no alternatives.  FirstEnergy wants its opposition to believe PJM is an omnipotent authority whose word can never be questioned.

Most people have never heard of PJM.  PJM is a mystery to the average electric consumer, and after years of watching the PJM dance, I'd have to conclude that PJM likes it this way.  PJM has never seen any value in making itself understandable and accessible to the consumers it serves.  While touting itself as "transparent" and open to any "stakeholders," PJM is a hopelessly bureaucratic and technical maze that electric consumers aren't supposed to figure out.  Sort of like this guy:
PJM describes itself as:
PJM Interconnection is a regional transmission organization (RTO) that coordinates the movement of wholesale electricity in all or parts of Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and the District of Columbia.

Acting as a neutral, independent party, PJM operates a competitive wholesale electricity market and manages the high-voltage electricity grid to ensure reliability for more than 65 million people.

PJM’s long-term regional planning process provides a broad, interstate perspective that identifies the most effective and cost-efficient improvements to the grid to ensure reliability and economic benefits on a system wide basis.

An independent Board oversees PJM’s activities. Effective governance and a collaborative stakeholder process help PJM achieve its vision: “To be the electric industry leader – today and tomorrow – in reliable operations, efficient wholesale markets, and infrastructure development.”
PJM's planning process uses NERC criteria to define reliability violations that must be remedied.  Who is NERC?
The North American Electric Reliability Corporation (NERC) is a not-for-profit international regulatory authority whose mission is to assure the reliability and security of the bulk power system in North America. NERC develops and enforces Reliability Standards; annually assesses seasonal and long‐term reliability; monitors the bulk power system through system awareness; and educates, trains, and certifies industry personnel. NERC’s area of responsibility spans the continental United States, Canada, and the northern portion of Baja California, Mexico. NERC is the electric reliability organization for North America, subject to oversight by the Federal Energy Regulatory Commission and governmental authorities in Canada. NERC’s jurisdiction includes users, owners, and operators of the bulk power system, which serves more than 334 million people.
Had enough acronyms yet?  This industry loves acronyms, it's their own special language that you aren't supposed to understand!

So, NERC sets reliability standards, and PJM uses NERC's standards in its planning process.  PJM and NERC are membership organizations.  Who are their members?  Companies with an interest in the work of the organization.  The industry sort of regulates itself within these organizations.  If the organizations are controlled by their members, and their members are the industry, then PJM and NERC are controlled by the companies they regulate.  PJM didn't use NERC violations to design the MCRP.  FirstEnergy proposed the MCRP to resolve NERC violations that showed up in PJM's 2011 planning process.  PJM simply rubber stamped the incumbent utility's solution to the problem, and nobody proposed any alternatives or spoke against it, therefore it was "ordered" by PJM's Board of Managers.

In its application to the NJ BPU, FirstEnergy says MCRP was the remedy for NERC N-1-1 (or Category C) violations.  If you stack up the different types of violations, N-1-1 comes at the bottom of the stack.  N-1-1 relies on a reliability comedy of errors to occur -- that one component of the system fails, and then a bunch of other components that were supposed to act as back up for that component also fail.  FirstEnergy describes the necessity for MCRP like this:
In the 2011 RTEP, PJM identified reliability criteria violations of NERC Category P7 (previously NERC Category C) contingencies for the outage of the Atlantic-Red Bank (S1033) 230 kV line and the No. 2, 230-34.5 kV transformer with the loss of the Atlantic-Red Bank (T2020) 230 kV line and the No. 8, 230- 34.5 kV transformer due to failure of a common structure containing both circuits. JCP&L confirmed this contingency may result in more than 700 MW of load loss, well above the 300 MW loss of load criterion limit, which violates the JCP&L Planning Criteria as well as PJM planning criteria. The JCP&L-proposed Project was confirmed by PJM that it adequately addresses the reliability criteria violation.
So, one transmission line is out, and then a transformer fails, and then another transmission line goes out, and then another transformer fails.... and then you need the MCRP to provide service.  That's 2 transmission lines and 2 transformers, all out of service at the exact same moment.  Chances of that happening?  Not likely, but it could happen, in theory.  However, it's not likely that failure to build the MCRP as proposed is going to make the lights in New Jersey go off in the near future.  Because if we want to play the "what-if" game, what if the MCRP also fails after the other 2 transmission lines and the other 2 transformers fail?  But NERC doesn't go that far out in its "what if" game, because it starts to get a little ridiculous.... and expensive.

A NERC violation was identified by PJM, FirstEnergy's JCP&L came up with a "back of the envelope" solution, PJM's Board of Managers approved the solution and assigned construction to JCP&L with a June 1, 2016 in-service date.  And then JCP&L began trying to implement their proposed solution.  The next year, JCP&L notified PJM that they couldn't get it done in time and proposed an extension of the in-service date to June 1, 2017.  And then JCP&L notified PJM a second time that the projected in-service date is now June 1, 2019.  In its application, FirstEnergy shares
PJM has not changed their required date for the project, but has listed the projected in-service date as June 1, 2019 in the RTEP Transmission Construction Status database... Note the PJM Required Date is the date the violation is initially identified to occur.
Apparently the violation keeps slipping out in time to keep pace with JCP&L's failure to get its proposed project accomplished.  How convenient!  I guess this "violation" isn't as urgent as FirstEnergy claims.  If the two transmission lines and two transformers fail tomorrow, PJM will still be able to keep the lights on using other components of the system.  But if the failure happens on June 1, 2017 (or 2019?), the lights will go out unless MCRP is there to pick up the slack.  Seems pretty improbable, doesn't it?

Nevertheless, as a member of PJM, FirstEnergy's JCP&L was assigned construction responsibility for the MCRP.  Membership comes with responsibilities.  Members pledge to follow PJM's operating rules, such as constructing projects which they are assigned.  The PJM Operating Agreement obligates the member to build, but it also gives the member an "out" if things go wrong with the project, such as a failure to secure required state or local permits.
1.7 Obligation to Build.
(a) Subject to the requirements of applicable law, government regulations and approvals, including, without limitation, requirements to obtain any necessary state or local siting, construction and operating permits, to the availability of required financing, to the ability to acquire necessary right-of-way, and to the right to recover, pursuant to appropriate financial arrangements and tariffs or contracts, all reasonably incurred costs, plus a reasonable return on investment, Transmission Owners or Designated Entities designated as the appropriate entities to construct, own and/or finance enhancements or expansions specified in the Regional Transmission Expansion Plan shall construct, own and/or finance such facilities or enter into appropriate contracts to fulfill such obligations.
PJM monitors the project's progress to meet certain milestones.
1.5.8 (j) Acceptance of Designation. Within 30 days of receiving notification of its designation as a Designated Entity, the existing Transmission Owner or Nonincumbent Developer shall notify the Office of the Interconnection of its acceptance of such designation and submit to the Office of the Interconnection a development schedule, which shall include, but not be limited to, milestones necessary to develop and construct the project to achieve the required in-service date, including milestone dates for obtaining all necessary authorizations and approvals, including but not limited to, state approvals.
 
1.5.8 (k) Failure of Designated Entity to Meet Milestones. In the event the Designated Entity fails to comply with one or more of the requirements of Section 1.5.8(j); or fails to meet a milestone in the development schedule set forth in the Designated Entity Agreement that causes a delay of the project’s in-service date, the Office of the Interconnection shall re-evaluate the need for the Short-term Project or Long-lead Project, and based on that re-evaluation may: (i) retain the Short-term Project or Long-lead Project in the Regional Transmission Expansion Plan; (ii) remove the Short-term Project or Long-lead Project from the Regional Transmission Expansion Plan; or (iii) include an alternative solution in the Regional Transmission Expansion Plan.

PJM isn't so much wedded to a certain project as it is compelled to find a solution to impending violations.  A project that fails to be permitted goes back to the drawing board, and PJM works with the utility to find an alternative solution that can be permitted.  Ill-conceived projects that draw staunch, sustained and wide-spread opposition rarely get permitted.  Who's monitoring JCP&L's "milestones" on the MCRP project?  Is PJM actively and independently monitoring MCRP's milestones, or are they simply taking FirstEnergy's word for it that its MCRP is on schedule and meeting milestones?  JCP&L's poor execution of this project has already cost the consumers three years of reduced reliability.  At what point will PJM "re-evaluate" the MCRP instead of simply shifting the milestones JCP&L fails to meet into the future?

While it is true that PJM has identified MCRP as the solution to future violations, that's only part of the story.  PJM can act to re-evaluate a failing project to come up with a better solution to prevent reliability violations.  PJM's mission is reliability, not adhering to rigid project concepts proposed by its members.  In fact, PJM transmission projects are suspended, canceled, or re-evaluated frequently.  PJM's approval of a certain project does not set its completion in stone.  PJM is subject to the outside forces of state regulators, who hold the ultimate authority to permit a certain project.  And state regulators are subject to the outside forces of state citizens who may support or oppose certain projects that are proposed.  The NJ BPU must weigh the benefits of the project against its detriments and find that the benefits outweigh the detriments.  If it does not find the MCRP beneficial, the NJ BPU may deny the project a permit.  And then it would be kicked back to PJM to come up with an alternative solution.  This sounds like a very long and expensive road, and ultimately it could cost JCP&L customers their reliable electric service. 

When will it be time for PJM to pull the plug on the MCRP?  Now, while there's still time to find an alternative solution to looming reliability violations?  Or later, when the lights go out?
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Federal Overreach on Transmission

2/18/2017

7 Comments

 
Cupcakes:  delicious little pieces of heaven!  You probably don't think you need a cupcake until someone puts one in front of you.  All of a sudden, you want a cupcake.  You need a cupcake.  You must have a cupcake!  But you would have gone happily along without that particular cupcake because you really don't need a cupcake, and there will be more cupcakes offered down the road.

The National Association of Regulatory Utility Commissioners (NARUC) baked a cupcake for landowners last week, but snatched it away at the last minute.  Does this mean that NARUC will stop baking cupcakes?  Nope.  It means that NARUC will get back in the kitchen to perfect its recipe before offering a new and improved cupcake in the future.

At its recent winter meeting, NARUC's Electricity Committee proposed a Resolution opposing the U.S. DOE's misuse of Section 1222 of the Energy Policy Act of 2005 to preempt state authority to site electric transmission lines.
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But the resolution was tabled at the last minute.  E&E News did a whole bunch of speculating about why the Resolution was tabled, however it appears that E&E wasn't in the room and created its story from comments and opinion.
The move Tuesday at the winter policy meetings of the National Association of Regulatory Utility Commissioners in Washington was "unusual" said Elizabeth Jacobs, a member of the Iowa Utilities Board and vice chairwoman of NARUC's Electricity Committee.

"It wasn't supposed to be directed at any one project," said Jacobs. Rather, she said the resolution "was supposed to be about defending state jurisdiction [over transmission siting] going forward."

But there was some confusion "that made people really nervous," in particular its specific mention of the Plains and Eastern Clean Line proposed by Clean Line Energy Partners LLC, she said.

"I think some people had concerns with language about NARUC taking all necessary actions" to challenge the line, Jacobs said, and thought "Let's think this one through a little more."

The resolution was proposed by Sam Britton, a member of the Mississippi Public Service Commission. He did not return a call seeking comment.

Britton had explained to the NARUC committee that the resolution was "resource neutral" and not anti-wind or anti-renewables, said one attendee.
Well, gosh, I wonder where that "confusion" came from?  Could it have come from Clean Line Energy personnel lobbying at the conference?

The Resolution doesn't mention any particular project.  But it uses an example of DOE's misapplication of Section 1222 on the only project it has decided to "participate" in.  That project just happens to be Clean Line's Plains and Eastern Clean Line.  The Resolution explains Section 1222.  It states:
WHEREAS, Provision “(d) Relationship to Other Laws” of Section 1222 states that “Nothing in this section affects any requirement of ... (2) any Federal or State law relating to the siting of energy facilities; or (3) any existing authorizing statutes,” and
 
WHEREAS, On March 25, 2016, the DOE announced its plan to own the portion of a proposed power line that would traverse the State of Arkansas and rely on Section 1222 to exercise a Federal right of eminent domain in that state; and
 
WHEREAS, DOE has stated that it does not plan to request a site permit from the State of Arkansas but will instead rely on the federal Condemnation Act, which it says authorizes DOE to exercise eminent domain authority over any property so long as DOE has the legal authority to acquire the property, and so long as the project will constitute a public use; and
 
WHEREAS, NARUC has a long-standing position that the siting of electric transmission facilities should be subject to the exclusive jurisdiction of the States, notwithstanding the limited “backstop” siting provision in Section 1221 of the Energy Policy Act of 2005 (which NARUC opposed); and
 
WHEREAS, Without taking any position whatsoever on the wisdom of constructing any transmission project in which DOE wishes to participate or the type of power envisioned to be transmitted over such project, NARUC wishes to state its position on the proper interpretation of Sections 1221 and 1222;
NARUC recognized that Sec. 1222 does not authorize DOE to site the line, but reserves siting decisions to the states.  However, DOE has misinterpreted the statute to grant itself siting authority for a transmission project.  And if this interpretation stands, other states in the WAPA and SWPA federal power marketing territories (AR, KS, LA, MO, OK, TX, MT, ND, SD, NE, MN, IA, WY, CO, NV, AZ, CA, UT and NM) will be wrongly subjected to federal preemption of their state siting laws for any future transmission projects under Sec. 1222.  It's not a matter of "if," it's a matter of when.  NARUC has fiercely defended state authority to site and permit transmission projects.  Section 1221 of the same Energy Policy Act authorized the Federal Energy Regulatory Commission to act as a "backstop" to site and permit transmission lines in a DOE-designated National Interest Electric Transmission Corridor in the event that a state failed to act, or could not act, on an application for said transmission.  FERC conflated a failure to permit with a failure to act.  After a prolonged and hugely expensive court battle, the 4th Circuit determined that a denial of an application is an action of the state, and "backstop" authority was not triggered by a state denial.
We have analyzed the phrase "withheld approval for more than 1 year." Read by itself, the phrase does not include the outright denial of a permit application within the one-year deadline. We have also considered the phrase in the context of the entire statutory provision in which it appears. A reading of the entire provision reveals that Congress intended to act in a measured way and conferred authority on FERC only when a state commission is unable to act on a permit application in a national interest corridor, fails to act in a timely manner, or acts inappropriately by granting a permit with project-killing conditions. The broader context of § 216(b) thus confirms that the meaning of "withheld approval for more than 1 year" is plain: it means that action on a permit application has been held back continuously for more than one year. The continuous act of withholding approval does not include the final administrative act of denying a permit. Because Congress's intent is clear, our review under Chevron proceeds no further. For these reasons, we reverse FERC's interpretation of the phrase "withheld approval for more than 1 year."
NARUC has continued its opposition to federal preemption of state jurisdiction to site and permit transmission projects.

And then DOE inappropriately attempted to utilize Section 1222 to usurp state authority to site transmission projects.  It's Groundhog Day all over again!  And finally NARUC proposed a resolution to "...take all necessary actions to confirm NARUC’s position regarding Sections 1221 and 1222 and/or challenge, if necessary, DOE’s circumvention of State siting laws in the pursuit of projects pursuant to Section 1222 of the Energy Policy Act of 2005."
And then "confusion" happened.  E&E News inaccurately reports:
A group of state electric utility regulators tabled a resolution critical of the Department of Energy's plan to take an ownership stake in a 720-mile interstate transmission project from the Oklahoma Panhandle to Tennessee.

The galvanizing issue for some NARUC members is DOE's unprecedented use of its authority to take an ownership stake in a line under Section 1222 of the Energy Policy Act of 2005.
That's not the issue at all.  Section 1222 plainly allows DOE to "own" a transmission project.  What it does not allow is DOE preemption of state siting authority.  That was clearly the galvanizing issue for NARUC as expressed in the proposed Resolution.

What else did E&E get wrong in their opinionated "news" story?
The Plains and Eastern line is ranked No. 9 in a list of 50 high-priority infrastructure projects circulating among governors, lawmakers and the business lobby. And the line could become a topic of debate if Congress and the White House develop economic stimulus legislation aimed at infrastructure development.

The 50-project document touted the line as a "national security project that can add resiliency to our electric grid," citing its ability to "move cheap, clean, wind power energy" that could power more than 1 million homes in the mid-South.
Oh, the lobbyist list?  That has nothing to do with actual need for projects and is nothing more than a business lobbyist wet dream.  Being on the list means nothing in the grand scheme of things.  Especially because this "high-priority infrastructure list" seems to be purposed to score government funding for projects.  News flash!  We don't use taxpayer funds to build electric transmission.  Electric transmission has always been "user pays."  That's because electric transmission has distinct beneficiaries -- a project benefits only a subset of consumers.  How could the government justify using the collective pot of taxpayer money funded by all citizens to provide a "benefit" to just one state or region?  What about the other regions?  Will they be getting government-funded transmission projects that benefit them as well?  And how about those profits?  Transmission lines produce revenue for their owners.  Who would receive the revenue from a government-funded transmission project?  In the case of other infrastructure, the government owns the not-for-profit infrastructure and any profits belong to the people.  Why would the federal government use taxpayer money to fund a privately-owned infrastructure project that pays huge dividends to its owners?  The government isn't going to buy me a small business and let me keep all the profits from its operation.  But that's just what the DOE has done with its proposed "ownership" of the Clean Line project.  Clean Line funds it, the government "owns" it, and Clean Line keeps all the profits from its operation (well, except for that 2% DOE squeaked out of the project in its Participation Agreement).  Quid pro quo?  Section 1222 doesn't even contemplate, much less allow, the DOE to profit from "ownership" of a third-party transmission project.  And then let's talk about how Clean Line's rates would be affected by a sudden government investment in its project.  Clean Line has negotiated rate authority from FERC.  In essence, it allows Clean Line to negotiate rates with voluntary customers.  It requires that Clean Line accept all financial risk of its market-based project.  But if Clean Line's project is funded by taxpayers under the guise of "infrastructure development" then the risk clearly shifts to taxpayers and Clean Line no longer qualifies for negotiated rate authority.  If the government is going to "own" the project and fund its construction, then what's the purpose of Clean Line?  It would be acting in the capacity of government contractor, with its payday being 98% of the revenue generated by the project... forever.  I'm pretty sure the government could find a much more capable contractor, since Clean Line has never built or owned any transmission before.  Shoot... I'm pretty sure the experienced incumbent transmission owners would be lining up for an opportunity like that!  And even when transmission is owned by the government, such as transmission owned by federal power marketers WAPA and SWPA, the users of the transmission pay for it in their electric bills.  WAPA and SWPA do not take any operating funds from the U.S. Treasury.  They are supposed to be self-supporting governmental entities.

So, listen, any governmental "infrastructure" funds would change Clean Line's projects so significantly that they would never happen.  Clean Line needs to quit posturing about the lobbyist list and governmental financial support.

But, hey hey, the lobbyist list called Clean Line's project "a national security project."  Who determined that?  The lobbyist who created the list?  No official entity tasked with national security has determined that Clean Line's project is needed for national security.  In fact, Clean Line's project is a national security risk.  It could provide just one more vulnerable target in our complicated transmission system.  Adding more transmission doesn't make the system safer, since it's generally known that the transmission system has a handful of "critical" assets that could collapse the grid if destroyed.   New additions simply provide another entry point for our enemies.  Just ask the U.S. military, who has been islanding itself from the larger grid through development of distributed generation assets.  Local assets it can protect and control are safer than depending on some huge, unprotected system for the energy the military needs to protect the country.

And what did Clean Line have to say about NARUC's resolution?
Mario Hurtado, executive vice president at Clean Line who leads the Plains and Eastern Clean Line project, welcomed the NARUC decision.

"Resolutions in a collegial body like this are supposed to be noncontroversial," he said.

"It's not really the role of NARUC to decide on projects. I think a lot of the commissioners were not comfortable passing judgement on single project in this informal association that's supposed be about broad policy," Hurtado said.

"To now to try to relitigate things is sort of like you're trying to start the clock again, and that's not really fair for investors," he said.
What?  NARUC can never take a position that the industry disagrees with?  Surely you jest, Mario.  NARUC derives its strength from taking positions on important issues.  Mario is not a member of NARUC because he's not a regulatory utility commissioner, therefore he has no authority to determine the veracity of NARUC issues.  As has been explained here, NARUC wasn't attempting to decide on a single project.  NARUC was taking a position in a policy issue - DOE's misinterpretation of Section 1222.  Mario seems to think it's all about him.  Maybe Mario needs to see a psychologist about that?

Relitigate?  What?  Was NARUC litigating this issue at its conference?  NARUC doesn't litigate issues.  It is not a court.  And how can one "relitigate" something that has never been "litigated" in the first place?  Section 1222 has only recently come under court scrutiny in litigation initiated by Golden Bridge LLC, a landowners group in Arkansas.  The litigation of Sec. 1222 has only just begun and is certainly no where near being settled.  That's "litigation," Mario -- the process of taking legal action.  Legal actions only happen in courts.  The Court will interpret the plain language in Section 1222 to determine if it reserves siting to the states.

Was Mario referring to legislation, not litigation?  There's a world of difference.  Legislation is the making or enacting of laws.  It is undertaken by elected legislators, and in the case of Section 1222, the legislators who made and enacted it are Congress.  So, let's apply Mario's whining to the word "legislation."  Mario thinks that Congress can never revisit legislation it enacts because that wouldn't be fair to filthy rich investors who are counting on the enacted legislation to make even more money.  How does that square with Clean Line's negotiated rate authority where its investors accepted all market risk for Clean Line's projects?  Risk involves the acceptance that situations can change at any time, such as laws being amended.  Clean Line accepted that risk when it chose to proceed as a merchant transmission owner, so it needs to shut its pie hole.  Risky business propositions can provide huge rewards, oftentimes the higher the risk, the greater the potential reward.  But risk means things can change.

And let's back up a bit here... E&E suggested:
...the line could become a topic of debate if Congress and the White House develop economic stimulus legislation aimed at infrastructure development.
So while Clean Line whines about changing the rules in  the middle of the game as support for maintaining existing laws, it also wants to write new laws to support its project.  Government funding isn't the half of it.  Clean Line also wants Congress to enact new legislation to preempt state siting and permitting for transmission projects.  It wants Congress to strengthen feeble "backstop" siting provisions that currently exist in Sections 1221 and 1222.  It wants federal eminent domain authority to preempt any state role in the permitting and siting of transmission.  That sort of sounds like changing the rules in the middle of the game to me.  If Clean Line was so confident in Sec. 1222's ability to preempt state siting laws, then it would have no need to attempt to strengthen it. 

Who's a hypocrite, Clean Line?

And let's take a moment here to reflect on Clean Line's use of Section 1222 in the first place.  Clean Line says that it explored the use of Sec. 1222 because Arkansas denied them a permit for their project.  Except that's not what really happened.  Arkansas said it did not have authority to grant utility status to an entity that did not intend to serve customers in Arkansas.  When Clean Line applied for utility status in Arkansas, it proposed to simply "fly over" the state without making any capacity available to Arkansans.  Clean Line applied for Sec. 1222 BEFORE the Arkansas PSC had even made a ruling on its state application.  Clean Line was clearly proceeding with federal preemption before Arkansas even had a chance to make a ruling.  And then Clean Line added an Arkansas converter station after the Arkansas PSC ruling and said it intended to serve customers in Arkansas.  But did Clean Line ever go back before the APSC with its changed plan to serve customers in Arkansas?  No.  It simply proceeded on a long and expensive path to preempt Arkansas authority altogether.  Arkansas was never given the opportunity to site and permit Clean Line's project.  It was simply preempted from acting.

And, let's cut to the chase (finally, they say!):
For Iowa's Jacobs, the siting issue is getting greater attention by regulators as "the citizens and the consumers are getting more and more involved in major infrastructure projects that deal with energy."

"Consumers would not feel comfortable that the federal government is making a decision that could impact them within miles of their home," she said. "We're hearing it more and more."

The trend in opposition "gives play to the old adage that all politics is local. That's really where we are right now. That whole populist sentiment is really strong out there," Jacobs said.
That's you, Americans.  You've been standing up and getting involved in energy projects that affect your community.  You don't want decisions about energy projects in your community made in a Washington political swamp that has turned a deaf ear to the needs of average Americans.  Business as usual is over.

No matter how much political posturing Clean Line does (first they were great Democrats, and now they're trying to be great Republicans), decisions about individual projects at the state level aren't supposed to be political.  They're only political at a federal level.  And how would a Republican Congress think about an energy project owned by Democratic party funders?  Would a Republican Congress steamroll a path for a project that would provide staunch Democrats with even more money to spend opposing Republican candidates?  If Clean Line wants this to be political, let's get political!

But meanwhile, your cupcake isn't ready for consumption yet, America.
Jennifer Murphy, NARUC's assistant general counsel, emphasized that the tabled resolution does not negate the organization's opposition to even limited "backstop" siting authority granted to the Federal Energy Regulatory Commission, also in the Energy Policy Act of 2005.

"We have a resolution from 2009 that states our position on backstop siting. And until we have another resolution about backstop siting, that's our position on backstop siting," Murphy said.
It's back to the bakery for NARUC.  And while NARUC's actions are on behalf of the Association, they do not prevent any individual state from litigating this important issue.  Strong feelings will foment strong actions.  The best is yet to come!
7 Comments

Show Me Why Grain Belt Express Should Be Denied, Missouri!

2/7/2017

1 Comment

 
And, they did!  Rebuttal testimony in GBE's latest attempt to get its project approved by the Missouri Public Service Commission has been filed.  This article attempts to "analyze" and summarize, but it doesn't acknowledge the weight of the individual testimonies, and that was probably hard to do within the confines of a word count.  So, I had to read it for myself... and I can use as many words as I need to do it justice.

Landowner parties Missouri Landowners Alliance and Show Me Concerned Landowners presented a fact-based, detailed, well-rounded defense against Grain Belt express.  They were bolstered by excellent rebuttal from Blake Hurst of the Missouri Farm Bureau and landowner Christina Reichert.  On the other hand, intervenors supporting Grain Belt Express filed a whole bunch of "me, too" fluff that was short on fact and detail and is likely to blow away in any strong wind of scrutiny.

Here are some of my favorites:

Ralls County Commissioner Wiley Hibbard -- gosh, I love this guy!  His testimony can only be described as forthright.  He doesn't mince words, but gets directly to the point on all issues.  For example:
In my opinion, this whole project is an attempt by a small group of investors to make a large amount of profit from the wind energy generation from Kansas. They have offered the proverbial 30 pieces of silver to local governments. Some have apparently taken it. I for one will not choose to do so. They promise Ralls County a whole million dollars (they must think this is 1960) to sell out our future. It is asking a lot of us to have our land taken by force to enable a few to get rich. I believe that other elected office holders should think beyond just today.
One million dollars?
Point made, Wiley, point made!

Don Lowenstein of the Missouri Landowners Alliance did a fantastic job with a really difficult subject -- taxes.  Nobody wants to even think about taxes,  instead they hire guys like Don to think about taxes for them.  He carefully and factually explains why GBE's claims of tax riches for affected counties are an overly-hyped generalization that has no basis in reality.
I think Mr. Tregengo’s assessment of the benefit to school districts and other county taxing jurisdictions is misleading because the facts are materially understated. 

I believe his overall discussion is short sighted because it does not address the tax revenues generated by the Project after it goes into service. Nor does it address the long term net tax benefits or losses. Therefore I regard most of his testimony as having little significance to an overall assessment of the longer term tax benefits to Missourians.

Basically, I believe that he spoke in generalizations which might leave the reader to see a much brighter prospect than actually exists for tax revenue benefits to Randolph and the other seven counties on the line. He omitted a discussion of which taxing jurisdictions receive little or no tax benefit.

Property devaluation expert Kurt Kielisch submitted fascinating testimony regarding the way electric transmission lines affect values of agricultural and rural property, and why industry-biased studies fail to capture the true cost to landowners.  The value of a piece of property in an open market is primarily perceptual, an idea routinely dismissed by industry-biased studies.
Essentially, the value of a property is based on the perception of the buyer. Understanding that perception drives value is the foundation in analyzing the effect that electric transmission lines have on property value.

This perception does not have to be based on a scientific or engineering fact, it is based on what a buyer believes. An example of perception driving value based solely on belief is the haunted house. A home cannot be proven scientifically to be haunted. Yet, there are several homes throughout the nation thought to be “haunted” which stigmatizes the property resulting in a diminished selling price.
Why would anyone want to purchase a piece of property with a high-voltage transmission line when they can find a comparable property without one?  I'm pretty sure nobody ever considered a high-voltage transmission line a wonderful and useful addition to a piece of property they were considering buying.  This goes double for agricultural property, where transmission lines pose an additional safety concern that the farmer has to work around.

Electric power expert Joseph Jakulski completely shreds GBE's greatest hope for approval, the transmission contract between GBE and the Missouri Joint Municipal Electric Utility Commission (MJMEUC).
Just as in the last case, Grain Belt still has no memorandums of understanding with wind generators, and no firm commitments from any load serving utilities to buy capacity on the proposed transmission line.

Grain Belt fails to mention that MJMEUC may without penalty or cost elect to take no capacity over the new line, and that decision will be made sixty to ninety days before the line is then expected to enter service.

The TSA is nothing more than an option agreement.


In short, there currently is no commitment from MJMEUC to buy any capacity on the proposed transmission line.

And about that purported $10M annual savings?
The only support provided for the $10 million estimate from the MJMEUC was an eight-row spreadsheet in response to MLA’s Data Request MJM.13.

It is a flawed calculation of the cost of transmitting 100 MW and 200 MW of wind power from SPP to MISO. There is no calculation of, or comparison to, buying wind power over Grain Belt. The spreadsheet also contains an error in calculating the loss component of the costs. The total costs end up including addition of megawatt-hours and dollars which is flawed mathematics.

The testimony of Christina Reichert is a well-written and compelling account GBE's burden on landowners, as well as a jaw-dropping account of GBE's repulsive interactions with landowners.  Christina tells how she was approached by GBE personnel after the PSC's original denial of the project because the PSC specifically mentioned her situation in their Order.  GBE told her they had "good news" and that the line was being rerouted off her property.  What happened next should give everyone pause:
  1. Mr. Lawlor asked how we felt about this move. We told him we would be thrilled not to have the line crossing our property, but that we did not want it moved to our neighbor’s property either. We couldn’t bring ourselves to benefit at the expense of our neighbors.

  2. He said that the proposal to move the line seemed like a viable option, but that they expected something in return from us. My husband asked what he meant. Mr. Lawlor never did tell us exactly what they were expecting in return for moving the line off our property, but said it would be nice to have something from us.
  3. We eventually told Mr. Lawlor that we could not agree to a move that would be detrimental to our neighbors, and that we would continue to oppose the Grain Belt Project. They thanked us for our time and left. That was the last we heard from Grain Belt about rerouting the line.
These are not the fair and aboveboard interactions with landowners that GBE pretends to carry out.  These are actions designed to reward landowners who toss their neighbors under the bus and support the project for the express purpose of saving themselves.  Sort of reminds me of GBE's pet landowner, Wayne Wilcox, who has testified that GBE crossing a tiny corner of his property isn't a problem and that he thinks the project is wonderful.

The testimony of agricultural expert Charles Kruse is a compelling account of the effects of GBE on agricultural operations.
I will rebut Grain Belt witnesses James Arndt’s and Lanz testimonies regarding how the Grain Belt Express project could impact farming operations as well as discuss other issues regarding the negative impacts to farming and land as a result of large transmission projects like the Grain Belt project. Specifically, I will address the following negative impacts: Compaction of Soil; Erosion; Irrigation Equipment Interference; Difficulty in Aerial Applications to Crops and Pastures; Possible GPS Interference; Problems Maneuvering Large Farm Equipment around Towers; Precision Farming Problems; Concerns about Storm Recovery; and Eminent Domain.
And he does, in factual detail.  He demonstrates that GBE's "agricultural expert" really misses the mark, as well as GBE's land lady, who really doesn't know much about agriculture at all.

Missouri Farm Bureau president Blake Hurst explains his organization's opposition to eminent domain, and he gets right to the truth:
Grain Belt Express Clean Line LLC’s supposed promises to sell power to Missouri municipalities should be recognized for what they are: a political stunt to create pressure for approval of this project by giving small benefits to local governments at the massive expense of landowners’ rights. Those municipalities in support will bear none of the burden from Grain Belt’s proposed project. It is instead Missouri’s rural landowners that will experience significant disruptions in their operations if Grain Belt Express Clean Line LLC is given the power to force land sales through eminent domain takings. This development does not change the underlying nature of the Grain Belt Express proposal. The project remains an attempt to engage in the abuse of eminent domain for private gain.
But the Missouri PSC Staff's report may perhaps be weightiest of all.  The Staff is acting as an impartial party to investigate GBE's claims and make recommendations to the Commissioners.  The PSC Staff found that the project is not needed and that GBE's analysis of "need" is severely flawed.  Staff also determined that the project is not necessarily economically beneficial.  It also opined that the Commission cannot grant a permit until GBE has the consent of the counties crossed.   The Staff has concerns about how GBE affects the safety of pipelines adjacent to its proposed route, as well as GBE's current ability to repair the project in event of failure.
In summary, based on Staff’s review: 1) Grain Belt does not have the consent of the Caldwell county commission for its proposed transmission line to cross the public roads and highways in that county, the validity of its consent from the Monroe County Commission is being challenged in court, and, presently, the prefiled evidence does not include any such consents by the county commissions of Buchanan, Clinton, Caldwell, Carroll, Chariton, Randolph, Monroe and Ralls Counties; 2) There is not a clear need for the Project; 3) Grain Belt is qualified to construct, own, operate, control and manage the Project, but additional expertise will be needed once engineering and safety issues have been resolved; 4) Grain Belt has the financial ability to undertake the Project; 5) It is not clear whether the Project is economically feasible due to the lack of various RTO studies and the uncertainties surrounding the ATXI Mark Twain transmission line and its effects on the Missouri converter station and corresponding congestion; 6) A determination cannot be made at this time as to whether the Project is in the public interest since there is still uncertainty related to the economic feasibility and the safety of the Project.
I'm not going to address the majority of the GBE supporters who filed "rebuttal testimony" in this case.  It's a fluffy bunch of opinion and hot air, short on facts and long on stuff that doesn't matter.  Instead I'm going to focus on only the testimony of MJMEUC witness John Grotzinger, who claims:
It is expected that the MoPEP cities will save approximately $10 million annually by utilizing the Grain Belt Express and Infinity wind contract in their power supply after the IPM contact ends in 2021.
And then he attaches the same spreadsheets that the MLA's witness has already shredded.  But you know what I found really amazing?  The continued use of that $10M savings number.  It was first seen in GBE's proposal to the cities last year as a preliminary calculation using existing production tax credits for wind.  And wouldn't you know it... that number has never varied, despite the reduction in production tax credits, and the sudden addition of a wind PPA just as the testimony was filed.  Wow, serendipity, right?  Or maybe just a little too much coincidence for believability.  It reminds me of the misery of high school algebra... here's the answer to a problem, now create an equation that could result in that answer.  Magic math!

Which brings us to the thing I found most ridiculous.  GBE's legal shenanigans and dirty tricks designed to keep MJMEUC's magic math from being fairly analyzed.  GBE wants MJMEUC to be able to barf all this who shot John into the evidentiary record at the latest possible date, and then prevent the other parties from getting background information to assist their analysis and rebuttal.  GBE has presented a "Joint Defense Agreement" that basically states that GBE and MJMEUC have a common interest and a joint defense that allows them to share information between the parties and keep the information they share confidential.  GBE supposes this keeps all its interactions with MJMEUC under wraps, a big mystery that can never be questioned.  Just look at that $10M savings number and don't ask how we got there.

But yet, GBE and MJMEUC chose to not file MJMEUC's testimony as part of GBE's direct testimony last summer.  Instead, they chose to keep it under wraps until January, when opposing parties would have only 30 days to analyze and respond to it.  GBE and MJMEUC pretend this is perfectly innocent, and that MJMEUC filed its testimony at its first opportunity -- the deadline for rebuttal testimony.  It simply wasn't legally allowed to file earlier.  Umm... deadline?  A deadline to file testimony means the last possible opportunity.  A deadline does not prevent an earlier filing.  In fact, MJMEUC could have filed its "rebuttal" testimony at any time prior to the deadline.  But filing it on the deadline narrowed the window of time available to the other parties to respond to it.  Your unsportsmanlike actions are plain for all to see, GBE.  So, if GBE believes MJMEUC is its saving grace for this application, and MJMEUC's contract is such a wonderful, transparent attempt to save ratepayers money, why is it trying to shield it from scrutiny?  And what does this say about whose interests MJMEUC is really representing at this point?  A really good deal for the electric consumers MJMEUC is supposed to serve should be able to shine in the sun, not be hidden under layers of confidentiality and legal dirty tricks.  If I was an electric customer in any of those cities, I'd be distinctly suspicious.  It's clear that GBE will do anything and toss anyone under the bus in order to get its project approved.  Must be a lot of money in it for someone.
1 Comment

FERC Orders $7M Refund of PATH Advertising, Lobbying and Front Group Costs

1/20/2017

5 Comments

 
On January 21, 2011, Ali Haverty and I filed a "Formal Challenge to Potomac-Appalachian Transmission Highline, LLC 2010 Formula Rate Annual Update." This was after several months of rather frustrating information requests to an active and threatening PATH transmission project.  We had no expertise or legal help, we simply did the best we could with available processes.

Now, nearly 6 years later, the Federal Energy Regulatory Commission has confirmed our contentions that PATH should not have collected from ratepayers the costs of its reliable power coalitions (West Virginians for Reliable Power, Marylanders for Reliable Power and Virginians for Reliable Energy), its PATH Education Awareness Team (or "PEAT"), its memberships in civic and social groups, its lobbying for release of a conservation easement in Loudoun County, Virginia, its hiring of a well-connected lobbyist in West Virginia, its cost of public opinion polling and focus groups in West Virginia, Virginia and Maryland, and the cost of all of PATH's television, radio and print advertising promoting its project in all three states.  The Commission has ordered PATH to refund these costs (plus unearned return and interest) to millions of ratepayers in PJM's 13-state region.
It truly was no bed of roses.  We combed through hundreds of thousands of documents, learned FERC's accounting rules, learned how to write and file all sorts of legal pleadings, made dozens of trips to FERC's offices in DC, and suffered through some middle of the nighters in order to meet deadlines.  We've spent the past 6 years jumping one hurdle after another to get to this point.

And we're still friends.  Never once did we consider giving up or splitting our team.  No matter how heavy the burden, we kept our eyes on the prize.

Opinion No. 554
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The Commission also ordered accounting transactions to remove an additional $1.1M of public relations & advertising expenses PATH booked to its asset account in 2008, before Ali and I began to challenge PATH's annual rate filings.  This $1.1M of cost has been sitting neatly in an account where it earned 14.3% (and then 10.4%) return on equity for the PATH companies every year since.  Not only will PATH have to deduct those costs from its ultimate recovery, it has also been ordered to make a compliance filing to essentially correct and replace each of its annual accounting filings for the past 8 years.  This approach allows crediting of that undue return to ratepayers.  So, while the total disallowance to PATH is more than $7.1M, the total ratepayer credit effected will be much more.

We appreciate the Commission's order, and our overall experience at FERC.  In an era where the agency has been kicked around by protestors and the media, we can honestly say that we were treated well by FERC staff, judges, and commissioners.  We never felt dismissed or marginalized.  We felt that our concerns were heard.

We wouldn't change a thing.
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5 Comments

Clean Line's Choo-Choo Runs Out of Steam

1/17/2017

2 Comments

 
"Full steam, ahead!" said the Little Engine That Thought He Could.  But when confronted with all the landowners he'd previously tied to the tracks with the hope of running them over, it turned out that he couldn't.  He didn't have enough steam.

"I can't, I can't, I can't, I can't get over these hurdles," said the Little Engine That Couldn't.  "Wheeze, cough, sputter," went the Engine.  "Where are my customers?" whined the Engine as its wheels fell off and it puffed mightily to a full stop. 

"Where are my customerssssssssss..."
KUAR reports that Clean Line has filed a motion at  U.S. District Court for the Eastern District of Arkansas in Jonesboro, asking that the Court speed up its hearing process because the lawsuit is hindering the company's progress in finding financing for its project.

KUAR also points out:
When asked in November whether the federal lawsuit will slow the project’s intended construction start following the delivery of a HVDC converter station in Pope County, Clean Line Founder and President Michael Skelly said the transmission project is moving “full steam ahead.”
Plains & Eastern isn't steaming anywhere without financing, despite claims that its "schedule" is set for construction to begin in the second half of 2017.

That's just not happening.  Clean Line has its eggs mixed up with its chickens.  While it's probably true that nobody wants to finance a transmission project with a pending lawsuit hanging over its head, the bigger problem here is that Plains & Eastern has no customers.  None.  Without customers, the project has no projected revenue.  It's just like asking for a loan when you're unemployed.  Just.not.happening.

Clean Line has neatly lined up all its own business failures in a row and blamed it all on the lawsuit.
“Utilities will have to contract for energy to deliver to their customers with specific dates in mind. A delay in this matter has the potential to delay the entirety of the project as financing institutions require a high degree of certainty – meaning a low risk of legal and regulatory obstacles – prior to committing the capital to make multi-billion dollar investments required to construct the project and the wind generation that the project will enable,” Heister continued. “Because of the interconnected nature of all of the various project participants, even small schedule delays can lead to cascading impacts.”
Then why didn't Clean Line have any customers before the lawsuit was filed?  The U.S. DOE agreed to "participate" in the transmission project last March.  The lawsuit wasn't filed until mid-August.

Clean Line can't get financing because of the lawsuit.
Clean Line can't get customers because of the lawsuit.
Clean Line's project will be delayed because of the lawsuit.
Wind farms cannot be built because of the lawsuit.
And, worst of all, any delay in the project would push back the date “on which the public benefits from new renewable energy generation" (!!!)

What generation?  I don't see any generation.  Because of the lawsuit.

That lawsuit!  It's the only reason Clean Line hasn't fired up the bulldozers yet! 

Want to be part of the winning team?  Golden Bridge, the landowner group behind the lawsuit, is still accepting new members.  Check it out!

And, hey, remember that Clean Line is having this gigantic fit in front of a federal court judge because it wants a hearing to be held one month sooner than the judge has scheduled.  One month.  A one month scheduling delay is going to make or break this project, or so Clean Line says. 

Clean Line has been trying to build this project since 2009.  That's eight years. Eight.  And suddenly one month is the difference between success and failure.  Maybe Clean Line is planning to run out of money sometime between October and November of this year and won't be around for a November court date?

And isn't it funny... the lawsuit claims that due process was never afforded to Arkansans during the DOE's Section 1222 process.  And now Clean Line wants a judge to speed up the routine hearing process as well.  Talk about adding insult to injury...

And what about those "conditions precedent" in Clean Line's "Participation Agreement" with the DOE?  These are the conditions Clean Line must satisfy in order for the DOE to "participate" in eminent domain land takings:
  1. Customers.  The project must present fully executed term sheets with customers.
  2. Executed interconnection agreements with regional grid operators.
  3. Insurance that holds the United States of America harmless for any of Clean Line's issues.
  4. Financing.  The project must have money with which to build.
So, if the Court moves the hearing date to October, will all these conditions be magically satisfied so that Mike Skelly can jump behind the wheel of his bulldozer?

Nope.

Clean Line needs to quit blaming others and own its failure.  Quit embarrassing yourself.

Update:  Oh, snap!  The judge has denied Clean Line's motion.
2 Comments

Dominion's Boogeyman Fails to Scare Tidewater

1/13/2017

0 Comments

 
Dominion upped the ante on its Surry-Skiffes Creek transmission project this week.  Because it has not been successful in overcoming opposition to an aerial crossing of the James River, it introduced the blackout boogeyman in the form of a remediation plan for the area, filed with regional grid operator PJM.
The so-called remedial action scheme Dominion prepared and presented this week to PJM Interconnection, the operator of the 13-state electrical grid Virginia is plugged into, would cut power to Hampton, two-thirds of Newport News, Poquoson and eastern York County if there are faults on two of the dozens of components in the Peninsula's high transmission network.
Oh no!  Blackouts, you say?

The people of the Tidewater said, "meh."
They say Dominion's been using scare tactics when it has said there could be as many as 80 days a year in which rolling blackouts are possible. Dominion says that's the number of days when demand is so heavy that faults in the system could force it to cut some customers off in order to avoid a widespread blackout.

"It appears that Dominion Virginia Power would rather continue their campaign to frighten consumers and threaten to close their Yorktown power plants," said James Zinn, a trustee with the Save the James Alliance, who argues that federal law allows the U.S. Department of Energy to order a power plant to operate in an emergency.
Well, gosh, PJM better get to altering its transmission plans in order to avoid emergency, because that's just not acceptable, and it doesn't appear that the opposition is going to fold on this one.
"If nothing else, this is consistent with their continued inflexibility to consider less intrusive alternatives for their construction of towers over the historic James River," he said.
So, what could they do instead?  Bury the line underwater?  Ya think?  Honestly, Dominion, you're behaving like a 5-year old.  "I'm gonna hold my breath until I die!"  Stop being a pimple on the ass of progress.
0 Comments
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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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