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Guidance For NIETC Comments for Mid-Atlantic Corridor

5/15/2024

1 Comment

 
Here's a little extra help planning your comments on the U.S. Department of Energy's preliminary Mid-Atlantic Corridor.  If you're concerned about a different corridor, such as the Midwest-Plains corridor that follows Grain Belt Express, there will be slightly different  guidance, coming soon.

The Mid-Atlantic Corridor roughly follows the path of the MidAtlantic Resiliency Link, or MARL, project that PJM ordered NextEra and FirstEnergy to build last December.  It begins at 502 Junction substation in southwestern Pennsylvania and traverses through West Virginia, Maryland, and Virginia on its way to bring coal-fired electricity from West Virginia to Northern Virginia's data centers.  It looks like this.  The lines on this map may be 200-400 feet wide.
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DOE's National Interest Electric Transmission Corridor that corresponds with that project looks like this:
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Each line on this map is 2 miles wide.

Here's my advice on submitting effective comments.  Make sure you have also sent your extension request and letters to elected officials for Step 1.
Quick Guide for Citizen Participation in Phase 2 Comments

DOE’s announcement of proposed corridors begins Phase 2 of its process. Phase 2 allows “information and recommendations” and comment from any interested party and you are urged to submit your comments. DOE requests information submissions in Phase 2 by 5:00 pm on June 24, 2024. Interested parties may email comments as attachments to [email protected]. You are encouraged to request DOE acknowledge your submission by return email so that you know it was received by the deadline. DOE requests comments in Microsoft Word or PDF format, except for maps and geospatial submissions. The attachment size limit for submissions is roughly 75 MB and may require interested parties to send more than one email in the event attachments exceed this limit. There is no page limit on comments. DOE requests that comments include the name(s), phone number(s), and email address(es) for the principal point(s) of contact, as well as relevant institution and/or organization affiliation (if any) and postal address. Note that there is no prohibition on the number of information submissions from an interested party, though DOE encourages interested parties making multiple submissions to include an explanation of any relationship among those submissions.

DOE will grant party status to anyone who comments in response to the notice of the preliminary list of potential NIETC designations, in the manner and by the deadline indicated above. Only those granted party status may request rehearing of the DOE’s decision, or appeal the NIETC in court. Protect your due process rights because you don’t know now whether you may want to request rehearing, or appeal an adverse decision. You are an interested party if: you are a person or entity, State, or Indian Tribe, concerned with DOE’s exercise of its discretion to designate a geographic area as a NIETC. Becoming a party does not obligate you to any further action, it only gives you the option of taking further action if you choose.

State in your comments that you are requesting interested party status in accordance with DOE’s NIETC Guidance at Pages 41-42 to preserve your right to request rehearing or appeal a corridor designation. Include comments that may become the basis for your appeal (where DOE is not following the statute). More information on the statute in the long version of this guidance that you can download at the bottom of this blog.

We are urging interested people to submit comments in two phases. RIGHT NOW and before the deadline.

RIGHT NOW:
To demand public notice and engagement from DOE and set a new comment deadline at least 45 days after the conclusion of the public engagement period. Ask for direct notification by mail of each impacted landowner within the corridor, as well as public notification, including posted notices in all local newspapers servicing the area of each proposed corridor. Request public information meetings, including an online meeting option for those who cannot attend in person. Ask that DOE share all available information on each corridor it is considering, including a narrative description of its boundaries, as well as identification of all transmission line(s) currently planned or proposed for the corridor.
We cannot comment on corridor requests submitted by utilities if we cannot read the requests! We cannot make effective comment on information DOE is keeping secret! It does little good to hold a public comment period for a project that has not provided notice to impacted landowners or disseminated adequate public information. DOE states, “Early, meaningful engagement with interested parties should reduce opposition to NIETC designation and to eventual transmission project siting and permitting within NIETCs, meaning more timely deployment of essential transmission investments.” But the DOE has not provided any notice or public information about this process, or attempted to engage impacted communities. DOE needs to walk their talk. Also consider writing to your U.S. Senators and Representatives and asking them to intervene on your behalf to ask DOE for public notice and engagement for the Phase 2 comment period.
See this link for a form letter and help contacting your representatives.

BEFORE JUNE 24:
At the end of Phase 2, DOE will identify which potential NIETCs it is continuing to consider, including the preliminary geographic boundaries of the potential NIETCs, the preliminary assessment of present or expected transmission capacity constraints or congestion that adversely affects consumers, and the list of discretionary factors in FPA section 216(a)(4) that DOE has preliminarily identified as relevant to the potential NIETCs.

DOE invites comments from the public on those potential NIETCs, including recommendations and alternatives.

Phase 2 provides a high level explanation of why the potential NIETCs in the list are moving forward in the NIETC designation process, and you are encouraged to provide additional information on why DOE should or should not proceed with a certain corridor.

Your comments before June 24 should focus on the underlying need within the geographic area as well as “information and recommendations” from DOE’s 13 Resource Reports and other possible topics below to narrow the list of potential NIETC designations. DOE also requests information on potential impacts to environmental, community, and other resources within the proposed corridor.

DOE’s 13 Resource Reports: (1) geographic boundaries; (2) water use and quality; (3) fish, wildlife, and vegetation; (4) cultural resources; (5) socioeconomics; (6) Tribal resources; (7) communities of interest; (8) geological resources; (9) soils; (10) land use,
recreation, and aesthetics; (11) air quality and environmental noise; (12) alternatives; and (13) reliability and safety.

DOE requests that interested parties provide in their Phase 2 comments the following resource information: concise descriptions of any known or potential environmental and cumulative effects resulting from a potential NIETC designation, including visual, historic, cultural, economic, social, or health effects thereof.

In addition to the above, a list of potential topics includes:
  1. Expansion of existing transmission easements to add new lines. Expansion will remove all existing buildings, lighting fixtures, signs, billboards, swimming pools, decks, flag posts, sheds, barns, garages, playgrounds, fences or other structures within the expanded easement area. Existing septic systems, leach beds, and/ or wells may not be permitted within the expanded easement area. This would seriously damage host properties or make them uninhabitable.
  2. Width of proposed NIETC (2 miles for MidAtlantic). All properties within the NIETC will have the perpetual cloud of potential eminent domain taking for new transmission. This lowers resale value.
  3. Area of NIETC not large enough or in the right place for alternatives or route changes you suggest, such as routing on existing highway or railroad easements. Federal authorizations needed (crossing Appalachian Trail, C&O Canal), along with impacts to other federal land in the corridor such as Harpers Ferry NHP, The National Conservation Training Center, Antietam Battlefield, to name a few examples.
  4. Need for the project – Do we need new transmission, or would it be a better idea to build generation near data centers instead of importing electricity from neighboring states? This new electric supply is only needed for data centers – suggest other options to supply power such as in-state generation from natural gas, biomass, waste-to-energy, nuclear, small modular nuclear, other large scale power generation in close proximity to the data center load. Building in-state gas generation is constrained by Virginia’s energy policy, which can be changed to avoid new transmission. The federal government can use corridors to force new transmission on states, but cannot force generation choices on states. Something is wrong with this scenario.
  5. Diversification of electric supply.
  6. Energy independence and security. Defense and homeland security.
  7. National energy policy (not defined).
  8. New transmission in the corridor will enhance the ability of coal-fired generators to connect additional capacity to the grid, resulting in increased emissions. Two plants slated for closure have already had their useful life extended (FirstEnergy’s Harrison and Ft. Martin). Imports constrain development of renewable generation in Northern Virginia by importing lower cost coal-fired electricity from other states.
  9. Maximize use of existing rights-of-way without expanding them, including utility, railroad, highway easements. Reconductor existing lines (new wires with increased capacity) without expanding the easement. Buried lines on existing highway or rail rights-of-way, including high-voltage direct current.
  10. Environmental and historic sites.
  11. Costs to consumers. Are the data centers a “consumer” or a beneficiary? New transmission to serve new data centers will increase electric costs for all consumers. Everyone pays to construct new transmission in these corridors, even if we don’t benefit.
  12. Water use and quality, wetlands.
  13. Fish, wildlife and vegetation impacts. Consider future vegetation management under the lines that includes the use of herbicides, weed killers or other substances toxic to humans, animals or cultivated plantings that are either sprayed on new easements from the air or by on the ground vehicles. Construction vehicles and equipment can spread undesirable, invasive vegetation along the corridor
  14. Cultural resources – Historic, tribal, other.
  15. Socioeconomics – impacts on property, income, quality of life, use of eminent domain.
  16. “Communities of interest” – environmental justice, racial disparities, income disparities, energy burden.
  17. Geologic – Karst, abandoned mines.
  18. Soil – erosion, loss of topsoil, loss of vegetation, drainage, compaction, introduction of rock from blasting, destruction of prime or unique farmland,
    protected farmland, agricultural productivity.
  19. Land use, recreation and aesthetics – changes to land use, homes and farms, conservation easements, parks, churches, cemeteries, schools, airports, visual impacts, public health and safety.
  20. Environmental noise and air quality – construction noise, operational noise, impacts to air quality and emissions caused by project (increased use of coal in WV to supply power to data centers – Mitchell, Harrison, Ft. Martin, Longview and Mt. Storm coal-fired power plants feed these corridors).
  21. Alternatives – suggest alternatives to this corridor, whether it is different design, different routing, or different power source.
  22. Public safety – hazards to community from weather or operational failure or terrorist attack, health hazards from electromagnetic fields and stray voltage.
  23. Your interaction (or lack thereof) with company applying for corridor. Lack of notice.

DOE must consider alternatives and recommendations from interested parties. Feel free to suggest as many alternatives as you want in one or more submissions.

DOE will prioritize which potential NIETCs move to Phase 3 based on the available information on geographic boundaries and permitting and preliminary review of comments. DOE must review public comments, consider recommendations and alternatives suggested. 
Want to read more suggestions and tips?  Download a longer version of these guidelines with additional information, quotes you can use, and more web resources to explore.
nietc_comment_instructions-1.docx
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1 Comment

Making Effective Comment on NIETCs

5/11/2024

4 Comments

 
The U.S. Department of Energy released its preliminary list of National Interest Electric Transmission Corridors (NIETCs) this week.

Interested persons have only 45-days to make comment on these corridors before DOE makes its selections to proceed to the next round.  DOE is not doing any notification for property owners within these corridors.  It is not doing any public education and engagement, aside from one "listen only" webinar with limited space (sign up now!)  There will be no public meetings.  DOE is not even sharing the information and recommendations it received from transmission owners (and others) in its Phase 1 information submission window.  Their maps are very generalized and have no details.  We're supposed to comment on something that we have very little information about within a very short time window.  It sort of sounds like DOE doesn't actually want us to comment.

But that only makes me want to comment more.  And spread the word like transmission's Paul Revere...
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First of all, we absolutely must have more time and information in order to make effective comment on something that threatens to put a cloud on our property in perpetuity.  Being located in a NIETC is a designation that will stick with your property, making it the first choice for new transmission projects.  How can our government make these kinds of land-use planning decisions that affect literally millions of people without providing notice and giving us information and time to comment?

This is unacceptable!
The first order of business is to demand the notice and information we need.  Therefore, I am urging everyone to send a letter to the DOE asking for notice, information and extension of the comment deadline.  It's quick and easy... simply download this prepared letter, add your name and other info. and then email it as an attachment to:  [email protected].
extension_request.docx
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It is recommended that you include in your email a request for acknowledgement that DOE received your comment, since there is no automatic acknowledgement provided.

One brief explanation:  On the bottom of the letter it includes a request for full party status.  Being a party doesn't come with any additional duties or expense, it simply allows you to request rehearing or appeal any corridor that impacts you in the future.  It does not require you to do so, but it reserves your right to do so if you choose.  If you do not request that right, you will have to live with DOE's future decision and cannot take any legal action.  It's just a safety measure to protect your rights.

And one more thing... we cannot rely on DOE to act on our requests without a little encouragement, no matter how many we send.  Therefore, it is recommended that you also contact your U.S. Senators and Representatives and ask them to demand that DOE provide notice, public engagement and an extended comment deadline for their constituents who are impacted by these huge corridors.  Here's your quick and easy guide for getting that done with just a couple clicks:
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Everyone should get started on this RIGHT NOW so that these requests are in the works early in the comment process.  Of course we are also going to encourage everyone to make more substantive comment on the actual corridors that impact them, but that's a post for another day.  Stay tuned!
4 Comments

DOE Releases Preliminary List of NIETCs

5/11/2024

4 Comments

 
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This week, the U.S. Department of Energy released its list of preliminary NIETCs.

You can read their list here.

There is also a larger map of each preliminary NIETC, and DOE's initial reasoning for including it on the list.

There are 10 potential corridors across the nation ranging in size up to 100 miles wide and 780 miles long.

I'm just going to concentrate on a couple for this blog.

The Mid-Atlantic corridor.  This corridor follows the path of the MidAtlantic Resiliency Link (MARL) project that PJM ordered to be built to act as a giant extension cord from West Virginia coal-fired power plants to Northern Virginia's data centers.  But this corridor isn't just for that project... it also includes corridors for the other two large 500kV transmission lines  that ship power to the east.
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It's a virtual spiderweb of coal-fired extension cords to No. Va.  Each corridor line on this map is 2 miles wide.  TWO MILES!  That means that anything within that 2-mile corridor would be turned into a sacrifice zone for new transmission lines.

Another is the Midwest Plains corridor.  This NIETC is 5 miles wide and 780 miles long and roughly follows the proposed path of Grain Belt Express.
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Since the purpose of an NIETC is to bump permitting to a federal level if a state denies a project, or to "unlock" government financing of a transmission project in a corridor, your guess is as good as mine why GBE applied for this corridor.  Do they expect that the Illinois Appeals Court will remand their Illinois permit back to the ICC for denial?  Or is this designation necessary to get government financing for GBE?  If it's the latter, maybe that explains why GBE's Environmental Impact Statement already in process for its government guaranteed loan seems to have stalled out.  A NIETC also requires a full environmental impact statement, and the NIETC corridor is much wider than what GBE originally proposed.  Perhaps it has to be re-done.

The last corridor I'm going to focus on is the Delta Plains.  This corridor begins in the Oklahoma panhandle and proceeds east across the state and on into Arkansas, where it forks north and south.  This corridor is 4-18 miles wide and 645 miles long.  It roughly follows the routes for the dearly departed Clean Line Plains and Eastern project and the WindCatcher project.  Although both of these projects were cancelled long ago, it seems that someone wants to bring the zombies back.
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These three corridors alone will impact millions of landowners.  When you add in the other 7 corridors the amount of people impacted by DOE's corridors is astounding!

DOE has opened a 45-day comment period on these corridors before it will further narrow them down and select some or all of them to proceed to its next phase of the process.  That phase will open environmental impact reviews, provide public notice, and issue a draft designation report that you can comment on.  Of course, by the time these corridors get that far, DOE will have already made its decision.  It is imperative that we all get involved and comment now.

I will be publishing more guidance for impacted landowners to help them make timely and effective comment, so stay tuned!
4 Comments

FERC To Announce New Transmission Rules May 13

4/21/2024

2 Comments

 
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The Federal Energy Regulatory Commission (FERC) has announced an open meeting where it will present its new rules for transmission planning AND its new rules for transmission permitting in a National Interest Electric Transmission Corridor (NIETC).

Both of these rulemakings have taken years to get to this point.  As you may know, rulemakings are public participation proceedings where the agency proposes a new rule, accepts comments from the public, and then issues a final rule.  The transmission planning rulemaking began in 2019 -- 5 years ago!  Five years to get a new rule in place isn't uncommon... things move at a glacial pace at FERC.  In addition, FERC's commissioners have come and gone over that time period, making FERC flip-flop on several different new rule proposals.  The transmission permitting rulemaking hasn't been in the works for as long, but it is going to have a profound impact on landowners so unlucky as to be targeted for new transmission projects.

First, the transmission planning rulemaking.  This is all the media has been talking about.  Fans of doubling or tripling transmission lines to ostensibly connect remote wind and solar generators are chomping at the bit, convinced that it will finally make intermittent renewables viable.  That proposed rule contains, among other provisions, a plan to prospectively build new transmission to remote "zones" where some unnamed authority believes new wind and solar can be built.  This would shift the cost of transmission to connect renewables from the owner of the generator to ratepayers across the regions connected.  As it has been for years, the owner of a new generator must pay the costs of connecting its new generator.  These companies want to shift this cost burden to ratepayers.  If a generator has to pay for its own connection, it makes economic choices about where to site new generation in order to build at the most economic sites.  If we're paying, generators can build stuff anywhere, even if it doesn't make economic sense, and stick electric consumers with the bill.

Another thing the transmission planning rule is going to do is create some hypothetical list of "benefits" from new transmission in order to spread the cost allocation as wide as possible.  Even if you don't "need" transmission for reliability or economic reasons, if the transmission owner makes up some hypothetical "benefits" for you, then you're going to be charged for it.  The idea is to spread the trillions of dollars needed for new transmission as wide as possible in the hope that if everyone pays a little that nobody will notice how their money is being wasted building transmission that they don't need.

Finally, the transmission rule will require planning authorities, like PJM or MISO, to plan transmission on a rolling 20-year timeline.  What are you going to need 20 years from now?  You have no idea, and neither does the planner.  By planning so far into the future, the idea is to drive generation choices through transmission planning, and not to plan the transmission system based on need.  It will also attempt to roll state and federal "public policies" into transmission planning so that we all pay a share of other state energy policy choices.  Is Maryland shutting down all its gas-fired generation?  You're going to pay for new transmission to replace it, even though you don't live in Maryland and had no say in the creation of their energy policies. 

The transmission planning rule will be prospective only and will not affect any transmission already included in regional plans.   After this rule is issued, planners will have to submit what are known as compliance filings, which detail how the planner will adjust its rules to carry out the new transmission planning process FERC orders.  In addition, I fully expect that this rule will be litigated for several more years, which is going to hold the whole thing up.

Now onto the Transmission Permitting rule, which is something that is going to impact anyone currently battling unwanted transmission, and anyone doing so in the future.  As you probably know, the U.S. Department of Energy is poised to release its preliminary list of potential NIETCs at any time.  That's a whole battle unto itself that I'm not going to cover here, but if a corridor is designated in your area, it means that one or more proposed transmission projects may be built in that corridor.  A transmission project sited in a NIETC is subject to "backstop" permitting by FERC.  If a state has no authority to permit transmission, or denies a permit to a project in a NIETC, then it can be bumped to FERC for permitting.  FERC will require the transmission company to file an application and then will hold a full-blown permitting process very similar to the state process.  If FERC permits the project, then FERC has authority to say where it goes and to grant the utility building it federal eminent domain authority to take property for it.

In FERC's rulemaking on transmission permitting, it proposed that a utility could begin the FERC process as soon as an application is filed at the state level.  This would mean that there will be TWO simultaneous permitting processes going on at the same time.  Two permitting cases, two interventions, two sets of lawyers, double your time and double your money.  The drawback here is that the FERC process may not even be necessary if the state approves the project in its own permitting process.  If a state approves, FERC doesn't have jurisdiction to get involved.  FERC said that it needed to speed up this process by running its own permitting process at the same time as the state process.  It's foolish and a waste of our time and money.  Let's see what FERC does with this as it was widely panned by those who commented on this rulemaking.

​Another horrible idea in FERC's proposal is an "Applicant Code of Conduct" to meet the statutory requirement for "...good faith efforts to engage with landowners and other stakeholders early in the applicable permitting process."  FERC proposes a voluntary, generalized, unenforceable "Code" that does little to protect landowners.  The "Code" is merely an idea of how a company should behave, not how it will behave.  FERC does not plan to enforce it, or intervene when landowners report violations.  The landowner should report violations to the company!  Don't laugh... they're serious!  FERC's proposed "Code" advises that the company should "avoid" coercive tactics, but it doesn't prohibit them.  That does NOTHING to meet the statutory requirement.  It's a big joke!

The new transmission permitting rule will become operational once it is issued.  Many readers will be subject to this government-sponsored landowner abuse immediately.  This is one you should not ignore!

Over the years, I have worked with a large group of transmission opponents from across the country to file extensive comments on both of these rulemakings on behalf of impacted landowners.  In particular, you should read our comments about the transmission permitting rule to familiarize yourself with what's about to happen to landowners.
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Please plan to (virtually) attend FERC's May 13 Open Meeting where they will release these two new rules and make comment and explanation.  The meeting is "listen only".  There is no opportunity to make comment or interact with the Commissioners.  This is an informational presentation, not a participatory event.  FERC's meeting begins at 11:00 a.m. and is expected to last about an hour.  You can watch it live on YouTube using a link that will appear on FERC's website the week before.  Later on that day (or the next day, remember FERC works at a snail's pace) the text of the rules will be released and then discussed over and over by lawyers and the media.  If you're impacted by a new transmission proposal, you can't miss this presentation!

You don't need to sign up in advance... simply click the link to view when the meeting starts.  You can find that link and minimal information about this special meeting at FERC's website.
2 Comments

What's an NIETC and what can I do?

4/7/2024

0 Comments

 
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The U.S. Department of Energy (DOE) is due to release its preliminary list of National Interest Electric Transmission Corridors (NIETC) that it is considering any day now.  In order to understand what an NIETC is and how you can participate in the process of designation, let's take a look back at the history of NIETCs.

In the Energy Policy Act of 2005, Congress passed legislation to give the DOE authority to study electric transmission congestion and designate NIETCs that would give the Federal Energy Regulatory Commission (FERC) jurisdiction to site and permit an electric transmission line in the event that a state either did not have the authority to approve a transmission line or failed to act on an application for a transmission line for one year.  This became known as "Backstop Permitting."  States traditionally have authority and jurisdiction to regulate the siting and permitting of new transmission lines within their borders.  This hasn't changed, but now there was a backstop measure to prevent a state from holding up a needed transmission project.

The legislation tasked FERC with developing rules for its backstop permitting process and FERC did so.  FERC interpreted the statute to mean if a state denied an application for a transmission project then it bumped permitting to FERC.  But that's not what the statute said!  Piedmont Environmental Council and several states appealed FERC's rulemaking in the Fourth Circuit Court of Appeals.  The Court found that state denial did not activate backstop permitting in PEC v. FERC.  This allowed states to deny a permit to build transmission and end the matter.

Meanwhile, DOE had performed its congestion study and designated two huge corridors, one in the southwest, and one along the east coast stretching from New York to Virginia.  The designation of those corridors was also appealed in the Ninth Circuit and the Court vacated the corridors due to DOE's failure to consult with states and its failure to perform an environmental assessment on the huge corridors it had designated.  That decision is California Wilderness Coalition v. DOE.

These two court decisions made DOE's NIETC program effectively worthless and the entire thing was put on a shelf and forgotten about.  But, in 2021, Congress passed the Infrastructure Investment and Jobs Act that contained a section that is meant to cure the problems with NIETCs, reviving the program. In addition to broadening the reasons for designating a corridor, the new statute allows FERC to site and permit a transmission project in an NIETC that is denied by a state.  The law tells states -- either approve it or FERC will do it for you.  It does not take the place of state permitting, the states still have authority to site and permit, as long as they don't say "no."  Transmission projects cannot go directly to FERC without first applying at the state and going through the state permitting process.

DOE has been busy trying to revive its NIETC program ever since.  In May of 2023, DOE issued a Notice of Intent and Request for Information proposing a new procedure for designating transmission corridors.  DOE proposed that it accept applications from transmission builders to designate a NIETC that corresponded with transmission they wanted to build.  That's not what the statute says... it says
Not less frequently than once every 3 years, the Secretary, after considering alternatives and recommendations from interested parties (including an opportunity for comment from affected States and Indian Tribes), shall issue a report, based on the study under paragraph (1) or other information relating to electric transmission capacity constraints and congestion, which may designate as a national interest electric transmission corridor any geographic area ...​
It says DOE must study and designate corridors, not farm it out for suggestions from for-profit transmission builders to come up projects that provide profits.  The DOE is supposed to be studying and designating corridors that accomplish the criteria in the study and benefit consumers.  There can be a huge difference between a project proposed simply for profit and one that is actually needed by consumers.  Designating corridors is supposed to be a government tool to incentivize the building of the right kind of beneficial projects.  If DOE thinks (all by itself) that a project is needed, then it designates a corridor that will attract transmission builders to propose a new project in the corridor.  Instead, DOE is, as I mentioned in my comments to the DOE, allowing the inmates to run the asylum.  And I wasn't the only one, DOE received more than 100 comments on its proposal for designating NIETCs.  Many commenters also thought allowing transmission builders to apply for NIETCs was a bad idea. Some thought DOE should perform a legal rulemaking to set parameters for its new program.

Meanwhile, DOE had been working on a National Transmission Needs Study required by the statute as the first step to designating NIETCs.  That study was published in October 2023.  The study found transmission congestion everywhere, meaning that NIETCs were needed everywhere.  Many comments were also submitted panning that study.  Mine are posted here.

In December 2023, DOE released a "Guidance" document on NIETCs, in lieu of the requested Rulemaking.  The Guidance says that it changed DOE's approach to allowing transmission builders to apply for NIETC corridors.  Instead, DOE opened a 60-day window for any person to submit a request for a corridor.  Supposedly this cured the DOE's problem with allowing transmission builders to control the process.  But it really doesn't.  Who else would submit a request for a corridor but a transmission builder?  It's a legal sleight of hand that is due a day of reckoning.  

Many blog readers got involved in NIETC at this point and attended DOE's webinar explaining its process in early January.  DOE was not really forthcoming about all the process that came before that webinar, but hopefully this blog will help you to understand that this didn't just drop out of the sky, but had been in process for more than a year.

DOE's 60-day window for submission of "information and recommendations" for corridors ended on February 2.  Many thought this was the one and only comment period for NIETCs, but it was actually designed for transmission builders to submit requests for DOE to study corridors to correspond with the projects they want to build.  After DOE's window closed, it began to take a preliminary look at the corridor recommendations it has received and promised to release a list of corridors it was considering within 60 days (which would be April 2).  DOE hasn't released anything yet, we are still waiting.

However, NextEra notified Piedmont Environmental Council that it had applied for a corridor in Western Loudoun for its MARL project.  I'm pretty sure that is not the extent of NextEra's corridor proposal... the corridor will cover the entire MARL transmission line, from 502 Junction substation in Pennsylvania to Data Center Alley.  It makes no sense to request a corridor for only part of a transmission project.  However, we will have to wait and see what DOE's list looks like before we proceed with our own response.

Our own response?  Oh yes, anyone can make comment on DOE's list for 45-days after it is released due to the way DOE expanded who may submit "recommendations."  I urge you to read DOE's Guidance, that separates the designation process into four phases.  Phase 1 began in December, when anyone (like NextEra) could submit recommendations for corridors.  Phase 2 begins when DOE releases its list of preliminary corridors to be studied.  In the 45-day Phase 2 window, any person may submit information and recommendations.  DOE is asking for specific information about each preliminary corridor.  It seems to be intended for transmission builders who submitted recommendations for corridors in Phase 1 to supplement their applications, err... "recommendations."  It does not seem to be intended for people concerned about the designation of an NIETC to submit their own information and recommendations, but we're going to crash this party and give DOE an earful about corridors that concern us.  More information about how to participate will be forthcoming after I see DOE's list.  After the 45-day Phase 2 process, DOE will decide which corridors will proceed to Phase 3.  Phase 3 opens the federal environmental study process required by NEPA.  DOE will also evaluate historical resources and endangered species.  During Phase 3, DOE will create a draft designation report and open it to public comment.  Phase 3 requires "robust" public engagement and notification.  This is where DOE wants you to join its NIETC party and make comment, and comes very late in the process, after DOE has already made up its mind in the draft designation report.  When all the studies and comment periods are complete, DOE will move onto Phase 4.  Phase 4 publishes a completed environmental study and DOE's Record of Decision and final Designation Report.  That's the end of the process.

However, a designation may be appealed, first through a Request for Rehearing at DOE, and afterwards through a formal appeal in the D.C. Circuit Court of Appeals (or other circuit where the transmission builder is headquartered).

Is it worth engaging in the NIETC process?  Absolutely!  Unfortunately it is just one more thing to deal with and will play out during the state permitting process for MARL.  If you do nothing on NIETC, you risk all your hard work opposing MARL at your state utility commission being for naught.  If your work in the state process causes the state to deny a permit, NIETC can bump it to FERC and start the permitting process all over again.

And speaking of FERC, it also needs to update its process for permitting transmission projects in a designated NIETC.  Back in 2005, FERC engaged in a rulemaking for a permitting process.  That rulemaking has to be updated for the new process.  FERC opened a rulemaking proceeding for siting and permitting transmission in a NIETC back in 2022.  The comment window closed way back in May of 2023.  However, FERC has not yet issued an order or taken any further action.  FERC cannot accept any applications for NIETC projects until it completes its rulemaking.  A group of nationwide transmission opponents submitted timely comments on FERC's rulemaking.  You can read their initial comments here, and their reply comments here.  This group was the only one to speak up for impacted landowners at FERC.  You can read other comments on the docket and monitor its progress by going to FERC's eLibrary and searching for Docket No. RM22-7.

As you can tell from the length of this blog post, NIETCs have been quietly in the works for a long time and there are a lot of moving parts.  I know it's a lot to understand all at once, that's why I will be publishing some guidelines for landowners who want to kick NIETCs to the curb just as soon as DOE releases its Phase 2 list.  

​Stay tuned!
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DOE Pretends to Plan New Transmission

3/16/2024

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Our Big Green government is wasting our tax dollars on an effort to "plan" new transmission, although is has absolutely no authority to do so.  The latest waste of money is entitled "Interregional Renewable Energy Zones" and is a partisan effort to create these "zones" in rural America and "suggest" new HVDC transmission to connect the "zones" to "load centers."  Boiled down, it's an ineffective "plan" to turn rural areas into industrial scale power plants covered with wind turbines and solar panels and then ship all that green juice to the elite bastions of urban arrogance.  Why?  It's simple... they don't want any ugly, invasive power infrastructure sited in their own backyard, but they still want to pretend they are "clean and green" by turning us all into their personal energy serfs.

Nice try, but rural areas aren't that stupid.  DOE has absolutely no authority whatsoever to plan renewable energy "zones" or new transmission lines.  It seemed they thought they did last year, until they were challenged and came up empty handed.  No authority.  Not happening.  

But they're not giving up.  They continue to waste our money on idiotic "reports" that do absolutely nothing.  This time, they claim that their work is "helpful" to states who may want to use this nonsense to plan for their own energy needs.  Sorry... the states don't need your help anymore that the transmission planning authorities do.  Nobody needs help from a bunch of babies that are too stupid and partisan to accept reality.
This study is a preliminary analysis to help state decision makers determine whether to pursue more detailed analyses of IREZ corridors that are relevant to them. This report could not fully account for all the case-specific details that would affect the configuration of a transmission project. Nevertheless, if a corridor examined in this study has a high benefit-to-cost ratio based only on energy cost savings, a follow-on study focusing on that corridor might expand the economic analysis to include local factors that we were not able to address here. A guiding premise behind the IREZ analysis is that states will ultimately take the lead in deciding whether to pursue IREZ development.
But that has approximately ZERO chance of happening.  Even if one or two states used this dreck to ask their regional planning authorities to plan for zones and transmission, there are too many "fly over" states that are never going to agree to it.

What states are those?  Take a look at the grandiose "plan."  (larger image available at the "report" link)
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The green dots are "zones" to be covered with wind turdbines and solar panels.  The red dots are the places that want to pretend they are only using renewable energy.  The lines are new HVDC transmission projects.
This study develops a model using renewable energy zones to address the new challenges of interregional transmission planning. An interregional renewable energy zone (IREZ) is an area comprising a very high concentration of very low-cost developable renewable energy potential. An IREZ hub is a collection point on the bulk power system to which renewable energy plants built in the IREZ can connect easily. The hub anchors an IREZ corridor that consists of a dedicated high-voltage transmission path from the IREZ hub to a major load center.
What were you smoking when you drew that?
We have identified and quantified several high-value IREZ corridors that affected states might consider for interregional transmission planning. Our analysis suggests that these corridors can be valuable tools for reducing carbon emissions in a manner that uses known technologies, has relatively small net impact on customers’ electricity bills, improves resource adequacy, and provides the grid with an additional measure of resilience against major disruptions related to climate change and other causes.
Affected states won't be "considering" that.  It is quite insane and wasteful.

And let's talk about that "using known technologies" thing.  The only "technology" NREL considered here was wind and solar.  That's it.  News flash!  We absolutely, positively, undeniably cannot reliably power the United States with only wind and solar.  Putting their intermittency and unreliability aside, they are just too expensive at this scale.  There's nothing in this report that adds up the cost of all those renewables in the "zones" and the cost of all the new transmission.  I don't think they can count that high.  Here's an idea!  Why don't you take all the money you were hoping to spend on this wasteful plan and use it to build clean, renewable nuclear generation at all the red dot load centers?  None of this transmission would be necessary, and that's a huge savings.  I'm sure it would be cheaper, but DOE didn't compare any other resource plans to this biased brain fart.

And, before I end, let's examine one of the huge errors DOE made purporting "benefits" for the states:
​Benefits could include assumptions about local tax receipts and indirect economic development effects in the IREZ state, payments to landowners for the acquisition of right-of-way (ROW) along the transmission path, net savings in energy costs for customers at the receiving end of the corridor, and enhanced resilience against extreme weather events.
Sorry, but payments to landowners for land taken from them against their will is NOT a benefit.  It is COMPENSATION for something taken from them.  The idea of compensation is that the landowner remains whole after the taking, although you can't grow crops on piles of dirty money.  It is not a windfall similar to winning the lottery.  The landowner is supposed to use that money to purchase additional land, or to make up for the inability to use that land in the future.  That is not a "benefit" by any stretch of the imagination.

DOE did a pretty poor job of trying to dredge up some reason why flyover states should willingly sacrifice themselves for the urban elite.  It also completely overlooks that the "zones" may not want to be covered in wind turbines and solar panels and may outright refuse to sign leases or permit these projects to be built.

What a complete and utter waste of taxpayer money.
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I Told You So!

3/7/2024

0 Comments

 
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This may be the first of several blogs with the same title.

I told you so, DOE!

It seems that one of the first merchant transmission projects that DOE gifted with a capacity contract has gone belly up because it couldn't find any other customers.

FACT:  Merchant transmission capacity contracts are NOT like painting Tom Sawyer's fence... just because the federal government is stupid enough to sign a capacity contract for service doesn't mean anyone else is equally stupid.

Last October, the U.S. Department of Energy announced the first three recipients to be granted transmission capacity contracts paid for by taxpayers.  And I blogged about it here.
DOE is buying something that it doesn't need and won't ever use, but will put a lot of money in the pockets of private investors who otherwise would have no buyers for their overpriced service.  Can I just say "I told you so" in advance?  This program is wasteful, illogical, and unfair.
Taxpayer funded merchant transmission capacity contracts for projects that have no other customers DO NOT inspire other buyers to sign a contract.

I've been telling DOE this since the dawn of this stupid idea.

But they didn't listen, being all concentrated on political nonsense and lacking common sense such as they are.

And this week, I was right.  The Twin States Clean Energy Link was cancelled.  It was cancelled because it couldn't find any other customers besides the U.S. DOE.  That's right, even when the DOE put up our tax dollars to support a merchant transmission project nobody needed, it still didn't inspire any other customers to sign up.  This experiment in propping up unneeded merchant transmission projects with taxpayer dollars is a miserable failure.

Undaunted, the DOE recently issued a second solicitation for more loser merchant transmission project contracts.

Sometimes you just can't fix stupid, especially when their pockets are full of Other People's Money.

Speculative merchant transmission projects are not viable.  Quit wasting our money, DOE!

Did I mention I TOLD YOU SO?
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Understanding NIETCs

12/29/2023

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What's a NIETC (pronounced nit-zee)?  Just when you thought the energy alphabet soup couldn't get any thicker, here's another federal program meant to enable a massive buildout of high voltage electric transmission, whether we need it or not.  NIETC stands for National Interest Electric Transmission Corridors.  NIETCs were dreamed up by Congress in the Energy Policy Act of 2005 as a way to give the Federal Energy Regulatory Commission (FERC) "backstop" permitting authority for certain transmission lines.  Transmission line siting and permitting is state jurisdictional.  It is up to the states to decide whether a new transmission line is needed and, if so, where to put it.  However, Congress wanted to give the federal government authority to permit transmission where states did not use their own authority.  In its original form, designation of a NIETC by the U.S. Department of Energy (DOE) would bump permitting to FERC if a state did not possess the authority to site and permit, or if it took too long, or if it burdened its permit with unworkable conditions.  Importantly, Congress did not give FERC jurisdiction to permit a transmission project if a state issued a denial within one year.  But our federal government overstepped its boundaries by interpreting the statute to mean that a state denial could be overruled by FERC.  The NIETC process was killed by two court decisions that said the government failed to consult with states in making its designations, and that it had no authority to permit if a state issued a denial.  NIETCs were shelved and we moved on.  In 2021, NIETCs were dusted off and a new Congress decided that FERC could overrule a state denial for a transmission project in a NIETC.  This overreach into areas of state jurisdiction has not yet been challenged in court, but I guarantee you it will be.

Meanwhile, the U.S. DOE has been busy re-imagining the NIETC process so that it can designate new corridors.  The purpose of a corridor is to turn FERC into an appeals court for new transmission lines in the event that a state denies a permit to build.  For its part, FERC has initiated a rulemaking to set up its new permitting authority.  After proposing the rule, FERC accepted comment on its proposal, and then let the matter die.  FERC has not yet set the rules for applying for a permit for a project in a NIETC.  Nothing can be done until this process is finished.  However, DOE is moving ahead to designate corridors.

DOE'S first proposal was to allow transmission developers to apply for NIETCs for transmission projects they wanted to build.  In order to inform its process, DOE also conducted a National Transmission Needs Study.  It came a no surprise that DOE determined that the entire U.S. is in need of lots of new transmission, although the regional transmission planners (like PJM Interconnection) have been planning the transmission we need for decades.  Although DOE does not have any authority to plan the transmission system, or decide who pays for it, DOE issued its biased report in order to enable the designation of NIETCs.  Now that the entire country needs new transmission according to DOE's report, DOE has issued what it calls a "guidance document" to create the rules for designation of NIETCs.  It's not a rulemaking (sez DOE), it's a "guidance" and there are no formal rules.  Of course, this does not comport with administrative policy rules that require public notice and comment on agency rules, but DOE isn't bothered by that.... it's simply plunging ahead.  As if that won't be litigated...

Anyhow, on December 19, DOE published its "guidance".  The guidance says that any person can suggest a NIETC anywhere, and DOE will evaluate the suggestions it receives and publish a short list of possible NIETCs by the spring of 2024.  After the list is published, DOE will accept comments on the possible NIETCs.  It doesn't look like DOE will bother to undertake any local community notice so that impacted landowners and communities will be made aware of the comment opportunity.  You're supposed to be in the dark about this (so spread this around and educate yourself).  Once DOE receives comments on its list of possibilities, it will further winnow it down to select a number of "draft" corridors.  The draft corridors will be subject to an environmental statement under the National Environmental Policy Act.  This is where DOE will finally begin "robust" public notification and invitation to comment.  However, the NEPA report only concerns itself with environmental issues, not issues of need for the project in the first place.  While you should comment on the Environmental Impact Statement, you should also comment before the draft corridor is designated.

I know the guidance document is long and perhaps confusing, but you shouldn't ignore it.  I expect that every transmission proposal that has not yet been approved by state utility commissions will be proposing a new corridor as insurance in case it cannot get the state approvals it wants.  Your goal should be to prevent designation of a NIETC in your own community.  DOE will be holding one of its silly webinars to explain its process on January 3.  You can register to attend here.  The webinar will consist of some DOE employees reading the slides of a power point presentation.  DOE rarely allows attendees to ask questions during the webinar.  When it allowed questions in the past, it never seemed to like the questions asked by real people.  Therefore, in order to avoid embarrassment for DOE, there is unlikely to be any actual interaction during the webinar.  However, if you are new to NIETCs, you may get some information from reading the slides yourself.  What the hay, it's only an hour.

DOE pretends that its "guidance" was informed by the comments it received on its initial plan.  But reality is that DOE cherry picked the comments that supported what it wanted to do, and ignored the rest.  I submitted extensive comments on this (and also all the other related rulemakings and studies at FERC and DOE), however DOE ignored everything that didn't fit in with its plan.  Here's what I found wrong with DOE's process:
doe_nietc_comments.pdf
File Size: 120 kb
File Type: pdf
Download File

The U.S. DOE is like a kid with a new Christmas toy.  In the name of "clean energy" DOE has been given limited new authorities by Congress that clash with other authorities already possessed by grid planners, state regulators, NERC and FERC.  DOE doesn't know squat about transmission for reliability or economic purposes.  It is only concerned about building a bunch of transmission willy-nilly because Big Green says we need a bunch of new transmission to connect more unreliable wind and solar generators.  Wind and solar alone are not a viable means of powering our society.  But certain companies are getting very rich on all the government handouts for "clean energy" so they make up all sorts of new ways to pick our pockets, claiming that there's just one more thing we need to pay for in order to make wind and solar work.  Several years ago, they complained that wind and solar weren't working because it was too hard to connect new projects to the existing grid.  So, all the grid interconnection rules were reformed and a huge amount of new connections were approved.  But guess what?  Most of the approved projects dropped out because they were not economic or profitable.  Now Big Green says we need to build new transmission in order to connect new wind and solar.  As Rosanne Rosannadanna once said:
The U.S. DOE is not a grid planner.  It is not a grid regulator.  It's not a cost allocator.  It's just a gigantic waste of everyone's time and money... but it's a waste that we would ignore at our own peril.
Who does our government work for? If not the citizens who fund and enable it, then it is not part of a functioning democracy. DOE has been working steadily over the past several years to gaslight stakeholders to believe that new transmission and generation is the ONLY solution to a cleaner energy future. There are many other tools in the toolbox that can aid the transition that do not depend on commandeering hundreds of thousands of square miles of private property. DOE’s role is to examine all the tools available and determine which scenario, or combination of scenarios, best serves all citizens. DOE should be purposefully engaging all stakeholders in consultation and making all its actions public, instead of carrying on programs like NIETC designation in secret, lest the hoi polloi find out about it before they are supposed to and become a fly in the ointment. 
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National Transmission Needs Study Declares Itself Useless

11/2/2023

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Wait... was it just 10 minutes ago that I said giving the children running the U.S. Department of Energy a pot of money to undermine our current transmission regulatory system was a dumb idea?  Here's another example!

This week the DOE released its National Transmission Needs Study.  As expected, it supposes that we will need many new transmission projects everywhere in the future.  

But what good is it?  After a lot of pushback on its draft study  contention that DOE has any authority whatsoever to plan the transmission system, the announcement says this:
The Needs Study is not intended to displace existing transmission planning processes and is not intended to identify specific transmission solutions to address identified needs, but it does identify key national needs that can inform investments and planning decisions.  ​
Right.  It's useless for planning purposes.  Mainly because experienced planning organizations are NOT going to take advice from a bunch of politically-motivated babies who don't know how to plan lunch, much less a transmission system.  But, bless their little hearts, the DOE babies still think they're influencing their superiors.

Let's look to the actual study.
The findings of this Needs Study are intended to inform regional and interregional planning, as well as help guide the Department in the execution of its transmission-related authorities. The Department understands the factors that drive industry transmission planning today and the entities and institutions that perform such planning. This Needs Study is not meant to displace these planning processes or the reliability standards they address. Rather, the Department believes it will be an important addition to overall industry and government planning efforts to reduce transmission congetion and capacity constraints that adversely affect consumers. 
In other words, all of the stuff in here is useless.  So why did all this taxpayer money get wasted?  It only has comedic value at this point.  

Appendix B contains a Comment Synthesis and Resolution.  
This is the only part worth reading because the rest of it is collective fantasy.  Reality intruded in the comments and watching DOE try to sidestep it is much more entertaining than the report itself.  Imagine how hard I laughed to find my own name mentioned 36 times in the Comments section.  Yes, I submitted comments.  I had fun writing them.  Apparently someone at DOE had fun reading them.  And then some idiot tried to "resolve" them.  I'm not going to list all the brainless responses to my comments, just the ones that made me laugh the most.
A few individuals express opposition to the basis of the Study and what they view as political or parochial goals of the Study. One individual, Keryn Newman, criticizes the discrepancy between needs identified in the 2020 Congestion Study and the draft Study, stating that in 2020, DOE did not find a need to designate transmission corridors. In contrast, this report finds significant transmission need “in an area so vast that if the DOE were to designate corridors to solve it, the entire continental U.S. would be one gigantic ‘corridor.’” Newman concludes that this discrepancy can only be attributed to the fact that the studies “are not based on data and science, but on political goals. 
DOE's "resolution" to my comment?  There wasn't one to this particular comment.  And so it begins...
Keryn Newman criticizes the Study’s conclusion that large-scale transmission build-out is cost-effective. Newman cites the Study’s “vague claims of ‘economies of scale,’” arguing they are never justified and allow DOE to avoid a comprehensive analysis of the cost of transmission. 
Again... not resolved.  Perhaps the comment quoter had big intentions for some of these legitimate comments to be resolved, but the resolver preferred to make crap up and watch cat videos on Facebook.
Keryn Newman argues that the Needs Study does not include adequate consultation with landowners, whom Newman identifies as those who will most experience the devastating impacts of transmission development. Newman argues that the Study identifies landowner concerns as a barrier to transmission deployment but does not bother to consult these “barriers” or to devise solutions to mitigate their concerns. For this very reason, Newman also objects to the FERC Report on Barriers and Opportunities for High Voltage Transmission, which is cited in the Needs Study. Additionally, Newman argues that landowner interests should be represented on DOE’s Technical Review Committee. ​
Finally... we're getting somewhere!  DOE's resolution to this issue is:
Department Response
In response to comments from parties requesting additional, targeted stakeholder and Tribal outreach and continued stakeholder engagement, the Department has made additional efforts to engage with entities beyond the Department’s consultation with states, Tribes, and regional entities pursuant to Section 216(a) of the FPA, as amended (16 U.S.C. §824p(a)(1)). The Department has continued to accept meeting requests from commenting and interested parties to discuss draft Study findings.
Further, the Department has created regional and national fact sheets to be appended to the final Study and released concurrently to help make Study findings more accessible. The Department hopes the final Needs Study will be used as an educational tool to engage communities in discussion about grid needs. Departmental communications on final Study findings are a tool to solicit additional feedback from stakeholders on what future iterations of the Needs Study should entail.
The Department agrees with commenters that landowner, community, stakeholder, and Tribal engagement is imperative. The Department added Section V.e. Siting and Land Use Considerations (pages 95–108) to the final Study on subjects of unique interest to the communities. This section contains discussion of best practices for developers in engaging with landowners and other affected parties. 
Would any landowner who has had a meeting with DOE please raise your hand?  DOE is lying about having meetings with landowners, or any contact whatsoever.  As well DOE does not intend to CONSULT with landowners... it wants to dictate to landowners about how they should feel, what they should want, and thinks it needs to "educate" landowners to gladly participate in their goose-stepping march to government control.  This is the kind of nonsense dreamed up by privileged babies who have never had to live life in the real world.  The DOE's "Best Practices" did not come from discussions with actual landowners.  They came from a bunch of urban dimwits who think meat comes from Walmart, a place where they would never set dainty foot!  This is completely useless.  What landowners want is a seat at the table, not a bunch of know-nothings speaking for them.  DOE actually thinks if they read a number of studies done by fellow urban dimwits that pretend to speak for landowners that automatically makes them experts on what landowners want.  It would have been a lot less time consuming and a lot more accurate to actually consult with landowners.  What is it about us that *scares* these babies so much?
Keryn Newman objects to the Needs Study’s statement that “large amounts of low-cost generation potential exist in the middle of the country and accessing this generation through increased transmission is cost-effective for neighboring regions.” Newman argues this approach is only low-cost due to taxpayer-funded subsidies and lower-cost lands and that “turning rural America into an energy serfdom to provide power to far-away cities” benefits urban communities that do not want to build infrastructure in their own backyard. Newman also argues that the statement exhibits “cultural and political elitism.” Furthermore, Newman argues that the Study dismisses legitimate landowner concerns as “NIMBYism” and barriers to transmission development without attempting to address them. Accordingly, Newman concludes that the Study lacks awareness and empathy. 
The use of quotation marks slays me.  The response does not.
The Department stresses that addressing landowner concerns is critical to ensuring just and equitable outcomes in transmission deployment. The Needs Study makes no reference to “NIMBYism” and the Department has taken care to ensure that landowner concerns are not presented as a barrier to transmission deployment in the final Study. 
Well, that demonstrates lack of awareness and empathy.  Bravo!

Here's what DOE's "study" concluded about transmission on farmland.
Transmission can share much of its rights-of-way with other activities, such as agricultural fields or recreational paths, and are considered a “mixed use” activity. 
This also demonstrates a complete lack of sense and an absolute disconnect with farmers.  This is WHY DOE needs to consult with landowners.

This is how your hard-earned money is being wasted in Washington, DC.
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$1.3B Taxpayer-funded Giveaway To Merchant Transmission Begins

11/2/2023

1 Comment

 
The children running the U.S. Department of Energy are out of control.  Buoyed by legislation that never made sense, the DOE announced the other day that it was giving away $1.3B to purchase capacity contracts with three specially selected merchant transmission projects.

Many of you are familiar with how merchant transmission operates if you've been reading this blog.  Unfortunately, Congress, DOE and the mainstream media have no idea.  No idea at all.  Congress included a provision in the IIJA (Infrastructure Investment and Jobs Act aka Bipartisan Infrastructure Bill) that grants DOE the ability to borrow up to $2.5B to facilitate construction of new transmission.  One of the new authorities allows DOE to enter into capacity contracts with transmission developers for up to 50% of the project's capacity for a period of up to 40 years.  These contracts provide taxpayer-funded revenue for merchant transmission developers that is supposed to enable them to get loans necessary for construction.  Congress and DOE think that the government's support will "encourage" other customers to sign up and that DOE can escape without spending any money before the project goes into operation.
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If you believe this you are extremely naive.  The mechanics of negotiated rate authority for merchant transmission prevent this from happening.  If these merchant projects want to sell to the government, and any other entities, they have to follow the Federal Energy Regulatory Commission's negotiated rate policy.  First they have to apply to use the authority in the first place, then make compliance filings demonstrating how they followed the policy afterwards.  Alternatively, they can just submit a whole package of junk afterwards and hope they did it right.  I haven't seen the second option used... who wants that kind of uncertainty?

Once negotiated rate authority is granted, the developer must make broad announcement that it is selling capacity so that every interested entity gets an equal chance to bid on capacity.  The developer can then negotiate with respondents based on criteria that would be approved by FERC.  If you want to make up your own criteria without FERC approval you introduce uncertainty that it may not be approved after the fact.  FERC requires the applicant to accept all market risk for its project.  This means NO CAPTIVE CUSTOMERS who would be required to pay for a project, such as U.S. taxpayers.

The basic premise of negotiated rates is that the market rate for transmission capacity serves as a cap to keep rates negotiated just and reasonable.  Nobody is going to pay more for merchant transmission capacity than they can pay for transmission capacity elsewhere.  However, DOE selecting a merchant project and promising them a capacity contract for the express purpose of providing enough revenue to get the project financed is not competitive.  While DOE pretends it will only pay "market" prices, where's the market?  Where's the competition?  And why is DOE's negotiation taking place completely outside any open season negotiations with other utilities?

Of the three projects guaranteed capacity contracts, only one has approved negotiated rate authority from FERC.  That project received authorization in 2015 but never completed the steps to have its negotiated rates approved by FERC.  Probably because it couldn't find any customers.  That company is going to have to start fresh because its whole project, corporate structure and investors have changed.

But DOE's announcement says it will have its contracts that commit to buying capacity before the project begins construction in place early next year.  How could that be fair?  What other entities are being offered capacity on these projects at this time?  How does DOE know that it even needs to enter these contracts if the project has not yet offered its service to the market?  This whole scheme doesn't work and makes little sense.

DOE thinks that just by announcing it will buy capacity on transmission projects that it will create a flurry of interest in the projects.  DOE Pollyanna believes that it won't actually have to spend any money because customers are going to be chomping at the bit to buy capacity from the selected projects.  We're not painting Tom Sawyer's fence here.  If merchant capacity was a good deal for utilities, they would buy it in the first place without DOE's encouragement.  If it's not, they're still not buying it.  In that case, the DOE is stuck using taxpayer funds to pay for a transmission project that nobody will ever use for 40 YEARS.  In addition, it is likely that DOE will overpay for capacity and make the project even less cost effective.  The only way DOE is going to get out of these unnecessary capacity contracts is to give the capacity away.  Taxpayers are still out the cost of the overpriced contract for 40 years, with only pennies on the dollar recovered.

The DOE seems to be counting on an ignorant media to spread the word about this program.  The stories are so completely ignorant that I'm not even going to comment on any particular one.  Ignorant eco-warriors and poor little rich kids who moonlight as annoying climate activists don't buy capacity on merchant transmission.  The only entities that would buy capacity are sophisticated utilities that probably think the DOE is dumber than I do.  This program is on the fast track to failure.

DOE is buying something that it doesn't need and won't ever use, but will put a lot of money in the pockets of private investors who otherwise would have no buyers for their overpriced service.  Can I just say "I told you so" in advance?  This program is wasteful, illogical, and unfair.

Merchant transmission is a market-based alternative to regionally planned cost-of-service transmission necessary for reliability, economic, or public policy reasons.  There is no actual need for merchant transmission.  It's strictly for profiteers who think they can fill a need that market participants will pay for.  When there is no market need for merchant transmission, it fails.  This new program is supposed to prevent these merchants from failing due to lack of market need.  Why are taxpayers paying for this speculative profiteering when they are also paying for the regionally planned projects they actually need to keep their lights on?  Giving DOE a pot of money with which to undermine our transmission planning and ratemaking system is simply adding layers of chaos that will ensure that nothing beneficial is ever constructed.
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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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