Category:

When Nerves Overtake Truth and Logic

4/10/2019

This article says city utilities are "nervous" about new legislation that would prevent the use of eminent domain for above ground HVDC merchant transmission facilities. Apparently their attack of nerves is so severe it has short-circuited their brains. Or maybe they are merely attempting to defeat the legislation with fearmongering. Pretty much none of what it has been reported that these "cities" said on a conference call organized by the Missouri Public Utility Alliance is even remotely likely, and some of it is just plain old not true.

Such as this bit of fearmongering:

“My fear of that is the precedent it would set within the state of Missouri for any future developments,” Klusmeyer said.
Any utility system in the state, whether it’s water, sewer, electric or telecommunications, has the power of eminent domain, Klusmeyer said. The bill could be construed to limit the use of eminent domain for “pretty much any utility in the state,” he said, even though it’s limited to “above-ground merchant lines.”
“That can trickle down into just about any type of utility expansion that’s done, whether it’s through Missouri American, or maybe even Ameren or Associated (Electric Cooperative),” he said. “That’s my fear of what it’s going to do to any type of infrastructure improvement or expansion in the state.”

Your fear is baseless, Dennis. In fact, it's completely manufactured. The legislation is specific to private entities constructing above ground, high voltage direct current, merchant transmission lines. It does not apply to buried merchant transmission lines (and, hey, this is a thing now!), water, sewer, telecommunications, or even any other electric transmission lines proposed by public utilities, such as Ameren. The kind of project affected is specifically named in the legislation, and no in-state public entity will be affected in the least, now or in the future. No utilities in the state are building above ground high voltage direct current (HVDC) merchant transmission lines. The inclusion of HVDC pretty much limits its application to a certain kind of electric transmission line used mainly to transmit electricity long distances without intermediate connections to communities through which it passes. HVDC has to be converted to AC power before it can be connected to the existing grid, and each DC/AC converter station costs hundreds of millions of dollars, making interconnection with this type of project cost prohibitive. This legislation cannot apply to AC electric projects, buried DC electric projects, DC electric projects owned by public entities, DC electric projects owned by anyone that erect substations at least every 50 miles along the route, and any water, sewer or telecommunications project. It says so right in the legislation:

Private entities shall not have the power of eminent domain under the provisions of this section for the purposes of constructing above-ground merchant lines. For the purposes of this subsection, "merchant line" means a high-voltage direct current electric transmission line which does not provide for the erection of electric substations at intervals of less than fifty miles, which substations are necessary to accommodate both the purchase and sale to persons located in this state of electricity generated or transmitted by the private entity.

Statutes don't "trickle down" to apply to something not mentioned in the statute. The final arbitrator of how a statute is applied is a court, and courts limit their opinion to what a statute actually says. Courts do not add or substitute language or meaning to a statute. There's simply no way this statute could ever apply to water, sewer, telecommunications, or other kinds of electric transmission projects. It appears that Dennis's fearmongering is intended to incite opposition from entities to whom the statute would never apply. Nice try, but I think people are smarter than that, especially utilities like Ameren and Associated.

There was also a lot of bogus information in that article that it's not clear was attributed to Dennis Klusmeyer, but was interspersed with quotes attributed to him, such as:

The bill, introduced by Rep. Jim Hansen, R-Frankford, would prohibit taking easements by eminent domain to make way for the Grain Belt Express, a planned $2.3 billion transmission line, which Chicago-based Invenergy bought last year. The line would carry electricity from the Iron Star wind farm in southwestern Kansas, across Missouri and Indiana, and into Illinois. The line would cross eight north Missouri counties, including Monroe and Ralls, which are represented by Hansen.

Targeted at the Grain Belt Express, the bill would also apply to similar projects. It bans all private entities from using eminent domain to acquire easements to build “above-ground merchant lines” if less than 12 percent of the power will be consumed by Missouri customers.

The bill wouldn't prohibit eminent domain or prevent a buried HVDC transmission project. If GBE was buried along existing rights of way, it would not be affected.

Chicago-based Invenergy did not buy the project last year. It signed a contingent contract to purchase if certain conditions are met. Invenergy does not yet own the project.

The line is proposed to carry electricity from a proposed converter station in southwestern Kansas, although no specific wind farms have signed on to be customers. Any wind that wants to connect would have to sign a contract to purchase capacity. That hasn't happened yet. In addition, the project has no clear path through Illinois to Indiana, so it is not guaranteed to connect to anything. GBE does not have a permit to construct the project in Illinois. In fact, it has not even applied for one.

There are no other "similar" projects.

And that 12% figure is not in the legislation, but came from legislative public hearings where proponents of the bill mentioned that less than 12% of the electricity planned for this project could possibly be for sale to Missouri utilities. The legislation contains no such threshold.

So, what was the point of spewing misinformation such as this to news reporters on a conference call?

Fearmongering.

And then there's this logic bender:

The Federal Energy Regulatory Commission has the power to regulate transmission, not the state legislature, said Mark Petty director of Kirkwood Electric. Every transmission project can be difficult for landowners to grapple with, which is why they are considered by a commission rather than elected officials who haven’t been reviewing all the facts, he said.

“It’s easy for an entity that objects to want to do an end run, even after all the other facts have been presented and laws been interpreted and reviewed,” he said.

So, let me get this straight, Mark. You believe that FERC considered Grain Belt Express, interpreted and reviewed the laws, and "regulated" it? I'm frightened to think you're the director of anything electric. FERC jurisdiction extends only to the rates of interstate transmission. FERC only regulates transmission RATES, which has nothing to do with Missouri law or HB 1062. States have jurisdiction to site and permit electric transmission projects, in this case the Missouri Public Service Commission. Where does the MO PSC get its authority? From state laws. Who makes state laws? The legislature does. The MO PSC is a creature of statute and must operate within the laws created by the legislature. The MO PSC exists at the will of the legislature. It defies logic to believe that an act of the legislature is an "end run" around a commission that only exists by legislative grace. The commission does what the legislature says, not the other way around. If the legislature is prevented from acting on GBE because it is FERC jurisdictional, then the MO PSC would also be prevented from acting. I'm not sure what FERC has to do with this anyhow, because it has no jurisdiction over state eminent domain laws. Federalism, it's a thing. Look it up, Mark.

Mark also said this:

Since the electricity is still coming to customers through public utilities, customers will have the same low rates and price stability, Petty said. The wind electricity from the Grain Belt Express is also cheaper than the alternatives, and Kirkwood could save up to a third of what it currently pays for electricity, Petty said.

A non-public utility selling service (and we are talking about transmission capacity here, since GBE does not sell power) to a public utility does not make the non-public utility a public utility for eminent domain purposes. A public utility buying service (and electricity from a non-public utility generator) can use any savings realized for any purpose, such as making system improvements, or giving themselves a raise. All "savings" are not guaranteed to show up on consumer electric bills. And if they did, Mark wants you to believe it will cut bills by 1/3. That's a pretty high number, Mark. So, if someone's bill is ordinarily $100, it will only be $67 if GBE uses eminent domain to build its project? Who has been purchasing power for your city, Mark? That person hasn't been doing a very good job. Perhaps Mark was a bit confused about the actual dollar amount of the savings, and this guy tried to pull him out of the fire...

Cities served by the public energy pool will also see savings, but not as large as Kirkwood. Each city would save about 3-4 percent, said John Grotzinger, vice president of engineering operations and power supply at the Missouri Public Utility Alliance. Those savings would be passed on to ratepayers, he said.

Three to four percent. But in Kirkwood it's 33.3%? That's so ridiculous it can't be true. Let's see... 3% of a $100 electric bill is a savings of... $3. That $3 isn't going to change anyone's life. However, using eminent domain to take land for GBE will take farmland out of production and impact yields, which directly translates into increased food costs for everyone. Any "savings" from GBE are minuscule compared to the consequences of using eminent domain to increase the profits of non-public entities such as GBE.

HB 1062 has incredible support. Use of fearmongering and misinformation to prevent its passage is a losing game. Or maybe these city utilities and public energy pool folks really believe their own nonsense and have been taken for a ride by out-of-state investors seeking to increase their own profits on the backs of Missourians? When someone offers you something at below their cost to supply it, there's always a catch. Perhaps this is the real reason cities are nervous? Their golden goose is on the chopping block!

May truth, logic and good sense prevail!

2 Comments

Missouri Legislators Act

4/3/2019

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Missouri legislators are working feverishly on legislation that would close a gaping hole in state eminent domain law that allows the taking of private property by private enterprise, for-profit, electric transmission companies that seek to increase their profits by using eminent domain to build cheaper, overhead high voltage direct current transmission across the state in order to export power to eastern states. HB 1062 will add a new section to Section 523.262, RSMo, that prohibits the use of eminent domain for the purposes of constructing above-ground merchant electric transmission lines. The new section reads:

Private entities shall not have the power of eminent domain under the provisions of this section for the purposes of constructing above-ground merchant lines. For the purposes of this subsection, "merchant line" means a high-voltage direct current electric transmission line which does not provide for the erection of electric substations at intervals of less than fifty miles, which substations are necessary to accommodate both the purchase and sale to persons located in this state of electricity generated or transmitted by the private entity.

Missouri landowners enthusiastically support this legislation. Why should a private business proposal be given legal authority to impact existing businesses against their will in order to increase its own profits? The construction of overhead transmission lines across existing agricultural businesses causes loss that cannot be adequately compensated with one-time land value payments, and provides no benefit to the existing businesses.

Marilyn O’Bannon of Monroe County says she will lose farmland and room to till:

“When do you give the right to somebody to take their business across your business. I’m going, as a landowner, to give up a lot of income. I’m not talking a few dollars here, a lot of income to allow something to come across my property that I will get no value from.”

Although the legislation has some opponents, opposition is coming from those who stand to profit from just such a proposal, the Grain Belt Express (GBE) merchant transmission project. The right to own and use land should be sacred, not subject to the whims of out-of-state investors or electric customers who want to save a few cents on their electric bills. In order to realize their profits, these entities propose taking from the profits of others. And it's not as if there is no other way to route GBE across the state. High-voltage direct current merchant transmission projects buried along existing rail and road rights-of-way are now technologically possible and have been proposed in other states. However, they cost more. A higher cost to construct the for-profit transmission line eats away at GBE's profit, essentially putting a landowner's property loss directly in the pockets of Chicago-based Invenergy, who proposes to buy GBE if the sale can be approved by Missouri and Kansas. Why should struggling farmers be saddled with additional loss that turns into additional profit for a private company?

There must be a lot of money at stake to get Invenergy and its lobbyists to Jefferson City, along with a host of others who all stand to make money from killing this legislation. And isn't it funny that a whole pack of new lies have surfaced? If that's the way these opponents of the legislation make their case, they're on the express train to Loserville. Lies? Certainly. I'm talking about this:

The Public Service Commission ruled that the landowners would have to be compensated for use of the land and caps the amount of agricultural land used for each tower.

There is no "cap" on the amount of agricultural land used for each tower. I've read the PSC Order thoroughly and no such "cap" exists. As written, GBE can use and control the entirety of its 200-foot wide approved right of way across the state. The origin of this lie seems to come from perhaps the most bogus statement in the PSC's Order: that only 9 acres of agricultural land will be used for the entire 200 mile route across the state. This presumption is flawed and based on a straight up math equation that doesn't translate into real life. Some genius calculated the actual footprint base of each transmission tower into a total acreage number. This "9 acres" includes only the footprint of each tower, as if a farmer could work right up against the base of the tower using huge pieces of farm equipment, and as if there would be no other agricultural impacts from the disturbance of a 200-foot wide, 200-mile long, linear strip of land. The truth of the matter is that the entire right-of-way will be disturbed during construction, along with miles and miles of new access roads across productive agricultural land. Chances of top soil being replaced perfectly and other damage to the land not affecting future operations are slim to none. Moreover, there is no legal significance to the 9-acre lie. It is not a cap, not a limit. It's nothing more than weasel words from someone trying to minimize the actual impacts. It's going to be a lot more than 9 acres.

And then there's this:

But the Public Service Commission on this past March voted unanimously to give Grain Belt Express Clean Line LLC a “certificate of need and necessity.” Former Missouri Gov. Jay Nixon argued on behalf of the company.

Not before the PSC, he didn't. GBE only used Nixon to grease their way through the Missouri Supreme Court. But, really, what difference does it make who the company's lawyer was? Are they trying to insinuate this is nothing but a political battle? Well, in that case, I guess the fight is on -- elected legislators with enormous power against former governor with no actual political power. Who should win?

Here's another:

The proposed line promises to deliver 3,500 megawatts of renewable energy from western Kansas to southeastern Missouri and into Illinois, and Indiana where it would connect to a grid that supplies energy to heavily populated northeastern states.

Reality check. The energy on the line could come from anywhere. There's plenty of wind in the Midwest, including new owner Invenergy's stranded "Wind Catcher" project in the Oklahoma panhandle. Won't Kansas look surprised if it permits (and abates property taxes for) a transmission line that moves wind from Oklahoma through Kansas for benefit of other states? If that happens, Kansas gets nothing from this project. And there are no promises about where this power would be "delivered" either. GBE has no permit to cross Illinois, and without that there is no connection to eastern states. Invenergy could sell capacity to anyone, who could then sell the power to other states... maybe Arkansas, Texas, Louisiana and Oklahoma? It could go any number of places if it doesn't go through Illinois.

Here's another misconception:

Peggy Whipple, who argued on behalf of Clean Line before the Missouri Supreme Court and the PSC, says the commission decision legally deems the company to be a public utility, answerable to local regulators.
“We have legal control over this company that will develop this line for everything that we could hope to have it for, other than rates only.” Rates would come from the U.S. Federal Energy Regulatory Commission and must be just and reasonable, she says.”

Peggy, Peggy, Peggy, this is why we have courts. Just because the PSC deemed the company a "public utility" does not mean it is. That question is one that will be answered by a court. The PSC's decision will be appealed. As an attorney, you should know this well. However, it looks like your working knowledge of FERC might be lacking. Just and reasonable rates, FERC-style, includes strict rules against self-dealing and market power. What do you suppose would happen, Peggy, if FERC revoked GBE's Negotiated Rate Authority? Who would pay for GBE then? And how would that affect its public utility status? And, just one more thing... who is "we," Peggy? "We have legal control..."? You represent the regulated, not the regulator. How much regulatory capture is going on at the MO PSC anyhow?

And this guy:

Small cities and their utilities spoke against the bill, saying they need the new power lines. Carroll County Commissioner Bill Boelsen:
“My previous job before I took on this job was high-voltage electricity. I traveled the entire United States working on substation transformers. This country’s infrastructure is crap anymore. It’s 70, 80 years old at least.”

My, my, my, it's a wonder the lights stay on at all, isn't it? Fact: We have reliability mandates and laws that keep the electric grid reliable. New additions and improvements to the system happen all the time under the supervision of regional planning organizations. None of these organizations have found GBE to be a necessary addition for reliability, or any other purpose. Exaggeration and fear mongering like this isn't helpful. People are smarter than that. The electric grid is not "crap." Your exaggeration, though, is crap.

Another crappy opinion shot down:

Stephen Franke, a businessman from Hannibal says they’ve been promised energy a third cheaper than the open market.
“Two cents a kilowatt-hour an entire third cheaper for a community with 20 percent poverty rate. That’s substantial. In addition, a 25-year contract, we’re locked in which means we can do capital planning, we can do reserve planning. We’re not exposed to the risk of an open and volatile market.”

So, we're robbing from the rich (farmers) to give to the poor (communities with 20% poverty rate). Robin Hood you're not. The PSC Order revealed that municipalities who may "save" with possible price benefits may not even pass this "savings" on to customers. The municipalities may use this "savings" to improve their systems, or give pay raises to their executives. There's no guarantee that any "savings" will find its way to customers. And, really, with the "savings" numbers being bandied about applied to millions of customers, the actual maximum monthly "savings" parceled out to any one of these people living below the poverty level wouldn't amount to the price of a cup of coffee. It's not going to raise these unfortunate souls above the poverty level. Your glittering generality is absurd when logic is applied.

Support for HB 1062 by Missourians will be crucial. Let your legislators know that you support this bill today! And be on the lookout to lend your support to upcoming grassroots lobbying efforts at the legislature! Allowing private enterprise to condemn and take private property to increase its profits affects everyone in the state. Next time, it could be you. Let's close this gap now and require for-profit electric transmission to pay its own freight to get across the state without burdening agricultural businesses!

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How Do You Go Slower Than Dead Stop?

3/26/2018

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Your statements to the media about the dead Plains & Eastern project have me questioning your sanity, Clean Line. There's no way to go slower than dead stop. Your project is over (and I believe your company is over as a whole) and denying reality isn't going to bring it back.

Clean Line spokeswoman Sarah Bray isn't even a Clean Line employee any longer. It looks like she's got her own consulting company now. That's an inventive way to cut company overhead... get rid of people and then hire them back as "consultants" so you don't have to give them benefits and can just pay them for assorted projects now and then. Such as telling the media stuff like this:

“The project is not dead, but is on a much slower track,” Clean Line Energy spokeswoman Sarah Bray said in an email.

You mean the side track to the dump? That slower track? Because this project just doesn't exist anymore. Let's examine...

The Plains & Eastern Clean Line was supposed to be a 700+ mile transmission project for the purpose of connecting not-yet-built wind generators in western Oklahoma to the TVA system in Memphis, Tennessee. Last year, Clean Line sold all its Oklahoma assets to NextEra. That would include any regulatory permits, project engineering, and right of way option agreements with landowners. So everything in Oklahoma is gone. No longer under Clean Line's control and not for its use. The generators Clean Line was going to connect to were all in Oklahoma. There's nothing to transmit, unless Clean Line customers buy power from some other entity and take delivery in Arkansas.

What does Clean Line still own? The Arkansas and Tennessee assets. There is no regulatory approval in Arkansas. The only thing Clean Line owns in that state is any project engineering and a handful of right of way option agreements with landowners. In Tennessee, Clean Line owns a regulatory approval from the state based on its former project, including the Oklahoma assets. It also owns a handful of right of way agreements with landowners and any project engineering.

Clean Line also owns negotiated rate authority granted by the Federal Energy Regulatory Commission, again based on its former project that included the Oklahoma assets.

What can Clean Line do with the assets it owns? Pretty much nothing. They're not worth anything. Clean Line no longer has queue positions to connect a transmission line in Arkansas or Tennessee. It owns a plan for a transmission line that no longer exists. Is Clean Line going to build a transmission line that doesn't connect with any generators in Arkansas and then not connect it with any customers in Tennessee? And customers are supposed to voluntarily step up and sign contracts for transmission capacity on this power line to nowhere?

Of course not! Clean Line couldn't even attract any customers when it actually owned the entire project plan. Now it doesn't even own a complete plan. And without the U.S. DOE trying to assert its authority in Arkansas, Clean Line no longer has any regulatory assets in the state. Could Clean Line apply for a permit to build a transmission across the state that doesn't connect with anything? Sure, they can apply. But they're not likely to get anywhere since Arkansas enacted Act 842 in 2015.

(b) The commission shall not issue a certificate of public convenience and necessity to any person or corporation that:
(1) Is not a public utility; (2) Primarily transmits electricity; and
(3) Has not been directed or designated to construct an electric transmission facility from a regional transmission organization.

Only someone not connected with reality would attempt to apply for a merchant transmission permit in Arkansas. Maybe someone whose sanity might be slipping.

Perhaps telling the media that the project is not dead and merely on a "slower track" fooled a few reporters who don't know what's going on. But even Utility Dive (often not the brightest bulb in the transmission reporting string) smells something disingenuous in Clean Line's claims.

Is Clean Line Energy still developing the Plains & Eastern Clean Line transmission project? The company says yes, despite the fact that selling the Oklahoma assets and ending its plan to build in Arkansas means the Tennessee portion of the line appears to be all that remains on the drawing board.

The Plains & Eastern Clean Line had been under development in Oklahoma for eight years when Clean Line sold it to NextEra. The company said the project has gone through an environmental review with "substantial stakeholder input" and received the regulatory approvals and major environmental permits necessary for construction, but it's unclear how it will move forward without the DOE support.

That environmental review and "substantial stakeholder input" as well as the "major environmental permits necessary for construction" were all part and parcel of the DOE's participation in the project. Those things went through the shredder on Friday. They no longer exist.

Clean Line's choo-choo

Where are you Michael Skelly? Why are you hiding from the media? And where's Mario Harturdo, the Plains & Eastern huckster? Looks like he's now "self-employed" as well. The circus is over. Get outta town.

2 Comments

Shame On You, Transource!

1/13/2018

4 Comments

Transource is a new joint venture of utility giant American Electric Power and Great Plains Energy. So far, it seems that Transource's Independence Energy Connection is being managed by AEP employees. AEP has more than 100 years of experience building utility infrastructure and interacting with consumers. So how did they screw this up so badly? Why has an elected representative demanded that Transource cease and desist aggressive and illegal land acquisition practices and issue an apology to all the landowners it threatened?

You've gone too far, Transource. Shame on you!

Transource thinks that perhaps they're dealing with a bunch of rubes who are easily threatened into submission. After all, the eastern portion of the project is only 10 miles of line in a rural community bisected by a state border... but it's a sophisticated and well connected community. Transource, your strong arm tactics and lies don't work here!

During the past week, Transource poured the gas on their fruitless efforts to get landowners to sign legal documents giving the company permission to "survey." Landowners are never required to sign survey permission forms. While Pennsylvania law allows a public utility to access private property, there's a lot more to it that Transource presumes landowners don't know.

Furthermore, the Transource letter sent to landowners dated January 5, 2018 is inaccurate and misrepresentative of the proper procedures set in place under the Eminent Domain Code and public codes of the Commonwealth. In the letter, your company stated it has obtained utility status by Pennsylvania. While the Public Utility Commission (PUC) approved Transource's application for utility status on December 21, 2017, your company has yet to obtain the appropriate certificate and orders from the PUC to operate as a public utility and conduct land surveys/assessments. Moreover, even after obtaining the appropriate approvals, Transource must follow the Eminent Domain Code and issue a 10-day notice to all landowners before accessing private property. As of today, Transource cannot send such a notice until the proper certificate and approvals from the PUC.

And Transource is going to pretend, with all its lawyers and legal support staff, that it didn't know these things? I don't believe you! And even if Transource was completely unaware of Pennsylvania law, there's absolutely no excuse for threatening to have landowners arrested on their own property. You went too far, Transource.

Even if Transource has the legal right to enter onto property, a landowner never has to sign a permission form. If the company exercises its right to access property without the owner's permission it cannot expect that the landowner would release the company from liability for its use of the property. You need never sign a permission to access form.

Numerous landowners on the eastern portion of the project reported a rash of strong arm tactics by Transource land agent Western Land Services last week. Landowners received threatening phone calls demanding that they sign the survey permission form or the sheriff would come and arrest them.

I have received numerous complaints from constituents in my legislative district who experienced threatening behavior from your contracted land services agent, Western Land Services. In communication with landowners, agents from Westem Land Services threatened to call the sheriff's office and arrest residents who did not sign letters granting access to their properties. This type of coercive behavior and harassment by your contracted agent is unacceptable and illegal at best. I am requesting punitive actions be taken to ensure this type of disrespectful behavior does not happen again during the remainder of the project.

The sheriff isn't going to arrest these landowners for failing to sign a permission form. At best, if Transource receives all its permits from the PUC the most it can do is issue a notification that it will be access the property in 10 days. Such notice would need proof of delivery. Only if Transource had accomplished all the necessary legal steps and had some sort of legal order to present to the sheriff, and the landowner physically threatened or interfered with property access, would the sheriff even be interested in wasting his time on this issue. Your sheriff works for you, not some company in Columbus, Ohio.

Whose idea was this, and why did they think it would work to intimidate this community? That person needs to be fired, first for breaking the law, second for having no morals, and third for being stupid, I mean just a complete idiot.

It really wasn't that long ago that another company got in big, big trouble in the Pennsylvania court and regulatory system by deploying threatening and coercive land acquisition tactics just like these. And TrAILCo's application to build transmission in Pennsylvania was denied by the administrative law judge who heard he case. Did TrAILCo's abysmal behavior play a part in its ultimate denial? Absolutely! Let's look at all the abusive land acquisition tactics that Transource has in common with TrAILCo... so far.

All communications with property owners and occupants must be factually correct and made in good faith.

Do not make false or misleading statements.

Do not misrepresent any fact.

Until the Company has been authorized by the state utility commission, do not suggest that the Project is a "done deal" or is "99 percent sure" or make similar statements suggesting that the state utility commission has authorized construction of the project.

All Communications and interactions with property owners and occupants of property must be respectful and reflect fair dealing.

Do not engage in behavior that may be considered harassing, coercive, manipulative, intimidating or causing undue pressure.

All communications by a property owner, whether in person, by telephone or in writing, in which the property owner indicates that he or she does not want to negotiate or does not want to give permission for surveying or other work on his or her property, must be respected and politely accepted without argument.

Do not represent that a relative, neighbor and/or friend have signed a document or reached an agreement with the company.

Do not represent that a relative, neighbor and/or friend supports or opposes the Project.

Do not threaten to call law enforcement officers or obtain court orders.

Do not threaten the use of eminent domain.

We've hardly just begun, Transource, and already you've violated accepted conduct for land agents working on your behalf. I know you're going to blame Western Land Services for going rogue behind your back, or a few "bad" agents who don't understand their job. But I know that's just not true. Land acquisition companies behave badly with the full knowledge of the company who is paying them. So maybe it's time to fire this company. And Transource needs to get all the money it paid Western refunded to the ratepayers so it won't cost the ratepayers anything extra to hire a reputable company with some moral and ethical standards.

Does PJM Interconnection know how badly you've screwed up this transmission project they "ordered" you to build? If I was PJM, I'd cancel your contract and find a reputable company to build it instead.

Meanwhile, Representative Hill wants you to apologize to the landowners you harassed. Try to be a big boy and take responsibility for your actions and don't blame them on rogue land agents or a fly-by-night company. You all know what's going on and chose to try to strong arm this community willingly. It blew up in your face.

Shame on you!

4 Comments

Looks Like Clean Line Has Overstayed its Welcome in Missouri

9/13/2017

4 Comments

The St. Joseph News-Press published an editorial today stating:

Officials with Clean Line Energy Partners are complaining about Missouri and its set of laws, as if the company didn’t know what it was getting into when it proposed stringing a high-voltage power line across the state.

The editorial went on to say:

...the problem is Clean Line has not yet done enough to allay concerns of key decision-makers — in this case, county commissioners who by law have a big say in this matter.

And concluded with this:

Our preference is for Clean Line to continue to negotiate with the counties where it has met opposition. Short of that, both opponents and Clean Line should expect to be governed by the web of laws and regulations — both state and federal — that govern these matters.

Clean Line's insistence that Missouri law must be changed to accommodate its desire to be above the law and build its project without county assent doesn't seem very popular with Missourians. And it's not just project opponents anymore. It's now the editorial board of a large newspaper, too.

The sheer arrogance of these out-of-state interlopers will be their undoing.

The News-Press must realize that the only thing standing between Clean Line and its success is... well... Clean Line! During recent oral argument before the Missouri PSC, Clean Line begged the PSC to issue an advisory opinion on the merits of the project, even if the PSC denied the project. Clean Line's attorney told the PSC that it needed that advisory opinion to take to the counties in order to convince them to assent to the project.

CHAIRMAN HALL: Yes, I have a few. I want to start with your alternative argument that
the Commission go through the Tartan analysis, determine that Grain Belt has met each of those factors, but then withhold issuing the certificate. Would that be an appealable decision?
MR. ZOBRIST: I think it would be because if you construe Neighbors United to say that you cannot issue a CCN, you're making these other findings and you're simply withholding it at that point. To be honest, I really haven't thought through that. It may be -- it depends on what your language is. I think if you say that this part is final, you view it as appealable, that that might be something for us to take a look at because it may not be an appealable order until either --
CHAIRMAN HALL: I think that would be your worst-case scenario. Then you're sitting in limbo here and you can't take the order up. MR. ZOBRIST: Well, I'm being the optimist, Chairman. I'm assuming we get favorable factual findings on the public convenience and necessity. We'd use those to go to the county commissions and say the Public Service Commission has weighed in and says the public is not going to be harmed and you should issue your county assents and then we'll be back. Now, if you -- if you deny it, if you dismiss it, then I think --
CHAIRMAN HALL: Well, that's --
MR. ZOBRIST: Pardon me. Go ahead.
CHAIRMAN HALL: That, to be perfectly blunt, seems a little naive to me that this commission's decision on public interest is going to sway the county commissions, and so --
MR. ZOBRIST: Like I said --
CHAIRMAN HALL: I think the reality is that that would be almost your worst nightmare because then the case just sits in limbo here and you can't take it up on appeal.
MR. ZOBRIST: Well, let me put it this way. The nightmare is if you just dismiss it out of hand because then the project's dead. The
problem --
CHAIRMAN HALL: I would say that's better than this because at least then -- oh, okay. I'm sorry. I'm with you now. Keep going.

But Clean Line has used the PSC's "concurrence" on the project's merits for everything BUT going to the county commissions. The county commissions haven't heard a peep out of Clean Line in months. Now Clean Line and its environmental friends from the big cities want to use it to change Missouri law for their own benefit.

And the people of Missouri perhaps think that's a step too far for a bunch of interlopers who want to use Missouri land and resources for their own gain. Clean Line is financed by deep pocketed investors from New York, Texas and the United Kingdom. None of these investors live or work anywhere near Missouri and won't have to suffer the consequences of their own actions. These investors have knowingly funneled around $200M into a very risky investment in Clean Line Energy Partners. When Clean Line goes belly up, these investors lose their entire investment in the company. I'll assume these sophisticated investors went into this transaction with their eyes wide open, so they must not have invested more than they could stand to lose. They'll probably hardly feel it. On the other hand, the damage to Missouri would now not only be a scar on its landscape and an obstacle to its productivity, but a long-lasting surrender of its authority through legislative change. I don't think Missouri is going to lay down willingly, and instead of winning the state's cooperation, Clean Line has obliviously lit a fire in Missouri's belly.

Perhaps Clean Line's executives don't really care if they ever build a project or not. Perhaps their only interest at this point is to continue their own personal gravy trains as long as possible, even though they realize this train is headed for a gorge where the bridge is out. As long as the investors keep handing them cash to engage in hopeless battles, like trying to get Missouri to legislate away its own authority, the executives continue to live high on the hog. That could be the only explanation for why Clean Line even wants to engage in Missouri when the fate of this project is currently in the hands of the Illinois Court system.

Did you listen to the oral arguments at the Fifth District Court of Appeals on the Illinois Commerce Commission's grant of a permit to Grain Belt Express under the wrong statute of Illinois law? If you haven't, you should. Based on questions from the justices, it isn't looking too swell for Clean Line, although the Court has yet to issue its opinion in this case. The opinion can come at any time.

As well, did you watch to the oral arguments before the Illinois Supreme Court on whether the Rock Island Clean Line can ever be considered a public utility? That didn't go so well for Clean Line either. An opinion could be issued at any time. And, if RICL isn't a utility under Illinois law, then neither is GBE. The Court's opinion can yank the rug right out from under both Clean Line's Illinois projects at any time.

And speaking of the Rock Island Clean Line, did you know that the Iowa Legislature legislated it's ability to use eminent domain out of existence during its last session?

May 12, 2017
Today is a day to celebrate!! It is a historic day for property rights!
Governor Branstad signed a bill Into law forbidding merchant high voltage transmission lines such as RICL from having condemnation power to take private property by eminent domain. Click here to read
Senate File 516: an Act relating to state and local finances by making appropriations providing for legal and regulatory responsibilities, concerning taxation, and providing for other properly related matters, and including effective date and retroactive applicability provisions. This bill passed the Iowa House on April 21, 55-39 and the Iowa Senate on April 21, 27-13.
Read the language related to merchant transmission lines beginning on page 18 of the bill.

And then let's take a peek at Clean Line's Plains & Eastern Clean Line that wasted more than $15M getting the U.S. DOE to "participate" in its project in order to usurp the laws of Arkansas. Despite DOE's decision to "participate" in this project 18 months ago, it's no closer to actually being built. In addition to being the subject of a lawsuit in federal court, Plains & Eastern has no customers to finance the project. No revenue, no project. Plains & Eastern is stalled out, making no progress whatsoever.

Honestly, I don't think Clean Line Energy Partners is ever going to accomplish anything, except to spend its investors' money tilting at windmills and engaging in hopeless and increasingly expensive battles at the state and federal level. How much longer must the party in Houston go on?

4 Comments

Missouri Law Works for New Transmission Projects

9/8/2017

11 Comments

Clean Line and its big city environmentalist friends want to change Missouri law for their own benefit. Changing Missouri law doesn't benefit Missouri.

The problem? A Missouri law that has been functioning for 100 years. Sec. 229-100 says

TITLE XIV ROADS AND WATERWAYS Chapter 229 Provisions Relating to All Roads
Section 229.100. Improvements along public roads--location--control.
229.100. No person or persons, association, companies or corporations shall erect poles for the suspension of electric light, or power wires, or lay and maintain pipes, conductors, mains and conduits for any purpose whatever, through, on, under or across the public roads or highways of any county of this state, without first having obtained the assent of the county commission of such county therefor; and no poles shall be erected or such pipes, conductors, mains and conduits be laid or maintained, except under such reasonable rules and regulations as may be prescribed and promulgated by the county highway engineer, with the approval of the county commission.

Missouri counties must assent to the crossing of their roads by linear infrastructure projects. Missouri counties are responsible for their roadways, so naturally they have control. Without that control, linear infrastructure projects could block, make useless, and destroy roadways that the county is financially responsible to maintain. A transmission company could cause all sorts of problems with county roads and skip off into the night, leaving repair costs to burden county taxpayers.

When the Mark Twain Transmission project was approved subject to future county assent, a Missouri court corrected by determining that county assent must come before PSC approval. Mark Twain found itself in a predicament. The counties would not give assent because the Mark Twain project proposed new rights of way over county roads. So, what did Mark Twain do? Did they have a big, sniveling tantrum and demand that Missouri change its law to allow crossing without county assent? No. Mark Twain went back to the drawing board to create a better project for which the counties could give assent.

The revised Mark Twain project used existing rights of way and road crossings for its project, adding new capacity and rebuilding an old circuit. Eminent domain for new rights of way was minimized. While not everyone was happy, the revised project was improvement enough to receive the assent of impacted counties. That's right... Missouri law worked as intended to allow impacted counties to have control over the crossing of their roadways, while still allowing transmission projects to be built.

The Mark Twain Transmission project is a MISO-ordered project. MISO thinks this project is important and needed. Perhaps it was important enough that compromise was the best path forward to achieving success. While MISO didn't get what it originally wanted, it did eventually get county assent to build a project that achieved its goal while also compromising to create a project that the counties could approve. This is the way the law is intended to work. Mark Twain changed its project to work within Missouri's law, instead of attempting to repeal the law in order to build its original plan.

Missouri law works to protect Missouri. There's no reason to toss the baby out with the bathwater and bow to out-of-state interests who don't want to follow Missouri law.

Clean Line's contention that no linear infrastructure projects can be built in Missouri with the 100-year old law in place is completely and totally wrong. Mark Twain is proof that infrastructure CAN be built in Missouri. It's testament that acceptable projects can be built.

The problem here is that Clean Line does not want to revise its project to become something acceptable to Missouri counties. Clean Line has cut off all communication with Missouri counties. Clean Line is not even trying to compromise for a win-win -- where counties are happy and projects get built. Instead, Clean Line wants to have its own way, building its project and leaving counties with the tax burden of caring for the roads Clean Line destroys. This is not in the best interest of Missourians. It is only in the best interests of Clean Line, an out-of-state company with foreign investors.

Just say no to Clean Line. Say no to its outside interference in Missouri's legislative process. Once Missouri cedes control of its fate to the hands of outside influence, it can never be regained.

Clean Line needs to go back to the drawing board and build a better project, one that doesn't require Missouri to cede control to greedy foreign investors or urban environmental groups. One that works for Missourians. Put Missouri first!

11 Comments

Clean Line's Sugary Empty Threats

8/18/2017

3 Comments

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

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

It took a while for Clean Line to stiffen its upper lip and say anything. The first words were Michael Skelly casting aspersions on Missouri, its institutions, its government, its people. And then he said:

“We will review the order in detail to determine next steps for the project,” adds Skelly. “We are currently assessing all existing authorities available to move the Grain Belt Express project forward, including but not limited to legal appeals.”

Clean Line executives said Wednesday that they were weighing their options for the Grain Belt Express power line, though they acknowledged that the “legal and regulatory conundrum” could add many months or years to the project if they decide to keep trying.

Right, vague talk about appeals. Blah, blah, blah. Sort of sounds like a whipped puppy, doesn't he? *snort* *sniffle* *wahhhhhh* Have a lick or two of Clean Line's delicious lollipop and dry your tears...

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

Sometime later Wednesday afternoon Mark Lawlor got ahold of that lollipop and went on a sugar-fueled romp among the media, supposing all sorts of things he could do to move a dead and denied GBE project forward. Each comment got more outrageous until Mark's pinnacle with a Fox News station out of Illinois, where he said,

"So, the Grain Belt Project will deliver enough power for over a million homes, and will do so at costs that are extremely competitive with wind energy that is clean and renewable.”

No, really, that's exactly what he said, listen to the recording on the video here. What is it that Clean Line will be delivering that will be extremely competitive with clean wind power? It can't be clean wind power, so it must be dirty coal power? Gas? Nuclear? All of the above? I think the sugar was running amok by that time and Mark's brain and mouth were running in different time zones.

What other stupid things did he say?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

“This decision runs counter to that.” As it now stands, he predicted that, “Other investors are going to look at Missouri and this will enter into their decision as to whether this is a good place to invest money.”

Wow, that was pretty impressive, for a company that seems to be out of money.

Lawlor's false bravado seems to have rubbed off on Clean Line president Michael Skelly the next day. Skelly says:

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

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

“If none of those three work, we’re toast,” Skelly said in an interview Wednesday.

And then he passes the lollipop to Clean Line's PR lady:

Clean Line’s other options, said spokesperson Sarah Bray, include asking the PSC for a rehearing, working with the state’s legislature to revise pertinent laws or seeking U.S. Energy Department approval under Section 1222 of the 2005 Energy Policy Act. The latter would authorize the department to take part in “designing, developing, constructing, operating, maintaining or owning” new transmission.

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

Bray told RTO Insider that Clean Line was “encouraged by the PSC’s determination that the project is in the public interest and will benefit the State of Missouri.”

That sugary lollipop the PSC handed them has done nothing but fuel delusions of grandeur that the company can't accomplish. And it's going to waste a bunch more time and money. Instead of being "toast," like it promised, the company wants to add years to its project schedule pursuing the impossible dream.

And what are Clean Line's options?

Seek rehearing. Will the PSC suddenly change its mind and do something the courts said was illegal and issue GBE a permit? No, that's not realistic. But a request for rehearing is prerequisite to appeal.
Appeal the PSC's denial to the Missouri courts. Is the Western District Court of Appeals going to reverse itself? There are no new arguments on this issue. It's all been said and done before and the appeals court and the Missouri Supreme Court rejected them all. What makes Clean Line think it's different or special at this point in time? The law is the law. The courts follow the law.
Repeal or replace Sec. 229-100 of Missouri law that says a transmission project must have the assent of the county commissions through which it passes. Read this carefully. Is Missouri really going to give up local control to have its fate dictated to by out-of-state companies with foreign investors? This statute has been in effect for years. It's not realistic to think it can be legislated away at the request of some Texas company in a big fat hurry. This is unlikely to happen, even if Clean Line spends years buying support to repeal it.
Ask the U.S. DOE to partner on this project under Sec. 1222 of the Energy Policy Act. Does Clean Line have $100M lying around to fund another 1222 process? Even if it did, the federal government wants to sell the power marketing authorities that would partner under Sec. 1222. Once sold, the PMAs would no longer have any government authority, but would be owned by private entities that have to adhere to state law. And let's be realistic here... even with Sec. 1222 being used on Clean Line's Plains & Eastern project to usurp state authority, that project is going nowhere. It's dead. No activity. Sitting in limbo. Has no customers to fund it.

None of these sound like workable options. They would add years and hundreds of millions of dollars to the project. Clean Line doesn't have years. The big wind farm building boom is waning with the federal production tax credits that will sunset in just 3 years. When the PTC goes, so goes any economic advantage for big wind. Because the PSC denied Grain Belt's application the other day, all those contracts between GBE, MJMEUC and Infinity Wind are void. The contracts were contingent upon PSC approval. All that would have to be rehashed at a later date. Pricing would change without the PTC. Any opportunity and savings attached to those contracts during the recent PSC application will have to be completely re-done. And that's the thing, unless appeal is granted (highly unlikely) Clean Line will have to prosecute a fourth application before the MO PSC with no guarantee of a favorable result. The MO PSC swings wildly from side to side.

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

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

3 Comments

Clean Line Wants Taxpayer Bailout for its Transmission Projects

6/30/2017

14 Comments

Building five ginormous transmission projects totaling thousands of miles of new merchant lines was a pipe dream. Utility experts said it couldn't be done. They were right, it can't.

Teetering on the brink of failure after spending more than $200M of investor cash on his impossible dream, Clean Line Energy Partners CEO Michael Skelly now suggests that the federal government bail out his investors.

The Trump administration could help by pushing for an infrastructure package that would see the government “buying down a portion of the capacity” on big transmission projects so they can enter construction more quickly, or perhaps through an investment tax credit, Skelly suggests.

“All the ideas come down to a temporary underwriting of the project so you can get these things over the top, or some sort of tax mechanism.”

Skelly has finally given voice to his frustration in an interview with Recharge News.

Skelly suggests that the federal government should buy capacity on his transmission project in order to get it over some imaginary hump that will allow him to start construction. The federal government isn't in the business of buying unnecessary transmission capacity in order to prop up commercial projects that cannot stand on their own two feet. While federal power marketers do occasionally purchase needed transmission capacity, they are not forced to do so merely to support the building of bridges to nowhere. And if the federal government legislated the purchase of transmission capacity by its federal power marketers, it would be creating captive customers to shoulder the risk of this speculative transmission idea that cannot get off the ground on its own merits. As a merchant transmission project, Clean Line has pledged to the Federal Energy Regulatory Commission that its investors will shoulder all the risk for its projects and that it does not have a captive ratepayer stream of funding. Merchant projects succeed or fail based on their economics. If a merchant project is useful, customers will voluntarily purchase its capacity, and the project will come to fruition. If there are no customers, a merchant project cannot succeed. Suggesting that the federal government pour taxpayer money into Skelly's projects would create an artificial "need" and economic basis for the project. Participation by a government customer would not be voluntary. That's not how merchant transmission works.

Clean Line has no customers. Despite Skelly's claim:

Plains & Eastern is “pretty much fully developed at this point”, Skelly says. “We’re now in the commercialisation phase, matching chippers – that is wind developers – with utilities in the southeast.”

He turns around in his next breath and suggests that the federal government be forced into being a customer through legislation or executive mandate. Obviously, Skelly's efforts to match his chippers with customers isn't working. It's been 18 months since the U.S. DOE got involved in his project in an attempt to usurp state authority and claim federal eminent domain authority to site the Plains & Eastern Clean Line, and Skelly still doesn't have a customer. When the DOE agreed to participate in the project in March, 2016, Skelly claimed that he would have his customer agreements sewn up in a matter of weeks, but that has not panned out.

Skelly's other taxpayer bailout idea is federal investment tax credits. This would give a direct tax credit to project investors, which they could use as cash to pay down their own corporate tax debt. Let's see... ultra rich 1% Democrats who invested in a renewable energy scheme supported by a Democratic White House want the current Congress to bail them out with tax credits.

A tax credit is taxpayer-funded cash for its owner. By eliminating its own corporate tax debt, the investor would have more cash to invest in Clean Line Energy Partners. Essentially, it's free government money for Clean Line that the investors wouldn't spend otherwise. It's a way to prop up Clean Line's failing business model with taxpayer funds. Clean Line's investors pay less taxes? You pay more to make up the difference.

Where does the federal government get its money? Out of your pocket. Every.last.dollar. There's no such thing as "free" government money.

So Clean Line has been posturing to the Trump Administration for months now, suggesting it is a prime candidate for the President's great, great Infrastructure Plan. Trump has posited that private investors can belly up to the bar and fund billions in new infrastructure projects in exchange for ownership that creates a revenue stream, or tax credits that allow publicly-owned projects to be built.

Except Clean Line isn't a publicly-owned project. Clean Line's rich investors will own the project and the revenue stream, and charge the public a fee to use it. There's no benefit for the public. It's nothing short of taxpayer-financed private industry, and it cannot be included in an infrastructure package designed to get infrastructure like roads and public works projects built. And furthermore, Skelly wants the federal government to be the "private sector investor" who gets his project over the finish line! I'm pretty certain that's not what Trump had in mind.

Once certain that his transmission projects would be marketable under a Democratic administration, Skelly now fantasizes about a Republican-led taxpayer bailout to prop up his failing company.

“It’s still a bit early to tell exactly what the administration will do to stimulate more infrastructure investment,” Skelly says. “But in terms of the things they’re talking about, with private-sector-led projects, it forms a pretty nice Venn diagram with transmission.”

What kind of a guy uses the words "Venn diagram" to prop up his unsuccessful ideas in the media?

Is Skelly's dream even logical, or is the stress getting to him? Why would the federal government fund an infrastructure project that's supposed to be "led by private investors?"

The idea that our current Congress will pour buckets of taxpayer dollars into a wind energy transmission project that has no customers in order to bail it out of its current financial crisis is insane.

14 Comments

Where's The Customers, Clean Line?

3/8/2017

5 Comments

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.

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?

5 Comments

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.

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!

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