"Clean" Bravado

The collapse of Clean Line Energy Partners has begun.  Although a long, screaming, fantastic flameout would tickle everyone's schadenfreude in a most delightful way, the death of Clean Line is more likely to look like this:

Now you see it, now you don't.  You simply wake up one morning and it's gone.  Snuck out of town in the middle of the night with its tail between its legs.

So, it looks like the company doesn't have enough "development" funds from its investors to continue running "full steam ahead" in Iowa.  The company was faced with filing very expensive exhibit material at the Iowa Utility Board, while its Illinois permit for the same project has been ordered void by a court.  It ended up being cheaper to withdraw its applications in Iowa.  If the company chooses to refile at a future date, it will  have to go through all the IUB requirements for a new application, such as landowner meetings in each county.  Although time consuming, and disastrous from a public relations standpoint, withdrawing was the cheaper of the two options in Iowa.

Cheaper.  Now all of a sudden Clean Line is concerned about costs?  Have they burned through $200M in "development funds" already?  Is the treasure chest getting a little low with no replenishment in sight?  Maybe that's because Clean Line has been using its "development" funds to pay for parts of its projects that should be financed.  Things like final engineering, environmental studies, purchase of rights of way, procurement of parts and labor, are all project costs, not development costs.  Development costs are the costs of obtaining a permit to build.  Once a permit is received, project costs begin.  Except Clean Line still has its cart before its horse and is funding project costs with development money.  Because it has no project financing.  Because it has no customers.

Wow!  How panicked are they in Houston right now?  Yesterday's press release on the Iowa withdrawal screams false bravado.

Despite the Rock Island Clean Line’s schedule delays, the need to build electric infrastructure remains. Clean Line Energy continues to move full steam ahead on its other transmission projects. Currently, hundreds of people are at work to complete engineering and design, test materials, and negotiate easements to prepare for groundbreaking on the Plains & Eastern Clean Line, the country’s largest clean energy infrastructure project. The Plains & Eastern Clean Line will connect low-cost, clean energy resources in the Oklahoma Panhandle to Arkansas and states throughout the Southeast.

No, Clean Line will NOT be breaking ground on Plains & Eastern any time soon.  Landowners in Arkansas and Oklahoma have refused to grant Clean Line right of way across their property.  Clean Line does NOT have eminent domain authority.  The most it can do is to run crying to the U.S. Department of Energy and ask that DOE begin condemnation proceedings against landowners who refuse.  And guess what?  The DOE has already written in stone that it will only begin condemnation proceedings against any landowners AFTER Clean Line reaches certain milestones with its project.  First and foremost, Clean Line must have customers for its transmission capacity.  Clean Line must have a contracted revenue stream sufficient to support financing to build its project.  Clean Line has no customers.  Therefore, Clean Line won't be breaking any ground until it has customers.

And on top of that, there is a lawsuit against DOE pending in federal court that claims DOE exceeded its statutory authority and trampled on the due process rights of Arkansas citizens.  DOE is unlikely to move forward with this project until the matter is settled.

Clean Line is going nowhere fast.  There is no "need" to build thousands of miles of "clean" lines.  No transmission planner has determined a "need" for these lines, and the lines have no customers.  No customers, no need!

No "clean" line!