Clean Line Business Plan May Be Beyond Reporter's Grasp

The Arkansas Business reporter who attempted to speak for landowners last year is back to assure everyone that the Plains & Eastern Clean Line is sure to be a favorite of the new Trump administration.  Maybe it was hard to breathe in there and he got a little confused?  Or maybe he just doesn't have enough information because he's been talking to the wrong people?

Kyle Massey insists:

... a GOP penchant for infrastructure projects and commerce-building is expected to favor endeavors like the Plains & Eastern Clean Line, a $2 billion plan for transmitting wind power across 12 Arkansas counties from Oklahoma to near Memphis.

Let's parse that statement.  Massey says Plains & Eastern is expected to be "favored."  Favored?  How is that exactly?  What might a GOP administration actually do to "favor" the project?  Does this mean that the administration will somehow step outside the law to "permit" this project?  Does it mean that a GOP administration will suddenly find a big chunk of taxpayer cash with which to build the project?  Does this mean that a GOP administration will finance the $2B project with taxpayer funds?

None of that will happen.  Because it can't happen.  The U.S. Department of Energy has already signed a Participation Agreement, in which it agrees to "participate" in the project only under certain conditions.

1.  No taxpayer or government money or loans will be used for the project.
2. The project must be fully financed before the government "participates."
3.  The  project must have confirmed customers for its transmission capacity before the government "participates" in eminent domain activities to secure needed right of way.

There's absolutely no way for any administration to further "favor" the Plains & Eastern project to assure that it gets built.

Plains & Eastern is a "merchant" transmission project.  That means that the company takes on all the market risk for the project.  If there is no market for the project, it cannot be financed and built because it has no revenue stream to pay for construction.  Only potential customers can volunteer to buy capacity and create a revenue stream.  It has no captive ratepayers forced to shoulder its costs and guarantee repayment of financing.

And Plains & Eastern has no customers.  No utilities have volunteered to become customers.  No "fortune 500 companies" have volunteered to become customers.  Fortune 500 companies do not buy power and transmission directly, but are served by their local utility franchise.  So no matter how much they may be clambering for renewable energy, the companies do not decide where it is procured, or how it is transmitted.  The utility makes that choice.  The utility has a responsibility to provide its captive ratepayers with the cheapest resource available.  So, sure, big companies do carelessly throw their names onto ineffectual letters that pretty much say nothing.  But they do so at their own risk... the risk that their customers may find their penchant for eminent domain to accomplish their corporate greenwashing goals repugnant and stop shopping at their stores or buying their products.  While it is generally accepted that "green is good," and that greenwashed companies are favored by the public, that changes when the greenwashing encourages the eminent domain taking of customer private property.  Do I want my shampoo made with green energy?  Do I want my shampoo made with green energy that hinders the productivity and profitability of a chicken farmer in Arkansas?  No, the "green" doesn't spread that far.  Maybe Unilever is going to produce, and Walmart is going to sell, new Eminent Domain Guilt Shampoo?  Lather, ruin someone's dream, rinse.  Repeat the misery.

Massey's dream is buoyed along by academia.

Academic voices say the trend toward renewables may be too entrenched to be crippled by Washington. Trump “can eliminate subsidies for solar power as well as electric cars, and he may not be very supportive of renewable energy, but ultimately technology and market forces will be the determining forces,” said Rajesh Sharma, an Arkansas State University assistant professor and expert in renewable energy technology. “Clean technology is advancing every year and costs are going down.”

Actually, the subsidies for industrial wind are already on the chopping block and were reduced 20% on January 1, with additional reductions to come every year until phased out completely by 2021.  Wind is going to get more expensive when tax credits evaporate,  not cheaper.  Economics aren't going to help Plains & Eastern.  The project failed to attract customers when the tax credits were highest, and a GOP administration is likely to further dampen enthusiasm for expensive power that utilities aren't required by law to buy.  Even our pal Mikey Skelly acknowledges that.

Skelly sees opposition to the Clean Power Plan as “probably a net negative” to his ambitious project...

Massey's prediction, masquerading as "news," holds no greater weight than the prognostication of someone else.

And with the help of Wayne and Garth we will now enter our own dream sequence...

President Trump:  "What's this Plains & Eastern Clean Line?"
Secretary of Energy Perry:  "It's a 700-mile electric transmission line that will encourage the building of thousands of new wind turbines in red states."
President Trump:  "Does it have any customers?"
Secretary of Energy Perry:  "No.  Even the previous administration wasn't capable of 'favoring' it enough to attract customers."
President Trump:  "Do the Republicans want it to be built?"
Secretary of Energy Perry:  "No.  As a matter of fact, the entire Republican delegation from the State of Arkansas is vehemently opposed to it because it is just so much federal overreach."
President Trump:  "$@$& that!  Plains & Eastern Clean Line, you're fired!"

We've all got dreams.  Some are more realistic than others.