Three cheers for idiot savant journalism! Windpower Monthly not only found where Michael Skelly has been hiding from the media, it also managed to leak a lot of important clues, albeit all mixed up in assumption, lies, and poor writing skills. At first glance you may think Michael Skelly is just plain old insane, but I don't think so. Not completely.
"For the time being, the project is on hold," confirmed Mike Skelly, president of Clean Line.
"I think it’s a wait for the market to come our way," Skelly said. "I think that over time, the south-east utilities will want more renewables; they’re just not there yet."
-On hold? Whaddya mean "on hold?" You cannot build the project you currently own. EVER. It's not a project anymore. It doesn't connect with any generators, and it doesn't connect with any customers. Clean Line failed because it couldn't find any customers. Nearly 10 years ago, perhaps it looked like states and the feds were going to enact a bunch of laws mandating clean energy, essentially forcing the "south-east utilities" (sic) to purchase renewables. There's no "want" here. A utility "wants" to do whatever makes them the most money. Clean Line never provided added value or revenue for utilities. In fact, it attempted to secure its own profit by taking profit away from the incumbent utilities it expected would purchase Clean Line's transmission capacity. D'oh, Michael Skelly! I hope AEP has made it quite clear to you over the past year why your transmission plans failed and why you couldn't find any customers. Utilities want to own the infrastructure themselves because it creates a positive, guaranteed revenue stream. Clean Line hoped to develop a rich revenue stream of its own by selling capacity on a transmission line it owned, right? It's really no different for big utilities. Why would they pay Clean Line a big profit when they could build their own transmission line and keep all the profits for themselves?
Enter Wind Catcher. AEP contracted with Invenergy to build a ginormous wind farm in Oklahoma that AEP plans to purchase upon completion (and regulatory approval). AEP also wants to own and build the transmission line necessary to connect its wind farm with customers in 4 states. Turns out that when big utilities "want" to purchase more renewables they are perfectly capable of building their own generators and transmission lines. There's no room for greedy speculators like Clean Line. Think about this:
Enter Wind Catcher. AEP contracted with Invenergy to build a ginormous wind farm in Oklahoma that AEP plans to purchase upon completion (and regulatory approval). AEP also wants to own and build the transmission line necessary to connect its wind farm with customers in 4 states. Turns out that when big utilities "want" to purchase more renewables they are perfectly capable of building their own generators and transmission lines. There's no room for greedy speculators like Clean Line. Think about this:
The Oklahoma portion of the line, bought by NextEra Energy in December, is still a long-term development opportunity, a spokesman for the utility said. It would be premature to comment on whether Clean Line’s move will affect NextEra’s segment, he added. But it is hard to see how it could not.
NextEra owns 1.7 GW of operating wind capacity in Oklahoma, with more in the pipeline. There may be an opportunity to bring solar energy, in addition to wind, from western Oklahoma to load centres in the east of the state, the spokesman said. American Electric Power’s 2GW Wind Catcher project, due online in 2020 in the Oklahoma Panhandle, "may be more cost-effective if it utilised the transmission corridor we acquired from Clean Line", he added.
Currently, Wind Catcher includes its own 765kV power line to a substation near Tulsa, eastern Oklahoma. Development of the 580km route began in summer 2017.
Oh, NextEra is still trying to peddle Clean Line to AEP? And I suppose if AEP bought it, that NextEra would also like to sell AEP a ginormous wind farm? Sounds like NextEra wants to make its own profits here. Do you suppose if AEP made a deal with NextEra that nobody would want to protect their pocketbooks any longer? Or would public interest groups still be telling regulators to protect our pocketbooks, like they did in Florida recently when NextEra subsidiary Florida Power & Light was pushing to have a new gas plant approved? At least the Sierra Club manned up and admitted it was behind that opposition.
So, now that the Plains & Eastern Clean Line is no longer a thing, landowners who may have signed easement option agreements want to know... what happens to my land now? Here's what Michael Skelly says:
So, now that the Plains & Eastern Clean Line is no longer a thing, landowners who may have signed easement option agreements want to know... what happens to my land now? Here's what Michael Skelly says:
He said the line would not be rerouted around Arkansas, where it has been most controversial.
Clean Line had hoped to start construction this year, with completion in 2021. The project has been fully permitted since April 2016. In Arkansas, 50% of the land rights have already been purchased, although Clean Line is now no longer pursuing land rights in the state, said Skelly.
First of all, the project is no longer approved in Arkansas. And I truly wonder whether it's approved in Oklahoma any longer. The project Clean Line applied for and had permitted by the Oklahoma Corporation Commission is vastly different than the one now owned by NextEra. We can start with the owner -- completely different. Does NextEra have the financial and technical know-how to build a transmission project? How many other merchant transmission projects does NextEra own? Is NextEra's project still a merchant project? Is it still a line that will export out of Oklahoma to serve customers in other states? Or will it now serve customers in state? Does NextEra have negotiated rate authority? These are probably all very good questions to ask the jurisdictional regulators, if you signed with Clean Line and feel like you're now in limbo.
Limbo? That probably accurately describes the situation for landowners who signed a right of way option agreement with Clean Line. The option agreement presented to the DOE by Clean Line (however, your particular agreement may be different and is binding as written) calls for a down payment of 30% of the agreed upon price, with the balance due on "the date construction crews access the property to install structures or wires." So, landowners who signed may have received 30% of the agreed upon price. The balance may be paid when construction begins. If NextEra and Clean Line have no idea when or if construction will ever start, then the balance due payment could be stretched out over a number of years, or possibly never happen. However, the option agreement states that this construction deadline may be extended by the payment of "extension payments." Extension payments are scheduled to be made in December 2017 and December 2018 and should be 10% of the purchase price each time. In addition, the balance due deadline could be extended for two additional one-year periods (2019 & 2020) by payment of additional extension payments. If the extension payments are not made, "Landowner acknowledges and agrees that Plains and Eastern is under no obligation to pay the Balance Due portion of the Total Easement Consideration and that if Plains and Eastern fails to do so on or before the Easement Compensation Deadline, subject to the cure provision in the Easement Agreement, the Easement Agreement shall terminate. Upon such a termination, Landowner shall retain the Initial Payment and any Extension Payment (if applicable), and Plains and Eastern shall have no further obligation or other liability to Landowner." So, landowners, were extension payments made timely in accordance with the particular agreement you signed? If not, the agreement is terminated. However, Clean Line has no further obligation to you. They may have already filed this agreement that gives them an interest in your land. Whether or not they make the extension payments or the lease terminates, your county land records probably don't reflect this. The company would have to file a release to completely remove this cloud on your title. It's probably time to get yourself a lawyer with all the money Clean Line paid you for signing this agreement.
Michael Skelly says the Arkansas portion is on hold, or on a slower track. He says he's no longer pursuing land rights. Will he continue to make the extension payments? Or will he let these signed agreements lapse? And if he does let them lapse by failing to make the payments, will he file a release in the land records of your county? Or will title to your property continue to show an easement owned by Clean Line that was never fully paid for?
And what about NextEra? If your easement option agreement is assignable, it means that NextEra now owns an easement on your property. Is NextEra making the scheduled extension payments? Or is NextEra allowing the agreements to lapse? If NextEra doesn't make scheduled payments, will it file a release?
It's tricky. Landowners are legally held in limbo and may never receive full value for the easement they agreed to sell, but nevertheless the easement shows in the ownership records for their particular piece of property.
This is why it's never a good idea to sign an easement option agreement without the advice of your own attorney, and never before a project is actually under construction.
Is Clean Line really expecting to build a project in Arkansas, where it is not approved or permitted, and doesn't connect with anything, or is the simple pretension of building the project just a way to avoid having to file a release on hundreds of properties. And how self-centered would that be anyhow? Although Clean Line doesn't have a real plan, it refuses to release Arkansans from these easement option agreements? Is Clean Line just going to sit in its offices and do nothing until the political situation changes and maybe utilities will be forced to purchase renewables? That's never going to happen. AEP has demonstrated how that scenario might proceed -- utilities will build and own their own renewables and transmission projects in order to increase their revenues. They're not going to purchase renewables and transmission from some third party who wants all the revenue that comes from owning infrastructure projects.
Clean Line's idea for merchant transmission for renewables is dead. Now they need to man up and clean up the mess they've made.
Limbo? That probably accurately describes the situation for landowners who signed a right of way option agreement with Clean Line. The option agreement presented to the DOE by Clean Line (however, your particular agreement may be different and is binding as written) calls for a down payment of 30% of the agreed upon price, with the balance due on "the date construction crews access the property to install structures or wires." So, landowners who signed may have received 30% of the agreed upon price. The balance may be paid when construction begins. If NextEra and Clean Line have no idea when or if construction will ever start, then the balance due payment could be stretched out over a number of years, or possibly never happen. However, the option agreement states that this construction deadline may be extended by the payment of "extension payments." Extension payments are scheduled to be made in December 2017 and December 2018 and should be 10% of the purchase price each time. In addition, the balance due deadline could be extended for two additional one-year periods (2019 & 2020) by payment of additional extension payments. If the extension payments are not made, "Landowner acknowledges and agrees that Plains and Eastern is under no obligation to pay the Balance Due portion of the Total Easement Consideration and that if Plains and Eastern fails to do so on or before the Easement Compensation Deadline, subject to the cure provision in the Easement Agreement, the Easement Agreement shall terminate. Upon such a termination, Landowner shall retain the Initial Payment and any Extension Payment (if applicable), and Plains and Eastern shall have no further obligation or other liability to Landowner." So, landowners, were extension payments made timely in accordance with the particular agreement you signed? If not, the agreement is terminated. However, Clean Line has no further obligation to you. They may have already filed this agreement that gives them an interest in your land. Whether or not they make the extension payments or the lease terminates, your county land records probably don't reflect this. The company would have to file a release to completely remove this cloud on your title. It's probably time to get yourself a lawyer with all the money Clean Line paid you for signing this agreement.
Michael Skelly says the Arkansas portion is on hold, or on a slower track. He says he's no longer pursuing land rights. Will he continue to make the extension payments? Or will he let these signed agreements lapse? And if he does let them lapse by failing to make the payments, will he file a release in the land records of your county? Or will title to your property continue to show an easement owned by Clean Line that was never fully paid for?
And what about NextEra? If your easement option agreement is assignable, it means that NextEra now owns an easement on your property. Is NextEra making the scheduled extension payments? Or is NextEra allowing the agreements to lapse? If NextEra doesn't make scheduled payments, will it file a release?
It's tricky. Landowners are legally held in limbo and may never receive full value for the easement they agreed to sell, but nevertheless the easement shows in the ownership records for their particular piece of property.
This is why it's never a good idea to sign an easement option agreement without the advice of your own attorney, and never before a project is actually under construction.
Is Clean Line really expecting to build a project in Arkansas, where it is not approved or permitted, and doesn't connect with anything, or is the simple pretension of building the project just a way to avoid having to file a release on hundreds of properties. And how self-centered would that be anyhow? Although Clean Line doesn't have a real plan, it refuses to release Arkansans from these easement option agreements? Is Clean Line just going to sit in its offices and do nothing until the political situation changes and maybe utilities will be forced to purchase renewables? That's never going to happen. AEP has demonstrated how that scenario might proceed -- utilities will build and own their own renewables and transmission projects in order to increase their revenues. They're not going to purchase renewables and transmission from some third party who wants all the revenue that comes from owning infrastructure projects.
Clean Line's idea for merchant transmission for renewables is dead. Now they need to man up and clean up the mess they've made.
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