Whether you believe in the idea that building infrastructure will "make America great again" or not, one thing is clear: electric transmission projects don't belong on a federal infrastructure project list.
But electric transmission appeared on lists released earlier this year under the guise that the Trump administration created the lists. However, men touting themselves as infrastructure "experts" created those lists, so you'd think maybe they actually had some knowledge about different kinds of infrastructure, and the specific projects they added to their independently-created lists. Apparently the only criteria needed for inclusion on these lists was a desire to be on a list.
Turns out not only do those infrastructure "experts" not really know much at all about the projects they're pimping, but they fundamentally misunderstand the way electric transmission is permitted and paid for. A recent article in Marketplace tosses a bucket of cold water on the transmission infrastructure woody the "experts" have been sporting.
More than 500 infrastructure projects are pitched to Trump, who will favor private money and speed says that not only do the infrastructure "experts" not know anything about the projects on their lists, but they also don't understand the difference between funding and financing infrastructure.
The Marketplace article highlights a dispute between two states over a flood diversion project in the Fargo, N.D., area. The project is touted as "shovel-ready" on the "expert's" list, but just a little digging for information by the reporter revealed that the project is embroiled in a gigantic controversy between states, and a federal lawsuit. Not "shovel-ready" by any stretch of the imagination. But it appears that what got that project on the list was someone lobbying for it... someone who wanted to pretend it was "shovel-ready" in order to get it on one of the "expert" lists, as if that would magically make the huge controversy disappear. It doesn't. It can't. And the "expert" showed his decided lack of expertise by failing to even take an independent look at the project with a quick google search. These projects got on lists at the request of their owners, and nobody cared to look past the information provided by the owner.
The "expert" also knows nothing about the Plains & Eastern Clean Line electric transmission project that appears on his list.
But electric transmission appeared on lists released earlier this year under the guise that the Trump administration created the lists. However, men touting themselves as infrastructure "experts" created those lists, so you'd think maybe they actually had some knowledge about different kinds of infrastructure, and the specific projects they added to their independently-created lists. Apparently the only criteria needed for inclusion on these lists was a desire to be on a list.
Turns out not only do those infrastructure "experts" not really know much at all about the projects they're pimping, but they fundamentally misunderstand the way electric transmission is permitted and paid for. A recent article in Marketplace tosses a bucket of cold water on the transmission infrastructure woody the "experts" have been sporting.
More than 500 infrastructure projects are pitched to Trump, who will favor private money and speed says that not only do the infrastructure "experts" not know anything about the projects on their lists, but they also don't understand the difference between funding and financing infrastructure.
The Marketplace article highlights a dispute between two states over a flood diversion project in the Fargo, N.D., area. The project is touted as "shovel-ready" on the "expert's" list, but just a little digging for information by the reporter revealed that the project is embroiled in a gigantic controversy between states, and a federal lawsuit. Not "shovel-ready" by any stretch of the imagination. But it appears that what got that project on the list was someone lobbying for it... someone who wanted to pretend it was "shovel-ready" in order to get it on one of the "expert" lists, as if that would magically make the huge controversy disappear. It doesn't. It can't. And the "expert" showed his decided lack of expertise by failing to even take an independent look at the project with a quick google search. These projects got on lists at the request of their owners, and nobody cared to look past the information provided by the owner.
The "expert" also knows nothing about the Plains & Eastern Clean Line electric transmission project that appears on his list.
Slane acknowledged, though, he didn’t know about the legal dispute between Minnesota and North Dakota.
Other high-profile projects listed from around the country are entangled in legal and political problems, too.
A proposed high-power transmission line that would deliver wind energy from Oklahoma to several southeastern states is under fire. The federal government approved the line in 2016 despite objections from landowners and the Arkansas Congressional delegation.
Since then, several landowners have sued to stop the line and several members of Congress introduced legislation that would require projects to receive state approval. Officials representing the company believe the line will be approved.
That hardly makes this project "shovel-ready," either. Officials believe it will be approved? I thought Clean Line already thought the federal government "approved" their project? I thought Clean Line said their project didn't need state approval? But it looks like now Clean Line believes it can get state approval. Is that what Clean Line is saying? Or is that what the infrastructure "expert" is saying on Clean Line's behalf? Because that just doesn't make sense.
And you know what else? The Plains & Eastern Clean Line has no customers. It has no revenue. There's no need to build something that nobody is going to use. In fact, it's just not possible to do that, no matter how many lists this project gets put on.
Electric transmission is not like a highway, or an airport. Electric transmission is always paid for by its user. It's not a "free" highway that the public can use on a whim. Electric transmission is always built with private investor cash, in exchange for a return on equity. There are two distinctly different kinds of transmission projects.
The first kind is ordered by a regional transmission planner and cost allocated to a select group of electric ratepayers who will pay to use it. The ratepayers are forced to create the future regulated revenue stream. This kind of project's return on equity is set by regulators, who must approve the rates it charges in exchange for creating a captive ratepayer revenue stream. Investors receive a regulated rate of return paid by customers.
The second kind of transmission project is the kind these "experts" have included on their many lists. It's a merchant transmission project that has not been examined or ordered by a regional transmission planner. It has no captive ratepayers to create a future revenue stream. Instead, merchant transmission projects are the financial responsibility of their owners, who must create a future revenue stream from signed contracts with voluntary customers. This project's return on equity is created by the market. If there's a need for it, voluntary customers will set market price for its use, and the return for investors comes out of any profits it can earn through rates. A merchant project must have confirmed customers that create a revenue stream before it can be financed and built.
A transmission project, no matter which kind, must have a confirmed future revenue stream before investors will plunk their money down. Who invests without knowing how, if, or how much, return they will receive on their investment? Nobody, that's who. And that's another thing seriously wrong with the "expert" infrastructure list.
And you know what else? The Plains & Eastern Clean Line has no customers. It has no revenue. There's no need to build something that nobody is going to use. In fact, it's just not possible to do that, no matter how many lists this project gets put on.
Electric transmission is not like a highway, or an airport. Electric transmission is always paid for by its user. It's not a "free" highway that the public can use on a whim. Electric transmission is always built with private investor cash, in exchange for a return on equity. There are two distinctly different kinds of transmission projects.
The first kind is ordered by a regional transmission planner and cost allocated to a select group of electric ratepayers who will pay to use it. The ratepayers are forced to create the future regulated revenue stream. This kind of project's return on equity is set by regulators, who must approve the rates it charges in exchange for creating a captive ratepayer revenue stream. Investors receive a regulated rate of return paid by customers.
The second kind of transmission project is the kind these "experts" have included on their many lists. It's a merchant transmission project that has not been examined or ordered by a regional transmission planner. It has no captive ratepayers to create a future revenue stream. Instead, merchant transmission projects are the financial responsibility of their owners, who must create a future revenue stream from signed contracts with voluntary customers. This project's return on equity is created by the market. If there's a need for it, voluntary customers will set market price for its use, and the return for investors comes out of any profits it can earn through rates. A merchant project must have confirmed customers that create a revenue stream before it can be financed and built.
A transmission project, no matter which kind, must have a confirmed future revenue stream before investors will plunk their money down. Who invests without knowing how, if, or how much, return they will receive on their investment? Nobody, that's who. And that's another thing seriously wrong with the "expert" infrastructure list.
And private investors are not going to build the projects without a return on investment, which might come from tolls for a new road or higher utility rates for an energy project, for example.
Greg DiLoreto with the American Society of Civil Engineers says that difference is important.
“Financing infrastructure is not the funding of infrastructure,” he said. “Financing is access to capital to do that funding, but at the end of the day you have to have cold, hard cash to build these projects that need building…”
Because the infrastructure "experts" don't have a clue how electric transmission is built and paid for, they seem to think transmission is a good fit for their "shovel-ready" list. Only a transmission project with a guaranteed revenue stream is anywhere near "shovel-ready."
Clean Line has no customers for its projects. It has no revenue stream. Being on an infrastructure list does not create one. Being on an infrastructure list does not create captive customers.
These infrastructure "experts" are nothing more than uninformed clowns, but the real Bozos are the merchant transmission companies schmoozing and lobbying and wasting their money to get their loser projects on some list. List or no list, the Clean Line projects just aren't happening.
Clean Line has no customers for its projects. It has no revenue stream. Being on an infrastructure list does not create one. Being on an infrastructure list does not create captive customers.
These infrastructure "experts" are nothing more than uninformed clowns, but the real Bozos are the merchant transmission companies schmoozing and lobbying and wasting their money to get their loser projects on some list. List or no list, the Clean Line projects just aren't happening.
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