Wednesday, December 19, 2012

Jimmy, Clean Line, & the Creation of the Next Enron

Frequently over the internet, Jimmy Glotfelty claims to be a “Roosevelt Republican”.  This is an interesting comparison considering Franklin D.  Roosevelt would call him something less flattering.  FDR fought hard to pass the Public Utilities Holding Act (PUHCA).  President Roosevelt saw a sharp rise the abuses of Holding companies, or rather a company that owns a company that owns a company….and so on and so on in the public utility sector.               

During the George W. Bush administration, Mr. Glotfelty lobbied heavily for the recall of federal oversight of utility companies.  In February 2004 Jimmy testified before the Senate Energy Committee on the 2003 Blackout.  He proudly said the following during his testimony;

"I just got back from spending from spending two days in New York City meeting with investment bankers ... and time and time again we heard that repeal of PUHCA was necessary for more investment in the transmission sector."

After aggressively lobbying Congress to abolish PUHCA, four months later, Mr. Glotfelty abruptly resigned from his position at the Department of Energy.  He went to work for a consulting company in Houston, Texas.  Sometime later, he quietly moved three blocks down the street to Clean Line Energy, the venture capital company that would not exist without his lobbying effort to Congress.  (It’s too bad the Cheney Energy Task Force notes were never made public.)

PUHCA was created during the Franklin Roosevelt administration to protect consumers from venture capital companies like Clean Line Energy from manipulating the energy markets.  Without PUHCA, the SEC does not regulate and watch over venture capital companies like Clean Line Energy who work in multiply states.  Without this regulation, Rock Island Clean Line, who is owned by Rock Island Wind, who is owned by Clean Line Energy, who is owned by who is owned by Michael Zilhka, Clean Line Investments, and Clean Line Investors, who is owned by ZAM Ventures, who is owned by ZBI Ventures, who is owned by Ziff Brothers Investments, who is owned by the actual Ziff Brothers.  

The number of companies involved in the ownership of this RICL project is beyond belief, and the company still does not produce a product or create added value to the economy.  None of these companies own one mile of cable.  They do not own one electric pole.  This is exactly the kind of company President Franklin Roosevelt called evil and a private socialist.   Even Ken Lay of ENRON would be proud of the number of companies involved in this one simple project by Clean Line!
RICL desires to be classified by the states as a “public utility” and obtain the power eminent domain to take the property of individuals and give it a select few billionaires, Michael Zilhka and the three Ziff brothers.  This is indeed what FDR referred to as private socialism.  President Roosevelt said it best in his letter to Congress recommend regulating public utility holding companies.

I am against private socialism of concentrated private power as thoroughly as I am against governmental socialism.  The one is equally as dangerous as the other; and destruction of private socialism is utterly essential to avoid governmental socialism.

Because RICL is a HVDC powerline, there is only one start and one finish.  Between the start and finish, Clean Line Energy owns the market and will be able to influence the price of energy from this powerline. 

Clean Line Energy would likely say these is no relationship between Jayshree Desai petitioning Washington to take regulating powers away from Public Utility Boards, and Commerce Commissions and Jimmy Glotfelty successfully lobbying Congress to repeal PUHCA.  Clean Line Energy would also likely claim it is just a coincidence Jimmy Glotfelty’s career currently ends at a venture capital company after he lobbied Congress to end PUHCA, yet the relationship RICL has to the former Enron business model is more than a coincidence.

The RICL model is strictly profit oriented.  The problem arises when current energy regulations were written for the more traditional electricity producers and actual utility company.  If a traditional energy producer wants to build a new transmission line, they must first prove a need for it.  Current state and federal regulations were built to protect consumers within the traditional cost allocation model.  Merchant Transmission Lines did not exist in the past.  Currently there are less than a half dozen such powerlines in the United States. 

Our existing laws and regulations were both designed for this traditional utility company model.  It is only through a slow and steady process of deregulations that we now have the potential for such companies as Clean Line Energy. 

Clean Line Energy and its RICL project recognizes this opportunity to take advantage of deregulation and argue the current rules do not apply to them as a privately held venture capital merchant transmission line.  Unfortunately, this opportunity for Clean Line Energy comes at the expense of the Illinois public and landowners.    

Is Jimmy Glotfelty a “Roosevelt Republican”?  No.  He is a private socialist!  Looks like Jimmy took good lessons from Ken Lay and Enron on how to create a personal energy empire.  

I oppose Rock Island Clean Line (ICC Docket # 12-0560)

1 comment:

  1. So, Clean Line doesn't want to follow the rules of a public utility, but they still want the benefits of a public utility, such as the power of eminent domain.

    Can't have both. I guess our pal Jimmy has to make some tough choices.