Thursday, February 28, 2013

When is Grain Belt Express Coming to Illinois?...Opposition is Waiting



Has anyone noticed Clean Line Energy (CLE) hasn't applied in Illinois with the Illinois Commerce Commission (ICC) for the Grain Belt Express (GBE)?

My guess is CLE doesn't want too much opposition in Illinois.  They screwed up big time listing four potential routes through Illinois for the Rock Island Clean Line (RICL).  All that did was tick off four times as many farmers and landowners.  Instead of people on one route encouraging CLE to put RICL on the land of someone else, all the farmers and landowners united and looked deeper into Clean Line Energy.

There’s a powerline going through the pasture behind my house.  It was put in about 2 years ago.  RICL might have even used it as an example in their case before the ICC.  Anyway, the power company announced their intention of running a line from LaSalle to the north end of Ottawa then on to Wedron.  From Wedron, the powerline would come back into the east side of Ottawa into a substation in the center of the town. 

There was probably three or four groups opposing this powerline, but largely all the groups were fighting each other making arguments why it was better to put the powerline somewhere else.  No one questioned the true need for the powerline.  Each group was going out of their way NOT to question the need but point the finger somewhere else.  Actually, it was kind of fascinating for our family to sit in the middle and watch this drama unfold around us.  The power company would win whichever way it went, and our pasture was literally in the middle.  Two of the three proposed routes would have affected us both going to Wedron and leaving Wedron.  Kind of weird how one powerline could affect the same farm twice, but such is the logic of energy transmission.  Anyway, most of the people fighting the power company lost. 
The power company won. The powerline was installed based on a “need” that was there in 2006 before the market crashed and the economy changed.   Much like Clean Line’s model, the projected need isn’t there now.

There is a book on Amazon, Powerline; The First Battle in America’s Energy War.  It was written by the deceased US Senator from Minnesota Paul Wellstone.  The same thing happened there.  Farmers were fighting farmers.  No one questioned the need for the HVDC powerline.  Presidents had public policies promoting coal energy as the “need” was explained.  (Sound familiar?  Only then it was coal energy and today it is wind energy.  What’s it going to be tomorrow?)  So, deals were made and landowners on the secondary route refused to question or oppose the need for the powerline because their silence meant the powerline wouldn’t affect them.

Something special is happening with BLOCKRICL.  We’ve learned.  Farmers aren’t fighting farmers.  Landowners and farmers are recognizing there is no need for this powerline and opposing the billionaires funding this aerial sewer.  Even those who could have been affected by some of the original routes are still opposing RICL!

If Clean Line Energy publishes a primary and alternate route for the Grain Belt Express down by St. Louis and east, there will likely be more opposition in Illinois.  It won’t be Grain Belt Express landowners opposing RICL landowners.  We will all recognize there is no need for these powerlines.  Clean Line Energy would be fighting a war on two fronts in the same state.. Northern Illinois and central Illinois would both be against Clean Line Energy, with Springfield in the middle.  It isn’t surprising CLE is keeping the GBE route through Illinois a secret and it isn't hard to figure out which counties GBE will go through.  Their pitchman leaves a nice trail.  A hound dog could follow that smell across the state.  The challenge is to find the townships and sections GBE is will likely pass through. 

If Illinois denies RICL public utility status or is Iowa decides a different powerline is in the state's best interest, Grain Belt Express is likely dead also.  It’s highly unlikely CLE can make a different argument for a need for Grain Belt Express that they won’t make for RICL.

Opposition to Clean Line Energy is growing in other states, like Kansas, but it appears Clean Line Energy is progressing towards full eminent domain power down there.  Hopefully people keep opposing Clean Line Energy in Kansas.  We can stop this monster if we stay focuses.  If Rock Island Clean Line fails to obtain state approval in Illinois, half of Clean Line Energy's projects are gone.  All the effort in Kansas is wasted.  RICL is indeed a Frontline Battle in America's Energy War.


If you haven't found www.BLOCKRICL.com yet, go there.  The opposition is growing. There is no true need for these powerlines.   

Sunday, February 24, 2013

Clean Line Energy, Vulture Capital, and Venture Politics

A mere forty years ago, beach volleyball was just a beginning.  No bureaucrat would have invented it, and that's what freedom is all about.  - Newt Gingrich

Like Newt Gingrich explained, "Policy Driven Innovations" from the government do not accomplish much other than make a very few people very wealthy.  How much more must we sacrifice for "clean" energy?
1.   The Wind Industry said they need PURPA so real electric companies would be forced to buy their energy. We gave them Public Utility Regulatory Policy Act.
2.   The Wind Industry said they need a subsidy, so we gave them the Production Tax Credit at $22/MWh and the Investment Tax Credit that paid for a third of the cost to build a new windfarm.
3.   The Wind Industry said they need PUCHA abolished to get more investors in powerlines for “clean” energy.   We scrapped President Roosevelt’s Public Utility Holding Company Act and venture capital could invest in powerlines for wind energy.
4.   The Wind Industry said they need Renewable Portfolio Standards as a policy to mandate 25% renewable energy by 2025. We Illinois gave them the RPS.
5.   The Wind Industry said they need 20 Year Power Purchasing Contracts. We gave them 20 year Power Purchasing Contracts at 184% the current market value for energy.  Illinois Governor chose "winners" and "losers" as his Illinois Power Agency agreed to buy and resell to ComEd  "clean" wind energy at $55.18/MWh while today's market price for energy in Illinois is closer to $30/MWh. 
6.  The Wind Industry said they needed a Rapid Response Transmission Siting Team for projects running through federal land, and this administration created such an animal.  Now we have created a situation where federal employees are told to approve projects passing through federal parks or be fired.
Now the Wind Industry says they need superhighway powerlines (Rock Island Clean Line, Grain Belt Express, Illinois Rivers project) to get the energy to the east coast.
Now the Wind Industry says they need federal "siting authority" or eminent domain for powerlines.  At the very least they claim a need for “State Siting Compacts” to make approval automatic for large transmission project traversing pass-through states.
When is it enough? 
Do captive ratepayers really need to pay for these grandiose powerline dreams for "Merchant Transmission Lines" also?
How much more of this "success" of government endorsed "public policy innovation" must we pay to the wind energy companies to ensure their success?
How much more do I need to sacrifice to the owners of these windmills?
What is the depth of the greed of the wind energy lobby?
Show me a wind company that is going out of business. Show me a wind company that isn’t making money. How do you think Michael Zilhka, the financer of Clean Line Energy made his billions from his millions? Wind Energy.
If the Renewable Portfolio Standard is not frozen, by 2025 Illinois residents are going to have 25% of our energy as unregulated “renewable” and “clean” energy.  These “clean” energy companies are exempt from all the regulations natural gas, nuclear, coal, hydro, and all other energy generators must work and abide by.  There is no restrictions or limits on profit wind companies can make.  By 2025 the largest player in the energy business (wind energy) will be left unchecked and all other energy manufactures will be scrapping for income and survival around this out of control monster.
Now is not the time to build Clean Line Energy's superhighway mega-powerlines across the nation for the sake of wind energy.  We have paid enough of our money to these “clean” energy companies.  It’s time to regulate "clean" energy's greed before it’s too late and we create the next Enron situation.  Michael Skelly, President of Clean Line Energy and his merry band, do a good job attempting to sell their product as value added, but in the end he's like the Wizard of Oz, just a man hiding behind a green curtain telling us to pay no attention to the abundance of supply and the bubble economy the government is creating.  As wise consumers and residents of Illinois we need to look at what the market is telling us and be aware of the rising bubble economic the government is creating by giving the wind energy industry everything it says it "needs" to survive and be competitive  in the marketplace.
Let's look at past governmental "Policy Driven Innovations" in the energy industry.  President Nixon, Ford, and Carter all had public policies declaring America's energy independence was through coal.  America built coal plants.  America built powerlines based on coal generated energy.  Today, we have a President who boasts about bankrupting the coal industry.  The farmers and ranchers of the Midwest now have an literal Aerial Sewers of these transmission lines through our farms ... virtual powerlines to nowhere.
20 years from now what will American's think of the "Public Policy Innovation" of wind energy?  Either we will be foolish enough to subsidize the industry for another 20 years or America will laugh at the folly of wind energy.  The Midwest farmers will have more of these aerial sewer through America's farmland.
While growing up on a farm with my formative years of school in the 1980's, there are two things this generation of farmers learned, what happens when "Public Policy Inovation changes and the effect of a large suppply when there is little demand for a product.  In the late 1970's President Jimmy Carter changed a "public policy innovation" and dropped a grain embargo on Russia.  Grain markets crashed.  Farmers suffered a severe recession while the rest of the nation enjoyed a significant economic recovery.  With supplies large, farmers went out of business as the export economic engine of the farm economy suffered.  Growing up, this was a hard lesson learned.
One thing I have learned about the energy industry is today there's a surplus energy.  The pre-2008 business model is gone.  People are not consumer as before.  The manufacturing industry is not consuming as it once was.  Look at the unemployment numbers as an example.  We once had 4.3% unemployment.  Today 8.0% unemployment is the standard.  People are not working and manufacturing, which uses tremendous amounts of energy, is hit hardest.  Cheap energy is great for the consumers, but at $30/MWh energy, the market is telling the industry there is too much supply and the industry needs to shed some generation.  Yes, in the next several years, we will likely see a reduction in the supply of energy. 
Even with a surplus of energy, FERC is encouraging more transmission and more wind energy.  FERC has created Order No. 1000 in an attempt to give incentives to tranmission for a "need" for more wind generation.  The federal government has extended the wind energy’s Production Tax Credit through 2013.  In the eyes of many in the government, there is a shortage of supply and a denial of the truth.  We have a surplus of energy in this new economy.  In its zeal and over estimation of the economy Illinois' government has purchased a surplus of wind energy at prices far higher than the current market price through 20 year power purchase agreements.  This is indeed a strange contrast in a time of surplus. 
Government’s endorsement through “Public Policy Innovation” of more wind energy is creating more risk than reduces it.  Look at what government’s endorsement did in the housing market.  The bubble collapsed.  Yes, wind energy can replace other forms of generation, but we still will have a surplus of generation.  The market is still telling the industry to lose generation as prices remain low.  It is very possible few wind companies will take advantage of the extension of the Production Tax Credit.
This is an interesting time for a start-up like Clean Line Energy.  The market was there when the business model was conceived.  Their business model was probably sound a few years ago, but that market is long gone.    All they can do know is hope and pray.  Hope the demand in the market comes back, and they can find wind farms to fill their powerlines.  Pray that the investment capital funding continues to fund their dream, doesn’t cut the flow of money, and walk away.
It’s time politics quit tampering with industry through "Public Policy Innovation".  Have we learned nothing from the housing bubble market, Presidents Nixon, Ford, and Carter's endorsement of coal energy.  It was and always will be a failed for the President, FERC, Governors, and other bureaucrats to tell the consumer what they :need".  Let the market be allowed to find the least cost energy resources. 
Yes, beach volleyball would never been invented by government bureaucrats.  These same people who are here to "help" the public manage our energy needs are promoting market inefficiencies and creating risk of a collapse of a false economic bubble.  Look at the list of regulatory concessions, subsidies, and general lack of oversite given to the wind industry. 
What is going to happen if we permit an unregulated wind industry to couple with a less regulated transmission industry?  America is exposing itself to see more energy manipulation and profit from energy trading with more power transmission and wind energy controlling the market,.  We will see the next Enron created once unregulated wind energy dominates the energy markets with their own transmission.  Perhaps this is the motive of vulture capital in the "clean" energy transmission business. 
It's time for some bureaucrats to take a step back.  In the name of removing barriers for wind energy, the government has created barriers for fair competition in the energy market with the Renewable Portfolio Standards and Power Purchasing Agreements.  It’s time to let Adam Smith's "Invisible Hand of Capitalism" help determine the most economical form of energy from the competing sources.  Wind Energy can compete in the marketplace, but the incentives handed out by the government is only making a bloated inefficient industry that is not the best option for consumers.

Wednesday, February 20, 2013

China Hackers attack the Energy Grid ....Remember Grid 2030?

Energy Grid Company hit by Hackers

I saw that headline and immediately thought of my friend Jimmy.

Explain to us again how a super-mega-powerline-highway makes America safer.

For those who forgot, Jimmy Glotfelty's masterpiece from his time with the Department of Energy in the Cheney Administration was GRID 2030

For some weird reason....I can't imagine why....The ChiComs felt it necessary to translate Jimmy's GRID2030 into Chinese (not to be confused with FERCenese)
.  
http://wenku.baidu.com/view/fc3e0737ee06eff9aef807fd.html

Soooo....Wouldn't a 3,500 MW powerline from Iowa to Illinois make those dependent on its energy more vulnerable for attack by terrorists?

There is the claim that interconnections on a DC line between MISO and PJM create links but maintain independence, but isn't is even safer to keep MISO and PJM as independent as possible.  

So, lets take a moment and give Jimmy thanks for giving the Chinese Hackers the inspiration to shutting down America's energy transmission system.
 

Thanks Jimmy!

edit:
2/21/2013  8:22 a.m.
OK, I really don't believe Jimmy G. is really the root cause to the ChiComs attempting to hack into "the Grid".  Grid 2030 probably did not give them the idea.  Grid 2030 translated to Chinese probably wasn't the roadmap to e-terrorism.  However, lets use this as a comparison.  

The Blackout in Northeastern states was caused by a lack of proper tree maintenance under a powerline, but yet we had "experts" testify before the United States Senate and anyone who would listen using it as a scapegoat to justify more transmission and anything else lobbyist could sell.  Some of these guys are still pedaling missinformation.

Reminds me of  that Rahm Emmanuel quote.

NEVER LET A GOOD CRISIS GO TO WASTE.
   


A Time to Freeze the Renewable Portfolio Standard and Fix the Illinois Power Agency



Part 1:    Wind Needs 20 year Power Purchasing Agreements

I love it when the wind lobbyist and those that jump on their coat tails make contrasting arguments.  The wind industry cried they needed long term Power purchasing Agreements…or the Illinois wind energy industry will just die.  This threat of suicide is a common thread for the wind industry lobbyist.  “We need (fill in the blank) or the industry will wither to nothing. “  This time the wind industry was lobbying Illinois and Governor Quinn for long term wind energy contracts.
Back in 2010 the New York Times ran this story;                 

They industry didn’t like it when the Illinois Power Agency Director, Mark Pruitt, was buying economical Renewable Energy Credits instead of 20 year Power Purchasing Agreements.

            But the byzantine process by which an obscure state agency decides where that wind power comes from has stalled development of new wind farms and threatens to curtail Illinois’s wind generation for years to come, experts said.

So…who were these “experts” back in 2010?  American Wind Energy Association lobbyists is my guess.

Companies say they are caught in a vise. In order to get bank financing to build a wind farm, companies usually need a promise from the Illinois Power Agency — a long-term power purchase agreement — that their electricity will actually be bought for years to come. But the power agency so far has not made guarantees that would facilitate new wind farm construction since it is required to buy electricity from the cheapest sources that will satisfy wind-power mandates.

Why can’t the wind industry compete in a competitive open market with other generators of energy?

The contracts will guarantee the agency’s power purchases, which could prompt construction of new wind farms. But many fear that the contracts will go to existing merchant wind farms, instead of financing new ones.

Again, here is an example where the government creates winners and losers.  The winners are the lobbyist who convinced Governor Quinn the state needs to give sweetheart deals  to new windmills.  The losers are the windfarms who already made a commitment to Illinois.  

A Houston company, Horizon, is ready to build a wind farm near Bloomington that would power 138,000 homes, but it probably needs a long-term contract to secure financing. “The reality is if we don’t have long-term contracts, we won’t get new resources built,” Mr. Deora said.

Again we gave these companies more than everything they wanted.  PURPA to force traditional  energy generators to buy this wind energy.  We abolished PUCHA so more holding companies to get involved with wind energy and power transmission.  The got the Production Tax Credit with a $22 per megawatt hour subsidy from the federal government.  After that, the Obama Administration gave them an Investment Tax Credit to cover 1/3 the cost of new construction of windfarms.

After all that, in 2010 the industry cried they needed long term contracts to lock in a price for the energy.  Howard Lerner of the Illinois Policy and Law Center also advocated these long term Power Purchasing Agreements for the wind industry.  Howard Lerner and the Environmental Policy & Law Center is also a big advocate for the Rock Island Clean Line, but in this NYT article he claimed the industry needs consumers to pay more for their “clean” energy.

Howard Learner, a professor of environmental law at Northwestern University, said this was a make-or-break moment for wind power in Illinois.
“There’s been recognition by everyone involved of the need for long-term contracts for new wind farms to support jobs in the state and also reduce pollution here,” Mr. Learner said.
Mr. Learner is also executive director of the Environmental Law and Policy Center, which released a study this month showing that Illinois is home to more than 100 wind-related companies employing more than 15,000 people.

Part 2: How Power Purchasing Agreements are “Killing” the Wind Industry

So the wind energy industry got what they begged and pleaded and lobbied Governor Quinn for and got their 20year Power Purchasing Agreements.  Crain’s Chicago Busniness did a great article last year  about how Power Purchase Agreements are affecting the wind industry in Illinois….with a little spin by the wind industry lobbyists.  What really caught my attention was Howard Lerner of the Environmental Policy & Law Center was used again in this article as a source.  This time Mr. Lerner, a strong advocate of the Rock Island Clean Line…the powerline for “clean” wind energy from Iowa, was telling the press what a problem these 2o year Power Purchasing Agreements have created.  Actually, while the terms in these 20 year contracts are grossly uncompetitive and unfair to the consumer at $55.18 per megawatt hour, the real root cause of the wind industry’s problem is their greed.  Consumers are willing to pay less for energy regardless of the virtues of wind energy.
An Exelon spokesman gave an excellent comment on the current situation with wind industry in Illinois.

“Right now, you have an excess of supply to meet the demand that's out there,” says David Fein, Chicago-based Exelon's vice president of state government affairs. “The market has spoken. It's obviously not economic to build. A 20-year contract . . . doesn't make sense.”

Yes, 20 year contracts at 180% the current market price still do not make sense.  The market has too much supply and too little demand with the poor economic condition of the nation.  At this time we don’t need more energy generation, powerlines from Iowa for more wind energy, or 20 year contracts signed by the Illinois Power Agency.
Howard Lerner of the Environmental Policy and Low Center was actually a bit more diplomatic for his friends at wind energy.

Howard Learner, executive director of the Chicago-based Environmental Law and Policy Center and an advocate for more clean-energy construction in Illinois, says the political hurdles are surmountable.   “Renewable energy is strongly supported by the Illinois public,” he says. “This is a problem for people of good will to solve.”

Another Crain’s Chicago Business article explains consumers and cities are moving away from ComEd because of these long term Power Purchasing Agreements.  Alternative Energy Retail Suppliers like  Constellation, ComEd parent Exelon Corp.'s retail power supply unit,  Integrys Energy Services, sister company to Chicago natural gas utility Peoples Gas,  or  Akron, Ohio-based FirstEnergy Solutions,  are able to offer cities electricity at lower prices than ComEd because these companies are not forced to buy “clean” renewable energy from the Illinois Power Agency. 

It seems a bit ironic that because of good old fashion corporate greed the wind energy industry lobbied and claimed they NEEDED these 20 year contracts.  Now after consumers are leaving ComEd, this corporate greed is hurting the companies.  So many cities are leaving ComEd and moving to cheaper suppliers that the Illinois Power Agency has purchased far more power than it knows what to do with it.

Who’s going to buy this excess “clean” energy at over 180% the market price?  Will the few remaining consumers of ComEd be forced to pay for Governor Quinn’s screwup?   Is this fair to force consumers to pay for the Governor’s mistake.   Will the state just eat the cost of this extra high priced energy where there are no captive consumers to force it on?  Will the Illinois Power Agency attempt to sell this power in the market at a discount and just attempt to cut its losses?

There are reports the Wind Industry now is lobbying Springfield to force the Alternative Energy Suppliers to buy the overpriced energy from the Illinois Power Agency.  Will the state just buy this excess energy and eat it?  Illinois is broke.  We have no money to waste on unwanted “clean” energy.

It’s not surprising Howard Learner at the Environmental Law & Policy Center supports the Rock Island Clean Line.  He’s a paid lobbyist under a non-government organization name and been nothing but a tool for the wind energy lobbyists.   His advice and recommendations have led Illinois to a broken Illinois Power Agency and a dysfunctional Renewable Portfolio Standard.  His bias is clear and his support for the Rock Island Clean Line deserves questioning for those who search beyond the name. 

With the current low prices, only the wind energy industry says we need more energy.  Exelon understands now is not the time for additional energy construction in Illinois.  Andrew Ott at PJM even questioned the wisdom of 20 year contracts for wind energy.  

“'A 20-year fixed-price contract (for renewable resources)? I'm not seeing a lot of that.”  Andrew Ott, senior vice-president of markets, PJM.

It’s time to freeze the Illinois Renewable Portfolio Standard and fix the Illinois Power Agency before we create a bigger mess with more unregulated wind energy in Illinois.  The last thing we need to do right now is import more "clean" wind energy into Illinois  with Clean Line Energy and the Rock Island Clean Line.  Let's fix the problems we have first.  Lets do what is best for Illinois consumers and not what the wind industry lobbyists claim they now "need".

Friday, February 15, 2013

The Cost of the Illinois Renewable Portfolio Standard



How much does “clean” energy cost the Illinois consumers? 

When Clean Line Energy first introduced the Illinois residents to the Rock Island Clean Line project, the powerline for Iowa windmills, this one question keeps being asked without an answer from Clean Line Energy. 

Hans Detweiler, the Illinois project developer, Jimmy Glotfelty the company’s second in command, or Michael Skelly, the company’s president, refuse to answer this basic question.  How much will this additional “clean” energy cost Illinois consumers? 

Projected“saving” is irrelevant.  Show me an economist for the wind energy industry who projected today’s current energy prices, supply and demand six years ago.

The more that is learned about energy industry, the more the “clean” energy industry looks to be a bunch of greedy little children of the energy industry.  There is one common theme coming from the wind industry, whether it’s the American Wind Energy Association, Howard Learner at the Environmental Policy and Law Center, or actual wind energy companies, like Invenergy or Horizon Wind Energy.   These companies and their lobbyists will always cry the industry is in jeopardy of going under unless they have everything their way with everything, and it is always the consumers who suffer for this “clean energy” industry’s profit.

The “clean energy” industry says it will just die if they don’t get a continuation of the Production Tax Credit with its $22per Megawatt hour (MWh) premium.  So, on January 4, 2013, the wind industry was granted a one year reprieve with an extension to the PTC.  This still doesn’t answer how much wind energy costs, but there is this additional $22/MWh for any new wind energy constructed for this powerline.  

So anyway, how much does wind energy cost?

Wind energy is sold a couple different ways.  The energy goes from a powerline and enters “the grid” where it is sold at the wholesale “locational marginal price” (LMP), like coal energy, energy made by natural gas turbines, or nuclear energy.  The LMP is basically a price determined by constant changes in supply and demand.  You can go to www.PJM.com and see the price for Northern Illinois Hub.  Right now the price of electricity on the wholesale market for the Northern Illinois Hub is $34.18 per Megawatt Hour (MWh).  This price fluctuates but $30-$35/MWh is a good average number for a rule of thumb.  The LMP price is the price of the open market.  It’s the benchmark of a fair market price for comparison to “clean” wind energy.

Energy retail suppliers can also buy Renewable Energy Credits (REC’s) from wind companies as proof they are purchasing “clean” energy on the open market.  PJM has a website where REC’s can be bought and sold.  It has been well documented REC’s are a very economical way to comply with a state’s Renewable Portfolio Standard.  Mark Pruitt, the original director of the Illinois Power Agency,  preferred REC’s over long term contracts.  According to the Illinois Wind Energy Association;

Pruitt's procurement process favored cheap renewable energy credits to fulfill the state's renewable portfolio standards for the procurement of renewable energy like wind and solar over the more costly long-term power purchase agreements preferred by developers and Quinn.

Renewable Portfolio Standard
As many of you know, Illinois has a Renewable Portfolio Standard (RPS) is a policy passed by the state legislature that mandates a certain percentage of power is supplied by “clean” renewable energy.  By the year 2025, Illinois is supposed to ramp up to 25% renewable energy.  The question is often asked “Who is counting the renewable energy and how are energy companies complying with the RPS” 

That responsibility falls on the Illinois Power Agency (IPA).  The IPA is a 1 man operation (literally) who is looking to hire a director.  They no staff, no accountant, and a temporary director who wants out but Governor Quinn can’t find a “qualified” replacement.   So if you know anybody with 15 years of experience buying energy (and is desperate for a job) have them send a resume (and a political donation) to Governor Quinn.

The way Springfield set up the Renewable Portfolio Standard, the Illinois Power Agency is responsible to buy the “clean” renewable energy for Ameren and ComEd (real energy companies).  Back in 2010 the Illinois Power Agency, at the urging of Governor Quinn) entered into long term Power Purchasing Agreements with wind energy companies.   These Power Purchasing Agreements are 20 year contracts!  According to Crain’s Chicago Business in 2009;

In a budding battle over Illinois' energy future, Gov. Pat Quinn is throwing his political weight behind wind power — even if it means higher electric bills.
Despite protests that wind power is too expensive, Mr. Quinn has persuaded the state agency that buys power for Illinois customers to negotiate 20-year contracts with wind developers for up to 4% of the power supplied by Commonwealth Edison Co. and Ameren Corp.


Wind Companies lobbied Governor Quinn  claiming 20 year contracts were needed to secure financing to build more windmills and Governor Quinn lobbied the Illinois Power Agency director Mark Pruitt to sign these contracts that went into effect in July 2012. Illinois is no locked into buying this energy from wind companies for 20 years.   The IPA then turns around and more or less sells the energy to Ameren or ComEd.  

Pruitt's procurement process favored cheap renewable energy credits to fulfill the state's renewable portfolio standards for the procurement of renewable energy like wind and solar over the more costly long-term power purchase agreements preferred by developers and Quinn.

Assumptions were made at the creation of the IPA that the state knows what’s best for its residents and will seek better deals than industry that has captive customers.  Unfortunately, this is Illinois where PAY-TO-PLAY reins.  Governor Quinn and the IPA did not seek out the best deal for Illinois consumers.  The politicians gave in to the lobbyists.  

One Illinois Power Purchase Agreement for Springfield governmental offices shows a $19/MWh surcharge above the market price was added to the price of the energy.  This is $19 over the market price of $30-$35.  So Springfield government is paying $49 to $54 for $30 energy. 

The 20 year PPA for Ameren started in the third quarter of 2012 at $50.44 per megawatt hour.  GO HERE TO SEE THE CURRENT MISO ENERGY PRICE

Comed’s PPA negotiated by the Illinois Power Agency under the leverage of Governor Quinn average price is $55.18 per Megawatt hour.  GO HERE TO SEE THE CURRENT PJM ENERGY PRICE (far right)

The average price of energy in the spot market in the Northern Illinois is about  $30-$35 per Megawatt hour. 

So ComEd’s customers are paying 184% of the market price for renewable “clean” energy.

Thanks Governor Quinn! 

Way to go! 

We appreciate you looking out for us….politics as usual in Illinois….yuck!


Do we really need to pay $55.18 for $30 energy?  Don’t forget we are also paying another $22 through the federal subsidy called the Production Tax Credit.  There were warnings.  Even from PJM!

"I'm seeing five-year and 10-year contracts" for renewables, says Andrew Ott, senior vice-president of markets at PJM, the Pennsylvania-based operator of the power grid stretching from Northern Illinois to the mid-Atlantic. "But a 20-year fixed-price contract? I'm not seeing a lot of that."

Is the state really looking out for what is best for consumers or what is best for wind energy companies? 

What ever happened to the concept of the most economically priced energy?

You don't know what's going to happen over 20 years," says Kevin Wright, president of the Illinois Competitive Energy Assn.   "It's saddling ratepayers with above-market rates for power when all of this should be procured in a competitive marketplace."

I thought Governor Patrick Quinn was a champion for economically priced energy for consumers?  What happened?  Is this politics as usual in Illinois?  Is over paying for energy bad when it’s a mega-nuclear company but perfectly acceptable when Governor Quinn “negotiates” for “clean” energy?

Now, I am a simple farmboy from Prairie Center, but it looks like the Illinois Power Agency is a failure.  It’s a one man show and no one wants the job.  The acting director resigned in October is waiting for ANYONE to replace her (another drama story here).  The Renewable Portfolio Standard is clearly politicalized.  The best interest of consumers is only being considered after the best interest of the wind energy companies and the best interest of the politicians and friends of the Governor.

The last thing Illinois needs to go know is build a powerline from Iowa and add 3,500 megawatts of more “clean” energy from the Rock Island Clean Line powerline at these ridiculous prices.  As consumers, we can’t afford more Power Purchase Agreements and shouldn’t be forced to pay 84% above the current energy costs.  Before we start building grandiose powerlines across the state for more “clean” energy, Illinois needs to stop the nonsense.

Illinois needs to straighten out the IPA & RPS mess before moving forward promoting more renewable energy and powerline for windmills.  Our legislature needs to reform the Illinois Power Agency, hire a true nonpartisan director, and a staff, or perhaps just scrap the IPA altogether.  Our legislature needs to review these 20 year Power Purchase Agreements.  A freeze on the state’s Renewable Portfolio Standard needs to be put in place.  The last thing Illinois needs to do is promote a policy for more high priced wind energy.  Consumers are being gouged enough. 

After we freeze the RPS, then Illinois needs open hearing to determine what is best for Illinois consumers and ratepayers. 

How many more powerlines do we really “need” for windmills?   

Heck, do we really want more windmills in Illinois?  

Are Illinois consumers suffering enough with the current economy?  

Do we really need to overpay for electricity? 

It's time to freeze theIllinois RPS.

Again, lets keep asking Mike Skelly at Clean Line Energy and Illinois’ Governor Quinn critical questions.

How much is this “clean” energy from Rock Island Clean Line going to cost ?