Sunday, August 4, 2013

RICL, ComEd, & IP&L in the Weird World of FERC-LANDIA

Below is an exert from FERC’s approval for the Rock Island “Clean” Line.   Interstate Power & Light (a division of Alliant Energy) filed an intervene at FERC and protested approval for RICL project.   After reading the expert testimonies from RICL’s ICC case in Illinois (ICC Docket 12-0560), it is interesting to see many similarities.   It’s also interesting to read FERC’s conclusion.   FERC blew Interstate off and basically said these are issues beneath us for PJM and MISO to handle.  
The words in red below are C&P from FERC’s approval for RICL.   Interstate's own words are below in blue. 

Perhaps forgotten, but back in February the Wall Street Journal did a great editorial supporting Interstate's opposition to socialized transmission costs that add an undo burden on their ratepayers. 
Interstate Power & Light (summary from RICL's FERC Approval)

In its protest, Interstate states that it cannot support the Project because Rock Island has provided only limited information on the Project’s potential effects and demonstrated a lack of due diligence and transparency. Interstate argues that Rock Island makes unsupported claims in its filing regarding the Project’s reliability benefits and that, to substantiate these claims, Rock Island should conduct analysis and modeling with PJM and MISO to examine the potential effects of the Project on surrounding systems. Interstate maintains that the results of Rock Island’s interconnection requests should be made available to stakeholders so that they can understand the effects of the Project

Finally, Interstate states that it supports the Project’s cost allocation approach but requests that the Commission specifically order that costs associated with the Project be only allocated to subscribers in order to protect customers in the Project area from any cost responsibility or potential problems that may occur.

In its answer, Rock Island responds that the Project’s impact on either MISO or PJM will be determined, and subsequently addressed if needed, in connection with the interconnection process of each RTO. Rock Island states that it has provided MISO and PJM with sufficient detail on the Project to enable them to determine whether the Project meets reliability criteria pursuant to Section 215 of the FPA and that it has initiated the interconnection study process with each RTO.  Rock Island also states that, as a merchant transmission developer, it is under no obligation to submit itself to RTO evaluation and selection process.

Finally, Rock Island clarifies that it is not seeking cost allocation for the Project, but will recover its costs from customers who have contractually agreed to purchase capacity through a rate schedule in the RTO’s OATT specific to the Project.   

Interstate Power & Light's own words
 IPL is opposed to the Project that Rock Island has put forth due to the limited information that has been provided and an apparent lack of due diligence into the Project’s potential affects. This current void of information prevents IPL from arriving at any sort of informed decision or supportive stance with the Project.

 As a transmission-dependent utility, IPL guards against unnecessary transmission costs being placed on its customers by advocating for only prudent transmission to be built in its service territory....

This analysis should also examine the potential affects the Project could have on surrounding systems. For example, if the Project should come off line, what would be the impact? An abrupt change in the large amount of energy the Project is proposing to carry would undoubtedly have impacts on the surrounding systems.

FERC's Determination
Rock Island commits that the Project will comply with applicable NERC and PJM/MISO reliability requirements. Additionally, Rock Island indicates that it has already filed an interconnection request with PJM and has submitted a request to complete the studies required to interconnect with MISO. Accordingly, we find that Rock Island has met the regional reliability and operational efficiency requirement, subject to Rock Island’s continued participation in the necessary regional planning processes. 

With regard to Interstate’s protest, the RTOs will determine the Project’s reliability impact on their systems as well as the cost to ameliorate any negative impacts through the interconnection study process. In addition, we note that Rock Island has already represented that it will recover its costs from customers who have contractually agreed to purchase capacity through a rate schedule in the RTO’s OATT specific to the Project.

So why are the same questions being asked in Illinois before the Illinois Commerce Commission?  Because the questions have yet to be fully answered.  Heck, I'm even asking these basic questions.  Looks to me like the FERC Commissioners failed to do their job properly.  These issues should have been decided and supposedly were decided over a year ago, but nearly the same protests of Interstate Power & Light are begin raised again.  Clean Line told FERC they would not seek captive ratepayer cost allocations yet after FERC approval was obtained, RICL still says it will go after captive ratepayer cost allocation again if the opportunity arises.  

Interstate Power & Light stated RICL was not providing sufficient details to MISO and PJM.  RICL said "Oh yeah, it's coming” and FERC accepted it.    Now it's over a year later and we are all still waiting for information on reliability. 

 No. RI has not identified the network upgrades required to ensure the reliability of theComEd system. This is not surprising because as stated above, PJM has not completed all the necessary studies to identify and assess such impacts.

Now, Michael Skelly and RICL is before the Illinois Commerce Commission where these issues are being discussed again but this time in more detail.  Looks at the quotes in the previous RidiculousRICL posting to see how the industry is still asking more of these same questions of RICL.  More people are looking into what is missing from RICL's  business plan (a lot).  If I was Michael RICL, I'd take the strategy that these issues were discussed at FERC and these matters were decided (despite FERC'S decision was avoidance).  I would expected  Michael RICL, to take the position that utilities and public should have protested these issues at FERC and the state public utility commission is not the place to debate these issues and attempt to claim that time has come and gone for these discussion, in spite the fact these issues were raised at FERC and answers have not been provided.

RICL was successful in glossing over these issues at FERC because the fed's failed to do their job.  If these issues are not dealt with, in Illinois, the very same issues will be raised again in Iowa.  Thankfully, some states public utility commissions take there jobs more seriously than FERC and consider what is best for the ratepayer.  RICL will have a tough job to now claim these issues should have been dealt earlier at FERC when FERC basically said it wasn't there job to review these issues.

Did FERC commissioners really think they could gloss over these issues like they do not exist, give RICL approval, and no one else would question RICL later before the state public utility boards?  Perhaps.  Kansas Corporate Commission grated RICL public utility status without Grain Belt Express owning a pole or mile of cable.  Heck Clean Line Energy didn't even have a proposed route or even an application in at FERC when the KCC granted approval.  So I guess some public utility commissions (like FERC) fail to take their responsibilities seriously. 

Thankfully not all public utility commissions act in this manner.  Let's not forget Arkansas took their job seriously in the matters of Clean Line Energy.   Now Clean Line is attempting to trump the state with federal eminent domain. (a.k.a. “federal siting authority”).   It's time we have some REAL transparency here.

The House and Senate Energy Committees really do need to hold hears and investigate FERC’s lack of concern for ratepayers and their inability to properly protect the public interests.  Clean Line Energy and their RICL, GBE and P&ECL would be some great case studies for Congressional review to determine how FERC should take a closer consideration of the ratepayers.

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