Monday, September 9, 2013

KCC & GBE; Will the KCC Buy the Ticket, Take the Ride?
I was reading the STOPPATH WV blog and it got me thinking just how naively foolish the Kansas Corporation Commission appears to be.  They actually think the GBE powerline will be beneficial for the state.   Let’s stop and logically think about this for a minute without the aid of happy pills.

How many anchor tenants will GBE have and who will use capacity in the open seasons?

Who is going to pay for the distribution lines to feed GBE?  We are talking about 4,000 MW's of distribution lines to feed into GBE.

Will Sunflower renew their plans to build more coal fired generation to feed GBE?

OK. So there will be a certain amount of anchor tenants from those wind generators who can secure 20 year power purchasing agreements for their wind energy.  But, has the KCC considered how much of the current generation produced in Kansas will leave the state? 

Does anyone really think all 3,500 MW's will come from new sources?

The real opportunity will be for all the current energy generators in Kansas who can send energy east into PJM over GBE or sell the energy in the Southwestern Power Pool.

If the price on the output side of GBE is higher than the local Kansas price of energy, there will be an exodus.   Put simply, if the demand is higher at eastern states, Sunflower and other energy produces in Kansas will send energy east.  This will reduce the supply in Kansas and the cost of energy in Kansas will go up.

This will likely create a scenario where Kansas will find themselves competing for the energy currently produced in their state.  An ENRON scenario is more likely where each buyer is played off the other, the price can be manipulated and the loser would be the ratepayers of Kansas. 

Does the KCC realize they will be encouraging manipulation by speculators and energy traders? 

But hey, the eastern states will appreciate the Jayhawks sacrifice as they can have Kansas energy and without any negative aspects of production in their home states.  Let the energy be produced in a land far far away.  Kansas is just one of those flyover states.  “Nobody really lives there” is the east coast philosophy.   So make Kansas and Iowa "The Generation States". Fill Kansas up with windmills.  South Carolinian won't have to be burdened with windmills off their coast in the Atlantic.  I guess we all need to sacrifice for the majority of people who live near the coastlines.  Let's get back to reality.

Seriously, the KCC really needs to think and study the negative effects the Grain Belt Express powerline can create.  In spite what the CLE reps claim, it's not going to be all rainbows and unicorns.  This can very easily be the new Enron price manipulation model.  Yes, the KCC could believe they are doing a good thing while practicing "Shove-It Down-There-Throats" Economics with a surplus of potential wind energy, but they need to consider the negative side.  This cozy arrangement with the Clean Line people can turn ugly very fast.

Does Kansas really want to "BUY THE TICKET AND TAKE THE RIDE"?   Like the Hunter Thompson quote, if the KCC decides to go down this road of rainbows and unicorns with the Grain Belt Express, there is going to come a time when the KCC realizes it was a mistake and they'll believe it's too late to turn back, at which point the KCC will be seeking a bailout for this endeavor.  

          "Buy the Ticket.  Take the Ride" 

 "Creating, and being involved in, a situation that may get you in way over your head-- but deciding that turning back would be a rather uninteresting option"

There is still time for the KCC to back out any proposed deal with Clean Line.  Listen to the Kansas residents who question Clean Line’s treatment.  Does the KCC really think Clean Line will be less deceitful with them than the state's residents?

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