Saturday, April 19, 2014

FERC'r John Norris - Advocate for Consumers? Doubtful



CLEP (Clean Line Energy Partners) probably didn't take the opposition to their business plans too seriously.  Looking in to the past opposition to Horizon Wind and Zilkha Renewable Energy, there was some opposition to their projects, but Zilkha and Skelly didn't lose to local opposition.  The guys at CLEP probably weren't expecting the massive multi-state opposition from ratepayers they are now facing.  For CLEP, the poop is getting closer to the fan (or wind turbine) these days with increased opposition in Iowa, Missouri, Kansas, Arkansas, and Illinois.  When CLEP finally does fall apart and self-destruct the shrapnel will is going to fall on many of CLEP’s supporters. 

One of CLEP’s supporters is Federal Energy Regulatory Commissioner (FERC) John Norris.  A year and a half ago John Norris gave a nod and wink of support to Clean Line at a conference in Memphis.  The next day Norris wrote a statement supporting the need for helping the wind energy industry with more transmission projects in the name of advocating Public Policy Statements.  Since that time, Norris has been on the radar as a player in these RICL, GBE and PECL dramas. Statements like the two listed bellow were found to be distrubing.

“It is clear that going forward, we will place a great deal of emphasis on the available ratemaking incentives that reduce risk for a project."

"Projects that provide access to location-constrained resources, such as our nation’s wealth of renewable resources, that previously had no or limited access to markets"

Those statements just kind of rubbed me wrong with being so close ot Jimmy Glotfelty it sure appeared to be winks and nods to Clean Line Energy Puttineers.  

FERC’r John Norris surfaced again this week.  Platts reported FERC’s Advances Efforts to integrate Renewables into the Grid.  The end of this article is most interesting.
 
Commissioner John Norris, meanwhile, noted a March study put forward by the American Wind Energy Association challenging the view that the PTC and negative prices for electricity are distorting markets for nuclear units and other baseload plants.

While he said he wanted more information on how the PTC impacts nuclear facilities, Norris also said that options should be considered to keep nuclear plants operational, including long-term power purchase agreements, and that he had spoken with state regulators on the issue. He expressed concern that the grid could lose what he called a clean-burning baseload generation source if there is not action at the state level, in Congress or elsewhere.


John Norris probably really doesn’t needs more information about the problems created by wind energy’s Production Tax Credit.  Heck, a simple farmboy from Illinois can see the Production Tax Credit is creating a false economy for wind energy.  Following RICL and GBE ratepayers can see the problems as wind companies are practicing a form of predatory pricing to produce energy when it would normally not be economical.  If FERC’r John Norris needs more information, Exelon’s report about negative pricing is an excellent read.  As a FERC commissioned  and an advocate for wind energy, John Norris really doesn’t need more information.  He’ll just take what is spoon feed to him by the wind industry. 

It would appear Norris is being an arbitrator between his friends the wind industry and the nuclear industry.  The compromise Norris is leaning towards, Power Purchasing Agreements for the nuclear industry above market pricing is also interesting as such Power purchasing Agreements is a state issue and not a FERC issue.  More long-term Power Purchasing Agreements will lead to higher prices for consumers.   So, John Norris, FERC and the federal government create the problem by giving the wind industry such favorable incentives.  When the rest of the industry suffers, Norris doesn’t lean towards reducing the gifts towards the wind industry, but proposes more lucrative terms for those in the energy industry being hurt by wind energy’s sweetheart deals. 

Who is representing the ratepayers in all this?   Consumers and ratepayers have no advocates at FERC and this is a classic example of FERC seeing its role as the arbitrator between energy companies or between RTO’s having turf wars in their little fiefdoms.  As commissioners, like John Norris, look for “fair” and “equitable” solutions, like recommending nuclear baseload receive their own 20 year Power Purchasing Agreements, the ratepayers are the ones who lose in these compromises.    

The problem with giving the nuclear industry 20 year Power Purchasing Agreements is this does nothing to eliminate the problem.  The Production Tax Credit for the wind industry creates a bubble economy for wind within the energy industry.  With the wind industry having 20 year Power Purchasing Agreements plus the Production Tax Credit, government bureacrats and regulators are telling the generate more wind energy when the market price is telling the energy indutry there is an over production.  With Norris advocating additional long term pricing contracts for others in the energy industry, the Commissioner is only making the problem worse and not better.

John Norris is a classic example of the theories of free markets being forgotten as regulators become meddlers picking winners and losers when the marketplace should chose. 

Winners and losers should be determined by who can produce the energy at the most economical price and still make a satisfactory profit.   Give a sweetheart deal to the wind industry, others suffer.  Give a similar deal to nuclear baseload will only place natural gas energy producers at a further disadvantage.  Then again maybe FERC’r John Norris is just punting here and saying “FERC only creates the problems.  The solution is a problem for state regulators to fix.”  Regardless, this is poor regulating by Norris.

It will also be interesting if John Norris chooses to keep his head stuck in the sand with the Missouri Landowner Alliance complaint to FERC that Clean Line Energy is still being prejudicial and marketing these transmission projects to wind energy companies in spite of FERC stating Rick Island Clean Line LLC (RICL) and Plains & Eastern Clean Line (PECL) cannot discriminate.

This brings us back to FERC'r John Norris's support for RICL, GBE, and PECL.  When these transmission projects for massive wind farms finally self-destruct as the poop hits the fan, how much of the ca-ca will land on wind advocacy regulators like Norris?  Regulators who are advocates for the industry are not friends of ratepayers and the ratepayers clearly need at least one advocate at FERC.  Maybe the commissioner to replace John Norris when his term is up will have experience advocating for consumers.  When the ca-ca does hit the fan and Clean Line implodes, some of that stuff is going to those bureaucrats supporting CLEP's plans.  This is bigger than one powerline.




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