Tuesday, June 17, 2014

How to Price Fix Transmission Easements to Promote the Wind Industry


The American Wind Energy Association wants us to think the lack of new transmission is the barrier to market entry for more wind generation.  I'm not convinced that is the case.  What about feeding into the regional grid and using regional planning?  How is grid capacity changing with the evolution in coal and natural gas based energy?  Is the nation taking advantage of changes in supply of energy and changes in demand?  How much of the perceived barrier is the wind industry seeking the easy solution for their advantage rather than learning the transmission industry and seeking innovative solutions to meet the need? Heck, no one can show a comprehensive grid capacity mad showing what lines are being underutilized.  Yes, there is skepticism.

If a "barrier" actually exists, it is not the lack of transmission, but the high cost of obtaining transmission easements from farmers and landowners, plus other little things, like constitutional rights, existing laws and current procedures..  As Clean Line Energy has shown, the barrier is obtaining the easements from farmer at an economical price.  So, how does the AWEA work to eliminate the barrier and benefit the industry with more transmission at a cost that still allows wind energy to appear cost competitive? 

Hypothetically speaking;

If I ran the AWEA (and had a total lacked of a moral compass), I’d remove the barrier of high priced transmission easements through a collective effort of conspiracy and price fixing to lower the price of easements.  Not that I am accusing the AWEA of violating the Sherman Antitrust Act, but if I ran the wind energies trade organization, and didn’t have a problem with ticking off a bunch of farmers through any tactic necessary, this is how I would take the easement market away from the landowners through lower prices.

First, it would have to be done through a trade organization at the top.  A trade organization brings together various competitors in the industry.  A trade organization can work to achieve collective goals individual companies cannot.  A trade organization is also a legal mechanism to bring together funds, whether from one entity or several companies.  Archer Daniels Midland was a great example of this first step.  Back in the 90’s they worked to form various phony trade organization to control the price of Citric Acid, Lysine and other amino acids. 

If one were to set up the price fixing model for acquiring land easements, a person would have to learn from ADM’s “mistakes”.  In this scenario, the individual companies would have to contribute or “donate” money to the trade organization and the trade organization, like the AWEA, would then disseminate the monies.  The trade organization would funnel the money to and through various Non-Government-Organizations (NGO’s).  These NGO’s would claim to be representing farmers, landowners, rural affairs, like the Center for Rural Affairs, “clean” energy, like Re-AMP, and a modern transmission planning, like America’s Power Plan.

These NGO’s would work to advance, the objectives of the trade organization members.  One NGO would promote the wind energy as economic development for rural America.  Other NGO’s would claim to promote “clean” energy while recognizing big wind corporations as the only legitimate option.  To promote “clean” energy, the only recognized solution would be more transmission.  Another organization would promote transmission development to create a 21 century grid that would enhance wind development. 

While the NGO’s need money to advance the agenda.  One of the objectives of the trade organization at the head would be to distribute the money.  Some of it would go directly to an NGO.  Other money would go through one or two NGO’s to a third or fourth NGO.  Keep the funds going through as many non for profit organizations as possible to fund each other would be vital.  This would make it more difficult to trace the money and trace the originator of the agenda.  For instance Re-AMP, the parent organization of Midwest Energy News, claims to have 160 members from other NGO’s.  The public cannot be a member of Re-AMP nor take part in its agenda making.  Also, having an arm of an NGO play itself as a news organization is also helpful to an industry and trade organization.   Need a news organization to publish your propaganda?  The best thing to do is create on as an arm of an NGO.

And then there is campaign contributions and perhaps more importantly, political lobbying.  Political contributions through multiple various organizations makes things more difficult to see who is driving the agenda.  Consider another obscure organization that has recently sprouted up, Citizens for a Responsible Energy Solutions (CRES).  Who funds these organizations?  Who pays for the downtown Washington D.C. organizations based out of marketing offices?  How do organizations like this sprout from concrete and office building?  When Representatives like Adam Kinzinger held an online “town hall meetings” at CRES to answer questions, those questions from outside his district were answered and questions from inside his district were avoided.  It is relevant to ask “Who is funding this organization and their agenda?”  What is the real agenda behind these organizations? 

For an NGO that sprang to life in a short time, this organization for “sensible” solutions has 23,000 followers on Facebook, yet no one ever “likes” its postings.  It would benefit a trade organization’s lobbying efforts to have as many NGO’s supporting it as possible.  Even if these NGO’s are offices rented by the hour, having as many voices as possible into the politician’s ear would be helpful in accomplishing the goal of more economically priced transmission.

Another organization called WindWard Iowa spontaneously pops up to advance “clean” energy and promotes the Rock Island Clean Line, and the same questions are asked.  Who is funding this organization that wants to be the “reasonable” mediator between landowners and the transmission speculation company?  It’s strange how these people based NGO’s like these can pop up with high priced Des Moines attorneys and national marketing firmed listed as mailing addresses and signing documentation. 

I absolutely believe it when these organizations like Windward claim they are not being funded by Clean Line Energy Partners LLC or other companies pushing transmission for wind generation.  It’s my guess the funding for these NGO’s is likely coming through trade organizations and other NGO’s.  It is still legitimate for the public to demand to know who is funding the agenda drive for these nonprofit organizations.  NGO’s don’t just voluntarily invest time, money, and labor to promote transmission for wind energy without it being a source of income for the NGO.   The Center for Rural Affairs has at least three people responsible for promoting energy policy (wind plus transmission).  This cost money and someone is providing it.

How exactly does an NGO like Re-AMP made up of other NGO’s generate income?  While “follow the money” is nearly impossible, these organizations have to be funded, and the big funding probably ultimately comes from industry. 

The model of organizations funding organizations funding organizations was the structure used by organized crime families in New York City.  Until the late 70’s and 80’s, this model was very effective by  using as many shell companies as possible so the true leadership of the crime syndicate was impossible to be shown in court without the help of an insider.  These organized crime families were brought down through a focused effort by federal prosecutors to prove the vast complication of the organization.  Before Rudy Giuliani’s successful prosecution, it was nearly impossible for the Department of Justice to trace this model back to the companies at the top above the original trade organization.   Without an insider, it’s doubtful the DoJ or FBI would invest that amount of time and effort to investigate such a small piece of the energy industry. 

The CFRA has now come out supporting a plan making it easier for transmission companies to acquire the easements and advance wind energy.  Again the question is being asked “who is funding this agenda by the CFRA”.  To me, it looks like an orchestrated effort to reduce the farmer’s ability to control their land.  The barrier for wind energy is not the lack of transmission, but the opposition and diligence by landowners.  If wind energy’s efforts are successful, the right of an individual landowner to choose to sell an easement to a wind transmission company is diminished as rural landowners would be forced to sell easements at a reduced price.

Now that the Chuck Hassebrock, the Executive Director of the Center for Rural Affairs resigned last September to run for Governor of Nebraska, the question about the influence of wind energy companies and the startup transmission company that was once a wind energy company are even more relevant.  Are these companies and trade organization funding Chuck Hassebrock’s campaign? Chuck Hassebrock’s opposition to corporate farms at the CFRA, but supports corporate wind farms and transmission specific for wind companies is a bit interesting.  With specific questions about CFRA’s funding for supporting RICL being avoided, it is also fair to ask where Hassebrocks campaign funding originates. 


Hypothetically, if I was a leader in the wind industry and wanted to buy political influence and promote an agenda to reduce landowner’s rights and influence, I’d do it through a trade organization and a plethora of NGO’s.  Does this sound like a crazy conspiracy theory?   Archer Daniels Midland once had the unofficial motto “THE COMPETITION IS YOUR FRIEND.  THE CUSTOMER IS YOUR ENEMY.”  It happened once. 

ADM’s mistake was stopping at just one trade organization.  In the organizational chart for price fixing, NGO’s are needed to play a vital role.  If I were Chuck Hassebrock with Governor Office aspirations, I would not be careless about what my NGO supports.  Orchestrated efforts to limit supply and reduce the price of easements for transmission still falls under price fixing and the Sherman Antitrust Act. 

These efforts don’t have to be successful to be illegal, just conspired and attempted.  If there is coordination within an industry and NGO’s to reduce the barrier and of lack of transmission that would result in lower easement prices and less control of landowner’s assets, the Sherman Antitrust Act is being violated.   Regardless, if I was in the wind industry, wanted to remove the barrier of landowners preventing transmission and had little morals, this is the strategy I would take.  

Factually

There is a concerted effort to "reform" the current process of obtaining easements.  With ideas being created by bill mills, like Multi-State Compacts being proposed by the Council of State Governments. the current checks and balance of the current system of individual state utility commissions would be eliminated.  The current system works.  Companies need to show an actual need, problem, or an actual congestion and prove more transmission is the best solution.  If a proposed transmission project crosses multiple states, the process must be done again and again in each state.   These independent hurdles at each state's utility commission are a form of checks and balances to protect the public from  unnecessary projects.  

Since 1776, the rights of private landownership has been a part of America's history.  Whether there is a coordinated effort or through random efforts, their is a campaign coordinated to reduce the rights of landowners and increase the ability for wind corporations to have special designated transmission.  To those opposed this campaign, it's not about the money.  It's not about increasing the price of easements, but forcing transmission and wind companies to work within the current system and not create a new system of lower standards to exploit farmland for the sake of wind corporation profits.

Like most people in the Midwest, I will not profit if RICL, GBE, or P&ECL are built.  If standards and qualifications are lowered for the sake of promoting wind energy, we all will suffer from a lower benchmark for eminent domain by rich individual and their speculation projects. 

This is bigger than one powerline.

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