Thursday, January 8, 2015

Rock Island Plains & Eastern Clean Line, GBE & Regional Transmission Expansion Plans

Clean Line Energy Partners llc is probably one of the best hustler since ENRON at constantly manipulating regulations for its advantage.   The Kansas Corporate Commission was a bit of a Clean Line Circus llc, but things are getting interesting at the Illinois Commerce Commission, in Missouri and in Tennessee.   Grab a bucket of popcorn and start reading the appeals at the ICC.

Plains & Eastern Clean Line is proceeding with its “partnership” with the Department of Energy where the federal government is providing the eminent domain through never before used Section 1222 of the 2005 Energy Policy Act.  Clean Line still has failed to provide a Regional Transmission Expansion Plan (the TVA calls it an Integrated Resource Plan) where it states a true need for a 750 mile HVDC to provide the TVA with wind power from the Oklahoma panhandle. 

How long can Clean Line and the Department of Energy hustle continue?  Is Michael Skelly at Clean Line Energy Partners llc hoping no one will notice?  Are they waiting for a federal lawsuit to challenge the Department of Energy’s validity to a need for this powerline?  The Administration clearly is set out to promote wind energy with no regard for those in the Midwest who are inconveniently living in the path of their agenda.

Arkansas and Oklahoma aren’t the only place where a lack of regional planning is becoming an issue with Clean Line.  The refusal of the Rock Island Clean Line llc could prove to be a mess for PJM and the Illinois Commerce Commission.  The Illinois Agriculture Association’s application to rehear the Rock Island Clean Line’s request for public utility status and a Certificate of Public Convenience and Necessity is before the ICC.  The Illinois Farm Bureau is arguing the need for RICL has not been determined.  With Clean Line claiming to be a Merchant Transmission Line when convenient with claims to accepts all the risk and rewards of the project, no one is responsible to determine the true need for the project. 

Since the beginning of this case, the Farm Bureau’s position has been that there is no evidence that provides any assurance that Rock Island, or its parent company or sister companies are anything more than non-utility new entrants to the market with a business plan, formulated and run by novices, who have never built or operated transmission lines. In addition, there is also nothing in the record to establish that Illinois consumers need the Project as required by statute, that the Project will make the market more competitive, that customers, generators, or financing will ever exist, or that the Project will definitely be built.

Despite the uncertainties presented by this Project, the Commission wrongfully approved Rock Island’s certificate, creating an immediate impediment to other transmission projects which very may well benefit Illinois consumers, the market, and the reliability of the electric system.
 As detailed in the testimony attached hereto as Exhibits B and C of ICC Staff Senior Electrical Engineer Greg Rockrohr in Docket Nos. 14-0494 (MidAmerican Energy Company) and 14-0514 (Ameren Transmission Company of Illinois), the Commission’s Final Order is having an immediate effect on other transmission projects.
Rockrohr’s testimony draws into doubt whether the two new proposed transmission projects are needed, or whether they are necessary to promote the development of an effectively competitive electricity market that operates efficiently, are equitable to all customers, and are the least cost means of satisfying those objectives given the Final Order entered herein giving the “green light” to Rock Island.

Although one would expect that Rock Island’s decision to enter the transmission business in Illinois would have an effect on the other transmission companies and their plans in the state, it should not be to the consumers’ detriment.

Clean Line has gone far out of their way not to associate with the PJM’s Regional Transmission Expansion Planning.  As a Merchant Transmission Line, they argue their projects deserve to be bumped up to the front of the line and trump all other projects under consideration in the PJM and MISO regions.  Perhaps Clean Line is fearful of justifying their business plan versus to projects deemed necessary by the industry.  Perhaps Clean Line would rather avoid competition and focus on their selling point that there is an alleged need for wind energy from Iowa and Kansas. 

So who decides the actual need for a Merchant Transmission Line?  

FERC claims it’s not their responsibility to determine need as they only approve rate structures to ensure an open market.  The state public utility commissions never were intended to decide what projects were best suited for a Regional Transmission Organization.  The Illinois Commerce Commission doesn’t have the funds or the staff.  It would take an act of the state legislatures to provide funding for such studies. 

Historically the states have relied on the Regional Transmission Organizations to determine the need for a transmission project.  This is exactly the middle ground Clean Line desires for RICL and the Grain Belt Express with no one determining the need and validating their project.  Clean Line is attempting to ride the train of no accountability with a mantra of “accepting the risk and rewards”. 

As a society we have regulated utilities for a reason, to protect consumers from being a captive market to unscrupulous utilities (ENRON).  Accepting the risk and rewards doesn’t mean a company is entitled to operate outside of the existing regulation system.   

If Clean Line is allowed to make a precedent where Merchant Transmission Lines do not answer to Regional Transmission Organizations, where the federal government allows exemptions to promote wind energy, and where the states provide approval for eminent domain to speculation projects, why have any of these regulatory organizations? 

As ratepayers, what confidence do we have in a process where no one determines the validity of a proposed project?  Will eminent domain approval be rubberstamped for all projects who are first claimed to be a Merchant Transmission Line?

How long will PJM and FERC allow this loophole to exist?

Perhaps those at BLOCK RICL are right.  Illinois should be looking at all proposed wind transmission projects and determine which project is in the best interest of the state’s ratepayers.

While this goes way-way back to 2010, Clean Line Energy stated their position to FERC and it really hasn’t changed too much. 
1.       All Public Utility Transmission Providers Should Be Required to Participate in a Regional Planning Process.
2.      Merchant Transmission Companies Should Not Be Required to Participate in a Regional Transmission Process.

This fairly well describes the position the Illinois Commerce Commission has placed Illinois residents with their decision on the Rock Island Clean Line.  RICL is a public utility except when it is not a public utility but a Merchant Transmission Line.  Looks like someone is making up the rules as we go here but always in the favor of the speculation company claiming to be outside the reach of regulators?

With all regulatory agencies abdicating authority, we find a potential eminent domain and transmission projects being installed that reduce grid reliability and possibly will not be the least cost.  Clean Line still hasn’t proven the Rock Island or the Grain Belt Express  will not decrease grid reliability.  We don’t know which of competing project will be best, if any.  Rock Island Clean Line, Grain Belt Express, Ameren’s Three Rivers project, MidAmerican’s project, or Exelon & AEP’s RiteLine all claim to be for the advancement of wind energy. 

Is RICL the best option because for the time being it claims to be a Merchant project, but reserves the right to apply for cost allocation at a later time?  Even with the ICC denying RICL approval under Section 8-503 and potential eminent domain, this ICC decision is still potentially going to be a mess on appeals.  

Then there is still the problem of Plains & Eastern Clean Line.  There is no Regional Transmission Expansion Plan expressing a need and Clean Line still refuses to provide reliable information about the cost of this wind energy for any of the projects.  Maybe Washington and the Department of Energy can fabricate their own expansion plan for the TVA. 

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