Sunday, April 19, 2015

National Grid and Speculating with Shareholder's Money

In November 2012 it was announced National Grid was investing 40 million into a speculation project called Clean Line Energy Partners llc.  In 2 years Clean Line went through National Grid’s 40 million dollars.  What a ride that was.  Somewhere in the last half of 2014 National Grid put another 15.7 million dollars into Clean Line.

For all that money, Clean Line has a conditional approval in Kansas.  No eminent domain authority in Oklahoma.   Arkansas doesn’t want Plains & Eastern Clean Line in the state.  Illinois denied the Rock Island Clean Line Public Utility Status with the road to eminent domain.  Things don’t look good for the Grain Belt Express Clean Line in Missouri.  The Tennessee Valley Authority does not want 3,500 megawatts of wind energy from Oklahoma.  After covering unreliable wind with baseload energy, the TVA estimates wind energy is seen to be 14% efficient. 

So what is National Grid getting for its 55.7 million dollar investment into transmission for wind energy to eastern urban centers?  That is an awful lot of money for a corporation to invest into a speculation project where two and a half years of "development" has shown no developed assets, no transmission towers, no cables to be strung, no and no transformers to convert alternating current to direct current. 

Can a project suffer from cost overruns with no physical assets to the project?  $55,700,000 is gone.  It’s all gone with nothing to show for it.  This isn’t cost overruns on a developing project.  For National Grid, Clean Line Energy Partners is a bad speculation with shareholder’s money. 

Corporate executives have been fired for less.  Engineers on projects have been blamed for projects with actual assets costing more than projected.  At least in those instances, there are actual assets.  All National Grid has to show for their investments in Clean Line are a few t-shirts with pictures of windmills on them. 

Rock Island Clean Line doesn’t have eminent domain authority in Illinois.  Plains & Eastern Clean Line has no authority in Arkansas to act as a public utility and no eminent domain authority in Oklahoma.  While no decision has been made, things do not look good for Grain Belt Express Clean Line in Missouri. 

Somewhere in the last half of 2014 National Grid invested another 15.7 million on top of the original 40 million.  At what point does this become a fool’s investment in an attempt to dig one’s way out of a screw up?   

So where does National Grid go from here?   How many more millions will National Grid;s leadership chose to invest into Clean Line before investors begin to question the wisdom of these speculations?  Listening to Steve Holiday, National Grid's CEO speak about investing in regulated and unregulated utilities is something of a dark comedy.  At best it is propaganda and spin.  National Grid's investment is a pure speculation without hedging one's liability.  How does one explain that to shareholders?

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