Monday, May 25, 2015

Where did this Grain Belt Express Come From and Why am I Just Learning About It


What is the Grain Belt Express Clean Line anyway?

Once  you’ve been fighting this company for a while, it is surprising to hear there are still a new pocket of people just learning Clean Line Energy wants to put up 200 foot lattice towers through their property.  Recently I’ve heard a couple reports of people in Central Illinois affected by the proposed Grain Belt Express are just asking “What is this Grain Belt Express and who is this Clean Line Energy?”  No, people haven’t been living with their heads in the ground.   Clean Line has avoided determining a route until recently, then pushes for an expedited process through the Illinois Commerce Commission. 

11.        Clean Line Energy Partners llc was born from speculation capital moneys.   The Ziff Brothers  (net worth about 12 billion) is a majority owner.  National Grid, a British utility company has invested and owns 40% of this company, with Michael Zilkha a minority owner (net worth about 4 billion). Many of the management team of Clean Line came ZIlkha Energy, aka Horizon Wind.  He sold this company to Goldman Sachs and it was resold to EDP Renewables, a giant wind energy corporation from Spain. 

22.        Clean Line Energy wants to be a utility company. Currently they own no assets beyond office supplies.  The own no powerlines but have four high voltage direct current (HVDC) projects they are “developing”.  Grain Belt Express, the Rock Island Clean Line, and Plains & Eastern Clean Line are three projects that desire to wheel energy from western Kansas, Iowa and Oklahoma 500 to 750 miles east where the energy would go into the grid with east coast urban centers as the final destinations. 

A fourth similar project that hasn’t been pushed by the company as aggressively desires to do the same thing but from New Mexico to California. 

33.       With four separate powerline projects under “development” Clean Line Energy Partners llc has 14 limited liability corporations!  It’s a weird organizational chart of shell companies layered on shell companies.  None of these shell companies have employees.  Bills are paid by the parent, Clean Line.  Comparisons to ENRON can be easily made.  While much of Clean Line’s upper management came from Horizon Wind, the Chief Operating Officer also came from ENRON’s Merger and Acquisition department.   

44.       Clean Line’s upper management team also has minority ownership in the company.  It was also disclosed by the company’s president during ICC cross examination for the Rock Island Clean Line hearings that Clean Line has an option to sell any and all projects to National Grid before construction.  It is a safe assumption Clean Line has no intention to actually build these powerlines but sell the projects once the easements are obtained.  Obtaining the easements and flipping the projects for a profit is the “development”.  Clean Line is acting as a glorified land agent for a European company. 

55.       Do eastern cities need this energy?  No.

Clean Line is relying on Congress continuing the Production Tax Credit subsidy.  While it officially expired two years ago, the last two years have had a December 31st surprise gift for the wind industry and renewed the subsidy for the expiring calendar year. 

66.       Clean Line is also banking on such things as Renewable Portfolio Standards, state policies that mandate a percentage of energy be supplied by specifically by wind energy.  Clean Line attempts to market their projects as promoting wind energy from the Midwest’s windiest zones and deliver it to regions that have less wind, more people, and higher energy prices.  The marketing challenge is to get people to believe wind energy is special over other electricity generation and there is a need from “public policy statements, like Renewable Portfolio Standards or the EPA’s proposed Clean Power Plan. 

77.       Will this Clean Line Project benefit my ratepayers in my state?  No.

Being a direct current powerline, they are limited access.  There would be acres of transformers at the starts and acres of transformers at the end to convert the energy back to alternating current.  In an attempt to justify a “need” Clean Line has added a 500 megawatt substation in Missouri for the Grain Belt Express and Arkansas for the Plains & Eastern.   There is no need for this energy in Missouri or Arkansas but Clean Line is claiming to offer a “benefit” to residents of the state.  In all likelihood, once these projects are approved, these sub transformers would be dropped from the plans as economically unfeasible. 

88.       Will Clean Line lower electricity prices?  No. 

Clean Line uses the vague argument and assumption that injecting so much energy into the market will lower prices.  Not really.  Wind Energy typically is sold through a 20 year Power Purchasing Agreement at a premium price.  There is another thing called the Localized Marginal Price which is the market priced based on a formula of supply and demand.  Injecting up to 3,500 megawatts into the grid would lower the LMP price but ratepayers will pay a premium that more than offsets any “savings”.   Clean Line’s projected “savings” doesn’t recognize the additional costs adequately.    

Illinois is also moving back towards more regulated electricity pricing.  This will make the “savings” projected by Clean Line Energy Partner’s llc less relevant. 

98.       Is the Grain Belt Express needed? No.

Clean Line has avoided to have their projects reviewed by Regional Transmission Organizations (grid operators).  Clean Line doesn’t want their projects critically reviewed by the people who operate the grid.  This allows Clean Line to make assertions of need, reliability, and necessity that don’t exist.  Traditionally, a real public utility will compete and bid for a project through the RTO once a need is justified.  The project is made through cost allocations in all of our electricity bills.  The company is then guaranteed a return on their investment.   The Grain Belt model avoids such review by attempting to sell space to energy generators, possibly wind energy corporations.  While Grain Belt Express has received authorization from the Federal Energy Regulatory Commission to negotiate pricing and contracts, there are no wind companies signed up in Kansas and there are no buys on the output side in Indiana. 

19.   Where is the opposition to Clean Line projects?

At the Illinois Commerce Commission, Grain Belt Express has applied for public utility status and a Certificate of Public Necessity and Convenience under docket 15-0277.  Public comments are posted.  This can give an idea why other people are opposing Clean Line’s project in Illinois.     If a person wishes to file their own comment, to the ICC, it can be sent here. 

The documents filed under 15-0277 can also be read at the ICC website. This is actually fascinating reading.  Motions, rulings and briefs are surprising interesting to read and not complicated to follow.  For instance, here is a motion filed by the Rex Encore Farms & Properties attorney.  It is requesting a motion to dismiss as Grain Belt Express has filed for public utility status (Section 8-406) with an expedited process.  Since the expedited process was created for exisiting public utilities, it should not apply to Grain Belt (GBX) because this is a new company seeking to become a public utility.             

110.   As a landowner or concerned resident, is it good enough to post a comment under the docket 15-0277?

Posting a comment is not the same as intervening at the ICC.  To intervene, a person needs to hire a lawyer.  Some individual property owners will hire their own attorney, such as Rex Encore.  Other landowners have joined together under the Landowners Alliance of Central Illinois.  The Illinois Farm Bureau is also intervening and having lawyers oppose Grain Belt.  There is also Concerned Citizens and Property Owners intervening and opposing.    

As a landowner affect by this project, one should have representation at the ICC.  The alternative is to sit back and accept what comes.  This is what Clean Line wants with as little legal opposition as possible.  This project is not necessary.  There is no need.  It will most likely raise your electricity prices.  This project will also lower land value while offering a pittance in compensation.  Hiring an attorney to represent a landowner, whether individually or as a part of a group like the Landowners Alliance of Central Illinois is the smart choice.

In the past, landowner groups have opposed utility projects, not on merits or need of the project, but opposed the siting and recommending an alternate route on someone else’s property.  This is not the case with Clean Line opposition.  Landowners are coming together to oppose the project on anyone’s property Block Grain Belt Express Illinois in conjunction with Landowners Alliance of Central Illinois.  BLOCK RICL was formed in Northern Illinois to oppose the Rock Island Clean Line and the website and Facebook page are also an excellent resource. 

 Clean Line refuses to concede siting this project on public property, like interstate easements or burying the transmission line.  They see powerlines through private property as the path of least resistance.   If we as residents, farmers and landowners don’t push back and fight such unnecessary easements that refuse to pay the true value of the right of ways, more will follow.  The threshold of need and necessity will continued to be lowered. 

Like wind corporations, Washington sees the Midwest as a potential huge windfarm.  They see us as obstacles and have no value for individual rights. They see our land as an opportunity to put money in their pockets (albeit the pockets of foreign investors and billionaires).    Our homes and our lives are nothing more than inconvenient obstacles to them.  If the Grain Belt Express is allowed, more eminent domain easement cases will follow. 

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