Legalectric

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Repeat after me… EASTERN STATES DON’T WANT OUR MIDWEST TRANSMISSION.

Once more with feeling… EASTERN STATES DON’T WANT OUR MIDWEST TRANSMISSION!!!

And they don’t give a rodent’s rump what we do with our transmission but THEY DO NOT WANT TO PAY FOR IT!

It’s not anything new, but it seems that the message is getting through all the way to Iowa.   Soon Minnesota? The message?  That the east coast does not want Midwest transmission, that they have their own renewables and not only that, they know that transmission from the Midwest means coal and, most importantly, THEY WILL NOT PAY FOR TRANSMISSION FOISTED UPON THEM.

The 7th Circuit case tossing out PJM’s cost apportionment scheme must be having an impact because everyone is freakin’ about cost allocation.  Again, GOOD!  The court said that PJM could not shove the costs of transmission on those who do not benefit from it:

Illinois Commerce Commission v. FERC - August 6, 2009

Enter the Coalition for Fair Transmission Policy, just launched today with a press conference in Washington, D.C.

Dig this from their site:

Assessment of National EHV Transmission Grid Overlay Proposals: Cost-Benefit Methodologies and Claims

HA!  I love it when that happens…

Here’s some background on our Midwest Transmission — transmission we don’t need and they don’t want:

JCSP & UMTDI in the news

This opposition to Midwest transmission is nothing new, I’ve entered documentation in the record in a couple of proceedings now, but what is new is that as of today’s “launch,” there’s now an industry group advocating against Midwest transmission, and that’s one utility interest I’m glad to see hopping mad as hell and not going to take it anymore!  GOOD!  Maybe that will help stop this stupid transmission-fest across the Midwest.

PUC Chair David Boyd had it right when he testified before Minnesota’s Legislative Energy Commission and led off with, “We need a business plan.”  Yes, that’s true, there is no business plan, and there is no MARKET for transmission.  I just hope that message gets through before “we” build and WE have to pay for all these wires in the air!

Here are a few recent posts of mine on this, followed by today’s article in the Des Moines Register.

Offshore transmission, NOT transmission from the Midwest

Eastern Governors stand up against transmission!

And today’s Des Moines Register article:

Eastern states balk at paying wind cost

By DAN PILLER • dpiller@dmreg.com • March 5, 2010

Much of the nation isn’t eager to help pay for a high-voltage transmission line to sell Iowa’s extra wind power to big markets east of the Mississippi River.

“If Iowa wants to build a transmission line for their energy, we have no objection. But Iowa or the Midwest should pay for it,” said Ian Bowles, secretary of energy and environmental affairs in Massachusetts. New England states want to produce their own wind energy from offshore farms.

A coalition of utilities in Eastern states will announce today their opposition to a 765-kilovolt transmission line, more than double the capacity of the current 345-kilovolt lines. The line would send electricity from the Dakotas, Iowa and Minnesota to Chicago and points east. Iowa is the nation’s second-largest producer of wind-generated electricity, behind Texas.

Such a transmission line won public support from President Barack Obama on his visit to Newton last April. It is a linchpin of the renewable energy policies of Gov. Chet Culver and Iowa’s largest electric utility, MidAmerican Energy of Des Moines.

Alliant Energy has its objections

Proposals by MidAmerican and ITC Holdings, which runs transmission lines in eastern Iowa, are considered the best chance for Iowa to reap a wind energy version of the financial windfall enjoyed by Texas and other oil- and gas-producing states.

But as wind energy becomes bigger and more corporate, the utility industry is divided even in Iowa.

Alliant Energy, which serves 525,000 customers in parts of northern, eastern and southern Iowa, has joined the newly organized Coalition for Fair Transmission Policy, which promises to fight a government-mandated transmission line from the Midwest.

“We don’t think the costs of transmission should be socialized,” said Alliant spokesman Ryan Stensland. Alliant’s wind energy production in Iowa is a fraction of MidAmerican’s.

Bruce Edelston, executive director for the Coalition for Fair Transmission Policy, said his group has formed to fight a proposal in the Senate to give the Federal Energy Regulatory Commission authority to site and assess costs for a wind transmission line.

“We don’t think it’s necessarily a good idea to build a multistate transmission line,” said Edelston, whose group will hold a coming-out news conference today in Washington, D.C.

The Fair Transmission group represents companies serving 28 percent of U.S. electric customers, including utilities in New York City, Michigan, Indianapolis, New England, Pennsylvania, the Carolinas and Florida, New Jersey and Georgia.

Those states presumably would be among potential markets for the wind-generated electricity moved from the Dakotas, Minnesota and Iowa, which have the potential to produce far more wind energy than would be consumed there.

Other states have their own plans

While Iowa has speckled its countryside with wind turbines, other states have similar aspirations.

Atlantic seaboard states advanced plans for offshore wind farms, which they say would eliminate the need to ship wind-generated electricity from Iowa.

Read the rest of this entry »

Susquehanna-Roseland… surprise, surprise, they just announced that they’re going to hold off until the end of the meeting, do everything else on a long agenda first… sigh…

Here we go  ROUGH NOTES

(with a few parenthetical comments)

BPU Agenda Meeting 2/11/10

Ken Sheehan: PSEG application.  Starts in PA, crossing to NJ at DWG, through 16 municipalities, following 230kV RoW.  PSEG building in conjunction with PPL in PA.  NJSA stt, taking it before the board, prove it is reasonably necessary (blah blah)

Three outstanding issues.

• Request for Oral Arguments - staff recommends denial.  may be useful if parties have had opportunities to make arguments.  Wouldn’t appreciable add to process.

• Request for Depositions - for 2 PSEG attorney re editing of PJM’s Herling’s letter.   Herling admitted they had made changes, but didn’t remember, and Motion followed.  Recommend denial of request.  Review has been minor, per Herling’s statement, board does not need additional info.

• Request for Dismissal - Internvenors requested, also recommended it be denied.

Fiordaliso:  Are we to move on all of these now?

Ken Sheehan: Move after all the discussion.

Damase Hebert:  Background.  Proposed line is about 145 miles long, 45 miles of it is in NJ, crosses over Delaware Water Gap, Picatinny Arsenal.  2 switching stations, pursuant to a deal, agreed to move the Jefferson station to Hopatcong.  East Hanover, PSEG is willing to move to Roseland.  Entire project will cost between $900 million and $1.2 billion.  Interventions of Townships, Municipal Intervenors, Gerdau Ameristeel, Willow Lake Day Camp & Fredon Bd of Ed, Exelon,  Stop the Lines, Environmental Intervenors.  Participant status to National Park Service as requested.  Fiordaliso appointed to preside over hearings.   (Commission Fox gave someone a big grin at this point)  Public hearings and many written comments.  Fiordaliso conducted site visit, 3 locations.  Fiordaliso also presided over hearings, main topics covered included need, routing, engineering and construction, and electromagnetic fields.  400 exhibits and over 1,000 pages of transcripts (BFD!).  PSEG witnesses, 4 on need, 4 on routing, 3 on engineering and construction, and 2 on EMF.  Muni Intervenors sponsored 1 on need, 1 on EMF, and STL on ability of homes to obtain FHA mortgages.  Briefs, Muni Intervenors, Env Inervenors, Exelon, PSEG, Rate Counsel.  Reply Briefs too.  During December, delays in other PJM ordered PJM lines, PATH, and MAPP.  Board requested Sec.  send letter to PJM requesting more information,Herling response 1/21, reopened for a day of hearings.

Jerry May (?) to address need.

Jerry May: Relies on PJM analyses, that there will be violations of NERC by 2012.  (background on NERC).  PJM analyses through RTEP process also determined that S-R 500kV was the most appropriate remedy for the projected recommendations.  Intervenors have questioned the bases for assumptions and recommendations, available capacity and load.  PJM has estimated over 15 year planning horizon, 13 different bulk transmission lines are asspected to be overloaded in assumed single contingency events.  In addition, 10 are assumed to be overloaded for two lines on a single structure.  Further explanation of what violations mean. (he’s presuming it’s cumulative, but those subsequent iterations replaced the ones that no longer demonstrated need!)  Overloading of lines due to single contingency events is NERC Category B, while double contingency events are Category C.  A NERC category A evaluates with NO contingencies, and PJM found no violations of category A criteria.  PJM tests for load deliverability and generator deliverability.  Load deliverability addresses defined load levels and ability of xmsn to deliver adequat power.  Generator evaluates ability of generation to be delivered to PJM system at peak load conditions.  Normal Peak Day condition assumes tha based on historical data there’s a 50% chance of being warmer or cooler.  Emergency assumes only a 10% chance that the weather will be any hotter on that day.  NERC category B requires that the system be evaluated with one system out of service, purpose is to ensure that system continues to be reliabile with instantaneous outage.  For Cagoegory B, assumes emergency peak load for area being tested, and normal for rest of system.  For Category C, requires the system be stable and within system limits, under a variety of multiple system events, i.e., lost of one system element, adjustments, and loss of second element.  Double circuit tower line contingency that are the source of the cateogyr C violations projected by PJM in this proceeding.  For thistype, no system readjustments are permitted as both are removed from system at same time, using normal load, that these are rare and not necessarily tied to weather conditions.  Category B violations, PJM projected that violations would occur on two bulk power lines by 2012, and another 3 over next three years.  Over the entire forecast period, PJM estimates 13 lines would have violations of NERC Category B criteria.  12 fail load deliverability, and 1 fails generator deliverability.  Category C, ___ violations, over entire forecast violations, 10 lines would violagte category C criteia.  All of them ae due to failing the PJM generator deliverability test.  The NERC violations reflect PJM’s 2009 retool analysis.  Earlier studies dating back to 2007 resulted in different mix, but the conclusions from each was that NERC criteria would be violated by 2012 if NERC did not take steps.

In the past month, PATH and MAPP were either withdrawn or held in abeyance due to updated analyses that the project was not necessary in the time frame.  The Board directed that an additional hearing be held to determine what impact the delay in these lines would have for need for S-R. During the hearing, Herling reconfirmed PJM’s view that the project would continue to b enecessary to avoid violating NERC criteria as early as 2012.  …  that taking into account RPM auction, would not materially alter the conclusion. (WITHOUT ANY CITES OR SUBSTANTIATION!)

While PJM considered xmsn based alternatives, it found that none were as robust or would provide the long term solution.  PJM’s position with respect to alternatives, such as adding generation, DSM, heightened efficiency, was that it had no power to order added generation or DSM.  PJM’s contention was that transmission was the only measure that it had authority over to correct the violations.

Intervenors argued that the analyses are flawed, designed with a preordained conclusion, were challenging load forecasts, DSM, energy efficiency, and challenges more generally in the conservative nature of the PJM analyses.  As an alternative to outright rejection, some suggest PSEG should hold this petition in abeyance until next RTEP report is in.  Herling would not commit as to when the next RTEP would be completed, suggesting that the typical time frame is in the fall.  Intervenors point out that the latest Retool does not reflect RPM, where significant amounts of demand response capacity cleared, and which would be included as available capacity in the 2012 year, and would also be included in the next RTEP analysis.

Staff’s review of the record leads us to conclude that PJM’s process does not result in a preordained conclusion and produces results that are reasonable.  Intervenors complained that the most recent load forecast is too high, given the load drop.  There is a great deal of uncertainty about economic recovery, and staff does not believe that PJM’s load forecast is unreasonable.  PJM’s load forecast which reflected events since the last quarter of 2008, predicted drop of 1.4%, and actual drop in 2009 was 1.9% (not addressing that peak was in 2006 and it’s been falling).  While the forecast underestimated the severity of drop, it did reflect actual recent trend.  Economic growth projections used by PJM are geared to metropolitan areas located within PJM territory, and cannot be directly compared with national projections. (and PJM historic actuals and PJM trends?)  Staff agrees that the results of the May 2009 RPM auction should be included, but witness Herling explains why even incorporating these results would not alter conclusions.  Intervenors have noted that the May RPM auction resulted in significant demand response in those areas impacted, however witness Herling pointed out that demand response could not resolve Category C violations.  Demand response is not on call during normal periods and is not sufficient time frame to offset Category C violations.  Herling points out that while there was a significant demand response, there was a marked decrease in generation availability in relevant load zones, and net increase was relatively small. (note they never deal in impacts of energy efficiency, which reduces peak overall?)  In contrast, the increases in demand response capacity where PATH amd MAPP were planned were substantial, … those were violations that MAPP and PATH were designed to address.

Intervenors have argued that PJM has failed to consider additional demand response coming, pointing to the New Jersey Energy Master Plan, however the board’s main resonsibility is to assure safe and adequate supply of electricity.  Staff does not believe that PJM excluded the Energy Master Plan from models and consideration. (EH?)  Just as PJM models do not include demand response, it also does not include generation that may or may not occur  (yes it does, as he testified in the initial hearing, with different weights put on generation with an ISA and not).

Staff concludes that PSEG has met its burden that S-R is needed to avoid violations of NERC standards as early as 2010.  The number, nature and severity of the violations all bear this out (Say what?  Decreasing number, decreasing severity, and change in nature in blatant attempt to find some sort of violation).   Realistic variations in the various key inputs would, in staff’s opinion (training, experience, they’re NOT engineers!), still point to violations as early as 2012.  The fact that the violations grow throughout the forecast period points to the need for a robust response (they start at miniscule amounts above 100%, so small that FERC asked about optimization).

Next issue is routing.

Damase Hebert: PSEG presented expert testimony that Route B was most appropriate route.  Luis Berger retained to evaluate routes.  Berger reviewed 3 alternative routes, selected Route B, which follows existing line.  Impacts least area of forested land, impacts least amount of forested wetland, fewer streams crossed, no change in existing land use, crosses Appalachian Trail on existing 230kkV RoW, least distance of Highlands area crossed, all on existing cleared RoW, likely to have the least impact compared to the other alternatives routes because existing RoW would not have to be expand.  Staff recommends approval, because it runs along existing RoW, least impact compared to other route.  Minor adjustments may be appropriate.  Montville has requested move 3 specific towers, and staff reocmmends that Board direct PSEG to relocate or report why it’s not pssible.  In relation to routing issue, STL argued that existing residential homes within a specific distance no longer eligible for FHA.  Baord staff recommends further evaluation of this issue. Switching issues, Jefferson and E hanover, and alternatives were proposed.  Staff recommends moving substations.  Staff notes that use of existing RoW reduces impacts, if approved by board, towers will either be monopole or towers based on characteristics of route.  During course of proceeding, company changed from 4 to 3 conductors, impacts charactteristics of line, change is based on engineering requirements.  Likely to reduce EMF fields. (EH?).  Intervenors have not provided sufficient evidence to prove it’s not safe.  Comapny argues EMF is not dangerous, and EMF are below limits established by any state and regularly used appliances.  Staff has analyzed EMF testimony, and has comcluded that it will be below all established standards, and electrical fields will below NJ’s standards.  Staff recommends that the board require PSEG monitor EMF levels and report results to board, to demonstrate that this meets their state EMF levels.

Cost allocation methodology.  Current PJM tarrif regionalized it across PJM.  FERC has adopted paper hearing, which has been set in response to the remand from 7th circuit decision directing FERC to explain why current methodology is sound (NO IT DOESN”T, that is NOT what remand said and it is not what FERC is requesting in its Order to PJM).  It is unknown when the board will have complete certainty of cost allocation (short paper hearing process, it’s fast tracked).  Given long construction schedule, staff recommends the board not wait until cost allocation (Fox is smiling again at this point)

Staff urges that board issue an order that local zoning does not apply.  Board attach conditions:

- Board direct PSEG to work with Montville Bd of Ed to relocate towers to address their concerns.

- Company follow with report relocating 3 towers to relocate.

- Work in good faith to determine relocation of other alignments that are practicable

- Report within 90 days about other relocations, and if can’t, proceed as proposed.

- Continue to optimize locations of access roads, tower locations and structures, with other agencies to greatest extent possible.

- Evaluate issues explored about inability to obtain FHA mortgages.

- Monitor regarding EMF levels

- Work on continuing basis with fire and safety at Hopatcong and Roseland

- Avian protection plan with guidance from USFWS

- Board require the company to report to the Board the findings of PJM’s next RTEP analysis.  If that RTEP analysis finds that the project is no logner necessary or can be delayed significantly, staff recommends the Board retainspecific authoirty to reopen the proceeding.

- Hopatcong and Roseland switching stations, should routing require modifications, get approval from board.

- This route is located with areas governed by the National Park Service, Highlands Preservation Act and the Watershed Property Review Board.  Staff recommends that the board specifically state in its order that the order shall not be construed as certificate, license, permit to construct or disturb land in these jurisdictions until the company receives the relevant approval from these governing bodies and from any other non-municipal bodies.

Fiordaliso moved, ?? (male) seconded.

Fiordaliso - Having served as hearing officer, which has taken about a year to come to judgment, I feel confident that this board has fulfilled its duty to residents of state of NJ.  Staff committed time and resources, investigating every possible angle, trying to determine whether this is needed, to maintaini electrical service, for all their hard work, I would like to point out certain individuals (thanks staff).  Speed sometimes does not substitute for trying to get it right.  I have to indicate that this was the most difficult decision that I’ve had to make since I’ve been a member of this board, to weigh all the factors involved during the evidentiary hearings.  This was a fair and open process, everyone who wanted to participate could, I wanted them to walk out of the public hearing indicating that they could be heard.  I have heard from the public and witnesses, met with staff, examined every angle of this proposal when PATH and MAPP revelation occurred.  The only thing I could do was to take notice of that, and the supplemental hearing that we had htis month.  With that, it is my contention that it hinges on reliability, increasing infrastructure is a reasonable plan, everyone wants to avoid power outages plaguing our already fragile system.  This project is one part of a wider system, remain focused on renewable, but we have to ensure safe, reliable service for the state of NJ.  PSEG will work with other stakeholders so the process will be a fair and equitable one for all parties.

Butler:  I have nothing to add, I think staff’s analysis was thorough, I’m convinced this is needed.

Fox: Lot of questions and issues.  First, I want to let you know, I reluctantly will be voting for this.  I am hoping that we will not go through this again.  This is an issue of timing, what’s in front of us now (they could choose to wait a couple weeks for additional information that’s in the works).  NERC sets reliability standards, FERC picked NERC, this is based on need, balancing out reliability for the good citizens of this state.  Based on what we have in the record.  What is in the record says there is a need, in 2012.  Timing is everything, PJM projected then, it projects that now, violations in 2012, that’s a little over 2 years away.  It’ll take 18 months or so for this to be constructed.  Our first responsibility is reasonableness of service.  We are subject to a one year time constraint.  If we don’t decide this, we are told this will go to FERC and they will take over the case.  A lot has happened, an economic downturn has taken place, federal government is promoting appliance standards, GHG has not been passed but some day will have to be, NJ will establish more extensive programs to reduce electricity use, a large part revolves about how much it is reduced, we have clean energy, efficiency, renewable energy programs, most of that is not included by PJM.  The Energy Master Plan has reduction of energy use, that is not factored in.  FERC oversees PJM, this board does not.  PJM is largest wholesale power in the world, responsible to NERC and to FERC, they do not report to us (sure, give away your authority over transmission, good idea).  PJM’s RTEP, looks at transmission, generation, customer loads.  The higher the forecast.. PJM’s RTEP, category A, B, C violations were possible, and I think that NERC set these standards and the RTO’s are responsible for following.  Fine?  (from staff: Fine of up to $1 million a day).  Differences between MAPP and PATH, staff has asked for a briefing, two, and it comes down to category C violations, this is not responsive to demand response.  Herling testified that project would still be needed, not directly impacted by load forecast, so we still have this violation, the loss of double circuit line.  The issue I want to get to is risk.  How much risk are we willing to bear, how much are we going to take, prevent that from happening.  Herling had no knowledge of what that risk might be.  Modeling, when I was at EPA we did a lot of modeling, and I am not happy with how this is being handled.  TEAC is contemplateing using sensitivity analysis on load forecast, and the only information we have in the record is from PJM, taking into account different load forecast, using state’s projections, great idea, they don’t do that now.  How much are we going to pay for not having an outage.  Asked to look at actual peak loads in NJ, and it’s quite minimal.  From 06-09, the unrestricted load has exceeded peak for 44 hours.  What is the risk that we’re willing to pay for?  We are used to having outages, when weather occurs, and I’m sure we could probably pay away, that’s a risk analysis that I’m sure had been done.  Is the risk that we’re lessening here worth the cost of a billion dollar line balanced against cost and impacts.  We need to get PJM to look at risk of outage, balanced against category C.  NERC has been modified standards, but again, timing is the issue.  NERC requires RTOs to test events, each has their own internal test, as NERC modifies, they should consider consistent standards, tests, for all future analyses.  Federal Policy Act of s005, set up two NIETC, where here is a huge need, we’re smack in the middle of it, we’re paying more because we’re congested.  The recommendations staff did I thought were good.  I ask that my fellow commissioners to ask the RTO to develop some risk and cost benefit analysis if you don’t require it in their case, why would they), category C violations, having RTOs accountable.  What PJM did was require a billion dollar transmission project.  The existing record I don’t think clearly showed the impact of these violations, that our ratepayers are paying for (and you’ll approve it?  HELLO!?).  That needs to be done for any xmsn lines (like THIS one?).  When the RTO says it exceeds rating, we need to look at the magnitude.  Load forecasting needs to be modified in PJM, direct and indirect costs and benefits, i.e. EMF, does it fit here or not, I think that we really need to look at what raetpayers would pay.  Board has been working on effective alternatives to xmsn, national and regional level.  Our NJ Master Plan deals with that, and it is not in the RTEP model.  No one seems to have jurisdiction over generation. (well duh, you deregulated!).  New generation, existing generation, we don’t have control over instate generation, what goes out of service.  We need most cost effective way to look at generation, it’s probably in Washington, maybe us working with other states.   Due to timing of this issue, and what is in the record before us, there is not any real evidence looking at load forecasting, looking at forecasting, I’m obviously gong to have to vote for this (??? that conclusion makes NO sense) and obviously having reliability issues two years from that.

Nicholas Asselta: The reliability is what strikes me as the most important, infrastructure is what NJ is about today, and in the future, has to continue to move forward to make us economically viable.  We know what our situation is, we know what the situation of the US is in the world competitive market, it is the key for us to retain power.  I bleive this project is needed reliability wise, major imporovements, I support this project.

Elizabeth Randall:  We all went to staff over and over.  The need is critical, the category C violations are important, and it is unacceptable to do nothing, it is important to have reliability.

Fiordalis0: Forgot one of his extended family (moi) in the back.

Board: Unanimous vote.

(BARF - how disgusting can it get)

Remember the hook that won’t go away (even though El did):

What’s the word?  TINKLENBERG!

It’s Bachmann-McCarthy Overdrive!

That was then, and this is now… Now Paul Hipp’s released “We’re #37″ and it’s shot way up, making the rounds on the DFL lists:

So do tell — what’s the tie to MN that got him interested in that obscure, awful race in the “Land of Ventura and Franken?” 

This is one of those things that’s been bugging me for a long time, and I’m finally getting around to looking it up.  There are a few twists and turns, and this is a long post, with a lot of links and a lot of audio listening for you to dig in if you’re interested.  If you’re a landowner, you sure better be!  If you’re a landowner affected by utility infrastructure, this is required reading and listening!

Here we go!

History of Minn. Stat. 117.189

Here’s the statute (the specific statutory cites below are linked):

117.189 PUBLIC SERVICE CORPORATION EXCEPTIONS.

Sections 117.031; 117.036; 117.055, subdivision 2, paragraph (b); 117.186; 117.187; 117.188; and 117.52, subdivisions 1a and 4, do not apply to public service corporations. For purposes of an award of appraisal fees under section 117.085, the fees awarded may not exceed $500 for all types of property.
History:

2006 c 214 s 14

Short version - this bill was a bipartisan sell-out that exempted CapX 2020 and any other public service corporation project from eminent domain that every other entity must comply with.  Why on earth would they do this… or rather, what innocent explaination is there for this 117.189 section of the bill?

So far that I’ve heard (only ~6 hours thus far), Sen. Scott Dibble is the only one asking “Why exempt public service corporations?”

The only Senators who voted against this were:

Anderson, Cohen, Dibble, Hottinger, Marko, Moua, Pappas, Ranum, Skoglund

The only Reps who voted against this were:

Davnie, Ellison, Goodwin, Hausman, Hornstein, Huntley, Johnson, S., Kahn, Lanning, Lenczewski, Mahoney, Mariani, Mullery, Paymar, Thao, Wagenius, Walker

Please take a few minutes and send them a thank you note!  Here’s a link to their emails:

House Members

Senate Members

*****************************************************

First, some more history, going back to my all time favorite bill:

2005 TRANSMISSION OMNIBUS BILL FROM HELL

Remember, this was the bill that grew from the deal the enviros did in 2003, incorporating the material terms of that deal into the 2005 Omnibus bill.

ME3, MCEA, Waltons, NAWO -TRANSLink deal

And… why… look, there’s language in the 2005 Transmission Omnibus Bill from Hell mandating an “Eminent Domain Landowner Compensation — Landowner Payments Working Group!”

55.35                             ARTICLE 1155.36               EMINENT DOMAIN LANDOWNER COMPENSATION56.1      Section. 1.  [LANDOWNER PAYMENTS WORKING GROUP.]56.2      Subdivision 1.  [MEMBERSHIP.] By June 15, 2005, the56.3   Legislative Electric Energy Task Force shall convene a landowner56.4   payments working group consisting of up to 12 members, including56.5   representatives from each of the following groups:56.6   transmission-owning investor-owned utilities, electric56.7   cooperatives, municipal power agencies, Farm Bureau, Farmers56.8   Union, county commissioners, real estate appraisers and others56.9   with an interest and expertise in landowner rights and the56.10  market value of rural property.56.11     Subd. 2.  [APPOINTMENT.] The chairs of the Legislative56.12  Electric Energy Task Force and the chairs of the senate and56.13  house committees with primary jurisdiction over energy policy56.14  shall jointly appoint the working group members.56.15     Subd. 3.  [CHARGE.] (a) The landowner payments working56.16  group shall research alternative methods of remunerating56.17  landowners on whose land high voltage transmission lines have56.18  been constructed.56.19     (b) In developing its recommendations, the working group56.20  shall:56.21     (1) examine different methods of landowner payments that56.22  operate in other states and countries;56.23     (2) consider innovative alternatives to lump-sum payments56.24  that extend payments over the life of the transmission line and56.25  that run with the land if the land is conveyed to another owner;56.26     (3) consider alternative ways of structuring payments that56.27  are equitable to landowners and utilities.56.28     Subd. 4.  [EXPENSES.] Members of the working group shall be56.29  reimbursed for expenses as provided in Minnesota Statutes,56.30  section 15.059, subdivision 6.  Expenses of the landowner56.31  payments working group shall not exceed $10,000 without the56.32  approval of the chairs of the Legislative Electric Energy Task56.33  Force.56.34     Subd. 5.  [REPORT.] The landowner payments working group56.35  shall present its findings and recommendations, including56.36  legislative recommendations and model legislation, if any, in a57.1   report to the Legislative Electric Energy Task Force by January57.2   15, 2006.

Now, let’s take a look at who was on that Committee:

REPRESENTATIVE MEMBERS

1. Jim Musso (Xcel Energy) representing transmission owning investor-owned utilities
2. Bob Ambrose (Great River Energy) representing electric cooperatives
3. Mrg Simon (Missouri River Energy) representing municipal power agencies
4. Chris Radatz-representing the Minnesota Farm Bureau
5. Tim Henning (farmer) representing the Minnesota Farmers Union
6. Jack Keers (Pipestone County Commissioner) representing county commissioners
7. Robin Nesburg (Rural Appraisal Services) representing real estate appraisers

AT LARGE MEMBERS

8. Beth Soholt (Wind on the Wires)
9. John Nauerth III (farmer)
10. George Crocker (North American Water Office)
11. Bob Cupit (Public Utilities Commission)
12. Bill Blazar (Minnesota Chamber of Commerce)

Here’s the report of the Work Group:

LANDOWNERS’ PAYMENTS WORKING GROUP

REPORT TO THE LEGISLATIVE ELECTRIC ENERGY TASK FORCE  (LEETF)

Laws 2005, chapter 97, article 11, required the Legislative Electric Energy Task Force (LEETF) to create a landowners’ payments working group to study alternative methods of remunerating landowners on whose land high-voltage transmission lines have been constructed.

The group was created, met twice, and this is a report of its findings and recommendations.

LANDOWNER PAYMENTS GROUP FINDINGS

1.  Farm owners in southwestern Minnesota want compensation for high-voltage transmission line easements to be paid annually as a percentage of the current value of the land so that as land values rise or drop, the payments rise or drop accordingly.

2.  Easement acquiring utilities are not in favor of the proposal described in item #1 and do not want to fundamentally change the current method of payment for easements, which consists of a onetime payment based on a percentage value of the land over which the easement is acquired.

3.  The Legislature has the authority to mandate the payment system described in item #1.

4.  There are no jurisdictions that have the payment system described in item #1.

5.  The payment system described in item #1 would be more expensive than the current payment system, assuming the percentages proposed by the landowners with attendant upward pressure on rates.

6.  There is a social value to having a harmonious, nonadversarial process to acquire high-voltage transmission line easements that has an economic value that is hard to quantify.

7.  There is a sense that the process for negotiating an easement and/or contesting it by a landowner is too expensive and complicated and it may be helpful to search for legislative ways to ensure that all similarly situated landowners receive the same just compensation without being intimidated by the process or forced to great expense by the process.

8.  While this group was formed due to farm landowner concerns, the scope of the charge extends to all landowners.  Guidance from the task force is necessary as to the scope of the charge because the scale of the issue is altered if any easement over any land is the subject of the discussion.

9.  While the direct parties in interest–the landowners and utilities–are stalemated, the current push to acquire easements for new lines makes the issue one that should have a firm handle kept on it.

RECOMMENDATIONS

1.  If further work is to be done on this topic, the task force should provide the guidance described under finding #8.

2.  If the task force wants to continue work on this topic and wants more public input, it should consider utilizing the same persons who are on the current study group.

3.  The task force may wish to consider whether there are flaws in the current easement acquisition process related to its expense to landowners to contest and perceived intimidating qualities.

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Let’s look at the eminent domain bills the following session, Senate bill, SF 2750 and the House bill, HF 2846.

SF 2750

Senate Authors, none added after introduction:    Bakk ; Kiscaden ; Bachmann ; Chaudhary ; Kubly

Bill as introduced, had the Public Service Corporation exemption AND the appraisal fee limitation:

12.8        Sec. 14. [117.189] PUBLIC SERVICE CORPORATION EXCEPTIONS.
12.9    Sections 117.031; 117.036; 117.055, subdivision 2, paragraph (b); 117.186; 117.187;
12.10   117.188; and 117.52, subdivisions 1a and 4, do not apply to public service corporations.
12.11   For purposes of an award of appraisal fees under section 117.085, the fees awarded may
12.12   not exceed $500 for all types of property.

On the Senate side, there are some interesting statements in the first Committee hearing, Judiciary, discussion about limiting who can speak at county meetings about eminent domain (!!!), limitations of attorneys’ fees… and there’s a discussion that I’m trying to transcribe … will post soon…

Senate Judiciary - March 9, 2006 - PART I

Senate Judiciary - March 9, 2006 - PART II

Senate State and Local Government Operations - March 13, 2006 - Part I

Senate State and Local Government Operations - March 13, 2006 - Part II

Here’s Sen. Dibble questioning, in State and Local Government Operations - March 13, 2006 Part I (linked):

MARCH 13, 2009

Senate State and Local Operations Committee

Sen. Dibble: I guess I have a larger policy question, why we think that utilities should be exempted from the provisions of this bill when we think that eminent domain is such a problem that we need to address.

Chair: We’ll ask Senator Bakk to address this question.

Sen. Bakk:    I think  You can have that question, as far as this amendment is concerned, it wouldn’t change anything in the bill other than just referencing the statutes, that statutory definition of utility. So, so, if you don’t like what’s in the bill, that’s fine, but this amendment doesn’t change anything.

Dibble:  I think it is a subject of interest that we should have as a policy committee, and as a larger public discussion.

Sen. Bakk:  Well, Madam Chair, Mike Ahern was, this question was asked at the judiciary committee and Mike Ahern came to the table and gave a pretty good explanation to the Committee of why utilities aren’t included.  This isn’t new that utilities are not included, this bill has been floating around, I think this is its third session, they’ve always not been included for a number of reasons.  One, they’re regulated by the Public Utilities Commission already.  And there is the Energy Task Force that’s looking at all of these energy issues, so, there are also provisions in law where, for instance, when they’re siting transmission lines, that there is a special provision in law, that if you’re gonna go over a farm, in addition to buying the easement for the powerline, the property owner has the right to ask that the entire farm be bought, I believe it’s called the Buy the Farm provision, but there are a number provisions in law, and maybe a little later when Mr. Ahern gets here, oh, he is here, Madam Chair, if you’d like, maybe he can respond to Senator Dibble’s question.

Chair: Mr. Ahern?

Mike Ahern: Yes, good morning Madam Chair, members of the committee, I’m Michael Ahern, and I represent a variety of utilities, pipeline, telecommunications
The question is the reason for exclusion of public service corporations. … I got in a little late.  Senator Bakk did touch on a number of the reasons. The reasons are, frankly, that the, substantively, most of the law governing public service corporations are dealt with in other sections of the statute, for example, Chapter 116C, governs powerlines, and not only does it deal with the grants of eminent domain, it sets up quite elaborate processes for, which this legislation addresses, quite elaborate public input processes, such as sets up EQB staff as facilitator for how and why a pipeline or powerline gets established.  There are things, again, that also conflict, such as the going concern provision, which is a major issue in this bill.  Public utilities are subject to language that entitles a farmer or business owner to take the entire farm or business at their option, since 1977.  I could go on and there are a lot of distinctions between, and reasons why at least traditionally, the legislature has dealt with utilities separately.

Chair:  Any other questions?  Sen. Dibble?

Sen. Dibble:  Thank you.   I’m not prepared yet to have a huge debate on this, but I think the same arguments could be made for local governments that are subject to elaborate processes in state law, and we can certainly look to examples that, driving motive and intent behind this statute, similarly we see places where people complain bitterly about abuses at the hands of public utilities, you can drive down Hwy. 52 and stills see the signs in people’s front yards about how they felt they were treated when a large powerline was being rammed along that corridor.  So it’s interesting that we’re making a special exception essentially for private entities that have been identified as culprits of abuse of eminent domain authority.

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HF 2846

Introduced with these authors: House Authors    Johnson, J. ; Thissen ; Smith ; Davids ; Dill ; Paulsen
By the end, here is who signed on to this:
House Authors        Johnson, J. ; Thissen ; Smith ; Davids ; Dill ; Paulsen ; Penas ; Moe ; Garofalo ; Nelson, P. ; Wardlow ; Magnus ; Cybart ; Olson ; Westrom ; Erickson ; Klinzing ; Charron

As introduced it had the Public Service Corporation exemption:

5.25         Sec. 9. [117.189] PUBLIC SERVICE CORPORATION EXCEPTION.
5.26     Sections 117.031, 117.186, 117.187, and 117.188 do not apply to public service
5.27     corporations.

*** The sentence about appraisals did not appear in it as introduced or in the 5 engrossments online.

Here’s the House Research explanation of that paragraph:

12      Public service corporation exception. Provides that the provisions for attorneys’ fees (section 4 ), compensation for loss of going concern (section 8 ), minimum compensation (section 10 ), and limitations (section 11 ), do not apply to public service corporations.

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Conference Committee

04/12/2006      Senate conferees       Bakk, Murphy, Betzold, Higgins, Ortman
04/12/2006      House conferees       Johnson, J.; Abrams; Davids; Anderson, B.; Thissen

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Here are the reports of House and Senate adoption of Conference Committee Report, including votes:

Senate Adopted Conference Committee Report, bill repassed

House Adopted Conference Committee Report, bill repassed

And that’s a good thing, because their SEC filings show that demand is down from 2007-2007, as it is everywhere.  It’s looking like utilities are unable to sustain their drive for long distance market dispatch, and if this trend is the reality, and their stock continues to be in the toilet, they can’t build their transmission dream — this is good news!  Chalk up one for the economic depression!

All of us participating in the Delmarva Power IRP have to make sure the PSC knows about the tanked market, after all, they’re addressing how Delmarva Power will fulfill its demand, and for sure we don’t need new generation (need different generation, to be sure) or any transmission.  As to needing different generation, it’s particularly important at this time to attach a requirement to SHUT DOWN FOSSIL FUEL to any RES.  Without that, they’ll just sell it elsewhere, and we won’t gain anything.

Here’s one example of how the economy can have an impact on electric infrastructure and market. Hot off the press — PEPCO may not be selling stock to finance projects, and the biggest project they’re looking at is the much-detested Mid-Atlantic Power Pathway, electric transmission known as the MAPP line.

And remember, not that long ago, PJM cancelled the part from Indian River to Salem, NJ, at the Salem & Hope Creek nuclear plants.  Here’s what it looks like now, supposedly:

HA!  THEIR MAPS DON’T EVEN REFLECT THAT CHANGE!!

MAPP - PEPCO-PJM Press Release May 19, 2009

The Press Release says:

According to Gausman, PJM has also reviewed the need for the section of the line that would run from Delmarva Power’s Indian River substation near Millsboro, Del., to Salem, N.J., and has decided to move this portion of the line into its “continuing study” category. This means that the reconfigured MAPP line will now extend approximately 150 miles from northern Virginia, across southern Maryland and the Chesapeake Bay, and terminate at Indian River. The change would likely reduce the total project cost from $1.4 billion to $1.2 billion.

(Emphasis added).  Hee hee hee hee hee — “… terminate at Indian River.”  No Indian River to Salem, NJ section.  Cutting a section out is just one more step to tanking the project.  What’s the point of a radial line to Indian River?  Some would say that “hey, there’s transmission there, it’s not a radial line,” but there’s NOT transmission there to facilitate the bulk power transfers coming in on a 500kV line.  The system there is comparatively VERY low voltage.  Others would note that the Indian River plant has two units shutting down, but folks, they’re the smallest units, totalling about 150MW or so, that will not make a big electrical difference, though it has a significant impact on our ability to breathe the air in southern Delaware!  Taking the small Indian River units most probably means that Bluewater Wind should have no problem interconnecting — lets see the interconnection studies with Indian River units off line!

Anyway, here’s the poop — and look at the PEPCO price: $13.39, about half of what it was a year ago ($26.25) (for month, YTD, year and 5 year, go HERE) If you look at the 5 year trend, it’s the same reflected in Xcel’s demand — everything goes south in 2007.  THIS IS NOT A “BLIP” FROM LAST FALL’S CRASH, this is a 2 year, nearly 3 year trend. (For Xcel month, YTD, year and 5 year, go HERE).

From PEPCO’s 2008 SEC 10-K, here’s their 2007-2008 energy delivery numbers (DOWN), regulated and default:

Here’s PEPCO 2007-7008 SEC 10-K info, 2006-6007, regulated and default - these numbers should be the same for the same years, and they’re not, what does that mean:

Here’s the PEPCO 2006 SEC 10-K info, their 2005-2006 energy delivery numbers (DOWN), first regulated sales:

CLICK HERE - PEPCO’s SEC 10-K filings for lots of years to do your own looking!

From Bloomberg:

Pepco CFO May Postpone Investment to Avoid Share Sale

By Katarzyna Klimasinska

June 26 (Bloomberg) — Pepco Holdings Inc.’s new chief financial officer, Anthony Kamerick, is considering postponing some investments beyond 2010 to prevent selling shares below book value.

Pepco, the owner of Washington’s electric utility, currently plans about $1 billion in total capital projects for 2010, mainly on the Mid-Atlantic Power Pathway transmission line and smart grid, Kamerick said. The completion of the transmission line, also known as MAPP, has already been delayed by a year.

“We have to balance, obviously, the need to make sure our system is safe and reliable for the customers,” Kamerick said in a telephone interview yesterday from Washington, where the company is based. “It’s a delicate balance.”

MAPP is scheduled to start service in June 2014 and will run from northern Virginia, across southern Maryland and Chesapeake Bay, to Indian River, Delaware.

Smart grids will be able to detect power failures and automatically isolate them, increasing the reliability of the power system, according to Pepco.

Pepco sold shares at $16.50 each in November and has had a 25 percent decline so far this year. The current price represents 72 percent of book value, or assets minus liabilities, per share, according to a Bloomberg calculation from company data.

Pepco fell 3 cents to $13.39 in composite trading on the New York Stock Exchange.

Kamerick replaced Paul Barry, who resigned, on June 12. He has worked for Pepco and its predecessor, Potomac Electric Power Co., since 1970, most recently as chief regulatory officer.