Well, Jeremy Kalin is not happy with me, but I don’t see that amendments to the Tax Omnibus bill does it.   He says that all the local governments are covered in a Tax Omnibus amendment (Tax Omnibus is HF 2323, HERE) and that they must have a Host Fee Agreement.  But what I see is one amendment that is GOOD language I’ve been passing out since 2005, except for one serious problem — where I had “Host Fee Agreement” it says “site agreement.”  Color me a lawyer, but that’s not the same thing.  Here’s that amendment, 272.0275 below.  If it said “Host Fee Agreement” or “Agreement for payment in lieu of taxes” I’d be over the moon with joy, but this could mean anything and does not address payment of taxes.   What do you think?

103.6 Sec. 6. [272.0275] PERSONAL PROPERTY USED TO GENERATE
103.7 ELECTRICITY; EXEMPTION.
103.8 Subdivision 1. New plant construction after January 1, 2010. For a new
103.9 generating plant built and placed in service after January 1, 2010, its personal property
103.10 used to generate electric power is exempt if an exemption of generation personal property
103.11 form, with an attached siting agreement, is filed with the Department of Revenue. The
103.12 form must be signed by the utility, and the county and the city or town where the facility is
103.13 proposed to be located.
103.14 Subd. 2. Definition; applicability. For purposes of this section, “personal property”
103.15 means tools, implements, and machinery of the generating plant. The exemption under this
103.16 section does not apply to transformers, transmission lines, distribution lines, or any other
103.17 tools, implements, and machinery that are part of an electric substation, wherever located.
103.18 EFFECTIVE DATE.This section is effective the day following final enactment.

The language they put in that’s LS Power specific does offer protections, but given there are three lines into the Chisago sub, and a new one just announced going east into Wisconsin, I don’t see that any limitation of transmission routing would be effective.

Here’s the LS Power specific language, one sentence is now two (para.5 & 6), and there’s an added paragraph that it must be in a county with an essential services and transmission services ordinance (geeee, I wonder who helped write that?).  A signed “development agreement” does not address personal property taxes.  So I’m not satisfied (I know, always the bitch, but there it is, this isn’t enough, doesn’t have the right language).

1.29 Sec. 5. Minnesota Statutes 2008, section 272.02, is amended by adding a subdivision
101.30to read:
101.31 Subd. 92. Electric generation facility; personal property. (a) Notwithstanding
101.32subdivision 9, clause (a), attached machinery and other personal property that is part of
102.1an electric generation facility that exceeds 150 megawatts of installed capacity, does
102.2not exceed 780 megawatts of summer capacity, and that meets the requirements of this
102.3subdivision, is exempt. At the start of construction, the facility must:
102.4(1) be designed to utilize natural gas as a primary fuel;
102.5(2) be owned by an entity other than a public utility as defined in section 216B.02,
102.6subdivision 4;
102.7(3) be located within five miles of two or more interstate natural gas pipelines;
102.8(4) be located within one mile of an existing electrical transmission substation with
102.9operating alternating current voltages of 115 kV, 345 kV, and 500 kV;
102.10(5) be designed to provide electrical capacity, energy, and ancillary services;
102.11(6) have satisfied all of the requirements under section 216B.243;
102.12(7) have executed an interconnection agreement with the Midwest Independent
102.13System Operator that does not require the acquisition of more than one mile of new
102.14electric transmission right-of-way within the county where the facility is located, and does
102.15not provide for any other new routes or corridors for future electric transmission lines in
102.16the county where the facility is located;
102.17(8) be located in a county with an essential services and transmission services
102.18ordinance;
102.19(9) have signed a development agreement with the county board in the county in
102.20which the facility is located. The development agreement must be adopted by a two-thirds
102.21vote of the county board, and must contain provisions ensuring that:
102.22(i) the facility is designed to use effluent from a wastewater treatment facility as its
102.23preferred water source and will not seek an exemption from legislative approval under
102.24section 103G.265, subdivision 3, paragraph (b);
102.25(ii) all processed wastewater discharge will be colocated with the outfall of a
102.26wastewater treatment facility; and
102.27(iii) penalties will be paid to the county for harm to any aquifer or surface water as a
102.28result of construction or operation and maintenance of the facility; and
102.29(10) have signed a development agreement with the township board in the township
102.30in which the facility is located containing provisions ensuring that noise and visual
102.31impacts of the facility are fully mitigated. The development agreement must be adopted
102.32by a two-thirds vote of the township board.
102.33(b) Construction of the facility must begin after March 1, 2010, and before March 1,
102.342014. Property eligible for this exemption does not include electric transmission lines and
102.35interconnections or gas pipelines and interconnections appurtenant to the facility.
103.1(c) The exemption granted under this subdivision is void if the Public Utilities
103.2Commission issues a route permit for an electric transmission line connected to the
103.3electric substation nearest the exempt facility on a route where no electric transmission
103.4line currently exists.
103.5EFFECTIVE DATE.This section is effective the day following final enactment.

===================================

Why do elected officials do things like this?  Who are they representing?  Why would they give away a source of much needed local revenue for local governments?  Why would they do that without any kicker for the affected local governments making the sacrifice of hosting a HUGE electric generating facility?  Why would they put a for-profit independent power producer above their constituents?  Why would they let a corporation off the hook, at the same time that millions of taxpayers are lined up at the mailbox?  What makes this corporation special?

LOCAL GOVERNMENT APPROVAL???

H-O-S-T   F-E-E   A-G-R-E-E-M-E-N-T ???

Is it that difficult?

Did they bother to look at Minn. Stat. 272.02 to see how exemptions are done?

Yes, there’s a new power plant planned for Chisago County, and

Rep. Jeremy Kalin and Sen. Rick Olseen, joined by  Rep. Rob Eastlund and Rep. Bob Dettmer, have introduced a bill to exempt LS Power’s 855MW gas plant from utility personal property taxes.  And by this bill, they’re screwing their constituents.  How?  There’s no requirement in the bill that the local governments (Chisago County, Lent Township and the school district) approve this exemption AND there’s no requirement in the bill that there be a Host Fee Agreement.

Here’s the bill, SF 1671 and HF 2317:

As someone said today, “They’re telling us that all the plants get exemptions.”  To which I said, “Yes, and are they telling you that most also require that local governments approve it, and that they get a Host Fee Agreement?”  And of course, the answer was: NO!  Local governments need to know that there is an option that they’re not being told about, and an option that would provide serious financial benefits at a time when local governments are really hurting.

Where to go for guidance?  Look no further than language found in other exemptions, in Minn. Stat. 272.02:

Jeremy, Rick, add this language, quick before you take away revenue that they sorely need:

To qualify for an exemption under this subdivision, the owner of the electric generation facility must have an agreement with the host county, township or city, and school district, for payment in lieu of personal property taxes to the host county, township or city, and school district.

Or from the Cannon Falls Invenergy gas plant:

To qualify under this subdivision, an agreement must be negotiated between the municipal power agency and the host city, for a payment in lieu of property taxes to the host city.

This is something we learned in Goodhue County, dealing with the Prairie Island nuclear generating plant, these are for-profit independent power producers, and they have to pay their fair share.  If they’re exempted, there must be a requirement that they pay their fair share to the county, township and school district to compensate them for hosting the plant.

Here’s a memo from Goodhue County’s former Auditor, Brad Johnson, who is now the head financial honch at the School District, still hot on the trail of that utility personal property tax:

Brad Johnson letter – Invenergy Peaking Plant, Goodhue County

Here’s a Resolution from Scott County showing how to do it, how to stand up on your hinders when faced with a corporation with its slimy hand out, or rather, its slimy hand in your pants pocket (hand in your pants, perhaps?):

Scott County Xcel Resolution

OK, Chisago County, Lent Township, and the school district, it’s YOUR turn.  Rep. Kalin and Sen. Olseen, it’s YOUR turn.  Step up to the plate, stand up for your constituents!

Meanwhile, I’ll keep looking for those Goodhue County and Scott County Host Fee Agreements.

HEY MOES, I’D SIGNED UP FOR THE LIST AND AS OF TODAY, 4/28, HAVE NOT RECEIVED NOTICE OF THIS PROJECT APPLICATION THAT YOU’VE POSTED ON APRIL 24!  WHAT GIVES?

Here’s the state’s routing webpage – HERE’S THE LINK FOR APPLICATION AND TO SIGN UP FOR FURTHER INFORMATION:

MOES page for Hiawatha Project

Now take a look at this map for the FULL plan, well, at least a larger picture, than what they’re disclosing for the Hiawatha Project.  Here’s the map, and note carefully, from B-C is what they’re calling the Hiawatha Project.  tHIS SECTION IS FOR XCEL’s PAM RASMUSSEN, WHO HATES IT WHEN I PUBLISH THIS MAP, SO I’VE GOT TO BE VERY SPECIFIC WHERE THIS INFORMATION IS COMING FROM AND WHAT CONSTITUTES THE “HIAWATHA PROJECT” and as far as Xcel is disclosing, the applied for Hiawatha Project is “B-C” of this map.  Look below to see where the rest comes from!

Here’s the NM-SPG meeting minutes reporting on the A-B link, the 345kV line from a new substation on Hwy 280 (A) to the new Hiawatha Project substation (B).

Minutes – NM-SPG meeting July 24, 2008

Then there’s “Hiawatha Project” from B-C.

For C, D and E, see the “Minnesota Transmission Owners” 2007 Biennial Transmission Plan, where they list these extension alternatives:

Alternatives. Initial investigation and scoping discussions have led to the development of three potential alternatives:

(1) Construct a new 115 kV line from a new Hiawatha Substation along Highway 55 to a new Oakland Substation near Lake Street and I-35W. The line would then continue south to a new Highway 62 Substation near Highway 62 and Nicollet Avenue. The line would continue to its final termination at a new Penn Lake Substation near I-494 and Sheridan Avenue.

(2) Similar to Option 1, but the final 115 kV line would stretch from Highway 62 Substation to the existing Wilson Substation near I-494 and Wentworth Avenue.

(3) Construct two smaller 115 kV loops with new 115 kV lines running from Hiawatha to Oakland to Elliot Park and a second loop from Penn Lake to Highway 62 to Wilson.

Section 7 of Biennial Transmission Plan, go to Section 7.5 and all the way down to 3rd and 4th to last pages:

CLICK HERE FOR SECTION 7 OF TRANSMISSION PLAN

Another point to note:  the Hiawatha Project is WAY over spec’d.  This is a double circuited ACSS 795kCmil conductor — see what that means and compare it with the claimed 100MW need in the FUTURE!

Ex. 35 – conductors – from SW MN 345kV docket

And now, for today’s STrib article:

Will burying power lines in Midtown bury city, users with $12.6 million bill?

Xcel Energy prefers to route transmission lines along the Midtown Greenway; public officials question the fivefold cost increase of putting them underground.

By STEVE BRANDT, Star Tribune

Last update: April 27, 2009 – 11:27 PM

If Xcel wanted buried power lines along this corridor, they should have expressed that when the greenway project was in the planning … read more stages. They could have accomplished this with a substantially reduced cost. Poor foresight on their part is not the responsibility of the city.

Xcel Energy has told state regulators that it wants its controversial twin high-voltage power lines through the Midtown area of Lake Street in Minneapolis to run along the rim of the Midtown Greenway.

But the utility told the Public Utility Commission that the line could be run either overhead for $3 million or underground for $15.6 million. If it’s the latter, either the city or electrical users in Minneapolis should pay the extra $12.6 million cost, Xcel said.

Some city and Hennepin County elected officials said the proposal represents an opportunity for state regulators to consider a paradigm shift in assessing those costs and whether the utility should bear the expense of installing a new underground line in an urban area. That’s because the lines would penetrate a dense urban area, unlike more typical routing through rural or developing suburban areas, said Minneapolis City Council Member Gary Schiff.

Read the rest of this entry »

It’s reflected in the Energy Information Administration’s Electric Power Monthly’s most recent report:

Electric Power Monthly April 2009

It’s not just Xcel, we knew that, but here’s a report on American Electric Power, it’s down down down:

UPDATE: American Electric Earnings Down

Amid Falling Demand

(Updates throughout with comments from American Electric chief executive and analyst, additional background.)

By Mark Peters
Of DOW JONES NEWSWIRES

NEW YORK (Dow Jones)–American Electric Power Co. (AEP) reported a 37% drop in first-quarter net profit as an insurance settlement and higher rates couldn’t offset declines in electricity demand.

American Electric, one of the nation’s biggest electricity generators and providers with more than 5 million customers in 11 states, has the largest U.S. transmission network. That makes the company, centered in the Midwest, a front-line victim of falling electricity use that began late last year as the country’s economic woes deepened.

The company sees industrial demand falling 15% as paper manufacturers, metal producers and other large customers slow and shut operations. Overall, utility earnings in the first quarter fell 16% on lower sales and higher costs. American Electric also faces an ongoing drop in the sale of power to other utility systems, with profits from excess electricity sales slumping 62%.

The company did benefit from higher rates in several jurisdictions and insurance payments related to a fire at its Cook Nuclear Plant.

American Electric reported net income on Friday of $360 million, or 89 cents a share, compared with $573 million, or $1.43 a share, a year earlier as the company benefited from a prior-year legal gain of 41 cents.

Revenue was flat at $3.5 billion as domestic retail electricity demand fell 6.5%. Wholesale sales tumbled 42%.

The mean estimates of analysts surveyed by Thomson Reuters was for earnings of 81 cents and revenue of $3.77 billion.

The Columbus, Ohio, company reaffirmed its guidance for the year of between $2.75 and $3.05 a share. Last month, American Electric had cut guidance, while recently raising some $1.5 billion through a stock sale that boosted shares outstanding nearly 15%.

“We continue to believe that AEP’s relative discount to the group is unwarranted and remain buyers of the shares,” wrote JPMorgan utilities analyst Andrew Smith in a note to clients Friday.

Shares of American Electric recently traded up 0.5% at $26.28.

Looking Ahead: Economic Rebound, Transmission Growth

American Electric executives told analysts during a meeting in New York City Friday that earnings growth will accelerate with a rebound in the U.S. economy in the near term and as much as $15 billion in possible transmission-line projects further out. The two factors could fuel earnings growth of 4% to 8% instead of the current projection of 2% to 4%, said Mike Morris, chairman and chief executive of American Electric.

During an interview after the meeting, Morris said the struggle in off-system sales is driven by demand declines, and the low price of natural gas is not cutting into sales from American Electric’s coal plants. But the company – which shares a portion of the revenue from sales with customers, unlike deregulated power producers – is seeing power-sales margins shrink amid slumping electricity prices and higher coal costs.

At the same time, Morris said American Electric will look to develop additional renewable energy generation, but only if regulators push for it. He continues to see the possibility of national reliability problems if more fossil fuel generation isn’t built.

Federal policy will be crucial for the transmission projects, with Morris seeing growing support for the federal government – not state commissions – to site projects and set their returns. If these rules change, Morris said there is plenty of capital ready to invest in projects.

As for a federal cap on greenhouse gas emissions, Morris said he doesn’t expect Congress will pass a cap-and-trade system until next year. He said Democrats in Congress still need to build support among their own members, let alone Republicans.

Democratic leaders “are going to have to solve some of these equations,” Morris said.

Rep. Henry Waxman, D-Calif., chairman of the Energy and Commerce Committee, is holding hearings this week on a wide-ranging climate change and energy bill that will likely become the blueprint for congressional and administration policy efforts.

-By Mark Peters, Dow Jones Newswires; 201-938-4604; mark.peters@dowjones.com

(Kevin Kingsbury contributed to this report.)

Remember Xcel isn’t too happy about the City of Red Wing intervening?  See “Xcel not a happy camper” from last month.

Maybe it’s because Red Wing has a stake in this, as host to Xcel’s Prairie Island nuclear generating plant.

Here we see that in Information Requests in the Prairie Island uprate and dry cask docket at the PUC, the City of Red Wing is asking the right questions:

Information Requests 19-29

Here’s a couple that I find extremely amusing, starting with IR-21:

or this one… IR-22:

and IR-23:

and IR-24:

Yes, we are having fun now.

I wonder… will they give the City of Red Wing a copy of EPRI’s “The TN-24P PWR Spent-Fuel Storage Cask: Testing and Analyses” report?  That’s EPRI report NP-5128.  Let’s see the results of that “Three Stooges” INEL unloading attempt where the assembly got stuck half out, half in, and wouldn’t move… HILARIOUS, I’ve never seen such a rip-snortin’ report, hard to read between the lines without busting a gut!

Once more, it’s David Morris, Institute for Local Self Reliance, telling it like it is.  The PUC process is long over do a complete revamping.  It is based on laws and rules that grew out of the 1970s-1980s transmission fights, and gave people a useful and meaningful way to participate in these proceedings.  But that’s gone, gone with the 2001 changes, gone with the 2005 Transmission Omnibus Bill from Hell, and we’re left with just about nothing.  In other states, there’s Intervenor Compensation which allows Intervenors the ability to pay for expert witnesses, there are free transcripts as a matter of course, and there’s encouragement and support of Intervenors, not a drive to push them out of the process that we see here, that we saw in this CapX proceeding, when the ALJ tried to boot out U-CAN; that we saw in the Excelsior Energy docket (scroll down to “Fourth Prehearing Order”).

David Morris: If it’s citizens vs. utilities, utilities win

The PUC has an approval process that stacks the deck against the public.

By DAVID MORRIS

Last update: April 23, 2009 – 6:50 PM

A few days ago, the Minnesota Public Utilities Commission (PUC) approved a massive high-voltage transmission project known as CapX that will cost Minnesotans an amount equal to the projected biennial state budget deficit and four times the total bill to taxpayers for the Twins and Gophers stadiums.

With respect to the stadiums, Minnesotans were able to actively participate in the decisions, both directly and indirectly through elected representatives. Both those in favor and those opposed to using tax dollars to pay for the stadiums engaged in a spirited public debate. The Legislature is currently just as vigorously debating ways it can eliminate the budget deficit.

The PUC process, on the other hand, is much more hostile to citizen participation and influence. Indeed, the deck is stacked against the average citizen. Utilities have a virtually unlimited budget to argue their positions — a budget they raise from their ratepayers. Citizens, on the other hand, must raise their own money, and lots of it, to participate effectively.

The rules under which the PUC operates are established by the Legislature. Utility lobbyists are powerful there. But they’re not all-powerful. Thus, over the years, Minnesotans have been able to enact rules to help level the playing field for citizens. For example, the law requires the PUC to reject an application to build a large power plant or a high-voltage transmission line unless the utility proves it is needed to improve reliability or meet increased demand or achieve renewable-energy goals. As part of the application, the utility is expected to thoroughly and completely explore alternatives to its proposal, including no-build options. The burden of proof on whether a project is needed rests with the utilities.

The PUC, regrettably, has interpreted this rule so as to turn it on its head. At the PUC, the burden of proof rests with those opposed to a new power plant or high-voltage transmission line. It is up to the people whose homes and farms may be seized by utilities if a project is approved to make the case for alternatives. Doing so requires an extremely high level of technical expertise. A serious technical and economic examination of alternatives can cost $100,000 to $200,000 or more.

Even if citizens are able to raise that kind of money, they face other hurdles. To analyze alternatives, they must access data that only utilities possess. In many cases, the utilities call that data proprietary and argue that to make the information public is to give a possible advantage to a competitor. One would think that this would be a hard argument to make. After all, Minnesota utilities have a monopoly on the sale of electricity. Apparently, however, it is not a hard argument to make at the PUC.

A formal proceeding, such as a judicial proceeding, involves the cross-examination of witnesses. In many proceedings, utilities again tax their customers by using ratepayer money to acquire a transcript. One would think that since the transcript is in electronic form, the PUC would post it and make it freely available to the public. Astonishingly, the PUC rules state that court reporters own the transcript! Citizens and other intervenors must pay for their own copies of transcripts, which, for controversial projects, could mean $5,000 to $10,000 per copy.

In the recent CapX transmission case, the PUC went one step further in denying citizens. The need for the transmission lines was based in large part on a projection of significantly increasing demand. That projection was largely made in forecasts completed in 2004. It has already proven to be vastly overstated. Moreover, the current economic collapse is translating into shrinking, not growing, electricity demand. Hundreds of citizens asked the PUC to take this new information into account and keep the proceeding open. The PUC decided the current economic free fall doesn’t make a difference.

Utilities are gearing up to ask the PUC to spend billions more for even higher-voltage transmission lines. These will be built to send electricity from the Dakotas to Chicago and New York while running right through Minnesota. If these lines are approved, Minnesotans will probably pay most of the costs, while receiving little if any benefit.

Imagine if legislators proposed taxing us to build a sports stadium in Chicago. The proposal would be dead on arrival. Citizens have influence and even power in the Legislature. The process and rules at the PUC must be redesigned to allow them similar access and influence over energy decisions.

David Morris is vice president of the Institute for Local Self-Reliance, based in Minneapolis and Washington, D.C.