Please say no to S.F. 1735, a bill that would result in removal of the regulatory protections for rate-payers and the public, and let utilities have the ability to charge us for private costs, and costs that have not been demonstrated to be prudent expenditures.

Little by little, Xcel Energy’s e21 Initiative is slithering into bills before the House and Senate Energy Committees.

Before anyone can vote on these bills, they should read Alfred Kahn’s “The Economics of Regulation,” both Volume 1 and Volume 2.

What’s e21 Initiative?  Here’s what Xcel filed at PUC, docket 14-1055:

Letter & e21 Initiative Report

Tomorrow, S.F. 1735 (see companion HF 1315)and S.F. 1431 are in Committee, and they’re supposed to vote on the Energy Ominous bill.

What’s up with S.F. 1735?  Well, check out this version, with yellow highlighting (and this is NOT all-inclusive):

SF 1735-1_Markup

SF 1735doesn’t have the part about “Competitive Rate for Energy-Intensive Trade-Exposed Electric Utility Customer” part that HF 1315 does, though we’ll see what the mines and Koch Refinery have to say about that when the Energy Ominous bill comes together and everyone has their hand out and foot in the door.

SF 1735 is a problem because… where to start…  the first problem is that it proposes, as Xcel does in e21, a BUSINESS PLAN which “replaces a general rate case filing,” REPLACES!  The standard it must meet is that it result in “just and reasonable rates,” and there’s nothing about “prudent” and there’s nothing about being in the public interest.  DOH!

And dig how it would be approved — they SHALL approve:

Stakeholder group… right, we know who that is, and we sure know who that isn’t!  And that’s the e21 Initiative mantra, stakeholders, and from who was included in e21, we know who would be deemed a stakeholder — all those who have done deals with Xcel Energy!  Oh, and DOH, they want approvals at the PUC based on “Settlement Agreements.”  Right, like the one that opened the door and welcomed CapX 2020 transmission, and that horriffic “it’s a deal, it’s a package deal, and it’s a good deal” of the 2005 Ch 97 – Transmission Omnibus Bill from Hell with Xcel transmission perks, CWIP and C-BED :

SETTLEMENT AGREEMENT 02-2152 ME3 Waltons MCEA NAWO

PUC decision based on “stakeholders” and deals with Xcel Energy?  No, I think not.

Per the House hearing on HF 341 (see also S.F. 237), Minnesota should now be an electricity exporter, which is one between-the-lines goal of e21 Initiative, the others being ability to build without demonstrating need, to use ratepayer money for market development, to eliminate contested cases and use “Settlement Agreements,” which they’ve done expertly in the past.  Exporting for profit is doable, now that we have the transmission in place.  It would help Xcel Energy to just get rid of that Certificate of Need requirement, which HF 341 would do for natural gas plants of any size, i.e., 800 MW (like the LS Power Sunrise Station proposed for Chisago County, Lent Township) if it’s for sale into the MISO market.  As you know, also up for consideration is SF 306 & 536, HF 338, which would lift the nuclear prohibition and allow a CoN for Monticello or anywhere.  There’s no need, instead there’s excess generation, but that electricity could also go into the market, and with Construction Work in Progress, Minn. Stat. 216B.16, Subd. 6a, we ratepayers could pay for that private market activity.  NO.  NO.  NO.

NO!

The situation we’re in is NOT new to Xcel or any other utility.

• Distribution system is utility responsibility as franchise holder and regulated utility, but they’ve neglected the distribution system over decades.  They have chosen not to upgrade and not to bring it into the 21st Century.  That neglect is not ours to correct.  Xcel has twice tried to invade and inflict communities with transmission when they had identified a distribution system deficit — Hiawatha and Hollydale.  NO!

• Transmission deficit a decade ago was caused by putting so many IPP gas plants on line without requiring transmission upgrades.  This is reflected in the TLTG tables for the SW MN 345 kV line, PUC Docket 01-1958.  It also became an issue when Big Stone II was proposed because at that time it was “cause cost pays” and they hadn’t been charging gas plants but were going to charge BSII for interconnection costs, and BSII objected (see “standstill agreement” and withdrawal of Bill Gates’ Cascade Investment from that project at Legalectric: Bill Gates & Otter Tail at the PUC Tuesday…).  That transmission CoN was denied, approved, and plant was withdrawn so non-issue.  Then utilities and paid-for-NGOs went to MISO and FERC to find a way to spread the payment of transmission construction costs around, which they did.  The ones building it are not necessarily the ones paying for it, and it’s us ratepayers paying for transmission construction all around the country (See Schedule 26A, MISO Tariff, also Tariff MM) and the PUC has yet to address whether that should be paid for by us — but wait, it’s FERC rates, so the PUC has no say… well, that MISO MVP bill hasn’t come before the PUC yet, and that’s the last thing Xcel wants.  That capital cost is for private purpose transmission (market transactions) and as such, it is not ours to pay.

• Generation changed decades ago too, moving away from utility construction and ownership, collect revenue for that, and now it’s morphed to an IPP (Independent Power Producer) mode where a third party takes on risk and cost of construction and sells power to utilities.  It’s been that way for decades.  Xcel has done some coal plant update, and nuclear update/uprate (grossly over budget by factor of 2+), but no new plants.  This shift from that regulated revenue stream was a business choice of utilities, but now they’re looking to make up that revenue that they don’t get for building the plants.  That business choice is not ours to “fix.”

• Rates — Utilities want out of rate cases!  Of course they’d want that, Xcel has lost ground in their rate demands the last few rounds.  A Business Plan is not adequate, however, they need to prove up their expenditures if they expect us to pay them, and we should not, must not, be assessed for their market private purpose expenses, like transmission for export.  The bills for CapX 2020 ($2 billion) and for MISO MVP projects ($5.2 billion across Midwest) are the types of large expenses that they do not want to have to justify.  Not wanting to go through a rate case is no reason for us to let go of that protective review, or to let them charge us for things that are not public purpose expenditures necessitated by their obligation to provide universal service under their franchise.

• Deregulation — this “e21 Initiative” looks and feels like the 2000 deregulation push to me, particularly with all the support from “environmental” and “advocacy” organizations, well funded, and funded I believe by Xcel and cronies (and that information should be made public).  Utilities wanted deregulation (back when Enron and Xcel’s NRG was making 300% profits screwing over California in an orchestrated rate skyrocket) and at that time, Xcel had all the “environmental” organizations behind it as “inevitable restructuring.”  Everyone was jumping on the deregulation bandwagon, all bozos on that bus, and that’s how this e21 feels.  Lots of people agreeing without knowing what they’re talking about, without understanding the consequences.  Back in that earlier deregulation push, the utilities also had everyone on board to pay them “stranded costs” for their large generating plants. Thankfully the A.G. stood up to that pointing out that deregulation is a disaster where ever it goes, and that the claimed “stranded costs” were really stranded assets, and if anyone owed anyone money, the utilities owed us for their assets that were paid for and fully depreciated.  Read Corneli on Stranded Assets.

This is not new to utilities.  It is not our job to correct their business plan errors, to pay for their neglect, or to finance their market activities.

More on this soon… but the short version, NO to SF 1735.  NO to SF 1431.

NO! NO! NO!

It’s not in the public interest.

And by the way, the “WE NEED MORE” histrionic mantra that you year year after year is false.  Excess generation?  Yes — here’s the peak demand that Xcel Energy has reported on its SEC 10-K filings since 1995:

Also from the 2014 SEC 10-K link:

The question to ask is “What’s stopping utilities?”  And it’s not our regulatory system.  It’s that utilities are looking for additional ways to transfer their costs to ratepayers without regulatory review.

An old PJM map, some transmission built since, some plans abandoned, like MAPP!

Today PJM released its “State of the Market” report, and this is something that everyone in the MISO region should read because afterall, that’s their “Target Market.”

2014 State of the Market Report for PJM		Posting Date
Volume I Volume I (2MB PDF) contains the introduction.Volume II Volume II (14MB PDF) contains detailed analysis and results.

I LOVE IT WHEN THIS HAPPENS — PJM PEAK DEMAND DOWN 10.1%

And here’s the MISO LMP map so you can see just what the electrical market is doing in real time:

MISO LMP MAP

New Jersey gets a bad rap, people here in the Midwest have no clue.  People think of New Jersey, and they think of Newark (which has its good points, I really enjoyed officing there during the Susquehanna-Roseland hearing) which is a mess, vacant buildings all over the place, TALL vacant buildings…

And that’s where the New Jersey Board of Public Utilities is, rolling a cart full of boxes back and forth from the R.Treat (right) to the BPU (big black glass smudged building under “Aug 2012”) in the snow was a joy:

Anyway, there’s more to New Jersey than that.  New Jersey where the Susquehanna-Roseland transmission line crossed is B-E-A-U-T-I-F-U-L.  It’s a lot like northern Minnesota, granite and pine trees, stunning.  Turns out my mother spent time there in the Army, and afterwards she worked at the Franklin Hospital, I think owned by the Franklin nickle mine.

Google Earth maps are now showing the summer’s construction of the Susquehanna-Roseland transmission project, and… OH… MY… DOG…

Here are photos from Stop the Lines in 2013 of new access roads through the Mahlon Dickerson Reservation, Lake Hopatcong, NJ to build this monstrosity:

And just google that park for another perspective:

And the view from Headley’s Overlook and Lake Hopatcong:

Here’s Lake Mohawk, another example of bizarre transmission routing:

From Stop the Lines:

And at the heart of Stop The Lines resistence:

How’s that for a depressing photo?  That’s Highview in Newton, NJ, and that’s a 500 kV AC line, TRIPLE BUNDLED (it originally was QUAD bundled, but that was over-reach beyond belief, and hey dropped it), HUGE capacity line, HUGE.  Oh, and that’s the same configuration as the GNTL line.   AAAAAAAAAAAAAAAAAAAAAAAGH!  Look how close it is, and if ice coated lines and towers meet high wind, what happens if these crumple like others we’ve seen?

Check out these solar panels, house on Marksboro Road.  The one just north has a roof full too, not just that garage!

Here’s where it crosses Mt. Holly Rd. and you can see what the construction does to this field:

Here’s a view of the Picatinny Arsenal, thanks to Stop the Lines, and the tower is 215′ tall, the transmission towers through here will be ~25 feet shorter than this:

And yes, this is the transmission line that goes over the Delaware Water Gap and the Appalachian Trail!  Here’s on the eastern side, NJ side, of the Delaware Water Gap:

DOH!  The Delaware Water Gap is one of the country’s few Wild and Scenic Rivers (like our own St. Croix River):

Just the place for transmission! Enough… transmission sucks.

One of the perks of the job and being in the neighborhood was that I got to hear Phil Woods at the Deer Head Inn, he lives right around the corner.  That must have been 2009, maybe 2010.  His relatives on the Charlie Parker side came in from the east, place was packed, and as Ed Berger would say, “way outside.”

OH HAPPY DAY!!!!

Washington State is working on “Buy the Farm,” based on Minnesota’s law, which is an option for landowners facing condemnation for a transmission line to force the utility to buy them out, to “Buy the Farm.”  A bill was introduced last Monday in the Washington State House:

House Bill 2047

It’s been referred to House Judiciary — here’s the page for status of bills:

CHECK STATUS OF HOUSE BILL 2047 HERE

Is this exciting or what?!?!  Each state where transmission projects are proposed should get going and enact “Buy the Farm.”  I’ve had a request to pass this around far and wide, so here goes!

Minnesota’s “Buy the Farm” law is, so far, the only one in the nation that provides and option for landowners to force the utility to buy them out, rather than just condemn a small easement.  This allows landowners to get out from under a transmission line. Here’s Minnesota’s Buy the Farm:

Minn. Stat. 216E.12, Subd. 4. Contiguous land.

(a) When private real property that is an agricultural or nonagricultural homestead, nonhomestead agricultural land, rental residential property, and both commercial and noncommercial seasonal residential recreational property, as those terms are defined in section 273.13 is proposed to be acquired for the construction of a site or route for a high-voltage transmission line with a capacity of 200 kilovolts or more by eminent domain proceedings, the owner shall have the option to require the utility to condemn a fee interest in any amount of contiguous, commercially viable land which the owner wholly owns in undivided fee and elects in writing to transfer to the utility within 60 days after receipt of the notice of the objects of the petition filed pursuant to section 117.055. Commercial viability shall be determined without regard to the presence of the utility route or site. Within 60 days after receipt by the utility of an owner’s election to exercise this option, the utility shall provide written notice to the owner of any objection the utility has to the owner’s election, and if no objection is made within that time, any objection shall be deemed waived. Within 120 days of the service of an objection by the utility, the district court having jurisdiction over the eminent domain proceeding shall hold a hearing to determine whether the utility’s objection is upheld or rejected. The utility has the burden of proof to prove by a preponderance of the evidence that the property elected by the owner is not commercially viable. The owner shall have only one such option and may not expand or otherwise modify an election without the consent of the utility. The required acquisition of land pursuant to this subdivision shall be considered an acquisition for a public purpose and for use in the utility’s business, for purposes of chapter 117 and section 500.24, respectively; provided that a utility shall divest itself completely of all such lands used for farming or capable of being used for farming not later than the time it can receive the market value paid at the time of acquisition of lands less any diminution in value by reason of the presence of the utility route or site. Upon the owner’s election made under this subdivision, the easement interest over and adjacent to the lands designated by the owner to be acquired in fee, sought in the condemnation petition for a right-of-way for a high-voltage transmission line with a capacity of 200 kilovolts or more shall automatically be converted into a fee taking.

(b) All rights and protections provided to an owner under chapter 117 apply to acquisition of land or an interest in land under this section.

(c) Within 120 days of an owner’s election under this subdivision to require the utility to acquire land, or 120 days after a district court decision overruling a utility objection to an election made pursuant to paragraph (a), the utility must make a written offer to acquire that land and amend its condemnation petition to include the additional land.

(d) For purposes of this subdivision, “owner” means the fee owner, or when applicable, the fee owner with the written consent of the contract for deed vendee, or the contract for deed vendee with the written consent of the fee owner.

+++++++++++++++++

Some Buy the Farm background:

(from No CapX 2020)

Today is the Xcel Energy “stakeholder” meeting for “stakeholders” at the PUC.  For the IRP docket, CLICK HERE and search for PUC Docket 15-21.

Here are their scenarios:

Regulatory process and timeline.  January 2 filing, 900 pages, and today between that filing and March 16, 2015 filing.  That March 16 filing will be next piece and will complete filing of plan to Commission, then forward with Information Requests and stakeholder meetings, and then PUC decision within next year or so, depending on what’s happening in stakeholder process.  Three components:

1) CAPCON Order (capacity acquisition process)

• Aurora Solar
• Calpine combine cycle expension
• Black Dog 6 Natural gas

2) Increase small solar forecast

3) Sherco Retirement Scenario

• Sherco 1 & 2 retirement in 2020
• Sherco 1 retirement in 2020, Sherco 2 retirement in 2023 (based on capacity acquisition process, retirement, etc. scheduling)

For questions about the IRP, contact Jim Alders  james.r.alders@xcelenergy.com

This is on the heels of last night’s meeting of “Citizens League Electric Energy” group.  From the Citizens League site:

• Read the Electrical Energy Phase I Report
• Read the Electrical Energy Phase 2 Report

And notes from committee meetings:

• November 10, 2014 notes
• December 8, 2014
• January 12, 2015

The January 26 meeting isn’t posted, but I scanned them in and will post later.  They had a charge of the “committee” in the Phase 2 Report to support Xcel Energy’s “e21 Initiative” below:

Charge-to-Electrical-Energy-Phase-3

That charge contained this specific direction:

Really, this is what it says:

… the Citizens League Study Committee will be asked to draft both a statement and legislation to direct the Public Utilities [Commission] to convene this public dialogue with the support of external stakeholder efforts.

So we shouldn’t have been surprised…  That charge was pretty much fulfilled and presented to the group last night, BUT the good news is that in addition to Alan and my objections to that endorsement of the “e21 Initiative,” there were several long-time Citizens League members who objected to the way that this was done and the endorsement of the e21 Initiative.  (I’ll insert the draft when I get back)

Short version, the Draft was soundly rejected.  WHEW!

And for those concerned about this e21 Initiative, Intervene!!! Yes, Citizen’s League, that’s something YOU can do!