Legalectric

The Delaware Water Gap is one of the few National Park Service Wild and Scenic Rivers, and it’s in a struggle to stay that way.  I represented Stop the Lines before the New Jersey Board of Public Utilities administrative proceeding, which ended with a permit issued to PSEG.  Boooo-hisssss.

TODAY, a lawsuit was filed by National Parks Conservation Assoc.,  Appalachian Mountain Club, Appalachian Trail Conservancy, Association of New Jersey Environmental Commissions, Delaware Riverkeeper Network, New Jersey Highlands Coalition, New York-New Jersey Trail Conference, Rock the Earth, Sierra Club, Stop the Lines versus Ken Salazar as Secretary of the Interior and head of National Park Service, and Dennis Reidenbach as Northeast Regional Director of National Park Service:

Complaint – National Parks Conservation Assoc., et al. v. Salazar & Reidenbach

GOOD!  Serves them right, after caving to Obama’s transmission fast-tracking!

So what’s the scoop?  PSEG and PPL have targeted the Delaware Water Gap for a crossing of its Susquehanna-Roseland transmission line.  Here’s the NATIONAL PARK SERVICE PAGE for the project.

Here’s the full map:

Which is a small part of the bigger picture, part of line #1 on this Project Mountaineer, the transmission for coal scenario hatched at a top secret FERC meeting in 2005:

The alternatives evaluated by the National Park Service’s Delaware Water Gap in their EIS looks like this (click on map for larger version):

Here’s the link to the National Park Service’s Final EIS.  Inexplicably, National Park Service went from identifying the “no action alternative” as the Environmentally Preferred Alternative,  to a (rolling over) “STICK IT HERE!”  Oh, and a payoff of $30-40 million.  And then there’s “pre-approval” of the project by NPS…

Stay tuned!

Xcel Energy’s 2Q report came out almost two weeks ago (where DOES the time go?!?!), and one part stuck out:

I think the strongest sales that we are seeing are at SPS, based upon the energy related businesses they had down there. We are also seeing on the C&I sides, some pretty good pick up in Wisconsin.  Again, that’s energy-related, but in this case, it’s more sand mining, which has really become quite the business in that part of Wisconsin.

This came from their transcript, on Seeking Alpha, linked above.  So who is looking at the impacts of frac sand mining on energy use, sales and peak demand?

The earnings call and other info is available on Xcel’s Investor site at www.xcelenergy.com.  CLICK HERE FOR THEIR INVESTOR RELATIONS PAGE (may need to agree to their “Safe Harbor Statement” to get here) Xcel’s demand isn’t anything to write home about, this from their 8/2/2012 Xcel Energy Second Quarter 2012 Earnings Report:

And from the SEC:

Xcel’s 10-Q filed with SEC

And in this filing, an amazing tidbit that I’d not noticed before — Firm Transmission Rights are regarded as COMMODITY DERIVATIVES:

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Commodity derivatives — The methods used to measure the fair value of commodity derivative forwards and options utilize forward prices and volatilities, as well as pricing adjustments for specific delivery locations, and are generally assigned a Level 2.  When contractual settlements extend to periods beyond those readily observable on active exchanges or quoted by brokers, the significance of the use of less observable forecasts of long-term forward prices and volatilities on a valuation is evaluated, and may result in Level 3 classification.

Electric commodity derivatives held by NSP-Minnesota include financial transmission rights (FTRs) purchased from Midwest Independent Transmission System Operator, Inc. (MISO).  FTRs purchased from MISO are financial instruments that entitle the holder to one year of monthly revenues or charges based on transmission congestion across a given transmission path.  The value of an FTR is derived from, and designed to offset, the cost of that energy congestion, which is caused by overall transmission load and other transmission constraints.  Congestion is also influenced by the operating schedules of power plants and the consumption of electricity pertinent to a given transmission path.  Unplanned plant outages, scheduled plant maintenance, changes in the relative costs of fuels used in generation, weather and overall changes in demand for electricity can each impact the operating schedules of the power plants on the transmission grid and the value of an FTR.  NSP-Minnesota’s valuation process for FTRs utilizes complex iterative modeling to predict the impacts of forecasted changes in these drivers of transmission system congestion on the historical pricing of FTR purchases.

If forecasted costs of electric transmission congestion increase or decrease for a given FTR path, the value of that particular FTR instrument will likewise increase or decrease.  Given the limited observability of management’s forecasts for several of the inputs to this complex valuation model – including expected plant operating schedules and retail and wholesale demand, fair value measurements for FTRs have been assigned a Level 3.  Monthly FTR settlements are included in the fuel clause adjustment, and therefore changes in the fair value of the yet to be settled portions of FTRs are deferred as a regulatory asset or liability.  Given this regulatory treatment and the limited magnitude of NSP-Minnesota’s FTRs relative to its electric utility operations, the numerous unobservable quantitative inputs to the complex model used for valuation of FTRs are insignificant to the consolidated financial statements of Xcel Energy.

“Financial Transmission Rights” which “entitle the holder to one year of monthly revenues or charges based on transmission congestion across a given transmission path.” SAY WHAT?!?!?!

Now please, correct me if I’m wrong, but wasn’t “derivatives” in a tanking market what got Xcel’s NRG into bankruptcy?

Just in today from PEPCO:

All,

I am writing to provide an update on PHI’s proposed Mid Atlantic Power Pathway (MAPP) project.

Today PJM issued the final results of its 2012 transmission analysis and due to factors such as lower load growth from the sluggish economy, the installation of new gas fired power plants, and the increase in demand response programs, no reliability violations were identified within the transmission planning window. As a result, the PJM Transmission Expansion Advisory Committee (TEAC) issued a recommendation that the MAPP project be canceled.  On August 24, 2012, the PJM Board of Managers will meet to make a final decision on the TEAC’s recommendation.

I would like to express my sincere appreciation for your interest and participation in the MAPP project over the past few years.

Thank you,

Mark Okonowicz
MAPP – Environmental Coordinator
Pepco Holdings, Inc.
P – 302-283-6115
C – 302-463-5438
mark.okonowicz@pepcoholdings.com

This is after their bogus claims, in 2008, of skyrocketing peak demand (utterly unsupported by fact) from a June 25, 2008 MAPP Presentation found on the DNREC site — this “forecast” is so outrageous, and cancellation is SO HILARIOUS in light of Todd Goodman’s objections to my chalenging demand:

So let’s take a step back – what is MAPP?

No, this isn’t about the Mid-Continent Area Power Pool… it’s the Mid-Atlantic Power Pathway (MAPP), and it is DEAD!

The Mid-Atlantic Power Pathway, a transmission line that was part of “Project Mountaineer,” a coal transmission web that was hatched at a 2005 FERC meeting.  MAPP was the NE part of line 4, below (Susquehanna-Roseland is the eastern part of line 1):

Here’s the transcript of that meeting, too scary, but it’s important to read this:

FERC Transcript 5/13/05

They tried and tried and tried, against evidence, to ram all these projects through.  The did manage to get the first one through, the TrAIL (Trans-Allegheny Interstate Line) project, but PATH (Potomac-Appalachian Transmission Highline) is dead, Susquehanna-Roseland is permitted but not yet built…

Slowly but surely, PJM is admitting that transmission is not “needed” by any measure.  With MAPP, first they planned it as above, in the first map, and then they eliminated the part in Delaware from Indian River to Salem/Hope Creek nuclear plants:

Despite this, Delaware’s DNREC issued permits for part of this project in Sussex County, Delaware!  Whatever for?  Why would they do this?  Aren’t they paying attention to things electrical?  DNREC should know this is not needed

Delmarva Power Receives Delaware Subaqueous Lands Permit

Delmarva Power & Light Company (DPL) has received the Subaqueous Lands Permit from the State of Delaware Department of Natural Resources and Environmental Control (DNREC) for the transmission line associated with the MAPP project in Sussex County, Delaware.  This permit grants DPL the ability to place temporary mats in the existing right of way to establish access and work areas over subaqueous lands to support construction activities.

Here is today’s good news — PJM’s latest review, just released, showing NO THERMAL VIOLATIONS — DUH:

August 9, 2012 Reliability Analysis Update

Here are two slides that say it all, the first focused on PATH but including MAPP, and the second, the “MAPP Project Analysis” results:

And the bottom line?  Another DUH, GOODBYE PATH AND GOODBYE MAPP:

Once again, we’re proven right.  How long have we been fighting all these transmission projects, how much time, effort and money showing it’s not needed, even when using INDUSTRY studies, documentation, forecasts.  All their claims of need are fabricated, reverse-engineering to get the result they want, billions of dollars of PRIVATE INTEREST, not PUBLIC interest, projects, built on the backs of landowners, with a FERC guaranteed 12+% rate of return for the owners/builders/developers.

The down side is the ratepayers are probably going to be hit with all these development costs because so many jurisdictions allow recovery for “CWP,” construction work in progress.  So we get screwed, but not as badly as if they had built the projects.

Like CapX 2020, this project was another of those personal projects.  MAPP was originally heading up through Delaware to the Salem/Hope Creek nuclear plants, and the Delaware part would have gone near us in Port Penn, we’re right across the Delaware River from Salem/Hope Creek.  They should know better than to try something like that!

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The DOE is hosting webinars on its 2012 transmission congestion study:

DOE 2012 Transmission Congestion Study Page

The study isn’t released out, even a draft, and the powerpoint isn’t available yet online.  GRRRRRRRR, we need that to have an idea what’s going on… oh, that’s probably why it isn’t there.  Soon, I’ll post it when it appears.

The first webinar was today, just over, and there are two more — just click on linked date to register:

• Thursday, August 16, 2012 2-3:30 pm ET (industry and others)
• Tuesday, August 21, 2012 2-3:30 pm ET (state focus)

What I’m seeing here from the powerpoint is that congestion is a non-issue.  And what is very clear from the congestion maps for 2009-2011 is that in 2009 there was essentially NO congestion, and it got worse in 2010, and then not so bad in 2011 but still far more than in 2009.  In essence, apparently what they’re doing has made it worse.

They did ask my question, based on the above observation of the 2009, 2010 and 2011 maps, and asked what the explanation was for absence of congestion in 2009:

A: He said that the relatively low level of economic activity was certainly a factor.  Temperatures were more severe in 2010 so that was a factor.  Yes, congestion, in terms of these three graphics, congestion is worse in 2010 than in the other two years, that is generally in the context of a generally declining pattern over a couple of years we’ve been looking at.  Don’t want anyone to get the impression that …. So part of this is that this is a function of scaling also?  Yes…

Uh-huh… right…

And then from slide 22, Preliminary Regional Findings: Midwest:

• Data indicate on significant, persistent constraints, apart from those related to the development of remote renewable resources

• Data do not indicate any areas with major reliability problems

• The economic congestion that is occurring is small in relation to the total cost of wholesale electricity traded in organized spot markets.

• Inconsistent market designs and practices between RTOS — as distinct from lack of transmission capacity — are a significant impediment to economically beneficial electricity trade.

But hey, we knew that!

Here are the prior “studies” from DOE:

2009 DOE Congestion Study

2006 DOE Congestion Study

And remember, the purpose of this is, in THEIR words, from THEIR site:

DOE’s Congestion Studies may contribute information needed to support the future designation of one or more National Interest Electric Transmission Corridors (National Corridors). On the basis of a congestion study, and after reviewing and considering public comments, the Secretary of Energy is authorized but not required to designate related geographic areas as National Corridors. Designation of a National Corridor has two effects:  1) it emphasizes that the Department considers the particular congestion problem to which the corridor pertains to be sufficiently acute to merit federal concern; and 2) it enables the Federal Energy Regulatory Commission to exercise “backstop” authority (under conditions specified in the Federal Power Act) to approve the siting of transmission facilities within the area of the corridor. In particular, the Commission may exercise its jurisdiction if a state agency has “withheld approval” for more than one year of an application to site a transmission facility within the corridor.

But wait, even they admitted in today’s Webinar that the courts have invalidated the designation of National Interest Electric Transmission Corridors both generally and specifically:

• NIETC designation of corridors tossed out by 9th Circuit Court!!

• Denial is NOT withholding… Piedmont v. FERC

So we’re doing this … why???

It’s all about market, it has nothing to do with electric reliability, and billions are being spent to address a problem that does not exist and which is illegal to implement.  WRONG?  Prove it, please…

OAH Rulemaking Request for Comments

OAH Rulemaking Draft Changes

Well, folks, here we go, just got notice TODAY from Judge Lipman of the rulemaking at Office Administrative Hearings. Send Comments to:

Honorable Eric L. Lipman, Assistant Chief ALJ

P.O. Box 64620

St. Paul, Minnesota   55164-0620,

Electronic Mail: eric.lipman@state.mn.us

Here’s the “purpose” according to OAH (listed in numbers, not letters):

The purpose of these draft revisions to Parts 1400 and 1405 is to:

1. streamline hearing procedures across different types of administrative proceedings;
2. leverage the broader familiarity with contested case procedures to improve predictability in the hearing process for other types of cases;
3. better reflect contemporary hearing practice and the technological changes occurring since September of 2001 (when the last revision of OAH’s procedural rules was completed); and
   
4. improve predictability in the hearing process by more closely aligning OAH’s procedures with the General Rules of Practice of the District Courts.

I have a vested interest in this because I’d filed a Rulemaking Petition ages ago:

Overland – Petition for Rulemaking – OAH

That was March, 2011, IT TOOK A YEAR AND A HALF!

Here are a few things I hope you’ll look at — the parts cited with a page number are from the OAH Rulemaking Draft Changes:

• Draft Changes, p. 2, definitions of Participant and Person – narrowing definition of person:

As proposed, on p. 4:

20   Subp. 6a. Participant. “Participant” means a nonparty who:
21
22  A. files comments or makes a formal appearance in a
23   proceeding authorized by the Minnesota Public Utilities
24   Commission, other than those commission proceedings that
25   are conducted to receive general public comments; or,
26
27   B. with the approval of judge, offers testimony or
28   evidence pursuant to part 1400.7150 or 1400.8605.

37  Subp. 8. Person. “Person” means any individual, business,
38   nonprofit association or society, or governmental entity.

As found in the PUC’s Rules, Minn. R. 7829.0100, Subp. 13 and 15:

Another in a trend of limiting participation by the public, QUESTIONING WITNESSES IS OUT – SAY WHAT????  See Draft Changes, p. 14-15 (see also p. 59-60):

45   Subp. 5. Participation by public. The judge may, in the
46  absence of a petition to intervene, nevertheless hear the

1    testimony and receive exhibits from any person at the
2    hearing, or allow a person to note that person’s appearance,
3    or allow a person to question witnesses, but no person shall
4    become, or be deemed to have become, a party by reason
5     of such participation. Persons offering testimony or exhibits
6    may be questioned by parties to the proceeding.

Where then PUC’s rules provide for much more — check out current Minn. R. 1405.0800, which they want to just ELIMINATE!  It starts here: