Legalectric

ILSR’s John Farrell is halfway there – he recognizes the federal part of the transmission equation, but the state part is missing, for example, Minnesota’s special eminent domain exemptions for “Public Service Corporations” (particularly where the transmission is for private profit, NOT public service), rate recovery for “Construction Work in Progress” and state regulators refusal to examine the interstate nature of transmission proposals.  And the third part of that unholy trinity — in the Midwest, bulk power transmission would not be being built but for the Settlement Agreement – ME3(Fresh Energy), Izaak Walton League (and Walton’s program Wind on the Wires), Minnesota Center for Environmental Advocacy, and North American Water Office.  This glut of transmission is their legacy.  It takes all three to build transmission.

From Grist, today:

Feds running a high-voltage gravy train for power transmission

by John Farrell
28 Jun 2011 6:00 AM

Even as distributed generation shows economical and political advantages over centralized renewable energy, the Federal Energy Regulatory Commission (FERC) is running a high voltage gravy train in support of expanded transmission. FERC’s lavish program is expanding large transmission infrastructure at the expense of ratepayers instead of looking at more economical alternatives.

Since 2007, FERC has had 45 requests for bonus incentives for transmission development — authorized under the 2005 Energy Policy Act — and has provided all or most of the requested incentives in more than 80 percent of the cases. With the bonuses, the average return on equity for utilities for their new transmission investments is nearly 13 percent. This high rate of return is a full 2.5 percentage points higher than the median utility return on equity [PDF], a value considered just and reasonable by state public service commissions in ordinary times. However, these rewards came during a time when unemployment doubled, the stock market tumbled, and most corporations were lucky to have any profit.

The ratepayer impact of these bonuses is significant. In a November 2010 criticism of FERC transmission awards, Commissioner John Norris noted that the 2 percent bonus FERC provided to the PATH high-voltage project on the Eastern seaboard would “cost [Maryland] ratepayers in PJM at least $18 million per year.” The bonus payments were also given in concert with other incentives that reduced risk, including rate recovery during construction and guarantee of payment if the facilities were abandoned for reasons outside utility control.

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A little birdie told me that the Comment period on the Green Power Express rate docket at FERC has been extended to March 6, a week from now.

To find the FERC docket (maybe there’s a quicker way, but this is all I know so far…), CLICK HERE and search for docket ER09-681.

The filing is just too big to upload, but you can see the redacted version here:

Green Power Express FERC Rate Filing

What they’re wanting to do is stick their Construction Work In Progress (CWIP) into the rate base… they want to be able to charge us for this, for putting this together!?!?!  “Who” is the rate base in this, what are the costs, at what point could they be assessed?

I’m struggling to wrap my pea brain around this, but I’m wondering what the difference is between this and what Xcel got in the 2005 Transmission Omnibus Bill from Hell, other than a much wider rate base:

Minn. Stat. 216B.16, Subd. 7b

The rate base that ITC Holdings could spread this over is immense, as opposed to Minnesota’s utilities’ rate base, and the idea of paying for development of this phenomenally stupid idea just galls me… but I’ve got some reading and thinking to do here.   Intervenors are lining up to weigh in and fight about it.

And then there’s that 7,000MW of wind in the MISO queue in Illinois, and it’s the Chicago transfer numbers they want to keep secret.  Shouldn’t someone tell them that there’s all that wind in Illinois?

I’m printing out this sucker for a winter night’s read…

Check it out — what do you think?