Legalectric

What does Obama’s transmission “streamlining” “fast track” agenda mean for states’ authority over need for and routing of transmission?

What does Obama’s transmission “streamlining” “fast track” agenda mean for federal agencies charges with NEPA environmental review of these transmission projects?

What does Obama’s transmission “streamlining” “fast track” agenda mean for public participation and due process?

Does Obama have a clue how many landowners/voters are affected by CapX 2020?

$$$$$$$$$$$$$

These are TWO of my transmission projects he’s targeting, TWO, the CapX 2020 Hampton-LaCrosse transmission line and the Susquehanna-Roseland transmission line.  Here’s the Dept. of Interior Press Release:

Obama Administration Anounces Job-Creation Grid Modernization Pilot Projects

Susquehanna-Roseland in the news:

Stop The Lines Press Release www.stopthelines.com

Obama administration will push Susquehanna-Roseland power-line, could be first project to be fast tracked

Federal Government Recognizes Need for Swift Action for Permits on Susquehanna-Roseland Power Line – PPL Press Release!

Obama backs power line upgrade that passes through Morris County

I guess we know why he was in Cannon Falls… at least part of it… I hate to think what else might have been on the agenda.

Here’s what’s flying out in the press about Obama’s Transmission Toadyism and CapX 2020, many are pretty much just a cut and paste of the White House press release:

Rochester Post Bulletin:  Obama Administration to fast track CapX 2020, other power-line projects

Minnesota Public Radio:  Obama seeks fast track for powerlines in Minn., elsewhere

Here’s one with some substance:

Feds step up power line projects in 12 states, including one in Wisconsin

The Obama administration moved Wednesday to speed up permitting and construction of seven proposed electric transmission lines in 12 states, including one between Minnesota and Wisconsin, saying the projects would create thousands of jobs and help modernize the nation’s power grid.

The projects are intended to serve as pilot demonstrations of streamlined federal permitting and improved cooperation among federal, state and tribal governments. The projects will provide more than 3,100 miles of new transmission lines in Arizona, Colorado, Idaho, New Mexico, Nevada, Oregon, Utah, Wyoming, New Jersey, Pennsylvania, Minnesota and Wisconsin.

In all, the projects are expected to create more than 10,000 direct and indirect jobs, help avoid blackouts, restore power more quickly when outages occur and reduce the need for new power plants, officials said.

In Wisconsin, a transmission company spokeswoman responded positively to the announcement. “We welcome any developments that help facilitate permitting of transmission infrastructure, especially as it related to permits from federal agencies. Sometimes those permits can drag along and any help in keeping projects on schedule is welcome,” said Jackie Olson of American Transmission Co.

ATC, which controls nearly 10,000 miles of high-voltage power lines in Wisconsin and the Upper Midwest, is not involved in any of the seven projects.

But opponents of the line between Minnesota and Wisconsin are raising concerns. It’s not clear what would be involved in fast-tracking the plan, said attorney Carol Overland of Red Wing, Minn. The line is part of a series of transmission projects extending from the Dakotas to Wisconsin known as CapX2020. Overland said the states involved have been going through their procedures without any delay.

“What this, to me, feels like is a threat to the states saying, ‘you put it through or we’re coming in,'” said Overland, who represents the citizens group No CapX2020. “I don’t see any basis for it. The state has to retain control … because we have to live with these projects.”

ATC is making plans for the Badger-Coulee line, a high-voltage transmission line that could connect to CapX2020 and extend southeast to Dane County. The company has been seeking public comment about potential routes.

State Journal reporter Judy Newman contributed to this report.

Once more with feeling:

What does Obama’s transmission “streamlining” “fast track” agenda mean for states’ authority over need for and routing of transmission?

What does Obama’s transmission “streamlining” “fast track” agenda mean for federal agencies charges with NEPA environmental review of these transmission projects?

$$$$$$$$$$$$$

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.

Read the rest of this entry »

Click map for larger version:

PATH, the Potomac Appalachian Transmission Highline, is in trouble… AGAIN…

The good news is that the West Virginia Public Service Commission staff is challenging need for the PATH line, which was already postponed by PJM.  And then there’s these pesky states questioning the need, like Maryland, which challenged the corporate organizational form, noting that it wasn’t a utility so “get outta here!”

Now it’s time for the West Virginia PSC staff to raise its eyebrows and deliver a solid Motion to Dismiss:

WVa PSC Staff’s Motion to Dismiss PATH Application

For the entire docket, go here:

West Virginia PSC Docket for PATH Transmission Line

And here’s the way it looks in the press:

$2B PATH project faces dismissal by W. Va. regulators

Posted: 6:39 pm Thu, December 16, 2010
By Associated Press

CHARLESTON, W.Va. — An application to build a $2 billion power line from West Virginia to Maryland should be dismissed because less expensive alternatives should be considered first, say staff reviewing the project for the West Virginia Public Service Commission.

Developers of the Potomac-Appalachian Transmission Highline, or PATH, say the 765-kilovolt line is needed to meet projected power demand along the East Coast by 2015.

But PSC staff said it was “ludicrous” to continue with the project while changes to the region’s existing power grid are being contemplated. Staff specifically mentioned Virginia-based Dominion’s recent notice to rebuild its 500-kilovolt line from Mt. Storm in West Virginia to the Doubs substation in Maryland. That upgrade and other improvements are estimated to cost $500 million to $600 million.

Another planned project is the Mid-Atlantic Power Pathway in Maryland. The line is to provide power to the Delmarva Peninsula.

Dominion says the Mt. Storm-Doubs line, which was built in 1966, must be rebuilt to maintain service. Developers gave the line’s current condition as a justification for the PATH project and the separate Trans-Allegheny Interstate Line.

“The rebuild will be a more stable line with 65 percent increased capacity,” PSC staff said it its Dec. 10 filing. The additional capacity “will push the need for the PATH line further out on the horizon,” perhaps to 2020, staff wrote.

PATH is a joint venture of Allegheny Energy Co. and American Electric Power Co. The proposed 275-mile line would run from AEP’s John Amos plant in West Virginia, across three counties in Northern Virginia, to a substation near Kemptown in Frederick County.

At least 250 groups, representing landowners, The Sierra Club, local county commissions and boards of education are opposed to PATH’s construction. Many of them have submitted letters supporting the latest staff filing.

The filing marks the second time PSC staff has recommended the application be dismissed. In October 2009, staff sought to dismiss the application because Maryland’s utility commission had dismissed an application in that state, saying it had been improperly filed.

Instead, the utilities agreed to extend the deadline for when the PSC must make a decision from May 16, 2011, to July 28, 2011.

PATH spokeswoman Jeri Matheny said Thursday the Dominion line “ties in very well” with the PATH project. Also, once PATH is built the Dominion line can be taken out of service for a rebuild, he said.

Matheny did not have an immediate comment on the staff’s recommendation to dismiss the application, saying a formal response would be filed with the PSC next week.

Earlier this month PJM Interconnection approved the Mt. Storm-Doubs line, but also reaffirmed its support of the PATH project. PJM manages the electrical grid in a 13-state region.

If the three-member PSC doesn’t dismiss the PATH application, staff is asking that it require developers to submit new testimony regarding the economic and environmental aspects of the project. Staff is also asking that AEP and Allegheny Energy again agree to extend the decision deadline.

The commission has not taken any action on the staff’s recommendation, PSC spokeswoman Susan Small said Thursday.

Apparently Great River Energy and Xcel Energy are outlooking for money.  Gee, I wonder why?  I remember the snorts and hoots that broke out in the room way back during the CapX Certificate of Need hearing when they admitted to presenting their CapX 2020 financing dog & pony show to Lehman Brothers.

As for GRE, from Monday’s article in Finance & Commerce:

For example, GRE’s 2009 revenues fell $42.1 million to $787.8 million at the same time the utility was paying to develop a coal-fired plant in North Dakota and helping develop the CapX2020 system of transmission lines with 10 other state utilities.

Xcel just made an SEC filing that shows some creative efforts:

The primary purpose of the Plan is to provide our common and preferred shareholders as well as new investors with a convenient and economical method of purchasing our common stock.  Once enrolled in the Plan, you may reinvest cash dividends and, through optional cash payments, purchase additional shares of common stock from time to time or at regular intervals.  Although we expect the Plan to appeal to many shareholders, it is entirely optional.  A secondary purpose of the Plan is to enable us to raise additional capital by selling newly issued shares of our common stock under the Plan.

“Secondary purpose of the Plan…”  (click the quote for the full filing)  “Secondary purpose…”

Yup, uh-huh…   …WHAT… EVER!

Here’s the full article from Finance & Commerce about GRE’s capital raising efforts:

Great River Energy to sell $450M in mortgage bonds

Posted: 4:35 pm Mon, October 18, 2010

By Bob Geiger

Faced with declining power-usage revenues and rising utility-plant costs, Maple Grove-based Great River Energy (GRE) on Monday issued $450 million in taxable first mortgage bonds to meet costs and pay down debt.

The mortgage bonds are intended to fund capital spending for the utility’s power generation and transmission as well as paying off $325 million of GRE’s $2.4 billion outstanding debt, said Susan Brooks, GRE treasury director.

“It’s part of our long-range plan to meet member costs in the most cost-effective manner,” said Brooks, who expects bond pricing to be set today.

The mortgage bond sale is the second such transaction in 2010 by GRE, which in April announced it would sell $106 million in tax-exempt first mortgage bonds issued by McLean County, N.D.

It’s not unusual for utilities to sell mortgage bonds to help make ends meet at a low cost. Such financing makes sense because GRE is making additions to its system and paying for generation and transmission improvements in the wake of the recession.

For example, GRE’s 2009 revenues fell $42.1 million to $787.8 million at the same time the utility was paying to develop a coal-fired plant in North Dakota and helping develop the CapX2020 system of transmission lines with 10 other state utilities.

Fitch Ratings assigned an A- credit rating to the $450 million mortgage bond sale. Fitch noted that, “while GRE’s debt level remains a concern, (it) has been effective in managing the higher debt loads, even in what has been a difficult operating environment.”

Background information on GRE’s mortgage bond offering from Fitch stated that GRE is working to lessen its debt-load by paring its five-year capital spending plan by $350 million.

GRE serves more than 645,000 residential and small-commercial customers through 28 member cooperatives. The utility maintains 3,647 megawatts of generation capacity, of which 2,751 megawatts is owned by GRE.

Additional capacity is expected to come online in 2012 when Spiritwood Station, a coal-fired plant near Jamestown, N.D., begins operation.

The start-up of Spiritwood, which has a peaking capacity of 99 megawatts, was delayed until early 2012 earlier this year because plans for an ethanol plant to use steam from the nearby coal plant failed to materialize.

Therese LaCanne, GRE spokeswoman, said Spiritwood also will provide steam for a Cargill Malt plant in the industrial park.

Of GRE’s 2009 power generation, 78 percent was coal-fired, with the remaining 22 percent coming from 7 percent renewable energy, 1 percent natural gas and 14 percent other energy sources.

Combined with the planned firing up of Spiritwood and wind energy contracts, GRE projects it will have adequate capacity to meet its member needs beyond 2020.

The utility projects compounded average annual peak load growth of 1.4 percent from 2010 to 2020, according to Brooks.

Underground Xcel’s Hiawatha Project transmission.  That’s BIG, it’s good news, except for one thing — “Who pays?” is still a question:

ALJ Heydinger’s Recommendation for Xcel’s Hiawatha Transmission Project

Problem is, cost allocation isn’t dealt with specifically, only explained, so no recommendation regarding that.

If the PUC went ahead, would it be spread across the Metro area, the full Xcel rate base, or???

For the SE Metro, and for the Chisago Transmission Project, if they cities would have agreed to shoulder the cost, undergrounding was no problem.  But that’s not feasible for a city to pay.  So now what?  Will the PUC actually order undergrounding, with a broad rate base recovery?