Getting railroaded?
February 2nd, 2010
We all know what a pain in the patoot siting transmission is (particularly when it’s not needed). And now for something completely different — an interesting and seemingly probable theory:
ARE Y’ALL PAYIN’ ATTENTION??!!!?!?!?!
This is one of those pieces that I want to preserve to take out and reread in the not too distant future:
Buffett’s Semaphore Signal: Should Burlington Northern Shareholders Think Again Before Saying ‘Yes’ To Berkshire Hathaway?
Author: Daniel Sinclair
Reasons commentators ascribe to Buffett’s offer to acquire one of North America’s largestrail networks, Burlington Northern Santa Fe (BNSF) are now familiar. Growing global trade, continued reliance on (especially low sulphur) coal, a resurgent and growing US economy (without needing to pick product ‘winners’ and ‘losers’), a low risk way to gain exposure to any rising process for commodities, a hedge against inflation given rail’s pricing power, a competitive advantage in rail’s oligopoly and high barriers to entry, more productive rail with more efficient and technologically advanced operations and a rise double-decker railway carriages, a way to play higher oil prices and cap and trade or carbon tax laws given that rail is 3 to 4 times more fuel efficient than trucks.
Those reasons are all good, and they have been part of the core investment thesis for rail. But, it is submitted, there may be something extra that offers compelling upside to rail that has Buffett excited. Think about all the land that rail owns. BNSF, for example, operates one of the largest railroad networks in North America with about 32,000 route miles of track plus an additional 23,000 miles for other rail related infrastructure and property. Much of this land is of relatively little value beyond the use of rail. No one is going to build condos or hotels or new subdivisions along side railways.
Now think again. You think Boone Pickens has an ambitious plan for wind farms? Wait until you see what Buffett could do right across the US with his investment in BNSF. This land might become prime property for alternative energy generation including from wind and solar farms either side of rail tracks. With much of rail land in the middle of nowhere, there are few worries about the ‘not-in-my-back-yard’ crowd and more difficult regulatory approvals. Small wind mills and solar panels might be placed on the trains themselves to generate energy.
Susquehanna-Roseland reopened!
January 27th, 2010
The Susquehanna-Roseland hearing has been reopened. And off we got to FERC. It’s been quite a hectic week, with a “flurry” of filings, and here’s the update. First, remember the NJ BPUat a special 1/15 meeting said they were NOT going to decide on PSE&G’s Susquehanna-Roseland transmission line and said they’d be asking for more information from PJM. Well, they asked PJM to answer a few questions (though not specific enough, not the right questions):
Here’s what PJM had to say:
Suffice it to say, the letter is … ahem… INSUFFICIENT!
And then the responses started coming in, first the Municipal Intervenors, then :
Municipal Intervenors response to PJM Letter
And the BPU issued an Order reopening the docket and first scheduled a hearing for February 2, 2010, and then THANKFULLY changed it to February 4, 2010:
The concept is that PJM is coming in as a witness regarding the assertions of their January 21, 2010 bullshit letter, and what does that mean? Is Steve Herling THE witness, or are there others? Is whatever witness/es coming with a truckload of exhibits that they’ll dump on us the day of the hearing? Is he going to be prepared in any way to back up his conclusory and unsupported statements? So I fired off a couple missives, first Discovery to get the requests in quick and let them be on the record of ignoring or refusing to answer, and then a letter to the BPU with my view of the fine mess we’re in:
As a sidebar, the escrow that PSE&G had to put out for the Municipal Intervenors is gone, this has been an intense case, and so they’re reasonably asking for more:
Meanwhile, back at the ranch, remember that great 7th Circuit decision tossing out the cost allocation for this project? Everything’s been up in the air since then, because if they can’t settle how they’re going to allocate the costs, this sucker won’t be built:
It was remanded to FERC and after some wrangling, just like in the BPU case, where the utilities were saying, “It’s all there in the record, you don’t need anything more to make a separate decision” and Illinois said quite succinctly, “AHEM, WE DON”T THINK SO!” and FERC issued an Order stating that the record was not sufficient, needed more information and directed PJM to provide some information and also provided some questions for parties to mull over in their comments:
Here’s the fun part – what they asked PJM to provide (hee hee hee hee hee hee), starting on p. 5 of the above Order:
10. PJM should provide the following information:
A. The total costs that have been approved through PJM’s Regional Transmission Expansion Plan (RTEP) process for facilities that operate at or above 500 kV (and necessary lower voltage facilities), and whose costs are assigned pursuant to Opinion No. 494. For these projects, calculate the total costs that have been assigned to each PJM zone, and estimate the total costs that would be assigned to each zone using PJM’s DFAX methodology.
B. PJM manuals require that, in planning projects, it seek to optimize projects in order to reduce the cost of addressing individual reliability criteria. Describe how the optimization process is performed. Also, explain how PJM determines the relative priorities of resolving numerous reliability issues with one project. For 500 kV and above facilities, explain whether PJM could accurately determine the beneficiaries of a project that resolves numerous reliability issues using its DFAX methodology.
C. PJM’s most recent RTEP report (2008), at P 5 states that:
Baseline thermal and voltage analysis encompasses an exhaustive analysis of all Bulk Electric System (BES) facilities for compliance with NERC Category A (TPL-001), Category B (TPL-002) and Category C (TPL-003) events. In addition, consistent with NERC standards TPL-004, a number of extreme events including those judged to be critical from an operational perspective as well as those defined in Table I of TPL-004 were evaluated for risk and consequence to the system. Describe the types of anticipated reliability requirements addressed by the PJM RTEP (i.e., voltage, thermal, stability). Explain whether and how the DFAX analysis applies to the NERC reliability analyses listed above and any other reliability requirements. Explain whether the RTEP upgrades designed to address these reliability requirements also will address other reliability concerns. In particular, explain whether the geographic location or voltage level of an RTEP upgrade makes that upgrade more likely to address broader reliability concerns.
Provide any relevant studies.D. In this proceeding, PJM recommended the adoption of a postage-stamp rate design for new 500 kV and above facilities.
1. Describe the benefits generated by such facilities that are not captured in the DFAX methodology used by PJM to allocate costs for lower voltage facilities. Indicate whether such lines provide reliability or economic benefits to the areas producing electricity.
2. Provide engineering or other studies showing any differences in regional benefits between 500 kV and lower voltage facilities (e.g., 345 kV
and 230 kV).E. Provide any existing engineering or other studies that indicate whether the modeling assumptions used in the RTEP analysis, such as the direction of flow,
remain consistent or vary over time.
The Municipal Intervenors sent in a Motion to FERC, PSEG objected, and then Stop the Lines sent in a Motion for Limited Intervention:
Municipal Intervenors – Motion to Intervene
PSEG Response to Munis FERC Intervention
Stop The Lines! Motion for Limited Intervention
PSEG’s response to our Motion to Intervene… yeah… (yawn)… what-ev-er…
And just now, hot off the press, the Municipal Intervenors have filed a Motion to Depose PJM’s Steven Herling! Oh, yes, this is much needed, so we can get an idea where they’re going and what they plan to present (I doubt they’d produce the pre-filed testimony I requested!):
As you can see, it’s been an intense few days, and isn’t letting off anytime soon. More to follow as it develops.
That line’s going to fall in my living room…
January 24th, 2010
MID-Atlantic Power Pathway and all of PJM’s “backbone” projects in the news:
She’s worried about a larger line rising in the shadow of her house. If the poles somehow get knocked over, “Where’s that line going to fall? That line’s going to fall in my living room.
That’s Farah Morelli’s question. She’s a regular person who woke up one day with a monstrously large transmission line planned literally in her back yard. That’s usually the most effective way to get someone to learn about transmission. It’s a steep learning curve, and what I’ve found in my work with people in the path of proposed transmission is that once they start looking, they find a disturbing fact: Utilities propose transmission lines not because they’re “needed” but that they’re wanted, wanted to increase their ability to transmit and SELL cheap power in areas where it’s higher cost, and make a bundle in the process. It’s not that people don’t have electricity (and high price is the best instigator of conservation), but it’s that people want more and want it cheaper and the utilities which make $$$ from that equation want to make it happen.
HERE’S THE REALITY — The PJM 2010 Load Forecast Report and the Monitoring Analytics “PJM 3Q State of the Market” report show that this market decline isn’t anything new and that it’s not going away anytime soon. The PJM market peaked in 2006:
Today’s News Journal article is a start at pulling it all together, taking a look at the bigger picture, and that bigger picture is what these transmission lines are all about. Three lines were proposed together, the Potomac Allegheny Transmission Highline (PATH), the Mid-Atlantic Power Pathway (MAPP) and the Susquehanna-Roseland line. These aren’t just transmission lines, they’re BIG HONKIN’ ELECTRICAL AUTOBAHNS, quad (or now maybe tri?) bundled 500kV lines. Like WOW. HUGE!
Here’s today’s article:
Lower energy projections put brakes on power lines
Susquehanna-Roseland delay in the news
January 16th, 2010
Here are the articles on the NJ BPU delay of decision on Susquehanna-Roseland transmission line, but before that, here’s the letter the BPU sent to PJM requesting more information based on yesterday’s decision to put on the brakes:
Color me jaded, but what is needed is what Stop the Lines requested in our STL – Reply Brief, based on the sensitivity analysis ordered for PATH:
• PSE&G must waive any claim to FERC “backstop” authority in the pendancy of this sensitivity analysis and Board deliberation.
• The sensitivity analysis must include, but is not limited to those scenarios Ordered in the PATH docket:
1. Susquehanna-Roseland load flow analyses updated to reflect the following changes in generation: (i) all existing generation as of January 7, 2010, which is not scheduled to be retired before 2014; (ii) all proposed generation that cleared the May 2009 PRM Auction; and (iii) all proposed generation with a signed ISA as of January 7, 2009 (“Scenario 1 generation”);
2. Susquehanna-Roseland load flow analyses updated for the changes in Scenario 1 generation, and updated to reflect PJM’s 2010 load forecast (“Scenario 2”);
3. Susquehanna-Roseland load flow analyses updated for the changes in Scenario 1 generation, and updated to reflect the demand response and energy efficiency resources that cleared the May 2009 RPM Auction;
4. Susquehanna-Roseland load flow analyses updated for the changes in Scenario 1 generation, and PJM’s 2010 load forecast (i.e., Scenario 2) and updated to reflect the demand response and energy efficiency resources that cleared the May 2009 RPM Auction;
5. Susquehanna-Roseland load flow analyses updated for the changes in Scenario 1 generation, PJM’s 2010 load forecast, and to reflect the demand response and energy efficiency resources that cleared the May 2009 RPM Auction (i.e. Scenario 4), and updated to reflect the forecasted additional demand response and energy resource reasonably available for 2014, 2015 and 2016 (i.e. using MW from PATH of 367, 420, and469 respectively); and
6. Susquehanna-Roseland load flow analyses updated for the changes in Scenario 1 generation, PJM’s 2010 load forecast, the demand response and energy efficiency resources that cleared the May 2009 RPM Auction, the forecasted additional demand response and energy resource reasonably available for 2014, 2015 and 2016; and updated to reflect additional demand response and energy efficiency projected (i.e. using MW from path of 1,825, 2,140 and 2,403 respectively).
These results shall be distributed to the parties as soon as possible and shall be subject to limited discovery and cross examination, after which the Board shall consider them together with the balance of the record in this matter.
See why it’s frustrating — they just missed the boat completely with the vague request to PJM…
So, on with the press coverage about yesterday’s decision to delay:
New Jersey regulators delay decision on PSEG transmission line
By Mark Peters
Of DOW JONES NEWSWIRES
Public Service Enterprise Group shares were at $32.32, down 50 cents, or 1.5%, in recent trading.
-By Mark Peters, Dow Jones Newswires; 212-416-2457 mark.peters@dowjones.com
================================================================
Decision delayed on power project
Saturday, January 16, 2010
Lawrence Ragonese
STAR-LEDGER STAFF
Lawrence Ragonese may be reached at (973) 539-7910 or lragonese@starledger.com
===============================================================
State officials delay decision on PSE&G powerline for a month
By COLLEEN O’DEA • STAFF WRITER • January 16, 2010
Karen Johnson, a PSE&G spokeswoman, said the utility was discouraged by the delay.
Colleen O’Dea: 973-428-6655; codea@gannett.com.
===============================================
Susquehanna-Roseland line approved with conditions in Pennsylvania; New Jersey vote is delayed
DELAY — Susquehanna-Roseland live from the BPU
January 15th, 2010
Fur was flying last night, late when I got a chance to check in, whew…
I’ll be typing notes as we go… we’ll see.
The room is filling up, almost standing room only…
I’ll correct all the typos later…
January 15, 2010
Pledge of allegiance
All five present
Next meeting 1/20 @ 10 a.m.
Special meeting regarding Petition of PSEG re Susquehanna-Roseland line
Ken Sheehan – background – description of project
Jurisdiction
Cost – portion for NJ ratepayers not clear, open issue at FERC
PSE&G claims must be in service by 2012
Extremely complicated
Key questions – need for the project, specifically to resolve reliability problems
Oct 15 2009 – PJM reaffirmed need for PATH, MAPP and S-R
Board became aware of changes in need for PATH line – VA-PATH has asked for withdrawal. Reduction in scope and severity of NERC violqations, PJM will work through planning process
This has raised issue of similar issues with this line
Fiordaliso gave official notice to these issues. PSE&G did not object to entry
Firodaliso also gave official notice re: MAPP suspension. MAPP – PJM said it needed to reanalyze need for MAPP because it assumed PATH
There has been a flurry of comments regarding official notice these last few days. Most notably was two paragraph letter from PJM witness – delays will not in any way change the need for Susquehanna-Roseland.
Intervenors have noted that this conclusory statement needs substantiation.
Fiordaliso has formally recommended that the Board take notice of PATH and MAPP.
Firodaliso – (these guys are talking way too fast)
One word that soood out was flurry. I was the prsiding commissioner. During the proceedings we have held multiple public eharings, held a full evidentiary hearing. We have provided opportunities to prepare Pos Hearing briefs, filed only on 1/6/2010. It was inthese briefs that the PATH and MAPP issues were first raised. Because of the importance of this issue, I felt it was appropriate to bring this to the full Baord. My immediate question, shared by the other commissioners, is whether this information has the ability to significantly change the underlying factual situation of these lines. If PJM is no longer certain that MAPP and PAH are no longer needed at this time. I believe our board would be remiss not to consider whether PJM would feel the same about S-R and how that would affect NJ. The changes to PATH aned MAPP are extraordinary, this is not minor updates and changes (Comm. Fox nods vigorously). One of the core analyhsis of this is need, are the lines needed for the protection of transmission. PJM is able to provide expert analysis. The board would be remiss in not taking this into consideration. PJM has sent a letter that nothing ash changed. (quoting from PJM letter, above is link) “For clarity and in order to avoid any confusion, PJM as the independent transmission authority, that the factors driving PATH and MAPP do not in any way change need for S-R in NJ as detailed in my testimony as set forth in this docket.” We appreciate that input, nevertheless we need more than a this suumary statement. We need to have PJM to explain how they reached that conclusion, and in a way that will allow all parties to comment.
Amend recommendation — recommend to Board that we issue secretary’s letter to PJM asking for their input, notably we should seek and receive detailed confirmation that despite changes in map and path lines no changes have occurred in its analysis tof SF that would materially alter PJM analysis. provide this as soon as possible to allow for our review and provide opportunities for all parties in this case to see the results. This will allow the board to make an informed decision.
I do not want anyone to have the opinion that the board will issue a decision today. One of the obstacles is that the Board may need additional facts, and this is where we currently find ourselves.
Everyone associated with this project has been working as hard as humanly possible to bring this to an efficient and proper conclusion. The size of the record and the significance of this case make it essential that the Commission have a full record and the depth of understanding to understand the positions advanced by all of the parties. This always takes time, with a record as voluminous and contested as this. I hope we can get a commitment from all the commissioners, we can get a commitment to have a decision within 30 days. This time-frame represents a fair balancing of the Board’s responsibilities and the Board’s desire to have this as fair as possible.
Butler:
In my 11 years as commissioner, I’ve learned a few things. Transmission cases are never easy. I also know that I have rarely seen a record this large and with this many parties, and I’ve never seen it decided just 7-8 days of receipt of final briefs. The size of the record, the need to reach a decision, we will give commitment to render that decision. I will be spending part of my holiday reviewing this case! We need to balance needs of community and its residents, take the time, that’s correct approach.
PSEGE called me and informed me Ex PARTE , others commissioners were contacted as well. (all were nodding at this statement). I believe our course of action is the correct one. Asking PJM for formal communication as to how they reached their decision, I am confident it will be a better decision because of the steps we’ve taken today.
Asselta:
I am also in agreement with the presiding Commissioner. I have to tell you that I have not been contacted by any parties. I know a few things that I’m in support of, improving reliability, making sure we have complete reliability, and besides that, economic opportunities, infrastructure improvement so state can grow, I am looking forward to the 30 day deadline, so that the state of NJ will come to conclusion on this decision. I too am looking forward to the reports, make sure this is the right project at the right time and that the ratepayers are not on the hook for every bit of the cost to produce this line. I am in support of Commissioenr Fiordaliso’s request.
Randall:
I agree, I am not prepared to cast vote on this today based on volume of information. I do believe that I will be prepared within the next 30 days.
Fox:
I want to thank follow commissioners and staff for work and thanks to Commissioner Fioredaliso. I’m in strong agreement with Commissioners, record is huge, the transcript is almost 1200 pages, in past , the government has to strive to get it right, for the state and people we represent. Good government requires we take notice of these developments and consider changes in transmission system, failure would be failure to do our jobs correctly. We are not ready to make decision at this time, we just closed record a week ago, and there are significant issues to get into, whether need has evolved, this is not a simple matter, it is not obvious. Resonable minds can and have differed, I’m aware PSEG has a construction schedule, but I am confident that this will not impact their schedule. I’m aware that there’s a FERC deadline, but I believe this action is necessary and propery. We can make this decision within a month. We can maek a final determination in the meantime.
Fiordaliso:
I make a motion, take judicial of information as outlined, and a secretary’[s letter be sent to PJM seeking additional information
Butler:
I second that.
Randall:
I also want to note that we are refirming Commissioner’s 30 day deadline.
Passed unanimously.
++++++++++++++++++++
Here’s the letter they sent, missing the boat…