You Can’t Tell the Players Without a Scorecard

You have been reading a lot lately on The Power Line about the Federal Energy Regulatory Commission wanting to take over all federal control of siting high voltage transmission lines from the US Dept. of Energy.  The DoE has been taking comments on this “delegation” of power and is posting those comments on its Web site here.

Reading these comments is very interesting, because it reveals just who stands where across the spectrum of the industry, big national environmental organizations and state public utilities commissions.  Some of the positions might surprise you.

The land based wind power company for which former FERC Chairman Joseph Kelliher now works, after he passed through the FERC/power company revolving door, supports the delegation of DoE’s power to FERC.  NextEra, Mr. Kelliher’s employer, filed a letter that sounds strangely like current FERC Chairman Wellinghoff’s anxious (and transparently false) reassurances that the change in FERC’s control is just fine and really doesn’t change anything.

Power companies like Duke Power, MidAmerican Energy (a recent partner with AEP in multi-state transmission lines in the Midwest), Pepco Holdings (owner of the MAPP transmission project) all think the FERC takeover is a great idea.

Nine state public utilities commissions filed individual comments.  All of these letters are critical of most of FERC’s plans.  A number of these state comments supported and echoed concerns voiced by the National Association of Regulatory Utility Commissioners (NARUC) the national organization of state public utility commissions.

NARUC was not happy.  Here’s how they started their comments:

Before we get into our specific comments, we wanted to register our general frustration with how this process has unfolded.  Until our abruptly scheduled August 19th meeting, we were given no formal or informal notice that such a dramatic policy change was even under consideration.  Given that our members remain the primary transmission siting authorities, we are disappointed that we were not privy to the details or even informal conversations about this proposal prior to the above-referenced meeting, especially since the proposal has been under discussion since June and was vetted with industry stakeholders long before it was even revealed to us.

Ruh roh.  Looks like NARUC smells a rat.  Note their clear assertion that state utility commissions are “the primary transmission siting authorities.”  Looks like there is a serious court fight brewing here.  Things don’t get any more cordial after that, either.

To the extent that this proposal is motivated by a desire to reduce barriers to transmission, it fails.  It relies on a tortured reading of the statute that would cause uncertainty, litigation, damage to State and federal relations, and delays in transmission development.

As you can guess, NARUC concludes its comments by strongly opposing FERC’s takeover plans.

Given NARUC’s strong arguments against FERC’s plans, you would think that most national environmental organizations would oppose the power grab.  You would be wrong.  The National Resources Defense Council, along with a number of other groups, including the Wilderness Society and other regional groups, support FERC’s takeover of federal control from DoE.  These environmental groups “strongly support” the takeover in their comments.  Why?  Because they think they can control what kind of electrons their wished for new transmission lines will carry.  The environmental groups think the FERC takeover will result in dozens of new “clean power only” lines that the land based wind industry desperately needs to make their projects profitable.  Why these groups think that new lines built through North Dakota will only carry wind power and not electricity from the dirty lignite coal that is mined in North Dakota is beyond me, but that seems to be the dream world in which they live.

Finally, we come to the comments that make the most sense of all the ones that were filed.  These are the comments from our great East Virginia friends, the Piedmont Environmental Council.  They are also the group that stood up and fought FERC, and won, in the federal Fourth Circuit Court of Appeals, removing FERC’s ability to take our land for PATH.

PEC begins its comments with a clear alternative under the heading “A Better Solution”:

If the goal is to increase transfer capability quickly; to tap into renewable resources; to enhance national security and to provide jobs for Americans, there is a better way to accomplish all these goals and to minimize the impact of transmission expansion on the lands, the people and the wildlife along the path of any transmission corridor.

According to many transmitting utilities, much of the existing backbone transmission infrastructure is congested and is nearing the end of its useful life.  If transmission providers could apply for and receive the same enhanced rate of return on a “wreck and rebuild” project as they can receive on constructing new transmission all of the stated goals of the plan could be accomplished without the attendant complications that will be outlined below.

A rebuilt line could be confined to the existing right of way, reducing the time and expense of land acquisition.  State commissions, stakeholders and utilities would have an easily understood siting process.  New conductors and upgraded equipment could expand transfer capability.  The current depressed demand for electricity offers a unique opportunity for scheduling the necessary outages on the grid.

Rebuilding existing lines is not without difficulties.  It is, however, a proposal that could be adopted quickly and would face far less challenges than the pending proposal while offering benefits to the grid, the environment and the economy.

And PEC concludes by saying:

In a larger sense, DOE and FERC should be exploring ways to incent and enhance non-wires solutions.  As PEC has argued previously to DOE as well as in other state and federal fora, the future of American energy policy lies not in building more and more transmission lines, but in increased efficiency, demand reduction and clean, distributed generation.  The pending proposal is a transmission expansion enhancement plan that accomplishes none of these goals and PEC cannot offer any words of support for its adoption.

Now that is talking sense to FERC and DoE.

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