Nigeria – One of Africa’s Most Prosperous Countries Has Collapsing Centralized Grid

This article from yesterday’s New York Times is a good companion piece to my recent post about Kenya’s M’KOPA.  Nigeria, the subject of the Times article, is more than 2000 miles from Kenya, but both countries are part of the same situation.

Over the last 50 years, African governments have seen the mass availability of electricity as a key to ending poverty in their countries.  The problem is that these governments imported highly centralized systems from the US and Europe.  These systems were expensive to build, and imposed heavy long term debt on Africans.  These systems are also very expensive to maintain.

Although wealthy oil-producing countries like Nigeria have a lot of oil to fuel their generating plants, the same ruling classes that rake off billions from oil exports also fail to invest in the maintenance that these expensive systems require for transmission and distribution.

Here is Mr. Adichie’s description of the situation in Nigeria:

Whenever I have been away from home for a while, my first question upon returning is always: “How has light been?” The response, from my gateman, comes in mournful degrees of a head shake.

Bad. Very bad.

The quality is as poor as the supply: Light bulbs dim like tired, resentful candles. Robust fans slow to a sluggish limp. Air-conditioners bleat and groan and make sounds they were not made to make, their halfhearted cooling leaving the air clammy. In this assault of low voltage, the compressor of an air-conditioner suffers — the compressor is its heart, and it is an expensive heart to replace. Once, my guest room air-conditioner caught fire. The room still bears the scars, the narrow lines between floor tiles smoke-stained black.

Sometimes the light goes off and on and off and on, and bulbs suddenly brighten as if jerked awake, before dimming again. Things spark and snap. A curl of smoke rises from the water heater. I feel myself at the mercy of febrile malignant powers, and I rush to pull my laptop plug out of the wall. Later, electricians are summoned and they diagnose the problem with the ease of a long acquaintance. The current is too high or too low, never quite right. A wire has melted. Another compressor will need to be replaced.

Mr. Adichie is a fiction writer, and his technical analysis is not all it should be in this piece, but he paints a clear picture of a distribution system with extremely poor voltage regulation, due mainly to failures to maintain substations and transformers, as well as deteriorating distribution and transmission lines.

Mr. Adichie describes how urban Nigerians (Rural Nigerians, like rural Kenyans simply have no access to centralized electricity.) cope with their collapsing grid.  He keeps a diesel generator available and runs it regularly.  He also owns a battery bank with an inverter to invert the AC from the central grid to the batteries’ DC current and then back again to AC when he uses electricity in his home.  When the centralized grid is on, he charges his batteries.  When power quits completely, he has some backup capacity.

Mr. Adichie’s personal solutions don’t really solve Nigeria’s electricity problems.  In fact, running his battery charger from the electric grid simply adds more loads to a system already beyond its capacity.  Running a generator simply shifts his energy source to the country’s overtaxed retail diesel fuel system.  Fuel is expensive, and, like Nigeria’s electricity, it’s quality is often poor.

Rural West Virginians face this same bad set of choices when our electrical system fails.  My neighbors immediately fire up their gas generators when Mon Power goes down.  For the next two days, all of the local gas stations run out of gas, because everyone needs fuel to keep their generators running.  The problem is not solved, it is just pushed to a different fragile system.  And people burn even more gas just driving around to find an open gas station.

As I have learned, and as people in rural Kenya are learning, we don’t need to consume massive amounts of electricity.  We just need enough.  When we become wise about what electricity we need, we find that we can produce our own electricity.  That lesson is the same in a Kenyan village as it is in Chloe, WV.

There are more connections between WV and rural Africa than you might think.  New Vision in Philippi, WV is bring solar-powered light and real reliable power to villages from Kenya to Liberia.  They are doing what West Virginians do best, helping their neighbors, even when their neighbors are 5000 miles away.

AEP Transmission Line Pulled in Arkansas

The Southwest Power Pool just dumped AEP’s planned 345 kV transmission project in Arkansas.

It was the same old story:

On December 29, 2014, SWEPCO received a notification letter from SPP stating that updated electric load forecasts showing lower future electric demand in North Arkansas than prior forecasts for the area critical to the Facilities, and the recent cancellation of several large, long-term transmission service reservations, establish that the Facilities are no longer needed to meet the reliability needs in the region.

And

Because of SPP’s determination that the Facilities are no longer needed, and its decision to initiate the process of withdrawing its NTC, SWEPCO no longer seeks the relief requested and hereby withdraws its Application for a Certificate of Environmental Compatibility and Public Need in order that this docket may be closed forthwith.

Citizens have won another big victory against multi-state holding company AEP’s transmission onslaught.

We already knew from expert Hyde Merrill (yup, that Hyde Merrrill) that the line wasn’t needed, so it was only a matter of time until SPP pulled the plug.

Congratulations to Save the Ozarks and all the citizens who worked so hard to stop this line that wasn’t needed.

Among all the Arkansas/Missouri media outlets, only the Joplin Globe appears to be the only one that went beyond reprinting AEP/SWEPCo’s press release.  The Globe’s story is the only one that includes interviews with citizens.

IL Commerce Commission Blocks Clean Line Speculators

The Illinois Commerce Commission has just issued an order denying utility status to the highly speculative Houston-based Clean Line operation under a state law granting the company powers of eminent domain.  This prevents the Clean Line companies from seizing land through condemnation in Illinois.  The Commission agreed with an earlier administrative law judge that their is no need for their line in Illinois.

The ICC did approve the construction of the Rock Island Clean Line, but with major financial conditions and no condemnation powers.  The IL Commission said, in effect, that Clean Line could build the line if they could get landowners to sell them their rights of way voluntarily.  Yeah, good luck with that.

Block RICL has the full story.

This decision is a huge victory for all the people who have been fighting the Rock Island Clean Line, one of many projects the Clean Line hustlers are working on across the Midwest.  The Illinois project was an important piece of their plan, because it enabled significant transmission connections through PJM to the East Coast.

There are other Clean Line projects across the Midwest in Iowa, Arkansas and Missouri.  Clean Line claims that all the lines are for bringing wind-generated power to eastern markets, but they have some big problems.  MISO, the Midwestern RTO has not designated any of the projects as necessary to insure reliability.  Clean Line’s projects are all speculative ventures with uncertain supply, beyond ludicrous claims that wind-power generators will all get rich selling through Clean Lines.  Demand for power on the other end is also a big question mark.  Although Clean Line has its sights set on selling to East Coast states with renewable portfolio standards, these states have little interest in buying wind power that includes costs for huge new transmission lines.

Our friends in Illinois have won a great victory.  They did it with hard work and smart strategy.

 

TrAILCo Has Too Much Capital — FirstEnergy Wants It

What a great way to start an article:

Insisting that the move will raise no risk of “corporate officials raiding corporate coffers for their personal financial benefit,” Trans-Allegheny Interstate Line Co. asked FERC to confirm that it can pay periodic dividends out of paid-in capital to its parent, FirstEnergy Transmission LLC, without violating the Federal Power Act.

That was part of outlaw FirstEnergy’s appeal to FERC to allow it to withdraw capital from its transmission subsidiary TrAILCo.  TRAILCo is filling up so fast with its extra-high rate payer subsidies from FERC for its obsolete transmission lines that failing FirstEnergy wants to get its hands on some of the loot.  Note also that the quote about corporate raiding was written by FirstEnergy’s own lawyers in the company’s FERC filing.

Back in 2001, Dick Cheney and Enron’s Kenny Lay whined in their secret energy task force report that the US transmission infrastructure was falling apart because there weren’t enough profit incentives in place for investors.  The Republican-controlled Congress obliged them in the 2005 Energy Policy Act by creating rate payer financed giveaways to high voltage bulk transmission owners. TrAILCo’s TrAIL line through PA, WV and East VA was one of those lines guaranteed extra high profits.

A new report has been released by The Power Line’s own Cathy Kunkel and Tom Sanzillo for the Institute for Energy Economics and Financial Analysis about FirstEnergy’s desperate attempts to rescue itself from a financial death spiral.  They document how FE is grabbing for all the subsidies it can get its hands on and how it is attempting to suck capital from its profitable subsidiaries to shore up its obsolete coal-fired and nuke plants.  TrAILCo is about the only profitable part of FirstEnergy right now, and they want to loot that subsidiary too.

FirstEnergy’s financial condition has deteriorated since it merged with Allegheny, and its key financial metrics are on a downward trajectory. Over the past three years, it has experienced declining revenues, declining net income, declining stock price, declining dividends, and rising debt. It has retired 4,769 MW of merchant coal plants and has booked impairments totaling $1.1 billion against the value of its coal plants from 2011 to 2013. To shore up its balance sheet, FirstEnergy has relied heavily on “one-time resources,” including proceeds from asset sales and short-term borrowings. FirstEnergy’s poor financial performance stems from the underlying condition that the company’s business – the sale of electricity – is performing poorly and not generating sufficient revenue to cover expenses.
The original quote cited above refers to paying dividends from paid-in capital.  There is no such thing as paying dividends from paid-in capital in standard accounting practice.  When you take capital out of a company, you are simply taking capital out of a company.  This has nothing to do with dividends, which are paid as a share of annual profit or net income.  FE is raiding TrAILCo, plain and simple.

Without the Cheney/Lay-inspired rate payer subsidies, TrAILCo would just be another of FE’s failing business ventures.  Thanks to the 2005 Energy Policy Act, FE doesn’t have to liquidate TrAILCo because the subsidiary is actually an asset that is earning them money, unlike their coal and nuke plants.  Now FE wants FERC to let them milk their cash cow dry.

PJM Unveils New Transmission Projects Under Order 1000

In 2013, PJM Interconnection replaced its goofy transmission “planning” process with a new process that conforms to FERC requirements spelled out in the Commission’s Order 1000.  Under its new process, instead of just picking transmission developers with very little transparency (as with TrAIL and PATH), PJM identifies reliability problems and then sets an annual deadline for project developers to propose solutions.

This year, PJM’s Transmission Expansion Advisory Committee received 106 project applications by its July 28 deadline.  RTO Insider has a good description of these projects.

Here is a map and list of those projects.  Note that none of them involve massive HV lines in WV.  PPL wants to get on the gravy train, though.

Did AEP Just File for Another Rate Payer Subsidy to the WV Coal Industry?

On Wednesday, I read this AP story on the Charleston Gazette Web site.

An American Electric Power subsidiary is asking state regulators to approve a transmission line that the company wants to build in Boone and Raleigh counties.

AEP West Virginia Transmission Company, Inc. filed an application for the Bim Tap Project on Tuesday with the West Virginia Public Service Commission.

The company’s filing says the proposed 5.5-mile 138-kilovolt line would replace an existing line located on property where Independence Coal Company has mining operations. Independence has asked the company to move the line because it plans to conduct operations in the immediate vicinity.

The new line would be located primarily on reclaimed and previously mined land.

The project would cost about $6.6 million.

So, OK, no big deal.  Independence Coal wants to mine where the existing 138 kV line is located.  They asked AEP’s newly split off merchant transmission company to move it onto land they have mined out.  Of course, Independence will pay the $6.6 million to move the line, right?

Probably not.  Let’s look at the certificate of public convenience and necessity application AEP made to the WV PSC concerning the Bim Tap move.  In the text of the AEP application to the PSC, you will not find an answer to the question, “Who will pay for this move?”  You have to look in the attached materials on page 19 to find what looks like the answer.  On this form, you will see information indicating that the cost of this project will be passed on to all rate payers through something referred to as “OATT.”  OATT is the Open Access Transmission Tariff system used by PJM Interconnection through which transmission owners pass on their costs to all rate payers in PJM through PJM assessments on electric utilities.  This means that the cost of this move will apparently be paid by every rate payer in WV through a rate increase that will be hidden away in charges in their power companies’ ENEC rate filings at the PSC.

Back in 2012, I did a post on how PJM OATT transmission costs are passed on to WV rate payers.  The Bim Tap project will not have all the extra added bonuses for transmission that were added to larger projects like PATH, but the mechanism by which PJM transmission charges appear on your electric bill in WV will be basically the same.

In AEP’s application to the PSC, the company notes that its right of way agreements with the big land companies that own the land that Independence is mining require that the owner of the line might have to move it, if the land owners wanted to use the land under the lines.  I’ll bet land owners under the TrAIL line would have liked that clause in their right of way agreements, if AEP’s claim is actually correct.  AEP did not provide copies of these original agreements with its application.

The WV PSC staff and the PSC’s Consumer Advocate Division should certainly intervene in this certificate of need case to get answers to the question of who is paying for Independence Coal’s private convenience.  It certainly shouldn’t be WV rate payers, or any other rate payers in PJM.

Or will the WV PSC and the Consumer Advocate Division just let another $6.6 million hidden subsidy to the coal industry slide by?

 

An American Electric Power subsidiary is asking state regulators to approve a transmission line that the company wants to build in Boone and Raleigh counties.

AEP West Virginia Transmission Company, Inc. filed an application for the Bim Tap Project on Tuesday with the West Virginia Public Service Commission.

The company’s filing says the proposed 5.5-mile 138-kilovolt line would replace an existing line located on property where Independence Coal Company has mining operations. Independence has asked the company to move the line because it plans to conduct operations in the immediate vicinity.

The new line would be located primarily on reclaimed and previously mined land.

The project would cost about $6.6 million.

– See more at: http://www.wvgazette.com/article/20140611/GZ01/140619842/1102#sthash.9GPzWlR5.dpuf

An American Electric Power subsidiary is asking state regulators to approve a transmission line that the company wants to build in Boone and Raleigh counties.

AEP West Virginia Transmission Company, Inc. filed an application for the Bim Tap Project on Tuesday with the West Virginia Public Service Commission.

The company’s filing says the proposed 5.5-mile 138-kilovolt line would replace an existing line located on property where Independence Coal Company has mining operations. Independence has asked the company to move the line because it plans to conduct operations in the immediate vicinity.

The new line would be located primarily on reclaimed and previously mined land.

The project would cost about $6.6 million.

– See more at: http://www.wvgazette.com/article/20140611/GZ01/140619842/1102#sthash.9GPzWlR5.dpuf

An American Electric Power subsidiary is asking state regulators to approve a transmission line that the company wants to build in Boone and Raleigh counties.

AEP West Virginia Transmission Company, Inc. filed an application for the Bim Tap Project on Tuesday with the West Virginia Public Service Commission.

The company’s filing says the proposed 5.5-mile 138-kilovolt line would replace an existing line located on property where Independence Coal Company has mining operations. Independence has asked the company to move the line because it plans to conduct operations in the immediate vicinity.

The new line would be located primarily on reclaimed and previously mined land.

The project would cost about $6.6 million.

– See more at: http://www.wvgazette.com/article/20140611/GZ01/140619842/1102#sthash.9GPzWlR5.dpuf

Arkansas PSC Orders Rehearing on AEP 345 kV Line

Big news out of Arkansas.  This week, the Arkansas PSC ordered a rehearing of the certificate of need case for the 345 kV line proposed by AEP subsidiary Southwestern Electric Power Company (SWEPCo).  This is an historic win for citizens and the main opposition intervenor, Save the Ozarks.

What was AEP’s problem?  The PSC determined that while the regional transmission organization, the Southwest Power Pool (SPP), had made a general determination that transmission upgrades were needed in Arkansas, AEP failed to demonstrate that their particular power line was needed.  As we have seen before, Save the Ozarks’ expert witness, Hyde Merrill, took apart AEP’s claims about need, pointing to a variety of alternatives that would resolve AEP’s and SPP’s problems more simply and at less cost to rate payers.

Considering all the evidence provided to date, the Commission finds that, whiIe some transmission development in the area appears warranted, the record is presently insufficient to determine: the need for the particular 345 kV project that has been proposed, whether that project is consistent with the pubIic convenience and necessity, and whether the project represents an “acceptable adverse environmental impact, considering . . . the various alternatives, if any, and other pertinent considerations.” A,C.A. 5 23-18-519 (b)(4).

Accordingly, the Commission grants rehearing for consideration of additional evidence on the need for, and the potential environmental impact of, the proposed 345 kV project, The parties should provide additional testimony and more recent, comprehensive evidence on whether the proposed 345 kV project is needed, whether transmission requirements in the region might be met by alternative options, such as expanding, upgrading, or building lower capacity facilities, including 161 kV lines, and if not why not, the comparative costs associated with the options, the environmental impact of the options, and the long term sufficiency of the options.

The Commission also grants rehearing for consideration of additional evidence on the routing of the proposed transmission line. The parties should provide additional evidence on SWEPCO’s proposed routes. If SWEPCO chooses to propose or modify a route, it should submit proof that all landowners have received the statutory notice.

With regard to routing, the parties should provide evidence whether existing 161 kV lines could be upgraded or existing rights-of-way used or expanded so as to limit adverse environmental impacts.

Because the Commission grants rehearing for consideration of additional evidence, the prior grant of the CECPN for Route 109 is vacated. Whether a CECPN for transmission facilities should be granted and, if so, along what route will be determined after consideration of all the evidence.

This is not a denial of the certificate of need.  It is an order for rehearing at which SWEPCo and AEP have to provide the specific evidence required by the PSC.

Congratulations to the citizens of Arkansas and Save the Ozarks.  If you want to know more about Save the Ozarks and their fight, here is a link to their Web site.