Clean Line transmission project in limbo after Mo. rejection

Source: Jeffrey Tomich, E&E reporter • Posted: Monday, July 6, 2015

A developer’s plan to construct a wind energy superhighway across the Midwest hit a roadblock yesterday when Missouri regulators denied the company’s application.

The Missouri Public Service Commission voted 3-2 to deny the $2.2 billion high-voltage transmission project, with the majority concluding that Clean Line Energy Partners LLC didn’t satisfy the criteria needed for approval.

The commission’s order is the biggest setback to date for Houston-based Clean Line, a company formed six years ago to build five high-voltage direct-current transmission lines linking remote, windy areas to more populous areas in the East and West.

Yesterday’s PSC ruling focused on the 770-mile Grain Belt Express, which was proposed years ago to help move energy from yet-to-be-developed Kansas wind farms to Eastern markets. The outcome highlights the difficulty in winning regulatory approvals for long-haul transmission projects.

Clean Line said the Grain Belt Express project would benefit Missouri through more than 1,000 construction jobs as well as property taxes. The project would drop 500 megawatts to a converter station in eastern Missouri while delivering 3,500 MW to the PJM Interconnection, which operates the bulk power grid across parts of 13 states in the Midwest and Mid-Atlantic.

And wind developers, including Santa Barbara, Calif.-based Infinity Wind Power, have indicated strong interest in the project, which they say is needed if the central Plains is to realize its energy potential.

But the project also triggered fierce opposition from rural landowners and farmers throughout eight rural counties who feared a drop in property values and the threat of being forced to sell easements through eminent domain proceedings if Clean Line were given utility status (EnergyWire, Nov. 12, 2014).

Michael Skelly, Clean Line’s CEO, said yesterday afternoon that the company would review the PSC’s 28-page¬†order¬†before deciding on a next step. But he made clear that the company isn’t giving up.

“There will be next steps,” Skelly said in an interview. “This is a project that is necessary, and anybody who looks at the grid says we need projects like this.”

Energy Policy Act provision could offer path to approval

The company’s options include appealing the decision in court or resubmitting an application to the commission if there is additional information that demonstrates the need for the project.

Commissioner Daniel Hall, one of two who voted in favor of the project, said he hoped the company would refile its application.

Clean Line could also seek federal approval for the project through a little-known provision, Section 1222 of the Energy Policy Act of 2005. The company is already seeking using that process to try to win approval for another transmission line — the Plains and Eastern project from the Oklahoma Panhandle to western Tennessee.

Clean Line sought federal approval for the project after being denied utility status by the Arkansas Public Service Commission. But that order was more about the wording of Arkansas statute and not a policy decision about the need for the project.

Under Section 1222, the Energy secretary could act through a federal marketing administration to build and operate new transmission projects within the administration’s footprint if the project meets certain criteria, including reducing congestion or meeting electricity demand.

While the language mainly provides a funding mechanism that allows a third party to pay for the process, the provision has stirred controversy because it allows the government to advance a power line that faces state objections (Greenwire, Nov. 3, 2014).

Fight ‘until the bitter end’

Whatever Clean Line’s next move, opponents say they, too, will stay engaged.

Jennifer Gatrel, an organizer for Block Grain Belt Express, a grass-roots group of Missouri landowners who oppose the project, said there have been thousands of written comments and testimony at eight public hearings across the state.

“We’re united, and we’re never going to give up,” she said. “We’ll stick with this until the bitter end.”

The opposition group doesn’t keep membership numbers, Gatrel said. But she said opposition is widespread.

“You can hardly drive down a gravel road without seeing a Block Grain Belt Express sign,” she said.

The commission, which held eight heavily attended public hearings across the state, said the case was unprecedented for Missouri. Never before has a merchant transmission company sought to build a high-voltage line across the state.

PSC Chairman Robert Kenney and Hall said the project is consistent with state policy goals promoting renewable energy. It could also help Missouri comply with U.S. EPA’s Clean Power Plan, they said.

Hall even favored granting a late request by the company to hold off on a decision until EPA’s final carbon rule was issued in August.

The EPA rule is “incredibly relevant” to whether the Grain Belt Express is in the public interest, Hall said. And if it leads to Missouri needing to add wind energy for compliance, the state will look back at this decision as a “missed opportunity.”

Others questioned whether Grain Belt Express was the cheapest option for Missouri to add clean energy.

“I believe in clean energy. I believe in wind and solar energy. But I don’t believe in giving utility status to anyone who comes along and claims that that’s what they’re going to deliver,” said Commissioner Steve Stoll, the only Democrat to vote against the project.

Commissioner Scott Rupp cited testimony from an evidentiary hearing last year that wind energy purchased from elsewhere in the Midwest was cheaper that what would be delivered by the Grain Belt Express.

Rupp also said he was also concerned that the Grain Belt Express was the product of a primate company’s business model and didn’t originate from a regional transmission organization (RTO).

Skelly said nothing in Missouri law requires transmission projects to originate from RTO planning processes.

What’s more, the Grain Belt Express spans four states and involves three regional grids — the Southwest Power Pool, the Midcontinent Independent System Operator and PJM.

There’s presently no transmission planning process that involves even two RTOs, much less three, Skelly said.

“The development of intrastate transmission projects is not something that we’re particularly good at in this country,” Skelly said.

But projects such as Grain Belt Express will become more needed as EPA’s Clean Power Plan rule is finalized and implemented, he said.

Said Skelly: “How we think about the grid is evolving, and we can be at the forefront of that evolution.”