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Released April 18, 2016 | SUGAR LAND
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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--A controversial interstate power transmission project is moving forward after the U.S. Department of Energy (DoE) (Washington, D.C.) overrode objections from Arkansas utility regulators. For the first time, the DoE used authority granted to it under the Energy Policy Act of 2005 to partner with transmission developers to advance transmission projects it deems in the national interest.
But Arkansans aren't going down without a fight. U.S. Senator John Boozman and other Republican members of the Arkansas congressional delegation said they will combat the DoE. In a statement, those elected officials criticized the agency's decision, reached March 25, as "a new page in an era of unprecedented executive overreach as the Department of Energy seeks to usurp the will of Arkansans and form a partnership with a private company--the same private company previously denied rights to operate in our state by the Arkansas Public Service Commission."
The flap is over the Plains & Eastern Clean Line, a 700-mile, $2.5 billion, high-voltage direct current (HVDC) line that will stretch from the Oklahoma panhandle to western Tennessee. The project, developed by Clean Line Energy Partners (Houston, Texas), will function as a merchant transmission line. It will bring up to 4,000 megawatts (MW) of wind energy from Oklahoma and Texas to Arkansas, Tennessee and other markets in the Middle South and Southeastern U.S. For more on this project, see March 19, 2014, article--Clean Line Energy to Move Wind Power via $2 Billion Plains & Eastern Transmission Line.
Like another Clean Line interstate transmission project, Grain Belt Express, the Plains & Eastern line ran into trouble when it was unable to gain approval from one of the states it was planned to pass through. In 2011, the Arkansas Public Service Commission (Little Rock) denied Clean Line's request for a certificate of convenience & necessity. A year earlier, Clean Line had submitted its project to the DoE for consideration, following a request for proposals from that agency. Last month, on March 25, the DoE issued its record of decision approving the Plains & Eastern project.
Clean Line spokesperson Sarah Bray told Industrial Info the company was not seeking DoE intervention in its Grain Belt Express project, currently stalled by Missouri utility regulators. For more on that project, see July 13, 2015, article--Grain Belt Express Transmission Project Blocked by Missouri Regulators.
In its decision supporting the Plains & Eastern project, Energy Secretary Ernest Moniz noted section 1222(b) of the Energy Policy Act of 2005 (EPAct) authorizes the agency to promote transmission development by participating in designing, developing, constructing, operating, maintaining and owning new electric transmission facilities. DoE noted this was the first time it was using the authority delegated to it by Congress as part of EPAct, a bill signed into law by Republican President George W. Bush. DoE said it will have no financial responsibility for the project.
In commenting on its section 1222(b) authority, DoE noted, "Congress passed this provision when it was becoming clear that our nation's transmission infrastructure was beginning to show its age and needed modernization. Congress recognized the need for a modern and resilient grid that could accommodate increasing demands for power with newly available resources. Based on our thorough review of the Clean Line project, it satisfies the goals for which Congress established DOE's authority."
"Moving remote and plentiful power to areas where electricity is in high demand is essential for building the grid of the future," Moniz said in a statement. "Building modern transmission that delivers renewable energy to more homes and businesses will create jobs, cut carbon emissions and enhance the reliability of our grid."
In its summary of findings, DoE said "the project as proposed will serve the public interest by facilitating renewable energy development, stimulating economic development, generating revenues for needed public investment and doing so while minimizing impacts to landowners and the natural environment."
Clean Line officials were delighted with the agency's decision. "The Department of Energy's decision shows that great things are happening in America today," Michael Skelly, president of Clean Line Energy, said in a statement March 25. "The Plains & Eastern Clean Line is the largest clean-energy infrastructure project in the nation and will modernize the U.S. electric grid while bringing forth new investment, job creation and more low-cost power for American consumers."
Skelly continued: "After several years of extensive evaluation, we now have the major regulatory approvals in place to begin construction in 2017. We look forward to continuing to invest in this project so that thousands of people have jobs and millions of consumers benefit from the delivery of low-cost clean power. We are encouraged by the strong market demand for low-cost, clean energy and anticipate that interest will only increase now that the project has this essential decision."
If the project begins construction in 2017, it could be operating by yearend 2020.
Though most of the power will be delivered to the Tennessee Valley Authority (TVA) (Knoxville, Tennessee), Clean Line officials have noted the project also would deliver about 500 MW of low-cost, clean power to Arkansas. The Plains & Eastern Clean Line represents a direct investment of over $500 million in the Arkansas.
U.S. Senator Lamar Alexander (R-Tenn.) joined his colleagues from Arkansas in criticizing the DoE decision. He told the Chattanooga Times Free Press, "Basically this decision says that Washington, D.C., knows more than the people of Arkansas do about whether to build across the state giant, unsightly transmission towers to carry a comparatively expensive, unreliable source of electricity to the Southeast where utilities may not need the electricity. This is the first time federal law has been used to override a state's objections to using eminent domain for siting electric transmission lines. It is absolutely the wrong policy."
Though opponents of the project vowed to continue fighting, it's not clear how they will proceed, because a federal agency acted with explicit congressional approval. In its record of decision, DoE noted all other requisite approvals for the project had been received.
"The industry has long sought federal help in keeping interstate transmission projects moving forward over the objections of state regulatory bodies," noted Britt Burt, Industrial Info's vice president of research for the global Power industry. "Interstate transmission projects that would enable greater use of renewable energy have run into obstacles in some jurisdictions. We'll certainly keep an eye on this, as DoE's decision could unblock several other long-delayed interstate transmission projects."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.
But Arkansans aren't going down without a fight. U.S. Senator John Boozman and other Republican members of the Arkansas congressional delegation said they will combat the DoE. In a statement, those elected officials criticized the agency's decision, reached March 25, as "a new page in an era of unprecedented executive overreach as the Department of Energy seeks to usurp the will of Arkansans and form a partnership with a private company--the same private company previously denied rights to operate in our state by the Arkansas Public Service Commission."
The flap is over the Plains & Eastern Clean Line, a 700-mile, $2.5 billion, high-voltage direct current (HVDC) line that will stretch from the Oklahoma panhandle to western Tennessee. The project, developed by Clean Line Energy Partners (Houston, Texas), will function as a merchant transmission line. It will bring up to 4,000 megawatts (MW) of wind energy from Oklahoma and Texas to Arkansas, Tennessee and other markets in the Middle South and Southeastern U.S. For more on this project, see March 19, 2014, article--Clean Line Energy to Move Wind Power via $2 Billion Plains & Eastern Transmission Line.
Like another Clean Line interstate transmission project, Grain Belt Express, the Plains & Eastern line ran into trouble when it was unable to gain approval from one of the states it was planned to pass through. In 2011, the Arkansas Public Service Commission (Little Rock) denied Clean Line's request for a certificate of convenience & necessity. A year earlier, Clean Line had submitted its project to the DoE for consideration, following a request for proposals from that agency. Last month, on March 25, the DoE issued its record of decision approving the Plains & Eastern project.
Clean Line spokesperson Sarah Bray told Industrial Info the company was not seeking DoE intervention in its Grain Belt Express project, currently stalled by Missouri utility regulators. For more on that project, see July 13, 2015, article--Grain Belt Express Transmission Project Blocked by Missouri Regulators.
In its decision supporting the Plains & Eastern project, Energy Secretary Ernest Moniz noted section 1222(b) of the Energy Policy Act of 2005 (EPAct) authorizes the agency to promote transmission development by participating in designing, developing, constructing, operating, maintaining and owning new electric transmission facilities. DoE noted this was the first time it was using the authority delegated to it by Congress as part of EPAct, a bill signed into law by Republican President George W. Bush. DoE said it will have no financial responsibility for the project.
In commenting on its section 1222(b) authority, DoE noted, "Congress passed this provision when it was becoming clear that our nation's transmission infrastructure was beginning to show its age and needed modernization. Congress recognized the need for a modern and resilient grid that could accommodate increasing demands for power with newly available resources. Based on our thorough review of the Clean Line project, it satisfies the goals for which Congress established DOE's authority."
"Moving remote and plentiful power to areas where electricity is in high demand is essential for building the grid of the future," Moniz said in a statement. "Building modern transmission that delivers renewable energy to more homes and businesses will create jobs, cut carbon emissions and enhance the reliability of our grid."
In its summary of findings, DoE said "the project as proposed will serve the public interest by facilitating renewable energy development, stimulating economic development, generating revenues for needed public investment and doing so while minimizing impacts to landowners and the natural environment."
Clean Line officials were delighted with the agency's decision. "The Department of Energy's decision shows that great things are happening in America today," Michael Skelly, president of Clean Line Energy, said in a statement March 25. "The Plains & Eastern Clean Line is the largest clean-energy infrastructure project in the nation and will modernize the U.S. electric grid while bringing forth new investment, job creation and more low-cost power for American consumers."
Skelly continued: "After several years of extensive evaluation, we now have the major regulatory approvals in place to begin construction in 2017. We look forward to continuing to invest in this project so that thousands of people have jobs and millions of consumers benefit from the delivery of low-cost clean power. We are encouraged by the strong market demand for low-cost, clean energy and anticipate that interest will only increase now that the project has this essential decision."
If the project begins construction in 2017, it could be operating by yearend 2020.
Though most of the power will be delivered to the Tennessee Valley Authority (TVA) (Knoxville, Tennessee), Clean Line officials have noted the project also would deliver about 500 MW of low-cost, clean power to Arkansas. The Plains & Eastern Clean Line represents a direct investment of over $500 million in the Arkansas.
U.S. Senator Lamar Alexander (R-Tenn.) joined his colleagues from Arkansas in criticizing the DoE decision. He told the Chattanooga Times Free Press, "Basically this decision says that Washington, D.C., knows more than the people of Arkansas do about whether to build across the state giant, unsightly transmission towers to carry a comparatively expensive, unreliable source of electricity to the Southeast where utilities may not need the electricity. This is the first time federal law has been used to override a state's objections to using eminent domain for siting electric transmission lines. It is absolutely the wrong policy."
Though opponents of the project vowed to continue fighting, it's not clear how they will proceed, because a federal agency acted with explicit congressional approval. In its record of decision, DoE noted all other requisite approvals for the project had been received.
"The industry has long sought federal help in keeping interstate transmission projects moving forward over the objections of state regulatory bodies," noted Britt Burt, Industrial Info's vice president of research for the global Power industry. "Interstate transmission projects that would enable greater use of renewable energy have run into obstacles in some jurisdictions. We'll certainly keep an eye on this, as DoE's decision could unblock several other long-delayed interstate transmission projects."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.
