Who wants some Clean Line whine?

Drink up! It's free, and Dave Berry has been handing it out without restraint in Georgia recently. Full disclosure: this post is long and nerdy. I am completely convinced that no normal person would want to read this stuff.

Introduction

Many of you are aware: Clean Line (and all of us, unfortunately) has a long road ahead of them with their "Plains and Eastern" project. Landowners oppose the project in record numbers, the entire Arkansas federal congressional delegation supports us (thank you!), and they have quite a few hurdles to jump before any shovels hit the ground. After the Department of Energy's recent approval, one of the biggest hurdles Clean Line has to jump over is obtaining customers. Not "letters of intent" or the like, but REAL, firm, and enforceable contracts for capacity on their line.

They need customers, customers, customers... like, yesterday. Customers are the butter for their bread. Without them, they can't use eminent domain against us, the DOE won't help them with landowner negotiations, they can't get financing, the line becomes financially unfeasible, and it doesn't get built. Period. As frustrating as it is... in this case, time is our friend.

These things being said, I would just like to say that being as immersed as we have been in this process and opposition for going on three years now, it is a spectacular emotional (and physical) roller coaster. There is constant worry, and you're always trying to find something, anything, to ease your mind a bit. If there's anything we've learned about Clean Line, there are two sides to them: There is the public, rosy aura that they want you to perceive, and then there are the things that are going on behind the scenes to accomplish their goals. Sometimes it takes a bit of digging to get the full picture. I hope you enjoy.

Clean Line Needs Customers

Really, Clean Line has just has about three options when it comes to subscription:

1. Large utilities such as the TVA, Southern Company and it's subsidiaries, Entergy Arkansas/Louisiana, etc, can buy large chunks of their capacity. One would have to assume that this option would be preferable to CLEP because it is the easiest for them.
2. Smaller municipal electricity co-ops throughout the "midsouth and southeast" can sign much smaller capacity contracts in the 25-50mW range. It takes a LOT of those to fill the capacity of a 4,000mW line.
3. There are some corporations that want to "green" their image. Imagine the scenario where a few private, for-profit "Fortune 500" companies are alright with other another private, for-profit company seizing land from private landowners to aid in their quest to make themselves look good. Yeah, that's the point we've gotten to in this country. Here's evidence:

Enjoy your Corn Flakes, folks!

One of the potential customers Clean Line has been courting (or attempting to strong-arm, depending on your perspective) is Georgia Power (GP). Now, for a little bit of clarity and perspective, GP is a subsidiary of Southern Company, and here is their service territory:

According to Wikipedia:

Georgia Power is an electric utility headquartered in Atlanta, Georgia, United States. It was established as the Georgia Railway and Power Company and began operations in 1902 running streetcars in Atlanta as a successor to the Atlanta Consolidated Street Railway Company.

Georgia Power is the largest of the four electric utilities that are owned and operated by Southern Company. Georgia Power is an investor-owned, tax-paying public utility that serves more than 2.25 million customers in all but four of Georgia's 159 counties. It employs approximately 9,000 workers throughout the state.

The Georgia Power Building, its primary corporate office building, is located at 241 Ralph McGill Boulevard in downtown Atlanta.

Unlike Clean Line, they're a serious utility, much like Entergy within the state of Arkansas. They're also leading the way in the southeast for emissions reductions, apparently now without Clean Line. Why do I say this? Let me explain:

Back in January, Georgia Power released their latest proposed Integrated Resource Plan (IRP), in which they lay out their generation requirements for the next twenty years. Here's the full docket. Where Clean Line enters this IRP mix is directly tied to their "REDI" program which is nested within their broader IRP on page 10-106:

As part of its continued effort to responsibly grow the renewable generation market in Georgia and provide energy benefits to all customers, the Company is proposing the procurement of an additional 525 MW of renewable capacity through 2019 if such procurement can be obtained below the Company’s projected avoided costs. In order to provide the maximum amount of benefit to customers, the Company is proposing to procure this energy through three distinct programs: (1) RFPs from renewable developers with utility scale projects to fulfill an annual portfolio capacity target; (2) RFPs from developers with smaller, distributed scale projects to fulfill an annual portfolio capacity; and, (3) smaller, distributed scale solar purchase offerings from Georgia Power customer-sited projects.

Where Clean Line's part would come in:

Under the utility scale portion of the REDI RFPs, Georgia Power proposes to purchase energy from up to 425 MW of renewable generation scheduled to achieve commercial operation no later than December 31, 2019. The Company will file a detailed RFP schedule in September 2016 that will outline the timeline for the 425 MW RFP. The Company will accept proposals for solar, wind, and biomass projects with 2018 or 2019 commercial operation dates (“COD”) based on transmission impacts and overall value. The Company will take ownership of all Renewable Energy Credits (“RECs”) produced by these facilities. Third-party proposals that allow for Georgia Power ownership will be considered.

For utility scale resource bids, the Company will accept proposals for projects that are greater than 3 MW in size, but no larger than 210 MW in size that can attain commercial operation in 2018. The Company will also accept proposals for projects greater than 3 MW in size but no larger than 215 MW in size that can attain commercial operation in 2019. Consistent with the ASI-Prime utility scale RFP, the PPAs will be for a term of up to 30 years. 

For all renewable resources bids, the Company will accept both “as delivered” proposals and “firm block” proposals. The cost of upgrades on Southern Company’s electric system to deliver to Southern Balancing Authority Area load, if required, will be imputed into the total bid costs.

However, for renewable resources located outside of the Southern Balancing Authority Area, proposals must bear all transmission delivery cost and risk to the point of delivery at the Southern Balancing Authority Area interface. The Company will accept proposals for delivery to the Southern Balancing Authority Area interface across high voltage direct current (“HVDC”) lines.

That sounds good for Clean Line, right? Georgia Power accepting proposals from HVDC would be a great thing for them. There's only one problem with it: Those pesky in-service dates. See, Clean Line is pushing the idea that their transmission line will be energized by 2020. My opinion is, even if everything goes exactly as planned for them, there's less than a snowball's chance of that, but that's another post entirely (I think GP knows that, too). The problem with GP's IRP for Clean Line revolves around their proposed "Request for Proposals" (RFP). In the original IRP, the RFP is laid out to be executed as follows:

For utility scale resource bids, the Company will accept proposals for projects that are greater than 3 MW in size, but no larger than 210 MW in size that can attain commercial operation in 2018. The Company will also accept proposals for projects greater than 3 MW in size but no larger than 215 MW in size that can attain commercial operation in 2019. Consistent with the ASI-Prime utility scale RFP, the PPAs will be for a term of up to 30 years. 

Clean Line really wants Georgia Power as a transmission customer. REALLY wants them. Where the "Clean Line whine" enters the picture is with their own David Berry's intervention into the docket to approve Georgia Power's 2016 IRP. See, Clean Line wants everyone in the southeast to have renewable energy as quickly as possible, unless it's not Clean Line's renewable energy. When it turns out that it might not be Clean Line's renewable energy that will enter Georgia Power's mix via their REDI program, they send one of their top guys to try to get the Georgia PSC to maybe persuade GP to change their IRP a little bit to help them out:

1. Authorize and direct the procurement of additional renewables beyond the 525 MW currently identified in the IRP so long as the resources are below Georgia Power’s avoided cost. Georgia Power currently proposes initiating a Renewable Energy Development Initiative (“REDI”), which includes plans to procure an additional 525 MW of renewable capacity through a REDI Request for Proposal (“RFP”). As identified in the IRP on page 10-104, Table 2: Components by Resource Type- Wind & Biomass, integrating wind resources results in significant benefits due to avoided fuel and purchased power costs, avoided operations and maintenance costs, avoided environmental compliance costs, and avoided capacity costs. The Commission should authorize and direct Georgia Power to procure more than 525 MW of renewables if additional proposals are received that have a higher benefit to Georgia Power ratepayers than cost, which will result in downward pressure in rates.
   
2. Maintain the RFP’s flexibility across technologies. Renewable energy technologies, particularly wind and solar, are complementary resources. Wind energy is typically the lowest cost resource, produces more energy per megawatt (“MW”) installed, contributes substantially to meeting winter peak demand and provides for economic development opportunities in the supply chain. Solar energy contributes substantially to meeting summer peak demand and provides for local construction job opportunities. The two resources also complement one another on a time of day basis, and a portfolio of both wind and solar produces less system variability. By increasing the size of the RFP, there will be substantial opportunities to include both cost-effective wind and solar generation into Georgia Power’s supply portfolio.
   
3. Accelerate the timing of the RFP to align with the wind Production Tax Credit phase out, resulting in lower costs of wind generation. The REDI RFP should begin as soon as possible to ensure that the wind proposals received capture the full value of the Production Tax Credit (“PTC”). 2016 will be the last year that new wind project construction will be eligible for the full value of the PTC. Wind generators can preserve this value by incurring 5% of the total cost, or starting construction, of the facility during 2016. However, without firm commercial commitments from Georgia Power, wind generation companies are unlikely to invest the significant capital needed to qualify wind farms for the full PTC value in order to supply the lowest cost wind power. Delaying the start of the RFP until late this year, or until 2017, will result in wind generation proposals that are more expensive due to a lower PTC value. 
   
4. Allow proposals commencing operations as late as 2021 if they offer higher net benefits to customers. The current construct of the RFP proposes procuring 210 MW of utility scale renewable projects that can attain commercial operation in 2018 and 215 MW of utility scale renewable projects that can attain commercial operation in 2019. This does not provide sufficient time for wind generators using Plains & Eastern or other new transmission lines to come online. Clean Line believes that the lowest-cost renewable resource available to Georgia Power is Oklahoma Panhandle wind power delivered via Plains & Eastern, which will begin delivering energy to the Southeast in 2020. Closing the RFP to such a resource would likely increase costs for Georgia Power customers.
   
5. Encourage Georgia Power to evaluate ownership of wind assets. Finally, the RFP should consider the additional benefits to ratepayers if Georgia Power were to own the wind facilities. Clean Line supports the following statement from pg. 10- 106 of the IRP: “third-party proposals that allow for Georgia Power ownership will be considered.” Investments in wind will likely result in a lower delivered cost of energy than the same resource procured via a power purchase agreement, due to Georgia Power’s low cost of capital and efficient use of tax credits. 

Also:

Q. Please explain how specifying required online dates may limit the responses received in the REDI RFP

A. The current construct of the RFP proposes procuring 210 MW of utility scale renewable projects that can attain commercial operation in 2018 and 215 MW of utility scale renewable projects that can attain commercial operation in 2019. The lowest cost wind resource available to Georgia Power is likely to be Oklahoma Panhandle wind delivered via Plains & Eastern, which will begin delivering energy to the Southeast in 2020. Clean Line plans to allocate a majority of the 4,000 MW of transmission capacity to the Southeast to generator-shippers in 2016 and early 2017. This finite resource will not be available if Georgia Power waits until the next IRP cycle in 2019 to evaluate delivered Plains & Eastern wind, and maintaining a 2018 or 2019 required online date may preclude these resources from competing in the proposed REDI RFP.

It would be incredibly convenient for Clean Line if the Georgia PSC directed Georgia Power to adopt these recommendations, wouldn't it?

So, did Mr. Berry get what he wanted? It doesn't appear like he will. Georgia Power did, in fact, increase the amount of renewable energy they'd procure. It also appears that they added a stipulation that only 300mW of energy procured through REDI could be wind. That doesn't help. Did they bend their RFP dates for the sole benefit of including Clean Line? No. Did they say they would consider projects with an in-service date in 2020-2021 in their 2017 RFP? No. Doesn't do a lot to help them:

3. The Renewable Energy Development Initiative ("REDI") is approved and shall be increased such that it will procure 1,200 MW (150 MW of Distributed Generation ("DG") and 1,050 MW of utility scale resources.) Utility scale procurement shall take place through two separate Requests For Proposals ("RFP"). The first RFP will be issued to the marketplace in 2016 and will seek 525 MW of renewables with in service dates of 2018 and 2019. The second RFP will be issued to the marketplace in 2019 and will seek 525 MW of renewables with in service dates of 2020 and 2021. No more than a total of 300 MW of wind resources shall be procured through REDI...

Conclusion: There's a good chance we can cross out Georgia Power from Clean Line's list of potential customers (at least until 2019). It's good news.

Time Is Our Friend

Mr. Berry outlines perfectly on page 19 the reason their project's success is related directly to the Production Tax Credit (PTC). Any pesky delays from landowners or other entities makes their project increasingly less financially feasible as the clock ticks:

V. The REDI RFP should begin as soon as possible, and should allow proposals for delivery later than 2018. 

Q. How will the timing of the REDI RFP affect the wind prices that are received?  

A. The timing of the RFP will have a large effect on the wind proposals received, as the Production Tax Credit will begin a multi-year phase out in 2017. The Consolidated Appropriations Act of 2015 extended the Section 45 PTC for electricity produced from wind generation retroactively to January 1, 2015, and prospectively through the end of 2019. After 2016, the credit will be reduced by 20% for projects that begin construction in 2017, by 40% for projects that begin construction in 2018, and by 60% for projects that begin in 2019. The wind PTC would expire for projects that begin construction on or after January 1, 2020.

Under guidance previously issued by the IRS interpreting the “beginning of construction” rule for qualified renewable power facilities there are two methods that a taxpayer may use to establish that construction of a qualified facility has begun:

1. A taxpayer may establish the beginning of construction by: (a) starting physical work of a significant nature (Physical Work Test) and (b) thereafter maintaining a continuous program of construction. 

2. Under the second method, a taxpayer may establish the beginning of construction by meeting the so-called “5% safe harbor,” which provides that construction of a facility will be considered as having begun if (1) a taxpayer pays or incurs five percent or more of the total cost of the facility before the applicable expiration date, and (2) thereafter, the taxpayer makes continuous efforts to advance towards completion of the facility. 

Wind generators need certainty of offtake arrangements prior to incurring five percent of the total cost of the facility or commencing construction. Georgia Power currently plans to file a detailed RFP schedule with the Commission in September 2016, which would lead to the issuance of the RFP likely in early 2017. This timing would eliminate the potential for wind proposals that include the full value of the PTC. Georgia Power should release the RFP as soon as possible.

This declining PTC value means that the lowest cost wind will be procured in 2016, and the cost of wind energy will rise between 2016 and 2020 as the tax credit is phased out. Improvements in wind turbine technology have significantly increased the capacity factor of wind, thereby lowering the delivered cost of energy, but near-term improvements in turbine technology will not be sufficient to compensate for this lost PTC value. 

Thanks for that description, Mr. Berry. I haven't been able to find a better one anywhere else.

Plains and Eastern is Not "Clean" Anymore

Not only that, but David Berry also admits something that we've known all along, but Clean Line says nothing about: Clean Line is no longer a "clean" line anymore, either. This is found on page 13 of the testimony linked at the top of this section:

Q: Are there any additional value components associated with transmission service across Plains & Eastern that should be evaluated during the renewable RFP process?

A. Yes. In addition to transferring low cost wind, transmission capacity on Plains & Eastern can be used to deliver bulk power from the SPP system during the hours when wind generation is not using the entire capacity of Plains & Eastern. Clean Line has estimated that the ability to deliver SPP market power could save Georgia ratepayers approximately $9 million dollars a year. This calculation assumes that Georgia Power or a wind generator has obtained enough transmission service across Plains & Eastern to deliver 1000 MW to the Southern system.

So, translation: As we all know, the wind doesn't blow all the time. What Mr. Berry is saying here is that, when wind generation isn't supplying full capacity on the line, that extra available capacity could very well be filled with coal-generated power from the bulk SPP system. While Clean Line has been portraying this line as the "green" way to go, it turns out that isn't the whole truth. Who would have thought, right? All of us.
 
What say you Glen Hooks and Bob Allen?

Conclusions

1. Clean Line needs customers, they seem borderline desperate, and Georgia Power is not likely to be one of those customers anytime soon.
2. In this case, time is our friend.
3. The Plains and Eastern "clean line" isn't quite as clean as it has been portrayed. It's turning into a regular old transmission line.

If you made it this far, thanks for reading! :)

NO subscription? NO partnership. PERIOD.

For mobile users, I apologize for the formatting irregularities. Orienting your phone horizontally should fix them.

Clean Line would have you believe they are going to use the lag time before the results of the NEPA and Section 1222 reviews to "inform landowners about the project". That they're being the good guys. Waiting until only after they get regulatory approval and gain the hammer of eminent domain, they hope, to subscribe customers to their unnecessary transmission line. There is only one small problem with this plan (shown above), and it is a problem they had hoped none of us would notice.

Before the Department of Energy agreed to enter into their Advanced Funding Agreement with Clean Line, acting Deputy Secretary Daniel Poneman wrote a letter to Michael Skelly laying out the criteria Clean Line would have to meet to further the partnership.

Clean Line has NO subscription. Not a single megawatt. Zilch. Nada. The Tennessee Valley Authority has indicated that it doesn't want any sort of HVDC wind until 2025 or later (but only if all proverbial stars align):

Unless something drastic changes in the next month (I don't think it will) before the TVA Board of Directors votes on the adoption of their 2015 Integrated resource plan, it appears the graphics above illustrate the near-term plan for TVA. No HVDC for TVA for at least 10 years.

Clean Line has recently tried to downplay TVA's importance to their business plan, even though the entire reason for the project from the beginning has been to deliver wind energy to the TVA:

Michael Skelly, president and founder of Clean Line Energy, said Thursday that TVA is just one of several utilities that seeks wind-generated power. One of those is The Southern Company, which provides power to 4.4 million customers in Mississippi, Alabama, Georgia and Florida.

“The market is much larger than TVA,” Skelly said.

So, I did a little more research on Georgia Power (a subsidiary of Southern Company). Georgia power is one of the other companies Clean Line would love to sign on with. This is going to be long, but for the Clean Line nerds among us, all of it is well worth a read. Seriously, if you have any serious interest in the future of this at all, read both of the following things and the documents in the provided links line-by-line. The following are just a few small excerpts of the analysis Georgia Power did on out-of-state wind purchases. On December 4, 2014, Georgia Power issued an RFP for wind energy. This is a summary of their findings, specifically regarding HVDC (emphasis added):

5.2 HVDC Project Impact. Five responders submitted proposals into the RFI that depend upon transmitting over a proposed HVDC line (the “HVDC Project”), which would facilitate delivery from the Texas/Oklahoma panhandle into the TVA Control Area. The use of this HVDC line has the potential to eliminate delivery risk across the SPP and MISO Transmission Systems. The HVDC Project referenced in these proposals is currently in the development stage with construction planned to begin in 2016 and is estimated to be in service by the end of 2018.

The proposed projects that rely on the HVDC solution are not without concern. Several of these projects were noted as being PTC dependent. Therefore, even if the wind projects were to come online before 2018, the proposed energy could not be delivered to Georgia Power customers until the HVDC line is in service. Any delay in the construction date of the HVDC line will likely affect the ability of these projects to take advantage of the PTC. In addition, transmission rights along the HVDC line have not been awarded, nor has pricing for the transmission rights been established. This calls into question the accuracy and validity of all proposals assuming that the wind resource will be transmitted to Georgia Power through the HVDC line.

And:

6.2 Net Benefits. As a result of the Company’s thorough review of the proposals, Georgia Power calculated potential total net benefits ranging from -$13.58/MWh to $24.31/MWh on a levelized basis. The indicative nature of an RFI suggests that net benefits are overstated, and more likely substantially overstated, as discussed further in the section below on risk.

6.3 Risks. Although the evaluations of the RFI responses forecasted net benefits for some proposals, the appropriate risk and contingency factors must be imputed to these results to get a clear picture of the actual value of the proposals. The total net benefit results are a direct reflection of quality of the inputs and the current assumptions included in the Company’s transmission base cases. Changes to the following assumptions and considerations could have a material impact on the previously noted net benefit valuations:

• The responses provided by developers are non-binding. As a result, respondents shoulder no risk in offering products that are unrealistic in terms of low prices, aggressive schedules, and excessive energy amounts.

• The pricing offered by developers was provided in a context outside the specific terms and conditions of a PPA. The contractual language within a PPA is a large driver in determining the allocation of risk and consideration within a transaction and results in transaction-specific pricing.

• Georgia Power assigned delivery costs based upon current market assumptions for projects offered at the busbar or delivered outside of the SBA. However, the recent merger of the Entergy and MISO transmission systems has created tremendous volatility in neighboring markets. In fact, the cost of firm transmission service through SPP and MISO has increased, by 65 percent and 100 percent respectively, in the past four years. While Georgia Power’s evaluation relied on the latest publicly available information, the current forecast calls for more moderate and stabilizing conditions, which is a very different environment from experiences in the past few years.

• The transmission costs assigned to accommodate additional imports across the SOCO interfaces are based upon the most current base case assumptions. These assumptions reflect commitments by entities external to Southern Company and were developed in a coordinated manner through the SERC and ERAG base case building process. The results provided in this Report are based upon the current conditions, but are subject to change based upon re-evaluations that are regularly performed in accordance with NERC planning and transfer capability guidelines.

• Five responses depended on a speculative HVDC transmission solution. Any potential net benefits from these proposals are highly questionable because the transmission rights along the line have not been awarded, nor has the pricing for transmission rights been finalized.

In addition, there was this: 

With regard to the Clean Power Plan (CPP), Staff Consultants assert that “procuring wind will likely be a method of compliance for the Company to meet Georgia’s goal under the clean power plan.” La Capra Associates Wind Request for Information Review (May 19, 2015), pg 3 (hereinafter “La Capra Report”). Yet no one knows how federal law will view out-of-state wind for CPP compliance purpose, until that issue is addressed in the final rule. Even if out-of-state wind is addressed, the final rule may be stayed and will most likely be litigated, so uncertainty will remain until Georgia’s CPP state or regional compliance plan is developed and approved a few years from now.

It is unnecessarily risky to issue an RFP for out-of-state wind as a compliance option for the CPP without the certainty it will be an actual option for compliance. Without knowing the rules and requirements for how that option will be treated, it would be premature to issue an RFP now. Additionally, if out-of-state wind can serve as a CPP compliance option, it will only mean that a wind purchase would be considered as one item on the collective list of compliance options. It is unnecessarily risky and possibly costly to unilaterally select wind to meet compliance requirements without first giving due consideration to the best mix of resources and options to achieve CPP compliance.

As stated previously, the Wind RFI Report shows there are significant limitations to procuring out-of-state wind products that will require system upgrades and additional costs for customers. The Staff Consultant does not contest this finding. Instead, Staff and its Consultant believe it is better to enter into non-firm transmission deals. However, reliance on non-firm wind opportunities introduces significant risks and cost concerns that undermine potential customer benefits from added wind resources. The La Capra Report states “that it may not be necessary for wind projects to have firm transmission to create benefits for ratepayers.” La Capra Report, pg 3. The Company disagrees. It is inappropriate to issue an RFP based upon conjecture. The marketplace trusts that when Georgia Power issues an RFP, the Company intends to procure new resources. To go fish for potential non-firm energy deals that may actually reduce the benefits to customers and then not proceed with contract execution undermines Georgia Power’s position in the marketplace. Furthermore, importing wind provides significant cost risk to customers, especially if such imports are of a non-firm nature, as Staff recommends. The benefits that non-firm transmission wind products would provide Georgia Power customers may be completely eliminated if customers take on the risk of operation and transmission costs for delivery. Further, Georgia Power will need to know with certainty what wind products it is purchasing and when such products will be delivered if it intends to use such wind resources for CPP compliance purposes. If Staff and its Consultant believe that it is more beneficial to customers to procure non-firm wind products, they should present testimony on that position in the IRP proceeding.

In conclusion, the value at which Georgia Power could procure out-of-state wind over the next 12 to 18 months cannot be predicted with any real level of certainty. There are significant risk factors that could weigh against the perceived value of additional wind resources. Most importantly, no record exists that supports a conclusion that the Commission must move hastily or that additional out-of-state wind is the right option for Georgia Power’s customers. The required record to make an informed decision on additional wind resources may be developed in the 2016 IRP. As always, the Company will continue to work with Staff and Interveners to ensure customers receive the greatest benefits from a diverse portfolio of resources. The Company will also continue to look for unique opportunities to improve its resource portfolio, which may include bringing additional projects of extraordinary advantage before the Commission in compliance with the Commission’s Rules. However, the best place to consider the addition of resources, including new out-of-state wind opportunities, is through the upcoming 2016 IRP.

And:

Georgia’s climate and environment is not conducive to significant domestic generation of wind resources. Therefore, procuring additional wind resources for Georgia means importing energy into the Southern Balancing Authority and into the Georgia Power Electric System. There is a finite amount of intermittent resources that the Georgia Power Electric System can absorb without incurring significant operational costs. While Georgia Power shares in the belief that wind energy has the potential to provide significant value to its customers, Georgia Power customers only realize that value when the benefits exceed the total cost of importing wind energy across multiple states. It makes no economic sense to focus solely on the purchase of out-of-state renewable energy without considering economic and reliable in-state alternatives. The Commission will need to decide whether it is in the customers’ best interest to pay for more in-state renewable resources, like solar, or pay for more out-of-state renewable resources, like wind. More importantly, the Commission will need to decide what additional resources are required, if anything, to serve the needs of Georgia Power’s customers in a reliable and cost-effective manner. These are all appropriate considerations and questions to be asked and answered through the IRP process. There is no evidentiary record proving it is more advantageous and cost-effective to issue an RFP now for out-of-state resources that have inherent transmission risk and operational costs, rather than wait until a more complete resource generation and procurement analysis is in evidence in the 2016 IRP. 

There's more, but I will stop with Georgia Power here. Read the documents in the links above for more.

So, what about Entergy? Arkansas Sierra Club Director, Glen Hooks, effectively stuck his foot straight in his mouth in a recent article in the Arkansas Times by regurgitating the following line Skelly likes to use to try to convince people Entergy is actually interested in purchasing electricity from them:

"Entergy recently did an RFP for wind and reopened it because the price was so good they wanted to buy more," Hooks said.

Entergy took very little time to correct Hooks' error:

CORRECTION: Entergy Arkansas spokesperson Sally Graham said that Entergy did not reopen its renewable energy bidding, as Hooks stated. She said that Entergy has selected the Stuttgart 81 MW solar project.

You'd think the Arkansas Sierra Club would have learned by now that supporting Clean Line is a bad position to hold, wouldn't you? We've been trying to tell them for over a year now.

If you've made it this far, I appreciate it. This is a very complex subject, and understanding that complexity requires countless hours of research and reading between the lines. One finding leads to another, until you've got so many browser tabs open you don't even know where you started. It's really easy to dismiss opposition as NIMBY until you start realizing just how complex and uncertain this whole thing is. Makes you think more than twice about this inexperienced private company obtaining the right of eminent domain to seize over 17,000 acres of land across two full states, doesn't it?

My takeaway:

1. The Plains and Eastern is not feasible without the TVA on board. Clean Line has been relying on TVA for almost 6 years to be its anchor. Their plan all along has been to get TVA to agree to purchase enough of a chunk of their capacity to prove that the transmission line is financially feasible enough to gain a regulatory approval from the DOE. All indications point to this not happening for at least ten years, but more than likely fifteen.
2. Clean Line has no subscription, and will not have any at all unless DOE approves this boondoggle. But, as I have shown you above, according to DOE's own readily available documentation, a partnership is not allowed without "a sufficient (unknown) percentage of its line subscribed to support the Project's financial viability".
   
   Which begs the question: What utility in their right mind would sign onto a firm contract with these guys? Utilities have to provide reliable and cost-effective power. Clean Line has not demonstrated in any way that they can provide reliable and cost effective power, and there is no utility that is going to agree to a firm service agreement with them without ALL regulatory approvals.

Let's face it, if Clean Line thinks they're going to put a shovel in the ground sometime next year, they're dreaming. This thing is going to court if it is approved, and the first lawsuit against the DOE could very well be a result of the very first requirement in the pre-AFA agreement referenced at the top of this blog post. Clean Line has had six years to prove itself as viable. They have failed miserably.

Is the Department of Energy willing to stick its neck out that far for a project that has no demonstrated need? We're not sure, but we're watching.