Capon Valley Coalition

This was passed on to us by one of our friends in River Ridge. There is not date on it.

Energy Washington Week

“Senate Panel To Hold Oversight Hearing On Transmission Corridors”

The Senate Energy and Natural Resources Committee has indicated it plans to hold an oversight hearing on the DOE’s implementation of the transmission corridor program, which permits the federal government to overrule state concerns in siting transmission lines in certain circumstances. The hearings are being prompted by a bipartisan coalition of 14 senators who say DOE has exceeded its authority in establishing high-priority transmission areas and has infringed on state rights.

DOE received widespread condemnation after issuing a final rule last October that designated large swaths of land in the Mid-Atlantic and Southwest as corridors. Environmentalist and state officials charged DOE with ignoring state concerns and flouting environmental protection obligations. The corridor designations are an early step in a process that may lead to the federal government siting transmission lines, a program supported by utilities due to needed transmission infrastructure upgrades in the nation’s most populous regions.

Speaking at the National Association of Regulatory Utility Commissioners (NARUC) winter meeting Feb. 19 in Washington, Leon Lowery, who is on the committee’s Democratic staff, said that the committee needs to have a variety of hearings on past pieces of legislation, one of which is the National Interest Electric Transmission Corridor (NIETC) program authorized in the Energy Policy Act of 2005.

“There are a number of areas that we feel that we need [to have] hearings” on, he said. “There’s the siting authority we need to look at it and see how it’s working.”

Lowery also referenced a letter that 14 senators sent to Chairman Jeff Bingaman (D-NM) and Ranking Member Pete Domenici (R-NM), requesting that the committee hold oversight hearings on DOE’s implementation of the program. The comments appeared to come in response to the letter, which requested the hearing to “bring all pertinent information to bear on the broad implications of the NIETC.” The legislation directed DOE to determine the areas of the country with a high level of electricity congestion and to designate those areas as “National Interest Electric Transmission Corridors.” Once designated, transmission line applications in those corridors that languish at the state level or are rejected can be appealed to FERC for siting authority. The program has been very controversial, leading to multiple lawsuits against DOE and numerous outcries by affected law makers.

NARUC had opposed the legislation in 2005, hoping to keep the siting control at the state level.

Lawmakers opposed to the DOE designations have sought to change or obstruct the policy numerous times over the past year. Sen. Bob Casey (D-PA) threatened to hold the re-nomination of FERC Chairman Joseph Kelliher over the program, and also offered an amendment to the farm bill, which would have blocked some of the legislation. The amendment was defeated.

Environmentalists have sued DOE over the program, alleging that the department violated National Environmental Policy Act and other statutory obligations for failing to conduct an environmental impact statement and failing to adequately consult with states.

The groups also plan on filing for a preliminary injunction which would delay applicants’ time line for appealing to FERC. As it stands now, applications filed before Oct. 5, 2007 can be appealed to FERC on Oct. 5, 2008. Criteria for appealing to FERC includes the application pending at the state level for over one year.

Lowery also said that the committee plans on having an oversight hearing on RTO electricity markets, focusing on “accountability” to discern whether customers are “getting what they pay for.” — Will Harrington

The Washington Post reported today on the TrAIL battle on the other side of the state line:

RICHMOND — Dominion Virginia Power, the state’s largest power company and a major force in the General Assembly, is facing what might be an unprecedented challenge to one of its planned transmission lines.

Starting Monday, the company and its opponents will square off at hearings in Richmond over a proposal to erect a 65-mile power line, carried atop 15-story steel towers, that would send electricity surging east across farms and forests in Northern Virginia.

Dominion Virginia Power says the line is needed to feed a voracious appetite for energy in the Washington area. Opponents say that the utility has exaggerated the need for the line and that the project would spoil a historic landscape and contribute to global warming.

The hearings mark a new phase in a two-year battle that has galvanized landowners, local officials and environmental groups throughout Northern Virginia, many of whom campaigned to defeat a proposal in 1994 by the Walt Disney Co. to build a theme park in Prince William County.

Over the next few weeks, engineers and industry specialists are expected to testify before the State Corporation Commission about the need for the $243 million project. Dominion officials say it would buttress an ailing electrical grid and help avoid the threat of blackouts, expected to start in 2011.

John D. Smatlak, Dominion’s vice president for electric transmission, characterized the opponents’ efforts as perhaps the greatest test Dominion has faced over a transmission line. But he said there also have been supporters, including Northern Virginia businesses.

“We’ve gotten hundreds of letters of support,” he said. “They see the amount of growth happening in Northern Virginia. They see that they are using more power than they used to. And they know it has to come from somewhere.”

But opponents of the proposal, which would connect power plants in western Pennsylvania to a substation in Loudoun County, have been campaigning against the project since it was announced.

“We have been preparing for this for two years,” said Chris Miller, executive director of the nonprofit Piedmont Environmental Council, which has raised more than $3 million to fight the project. Miller said no group has ever raised that much to oppose the utility. “We want to do the best job we can in presenting a factual case to the State Corporation Commission that demonstrates this project is a power line searching for a purpose,” Miller said.

It will be months before the three-judge commission, which regulates utilities and businesses, decides whether the project can go forward. It is a complex case with dozens of participants, and it may finally be decided by the Virginia Supreme Court or federal regulators.

The power line battle resembles others around the nation. Utilities in New York, Pennsylvania and elsewhere have introduced a flurry of power plant and transmission line projects in recent years. The utilities say the projects are needed to feed growing energy demands and fend off massive failures such as the one that plunged the Northeast into darkness for a day in August 2003.

Two other large power lines have been proposed for the Washington area. One would start in West Virginia and end close to the Montgomery County border. The other would begin in Prince William, extend through Southern Maryland and then cross the Chesapeake Bay to the Eastern Shore.

“We are in a mode today where there’s an urgent need to beef up our energy delivery system, and transmission is part of that,” said David Owens, executive vice president of the Edison Electric Institute, a trade association. “Even if you have the most aggressive energy-efficiency program, there is still the need to build new power facilities as well as transmission facilities in order to maintain the reliability we are accustomed to.”

The reliance on long-distance transmission lines worries environmentalists who say the lines and steel towers would ruin the landscape and spur the construction of large power plants that emit greenhouse gases and hasten global warming.

Opponents also argue that the Dominion line is not needed for Virginia. Experts for the opposition are expected to testify during the hearings that the company has exaggerated the region’s energy needs and that the company’s true purpose is to sell electricity to lucrative markets in New York.

“If you look at the size of this line, the capacity of the line, and you compare that to the expected growth in the whole Northern Virginia area over the next decade, the line is grossly out of proportion,” said Mitchell S. Diamond, a former energy official at Booz Allen Hamilton. “There are other solutions that would be better.”

Foremost among the opponents is the Warrenton-based Piedmont Environmental Council, which has helped shape outlying parts of Northern Virginia with its anti-sprawl efforts, which have included the Disney fight.

Among the group’s high-profile supporters are the Mars family, founders of the candy company, and actor Robert Duvall, who hosted a fundraiser for the group last year on his 360-acre farm in Fauquier County. The organization has hired several legal and environmental experts to represent them for the power line hearings, including Jeffrey D. Watkiss, a partner in the law firm of former New York mayor Rudolph W. Giuliani.

But opponents face a formidable foe. Dominion is one of the state’s largest business taxpayers and an influential player in Richmond, with 16 registered lobbyists.

Last year, Dominion’s political action committee donated more than $775,000 to political campaigns, split about evenly between Democrats and Republicans. The company was the largest business donor to state campaigns in 2007, data from the nonpartisan Virginia Public Access Project show.

The Dominion project is part of a 300-mile project planned with Allegheny Power. Dominion would be in charge of the eastern stretch, which would begin in Frederick, Va., and end in Loudoun, slicing through parts of Fauquier, Rappahannock, Culpeper, Warren and Prince William counties.

This appeared in the Pittsburgh Tribune-Review two years ago. Now we know the plan. Let’s hope we don’t get in his way:

From By Rick Stouffer
TRIBUNE-REVIEW
Sunday, February 19, 2006

Thirty months ago, the largest power blackout in U.S. history struck the Northeast, placing an exclamation point on cries by power industry experts that new transmission lines are needed.

Now that Allegheny Energy Inc. Chief Executive Paul J. Evanson has cleaned up his organization’s finances and placed the Greensburg-based energy company on a profitable track, he wants to get involved in long-distance power transmission.

Over the next three years, Allegheny Energy must spend $1 billion on new equipment to reduce power plant emissions. Then, look for the company that three years ago was contemplating bankruptcy to either partner with other companies or go solo constructing new power transmission lines.

“With transmission, you get a good rate of return,” Evanson said. “Some companies have split out their generation, transmission and distribution (lines to your home), but I like having all three parts of the business.”

The typical rate of return on transmission is 10 percent to 12 percent, and since transmission/distribution remains a regulated business, utilities like Allegheny Energy are permitted to pass the cost of system additions or upgrades to customers.

“Everyone today is interested in investing in transmission,” said Tia Barancik, a partner at law firm King & Spalding, New York. “Private equity firms have a tremendous amount of money they want to invest in transmission due to the relatively good rate of return (on investment) relative to the lower risk. They are looking to partner with utilities.”

Even if Allegheny Energy wasn’t interested in new transmission, its larger utility neighbor to the west, American Electric Power, in late January opened its eyes and those of the power industry, proposing construction of a $3 billion, 550-mile-long transmission line. It would stretch from southwest West Virginia, through Northern West Virginia, Northcentral Maryland, Southeastern Pennsylvania, into central New Jersey. The line would move low-cost power generated by coal-fired plants to the power-deprived East Coast.

About half of the Columbus, Ohio, company’s proposed electric freeway goes through Allegheny Energy’s service territory.

“Half the AEP line runs through our territory; we will have the right to invest in, own and operate the line,” Evanson said.

“When your next-door neighbor suddenly decides to build a highway through your neighborhood, it gets your attention,” said Daniele Seitz, an energy analyst in New York who follows Allegheny Energy for Dahlman Rose & Co. LLC.

In addition to possibly partnering with American Electric, Evanson is interested in building new transmission lines, stretching from near its Hatfield’s Ferry plant on the Greene-Fayette County border, east into eastern Maryland.

“It’s a billion-dollar investment, and we’d probably do it ourselves, although if we needed help in financing, I’m sure there would be other utilities interested,” Evanson said.

Analysts and consultants said such expenditures make economic sense, particularly when your customers are paying the bill and there is money to be made moving low-cost power to high-price areas.

“Companies always are looking for growth and growth potential,” said Michael Worms, an energy analyst in New York with Harris Nesbitt Gerard. “One way to grow earnings is to add to the rate base. And, there are good incentive mechanisms in place by FERC (the Federal Energy Regulatory Commission).”

Rate base is the value of a utility’s property upon which the company is permitted by regulators to earn a set profit. Evanson said the usual 10 percent to 12 percent return on transmission-line investments could climb into the 14 percent range.

“With Allegheny Energy, even if building transmission didn’t help its unregulated business, it would help its rate base,” said Olaf Karstens, a director with Navigant Consulting, Chicago. “With Allegheny, transmission would help its rate base, help its unregulated generation move power and upgrade the overall (power grid) system.”

Bill Golemon, our CVC Chairman, passed on this urgent call to action from our allies across the state line in Virginia, the Piedmont Environmental Council:

Please call Senator Rockefeller and Senator Byrd next week and ask them to sign onto a letter requesting oversight hearings on National Interest Electric Transmission Corridor Designation (the letter is attached). The Department of Energy has designated 42 of 55 counties in West Virginia as part of the Mid-Atlantic NIETC.

Within this area, an interstate transmission line applicant has access to federal eminent domain to site the line. NIETC could be used to site the TrAILCo/Dominion transmission line in West Virginia.

Please ask your Senators to join Senators Casey, Whitehouse and Biden in asking the Energy & Natural Resources Committee to hold hearings on this flawed policy.

Senator Rockefeller’s DC office: (202)224-6472

Senator Byrd’s DC office: (202)224-3954

For more information, please contact Liese Dart at (202)857-6982 or by email at ldart@pecva.org.

What is NIETC Designation?

Sec. 1221 of the 2005 Energy Policy Act provided the Department of Energy the discretion to designate National Interest Electric Transmission Corridors (NIETC) in areas of the United States that are found to be electrically congested. If a project lies within an NIETC, a utility may appeal an unfavorable state decision to the Federal Energy Regulatory Commission for use of federal eminent domain to site the project.

Despite receiving over 2,000 comments against the designations, the Department of Energy designated two corridors on October 5, 2007. The first NIETC’s encompass portions of 10 states, 220 counties and impact more than 72 million people.

The Department of Energy failed to conduct an alternatives analysis or to consult with the affected states prior to these designations, both requirements of Sec. 1221. Although this policy could be used to provide long distance transmission access to our nation’s developing wind and solar facilities, the Department of Energy has not designated areas of the country that are identified as having significant renewable resources.

The Mid-Atlantic NIETC designation will increase transmission infrastructure to coal-fired generation built prior to the 1972 Clean Air Act, facilities that lie outside of the EPA’s non-attainment area for air quality. These investments in unnecessary interstate transmission will make cleaner alternatives such as efficiency and demand response technologies less economically viable.

Eight of the ten states in the first NIETC designations have filed Petitions for Rehearing against the Department of Energy’s final decision.

Map of Mid-Atlantic NIETC area

The Washington Post ran this story on the front page today about the Washington area’s growing hunger for electricty … and the region’s expectation that the power will come from somewhere else.

Electric power has already become painfully expensive in Washington and its suburbs. Now, local utilities say, it could become something even worse: scarce.

With its humming data centers and air-conditioned mansions, the region is using 18 percent more electricity than in 2001. And as demand has gone up, so have prices. Some homeowners have seen their rates jump by half or more.

Utility and government officials say the region has to face the idea that its demand for electricity could overtake the supply. In a little more than three years, they say, lights could flicker off in rolling blackouts.

To avert such shortages, electric companies have proposed a transmission line through the Loudoun countryside, a third nuclear reactor in Calvert County and other controversial projects. Even if the projects are built, they won’t come online for years. Environmentalists say the region could solve many of its problems simply by conserving energy.

This year, leaders in Maryland, Virginia and the District will all face crucial decisions affecting the power supply. The main question: Given that Washington loves electric power as much as other types of power, could the region make do with less of it?

The can read the entire story at WashingtonPost.com.