A group of rural electric cooperatives and users of hydroelectric power are expressing concerns about a project planned by Clean Line Energy Partners LLC to take electricity from wind farms in the Oklahoma Panhandle to Tennessee.
The Oklahoma Association of Electric Cooperatives and the Southwestern Power Resources Association are worried their members could be on the hook for a share of the project’s $2 billion cost if it’s not successful.
Clean Line representatives said the company is working with the federal Energy Department and its Tulsa-based Southwestern Power Administration to address the groups’ concerns.
“We have been in front of the co-ops for almost two or three years now working with individual co-ops along our route,” said Jimmy Glotfelty, executive vice president of external affairs. “We do not want our costs to be borne by the ratepayers of the Southwestern Power Administration unless they actively and affirmatively buy power across this project. If they don’t, there should be little fear or no fear that they will pay these rates.”
Clean Line has agreed to fund the federal government’s costs as the Energy Department begins a regulatory review of the Plains and Eastern Clean Line, a high-voltage, direct-current transmission line stretching more than 750 miles from the Oklahoma Panhandle to north of Memphis, Tenn.
The company is using a section of the 2005 Energy Policy Act that directs power marketing administrations such as Southwestern to work with private companies on new transmission projects that benefit the electric grid.
Southwestern is one of four federal power marketing administrations set up by the Flood Control Act of 1944.
The administrations market and transmit electricity from hydroelectric dams built by the U.S. Army Corps of Engineers. Their customers include electric co-ops, municipal electric authorities and other government users.
Ted Coombes, executive director of the Tulsa-based Southwestern Power Resources Association, said his group of hydroelectric users adopted a policy outlining its concerns over liability.
“There’s always the chance of somebody getting a huge legal judgment against them, there’s always a chance of somebody running out of money, the market turning around or they drop the investment tax credit for wind production and the market dries up,” Coombes said. “Our biggest point is to get indemnified by the U.S. government so we won’t have to pick up any of the costs on this if anything goes wrong.”
Coombes said his group met with Clean Line officials at one of the association’s meetings in September. Southwestern also held a public workshop in late November on the subject.
“Our position is not against Clean Line, or Clean Line building the project,” Coombes said. “Our position is: Just hold us harmless, and make it ironclad.”
Coombes pointed to a case from the early 1980s when the federal Bonneville Power Administration in the Pacific Northwest participated in a project to construct several nuclear plants. When the project failed, a court determined bonds sold for funding the plants were at least partially the responsibility of the federal government because of Bonneville’s involvement.
“That’s the kind of situation we want to avoid,” Coombes said. “It’s easy to give lip service and say, ‘Don’t worry about it, you’ll be taken care of.’ It’s just not that easy to get the ironclad guarantee.”
Clean Line said it has assurances from the Energy Department that Southwestern customers will be protected, but that it’s still early in the project. The transmission line isn’t expected to be in service until 2017.
“We’re not at the stage yet where we can show exactly how it’s covered because we don’t have an agreement with the Department of Energy yet for the participation of Southwestern,” said Mario Hurtado, executive vice president of development.
Coombes said if the federal government approves Clean Line’s project with Southwestern’s participation under Section 1222 of the Energy Policy Act, Southwestern would be the condemnation agent to acquire land for the project under eminent domain.
“If somebody’s taking your land away to build a power line across it that you don’t want or you don’t think you’ve gotten enough money, you have a choice of suing the federal government or Clean Line,” Coombes said. “Any decent lawyer is going to go after the one with the deepest pockets. It’s probably going to be the federal government.”
Clean Line representatives said the company has been upfront with its stakeholders and state and local officials that the project could acquire land using Southwestern’s federal authority. The company said its preference is to gain permission at the local and state level. Clean Line has held hundreds of meetings already with stakeholders along the proposed route.
“This is an inter-regional project that covers three different states,” Hurtado said. “In order for us to really do this in a complete way, and responsibly, it makes sense for us to avail ourselves of this opportunity to have an inter-regional approach to it, and that’s what (Section) 1222 offers.”
Chris Meyers, general manager of the Oklahoma Association of Electric Cooperatives, said his group isn’t sure Clean Line’s project fits the intent of the law because it won’t benefit local co-ops. The association’s members purchase some hydroelectric power from Southwestern.
“A direct-current line isn’t going to improve the reliability of the existing grid,” Meyers said. “It seems like it’s really stretching the intent of the law.”
Meyers said he’s not opposed to wind power or Clean Line’s planned transmission project. But the law setting up power marketing administrations says its ratepayers are responsible for costs to upgrade their infrastructure, he said.
“If we are going to do it, we need a clear understanding of the risks,” said Meyers, who wrote a column about the issue in the association’s monthly magazine.
Southwestern officials said that’s also their intent. Clean Line is one of the first companies to build dedicated transmission lines from renewable energy projects in the central United States to utilities across the country. The company has three other high-voltage, direct-current transmission line projects at various stages of development.
“Southwestern will do whatever it needs to make sure our ratepayers won’t be paying for this project,” said Nicki Fuller, a public utility specialist for Southwestern. “It’s a groundbreaker, so I think we all just need a little more clarification.”
Southwestern has 1,380 miles of transmission lines and serves customers in Oklahoma, Arkansas, Missouri, Kansas, Louisiana and Texas.