|6/20/2019 11:26:00 AM|
How to Create and Hide Demand for
$200- $272 Billion in Utility Infrastructure
If the headline of this letter read, "How to Create and Hide Public Demand for $200 to $272 Billion for Dairy Infrastructure Construction," you would balk. But would you reconsider your response if the American Dairy Association was guaranteed 10-12% profit on just the construction of dairy operations and cheese factories and not take on any financial risk from continually driving down milk prices?
As strange as this "economics" is, it only takes a few more stipulations to sell it to the public: modern society running on milk, restrictions on reducing household and business demand for milk and disincentives to produce milk on rooftops with sunlight. Toss in decades of public relations imagery and deceptive economic modeling and the accurate analogy of the modern, aggregated utility and finance industries is complete.
FERC, The Federal Energy Regulatory Commission, is owned and operated by US utility interests. FERC makes up its own rules about how power will be sold on the nation's vast electricity markets. Congress does not. Crucially, FERC guarantees its utility interests 10 to 12% profit on the construction of every power plant, transmission line, substation and distribution line that state utility commissions, "permit."
We all know that demand is flat. Growth has disappeared since 2007 not because of the recession like the utility interests print, but due to increasing efficiencies in equipment and dwellings and higher and higher bills.
Over the same period of time, the traded price of electricity has dropped from five cents per kilowatt hour to about three cents per kilowatt hour. Today, about 30% of a typical electric bill pays for electricity, 15% for operation of one's utility and the remaining 55% goes to payment on debt for already constructed power plants, transmission lines distribution lines. Instead of profiting by selling power, the industry now makes most of its profits by "putting new steel in the ground."
In order to create demand for new steel requires demand for transmission. To create demand for transmission requires new power plants. To achieve this false demand for plants in the Midwest requires industry players coming together each year and developing the annual, MISO Transmission Expansion Planning (MTEP). In 2017, when the underlying economic modeling for Cardinal Hickory Creek was developed, these utility interests decided to assume, without question, that $200-$270 billion in new power plants would be built over the next 15 years.
Are you aware of a "transparent, stakeholder" MISO request asking, "Hey, we need your input electric customer! Help us decide whether customers will spend $200-$270 billion on new plants when demand for electricity is flat or should customers place any spare dollars they have into energy efficiency rebates to improve homes and farms and businesses, use less power and require fewer power plants?" Somehow, I missed that request.
In order to conceal these assumed consumer dollars, MTEP economic modeling must include the new construction in what is called the, "base case." Alarmingly for Cardinal Hickory Creek, MTEP economic modeling hid $200-$270 billion on new plants within a future scenario named the "No Action" scenario. The self-appointed, "stakeholders" studied no scenario in which these billion are not spent on new power plants.
Fortunately for us in SW WI, pressure applied by our state legislators worked. We now know that Cardinal Hickory Creek would not save us money, as touted, CHC would add costs in 8 of 11 future economic scenarios studied by state Public Service Commission staff. Any potential pennies per month ignore midwest electric customers dolling out $200-270 billion in the hidden new construction costs.
The people of Wisconsin cannot allow one inch of our lands to be condemned under this guise. Expansion transmission lines are being stopped across the United States because brave utility commissioners are standing up to utility interests and saying, enough is enough. This takes nerve and this calls upon massive turnouts at public hearings to encourage our leadership to do the right thing.
When you go to the hearings, a simple message is powerful. Any new dollars you ask from me must go towards improving efficiencies in my home, farm or businesses and developing power, locally. I forbid one more dime to deceptive expansion ruse for renewable energy in our outlets that has only increased from 5% to 8% after hundreds of billions of dollars spent. We can do better; we must do better.
Heaven will protect our lands and our economies but only if we use our intelligence and our hard won powers as citizens. Get out your calendar now. I'm looking forward to seeing you at every one of the public hearings June 25, 26 and 27.
SOUL of Wisconsin
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