February 24, 2024

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Manchin electric grid takeover mirrored by KCC

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Even before Senator Joe Manchin (D-West Virginia) was proposing a bill that would have essentially nationalized energy transmission in the United States, members of the Kansas Corporation Commission — which oversees for-profit utilities in the state — were advocating for the same thing.

Manchin’s bill — since pulled from a budget reconciliation package for a lack of support — was touted as “permitting reform” but contained several troubling provisions.

Dubbed the “Energy Independence and Security Act,” the bill would have authorized the Federal Energy Regulatory Commission (FERC) to direct utilities to build long-distance transmission lines if they have been previously proposed by a state or business — or if the secretary of energy finds the project to be “in the national interest,” the Daily Caller reported on Sept. 25, 2022.

The idea is to relieve congestion on the national power grid by making it easier to move cheap wind power from, say, Kansas to urban centers where there is more demand.

“The Manchin-Schumer bill would give unelected regulators the authority to compel utilities to build high-voltage transmission lines to connect wind and solar facilities hundreds of miles from urban centers, use eminent domain to condemn rights of way, and then pass the costs on to consumers,” Myron Ebell, Director of the Competitive Enterprise Institute’s Center for Energy and Environment, told the Daily Caller News Foundation.

It would also have allowed FERC to “allocate” costs to those who “benefit” from transmission projects — meaning the costs of lines no state agency has approved would be passed to taxpayers — even if voters or state agencies had rejected them.

Earlier this week, however, Manchin requested the bill be removed after it became clear there were simply not enough votes — from either party — in the Senate to pass the bill.

Conservatives objected to federal control of the energy grid, and progressives opposed any measure which would make “non-green” energy projects easier to permit.

Senate Majority Leader Chuck Schumer (D-New York) has said he intends to try to pass the bill “before the end of the year” as a separate measure or as part of another piece of legislation.

KCC pushing for federal control of transmission projects

The KCC, which recently cleared the way for a major transmission project to take power from the Wolf Creek nuclear power station to Missouri, has filed comments with FERC suggesting that more transmission capacity should simply be “required.”

At a joint state-federal task force with FERC, several state officials — including commissioner and former chairman of the KCC Andrew French, appointed by Gov. Laura Kelly– suggested that FERC require regional grid operators have the capacity to transfer a minimum amount of energy to other grid regions

Known as a “minimum interregional transfer capability,” such a requirement could lead to more multistate power lines being developed, industry newsletter EnergyWire reported.

An authority even FERC Commissioner James Danly wasn’t sure existed.

“I have yet to hear anything that makes me think we’ll be able to make that showing,” EnergyWire reports Danly said.

Citing last year’s major winter storm, French said: “I think we have a pretty strong evidentiary basis now that something needs to be done.” 

It was not the first time French had suggested that federal regulators take a firmer hand in transmission policy — despite the fact that transmission projects are invariably paid for by utility customers.

Several times in the last couple of years — most recently in June of this year –French has suggested that transmission costs should be spread more broadly rather than being passed directly to local consumers.

“I would’ve liked to see some sort of express requirement,” Bloomberg reports French said. to “protect those local areas that aren’t necessarily using the resources from being burdened with an inordinate amount of the costs.”

However, it is notable that neither French nor the KCC suggests that Kansans should bear none of the cost of transmission projects — even when those projects do not directly benefit Kansas ratepayers.

The KCC position, stated on at least three occasions in the 12 months, is that Kansas retail ratepayers should pay part of the costs to expand or upgrade the transmission grid for exporting Kansas renewable energy — despite the fact those upgrades materially increase costs for Kansans already paying some of the highest electric rates in the nation.

Attorney James Zakoura, who represents the Kansas Industrial Consumers Group and Kansans for Lower Electric Rates before the KCC, said in a release that his groups are opposed to such projects.

“KIC and KLER filed Comments at FERC in opposition to the KCC Comments because the KCC did not open a Kansas Docket where positions of all stakeholders on this issue — retail ratepayers, the Legislature, and the Governor and Administration — could be vetted and considered,” he wrote. “KIC and KLER continue to believe that important state energy policy is the shared responsibility of the Governor and the Legislature – after all, stakeholders have been granted an opportunity to be heard on state energy policy issues.”

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