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DOE Makes Headlines and Encounters Headwinds with Clean Line Approval

Michael Kelly — April 13, 2016

Der Rotor wird angesetztThe U.S. Department of Energy (DOE) made headlines last month with its approval of the Plains & Eastern Clean Line transmission project. Headed by Houston’s Clean Line Energy Partners, this venture aims to erect a 720-mile, 600 kV transmission line across the Midwest to help facilitate wind energy delivery throughout the region. Originating in western Oklahoma, this clean energy pathway will traverse eastward and deliver 4,000 MW of power to Arkansas, Tennessee, and other southeastern markets. The project’s path to approval has been beleaguered by opposition and now sets up an interesting conversation surrounding the future of large-scale transmission projects and the DOE’s contested use of the Energy Policy Act of 2005.

Energy Policy Act

To understand the total implications of this decision, we must discuss the Energy Policy Act of 2005, and specifically Section 1222. Section 1222 authorizes the Secretary of Energy to “participate with other entities in designing, developing, constructing, operating, maintaining, or owning, an electric power transmission facility and related facilities.” This authority is subject to a set of conditions pertaining to project need and operating standards. This legislation provides a solution to projects plagued by state-level obstacles. The Plains & Eastern Clean Line is the first project being developed under the umbrella of Section 1222.

An array of benefits stemming from the project have been touted by Clean Line Energy Partners, including increased job creation, renewable energy investment, new wind energy generation, pollution reduction, water savings, voluntary payments and ad valorem taxes to local counties, and right-of-way payments. The line would deliver 500 MW to Arkansas utilities and 3,500 MW to the Tennessee Valley Authority, greatly opening up the Southeast to clean energy.

Not without Opposition

While activists have been quick to tout the multitude of project benefits, there is strong and vocal opposition to the project. Much of this opposition has emanated from Arkansas, including state legislators and the Cherokee Nation. Senators John Boozman and Tom Cotton have aligned with other representatives in asserting that the project doesn’t meet the statutory requirements of Section 1222 and omits serious concerns that ought to be addressed in a state-level review. These legislators have stressed that decisions regarding electrical transmission siting should be left to the states, as they historically have been. The Cherokee Nation has also let their grievances be known, openly opposing the project due to its perceived impacts on property value and the cultural insensitivity of siting the project alongside the Trail of Tears and through the Nation’s ceremonial ground. Regarding local property values, the project is expected to result in declines of 10%-30% in affected areas.

This landmark approval sets the stage for potentially significant change in the wind energy industry and beyond. This project has the ability to spur wind energy investment throughout the region via increased line capacity. Creating this wind superhighway could inject value across the supply chain through increased demand for wind turbines, components, and associated services. This was the first project to be developed under Section 1222, leaving open the possibility that other similar initiatives can survive the seemingly unavoidable obstacles met by large-scale projects. Who will ultimately decide the fate of these projects is still left unclear, as the state versus federal debate can be expected to continue into the future.

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