Clean Line CEO ‘optimistic’ FERC will grant Plains & Eastern negotiated rate authority

Clean Line Energy on June 29 requested from FERC authorization to charge negotiated rates for its $2bn Plains & Eastern HVDC project (Docket No. ER12-2150-000).

As with its Rock Island project, the merchant transmission developer is asking for permission to contract up to 75% of Plains & Eastern’s 3,500 MW capacity to anchor tenants. The remaining 25% of capacity will be sold through an open season.

“It’s FERC’s decision, but we think there’s ample precedent with our filings and with other filings to do what we’ve asked to do, so I’d say we’re optimistic,” CEO Michael Skelly told TransmissionHub on June 29.

FERC on May 22 granted the company authority for its Rock Island transmission project to charge negotiated rates. Clean Line said it would wait to solicit customers.

Plains & Eastern as conceived will connect areas rich in wind energy to load centers farther east along a 750-mile ±600-kV HVDC line. Starting in Oklahoma, the line will connect with the Tennessee Valley Authority’s 500-kV system and will be capable of transporting 15 million MWh of energy per year, or “the equivalent of three Hoover Dams,” the CEO said.

If granted authority to charge negotiated rates, Clean Line will likely wait to sell the capacity on the line until it is further along in the development process, Skelly said.

“We’re in constant communication with both producers and with load-serving entities who have an interest in buying capacity on the line,” Skelly said. “I think they’ll evolve along lines similar to those of Rock Island – as the project gains momentum, there will be stronger and stronger interest.”

Clean Line waiting on DOE partnership decision

Clean Line expects to partner with the U.S. Department of Energy on the National Environmental Protection Act process. The DOE in April 2012 “indicated its willingness” in such a partnership, according to the filing.

“We are in active negotiations with DOE about the mechanics of permitting process and we’re optimistic that those issues will get resolved soon,” Skelly said. The CEO on June 18 told TransmissionHub the company may get a decision “in a month.”

The company in July 2010 submitted a proposal to the DOE and the Southwestern Power Administration to enter into a development agreement. Under the Energy Policy Act of 2005, the DOE, acting through Southwestern or the Western Area Power Administration, is authorized “to accept and use funds contributed by another entity to design, develop, construct, operate, and maintain transmission facilities,” according to the filing.

Clean Line assessing Arkansas permitting options 

Though Arkansas regulators denied Clean Line’s application for utility status in the state, the state is “supportive” of the project, Skelly said. “What we find in Arkansas is people get what we’re doing and why. They’re adventurous.”

Arkansas on June 28 released a poll showing that 88% of Arkansans support advanced energy solutions for the state and country.

The company continues to analyze permitting options in Arkansas, it said in the filing. Clean Line received utility status in Oklahoma in October 2011.

About Rosy Lum 525 Articles
Rosy Lum, Analyst for TransmissionHub, has been covering the U.S. energy industry since 2007. She began her career in energy journalism at SNL Financial, for which she established a New York news desk. She covered topics ranging from energy finance and renewable policies and incentives, to master limited partnerships and ETFs. Thereafter, she honed her energy and utility focus at the Financial Times' dealReporter, where she covered and broke oil and gas and utility mergers and acquisitions.