On September 7, 2012, FERC conditionally authorized Plains and Eastern Clean Line LLC and Plains and Eastern Clean Line Oklahoma LLC, subsidiaries of Clean Line Energy Partners LLC, (collectively “Clean Line”) to charge negotiated rates for a proposed high voltage direct current merchant transmission project.  This negotiated rate authority will allow Clean Line to allocate up to 75 percent of the project’s capacity to anchor customers through negotiated rates, while the remaining 25 percent will be available through an open season auction.  In recent years, FERC has allowed merchant developers to utilize anchor customers as a means of financial support for a transmission project (see June 4, 2012 edition of the WER).

The Clean Line project is a 750-mile, 600 kV HVDC transmission line with associated facilities that is intended to  deliver up to 3,500 MW of wind power from the states of Oklahoma, Texas, and Kansas to the Tennessee Valley Authority (“TVA”).  Clean Line expects that, upon completion of the project, approximately 15 million MWh of power will be delivered each year from wind resources to TVA.  Once the project is completed, operational control of the project will be transferred to the Southwest Power Pool, Inc. or another Regional Transmission Organization or Independent System Operator.

The route of the project has yet to be finalized, but the Clean Line project has submitted a proposal to the Department of Energy (“DOE”), under section 1222 of the Energy Policy Act of 2005 (“EPAct 2005”) that would expedite the siting and permitting process for the project.  Section 1222 authorizes the DOE, via the Southwestern Power Administration (“SPA”), to accept and use funds contributed by another entity to design, develop, construct, operate, and maintain transmission facilities.  In July 2010, Clean Line submitted a proposal to the DOE seeking to enter into a development agreement with SPA/DOE for the proposed transmission line.  Under the proposal, Clean Line will finance the project and work with SPA and DOE to expedite the siting and permitting process by claiming eminent domain over contested land.  Because the Clean Line project would be a government project, DOE/SPA can assert eminent domain authority on the land needed for the transmission line, regardless of the objections of a land owner or state.   Although DOE has not released a statement on the project, Clean Line’s FERC application indicated that DOE is willing to enter into the development agreement and begin the environmental review process.

A copy of the Commission’s order is available here.