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Archive for the ‘Public Utilities’ Category

Yesterday the U.S. Attorney’s Office for the Northern District of Illinois brought out its 22-count indictment of Michael (“I’m not the target of anything”) Madigan.

In July 2020, the U.S. Attorney’s Office entered into a Deferred Prosecution Agreement with Exelon Corp. and Commonwealth Edison Company, which served as Madigan’s political patronage machine for close to a decade. The DPA refers to Madigan as “Public Official A,” and includes messages from people in his corrupt network that refer to Madigan as “Himself” or “Our Friend.” It seems like Madigan was more popular among the federal prosecutors than he thought. In exchange for bribes to or for the benefit of Madigan, ComEd and Exelon ensured the passage of legislation favorable to them, and hindered or prevented legislation Exelon didn’t like.

If we could delve into the inner recesses of Madigan’s mind, we’d find that his Id, Ego, and Superego are all composed of one thing: a driving ambition to be the Second Coming of Richard J Daley. Madigan’s father and Daley the Elder became friends when both held political patronage jobs in the Cook County Clerk’s Office. Using political patronage, Daley the Elder went on to build one of the most powerful political machines that any American city had ever seen. During old Mayor Daley’s tenure, parts of Chicago’s government, like the Department of Streets and Sanitation, were turned into political patronage machines that Richard J. Daley used to provide jobs for his supporters.

One of old Mayor Daley’s chief precepts, which Madigan was later to adopt as his guiding principle, was to help your friends and either punish or co-opt your enemies. To Madigan, Daley the Elder had achieved what he considered political Nirvana: a world in which everybody both depended on you and was afraid of you.

But Old Man Daley passed away in 1976, and in 1983 the Shakman Decree ended Chicago city government’s role as a perpetual patronage machine.

Madigan’s alternative was to use ComEd and Exelon as a way to create a new political patronage machine and do an end run around the Shakman Decree. For Exelon and ComEd it was a match made in, well, maybe not heaven. As the DPA showed, bribery and corruption are integral components of Exelon’s business model: the utility parasite and the political parasite established a symbiotic relationship.

Over the next few weeks we’ll go further into the specific chapter and verse of the legislative benefits that Exelon and ComEd obtained at the expense of Illinois ratepayers. Nothing in the 22-count Madigan indictment revises the amount of bribes that Madigan directly or indirectly received: about $1.3 Million. We’ll tally up the economic benefits that Exelon and ComEd obtained from these illegal payments, and see how they balance out.

But Madigan and the Illinois legislature comprise just one sphere of influence. We’ll also take a look at how Madigan’s malignant principles have metastasized throughout the Illinois courts — an area the U.S. Attorney’s Office might be interested in. The General Assembly and the Illinois courts are the two poles between which the Madigan supremacy oscillated for nearly a half century. Within the courts Madigan’s fingerprints are harder to see, but it must be borne in mind that, whether Madigan was acting at one or the other of these poles, it was the Madigan supremacy still. His control was absolute and coordinate.

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Consult the Negotiator is the podcast of Marc Siegel, a leading labor and employment attorney in Chicago. Marc’s podcast series focuses on strategies and tips for negotiation and settlement of disputes. Marc was kind enough to invite me on as a guest to discuss taking on utilities and power suppliers, and approaches to settlements with those types of adversaries. It’s the May 19, 2021 episode, so if you’d like to hear yours truly, please listen to Consult the Negotiator wherever you get your podcasts. Thanks!

UPDATE 5.24.2021: Here’s the link to the podcast:

https://lnkd.in/d26mKyc

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Governor Abbott of Texas has blamed the Green New Deal for the prolonged power outages caused by the extreme cold and snow/ice conditions that have descended on his state.

Nope.

The Green New Deal is not legislation. It’s nothing more than a 2019 U.S. House of Representatives resolution. Beyond that paper resolution, it doesn’t exist.

Mad Magazine, the comic book, used to run a section called “Things We’d Like to See,” and the magazine would have some parody cartoons of then-current events. The Green New Deal is just a set of “things the U.S. House of Representatives would like to see” in energy and the environment. Granted, an H of R resolution is more serious than Mad Magazine, but the Green New Deal has about the same degree of reality. So, no, the Green New Deal did not do harm to Texas.

Even if some sort of Green New Deal had been passed, it would not have applied to the Texas electric grid. Texas is the grid’s version of an island; its electric system is all intrastate and subject only to Texas, not federal jurisdiction.

Texas had similar cold-induced power outages ten years ago. The feds studied those events and recommended that Texas harden its generation, transmission and distribution infrastructure for cold weather. But those recommendations had no binding effect on Texas. Maybe Texas will now put those recommended improvements in the category of “things we’d like to see.”

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Manchurian_Cand

The 1962 Spy Thriller

“Why don’t you pass the time by playing a little solitaire?”

In the 1962 thriller The Manchurian Candidate, a U.S. Army platoon is captured during the Korean War and taken to China. There, the platoon is brainwashed by Chinese and Soviet spymasters into believing that their sergeant, Raymond Shaw, rescued them all from the hands of the enemy. Not only that, everyone in the platoon believes (and repeats) that Shaw “is the kindest, bravest, warmest, most wonderful human being” any of them have ever known in their lives. Shaw is awarded the Congressional Medal of Honor. The nefarious Communist plot is to turn Shaw into a sleeper agent who will rise through the U.S. intelligence and political establishments. Once he’s in place, the Chinese can trigger him by suggesting that he play a little solitaire. When Shaw turns over a red queen, the sleeper agent is activated.

Fast forward to May 1, 2020: The Trump Administration issued Executive Order 13920, Securing the United States Bulk Power System.

The Executive Order acknowledges that the U.S. bulk-power system (shorthand for the interstate electricity transmission system) is a target of foreign adversaries of the U.S. who seek to commit malicious cyber- and other attacks on our bulk-power system. Historically, blackouts in the U.S. have affected areas or regions, but none have stretched from coast to coast. Still, anybody who has been through a blackout knows that the failure of the electricity grid is catastrophic, no matter how localized the outage. Electricity is the unnoticed platform that supports modern civilization itself.

The Executive Order prohibits the unrestricted acquisition or use in the United States of any bulk-power system electric equipment designed, developed, manufactured, or supplied by persons owned by, controlled by, or subject to the jurisdiction or direction of foreign adversaries. Any such acquisition or use is a “transaction,” and such transactions are prohibited even if any related contract, license or permit was entered into or granted prior to the date of the order. (Executive Order 13920, Sec. 1(c)).

The order itself doesn’t name the foreign adversaries with whom transactions are prohibited, but the State Grid Corporation of China, the world’s largest utility, most likely tops the list.

State Grid has been on an acquisition binge for several years. As far back as 2012, State Grid became the largest shareholder in Redes Energeticas Nacionais, Portugal’s national power grid. In 2013, State Grid began acquiring interests in utilities and transmission and distribution networks in Victoria and New South Wales, Australia. In 2014, State Grid took a substantial equity stake in Italy’s CDP Reti, which operates both electricity and natural gas networks. Brazil, Laos and some countries in central Africa have also been recipients of State Grid’s interest, in particular with regard to the development of ultra-high voltage transmission facilities that can transmit power over very long distances with relatively lower line losses. (There are still line losses, however.) Many have viewed Beijing’s rapid international expansion of its electricity industry as a geopolitical companion piece to its Belt and Road Initiative.

Xi_Jinping

Presiden Xi Jinping of the People’s Republic of China

A Manchurian Capacitor (used to improve power factors) is a distinct possibility. If China were to build into the grid equipment it sells in the U.S. sleeper mechanisms that could cause a breakdown in our electrical grid, the effects would be catastrophic on a historical scale. But even short of this, a threat by China to trigger a grid failure in the U.S. would be much more plausible, and therefore much more effective, than a threat made with ICBM’s that could end China’s existence as well as ours.

Executive Order 13920 signals a fundamental change in the perception of China since the outbreak of the global Covid-19 health crisis. Nobody wants electric grid equipment that Xi Jinping can tell to go play a little solitaire.

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Thomson Reuters has published my article, “Merchant Transmission and its Discontents,” in the current issue of the International Energy Law Review, [2019] I.E.L.R. 35.

While FERC has sought to encourage merchant transmission development in a manner similar to that in which it encouraged merchant generation, the merchant transmission concept is beset with internal contradictions that radically limit its practical implementation.

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Cyber-Security Grid

The Freedom of Information Act (5 U.S.C. 552) was originally enacted in 1966, and has been amended a few times since. The U.S. Supreme Court has said that “[t]he basic purpose of FOIA is to ensure an informed citizenry, vital to the functioning of a democratic society, needed to check against corruption and to hold the governors accountable to the governed.” NLRB v. Robbins Tire & Rubber Co., 437 U.S. 214, 242 (1978). There are, however, nine exemptions, including three related specifically to law enforcement, under which the federal government can withhold information that would otherwise be disclosed under the FOIA.

At federal agencies today, and particularly at the Federal Energy Regulatory Commission, those exemptions from disclosure have been so broadly construed that one can say with reason that FOIA has been administratively repealed. Instead of starting with a policy of full disclosure, from which certain specific categories of information are carved out, federal agencies instead start with St. Peter’s maxim: they’d rather cut off their left hand than allow it to obtain information about their right. Imagine being at the British Admiralty circa 1906 and receiving a request from Kaiser Wilhelm for a complete set of plans for the H.M.S. Dreadnought. That will give you an idea of the view contemporary federal agencies take toward FOIA requests.

Like water in a state of nature, less interesting work in a bureaucracy always flows downhill, where it is handled by persons of lower seniority and even less authority. This leads to over-classification of agency materials as top secret and exempt from FOIA. After all, if you’ve been at your agency job for four years or less and your responsibilities include responding to FOIA requests, why would you release something and risk your superior’s ire, if not your job? Better to pick out an exemption or two from the FOIA menu and send back a response of

REQUEST DENIED

Of course FOIA provides for remedies to obtain disclosure, and those often work for large media companies and the like. But for the vast majority of Americans who lack the resources to commence a FOIA enforcement action in federal district court, those remedies are worse than useless. They’re a cynical joke played on the American people.

Now we have another FERC FOIA dust-up. The North American Electric Reliability Corporation (NERC) submitted to FERC a Notice of Penalty against an electric utility for 127 cybersecurity violations between 2015 and 2018. The company agreed to pay a record-setting $10 million fine its cybersecurity violations. According to some reports the utility is Duke Energy, though that hasn’t been officially confirmed. FERC doesn’t want to publicly release the name of the electric utility.

Why shouldn’t the public be able to know whether their utility is the one that’s risking the reliability of their electricity supply and distribution system because they’re unable to get their cybersecurity act together? These violations, and the $10 million fine, are the fault of the utility’s management, not its ratepayers. Shouldn’t the ratepayers be allowed to know whether their utility is going to try to pass this cost onto them through rates?

Public Citizen, a watchdog group, has demanded that FERC disclose the utility’s name. They have stated that

“Concealing the name of the recipient of the largest fine in history sends a confusing message to the public that large penalties do not come with full accountability,” said Tyson Slocum, director of Public Citizen’s energy program and author of the filing. “Future violators may be able to similarly hide behind the veil of anonymity. Moreover, keeping the public in the dark about the cybersecurity track record of our electric utilities may create a false sense of security and reduce the likelihood of more public awareness and vigilance needed to protect cybersecurity.”

The real problem is that bureaucracies like FERC do not want the curtain pulled back on anything they do, regardless of whether any exemption applies. Any unplanned exposure of their operations risks upsetting their messaging and tarnishing the public image they want to create. Every public performance by an agency has to be staged just so, or else, in this internet media-driven age, a public relations catastrophe could occur.

 

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Paradise (KY) Coal Plant

The Paradise 3 Coal Plant near Drakesboro, Kentucky

Today the Tennessee Valley Authority, the federally-chartered corporation that provides electricity to all or parts of seven southeastern states, will determine whether the Paradise 3 generating station near Drakesboro, KY and the Bull Run station in Clinton, Tennessee, both of which are coal-fired, will be closed. You might well ask why a coal-fired station would be named “Paradise.” If Adam and Eve had lived anywhere near the Paradise 3 station, as pictured above, they probably would have skipped that whole business with the serpent and just left on their own.

If the plants are to be closed, it won’t happen overnight. They’ll be phased out as part of a process that preserves grid reliability. President Drumpf has urged the TVA to keep the two plants open, which would help coal mining companies that contributed to his campaign. It would also help preserve some employment of coal miners, but any claim that keeping these two plants running is “bringing coal back” is absurd. The percentage of coal-fired generation has been on a steady downward march and, as explained in a recent post, that is not due to some alleged “war on coal.”

The reasons for shutting down these two plants shows the problems politicians encounter when their campaign claims to “dig coal” meet the real world. A report commissioned by TVA states that these two plants will have relatively high projected future maintenance costs and environmental compliance expenditures, high forced outage rates and are a “poor generation fit” for TVA’s future power demands.

Forget about air emissions for a moment. When coal is burned, it doesn’t just disappear. Just like the burned-out briquettes in the barbecue the morning after the party, coal leaves ashes behind; coal ash, to be specific. It’s a mess:

Coal Ash Pit

When it rains, water falls onto the open coal ash pit and seeps down through it, percolating into the ground below with bad effects on groundwater resources. When it’s dry, even a moderate wind can pick up coal ash and blow it over a wide area.

Coal-fired generation will be with us for some time yet, but over the long term it’s an 18th- and 19th-century technology that will go the way of the cross-bow, the walled city, and the eight-track tape.

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Electric utilities have to worry about a lot of stuff that sounds mundane, including that part of system maintenance that goes under the heading of “vegetation management.” In plain English, that means trimming trees so that they don’t interfere with transmission and distribution lines. The problem is very large and very complex because many miles of utility lines run through remote areas in which trees and brush, left to grow over decades (plural), can cause problems for both inspection and access for maintenance. In the eastern U.S., vegetation management is primarily a matter of system reliability: A branch or fallen tree can press one wire against another, causing a short or other disruption in service.

But in the western U.S., vegetation management is also very much a safety concern. A tree branch doesn’t need to touch a line to cause a fire. If it gets too close, electricity can arc from the line to the branch. If the branch is dry, which is often the case in rural California, it can burst into flame. Sparks, embers or burning fragments of the branch may drop to the ground. The ground is usually full of dry leaves and underbrush. Combine that with strong winds and within a few minutes a vast area of dry forest will be turned into a blazing inferno. The proximity of suburbs and exurbs to these forested areas only increases the risk to lives and property.

California generally, and PG&E in particular, has had a very tough history in this regard. going back decades. The Camp Fire, which raged through much of last November in PG&E’s service territory, shows that vegetation management is literally a matter of life and death: 86 persons died in the Camp Fire, which also destroyed 14,000 homes, more than 500 businesses, and 4,300 other structures. Estimates of damages are in the range of $7 billion.

CNN reports that California utility PG&E will file Chapter 11 at the end of this month. It’s believed that a PG&E power line came in contact with nearby trees and sparked the fire. The Camp Fire comes on the heels of a series of wildfires, also blamed on PG&E, in 2017. Those fires caused $10 billion in damages and 44 deaths. In 11 of those fires, state investigators found the company violated codes regarding brush clearance near its power lines or had made related violations.

 

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transmission line

The transmission lines you see along the highway may strike you as ugly eyesores or as proud monuments to modern civilization. But whatever your point of view, one thing is certain: every one of those lines is the result of a complex physical and economic calculation, including a number of forward projections on load and capacity. Plus, while some stand-up comedians are called high voltage, the real high voltage is in those lines. Why is the voltage high?

Under the second law of thermodynamics, whenever power is transferred, some of it is lost. In the case of transmission lines, losses take the form of heat emanating from the conductors, leakage of current across insulators, ionization of pathways in the air surrounding the conductors, or just current running to ground. Also, magnetic and electric fields are created around the conductors, which create inductance and capacitance in the lines. The short answer is that the higher the voltage, the smaller the losses.

Under Ohm’s Law, the voltage (V) is equal to the product of the current (I) and the resistance (R) in the circuit, or V = I*R. The power (P) is the amount of the energy absorbed in the circuit (i.e., delivered to a load such as a customer’s machinery), which is equal to the voltage (V) times the current (I), or P = V*I. The power lost (PL) when current flows through a conductor is the product of the resistance (R) of the conductor through which the current flows and the square of that current. PL = I2*R. Thus, if you lower the current (I), you reduce the amount of power lost.

But if you lower the current, under P = V*I you would have to raise the voltage in order to keep the same amount of power going to the load; that is, the power must be constant, so under P = V * I, V has to increase if I is lowered.

The reverse is also true. If you raise the voltage, you can decrease the current and keep the power constant. So if we were to raise the voltage by a factor of 100, the current would be reduced to 1/100th of its former value.

Going back to our loss equation, since power lost is proportional to the square of the current (I2*R), reducing current by a factor of 100 reduces losses by a factor of 10,000 (.01 * .01 = .0001).

And that’s why high voltage makes sense.

 

 

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Linemen

The online magazine Transmission & Distribution World today re-ran an earlier article on the dangers faced by electric utility workers. Though it describes a really brutal accident, it merits reading if only to be reminded about the danger that some workers face every day as part of their job — more dangerous than police and fire. You can read the full article here.

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