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The Great Texas Wind Swindle: Property Owners vs. the State (Part I)

Editor Note: Sam Pakan (full biography below) is a rancher and writer living in Wheeler County, Texas. Part II discusses the environmental controversy regarding Texas’s latest wind development push.

The eastern Texas Panhandle, a land of rolling sand hills, tree-lined creek beds and tall grass vistas, may seem a desolate place to outsiders. Still, it has its beauty, especially to the cattle ranchers and wheat farmers who work and live on it. But not for long.

Much of this land–the fragile habitat of the Lesser Prairie Chicken and the Whooping Crane–is scheduled to become industrialized if the Texas Public Utility Commission (Texas PUC), the Department of Energy (DOE) and Federal Energy Regulatory Commission (FERC) have their way. Incongruously, the demolition of this mostly native grassland is being proposed in the name of green energy. And this project is wholly government-dependent in a sector where suppliers do not have to be taxpayer enabled.

The Competitive Renewable Energy Zone (CREZ), a name not without irony, was initiated by $10 million from DOE. In December of 2009, plans were expanded when Secretary Chu joined Jon Wellinghoff of FERC in a Memorandum of Understanding to coordinate efforts to interconnect several transmission lines. The CREZ line, part of the larger Electrical Reliability Council of Texas (ERCOT) system, is to help supply the Dallas/Fort Worth Metroplex with wind-generated electricity from the northern Texas Panhandle.

There are problems, however, with the multi-billion-dollar nowhere-to-somewhere transmission project. Protests from disgruntled landowners have greeted Cross Texas Transmission (CTT), the developer of the Gray-to-Tesla and Gray-to-White Deer lines.

Fanning that resistance, landowners received a “Access Consent Form” the day before Thanksgiving insisting that their lands be made available for survey. With the long weekend, landowners had only two working days to find representation, prepare a response, and still meet CTT’s deadline.

CTT, acting under the auspices of the Texas PUC, has been given the power of eminent domain (compulsory acquisition). With that looming over their heads, most landowners signed but added wording insisting Cross Texas Transmission follow established environmental laws, the same wording and the same laws now required on state-owned lands. Cross Texas responded to their request by issuing restraining orders and suing for entry without restraint.

The action was not surprising. Since having been awarded the contract to construct, operate, and maintain these lines in October of 2009, Cross Texas has consistently reminded landowners that they have no options and has refused to address any of the economic or environmental problems created by the transmission lines.

Taxpayer Subsidies, Ratepayer Pain

According to the Texas Public Policy Foundation, wind energy in Texas will have in excess of $28 billion in subsidies, federal and state, poured into its development by 2025. When tax breaks, market disruptions, increased production and ancillary costs are added in, the taxpayer’s bill could top $60 billion.

In spite of the massive funds being thrown its way, wind-generated electricity remains far more expensive for consumers than that produced from coal, gas or from nuclear facilities. It’s also severely compromised by its intermittency (the wind does not always blow).

As a result, continued expansion of wind fields could raise rates paid by consumers by as much as 50 percent, even with the massive federal and state subsidies. The impact to small businesses and to those on fixed incomes could be devastating. Moreover, many experts believe that, due to the intermittent flow and low energy flux, wind generated electricity can never be competitive.

Energy Density: Nuclear vs. Wind

Science and Technology writer Gregory Murphy compared the energy flux density of the Comanche Peak nuclear plant south of Dallas to a hypothetical wind installation. The nuclear plant has two units capable of generating 2,500 megawatts and sits on only 4,000 acres which includes a man-made cooling lake that is open to the public and is used for recreation. Taking into account that the average wind turbine has a capacity of only 25 percent of its nameplate rated output, it would take 6,668 1.5 megawatt wind turbines to equal the output of the Comanche Peak station.

Spacing wind turbines at five per section of land, a rate somewhat higher than the density landowners were promised by wind farm developers, a wind installation equaling the output of the Comanche Peak plant would require well over 13,000 sections of land or 8.6 million acres. That is an area roughly 1/20th the size of Texas. All this land, plus the lands decimated by the transmission lines carrying electricity to major metropolitan areas, would have reduced productivity, severely increased erosion and drastically reduced property values—certainly no boon for landowners.

“Wind works only 25 percent of the time,” said Jeff Haley, rancher and Commissioner in Gray County, Texas. “And the CREZ line alone will cost 4.9 billion dollars. That’s a projected cost in 2008 dollars. It will almost certainly be more, but whatever it turns out to be, it will have to be paid for.”

“Don’t kid yourself,” said David Hall, another Gray County rancher. “The consumers will pay for much of this, and we’ll all pay for the rest with our tax dollars. It’s not just that I don’t want them on my land. It’s that this kind of government boondoggle is wrong. The politicians supporting these things don’t understand them. They’re being advised that this or that is the right thing to do, and they’re not informed enough to make the right decisions.”

Soviet-Style Technocrats

“We’re dealing with Soviet-style technocrats,” Haley added.

The metaphor isn’t without basis. Cross Texas Transmission is a wholly owned subsidiary of J. L. Power Group, a Delaware shell corporation with no board of directors and only a few employees. SEC filings list Mikhail Segal, a one-time official in the Ministry of Energy in the former Soviet Union and Michael Liebellson as founders. From the outset, landowners say, Cross Texas Transmission has acted every bit the oligarch and used the PUC’s power of eminent domain as a weapon.

“These technocrats understand how to maneuver through the technicalities of the law.” Haley said. “It’s their job. They do it every day. How can we run our businesses and spend the time this is requiring to stand up to this kind of abuse?”

One of the maneuvers he is referring to is the Texas PUC hearings held last August. Three routes had been selected for the proposed Gray to Tesla line with one listed as the “preferred route.” Multiple landowners and attorneys were present to defend their properties from damage along this route. Without discussion, the Public Utilities Commission chose an alternate route automatically subjecting those properties not represented to eminent domain. The landowners on the route selected had received a notice that their lands could, at some point, be affected, but all assumed that only the preferred route would be considered at the hearing. None realized they would not have an opportunity to intervene specifically for their properties should the preferred route be rejected.

Beyond Property Rights: Performance

In addition to the issues of land spoilage and the usurpation of private property rights, the issue of viability is very much at the forefront. A number of wind power companies are currently being sued by utilities companies and municipalities for not being able to deliver the electricity they promised.

In Texas, three wind farms owned by NextEra Energy Resources LLC agreed to sell specified amounts of power annually to Luminant Energy Company beginning in 2002. When they failed to deliver the contracted amount, Luminant sued for $29 million in liquidated damages and won. A similar case occurred years earlier in Washington state, and observers of the wind industry are predicting a deluge of such cases in the future.

Headed Towards the Junk Pile

The Waxman-Markey Cap-and-Trade Bill may be momentarily dead, but there are persistent rumors of its resurrection. Even without it, proposals are floating through the halls of Congress which would offer billions more to wind developers and demand that as much as 20% of our electricity be generated from renewable sources. While these proposals are being discussed, three wind farms are cluttering the landscape of Hawaii, monuments in rust to the government’s imposition of a technology that simply does not work.

A similar situation exists in California. In a recent edition of The American Thinker, Andrew Walden discusses what was once the largest collection of wind farms in the world. “In the best wind spots on earth,” he writes, “14,000 wind turbines were simply abandoned. Spinning, post-industrial junk which generates nothing but bird kills.”

If and when federal funds cease to be shoveled into the wind projects now underway in Texas, most industry observers believe they will also be abandoned leaving the once swaying prairie an industrial junkyard of concrete, steel and fiberglass. Wind’s entry is bad for the environment; its exit will be the same. And this is “green”?

—————————-

Sam Pakan is a rancher and writer living in in Wheeler County, Texas. He is currently producing beef for the health market, while writing a series of historical novels set in WWII.  He also edits books for selected novelists.

Pakan holds a B.A. degree in English and political science and an M.A. in English literature from West Texas A&M University.

16 comments

1 Jon Boone { 03.08.11 at 10:13 am }

I’ll look forward to Part II of this well-written report. The bullying tactics, the political cronyism, the complicity of regulatory agencies, and the collusion of government, environmental, and limited liability wind companies constitute normative behavior. They are not specific to Texas. Perhaps Part II will name names, giving Texas governor Rick Perry due credit for the gangsterism catalyzing Texas wind–which is especially galling given how Perry today is attempting to cloak himself in the mantle of getting government off our backs and giving the taxpayer a break.

Several notes of correction: 6668 wind turbines couldn’t replace the capacity of Comanche Peak’s nuclear facility, since wind provides no effective capacity. Such comparisons illustrate only mathematical equivalence, not functional performance. What must happen when those 6668 turbines are producing only 5% of their rated capacity? Or nothing, as would happen about 10% of the time?

Wind’s problem is its relentless variability–not its intermittence. Wind “works” about 90% of the time, although it may have a capacity factor that produces an annual average of 25% of its rated capacity. However, as wind unpredictably bounces around the system, one cannot know what “work” it will yield at any future time.

I hope Texas ranchers will band together to create a legal war chest that will prosecute those responsible for this bunco scheme. They deserve no less than long stretches of jail time–Texas style.

2 Tom Tanton { 03.08.11 at 11:09 am }

http://tinyurl.com/4s7m9dy
seems the Brits are joining many in the world economy realizing the futility and silliness of wind…it will be interesting to see how long it takes us to catch up. “Once we were leaders…”

3 kramer { 03.08.11 at 3:38 pm }

Here’s what James Lovel0ck had to say about how much area is needed to produce one gigawatt of electricity from windfarms:

” I am not against renewable energy, but to spoil all the decent countryside in the UK with wind farms is driving me mad. It’s absolutely unnecessary, and it takes 2500 square kilometres to produce a gigawatt – that’s an awful lot of countryside.”
http://www.newscientist.com/article/mg20126921.500-one-last-chance-to-save-mankind.html?full=true&print=true
NewScientists, Jan 23, 2009

4 kramer { 03.08.11 at 3:46 pm }

“These technocrats understand how to maneuver through the technicalities of the law.”

How I would love to see a mob of angry Americans push these people literally on their duffs and keep pushing until they stop screwing us.

5 Power Engineer { 03.09.11 at 10:31 pm }

Wind driven transmission is coming soon to your state. FERC is expected to order the building of transmission to enable huge wind projects under the “variable energy resources” NOPR. The wind driven transmission alone (without the wind generators and storage) is typically more costly than building nuclear plants for the same energy.

6 Texas wind blows « JunkScience Sidebar { 03.09.11 at 10:49 pm }

[...] The Great Texas Wind Swindle: Property Owners vs. the State (Part I) [...]

7 Mitzi Mays { 03.11.11 at 9:46 am }

Is there no end to the irresponsible spending of our government? Their blatant disrespect for the land and the landowners is absolutely mind boggling. Wind Swindle is certainly a good name for the projects. I am disgusted and repulsed with the way the PUC goes under the wire to choose an alternate route. The land that has been in our family for over 80 years was affected by one of the PUC decisions. Amazingly the PUC went from the #1 route to the #8 route. We had no time for defense.

8 spakan { 03.11.11 at 11:09 am }

Apparently, Mitzi, there is no end. And with the National Chambers of Commerce calling for legislation that would end any right of opposition in the courts, any legal challenges to what is obviously an abusive use of power, things are apt to get worse. I fear there will soon be no rights of ownership. Some are actually suggesting now that the EPA actually owns all land in the U.S. and that landowners are actually given only custodial rights. Do you ever wonder what happened to the constitution?

I’m so terribly sorry you are also a victim of the PUC.

9 spakan { 03.11.11 at 11:18 am }

Jon, I agree. Jail time is in order here. Unfortunately, the amount of money required to fight these mega-corps supplied with billions from the U.S. Treasury and rules that disallow protest are difficult to fight. The insanity of the rulings are beyond belief. When Gray County filed suit demanding that Cross Texas follow the law and complete an EIS, the U.S. Fish and Wildlife Service claimed there was no federal nexus. That despite the fact that the project was started was funded by the feds from planning to construction. They honestly argued that the U.S. Treasury and the E.P.A did NOT constitute a federal nexus. It’s amazing what they’re getting away with.

10 spakan { 03.11.11 at 11:23 am }

Kramer, yes, a massive public outcry is what is needed. Unfortunately, both the local and national media outlets refuse to report both sides of this story. The public remains largely unaware of the dark side of green energy.

11 Joe Dantone { 04.08.11 at 3:45 pm }

I’m not happy with this either, but the legislature passed a law in 2005 requiring PUC to establish renewable energy sources and CREZ’s. For some reason the subcomittee which initiated the bill no longer exists.
Regardless, the PUC is doing what it is required to.
You would be better complaining to the Commerce and Business Committee which now has oversight.
Call 512-463-0365, ask for Erica and politely leave your comments for the Committee Chairman.
Next contact your local legislative reps.
Lastly contact the following committee members:
Position Member
Chair: Sen. John Carona
Vice Chair: Sen. Chris Harris
Members: Sen. Kevin Eltife
Sen. Craig Estes
Sen. Mike Jackson
Sen. Eddie Lucio, Jr.
Sen. Leticia Van de Putte
Sen. Kirk Watson
Sen. John Whitmire
That does more than complaining on political forums.

12 Morris Norwood { 04.09.11 at 10:45 am }

All of the above is mostly accurate. But I think that the greater point to be made is that due to the inherent variation in wind and thus the power derived from it means that the other standard means of producing electricity have to stop producing electricity when the wind production comes on line. But these plants cannot be shut down in minutes or even hours. They have to continue to produce the steam to drive the turbines but simply take the generator off the end of the system. So no energy is actually saved. It is just wasted and we all have to pay for that as well.

13 spakan { 04.11.11 at 10:18 am }

Mr. Dantone,

Thank you for your suggestions on directing our grievances. Unfortunately, most of the people you suggested have already been contacted many times. To date, I have personally only had two responses. First, my U.S. Representative comforted me with the knowledge that myconcerns were important to him. (My state legislators have never even acknowledged my letters.) Second, Mr. Carona’s office informed me basically that my gonads were firmly secured within the jaws of the PUC’s vice, and he saw no legal necessity to loosen said jaws. (A rough translation.) Given the unresponsiveness of public servants, what choice do property owners have but to “complain” on “political forums?”

Furthermore, Cross Texas Transmission has far exceeded the powers given to it under the CCN demanding landowners sign easements that will give them unfettered access not only to the right-of-ways they’ve taken, but to any and all property they want including the building of roads of any length and width they deem necessary across grasslands that should never be exposed. They also insist on wording that will allow them to build additional lines without an additional easement. They demand this and much, much more for the grand sum of 3 dollars per linear foot with no additional payments for land destroyed by roads, stack lots, excursions or company picnics.

Requests for the PUC to at least limit Cross Texas to the already broad powers of confiscation granted by the CCN have resulted in more form letters explaining to landowners the exact position of their private parts.

Now, given that the PUC may, in fact, only be doing its job, one has to question the responsibility of individuals carrying out orders that are neither legal nor moral. At what point does individual responsibility come into play? Does anyone in Austin recognize that their jobs may be illegitimate? Does anyone question orders? Ever? If the PUC is given orders to execute landowners who oppose having their properties destroyed, their livelihoods hindered and their childrens’ inheritences squandered, will that also be seen as merely doing one’s job?

Again, thank you for your suggestions. We will certainly continue to pursue any avenues we have not already exhausted, but those are few. Public forums are really all that is left us.

14 spakan { 04.11.11 at 10:25 am }

Mr. Norwood,

Thank you for confirming this. I heard this from two different engineers, but was unable to find documentation for it and therefore omitted it from the article.

Unfortunately, most of what we have learned in this process is not completely varifiable. If half of what is reported is true, however, “green graft” via political payoffs is by far the biggest can of worms this nation has ever opened.

15 Joe Dantone { 04.11.11 at 1:09 pm }

If you haven’t seen how wind turbines actually perform when the subsidies end, look at this:
http://wattsupwiththat.com/2011/03/19/the-reality-of-wind-turbines-in-california-video/
The TTC ended when it became universally despised. Maybe the same thing will work. Regardless, it won’t end until some politicians get involved.

16 The answer, my friend, ain’t blowin’ in the wind « 4TH ST8 { 05.30.11 at 1:31 pm }

[...] Meanwhile, some of those wind farms have been paying utilities to take their power in order to collect the federal tax credits. Others have called the whole endeavor a swindle. [...]

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