As Arkansas' congressional delegation stepped up its war Tuesday on a $2.5 billion wind-power transmission project, Clean Line Energy Partners has confirmed that it has shelved plans to string the controversial power line across Arkansas.
Michael Skelly, the company's president, told Arkansas Business that the direct-current project, which would have transmitted 4,000 megawatts of renewable energy from Western Oklahoma to eastern Tennessee, is basically on life support.
"Everybody knows that if you can delay a project, you can hurt it or force a different outcome," Skelly said after devoting nearly nine years and some $100 million in private investor money to the project, which would have crossed 12 Arkansas counties with 200-foot-high transmission towers. "We're ending up with an outcome that's just fine for us business-wise, but not as good for Arkansas."
Clean Line Energy Partners, based in Houston, sold the Oklahoma portion of its project — about 420 miles of the 720-mile planned route — to NextEra Energy Resources of Florida. The sale in December, for which financial details were not disclosed, came after a decision by the Tennessee Valley Authority not to buy the line's energy on the Tennessee end. The two developments appear to have doomed the project in Arkansas.
"We're happy with the outcome for business purposes, and excited about a lot of economic development in Oklahoma, but we're disappointed that we won't be delivering this energy to Arkansas, at least not directly for the time being," Skelly said. "The payments we would have made, the jobs we would have brought and the tax money we would have paid will be delayed or may never come to pass."
Arkansas' representatives in Washington — Sens. John Boozman and Tom Cotton, along with Reps. Rick Crawford, French Hill, Steve Womack and Bruce Westerman, all Republicans — issued a letter to Energy Secretary Rick Perry on Tuesday calling for him to pause or terminate the federal Department of Energy's involvement in the project.
The DOE became involved after the Arkansas Public Service Commission rejected Clean Line's plans in 2011. The federal agency endorsed the line as a necessary infrastructure project under provisions of the Energy Policy Act of 2005, a decision that asserted federal powers of eminent domain. Arkansas' delegation saw that as a government overstep, particularly since the decision asserted federal eminent-domain powers to force landowners to accept lines across their property without their approval. The lawmakers also believe that the DOE usurped the state's right to determine which infrastructure projects should be built in Arkansas.
The letter to Perry said the sale of the Oklahoma assets had fundamentally altered the project, invalidating the agreement Clean Line had made with the DOE.
"With the project eminently unable to reach the pre-conditions set out in the agreement, and the uncertainty of an altered Clean Line Project which has not been properly studied, the Arkansas delegation requests that the DOE pause the project to either study or terminate its participation," the letter to Perry said. It was signed by all six Arkansas senators and congressmen.
Clean Line supporters say the project would have generated hundreds of jobs and powered some 160,000 homes in Arkansas and a million more in states further east. But the state delegation was never on board.
"I have always had concerns about the demand for and legality of this transmission line," said Crawford, whose 1st District in east Arkansas includes four of the 12 counties crossed by the line. "A project like this should be able to stand up on its own merits, so if the market doesn't need it, and Arkansans are rejecting it, I think that speaks volumes."
Womack welcomed news that the transmission line plan was in trouble.
"Clean Line's persistence in Arkansas has been a historic example of blatant federal overreach into citizens' property rights, and is one particular example that our state has fought for fair recognition on since day one," he said in a statement to Arkansas Business. He said he would continue working with the delegation "until the issue is ultimately resolved in our favor."
Billed as the largest private wind energy project in the country and the first major domestic overhead direct-current line in decades, the Plains & Eastern Clean Line would have had a $660 million impact in the state over 30 months of construction, according to an analysis by the Center for Business & Economic Research at the University of Arkansas. Clean Line said it would make $147 million in tax payments to Arkansas counties over the 40-year life of the project, which was once scheduled to begin construction this year and be complete in 2020.
"We're still here at Clean Line, working away on other projects," Skelly said. "Some of the people who were working in Arkansas are now focusing on the Oklahoma piece."