U.S. DOE Inspector General Critical of $161M MATL Stimulus Loan

The Western Area Power Administration (WEPA) was criticized in a U.S. Department of Energy document, dated November 2011, for their financial handling of the Montana Alberta Tie Limited (MATL) transmission line here in Montana.

The fifteen page PDF Management Alert, titled Western Area Power Administration's Control and Administration of American Recovery and Reinvestment Act Borrowing Authority, was reported by the Washington Post ...

Report faults Energy Dept. for handling of stalled electric transmission line Oct 7, 2011'The groundbreaking ceremony took place on Nov. 30, 2009, but the developers have struggled to obtain the right of way to build across private land in Montana and also squabbled with contractors.

Tonbridge later ran out of money.

A Canadian company called NaturEner Energy Canada delayed construction of its planned Rim Rock Wind Farm.

Now, however, the acquisition of the line by Enbridge has raised hopes that construction can resume. NaturEner is again preparing to start its project, though it has scaled down the size of its planned wind farm to 189 megawatts, from the original 300 megawatts planned.'
...See also here, here, and here.

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The DOE's IG report, OAS-RA-12-1, contains some candid charges ...
'Because of a variety of problems, the project is estimated to be 2 years behind schedule and $70 million over budget; essentially out of funds; and, currently at a standstill, with no progress being made. Western officials expect construction to resume in the near future, as MATL's parent company has now been acquired by a reportedly well-capitalized Canadian company that has pledged to complete the project.'
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'Western financed $161 million of the original $213 million transmission project's estimated cost, with $52 million contributed from other sources, including subordinated non-federal loans. MATL's repayment of the Western financing was to begin after the project became operational and was generating revenue.'
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'Not all of the issues causing delays and cost overruns were within Western's control. Since the beginning of the project, MATL had encountered legal difficulties securing rights-of-way for the land needed to construct the transmission line. In fact, as of October 2011, Tonbridge reported MATL had not yet secured the use of 79 parcels of land in Montana to complete the project. Officials told us the acquisition difficulties were primarily attributable to landowner lawsuits and a December 2010, Montana court decision that curtailed the rights of utilities to condemn property for development of transmission lines. However, identifying and correcting weaknesses in project management and schedule/budget reporting were within Western's purview.'-
Side notes and such ...

I've yet to see any media report the connection between the Canadian oil sands and the new owners of the embattled MATL, Enbridge, Inc., although there is a chance I've missed it.

I highlighted this connection a while back and in mid-October, Al Jazeera reported on the Kalamazoo oil spill here. This is especially noteworthy due to the recent Keystone XL protests, whose entrants sometimes carry pro-wind banners proudly.

Speaking of the Keystone XL, the IG is said to have been tasked to have a look.


Likely coming out of this unscathed because of the medias' adoration, of course, is our own Montana Governor Brian Schweitzer. One of his Administration's projects, the Montana Department of Commerce Energy Promotion and Development Division (EPDD) has been closely involved with MATL although this department is not widely reported on.

In a June 2010 Legislative Fiscal Division Performance Measurement Report, the close tie to the MATL was touted ...
I've no doubt the Governor and his official office will not have to handle any questions about his administration's involvement in this project. In fact, he is currently in Brazil, possibly meeting with Fuhrländer (Fuhrlander) concerning their new wind turbine plant or with Elecnor regarding one of their new wind farms, likely planning his next press release.

Getting back to the MATL transmission line, remember, it was reported that the Rim Rock Wind Farm started construction recently, which I covered in an October 18, 2011 post. This wind farm (currently) requires the MATL to be built to ship power to Canada to supply San Diego Gas and Electric (SDG&E) Utility customers with renewable energy credits.

Those watching should take note of the Montana media coverage throughout the history of this project. As a peruser of the print media articles produced by the reporters here in Montana regarding the MATL, there was a definite lack of coverage over the years of the troubles outlined in the Inspector General's report. These deficiencies are namely the land owner problems, sans the late entry of the Tipi Ring Story, and contractor disputes that evidently plagued the project.

In the end, in my opinion, the DOE Inspector General's report will likely be reported locally as a positive thing for the MATL project. As I see it, there is little accountability these days brought about by most reporters, especially when it comes to their favorite politicians and their green energy projects. This seems to me to be especially true when public money is involved, thanks for reading.

*** Update 11/8/11 815AM ***
So your own newspaper fails to report to its readers the actual number of effected citizens during longstanding landowner disputes, serious construction and contractor problems, Tax 14 (tax) credit applications, the ACTUAL monetary benefit figures, the new MATL owner's tar sands oil spill in Kalamazoo MI, and, after this IG's reports release ..... you ... say ...

".... all's well that ends well, eh?"

Maybe you should have one of your reporters cover the May 20th submitted Montana Ninth Judicial District Court (Teton/Pondera County) lawsuit filed against the State of Montana and MATL LLP by Montana landowners? Or at least mention it, "eh"? Apparently, the briefs were due on November 4th with a December 22, 2011 trial date.
*** End Update ***