The NERC-induced lickspittle lobby has begun at FERC, with regional reliability organizations petitioning to intervene in the NERC audit docket, and the much ballyhooed "trade associations" taking control of the matter with their fearsome comments.

Really?  Haven't you all wasted enough of the ratepayers' money on this ridiculous spectacle already?  How many billable hours just got wasted on these filings?  Haven't you all got better things to do with my money, like, oh I dunno.... KEEP THE LIGHTS ON?

The regional entities think they have a stake in the matter because their precious budgets (ratepayer gravy train) may be under attack.  And the trade associations think they have a stake in it because... get this... "The ERO budget is funded by industry and load, which include members of the Trade Associations."  They act like it's coming out of their own pockets when they just turn around and bill "the ERO budget" to ratepayers (now with lucrative lawyer loot added in!)

The trade associations believe that a transparent and public audit process, open to participation by all stakeholders, will "best ensure stakeholder confidence in the performance audit results."  If that's the case, I think we should increase stakeholder confidence all around by making ALL FERC audits public and open to participation by interested parties.  Wouldn't that be fun?  There's a couple of audits in process that I'd love to "participate" in.  Do I need to hire an expensive lawyer to get that taken care of, or would a ratepayer cavalcade of kvetching do the trick?
AEP won its first real victory over FirstEnergy in the Ohio dodgeball game today when PUCO temporarily extended AEP's $255 per megawatt-day pricing scheme until a final decision is made in the case some time in July.

Pablo smirks.
Donny whines.

But wait... FirstEnergy has a new commercial!  Didn't PUCO watch the commercial before making their decision?  When FirstEnergy was unable to drum up any real grassroots support for its own money-making schemes, they simply borrowed some hatred of AEP from the case docket.


FirstEnergy still doesn't get it.

There's a little clue for FirstEnergy in the comments of the Columbus Dispatch article.  Do you think they can find it, or does someone have to beat them over the head with it?

What was it that made PUCO jilt AEP earlier this year when their rate increase incensed small business owners?  Was it because everyone hated AEP?  No, it was because everyone hated AEP's collusion with PUCO.  Fear for their own safety is the only thing that spurred PUCO into action against their master.  A yappy, little dog will protect the hand that feeds it until it realizes it's about to get punted in the head, at which time it will turn tail and run for its life.

If FirstEnergy wants to break up PUCO's waltz with AEP they need to whip up a little public anger accusing PUCO of, once again, being caught in a state of dishabille with AEP.
FirstEnergy made some big, stinking deal out of packaging their profiteering on coal plant retirements as "an initiative" today.  Their "initiative" will increase their profits and energize their future [profits] at your expense.  However, a turd by any other name still stinks just as bad.

FirstEnergy's big transmission play has been common knowledge since April 26.  Take a look at PJM's April 27 TEAC presentation to find a FirstEnergy transmission project near you.

But suddenly, FirstEnergy attempts to package $1B worth of transmission projects as "an initiative."  They are simply revving their propaganda engines -- more improper influencing of regulators, shifty land agents, divide and conquer "open houses," and astroturf front groups coming right up!

"Whether it's new high voltage transmission lines, new substations, or installing voltage regulating equipment at the power plants being deactivated, we are committed to providing ongoing communications to affected stakeholders - particularly governmental officials and customers - and will minimize impacts to property owners and the environment wherever possible as these projects are built."

And about those, "impacts to property owners and the environment"...

During their 4th quarter 2011 earnings call, FirstEnergy bragged that, "The skill sets acquired from Allegheny on transmission siting and construction will also be invaluable going forward as future projects are completed." 

In that case, check out Allegheny Energy's transmission "skill sets" in minimizing impact to the environment (pictures!). Also check out Allegheny Energy's impacts on property owners here and here (letters from affected landowners).  See one of Allegheny Energy's Option for Real Estate Purchase, or a Right-of-Way Purchase Agreement and read about how Allegheny Energy treated landowners during their failed PATH transmission project in West Virginia, Virginia and Maryland.  Expect to be treated accordingly because these old dogs will never learn new tricks, they just move on to fresh meat with their "skill sets" intact.

And how does Ohio feel about FirstEnergy's "Energizing the Future" initiative?  Lance S. Traves, president of Labyrinth Management Group Inc. in Medina, a strategic environmental, health and safety consulting firm, thinks FirstEnergy's initiative is "bad energy policy for Ohio."

"FirstEnergy Corp.'s recent announcement that it will spend up to $1 billion to upgrade the electricity transmission system in Ohio to further support centralized generation is another example of a short-term energy policy that is bad for the state.

These costs to be paid by Ohio ratepayers will only heighten existing barriers to more efficient and cleaner forms of distributed electricity such as industrial co-generation and combined heat and power (CHP) in Ohio.

Second, the planned transmission upgrades will subsidize FirstEnergy's ability to use more distant power plants to provide power to Ohio. Longer transmission distances result in increased transmission line electricity losses and lower overall efficiency. However, when rate payers cover the capital cost for transmission, FirstEnergy and other investor-owned utilities can afford the additional transmission losses."

Gotta introduce this guy to Bill  :-)

FirstEnergy -- out of your backyard and into someone else's.  It would be nice if they could at least finish their last failure by properly abandoning the PATH project before moving on to new profit-making "initiatives" and having their "best practices" turned upside down by a new crop of transmission project opponents.

Those of us who look wistfully and admiringly upon the Illinois Commerce Commission as a staunch defender of the electric consumers they are mandated to protect because our own Consumer Advocate sees himself as someone who must balance the rights of consumers with the wants of investor owned utilities, now have one more reason to want to move to Illinois.

The ICC filed a motion to intervene in PJM's recent cost allocation filing at FERC that added a whole bunch of new RTEP projects approved earlier this month.  At issue are three new allocations for 500kV projects located in  Pennsylvania and Virginia.  The ICC notes that ratepayers in Illinois will pay approximately $26M for these projects, but will receive no benefit.

"Given that the three projects are to be constructed in Virginia and Pennsylvania, it is a reasonably safe assumption that the primary beneficiaries of the projects are not distributed evenly across the PJM footprint. Yet, PJM’s load-ratio share approach allocates the costs of these projects as if they were."

"A second flaw in PJM’s load-ratio share cost allocation approach is that it typically results in customers in distant zones like ComEd paying more than the customers in the local zone where the facility is located. In this case, electricity consumers in the ComEd zone would pay a higher share of the cost of the three projects than the customers in any of the transmission zones in which facilities are to be located (14.64 percent for the ComEd zone versus 5.53 percent for APS, 1.92 percent for Metropolitan Edison and 12.45 percent for Dominion) simply because the ComEd zone’s non-coincident peak load is higher than the non-coincident peak load."

The ICC requests that FERC dismiss cost responsibility for the ComEd zone, or "hold its consideration of this part of PJM’s May 2 Filing in abeyance until the Commission addresses the requests for rehearing of its order responding to the remand from the United States Court of Appeals for the 7th Circuit."

Ut-oh, FirstEnergy and Dominion!  Looks like your transmission projects have run off the rails already!

How completely delightful!
One of the things we do here is pull bits and pieces together to see what kind of overall picture they make.  Bill refers to it as "PATH Kremlinology," and I once referred to it as "putting together the world's biggest jigsaw puzzle."

NERC's arrogant stupidity in contesting FERC's audit just doesn't make sense.  Maybe if NERC had no experience with audits, it could just be ignorance, however NERC performs audits of others.  They should know better.

Now here's the other piece that's starting to make a pattern.  The WSJ, Fox News and some political blogs are categorizing the NERC audit as Obama's revenge against NERC for making some comment about coal-fired generation retirements causing reliability issues.  This "reason" for auditing NERC doesn't even make sense!

And if we combine this empty rhetoric with NERC's proposal for FERC to open "a paper hearing process that would allow all interested parties to express their views on all 42 recommendations contained in the Final Audit Report and allow the Commission to resolve them on a comprehensive basis," what do we get?  Is NERC intending to turn FERC into a political circus?  I'm really starting to wonder...

After all, if NERC did not intend for the hoi polloi to comment on their audit, perhaps they would have seen the open invitation contained in their proposal after a concerned ratepayer submitted comment on the docket.  However, NERC re-confirmed their support for their proposal today.

NERC's letter was a rather quick and snarky reply to FERC staff's filing today that proved NERC's previous accusation that FERC refused to discuss the audit findings was baseless.  Over and over again.  Auditors are firm believers in documentary evidence, it is their bread and butter, after all.

If you are gullible enough to believe that FERC's audit of NERC was political revenge, be assured it's not.  FERC is legally required to perform audits of entities under their jurisdiction, it's part of their job to ensure just and reasonable rates.  Just about everything FERC does comes back to this same basic premise.  FERC is protecting YOUR interests here (and even the interests of the unenlightened who believe the politically motivated lies).

"Audit staff has approached its review of NERC’s budget and the associated costs from a ratepayer’s perspective

o Since the ERO is funded by public funds and those who pay the assessments (i.e. its Ratepayers) - whose  interests are represented by the Commission
o The expenses incurred by the ERO must be paid by its Ratepayers alone – therefore having controls in place to prevent unwarranted expenses is in the interest of the ratepayers
o We have also recognize the fact that NERC, when acting as the ERO is under the authority of the  Commission, but it is free to engage in other non-statutory activities that do not impinge upon its ability to perform its obligations to FERC."

FERC had no prior knowledge of what it would find during the audit, making claims of "revenge" mere ignorant rubbish.  All FERC staff's concerns are valid, for instance:

"Second, audit staff noted that NERC incurred various expenses to entertain Trustees outside the official BOT meetings

Audit staff is concerned for three reasons:
1. These costs were incurred outside (after or before) the actual Board meetings and activities during the day
2. This presents a potential conflict of interest concern in which NERC employees are providing entertainment to the Trustees that are responsible for determining
employee compensation
3. NERC’s accounted for the costs as routine business expenses, which inflates NERC’s actual cost of business at the ERO

As a result, the expenses incurred outside the official BOT meetings may have been improperly funded by ratepayers under section 215."


"Audit staff noted that NERC incurred costs for entertaining its employees, including annual holiday party expenses and employee reward meal expenses

While audit staff believes NERC should have the discretion to incur these types of expenses, audit staff is concerned that:
o The majority of these costs were accounted for as normal operating costs and not as employee  entertainment or employee reward expenses
o These costs were not transparently presented in the budgets or trueups as such
o These costs were not governed by formal guidance for determining if entertainment expenses were reasonable and reimbursable

From a rate-case perspective, such expenses would not be allowed as normal operating expenses

Audit staff believes that if NERC management wishes to incur employee entertainment costs or costs to reward employees, such costs must be declared, budgeted, and approved as such through the budget process."

FERC has merely switched NERC's speeding ratepayer gravy train onto a siding so it can be slowed down before it runs completely off the rails.  If you pay an electric bill, you should be thanking FERC, not parroting conjectural, politically-motivated nonsense.

I hope FERC has the good sense to deny NERC's proposal to turn this matter into a political circus.  As a ratepayer that funds NERC, I'm now thoroughly disgusted with their antics.

Next:  Let's ALL Participate in FERC Audits!

After AEP accused FirstEnergy of using "high-priced lobbyists" in their commercial last week, FirstEnergy swats back by accusing AEP of using "a totally made up group" to attempt to sway electric consumer opinion in the state of Ohio.

I give FirstEnergy an 8 on their new door-to-door commercial.  I laughed!  Of course, I probably laughed for a whole bunch of other reasons that they didn't intend. ;-)  Creativity improvement, FE!

Unfortunately for FirstEnergy, AEP responded by dumping their "totally made up group" and re-directing all traffic on to their AEP-Ohio Answers website. Presto!  No more "made up group"!  It took AEP about 5 minutes to pop FirstEnergy's balloon.

AEP has added a new video to their "totally legitimate group."  They've taken Pablo outside, away from the corporate ego wall, where he can compete with traffic noise and distractions while he drones on for over two minutes.  Who do you think is going to watch that, AEP?  Nobody cares!  Even I stopped listening after about 15 seconds and spent more time looking at Pablo's ugly tie.  For some reason I started thinking about a telephone I had circa 1978:
And then I just started thinking about 1978.  Much more interesting than anything Pablo had to say.

Lobbyists and "totally made up groups."  It takes one to know one, doesn't it fellas?  Both companies were as thick as thieves spending ratepayer money on lobbyists and front groups while trying to get their PATH transmission project approved in WV, MD & VA over the past four years.  In fact, they are currently facing two formal complaints at FERC about their spending of well over a million dollars on lobbyists and front groups.  Obviously the companies know it's wrong and that public knowledge of lobbyists and front groups can turn public opinion against an idea or proposal.

What's next?  How about some testimonial and transfer from well-paid "experts," or perhaps more accusations that the other company has exerted improper pressure on PUCO to get their way?  1, 2, 3, go....
Sugarloaf Conservancy filed a complaint with the Maryland Public Service Commission today, requesting that the Commission open an investigation into the billing practices of FirstEnergy subsidiary Potomac Edison.

Sugarloaf Conservancy noticed and took assertive action regarding the same scam that we have all been experiencing for the past year.  For brevity, I will call it The Disappearing Meter Reader Scam.

In Potomac Edison's Disappearing Meter Reader Scam, the company fails to read your electric meter for months on end, sending you an "estimated" bill instead of one based on your actual usage.  Potomac Edison has plenty of excuses for not performing a scheduled reading.  Two I have personally heard are:  1)  There was a snowstorm and the meter readers were pulled from their duties to perform other work; and 2)  The meter reader "probably" called in sick that day.  So, instead of reading your meter at least every other month, as required by Maryland law, Potomac Edison sends you an estimated bill that may be much higher than your actual use.

Personally, I'd like to see staffing levels for meter readers before the FirstEnergy/Allegheny Energy merger compared to current levels, along with an analysis of necessary staffing levels to to accomplish bi-monthly readings.  I'm betting that Potomac Edison comes up short.

When consumers receive higher bills than normal and notice that their meter has not been read, what do you suppose they do?  Why, they go read their meter, and compare it to the bill, don't they?  Potomac Edison will reward them with a credit for the over billing if they call in their own reading.  And then the next month, that same consumer isn't going to trust Potomac Edison's estimate, are they?  No, of course not, they're going to start calling in regular meter readings every month, making the meter reader's regular visits unnecessary in the future.  Oh sure, they'd probably check it once a year to make sure you're not lying to them, or perhaps sooner if your usage drops significantly, but they can probably accomplish that with a skeleton staff, can't they?  Meanwhile, Potomac Edison is charging you for staff and expense to read your meter at least every other month, but you are doing all the work!  It's nothing but pure profit for Potomac Edison, and it's a great big scam.

Word is that this same scam is also taking place in other FirstEnergy subsidiaries in other states

Ut-oh, FirstEnergy!

Oh behalf of Potomac Edison customers in two states, thank you, Sugarloaf Conservancy, for taking action!
So, PJM waited until close of business (on a Friday) to release the results.  How predictable of them.

Anyhow, the headlines are that a record amount of new generation, demand response and energy efficiency cleared.

"The RPM auction procured a record amount of new generation in one year, 4,900 megawatts (MW). In addition, capacity imported from west of PJM increased about 8 percent from last year to 4,335 MW.

In addition to new generation, most of it natural gas-fired, the capacity auction also procured 14,833 MW of demand response, a 5 percent increase over last year, and energy efficiency, a 12 percent increase. The amount of demand response was also a record for PJM, as well as for renewable generation. Solar increased to 56 MW of solar -- a 22 percent increase over last year - and wind increased to 796 MW - a 15 percent increase."

The RTO base price was $136 per MW, with a higher price of $167 per MW in the mid-Atlantic region (Atlantic City Electric, Baltimore Gas and Electric Company, Delmarva Power, Jersey Central Power and Light Company (JCP&L), Metropolitan Edison Company (Met-Ed), PECO, Pennsylvania Electric Company (Penelec), Pepco, PPL Electric Utilities, Public Service Electric and Gas Company (PSE&G) and Rockland Electric Company)

FirstEnergy's northern Ohio territory was the big loser though, with a price of $357 per MW.  That's extra money that goes in FE's pocket and out of yours.  Remember when AEP's Mikey Morris had a big tantrum last year about coal plant closures and pumped millions into lobbying to try to change the rules?  Yeah, well FE's Tony the Trickster kept his mouth and wallet shut and got busy scheming to make it work for his company.  FE announced the early closure of a whole bunch of their coal plants, mostly in Ohio.  The closure of so much generation in one area won FE some profitable RMR contracts to keep certain plants open, as well as an "order" from PJM to build $1B of transmission improvements made necessary by the closures, AND a capacity price more than double the RTO base price.  It's like winning the utility lottery for FE's stockholders.  Unfortunately, that translates into higher electric bills for consumers because FE's gain is your pain.

Most of the new generation is gas-fired and located in the east, however nobody seems to be quite sure what cleared and what didn't.  Most company reps. weren't available for comment after 5:00 on Friday.  In the states of NJ and MD, where a battle against PJM and FERC has been taking place to build new generation, here's what information is available: 

"New Jersey power company NRG Energy Inc said its proposed New Jersey project did not clear the auction.

"We're disappointed but will continue to develop the project," said NRG spokesman David Gaier."

The rest of what I've got is unconfirmed rumor at this point, but supposedly MD's plant cleared, along with Dominion's Warren Co., VA plant.  In NJ the following plants probably cleared:  LS’s West Deptford plant, PSE&G's Sewaren, and Hess's Newark plant, one of the LCAPP projects.  Calpine's Garrison, DE project likely cleared as well.  Hopefully the press will have a chance to confirm this on Monday.

So, what does this indicate for the PATH Project?  I'm not going to speculate, since PJM's decisions about PATH have never been logical or based in reality.  It was always about what the parent companies wanted.  And where are those companies now?  They're playing dodge ball in Ohio.  Might as well ask the Magic 8 Ball... "Reply hazy, try again."  Well, there you have it.
Now that PJM's Market Monitor has withdrawn their complaint, we're supposed to see the results of PJM's Reliability Pricing Model auction today.  PJM has stated that they will be using the auction to re-evaluate the PATH Project and decide whether to abandon it, continue to hold it in "abeyance," or move forward with the project.

So, what is the RPM?  The American Public Power Association has a handy-dandy fact sheet that explains the RPM.

"In 2007, the PJM Interconnection (PJM) began implementing its “Reliability Pricing Model,” or “RPM” – a
funding device to provide extra money to power plant
owners to induce them to build new power plants and
keep old ones running. These are payments over and
above their sales of electricity in the wholesale power
market, also run by PJM."

Has the RPM been an effective tool to get new generation built?

"While the cost has been great, the results have been
slight. PJM claims that considerable capacity has been
secured through its RPM mechanism (over 42,000 MW from 2007 through the 2011 auction)—but these claims
are misleading at best. PJM includes in their figures upgrades of existing plants, withdrawn or canceled retirements, and capacity imports from other regions."

"Perhaps most significantly, very little of the $50 billion
so far for RPM is financing new generation capacity;
rather it is overwhelmingly going to existing generation capacity. More than 93 percent of the total revenue paid by customers has gone to the owners of existing power plants—coal, natural gas, hydroelectric, nuclear, oil, and other existing capacity types. Only 1.8 percent of the RPM revenue so far has gone to new and “reactivated” generation resources."

How much has the RPM cost you?

"Since it began in 2007, RPM has cost customers in
PJM’s territory approximately $50 billion (through the
end of 2011). This works out to approximately $900
per man, woman, and child living in PJM’s 13-state
area. This cost, however, is not evenly distributed
throughout the region; customers in the eastern portion
of PJM have shouldered the main burden of this
cost. New Jersey’s portion alone is over $11 billion and
counting—or almost $1,300 per person living in New
Jersey today. For the RTO overall, in 2010 the RPM
added $140 per year to the average electric bill of a
homeowner, $1,000 for a retail store, and $15,000 for
an industrial facility."

At the PJM cartel, it's not about fair markets, it's about PIG -- Protection of Incumbent Generators.

In response to the flood of inquiries and information we've been getting from throughout the county about Dominion's Mt. Storm - Doubs 500kV transmission line rebuild, Patience and I took a little field trip yesterday to see for ourselves.

We came away with the general feeling that on a planning and process level, Dominion isn't doing too badly (yet), but all the careful planning taking place in office buildings in Richmond isn't translating to "boots on the ground" behavior in Jefferson County by Dominion's contractors.  For instance, at one work site clearly marked "stay on mats," the only vehicles we saw onsite were parked off the mats!  In another example at a different site, a gate with a sign reading, "Keep Gate Closed at All Times" was open and chained to a post, with the closest visible crew at least 1/4 mile away on the other side of the road.  Either Dominion's contractors can't read their own signs, or they just don't care.  If this is how Dominion's contractors adhere to their own rules here at the beginning of the project, what's to happen in the future when activity speeds up to meet tight deadlines?
One of the things we found most frightening is the proximity of some of these towers (both existing and marked new) to occupied homes, certainly within the fall zone.  I'm sure Dominion has a plan to get new towers constructed and old ones demolished safely, but I wouldn't want to be there when it happens if they can't even follow simple instructions to close a gate or stay on a mat.

And the flow of public information from Dominion remains a dry well, and the inquiries from curious folks continue.  This demonstrates Dominion's fear of dealing with landowners collectively.  They'd much rather keep you isolated and feeling intimidated, powerless and dependent on the company for information.  This strategy does not demonstrate respect for landowners.