As stipulated in its federal Formula Rate that allows PATH to recover the cost of their project from over 60 million ratepayers in 13 states and the District of Columbia, PATH is obligated by certain rules crafted to provide rate transparency.  These obligations are stipulated in PATH's PJM OATT Tariff Protocols, Attachment H-19B.

One of PATH's obligations is to hold an "Open Meeting" among interested parties after the filing of each yearly Actual Transmission Revenue Requirement and Projected Transmission Revenue Requirement.

On June 1, PATH filed their ATRR for 2011.  This filing compares the actual expenditures to PATH's estimate collected during 2011, and produces the actual rate consumers pay.  As required by the Protocols, PATH posted an announcement of the meeting.  As directed in the notice, several interested parties (as defined in the Protocols) submitted their RSVP for the meeting.

Compare the tone of PATH's Notice of Open Meeting to that of another company who is following the exact same rule in its own Formula Rate Protocols.  While PATH's meeting is held only over the telephone, Dominion's meeting is held both at their facility and over the telephone, for those who don't want to travel to Richmond.  Dominion asks for 4 days notice of participant's attendance, while PATH demands you RSVP 5 days in advance, or you will not be permitted to "attend" and will not be provided the call-in information that Dominion freely provides in its Notice.  Paranoid much, PATH?

As if the Frau Farbissina tone of PATH's Notice isn't bad enough already, PATH sent the following email notice to certain interested parties, who had sent in their RSVPs weeks earlier, on June 24:

"The open meeting conference call that Potomac-Appalachian Transmission Highline, LLC ("PATH") will hold on July 18, 2012, to explain and clarify its Annual Update is to provide Interested Parties an opportunity to seek information and clarification concerning the Annual Update. Under Section I.H of the Protocols, an  "Interested Party" means  "An entity that is or may become a customer taking transmission service under [the PJM Interconnection, L.L.C. Open Access Transmission Tariff], a state public utility commission or state consumer advocate agency in Maryland, Pennsylvania, Virginia, West Virginia, Delaware, New Jersey or the District of Columbia, or any entity having standing under Section 206 of the Federal Power Act."
It is not clear that you meet the definition of Interested Party under the Protocols. Please provide a response to this email by June 19, 2012 stating the basis for your status as an "Interested Party" under the Protocols."

PATH has yet to respond to any of the parties who tried (in vain, judging from PATH's impossible deadline) to provide the required information.  PATH is erecting additional hurdles for certain interested parties by requiring them to plead their case to PATH.  PATH has appointed itself adjudicator of consumers' rights to participate in the setting of rates that they are required to pay.

PATH's behavior is especially egregious in light of FERC's findings in PATH's request to change the definition of "interested party" in its Protocols last year.  As certain parties contended in that case, PATH's proposal to change the definition was a not-so-cleverly disguised attempt to exclude certain parties who have participated in the review of PATH's Formula Rate and filed Challenges in the past.  Because PATH has been caught with its hand in the cookie jar and has no logical defense, they simply seek to exclude parties who may take notice and challenge ongoing fraud.

Interested party Alison Haverty has apparently grown tired of PATH's heavy-handed attempts to disenfranchise consumers and filed a Complaint against PATH at FERC (Docket No. EL12-79).  PATH has 8 days to answer Alison's complaint.

UPDATE:  FERC has issued a Notice of Complaint setting a very short intervention, comment, protest and answer deadline.  All filings are due by 5:00 p.m. July 5.  If you want to participate, you'd best get crackin'.  It looks like FERC wants to get this over with well before the July 18 meeting.



 
 
We've all been laughing at the AEP vs. FirstEnergy TV commercial beat down going on in the state of Ohio.  The companies are doing such a bad job presenting a coherent message, the public is left wondering what it's all about.  While the commercials focus on a current AEP rate case, the FirstEnergy rate case also going on right now before PUCO is much, much more interesting and has more potential to rip off consumers than anything AEP could dream up.

You see, FirstEnergy's current rate ripoff scheme is just a small part of their long-term, grand design to manipulate markets, laws, and administrative processes in a number of venues in order to produce incredible financial windfalls for the company.  FirstEnergy put quite a lot of thought into machinations that would beat their competitors at the EPA coal plant closure game and manipulate the situation into a financial benefit for the company.  FE's stockholders may see it as great business sense, but for Ohio's electric consumers, it's a huge financial loss.  Whether FE will get away with pushing the legal envelope, or whether evidence of possible misdeeds will begin to float to the surface like untethered bodies, remains to be seen.

It started several years ago with FirstEnergy's acquisition of Allegheny Energy and its plethora of scrubbed coal generation.  Tony the Trickster admitted as much on some annoying idiot's TV talk show.  He claimed that the EPA's new rule will benefit FirstEnergy, while other companies, like AEP, were wasting their time whining and trying to lobby the rules away.  Here's how FE's plan worked:

1.    Acquire bigger footprint and additional scrubbed coal generation capacity.

2.    Close un-scrubbed coal plants several years earlier than necessary, on very short notice, and create localized capacity shortages (especially in FirstEnergy's home base of Ohio). 

3.    Generation shortage will drive capacity prices in ATSI up more than double those in the rest of the RTO.  FirstEnergy will be the beneficiary of increased capacity prices.

4.    Closures will result in reliability issues.
    a.    Possibility for very profitable "Reliability Must Run" contracts to keep plants slated for closure open until reliability solutions can be implemented. 
    b.    Propose $1B in new transmission "reliability" solutions to be owned and constructed by FirstEnergy that source to other existing FirstEnergy-owned generation in order to lock in future market domination.  The transmission will predominantly become the financial responsibility of consumers in the ATSI zone, and will consist of many small upgrades to FirstEnergy-owned transmission so as to avoid any competition for projects under FERC's Order 1000.

5.    File Ohio rate case to lock in all that juicy profit and rush it through approvals!

6.    Engage powerful competitor in silly tit-for-tat PR battle over their own rate case, in order to focus attention elsewhere.

Here's what's turned up in FE's Ohio rate case:

Read the brief of the Ohio Consumer's Counsel.  This agency, tasked with representing the interests of Ohio's residential ratepayers, was chopped and crippled by Ohio's Governor last year.  The ever-struggling OCC claims that FE, with the assistance of PUCO, rushed their case through the process and disenfranchised the public.  FE sought waiver of many important rules and kept evidence to a minimum.  FE engineered an upfront settlement with certain parties, who all received kickbacks for their cooperation.  No parties representing residential ratepayers were included in the settlement, leaving the ratepayers without representation and bearing the cost of the kickbacks the cooperating parties received.  FE's switch to a three-year auction leaves ratepayers at risk of higher prices.  Sure, your rates may be "stable," but that will be stably HIGH.  FirstEnergy's generation affiliates will substantially benefit from the three-year auction.  A distribution rider produces excessive cost to consumers and locks FirstEnergy into a guaranteed revenue stream without rate transparency.  FirstEnergy escapes Ohio's "significantly excessive earnings" test.  FirstEnergy's claimed "benefits" for consumers are nothing but smoke and mirrors.

Read the brief of AEP Retail Energy Partners.  Be sure not to miss their handy-dandy table of all the settlement parties who financially benefited from their support of FE's plan, how much they got, and who gets to pay for it (mostly Ohio's residential ratepayers).  See also AEP's arguments about how FE is, in fact, the one stifling competition in Ohio by locking customers into purchasing FE's generation.  So much for a level playing field, FE, you little fibber!  And this -- it's such a great line, I've got to quote it:

"In effect, what is presented to the Commission and the ratepayers of the FE EDUs is much like a bad sequel.  Even if one liked the original movie, there is no assurance that the sequel will be equally enjoyable.  Unlike a movie, however, the FE EDU customers must stay to watch, once they have paid."

But probably the most stunning evidence submitted in the case comes from The Sierra Club's brief.  The brief details how FE severely underbid energy efficiency into PJM's RPM auction.  FE's failure to bid even the minimum amounts of EE required by state law into the auction artificially drove up ATSI's capacity price in PJM's 2015/16 auction.  FE's gaming of EE capacity cost ATSI consumers $600M in unnecessary capacity costs and prevented them from realizing an additional $39M in revenue!

But, what will all this mean for Ohio consumers if FE's plan is approved?  You're going to be paying more... lots more!

FirstEnergy has a bunch of hungry mouths to feed, such as:

CEO "Tony the Trickster" Alexander, who pulled in $18.3M in total compensation in 2011, according to FirstEnergy's SEC Proxy filing.

CFO Mark Clark, who pulled in $6.6M in 2011.

General Counsel Leila Vespoli, who pulled in $5.5M in 2011.

Charles Jones, President of FE Utilities, who pulled in $4.7M in 2011.

And then there's FirstEnergy's dead weight, retired executives, who still have their hand in the till:

Gary Leidich, who walked away with $4.4M in 2011.

Paul "Mr. Burns" Evanson, who walked away with the big prize - $14.4M in 2011.

So, while you're struggling to pay your increased electric bill in the future, remember how hard your friends at FirstEnergy are also "struggling."

If you've heard that the EPA is causing your electric bill to "skyrocket," you're getting incorrect "information" spoon-fed to you by propagandists with an agenda.  You need to work a little harder to get the unvarnished truth.  The truth is that your Ohio electric bill is going to "skyrocket" because of the financial scheming of FirstEnergy.

Remember, while all those TV commercials are kinda funny, the real story can only be found elsewhere.

 
 
PJM's Independent Market Monitor stuck their finger into the Primary Power pie at FERC, "[b]ecause this case has important implications for the Commission’s initiative in transmission competition policy, the Market Monitor urges the Commission to resolve the issues raised here in a manner that preserves and strengthens that policy."

Looks like the Market Monitor also smells a couple of incumbent rats exercising unfair advantage over their competition in the PJM cartel.  The IMM doesn't come right out and say that PJM is complicit, but what other conclusion could there be?  The IMM loves themselves some competition to make their little markets work, and PJM's decision to grant ownership of an independent transmission company's projects to incumbents smacks of uncompetitive, unfair advantage won through schmoozing and arm-twisting of PJM's management.  That's really nothing new.  The favoritism of incumbents has been going on at PJM for years, and will continue until a responsible entity puts a stop to it.  Bravo, IMM, for at least taking a stab at it.

IMM says, "PJM has not adequately justified its decision"
and thinks the following ambiguities in PJM's rules need to be corrected:

1.    "Sponsorship"
2.    New vs. Revised Projects
3.    Upgrades/rights of way/incumbent property rights

They also take issue with the fact that "PJM compares Primary Power’s costs to build the original projects against incumbent transmission owners’ cost to build the revised projects. There does not appear to have been a process that would have permitted direct competition between Primary Power and the Incumbents."

The IMM recognizes that PJM's "cost competition" arguments are bogus and cause undue expense for consumers and that some control needs to be put on cost estimates.  Perhaps the IMM should have weighed in on FERC's Transmission Incentives NOI as well, where this issue has been a part of discussions.

"The fact that the referenced costs are only estimates which cannot be enforced gives rise to significant questions about the significance of whether one project’s estimated costs are less than the estimated costs of another project. The Commission should consider whether transmission owners, whether incumbent or potential entrant, should provide firm, enforceable cost estimates. This would make a reasonable comparison of costs possible and would also define the assignment of risks between investors and customers."

PJM thinks they are omnipotent and invincible (because the incumbents tell them so while hefting their golf tackle around at ratepayer expense).  Someone needs to let Kerry Stroup know that PJM exists to serve CONSUMERS, and not the profit margins of their corporate members.

"They don't realize that PJM doesn't report to anybody ... although we are regulated by the Federal Energy Regulatory Commission," Stroup said."

Maybe FERC should spend less time in private "visits" with energy company CEOs, and start doing some regulating.

 
 
TPL brings us the news that Susquehanna-Roseland partner PPL has made an announcement that they will begin construction on their part of the unneeded project next month.

Never mind that they only have "unofficial" approval from the NPS to annihilate the Delaware Water Gap National Recreation Area in exchange for some "mitigation" pay offs, and the EIS has not been completed yet.

Never mind that there's still a pending court case before the NJ Court of Appeals.

PPL wants affected citizens to step in line to receive their stipend of axle grease and Koolaid.  The first 50 to sample the beverages at PPL's "Open House" may also receive a limited edition crying towel.

The race to the "too big to fail gold-plated reliability project to nowhere" finish line has begun!
 
 
Time for another comedy break, brought to you by AEP & FirstEnergy, who continue to burn their shareholders' money for your own personal entertainment (because NONE of this crap is recoverable through rates, right?)

The "squabble" got national coverage in Business Week recently, although the reporter seems to be among the larger crowd who just doesn't quite get it and is merely attracted by the bizarre nature of the whole spectacle... kind of like slowing down to rubberneck at the scene of an accident just to see if there are any severed heads rolling around in the median.  For instance, the reporter thinks the competition tit for tat series was about... basketball (it was dodgeball!)  Julie must have had a deprived childhood.  Business Week also attributed one of AEP's commercials to FirstEnergy (the lunch ladies).  Umm hmm... you two sure are getting out a coherent message.  Too bad that message is... WTF?

AEP seems oblivious that their own arrogance is sneaking up behind them and baring its teeth to take a bite.  But then again, why should they care when they have PUCO on a leash? 

AEP has re-focused their issue on commercials shamelessly fear-mongering about jobs.  Some are just plain old sappy.  Thomas Edison would be ashamed of you, AEP!  Unfortunately, the only ones they're scaring with this commercial are their own employees.  Was that what they intended?

No matter, the ads sort of fall flat because they direct viewers to "Fair Energy Ohio dot org" and use the logo from that site, which AEP dumped after being accused of running a front group.  AEP must have forgotten that they re-directed that url to go to Pablo the AEP Answer Man's website, which doesn't correlate with the targeted destination in the commercials and makes the average person think they typed something wrong, or worse yet, got hoodwinked into visiting AEP's website through propaganda.  Nice going, nincompoops!

FirstEnergy is running as fast as they can to catch up.  They actually produced a creative commercial all by themselves, so you can toss them a doggie biscuit.  Yeah, I know it's kinda cheesy and they're probably lucky some postal worker didn't happen by when they were abusing that mailbox and, well, go postal on them.

Next, FirstEnergy has been paying attention in class and attempts to stir up a little of that old "PUCO is AEP's lapdog" sentiment that caused such a ruckus earlier this year.  Unfortunately, they weren't quite dumb enough to make a commercial that comes right out and says so.  It's kind of like walking through a mine field to get that message across without alienating PUCO, isn't it?  So, FE experimented with a couple of different ways to get the job done without leaving fingerprints.  The newspaper editorial from one of FE's lapdogs. "Too bad, all but one member of the PUCO appear determined to serve AEP first."  The opinion from one of those angry small business owners, where PUCO is placed in position to look like the peoples' hero, but is actually intended to dredge up the old PUCO lapdog scenario.  Eh... it's not really working.  They should get the guy who

Oh, wait... that just wouldn't be sporting of me, now would it?  Keep tippy-toeing through the mine field and listening for that telltale "click," FE!
 
 
PSEG filed a Protest of PJM's compliance filing for their new planning process at FERC today.  I had to read it several times... and I'm still not sure what they're up to here, but at face value it makes them look like Sybil.  Overall, it's kind of like a pair of new shoes that rubs the wrong way, but you can't quite figure out what's causing the irritation.

First PSEG complains about PJM's new planning scenarios allowing decisions to be made within the mysterious "black box."  We've been complaining about PJM's mysterious "black box" for years, but because the old black box worked for PSEG, that was okay.  However, if PJM would now make black box decisions that include public policy considerations, that's not transparent enough for PSEG.

"The vague criteria of “the PJM’s engineering expertise and experience as the transmission planner and operator for the PJM region” does not provide sufficient clarity
regarding the decisional framework. PJM’s proposal is tantamount to black box decisionmaking. It fails to provide any decisional criteria that PJM would be obligated to follow in finalizing the RTEP before sending it to the Board for approval. It says nothing about how PJM will pick one scenario over another or whether such scenarios will be weighted based on any factors. As such, the issue of how PJM will be utilizing scenario planning in making RTEP decisions stands no clearer post compliance filing than before."

Next PSEG goes completely Sybil and complains that PJM puts no limits on how much an existing project could be modified and that such a modified project may no longer comply with market efficiency cost controls.  Yeah, I know... how can they say this with a straight face while simultaneously pushing their Susquehanna-Roseland white elephant??

"Further, the compliance filing puts no bounds on the extent to which an existing reliability or market efficiency project may be modified as a result of the sensitivity and scenario studies. Such an open-ended option puts at risk the cost control measures that
currently ensure that customers do not pay for projects that are neither economic nor “gold-plated” from a reliability standpoint. For example, under current rules, a market efficiency project must pass a cost benefit test in order to be included in the RTEP. Scenario planning may point to further project enhancements, but the compliance filing sets forth no requirement that such enhancements must also pass the same cost benefit
test. Without such a requirement, the fundamental cost controls that ensure customers do not pay for  uneconomic transmission upgrades would be lost."

PSEG puts the caboose on their crazy train by insisting that PJM align their RTEP assumptions with their RPM results.  PSEG (and PJM though the quote PSEG cited) insist that the RPM is working and responded perfectly to generation retirements, although the Market Monitor has been on the warpath about the new generation that cleared, saying that it skewed the market.  Now they're all fighting over who gets to wear the straight jacket!  PSEG says that "public policy" scenario assumptions that have not cleared the RPM should not be considered.  Okay... so let's apply that to S-R, shall we?  How about we retool that loser using the latest RPM results?

Is PSEG looking to dump their "gold plated reliability project" at this point in time?  C'mon PJM, step up here and be the hero.  Kill it, kill it, kill it!

Meanwhile, Atlantic Wind Connection made a filing complaining that PJM didn't include public policy scenario criteria in its compliance filing.  I guess they think they're about to be left at the alter...

I wonder if the FERC Commissioners can just send everyone to their rooms without supper?  Maybe some day we can make transmission decisions that are actually in the best interests of consumers, and not corporate bottom lines.  Call me a dreamer.


 
 
Battleship!  *BOOM*  Battleship!  *CRASH*  Battleship is national energy policy's great game of strategy.  It's loaded with action and suspense.  Play it anytime, anywhere.  B-4.  Hit.  J-10.  Hit.  Oh no, we sunk EEI's battleship!  Hahahahahahahaha!

If you loved playing Milton Bradley's game of Battleship as a tyke, you'll probably also enjoy the grown up edition that goes on while deciding national energy policy.

A week ago, Consumer Organizations filed joint reply comments on FERC's Promoting Transmission Investment Through Pricing Reform Notice of Inquiry.  In the joint comments, the Consumer Organizations expressed their dismay and provided a link to EEI's "Transmission Policy Task Force CEO Priorities & Outreach plan" that was publicly available and accessed on the internet through EEI's website.

It has been brought to my attention that just a short week later, the link that was provided in the Consumer Organizations' comments has been hidden behind a "members only" firewall on EEI's website.  I guess we weren't supposed to see it, much less publicize its contents and bring it to the attention of FERC and other parties on the docket and now they are attempting to hide the evidence.  Embarrassed, are we, EEI?  That's a real shame.... because the document is STILL publicly viewable for anyone who wants to enter "2012-04-26-TransmissionPolicyTaskForce-Ingram-CEO Priorities.pdf" into Google search and then use Google's "document quick view" utility.

And, of course, I didn't just fall off the back of the NIMBY truck last week, either.  You can also see EEI's formerly publicly available, but now private, plan here.  Of course I saved a copy.

Oh no!  Did we sink EEI's respectability battleship?  Or did they do it to themselves through the false assurances of sheer arrogance?

I'm laughing at you, EEI!   :-)
 
 
Back in 2005, Congress decided that not enough investment was being made in the transmission system, and this lack of investment was subsequently causing a decline in electric reliability.  They ordered FERC to concoct rules to provide for transmission investment incentives.  One of FERC's qualifications for incentives is based on the project's "challenges or risks," with the thought being that by making transmission investment less risky, it would become more attractive and result in increased investment.

What is the "risk" in building transmission?  The greatest risk is faced by new transmission projects that require new rights-of-way and new corridors through virgin territory, which will always be met with opposition from affected landowners and communities.  Replacement or upgrading of existing transmission faces much less risk and opposition, and should always be considered first before planning new builds.  However, industry continually fails to follow the path of least resistance because transmission incentives have made building and owning new assets a corporate profit-center in itself.  Investor owned utilities choose to take on riskier projects because they reap bigger financial rewards.  In addition, FERC has redirected all responsibility for financial risk from investors and transmission owners to consumers.

FERC defines risk this way:  "the challenges or risks faced by a project, e.g., siting, long lead times, regulatory and political risks, and financing challenges."  FERC attempts to financially reward investors and transmission owners for undertaking this risk, which has the effect of rewarding them for finding ways to overcome the risk.  Instead of removing risk, FERC attempts to financially compensate for it, and that increases consumers' ultimate cost of electricity.

The methods the industry has developed to overcome risk do not work and actually serve to increase the risk of successful opposition and the cost of the project.  Opposition fuels the siting, political, regulatory, long lead time (delay) and financial (cost allocation) risks.  The more opposition a project garners, the riskier and costlier it becomes.  A more costly project increases profit for investors and transmission owners.  They have no incentive to reduce risk.  As a result, we've reached a standoff where nothing of any substance is ever going to get built, even projects that are needed and economical.

The crux of this problem lies with transmission planning and siting "best practices" that rely on dishonesty, subversion of due process and dissemination of propaganda as a means to control "the public."  These self-defeating practices actually fuel more public anger, delay, political unpopularity and opposition entrenchment.  The solution is to change the transmission planning and siting processes undertaken by project owners, and to some extent by regulators, in order to prevent opposition and incite the support of the public as an equal partner in accomplishing a common goal.

The only way to accomplish this sea change is to throw everything the industry currently thinks they know about successful siting strategies out the window and start fresh with new perspectives.  The solutions have been right under the noses (and barking at the heels!) of transmission owners for quite a while, but they refuse to take the mental leap that would enable them to learn from experience.  Like a stubborn animal, transmission owners just keep butting their head into the same, old brick wall, and expecting different results.  It will never happen with the current "us vs. them" mindset that gives transmission owners a wholly unwarranted feeling of intellectual superiority over project opposition that allows them to incorrectly conclude that opposition can, or should, be dispersed through bullying, trickery or bribery tactics.  There is a complete lack of trust from square one when the root of a project lies in corporate or investor profit.

If you're a regular blog reader here, you might have seen an earlier post that featured the work of a couple of Brits who are nothing short of brilliant.  Patrick Devine-Wright and Matthew Cotton from the University of Exeter have continued their excellent research into the phenomenon of opposition to high-voltage electric transmission siting and, once again, they come to apt and stunning (to the industry, not to us opponents) conclusions.  What makes these guys so brilliant is that they spend time with the opposition and approach the problem honestly in search of a mutually acceptable solution.

Putting pylons into place: a UK case study of public beliefs about the impacts of electricity transmission-line-siting is the result of their work with a group of transmission line opponents.  I think it would be interesting to see their conclusions if they studied a successful opposition group, such as the tri-state PATH opposition, and the ways in which we manipulated, out-smarted and out-maneuvered PATH at every turn, but that's not particularly germane here, although there would undoubtedly be quite a lot of laughter and not a few pints of Raging Bitch ale consumed in the process...

The study comes to the conclusion that the industry and regulators are approaching the problem all wrong in the very beginning.  Transmission planning decisions are currently made at a level that is quite mysterious to the average citizen and subsequently presented to them as a front-loaded fait accompli where the community's only input is framed in an inaccurate "NIMBY" context that reduces their input to a choice between two evils that utilizes a "divide and conquer" methodology. The tone is dismissive and arrogant, whether intended or not. This approach breeds immediate mistrust of a self-interested "authority," and forces them into the hopeless position of attempting to justify and defend a previous decision, instead of a true community consultation process.  Trust, once lost, can never be regained. 

Once the industry has so kindly gathered affected individuals with common cause for these community exhibitions (referred to by PATH opponents as "dog & pony shows") opposition breeds and gathers steam.  The opposition groups satisfy the public's search for a trust-worthy, open and inclusive source of information and a plan for action that empowers and encourages the David vs. Goliath battle that will ensue.  The industry doesn't stand a chance here and have, in fact, already lost the battle at the first engagement.

By broadly painting any opposition with the selfish "NIMBY" brush, the industry is simply lying to themselves and ensuring their own defeat.  What the researchers found was that opposition is intellectually capable of, and indeed demands, a thorough discussion and debate of alternatives.  However, this discussion and debate has already taken place at a higher planning level where the interests of the public have been represented by disconnected and uninformed regulators and government-funded consumer advocates who are out of touch with the real world they supposedly represent.  The only mutually satisfactory conclusion at this point is an acceptable alternative (such as the Mt. Storm - Doubs rebuild in the case of the PATH Project).

Current industry "best practices" lack procedural fairness, effective consultation with affected individuals and consideration of acceptable alternatives.  Until that is remedied, transmission will continue to be "risky" and unduly costly and the stalemate will continue.

 
 
PJM spends a whole bunch of our money trying to manipulate their "markets" to be economic by expanding the transmission system to relieve economic "congestion."  Congestion simply means that "cheaper" power can't be transported to all points via the existing transmission system at certain peak load times.  That doesn't mean the lights are going to go out in those areas that can't import "cheaper" power, it simply means that they may have to crank up some more expensive generators closer to load. 

PJM has been whining for years about all the "congestion" between western PJM coal-fired generators and east coast load.  It was their basis for the failed $6B Project Mountaineer scheme.

See PJM's 2012 Market Efficiency Analysis Results presentation that is on the agenda for tomorrow's TEAC meeting.  As we've been telling you here and on The Power Line, PJM's "congestion" situation has changed dramatically since Project Mountaineer was proposed. 

Slide 3 tells us:

Significant drivers of congestion differences in 2011 and 2012 simulation results.
  • Gas prices relative to coal much lower resulting in less coal units committed and less west to east transfers.
  • Reactive upgrades on high voltage system led to significant increase in reactive transfer capability for future years.
  • Decreased load forecast relative to previous years.
  • Generation portfolio shifts to include more gas due to sustained lower gas prices, coal retirements and a net increase in natural gas generating capacity near load pockets.
  • Emissions policies impact unit commitment/dispatch and shift to higher commitment of natural gas burning generation.
That's right... decreased load forecast on the east coast and new, cheaper gas generating capacity near east coast load pockets means less west to east (coal-fired) transfers, and that means Project Mountaineer is a big, fat, costly failure!  PATH might as well jump off that cliff they're perched on, and they can take MAPP with them (unless PJM re-purposes it as a east to west offshore wind transmission line).

As far as Susquehanna-Roseland goes, look at slides 4 & 5 where S-R and the Mt. Storm Doubs rebuild appear to alleviate "congestion."  While PJM pats themselves on the back for conquering the congestion monster, notice that some "congestion" simply moves to other areas.  Every change to the transmission system causes other changes.  They're never going to fix it all, just simply shift it among different consumers like a big electric bill fairy.

Now let's move on to slide 6 where we see "Constraints with at least $5 million Congestion Reduction and Upgrade(s) responsible for reduction."  Susquehanna-Roseland is credited with congestion reduction only twice in the table, and one of those instances is combined with reactive upgrades.  If we're generous here, we'll say S-R "saves" $32M per year in congestion costs for that line item.  The second reference to S-R credits it with saving $12M in "congestion" costs.  If we add those up, we've got $44M per year possible savings.  However, S-R is probably going to end up costing in the neighborhood of $200M per year when it's completed.  What the heck, PJM?  Thanks a lot for the "efficient" cleaning out of my wallet.

Abracadbra!  PJM's "efficient" markets have even more magic to perform for me!  That $44M in yearly "congestion" savings accrues only to the load pockets on the east coast (not me!), however S-R's $200M yearly cost is shared by all 61 million PJM consumers in the entire 13-state region (me included)!  Wow!  Sign me up!  It warms my heart to pay $156M to save other people $44M in "congestion" costs!  In fact, I'm now feeling so generous that I think I'll hop in the car, clean out my bank account, and then hand out money to all the winos hanging out on local street corners.  They'd probably spend my money more "efficiently" than PJM.

Oh, but wait, that's not all S-R will do for me.  It will also provide some illusory and hard to define "reliability."  $156M worth?  What kind of a rube do you think I am?

Won't someone pull the right lever and stop this out of control gravy train?  Please?


 
 
PJM has filed an answer to the complaint of Primary Power at FERC.  If you'll remember, Primary Power filed a complaint after PJM reassigned SVC projects Primary Power had spent 5 years and $5M developing to incumbent transmission owners Dominion and FirstEnergy.

PJM says they based their decision on three factors:

1.    The fact that the incumbents already owned land (their substations) on which to site the projects.

2.    The fact that the incumbents wouldn't need a CPCN because they would merely be "upgrading" existing transmission.

3.    Cost.

Wow!  That's it?  The crappy lawyering doesn't stop with the IOUs after all, but apparently also extends to RTOs as well.  1. & 2. are situations in which the incumbent will always prevail, effectively shutting the door on any independent projects and FERC's intent to encourage independent transmission ownership.  What a joke! 

But who said the projects won't need a CPCN or run into a siting buzzsaw in West Virginia if the incumbents construct them?  That's a lot of fallacious logic on PJM's part.  As I recall, somewhere in one of Primary Power's documents they said something about already having secured needed land, but I'm not going on a fishing expedition to find it.

And as far a 3. goes...  While Primary Power had a real cost estimate based on facts and figures, FirstEnergy and Dominion had back of the envelope guesses at cost.  PJM never did any independent cost evaluation to compare the alternatives.  Just like the PATH Project, the incumbent gets a free pass to underbid any competitors with estimates they pull out of thin air.  One of my favorite parts of PATH's fictitious cost estimate was demonstrated when the $1.8B project was reconfigured from twin 500kV lines from Bedington to Kemptown to a single 765kV line from a new  Welton Springs substation to Kemptown... and the $1.8B price tag remained exactly the same.  This proved that PATH's cost estimates were completely invented.

A plethora of parties have intervened in the Primary Power complaint at FERC.  Predictably, a bunch of PJM's favored incumbents protested the complaint and sided with PJM.  However, there was an equal number of independent transmission developers who intervened to support Primary Power's complaint.  If you want to browse through the filings, go here and enter Docket No. EL12-69.  Lots of good reading, but I'm not going to upload a whole bunch of them here.

The only party who can even claim some semblance of independence here is the Pennsylvania PUC, and guess who they sided with?  You'll have to read it to find out...

But what do I know about any of this... let's ask the PJM Magic 8 Ball if FERC is going to grab PJM by the scruff of its incumbent-lovin' neck and swat them with a rolled up newspaper...  take it away 8 Ball... "Outlook Good!"