We've been following New Jersey's fight with the PJM cartel and FERC, who manipulate markets in order to keep electricity prices high in the state for the benefit of PJM's 200-pound gorilla incumbent power conglomerates.Yesterday, the NJ BPU issued an order setting a new hearing on the matter.
Questions the BPU will be exploring at the hearing include:
Read more about the situation here.Ut-oh, PJM! Looks like your continued bias has made you and your power company masters a dangerous enemy!
- Are incumbent generators submitting projects for the purpose of taking up positions in the PJM interconnection queue to the detriment of new entrants?
- Is it inappropriate to have PJM transmission-owning entities (“TOs”) perform interconnection studies given that some of the TOs are part of holding companies that own generation through other affiliates or subsidiaries that participate in the PJM markets? Are such TOs causing intentional delays in the interconnection process to benefit incumbent generation affiliates?
- Are there any inconsistencies between the transmission assumptions made in the PJM Regional Transmission Expansion Planning (“RTEP”) process and the transmission assumptions made in calculating the Capacity Emergency Transfer Limits (“CETL”) for the Locational Deliverability Areas (“LDAs”) modeled in RPM (e.g., double-circuit tower line criteria violations)?
- Since implementation of the RPM in 2007, why has the market responded with disproportionately greater amounts of new generation capacity built outside of LDAs with higher capacity prices such as those that comprise New Jersey?
- Does structural market power play a role in obstructing the development of new capacity in the constrained LDAs that serve New Jersey electric consumers? What are the precise means by which incumbent generators with structural market power obstruct or could potentially obstruct the development of new capacity projects in these markets?
- What actions can the Board take to dilute existing structural market power and thwart any abuse of incumbents who exercise it to impede capacity development?
One of the surest ways to win any battle is to sit back smugly and watch while your enemies exhaust themselves attacking each other. Ohio electric customers could see cheaper bills when the dust finally settles in an epic battle going on that pits 3 different power companies against each other and Ohio's PUC.AEP and FirstEnergy have been busy trying to undercut each other
and lock in a bunch of new customers. The Ohio Consumers' Counsel is against AEP's plan to lock in a bunch of customers and overcharge them.
FirstEnergy is trying to do away with a state-ordered all-electric discount. Oh, and by the way, they want to steal AEP's customers by offering them lower rates.Now Duke Energy jumps in and wants to undercut FirstEnergy's "savings."Isn't "competition" great, fellas? Deregulation = not really saving the consumer any money, but the show is pretty entertaining to watch!
Ignoring The Citizens McKinney-Tomblin Chip ice cream
leaves a nasty, bitter taste in your mouth. I wouldn't recommend it.
Here's more on the situation
between the New Jersey BPU, PJM and FERC and industry manipulation of New Jersey's energy market.As reported last week, New Jersey wants to site several new gas fired generation plants in New Jersey in order to bring down the price of electricity in the state. The high prices are caused by lack of generation near load. PJM pretends that the markets it runs encourage market solutions, such as siting of new generation in areas of high load, to reduce cost. These load pockets experience higher prices because they don't have enough local generation and must rely on long-distance transmission lines to supply enough power. The more power these load pockets demand, the more "congested" transmission lines become.
When generation is sited near load, "congestion" on transmission lines disappears. But then so do the enormous profits for the power companies that supply that high-priced electricity via "congested" transmission lines. "Congestion" also keeps the old, decrepit, dirty coal plants these energy supply companies own on standby to provide generation via transmission lines at times of peak load through "reliability must run" contracts. These generators are paid handsomely to keep their plants available to supply generation just a few days a year. They essentially get paid to sit idle. This "congested" situation is a huge financial windfall to coal-lovin' companies like FirstEnergy and AEP, who also score big profits by building more new transmission to supply more of their coal-fired generation to relieve "congestion" in areas of high load.If another company builds a gas-fired plant in New Jersey near load, then FE & AEP's profits from RMR contracts, as well as both existing and new transmission lines, goes bye-bye.
PJM has a history of favoring AEP & FE and other big energy corporations in their decisions. Therefore, PJM is fighting with New Jersey to prevent these new plants from being built. FERC has weighed in on PJM's side of the argument and New Jersey is now being held hostage by all this market manipulation being carried out by the very entities tasked with ensuring that energy markets are fairly run.Maryland has also experienced a similar situation where they were prohibited from building new generation near load.Now, New Jersey says they are not going to tolerate it any longer. A new transmission line project that will bring more coal-fired power into the state, which was approved by the BPU last year,
is now being appealed. New Jersey's BPU is no longer in favor of the project. If their earlier decision is kicked back to them, they are free to reconsider. They could reverse their approval of the Susquehanna Roseland transmission line in the hope of forcing PJM and FERC to acquiesce. Who will win this game of chicken?
I'm sure our FirstEnergy fans have been enjoying the show while we beat up on AEP here on the blog. But now it's AEP's turn to be smug while we take FirstEnergy out behind the woodshed.Some state senators in Ohio have introduced a bill that will repeal the state's Alternative Energy Portfolio Standard... in its entirety.I smell power company conspiracy. The utilities spend millions of dollars a year trying to influence legislation (because they're people, too!) So, which company could be responsible for what I'm going to dub "The Caveman-Knuckle Dragger Bill?"
According to the article, three out of four Ohio power companies have received pretty good marks on compliance. Duke and Dayton Power each received an "A" on Environment Ohio's Clean Energy Report Card, while AEP received a "B." FirstEnergy received an"F"
for failure to meet the standards for the past two years. Gosh, I wonder who would want to repeal Ohio's Alternative Energy Portfolio Standard?Get ready to laugh... a "study" from the "American Tradition Institute" cited by bill sponsor Senator Kris Jordan
claims:"The report maintains environmental impact will be negligible because renewable sources are not proven to emit lower quantities of greenhouse gasses."Ha ha ha ha ha! Not even a knuckle-dragging caveman would believe that!Even AEP's duplicitous CEO, Mikey Morris, is smarter than that! Bend over, FirstEnergy and take your medicine!
And I like a little help now and again digging up juicy web tidbits such as, Orphans & Executives at American Electric Power…
Although it was originally written in March, it's still quite interesting, in a barf-a-licious, trainwreck
, kind of way.Be sure to click on that link to AEP's proxy form to see lots more enlightenment that the article doesn't mention, such as how all the AEP executives had their perquisites snatched from them in 2010 :-( Well, except for Mikey, who was wily enough to get his promise of free personal use of the corporate jet penciled into his employment contract
, along with a lot of other goodies.Why are some senior citizens having to choose between paying their AEP subsidiary electric bill or paying for medication on a monthly basis?
I guess they won't be playing canasta with Mikey down at the Senior Center any time in the near future...
According to Igor Kliakhandler, PJM tried to be "Holier that Pope."Since PJM's attempts at transmission planning have been such an abysmal failure, I guess they're trying to launch a new career in comedy.Here's your end of the week laugh:
Email from Igor to PJMObviously, English isn't Igor's native tongue, but the insult transcends tortured translation. What Igor meant to say was PJM tried to be "holier tha[n] [the] Pope."Just another example of PJM's bias toward their big, influential, English-speaking members.Wipe that smile off your face... Igor has a serious problem!
Because we had nothing better to do on a sunny Tuesday afternoon in September, my friends and I were enjoying some delicious ice cream at Skipper's Downtown Dips and Deli
. Imagine our surprise when our friend Earl Ray
walked out of the back room, entourage in tow, just like a celebrity! I know, wow, what are the odds, huh? Running into Earl Ray while enjoying a cone of chocolate insanity would kind of be like running into Commissioner Jon McKinney in front of AEP headquarters, or mowing Mike Morris's lawn, or something! I guess it was our lucky day!When Earl Ray approached our table, we figured it wasn't to see if we needed drink refills, so we took the opportunity to catch up on old times. We gave Earl Ray an official "I Stopped PATH!" button, just like the ones we were wearing. I'm certain he will wear it proudly during campaign season.Somehow the discussion got onto the topic of appointing a new PSC Commissioner to replace expired Commissioner McKinney. Earl Ray told us he was still evaluating the candidates, but probably wouldn't be able to make an appointment in the next 2 weeks
. He's been so busy campaigning that he hasn't had time to evaluate all the candidates and make a decision.I know Earl Ray is always working in the citizens' interest, so I have hope that perhaps he'll manage to eke out a quiet moment or two to make a decision on this important matter, that he's been considering since June 30, within the next two weeks (and besides, when have I ever accepted "No" as anyone's final answer?)So, if you happen to see our friend Earl Ray at your local ice cream parlor, be sure to ask him if he's made a decision yet. Oh, and ask to see his button!
In 2010, the New Jersey Board of Public Utilities approved PSE&G's Susquehanna Roseland 500kV transmission project. That approval is currently being appealed.Susquehanna Roseland is one of four transmission lines dreamed up as part of PJM Interconnection's 2005 Project Mountaineer
, a scheme to transport 5000 MW of coal-fired electric generation from the Ohio Valley to the Eastern Seaboard. This plan was a money-making conspiracy between coal companies, coal-dependent generators such as Allegheny Energy (now FirstEnergy) and American Electric Power, PJM Interconnection, and West Virginia Governor (now Senator) Joe Manchin, along with other politicians, and FERC officials.The New Jersey BPU and Attorney General filed comments last week on FERC's Promoting Transmission Investment Through Pricing Reform.
In their comments, they finally admit the truth, which opponents of Susquehanna Roseland and other Project Mountaineer transmission lines have been contending from the beginning:"The NJ BPU, however, is concerned that while
new transmission lines delivering mostly coal-powered electricity from older plants may reduce
the delivered cost of power, they do so at the cost of increased air emissions from these older,
less efficient plants."And now New Jersey wants to get tough:"Coal plants produce a significant portion of the greenhouse gas emissions that impact New Jersey. While coal plants have historically provided reliable electrical service and have balanced the technology mix of generation resources in New Jersey, coal is a major source of CO2 emissions and, therefore, New Jersey will no longer accept dirty coal as a new source of power for the State."The NJ BPU
finally sees the light:"The NJBPU submits that building clean generation can eliminate or lessen the need for new transmission lines and upgrades, and therefore, on March 29, 2011, the Board awarded contracts under its Long Term Capacity Agreement Pilot Program ("LCAPP") to three CC generators."However, the coal-dependent generators, PJM and FERC are fighting them all the way. This is because a self-reliant New Jersey power market cuts into the profit margins of FirstEnergy and American Electric Power.New Jersey finally realizes that its captivity to the industry-favoring decisions of FERC-endorsed
PJM are what keeps electricity prices artificially high for their consumers. PJM is a transmission planner, therefore all "problems" have transmission solutions, even when cheaper, smarter solutions are readily at hand."The NJ BPU notes that federal incentives to encourage
the development and construction of new transmission facilities to address reliability issues that utilize state-of-the art technologies is encouraged by and acceptable to the Commission, but, efforts to encourage the development of new state-of-the-art, efficient, environmentally friendly gas-fired generation to address reliability needs through incentives has been thwarted and impeded by the Commission by its recent ruling on the Minimum Offer Pricing Rule ("MOPR"),which specifically discriminates against this technology."There are, however, other ways besides simply building new transmission lines to address these potential reliability issues and the related congestion costs created by load pockets."Looks like the state of New Jersey has finally had enough of the PJM cartel's heavy-handed, self-interested control of their energy future. Will Susquehanna Roseland's approval be overturned on appeal? Denial of a new coal-fired electric transmission line into New Jersey in favor of new, in-state, gas-fired generation solutions
would be just desserts for FE, AEP, PJM and FERC. It would also put New Jersey back in the driver's seat in setting their own smart energy policy, lower electricity prices for New Jersey consumers and give a nod toward a cleaner environment.American Electric Power, FirstEnergy, PJM Interconnection and FERC ought to be embarrassed by the boldness of their Project Mountaineer conspiracy, which is on record as a FERC technical conference held on May 13, 2005 in Charleston, West Virginia.Maybe other states will wake up and join New Jersey in their insurrection against the FERC-endorsed stranglehold of PJM on their energy markets
. FERC's recent federal transmission siting power grab
certainly isn't making them any friends at the state level.