It's a good thing when it supports the public enjoyment of the arts, history, or nature. But where does the line get drawn between philanthropy and tossing money down the toilet?
Do you suppose that the Clean Line executives sing and dance for their investors? They ought to, since I believe that's all the investors are going to get in exchange for their philanthropy.
It's been a while since we've gotten a look at who's supplying the money that keeps this rickety boat afloat. During the ICC RICL hearings in December of 2013, we heard that Clean Line was going to be out of money by mid-2014.
But, here they still are... being a nuisance to Mayberry. Looks like National Grid had to up the ante and kick in another $15M. And since a 40% share seems to have increased in value, does this mean that other investors have also flushed some more money down the Clean Line potty? And what about Bank of America? Didn't one of Clean Line's spinners say the company was getting cash from Bank of America?
If we can believe Clean Line's Grain Belt Express application to the Illinois Commerce Commission, here's a listing of who's to blame for funding this fiasco:
GridAmerica Holdings (National Grid) has invested $55.7M and currently owns 40% of the company.
ZAM Ventures (Ziff brothers) has invested $73.8M and currently is the majority owner, with a 53% stake.
Michael Zilkha has a piddling $2.8M invested, which gives him a 2% ownership interest.
The remaining 5% (or $6.7M) is owned by "Clean Line Investment" which is some vague investment vehicle owned by "service providers and employees of Clean Line."
Total investment: Around $140M
That's a lot of green that is simply going to disappear when Clean Line's circus tent folds in the middle of the night and the company slips out of town. But that's okay, I'm sure these savvy investors wouldn't invest money they couldn't afford to lose.
$140M invested and the company still doesn't have even one of its projects fully permitted and ready to build.
In addition, all the interest in the project is coming from non-existent generators. It really doesn't matter how much Clean Line talks about how much its project is needed by other states in the east, without any contracts, Clean Line will fail.
Dance, Clean Line, dance!!!
Disturbing news out of Colorado this morning. The Denver Post reports
that the legislature is playing games with funding of the Colorado Office of Consumer Counsel (OCC) for the next 10 years. Without funding and authorization, the OCC will simply cease to exist under Colorado's "sunset" law.
A concerned legislator likened the refusal to deal with the re-funding of the OCC to "Washington, D.C.-style politics."
"If people disagree on the policy, the substance or the process, that's fair; that's what we're each here to do," Garcia said. "But what we're seeing here is Washington, D.C.-style politics where you put something off to the side, and the committee chair doesn't give it due regard until it's too late."
Why is consumer counsel so important? Because it is the utility consumer's only defense against high rates and utility policy that compromises their interest. Only the consumer counsel is looking out for residential and small business interests during utility rate cases. Without the OCC, residential consumers would have no choice but to represent themselves in every utility case before the Colorado Public Utilities Commission. Who can afford the time or expense of that? Nobody, therefore consumers would be unrepresented. It's just not true that outside consumer groups, contingency-based lawyers, or class-action lawsuits can take the place of an independent, governmental advocate that defends the interests of all
residential and small business consumers.
According to a report prepared last fall, the OCC regularly saves this class of consumers between $40-50 million per year in increased rates. The cost of this representation is a mere $1.5M/year. The funding for the OCC comes from fees paid by regulated utilities, not out of the state's general fund. It costs consumers nothing, and it consistently saves them money. The report recommends continuing the OCC until 2026. However, the legislature is ignoring it, and without their nod, the OCC will sunset.
Don't let the Colorado legislature rob you of the representation that keeps your utility bill in check. Without the OCC, out-of-control rate increases could have you lamenting that "someone" should do something about that. The OCC is the consumer's "someone," even though most consumers don't even know they exist. Get educated and take an active role in the processes that control your utility costs -- support the re-funding of the Colorado Office of Consumer Counsel.
Halt The Power Lines makes it quick and easy to do your part! Visit them here to find out how to take action!
If I didn't know any better, I'd think that Clean Line's Grain Belt Express Project was trying to unload a whole bunch of 90s beanie babies. Once upon a time, beanie babies were so popular, it was a seller's market. Now, you can't give the critters away.
Same deal with GBE.
Big announcement that the results of GBE's open season attracted requests for service totaling more than 4 times available capacity. Beanie babies for sale!!!
However, GBE's open season didn't attract any buyers for the power in Missouri. Poor, homeless, unwanted beanie babies!!!
And why would that be? Because, according to the staff of the Missouri Public Service Commission, none of the utilities in Missouri need to purchase wind power to meet their renewable portfolio standard goals.
"Grain Belt Express has not shown its project is the most cost-effective means of compliance with renewable energy standards in Missouri, as all but one of Missouri's investor owned utilities has already disclosed that it has existing capacity and new contracts that will meet or exceed the 15% renewable portfolio standard target by 2021."
GBE's mouthpiece tried to pretend Missouri was always the intended terminus of his project.
Ten respondents submitted requests for service to deliver some 3,000 MW of power to Missouri, more than six times the available capacity at that delivery station, Lawler said.
“We have 500 MW going to Missouri, which is enough to power 500,000 Missouri homes,” he said. “The rest of it will go farther east, to Illinois and Indiana.”
“Originally we had it all going to Missouri, but the grid there is not robust enough to take full delivery, so we had to bust it up and make an additional delivery point.”
Something got busted up here, and I think it's Clean Line's propensity to make crap up. The Missouri converter station didn't exist until Clean Line came to the realization that there was NO WAY they could get their project approved in Missouri as long as it was intended as a fly over state to lucrative eastern energy markets. But, despite Clean Line's offer of beanie baby consolation prizes for Missouri, they're still in serious trouble.
“In Missouri, we’re at the very tail-end of the regulatory process,” Lawler said. “We expect an order from the (Missouri Public Service Commission) in the next couple of months. There is no regulatory time frame (for approval) like there is in Kansas. We expect a decision in the first half of this year.”
Sure, everyone expects an order from the MO PSC, but there's no guarantee that it will be a favorable decision. How much longer is Clean Line going to pretend everything is hunky dory while the SS Clean Line is rapidly taking on water? That's awfully brave of them, don't you think?
And what about the rest of the power that's intended to be delivered into PJM's eastern grid... any interest from buyers there? Nope. The eastern U.S. doesn't need any beanie babies, either.
So, just like its open season on its Plains & Eastern project, Clean Line is holding a bag full of beanie babies that nobody wants. None of these generators have been built yet, and won't be built until they have buyers for their product. Who is going to contract with an unbuilt generator to maybe supply power via an unbuilt transmission line that can't get state approvals? Utilities hate risk (and beanie babies).
Take a memo, Clean Line: There's no interest in your product. The utility industry has been trying to tell you this since your inception. You just can't overcome the chicken/egg scenario that makes utilities shy away from resource uncertainty. Yes, I understand Mikey thought they were wrong when he decided to market beanie babies way back in 2009. But time has been unkind to his beanie baby market. The sooner he admits it and stops this farce, the better off we'll all be!
Because transmission is such a long-term asset, we must be extremely mindful of
how new projects relate to each other to achieve comprehensive energy policy goals. If we continue to approach transmission as a hodgepodge, knee-jerk reaction to serve short-term goals and provide sustainable revenue streams to investor-owned utilities, we risk setting ourselves up for a possible future where a huge investment in transmission becomes the financial responsibility of a shrinking pool of ratepayers. Technological advances and affordability are making it possible for an increasing number of consumers to produce their own power and feed it into the local distribution grid by making their own smart, fuel-free, power producing investments. Energy efficiency and demand management gains continue to shatter future demand projections, further decreasing the need for billions of dollars of investment in new transmission infrastructure.
Nothing like a wake-up slap across the face, eh, EEI?
In September of 2012, EEI held a pow-wow to talk about how they were going to manage this strange, new world where their control of the electricity-consuming public was going to erode with alarming alacrity. Instead of approaching the problem honestly, EEI preferred to use its power, money and influence to try to find ways to kill distributed generation, instead of getting on the wagon and finding a way to turn it into a profitable business model.
In early 2013, EEI produced a white paper addressing what it termed "disruptive challenges" heralding doom and gloom for their stable of investor owned utilities.
And the battle lines were drawn.
Solar advocates have created their own issues, with polarized insistence that their use of the distribution system to sell their excess back to the utilities should be free, and that they provide so many benefits to the system that they should actually be paid more for avoided costs.
Because utilities are so bloated and focused on building more infrastructure from which they derive their profits, a shrinking pool of ratepayers increases the costs to the ones who don't install solar. Utilities crying about the burden placed on "the poor" is ludicrous and hard to stomach.
There has been no middle ground, and messaging on both sides is pretty ridiculous. Too much rhetoric causes increased polarization that stymies progress and the eventual realization of our energy future. Can't we get it together here, and effect a reasonable compromise?
Otherwise, the utilities can continue their self-destructive initiative to have it all, while solar advocates can disconnect from the public utility grid and build their own system to share their excess. Seems kinda silly, doesn't it? Where's King Solomon when you need him?
Have you been getting random mailers from "Potomac Edison," "Mon Power," or another FirstEnergy distribution affiliate trying to sell you an "Exterior Electrical Line Protection Plan from HomeServe?"
Just say no.
Go outside and look at your electric meter. You are responsible for some components of your electric service connection. The utility is responsible for the meter components and any underground service lines. You are responsible for maintaining the rest. Is your service drop overhead, or underground? Read the fine print:
The meter that measures the amount of electricity used, any underground service entrance conductor, and the meter base (materials only) are not covered under this plan, but are covered by your local FirstEnergy Company. Your local FirstEnergy Company will supply the materials to repair or replace the meter base...
So, what is covered? An overhead connection to your house (cost estimated at $200) and the labor to replace the company-supplied meter base (estimated to cost another $200), if they ever need to be replaced! So, how much will FirstEnergy's insurance cost you? $5.49/month. Forever. You'd be better off putting that $5.49 in a mason jar every month, on the off chance that you ever do need these unusual electrical repairs, so that you can hire a local electrician to fix them. FirstEnergy's literature claims that your homeowner's insurance won't cover these repairs. Know why? Because the cost of repairs is usually lower than your deductible!
Why would you want to give a bunch of money to the utility for "insurance" against an unusual problem that only costs a couple hundred bucks to fix? It doesn't say "stupid" on my forehead. Oh, but wait! If you sign up you will receive a "special" phone number to call to get your service. If you remember what you did with that phone number and the rest of your paperwork when you have an outdoor electrical line issue, then you could avoid the hassles of looking for an electrician in the yellow pages and "waiting" for service (because service dispatched through Akron, Ohio, is much quicker than calling an electrician in your own town).
Sounds like a scam to me!
So, I've been a Potomac Edison (or Allegheny Power, when that name suited them) customer for nearly 30 years. How come I'm just now being bombarded with these junk mailers? Because the West Virginia PSC recently sold me out to the company, going against the advice of its own Staff, the Consumer Advocate Division, and the findings of one of its own Administrative Law Judges.
Say what? Take a look at WV PSC Case No. 13-0021-E-PC (look up "Case Information" here). Two years ago, FirstEnergy asked the PSC for permission for its two West Virginia distribution companies (Potomac Edison and Mon Power) to market these useless "services" and products to their customers and to add the cost of any purchases to the customer's electric bill.
The Staff of the PSC and the Consumer Advocate objected to FirstEnergy's plan, which, in addition to the "Exterior Electrical Line Protection Plan," will soon be offering you:
1. Other Home Solutions maintenance and repair plans (i.e. insurance) for other appliances you own, your natural gas service lines and even your plumbing.
2. Surge suppression service (which they already separately offer as part of their regulated service activity in West Virginia).
3. Customer Electrical Services Program that allows your electric company to "arrange" electrical service work to be performed in your home. You still pay for all the work they do, your monthly fee just alleviates your "hassle" of finding your own electrician and negotiating a reasonable fee for service with him.
4. Online store - where you can buy all sorts of useless crap and energy-wasting space heaters, and pay for it all on your monthly electric bill.
A hearing was held, and the PSC's Administrative Law Judge recommended that the Commission prohibit this kind of promotion. However, FirstEnergy didn't like that decision, so they filed exceptions to the Judge's Order and the Commission disregarded it and made a new finding that FirstEnergy could continue to promote these useless "services."
Remember, none of these services are regulated, so if you have an issue with service or billing of these add-ons, the PSC can't help you. You're on your own to solve the problem with the company (and it's not even the utility you'll be fighting with, but some third-party "insurance company") or through the court system.
So, how much money does FirstEnergy make off these products? Is the company really that desperate that it needs to peddle space heaters and worthless "insurance" to its customers? It's not about the few pennies in kickbacks FirstEnergy receives from these third-party companies for selling you a "service," it's about the half a million bucks FirstEnergy was paid by one of these third-party companies for "licensing rights and utility bill access fees" to access Potomac Edison's or Mon Power's customer records and to have your utility bill you for their services. FirstEnergy is essentially selling an asset -- its customer base and monthly billing system -- to a private company that hopes to make money selling things to the customer base. There is a commercial value to a customer base of 500,000 customers. When the customer base is acquired through a regulated monopoly, should the utility be able to sell it for private profit? Your WV Public Service Commission says they can.
Tell your legislators to ask the PSC why they have allowed Potomac Edison and Mon Power to sell you out like that. And think twice about jacking up your monthly electric bills with "insurance" you'll probably never need and overpriced lightbulbs from FirstEnergy's online store.
And want to have some fun right now? All those junk mailers they're sending you have postage paid return envelopes to "Plan Administrator." The envelope instructs: "Include only your form and nothing else." If you don't sign up for the plan, you won't need a "form," so go ahead and stuff them with "nothing else" or whatever you want and return them. See how much scrap paper you can fit into the envelope! Or perhaps your child would like to draw a picture for "Plan Administrator?" Go ahead, have some fun!
And then, get serious. The fine print instructs:
If you would prefer not to receive these solicitation from HomeServe, please call 1-888-866-2127.
Tell them you don't want to receive any more offers for their services from Potomac Edison or Mon Power and see what happens. Of course, this won't stop the other offers from the other vendors mentioned above, but it's a start. I'd like to know who's really controlling the mailing list here -- is it FirstEnergy or is it HomeServe? Let me know what you are told in the comments section of this blog post...
Energy markets aren't special.
They're just another product of the PJM cartel's enabling of its members profits.
Bowring said the process that RTOs use to create market rules is flawed because market players get to vote on those rules, and sometimes they block the passage of needed reforms because they are engaging in the behavior that a new rule would prohibit.
It's like attending goody-two-shoes-kindergarten if you want to participate in PJM's energy markets, and you're going to have to tattle on yourself if you make too much money:
Bowring said market participants also have a duty to inform market overseers of faulty rules and false arbitrage opportunities and to not engage in such behavior once they suspect it to be wrong. He said the "vast majority" of market players do just that, and that those who think "they're the smartest guys in the room" by figuring out how to exploit some rule loophole are usually not since others have also seen that opportunity but chose to do the right thing by not engaging in such behavior.
When is FERC going to "do the right thing" and get rid of its mysterious and dysfunctional energy markets?
They need to realize that they need outsiders to make their silly markets work. If outsiders aren’t allowed to make money playing by the market rules without suffering the occasional random sacrifice from their ranks to serve as an example of a "bad egg" and a demonstration of FERC's power, then perhaps they should just outlaw their participation altogether. Will the beatings continue until morale improves?
It’s like slopping a whole bunch of chum into the water and complaining when sharks show up instead of some pretty goldfish.
The embattled Clean Line Energy project that proposes to transport energy from rural America to the heavily populated Eastern Seaboard has had a series of major setbacks.
In Missouri, the PSC's own staff, which is made up of engineers, utility economists, and attorneys advised the Commissioners to deny the application. In their Conclusions of Law brief they stated, "Grain Belt Express has not shown electricity delivered over its high-voltage transmission line and converter stations will be lower cost than alternatives for meeting renewable portfolio standards and general demand for clean energy because it overlooks significant costs affecting the integration of wind energy in its production cost modeling and its modeling inputs are insufficient to predict electricity prices at specific locations." They also recommended “The Commission finds that Grain Belt Express' HVDC transmission line project is not needed in Missouri."
On February 11th the commission took the unusual step of ordering Clean Line to submit a considerable amount of additional documentation
after the final briefs were turned in. Among the many requirements: Grain Belt Express shall set forth the status of its efforts to obtain the assent of the county commissions required by Section 229.100, RSMo, in the eight counties crossed by the selected project route in Missouri and provide supporting documentation thereof, including any letters of assent from those eight county commissions.
Five of the eight impacted counties have rescinded support they had previously given Grain Belt. Given that the local sentiment against Grain Belt tends to be very high, and that nearly 2,000 people turned out at the eight public hearings opposed to the project, it seems unlikely that they would be able to secure the needed county assent.
Additionally, Clean Line is running into many roadblocks with its Plains and Eastern project in Oklahoma, Arkansas and Tennessee. Clean Line hopes to be the first company to utilize Section 1222 of the 2005 U.S. Energy Policy Act to obtain federal eminent domain after they were denied eminent domain authority by the state of Arkansas. This provision would authorize DoE to essentially act as a land agent for the private company and use the government's power of eminent domain to condemn the private property in its path.
Recently the Cherokee Nation and several county boards passed resolutions against Plains and Eastern Clean Line obtaining federal eminent domain authority. Earlier this week, the Arkansas House Joint Energy Committee unanimously passed a resolution to send a letter
to the Department of Energy condemning Clean Line's use of Section 1222. Arkansas’ congressional delegation has also been seeking answers from the DOE in Washington, and were instrumental in extending the public comment deadline on the project’s federal environmental impact statement an additional 30 days.
Clean Line is also facing major problems for their Rock Island Project in Illinois and Iowa. The Illinois Commerce Commission voted unanimously to withhold eminent domain authority at this time. In Iowa, where Clean Line recently filed franchise applications, they have been met with fierce resistance and an organized opposition group who is taking their fight to the state capital building.
Jennifer Gatrel from Block Grain Belt Express Missouri states, "Overall the idea that a private company could seize privately-held agricultural land for its own private benefit is just wrong. Clean Line has brought together a vast group of very different individuals from around the country working united on the common goal of protecting landowner rights. This company has brought a major disruption to our community and much time and money has been lost. Clean Line’s proposals have also created an enormous, tightly-knit family formed in reaction to the crisis. We will not lose this fight!!"
Below is a press release from Powhatan Energy Fund. Why mess with perfection? Here goes:------------
West Chester, PA - Last week, PJM Interconnection stated that Powhatan Energy Fund's response to FERC’s order to show cause illustrates our “failure to appreciate the unique legal and regulatory framework governing organized wholesale electricity markets.” Yeah, perhaps we do not understand this “uniqueness” – we were under the impression that constitutional protections applied to all regulated markets in this country, including theirs. We’ve raised our voice against the bullying tactics that FERC has employed in this investigation as they have completely ignored these protections, including our rights to due process and fair notice. Powhatan is in the news and people feel compelled to respond to us because we’re not unique – a lot of people know there’s a fundamental problem here.
The industry struggles to understand the rules and the laws under which they can operate their businesses. PJM’s recent statements add to their confusion. PJM’s pronouncement that FERC’s regulatory mission “to protect consumers and other market participants” is held to a “higher standard” than the SEC’s mission to protect investors is simply wrong. We do not believe PJM could cite any authority to support this claim. The SEC’s mission to protect investors is every bit as stringent and important as FERC’s. FERC has even stated that its market manipulation rule is modeled after the SEC’s 10b-5 precedent.
We wish PJM would stop pretending that this investigation has anything to do with “just and reasonable prices” for power, as they put it. There is no allegation that we increased power prices. As a matter of fact, Alan’s trading had no negative effect on prices or on the power markets at all. If PJM wants to argue, we suggest they find a different straw man.
PJM made the rules, and Alan traded under those rules. Our activities were perfectly legal. And the thing is – PJM knows it. Even after August 2, 2010, when Alan stopped trading, PJM continued to wire funds to us for the very trades that are the subject of the investigation. If they really thought there was anything illegal about the trades, we wonder why they repeatedly sent us money.
We suspect that every single UTC trader made money in the summer of 2010. Instead of vilifying us in the press, PJM should thank us for identifying the goose that was laying these golden eggs. If PJM feels compelled to run any more simulations, Powhatan suggests they quantify how much money the big utilities would have “lost” the last five years had PJM continued to pay UTC traders to take transmission service out of the system. It will show the big utilities are better today, in part, because of Alan’s trading.
Throughout this five-year investigation, we’ve been very cooperative. Over the last year, we’ve been very open. The analysis of our experts, the interactions we’ve had with the FERC, and even our legal correspondence are available to the leadership team at PJM, who can see it all at www.ferclitigation.com
. We encourage a visit.
C. The Report Contains So Many Obviously Wrong Accusations That Some
Additional Comments On the Most Blatant Inaccuracies Are Warranted
1. Dr. Chen’s “Home Run” Trading Strategy Is Not A “Post Hoc Invention” Because, Among Other Things, 35 Is Less Than 50
2. The Staff’s Analysis Of The “Indicia of Manipulation” Misses The Mark Entirely
3. Dr. Chen’s Trades Were Not “Wash-like” Or “Wash-type” – Whatever The Heck That Means
4. The Staff’s Stubborn Reliance On The Unpublished, Non- Precedential Amanat Case Is Just Lame
5. Uttering the Phrase “Enron” Or “Death Star” Does Not Magically Transform The Staff’s Investigation
6. Who Cares What Bob Steele Thinks?
7. The Staff Has Not Identified Any Actionable “Harm”
Although weighing in at 49 pages, Powhatan's response is a quick and easy read, heavy on the common sense, and light on the bafflement that DC lawyers like to rely on to confuse the decision-makers. It's a modern-day, regulatory version of The Emperor's New Clothes down there, where the object seems to be to simply confuse the issues with lots of big words and complicated concepts until the decision-maker (who most likely doesn't have the technical background to appreciate all the little nuances) is left drooling in his chair, more confused than he was before he entered the room. I believe they hope that the decision-maker, like the long-ago emperor, will simply be afraid to admit that he doesn't get it, for fear of looking stupid in front of his lawyer courtesans. When that happens, the emperor may nod his head and agree with the sagest of experts before him.
And in that spirit, OE's self-designated little conscience has entered the room by filing a public protest on the debacle.
Former compliance counsel and current Super Dad Eric Morris shares:
I would hope the four Commissioners voting on this docket would reflect on the unjustness of treating certain entities that have regular business before the Commission very deferentially and then outsiders who receive zero funding from ratepayers such as the subjects of this investigation very harshly.
He also has some other interesting observations, such as:
If [Kevin Gates] had become rich and bought a utility or five, I would imagine you would treat that future version of Kevin Gates much more nicely.
But what would Kevin Gates want with a utility (or five)? He'd have to abandon his morals in order to run them.
Even Eric can't seem to find the harm that FERC's OE claims was done by Powhatan:
And speaking of protecting the incumbents, all the “harm” is supposedly being done to them. I’d love to see OE prove that that money would have lowered ratepayers’ bills; if so, PJM should be broken-up for ever allowing this. I would guess it is much closer to the old story of private gains (to PJM Members) and public risk (ratepayers paying for this investigation), though. Who knows, maybe the PJM cartel is smarter than the Wall Street banksters like Goldman and I am just not giving them enough credit?
I doubt it.
*FERCenese |ferk in knees| noun: The incomprehensible, acronym-laden gibberish spoken at FERC that is hard for common folks to understand. Origin: Electric ratepayer Scott Thorsen, standing in a field in Illinois.
The West Virginia PSC has approved the settlement
reached by the parties to FirstEnergy's request to increase rates, and your rates will go up 8% overall on February 25. Yeah, rate increases suck, but I think the bigger question here is... Did you get a better deal in the settlement than you would have if this case had gone through the full evidentiary hearing and been decided by the Commissioners?
I'm thinking... yes. And here's why:
Actual base rate increase requested: $95.7M (9.3%).
Actual base rate increase granted: $15M (1.45%).
Vegetation Management Surcharge requested: $48.4M
Vegetation Management Surcharge granted: $47.5M HOWEVER, something good happened here that is not reflected in the number. For the first time, FirstEnergy will have to account for every dollar spent on vegetation management and file semi-annual reports that true up its actual expenditures to actual rates collected. The vegetation management expenses must be reviewed for prudence. In the past, the company was simply handed a certain amount annually for "vegetation management." The company never had to account for how (or if!) the amount was actually spent on vegetation management. What happened is that the company wasn't doing adequate vegetation management, resulting in more severe and frequent outages, but was using the money to bulk up its balance sheet and share dividends. Now all the money collected for vegetation management must be spent actually maintaining vegetation. This is a very good thing!
Depreciation rate change increase requested: $17M
Depreciation rate change granted: None.
Requested increase in monthly customer charge: $1 (up to $6 from the existing $5)
Monthly customer charge granted: $5 (no change).
Deferred expense for 2012 storm restoration: $45.8M. The companies wanted to collect this with an annual return calculated on the balance. Instead, they will collect this over 5 years ($9M/yr.) WITHOUT any return (interest) being paid.
The company wanted to collect $60M in expense it incurred in closing its Albright, Willow Island and Rivesville generating plants. Instead, it will collect zero. However, the companies are permitted to defer this expense (hold it on their balance sheet) for the time being, and may request recovery of it at a later date. At that later date, you bet the recovery request will include years of "interest" accrued during the deferral. This bears watching!
The companies had requested a surcharge to pay for the cost of upgrading their generators to comply with EPA regulations. They withdrew their request in the settlement, however, the settlement simply kicks that can down the road, allowing the companies to create a regulatory asset (deferral) for those costs and to collect them during its next base rate case. In the meantime, the accumulating costs will earn 8.19% return (interest), which will be payable at the next rate increase.
But, it looks like the apportionment of rates between customer classes was adjusted to lower rates of the industrial users, while residential rates were increased. Remember, industrial users were a party to this settlement.
Do you think you might have gotten a better deal from the PSC Commissioners? I doubt it. They're used to giving FirstEnergy everything it wants. The Commissioners aren't really fighting for you, but the staff of the PSC, and our Consumer Advocate WERE fighting for you here and I think they engineered the best deal possible. There was never any chance that the PSC would simply deny the rate increase in its entirety. It was all about "how much." And you kept the pressure on by filing comments and speaking at the public hearings. Get educated, stay engaged!