Well, there they go again… the geniuses at FirstEnergy have devised another not so ingenious way to encourage you to pull their money-losing corporate keister out of the fire. If you live in FirstEnergy's JCP&L or MetEd service territories, the company invites you to engage in some holiday excess that will put some excess cash in its own pocket. The company's "Merry & Bright" Christmas lights contest invites you to create an electrical charlie foxtrot on your home and front yard that would put Clark Griswold to shame and then "like" the company Facebook page to enter a photo of your creation. You could win a $250 gift card! I don't think the company accepts gift cards to pay your $250 Christmas lights extravaganza electric bill though. Ho, Ho, Ho, Big Daddy Tony needs a new Rolex for Christmas!
If you live in FirstEnergy's Penelec territory, run, don't walk, to your nearest Yankee Candle outlet. Union buster FirstEnergy has lockedout union workers after they refused the company's "best offer" during contract negotiations. FirstEnergy plans to replace line and substation workers, meter readers, technicians and other employees with managers and supervisors. It's about time Toad Meyers completes his route! Ha ha ha ha, and they expect these do-nothings can keep the lights on? Good luck there, Penelec customers.
"It is clear that the Alliance will seek to make this process unnecessarily burdensome and overly complicated before the board can even make its initial determination on whether the franchise should be granted," the company's lawyers conclude. Let's take a look at who is making the process "unnecessarily burdensome and overly complicated," shall we?
Each state has a different process for transmission line permitting. In Iowa, a hearing must be held if objections are filed, or when a petition involves the taking of property by eminent domain. The Alliance has helped lots of landowners file objections, therefore a hearing is guaranteed. Also, Iowa law requires informational meetings for landowners before they can be approached by RICL's land agents. But, because RICL will stretch across nearly 400 miles of Iowa, eminent domain will most likely be needed to secure easements. When a company files an application for its project, it must also state whether eminent domain will be sought. If so, the applicant must provide an "Exhibit E" with specific information on each property it expects to take by eminent domain, to include specific ownership, legal description, a map of the property showing buildings, electric lines, and other features, as well as the names of any tenants on the property.
Clean Line can't be bothered to spend this much time and money on each property it wants to acquire, so they have asked the IUB to bifurcate (separate) the franchise process into two separate proceedings. First, Clean Line wants the IUB to determine if its project is needed and serves a public purpose. That way Clean Line can try to keep affected landowners out of that part of the process. Only after that determination has been made would Clean Line bother to spend the money to provide "Exhibit E" information for eminent domain takings. Clean Line also states that an affirmative determination granting it the requested franchise would "put Clean Line in a better position" to spend the money. What they really mean is that it would put them into a better position to threaten landowners and tell them it's a done deal, hoping that would result in less eminent domain takings and less "Exhibit E" material.
Let's take a minute here to talk about Clean Line's "RSVP" for the initial public hearings. I'm not sure why the IUB let them get away with this, but landowner notice of the project and meetings included a superfluous "RSVP" for the meeting, and a "request for information." What kind of information does RICL want? "Exhibit E" info. it would have a hard time gathering on its own, the names of any tenants. This is the same info. it is whining about having to supply in order to apply for eminent domain.
Much to Clean Line's chagrin, however, the Alliance has some very smart attorneys who have filed a motion to resist the motion to bifurcate. First of all, they argue that a motion to bifurcate is premature until the actual application for the franchise is filed because it deprives any potential intervenors of due process to object to the bifurcation. They also note that Clean Line unsuccessfully lobbied for legislation to bifurcate the franchise process in 2011. What Clean Line was unsuccessful at legislatively, they are now trying to acquire through the IUB. They also point out how Clean Line intends to use any potential approval of the franchise before eminent domain proceedings to coerce landowners to voluntarily sign easement agreements.
Now, here's where it gets funny. Clean Line starts to squeal and whine. First, they want to limit the Alliance's participation in the case. I'm sure our friends in Kansas, who were denied due process by having their own participation limited by the KCC, will identify with this tactic:
Clean Line does not object to the Alliance's limited intervention at this stage; however, Clean Line reserves the right to request specific limitations be placed on such participation depending upon the participation of other parties who may have the same interest as the Alliance. Such limitations may include but shall not be limited to prohibiting the Alliance from preparing direct testimony, submitting exhibits or other evidence, or conducting cross examination of witnesses. If the Alliance seeks to "advance the mutual arguments of all its members" as stated in its Petition to Intervene, limiting its participation to briefing legal arguments will satisfy the Alliance's goal. And then Clean Line starts whining about how it got outsmarted by quoting information it harvested from the Alliance's website: ...the motive of the Alliance is clear: to make sure Clean Line does not build this transmission line. A recent statement
from the Alliance Board President Carolyn Sheridan to the Alliance members concisely details the strategy:
"From the Board President
Think about it: Imagine you're [Rock Island Clean Line ("RICL")] and you have to file all
this information about a parcel of land in a distant location: How much time would it take
you to learn the names and addresses of all persons with an ownership interest in the land?
How much work would it be for you to prepare a map showing the location of all electric
lines and supports within the proposed easement; and the location of and distance to any building w/in 1OOft. of the proposed line? A lot of work. Multiply that by hundreds; and
you have an idea of how important it is to the success of RICL's project that it obtains.
The more parcels upon which RICL has to do all this work, the less likely this project is to
succeed. Every parcel upon which it has to do all this work is one more shovel of dirt on
the grave of this RICL line. Join the opponents of the line. DO NOT sign an easemnts
[sic] with RICL.
Carolyn Sheridan
Board President"
Without bifurcation, it is clear that the Alliance will seek to make this process unnecessarily burdensome and overly complicated before the Board can even make its initial determination on whether the Franchise should be granted. Umm... so? The Alliance is just using existing laws that were put in place to protect Iowa landowners from out-of-state speculators like Clean Line. If the process is "overly complicated" Clean Line ought to be taking its whining to the Iowa legislature, who made this law.
Clean Line also gives away another one of its strategies: to financially break the Alliance by requiring them to participate in two separate legal processes, hoping they'll run out money and determination somewhere along the way.
I really don't think Clean Line's strategy is working. It's only encouraging landowners to dig in even deeper and resist a voluntary easement. If Clean Line is going to be met with a brick wall in either case, why bother with two different hearings? That doesn't serve administrative efficiency.
And this about sums up Clean Line's little pity party:
The Alliance seeks to force Clean Line to waste time and resources, and consequently also the time and resources of the IUB, with the hope that Clean Line eventually gives
up on the project. Well, if Clean Line wants to waste the time and resources of the people of Iowa, Illinois, Kansas, Missouri and Indiana, as well as regulatory boards in all these states, adjudicating and opposing its unneeded, speculative projects, I'd say Dr. Karma is making a long overdue house call to Clean Line headquarters!
Give up, Clean Line. You've been completely outsmarted by the people of Iowa!
See the following newslinks about Clean Line's public meetings in Iowa this week:
Clean Line's Beth Conley tells a BIG LIE in this story:
Landowners Skeptical of Wind Energy Transmission Line
"...other states to the east that have little wind power potential but a strong demand for clean, reliable energy." First of all, we have a better wind power resource 12 miles off the Atlantic coast, and furthermore, we are not "demanding" this project.
Clean Line Opponents Speak Out
Crowds Grow at Clean Line Public Meetings
Proposed Power Line Leaves Farmers Concerned
The faces and snarky comments from the anchor and reporter in this story are worth watching!
Details on Transmission Line Aired Out
Proposed Power Line Project Sparks Controversy in Northeast Iowa
Property owners sound off on Clean Line plan
Patience and I met two very delightful new friends today. Hyosil Kim, a reporter for Korean newspaper The Hankyoreh, and her translator Brian Kim, spent the day with us touring Jefferson County and learning about PATH's spectacular, flaming failure to get its transmission project sited and permitted.
PATH's failure is interesting to the people of South Korea because they are engaged in their own furious battle with transmission developer Kepco over a 765kV line intended to export nuclear power out of the country.
The concept of social justice is being debated in Korea, just as it is here. Why should any person have to sacrifice their home and well-being to serve the energy or environmental needs of others?
We took a fond trip down memory lane with many of our fellow PATH opponents during our tour of PATH's proposed route, recalling funny and touching moments during our successful David v. Goliath struggle to take control of our own energy future.
You'll be happy to know that the story of The Coalition for Reliable Power is just as funny when translated into Korean!
The message Hyosil will take back to Korea is encouragement for the people to persevere and refuse to give up!
We'll be posting a link to Hyosil's story here when it's written...
Pipelines are monopolies regulated by a little-known agency, the Federal Energy Regulatory Commission, which is financed not with tax dollars, but with fees paid by the regulated companies. In 2007 the commission authorized pipelines to collect the corporate income tax in the rates charged to customers. But instead of just charging the 35 percent federal tax on profits, the commission let companies charge what is known as the “grossed up” tax of 54 percent.
But since 1987 pipelines have been exempt from paying the corporate income tax as long as they are organized not as corporations, but as Master Limited Partnerships.
Forcing customers to pay a tax that never gets to government sounds like an issue someone might want to get before a judge. This issue was taken before three federal judges on the District Court of Appeals in Washington. Judge David B. Sentelle, a conservative, wrote that while he was troubled that taxes were even considered in setting pipeline rates, the court had no authority to interfere. Remember, these regulators exist for your protection, little ratepayers.
On a recent day, the men stood behind ropes tied across the path leading to the outpost, smoking cigarettes and watching for construction workers they feared would come at any time. Three nooses dangled from nearby pine trees. “To hang them or be hanged,” the men said.
The women have also taken a fatalistic turn, building trenches in front of their tents they say will serve as their own grave sites if the authorities try to remove them. Ms. Sohn said she recently tried to prepare her children for the worst.
“When they called me the other day, I said, ‘I will die fighting,' ” she said. “That way, I would be less ashamed when I met my dead ancestors.” The social injustice of forcing rural landowners to make a sacrifice to provide a benefit for distant cities and corporate profits is internationally recognized, and particularly galling when the need for sacrifice is purely manufactured based on political or financial goals.
Building transmission (whether it's needed or not) has been a utility profit center for years. But now investor owned utilities are really shaking the transmission money tree to make up for the fact that the rest of their business is failing.
And like all good utility money-making schemes, West Virginia's out-of-state utility tedious twins go head-to-head to see which one can make the most money doing it fastest and "bestest."
Last week, FirstEnergy's Tony the Trickster made some big deal about a new transmission money making scheme approved by FirstEnergy's Board of Bamboozlers. This $2.8B "transmission spend" was given cover by being dubbed the "Transmission Reliability Excellence Plan 2014-2017," like it's all about reliability and not about "target[ing] annual transmission Net Income growth of 20+%." At what point do the reliability needs of customers intersect with FirstEnergy's need to make money? Wow, serendipity! FirstEnergy's system is going to be as "unreliable" as needed to grow income 20+%. The more "unreliable" FirstEnergy's system is, the more money FirstEnergy makes!
The "near term" plan consists mainly of rebuilds and upgrades to FirstEnergy's ATSI and TrAILCo systems. FirstEnergy will concentrate on its 69 & 138kV systems in order to avoid regulatory or community opposition hurdles that could slow down the "investment." FirstEnergy also reasons that an improved system will cut down on future maintenance costs, and that will help keep O&M in check.
But, wait a tick, how much of this "need" for re-building has been caused by FirstEnergy's long-term failure to maintain its system, and therefore should properly fall under the category of ordinary maintenance expense that the company has already been reimbursed for? If it were this easy, utilities could simply refuse to perform any maintenance on their transmission systems, and then wrap all the ordinary course repairs into some fancy package called a "Transmission Reliability Excellence Plan" and get reimbursed for it separately (and at higher rates) when a need to grow income arises. This isn't "reliability," it's a ratepayer shakedown. If FirstEnergy gets away with it, the company plans to increase their "reliability" to the tune of $12B "over time."
FirstEnergy reasons: The majority of these projects located in the ATSI region will target 69kV lines, which are outside of the RTEP approval process, and that construction would occur on land where most rights- of-way are already secured. But, assets assigned to TrAILCo must receive PJM RTEP approval and operate at 100kV and above, therefore these will be secondary to the low-hanging fruit in ATSI.
You'll be happy to know that public-money-sucker Burns & McDonnell has been hired to manage the engineering, procurement, construction and completion of the capital portfolio created for the plan and has established an office in Akron, OH. It's full steam ahead to spend as much of your money as fast as possible, little ratepayer!
FirstEnergy plans to put all its "transmission spend" eggs into its FERC jurisdictional formula rate baskets -- ATSI with a return of 12.4%, and TrAILCo, with a return of 11.7% for non-TrAIL projects and 12.7% for rebuilds and upgrades to the two-year old TrAIL line. Is this really about "energizing the future by improving the health, capacity, and reliability of the transmission system for existing and new customer loads," or is it more about "energizing the future by improving the health, capacity, and reliability of the FirstEnergy balance sheet for existing and new shareholders"?
Meanwhile, not to be outdone, AEP has also announced its own plan to spend around $5B on the "reliability" of its transmission systems over the next 3 years.
AEP CEO Nick Akins said the company’s infrastructure investments will be aimed at improving the reliability of electric service to customers. He said the company expects to invest nearly $5 billion in its AEP Transmission Holding Co. unit through 2016, adding the holding company’s contribution to earnings will nearly double in 2014 alone. However, AEP isn't afraid to invest in joint ventures and big, new projects outside its footprint.
Both companies have also submitted numerous bids on the first two PJM transmission project bidding windows.
Which transmission investment business plan will be the winner? And how much is this going to cost us before regulators catch on to the "reliability" scam and challenge it? And what if someone goes after the companies' FERC ROEs? The fun is only just beginning...
Maybe we should distract their attention by challenging these two companies to see which one of them gets into the solar business first? How much money is there to be made putting solar on every residential roof and then charging the customers "rent" for the investment? Or will they continue pumping the transmission "reliability" well until it runs dry before taking any positive action to make themselves relevant in a brave, new, distributed generation world?
The White House is said to be taking its time nominating another candidate to lead the Federal Energy Regulatory Commission, in the wake of this fall's Binz Bureaucratic Bungle. Several quite boring candidates have emerged, and that's probably good news. Nobody wants a regulator that needs a PR firm to shepherd him or her through congressional approvals. The bullshit is already thick enough on the floor of the Capitol.
However, this means that Jon Wellinghoff will continue as Chairman until a replacement is confirmed next year. But Wellinghoff just couldn't wait to sign his post-FERC revolving door deal. He announced earlier this month that he would be taking a position with law firm Stoel Rives LLP, whose clients have business before the Commission.
Wellinghoff says he has been recusing himself from the firm's cases for months, and will continue to do so until he leaves FERC. Wellinghoff says this doesn't present a conflict of interest.
Senator Barrasso says it does too.
And so another revolving door conflict starts. Why doesn't Congress institute a cooling off period between being the regulator and being the regulated? Or perhaps just prohibit it in its entirety? Maybe then we'd get regulators who want to regulate, not use their position as a stepping stone to a cozy retirement twisting the arms of those who take their place.
Regulatory capture is real. In a most appalling recent case, Wisconsin's Citizens Utility Board ratepayer advocate said goodbye to public service and took a job with transmission company ATC.
Is anyone looking out for you anymore, or are they all just studying the revolving door in order to time their exit for maximum profit?
by Dr. Luis Contreras
The US Power Grid is a very complex system, expensive, insecure and not very reliable, as we found out yesterday in Rogers and NWA where thousands of people were left in the dark while SWEPCO tried to fix the grid. All is good now, but it could happen again, say tomorrow. Fossil fueled power plants, many of them coal-fired, are based on the 1800’s idea of using fire to heat up water and make steam to power generators, a technology that goes back to the Industrial Revolution of 1712. Central bulk power is located far away from people to hide the air pollution and water contamination, based on the idea “if you don’t see it or can’t smell it, we can live with it.” Coal plants are built near rivers and lakes as they use great quantities of water to generate steam. The man-made SWEPCO 500-acre lake is warm 365 days a year because it serves as a cooling agent for the Flint Creek Power Plant. The water is between 70 and 90 degrees Fahrenheit, good for fishing if you don’t mind the emissions of sulfur dioxide, nitrogen oxide, mercury and other hazardous pollutants. Bulk power is transmitted on the Grid where different voltage levels are interconnected by substations which contain voltage transformers, circuit breakers, surge arrestors, isolators, as well as measurement equipment and switchgear. Electrical Engineers spend years designing and planning trying against all odds to make it work under any conditions. It is not easy and it is not even possible: adding redundancy only increases cost and complexity, any additional component can make it fail. Even Rocky, the Flying Squirrel can take it down. The lean alternative is distributed generation and consumption, using the existing grid as a buffer: extra energy generated is sold to the Grid which sells energy to everyone else. That is true reliability. To take down a distributed power system, you need millions of squirrels, at least one per home. Squirrels and humans can live in peace, as long as we don’t put all of our eggs in one Grid. Maintaining the existing grid and distributed renewable power are the future of the Ozarks, not more 345,000 Volt transmission lines. Doc is a a Lean Systems Expert Consultant, with a PhD from Georgia Tech, trained by Jesuits to take a firm stand on defense of social justice, and protect his family and friends "Por los demas, y para los demas, con hambre y sed de justicia."
He is an Austin TX resident, with a vacation home in Eureka Springs Arkansas.
He was trained in Martial Arts to respect others and have a lead and take action with a calm mind and determination.
When in doubt, he asks himself "what would Bugs Bunny do?" that helps him think out of the box, take a chance, and hope for the best.
He feels that we are here for a reason, we will be gone soon, and we need to make a difference in what matters - good friends, mother earth, our common house, are important to him.
He plans to make a $100 contribution to the Save the Squirrels Foundation.
Thanks for the earnings call fun today, FirstEnergy. It gave Patience and I an excuse to dine on fancy sandwiches and cornichons, drink Raging Bitch, make certain hand gestures at the voices coming out of my laptop, and laugh at all the stupid things your NEOs said. And a fun time was had by all... at least on this side of the internet connection! "FirstEnergy's third quarter net income this year tumbled to about half of what it was a year ago," read the lead of The Plain Dealer's pre-call story. I had to quickly whip up a side of schadenfreude to serve with lunch! Tony the Trickster mentioned that, after recent closings, his "fleet" of generators is now about the same size as FirstEnergy's "fleet" was at the time it merged with and swallowed up the former Allegheny Energy. This wouldn't be the first time I pondered if the merger's sole purpose was to carve up the Allegheny carcass, saving that which benefited FirstEnergy and tossing the rest on the rubbish heap. When does the sale of troubled Allegheny distribution subs begin, now that FirstEnergy has accomplished its evil plan to raise cash by sucking the lifeblood out of Mon Power/Potomac Edison and leaving a dried up, debt-laden shell that no longer provides service to its customers? For example, we have reduced the size and mix of the fleet by closing and selling competitive units. Last month, we closed the Hatfield and Mitchell Power plants and we expect to complete the sale of certain hydro assets later this year. In addition, we completed the Harrison and Pleasants transfer this quarter. Once the RMR units are deactivated, our competitive fleet will be a little more than 13,000 megawatts. This is about the same size as our fleet prior to the Allegheny merger, but it's a much stronger platform of units, more environmentally controlled and more efficient overall. It's all about Tony's "plan" to pull his ass out of the fire. It never was about serving customers, or any of that other dreck two of the WV PSC Commissioners wanted to believe.
Let's turn to an update on the financial plan that we introduced in February. Through a series of actions this year, we have made significant progress towards completing the plan, strengthening our credit metrics and reducing our risk profile.
This financial plan, which is now virtually complete, successfully improves the balance sheet at our competitive and regulated businesses and enhance liquidity in a very short period of time. Tony's next great plan is to plop his "spend" into regulated transmission investment accounts that earn risk-free, high returns.
Last week, our Board of Directors approved as a part of our energizing the future program, a new multiyear $2.8 billion incremental investment in a transmission reliability excellence plan. The plan includes additional transmission investments above current plans, which are expected to be about $500 million in 2014, growing to about $700 million in 2015 and about $800 million in both 2016 and 2017. This program will begin with investment primarily in ATSI, but will ultimately extend throughout our service area. We currently expect to fund these investments with a combination of debt and equity. These projects include rebuilding lines and equipment to improve reliability and reduce future maintenance costs, enhancing and expanding communication networks to harden the system and increasing system capacity to meet the service level and reliability requirements of our customers. This announcement turned the analysts on the call into curious monkeys who wanted to know all about tricky Tony's tantalizing transmission targets, but that wiley old geezer strung them along, talking about rebuilding lower voltage lines that don't require regulatory approval and said he would talk more about it at an upcoming EEI conference. Tony also said that the company is primarily looking to "spend" inside its footprint and not looking for projects that have long lead times with respect to either approval processes or likely construction processes. Because they learned their lesson with PATH? Someone's been paying attention in class! But he forgot to tell them about FirstEnergy's proposal for a project to solve PJM's Artificial Island issues, and any lingering ratepayer-funded PATH assets that may still be kicking around. Do you think the curious analysts were only pretending to be that clueless? In response to a question about coal costs, Donny started talking about pulling his lever. I'll spare you the hand gestures that instigated. And before the laughter had died down, Tony started talking about the possibility of things being soft down the road...I love my job.
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