When does cleaning up your dirty habits turn into an even bigger problem? When you're beleaguered dirty energy maven Duke Energy, and you try to profit from cleaning up your mistakes. And the folks in the western Carolinas are having none of it.
Duke's audacious plan is to shut down a 368MW coal-fired generator in North Carolina, replace it with a 650MW gas-fired generator, then build a new 230kV transmission line from the upgraded plant to a new super-sized substation in South Carolina so it can ship out all that excess generation for big profits.
Except the good people of North and South Carolina have come together to oppose the project. And they don't seem to be getting the least bit tired, or distracted by Duke's efforts to divide and conquer them by fomenting local routing battles between neighbors.
Word is that Duke had to fast-forward its initial routing comment period after it received more than 9,000 comments in just a few short months. What's going to happen when 9,000 people show up to oppose Duke's plan during regulatory commission hearings?
Get more information, and sign on as a supporter, at the website of the Carolina Land Coalition. Becoming a supporter is free, and you don't have to be from the local area. You just have to have a healthy skepticism for any utility's plan to overbuild generation and transmission to fatten its own balance sheet.
More fun to come...
What's been happening in transmission news this week? The Virginian Pilot
took a look at Dominion's Skiffes Creek 500kV transmission project... and it sort of looks like the project itself is up the creek. Dominion has lots of excuses for why it needs to build a ginormous transmission line across the James River, but none of them are exactly logical. Skiffes Creek is not really the only option to ensure reliability, it's just the one that regional grid planner PJM Interconnection approved a long time ago in an uncompetitive environment. If the transmission project is not approved by the U.S. Army Corps of Engineers, then PJM will have to go back to the drawing board and re-engineer another solution to what it views as a reliability problem.
Gotta wonder... if this problem was put out for bid in PJM's new competitive transmission process, would other companies have better solutions? Solutions that solve the problem without creating an eyesore and river hazard of an aerial crossing of the James River? Probably.
Dominion contends that the technology doesn't exist to run a reliable line of the caliber and kind needed under 4 miles of riverbed - at least not without a price tag in the billions.
Oh, baloney, Dominion! Take a look at the Artificial Island project
that is proposed to cross underneath the Delaware River just a couple states to the North. When transmission solutions are evaluated in a competitive environment, a submarine crossing suddenly becomes viable, not only from a cost standpoint, but also with an eye toward "constructability," a measure of the ease of getting a project approved and constructed with minimal opposition. In the case of the Artificial Island project, PJM ultimately selected a proposal by LS Power that uses a 3.5 mile submarine crossing of the river in which the company capped its construction costs
. Dominion needs to re-evaluate its submarine options.
The Skiffes Creek project is a cash cow for incumbent utility Dominion. Under PJM's old, pre FERC Order No. 1000 transmission project selection process, the incumbent was allowed to propose all solutions. The incumbent could propose only those solutions that would provide a healthy shot to its balance sheet. FERC recognized that this process didn't necessarily inspire the best and cheapest solutions and has revolutionized the way regional grid planners select new transmission projects.
Dominion tries to hide behind an aura of concern for ratepayer issues.
Curtis said the Skiffes over-the-river plan, at $60 million, is indeed on the lower cost end of the dozens of routes and options the company considered. Whatever the expense, though, customers will reimburse Dominion. Rate hikes are automatically allowed for utilities that build infrastructure to strengthen the grid.
"So these are rate-payer dollars, not Dominion dollars," Curtis said. "But the opposition is still committed to the conspiracy theory."
Curtis tells only part of the truth here. The part he leaves out is that Dominion will be earning a double-digit return on its $60M investment in the project over its useful life of approximately 40 years. The more the project costs, the more Dominion makes in pure profit. Dominion is hardly agnostic about ratepayer costs. Also, if Dominion had to compete to build this reliability solution, it would face giving up this potential profit entirely to another company with a cheaper, less intrusive proposal. There IS a conspiracy... because the investment is Dominion's dollars, not ratepayer dollars. And Dominion earns a healthy return on every dollar it invests in this project.
So, are there other solutions? Opponents accuse Dominion of not examining and considering all options.
"What's frustrating is that people think we're being disingenuous," Curtis said. "They don't believe we've looked at all the alternatives, or they think we're only concerned about making the most money for our shareholders."
The article reveals
Several lines already feed outside power to the Peninsula, but it won't be enough without the Yorktown plant, which Dominion says is too costly to upgrade in the face of new federal clean-air standards.
Did Dominion consider upgrading and rebuilding the existing lines to increase capacity before settling on an entirely new transmission line? C'mon, Dominion, you're no stranger to this plan... after all, your plan to rebuild the 500kV Mt. Storm-Doubs transmission line to increase its capacity is what killed the entirely new 300-mile PATH transmission line. Or are much cheaper rebuilds only considered when Dominion finds itself in a competitive environment?
How much time and money will Dominion's effort to keep itself from being propelled "up the creek" with Skiffes Creek cost ratepayers? Dominion's blind pursuit of this project in the face of better alternatives is what may cause "rolling blackouts" on the peninsula. The longer Dominion delays by backing a lame horse, the closer the peninsula gets to a genuine reliability issue. Get with it, Dominion, and switch to a solution that everyone can agree upon. Don't you have a legal obligation to keep the lights on? Or only one to increase shareholder dividends every quarter?
...or maybe we should call it a lesson in identifying good guys vs. bad guys?
Hey, Feds, your right hand should introduce itself to your left hand.
This article in Vista Today
informs that FERC bad boy Rich Gates will apply for a "Whistleblower" reward from the U.S. Securities and Exchange Commission for his work in exposing Credit Suisse's "dark pool" after the penalty is announced. Gates estimates he could be in line for a reward in the neighborhood of $5 - $15 Million.
Meanwhile, the Federal Energy Regulatory Commission has fined the other Gates twin $30M for alleged "market manipulation" for exposing a loophole in PJM's poorly designed energy markets.
So, if Rich Gates takes in $15M from the SEC, could he use that money to pay off part of the FERC's $30M fine (assuming FERC can make it stick in court)? I'd say that's some pretty smart money management!
Next up... will Disney be making a good twin vs. bad twin flick starring Rich and Kevin Gates? This story has been done many times over, but I think some government employees might relish the chance to prance across the big screen as cartoon characters set to an inspiring theme song and cymbal-crashing, energizing score.
Rich can play the "good" twin, who developed tests of buying and selling the same security in numerous dark pools or exchanges to see if anyone was getting in front of client’s trades, as chronicled in Michael Lewis's book, Flash Boys.
Kevin can play the "bad" twin, who performed a similar test of PJM's MLSA payment market and ended up making money that would have gone to certain gigantic utility holding companies if not for his participation in the market and exposure of PJM's poor market design.
But, wait, which twin is good, and which twin is bad? They sort of look the same to me. Like maybe identical? Both twins demonstrated that they were much smarter than the regulators who are supposed to be monitoring both markets. Maybe it depends on where in the federal government you're standing when you blow your whistle. By offering a reward for whistleblowing, the SEC demonstrates that it could actually be helped by those who expose things the agency wasn't smart enough to catch. On the other hand, FERC punishes those who expose things they weren't smart enough to catch. I don't think FERC offers any rewards for exposing utility scams. In fact, it punishes those who expose incumbent utilities, dumb market design, and lazy regulation.
But now it can all end well, like it did in Disney's The Parent Trap, when the twins switch places and the SEC reward pays FERC's penalty... and they all live happily ever after.
“All our other grant awards come with letters of congratulations, including reporting requirements and specifications on how the funder would like to be recognized in Rec Center publicity,” she said, noting that the CCJCA award “came with no such letter.”
Morann said her board had recommended “that we apply for it (the CCJCA grant) and then wanted to see what the conditions were.”
“We were never able to discern the conditions” and whether they included giving public support to the CCJCA and Northern Pass, Morann said, “and after the check had been cut and I attended the ceremony at the request of the board of directors, the board met (Thursday) and decided to return the money.”
Grants are made for specific purposes
, and usually the grant funder requires the recipient to make some demonstration that the grant funds were used for grant purposes, not simply pocketed for personal profit, or spent on things unrelated to the grant program.
There's lots of press about Eversource sprinkling "grant" money around the proposed route of its transmission project.
But, of course, there are no strings attached to the money.
The money came by way of the Coös County Jobs Creation Association, which was created by Eversource, formerly known as Public Service of New Hampshire.
John Gallus, who chairs the Coös County Jobs Creation Association and is a former state senator and representative from Berlin, said there were absolutely “no strings attached” to the CCJCA awards, other than they be used to create or keep jobs in Coos County.
While Eversource is the financial resource behind it, the jobs creation association is independent, said Gallus, who is disappointed that the recreation center returned the grant.
“They knew where the money came from,” Gallus said. “The grants aren’t based on how anybody feels about Northern Pass and nowhere on our application did it say you had to sign up to great feelings about Northern Pass. We would give money to the biggest opponent of that project if they were creating jobs in Coos County.”
But if there are no instructions, and no reporting requirements, how will the "Coos County Jobs Creation Association" ensure that the money is actually spent creating jobs? More importantly, HOW is the money supposed to create jobs? Will it fund a bunch of temporary, make-work "jobs" that aren't supported by any economic need in the county? How many permanent jobs would actually be created?
Is the "Coos County Jobs Creation Association" actually a legal entity that files an annual tax return? Or is it just an informal conduit to funnel this money into the community? Ut-oh, rabbit hole ahead!
The Coos County Job Creation Association is registered with the State of New Hampshire, to further the objects and purposes of the promotion and support of job creation for the growth and prosperity of the cities, etc. of Coos County. However, the organization doesn't seem to be registered with the IRS, or to have filed a tax return for 2014. How does New Hampshire keep track of its "non-profit" corporations if they don't file tax returns?
Even curiouser, there already seems to be an organization in Coos County that serves the same purpose. The Coos Economic Development Corporation has been in existence for many years and its purpose is to promote economic growth that fosters a strong and diverse workforce, sustainable employment, and a thriving business community in Coos County.
The documents show that a past president of CEDC was one of the initial directors of the CCJCA, but seems to have been omitted from the CCJCA's most recent annual state filing.
Why does Coos County need two separate non-profits doing the same thing? No wonder the Rec Center seemed uneasy and gave the money back.
Anyhow... the $200,000 in "grants" that the CCJCA has handed out with no strings attached, are just the tip of the iceberg, an appetizer if you will, for the $7.3M more the CCJCA will receive if the transmission project is approved and built.
Eversource has awarded grants to improve cellular service, and in founding the jobs creation association, it provided the entity with $200,000 in seed money while also pledging $7.3 million more if and when the transmission project is approved and built.
So, if Coos County wants more, it would be in its interest to make sure the project gets approved and built? No strings attached, of course.
How did Eversource "pledge" this additional funding? Is there a written legal agreement that this money will change hands? And I notice that Eversource also "founded" and "created" the CCJCA, according to this news source. If that's so, why is Eversource not mentioned anywhere in the company's Articles filed with the State of New Hampshire?
There's big money to be had for communities that support invasive infrastructure projects, not just in New Hampshire, but nationwide. It's an opportunity for those not directly affected to throw their neighbors under the bus for a little scratch, as long as the project is "not in my backyard." This reverse-NIMBY scenario causes unrest and bickering in the community, and pits neighbor against neighbor. It's divide and conquer in its purest form, often engineered by out-of-state corporations for their own profit. Greed is an enticing motivator.
And, finally, one organization stands up and says no. Bravo! There's a lesson to be learned here by other communities who care for each other and the long-term well-being of their community as a whole, and not their own immediate personal gain.
There ain't no such thing as a free lunch. How much is your personal integrity in the community worth?
The Public Service Commissions of both Delaware and Maryland have filed a complaint
at FERC over PJM's new transmission cost allocation process, specifically the cost allocation of PJM's Artificial Island transmission project. Under PJM's cost allocation rules, ratepayers of Delmarva Power in Maryland and Delaware would pay nearly 90% of the cost of the project, which is intended to improve transmission from the Salem/Hope Creek nuke in New Jersey. However, Delmarva customers will receive only 10% of the benefits flowing from the project.
Whoopsie, PJM! Your formulas still don't work! Didn't FERC's Order No. 1000 determine that costs would be commensurate with benefits? And didn't the 7th Circuit remand your prior cost allocation method TWICE because PJM and FERC couldn't show a correlation between benefits and costs?
It seems that PJM and FERC still haven't gotten it right on cost allocation. And the legal battle is just beginning. This could muck up PJM's cost allocation process for the transmission it orders up for years! As a result... transmission won't get built. Nice going, knuckleheads!
We have yet to see a massive transmission build out intended to ship renewables thousands of miles in an attempt to subvert state planning for compliance with the Clean Power Plan. Expect problems there, too! After all, not every state is going to receive the same kind of benefits from long-distance transmission that passes through in an attempt to meet the CPP goals of a different state.
I guess that's what happens when "regional" and federal interests attempt to overrun state regulators. This complaint is going to be interesting and eat up a lot of ink. Woo Hoo!
From Indiana, where investigative journalists are on the trail of Gov. Mike Pence and his curious "economic development" junkets with his utility executive buddies...
When are a utility's "economic development" donations a back door to corporate favors and lobbying, and when do they benefit the consumers the utilities serve?
Curiosity was raised when Gov. Pence took several foreign and domestic junkets, with his utility executive buddies in tow, for the purposes of "economic development" in Indiana.
Gov. Mike Pence took a quick trip to New York City this week with a "delegation of Hoosier business leaders and economic development professionals" in an effort to coax businesses to relocate to Indiana to escape the "high-tax metropolitan area."
Oddly, the only business leaders from Indiana who accompanied Pence and eight economic development staff folks on the trip are all executives at public utility companies.
IEDC staff posted pictures of Pence in a corporate suite at a New York Yankees game where the home team was taking on the Boston Red Sox.
Who's paying for this?
Apparently the utilities are
, by "donating" to the Governor's Indiana Economic Development Corporation, a nonprofit subsidiary of the state's economic development agency.
Donors have paid for Gov. Mike Pence to travel overseas, rent luxury sports suites, lobby lawmakers and fly to Iowa ahead of its first-in-the-nation presidential nominating contest.
The list reveals that more than 50 companies, trade groups and governmental entities contributed $2.19 million to the foundation from January 2014 to June 2015.
The majority of that money — about $1.7 million — came from utility companies. Duke Energy and its foundation gave the most — more than $456,000. Other contributors included lobbying firms, industry groups, regional economic development agencies, universities and large Indianapolis companies such as Eli Lilly and Co. and Dow Agro Sciences.
"We continuously seek donations for the foundation to support our business development efforts," said Indiana Economic Development Corp. spokeswoman Abby Gras. "As you can see, there are a number of donors from economic development groups to businesses who donate to the foundation. I can't speak for those donors, but I imagine they donate because they see the value of the state's economic development efforts and support the continued growth of business and job creation in Indiana."
Or maybe they donate for a different reason:
"It creates another opportunity, for example, with utility companies, which are heavily regulated at the state level, whose profits are really dependent on how they are treated by state government, it gives them the opportunity again to build relationships to be seen more as friends than somebody who needs some careful watching," said Julia Vaughn, policy director for Common Cause Indiana.
Executives from the same companies that fund the trade missions often accompany Pence on those trips, providing valuable access to the state's top executive.
"What they are effectively doing is looking for business, and so what we have as a result are policies at the administration level and the legislative level that favor the utility business plan, which isn't necessarily in the interest of the public," said Kerwin Olson, executive director of the Citizens Action Coalition.
And the line between economic development and lobbying is very blurry.
The foundation's funds have even been utilized for lobbying efforts.
Since November, the Pence administration has spent at least $2,950 on a website to promote his $84 million "regional cities" initiative, which is intended to boost economic development across the state by leveraging private investment. During this year's legislative session, when lawmakers threatened to reduce the amount Pence was seeking, the website criticized his fellow Republican lawmakers and urged people to "TAKE ACTION!" by sending a form letter to their legislators.
Foundation money also was used to purchase gift bags for 25 key lawmakers. The bags included letters of support for the initiative from local mayors and a magnetic paperweight with paper-clip men.
Indiana Michigan Power $424,000
Duke Energy $381,654
Northern Indiana Public Service Company $260,000
Indianapolis Power & Light $157,500
Duke Energy Foundation $75,000
Hoosier Energy $37,500
Indiana Municipal Power Agency $28,883
American Electric Power $10,000
That's a lot of donations. Assuming the IEDC's purpose is purely the creation of jobs and tax revenue in Indiana to benefit the citizens, what do utilities get out of it, aside from a private conversation with Gov. Pence in a suite at a baseball game?
"Economic development benefits everyone," said Brian Bergsma, director of communications and government affairs for Indiana Michigan Power. "Job creation creates better streets, better schools, better economic opportunities for everyone."
Duke Energy spokesman Lew Middleton said the company has an ongoing relationship with the IEDC, where it meets with state economic development officials on a regular basis.
"We do hope to attract new businesses to our service area," Middleton said, "and at the same time, then be able to increase the number of jobs in any given community where a business might be thinking about locating. It sort of helps raise the quality of life for all the citizens in a particular community when new jobs come to the area."
And jobs and economic development increase power company sales of electric power, increasing a utility's profit. The utilities may also argue (but they didn't think of it yet, so I'll help them out) that spreading their fixed costs over a bigger customer pool lowers each customer's overall share of those costs, incrementally lowering their bills.
But who's doing the math? Will each customer's savings outweigh his share of the "economic development" donations, plus the utility's increased costs to serve additional customers? In addition, the donations are spread over all customers of the utility, while the economic development is actually taking place in a very small portion of its service area.
For example -- Indiana Michigan Power serves customers in both Indiana and Michigan. What benefits are the customers in Michigan getting from economic development in Indiana?
And how much of the "economic development" donations are really being spent on economic development? Could economic development be undertaken without expensive sports junkets? How many other benefits are being given away at these "economic development" schmooze-fests? Are the utility executives there to promise cheaper (or free?) electric rates for industries that relocate to Indiana? If so, are the captive ratepayers picking up the tab for that in exchange for a few jobs? Why do only a few benefit at the expense of the majority? And when does "economic development" cross the line into straight up political pandering and lobbying?
The list of "donors" also includes many non-utility corporations, however the amounts of these donations were small. Non-utility corporations must balance their "donations" against their profit margin. They must include the costs of their donations in the cost of their product, so that holds "donations" in check. If generous giving increases the cost of a company's product, it will suffer in the marketplace as customers go elsewhere for a cheaper product.
However, in the case of a regulated utility monopoly, customers are captive, and must pay whatever costs a utility incurs, subject to regulatory approval. Does sharing a red hot and a beer with Pence at a ball game grease that approval? Everybody wins! Except the consumers. They lose.
More uproar this morning as word spreads that yesterday FirstEnergy subsidiaries Potomac Edison and Mon Power filed for ANOTHER 3.6% (Residential) rate increase
to cover the cost of its vegetation management program ordered by the PSC in 2013.
Just like the ENEC case filed mid-August, this rate increase is simply the result of more bad decision-making by the WV PSC. The vegetation management program (VMP) has already been ordered and the company has already spent this money. They will recover it. What remains to be seen is how much.
According to FirstEnergy's filing, the Commission decided to cover the cost of the VMP with an additional surcharge, instead of including it in base rates. However, the surcharge didn't go into effect until 2015, so now FirstEnergy wants to collect all the money it spent before the surcharge, the amount of the surcharge it undercollected to date, and the amount of the surcharge it is predicted to undercollect in 2016 and 2017 if the surcharge rate remains unchanged. Total for you: $75.8M.
So, what's in this filing, and what are you getting for your money?
FirstEnergy says its program has increased your reliability by demonstrating "a remarkable decline in the
customers affected per mile from tree-related outages."
And it demonstrates with a evidentiary slide show of some before and after photos of its tree hacking prowess. Here's just one example of the work FirstEnergy did on its unfortunately named circuit "Hacker Valley." Indeed!
Prior to the VMP surcharge, the company recovered its cost of maintaining rights-of-way through its base rates. Base rates are determined in periodic filings, where the company demonstrates its costs. A fixed rate is set allowing the company to recover the costs. The rate is not changed until the company files another base rate case at their own prerogative. In between base rate cases, nobody is minding that the company is actually spending its base rates on what it said it was spending them on. Therefore, a company can cut services, while still recovering the cost of them, and increase its profits.
So, you may be asking yourself... how did the rights-of-way get so overgrown that they were seriously affecting reliability? What in the hell was the company doing with all the tree-trimming money it was collecting in base rates? Obviously, not trimming trees.
Instead of asking this question, the PSC acted proactively to fix the problem by making ratepayers responsible for the cost of all this unperformed maintenance. FirstEnergy got off scott-free in terms of financially owning up to its years of neglect. However, the PSC, in removing VMP costs to a surcharge, are now going to be monitoring that your money is actually spent on tree-trimming. Hurray! So now you will notice how much it actually costs.
How much does it cost? Customers have reported, "...they cut HEALTHY trees for no reason on our driveway. Some sat in the truck hidden back on the power lines for hour at a time waiting for quitting time." Yup, plenty of job milking going on by the tree contractors. In addition, FirstEnergy says that their costs to begin this program were high because it needed to double its work force in order to actually do something, and it was in competition with rival power company Appalachian Power to find new workers for this new program. Because of that, FirstEnergy needed to import tree hackers from out-of-state and pay them travel costs and per diem. Also, the company had been paying its contractors on a time & materials basis, instead of a firm bid, job-based contract.
But don't you worry, little hack-ee, FirstEnergy has been looking out for your interests by finding ways to reduce the cost of the VMP. They have now switched to 70% firm bid contracts, have managed to train all the new employees (and supervisors, you know, those guys who sit in the truck and sleep) and are diligently looking for ways to cut costs.
And if you believe that, I've got a bridge to sell you. That's because the cost of the VMP is projected to be split almost evenly between captial costs and operations and maintenance costs. An O&M cost is reimbursed dollar for dollar as incurred. However, capital costs are depreciated over the life of the line trimmed, taking many years to pay off. And guess what? Capital costs will earn FirstEnergy 8.19 percent interest yearly! The more "capital" they spend, the more profit they make! Who's minding the capital and expense split? Nobody.
FirstEnergy also says they will cut costs by increasing the amount of herbicide spraying they do vs. manual clearing. Get ready for lots more dead, brown, right-of-way strips and overspray killing adjacent vegetation and polluting your water supply. But don't worry, your government would NEVER let a company use chemicals that could harm you.
FirstEnergy has also changed its tree hacking game plan, to include many new trees outside its right-of-way that could fall on the line... maybe... if the stars align... or something. So this means they're widening their rights-of-way without paying the property owners for this additional taking. Tsk, tsk!
As of June 15, the company has trimmed over 1.8 million trees, removing over 400,000 trees and
controlling/clearing over 19,000 acres of rights of way. To provide some perspective, the 19,308 acres of right of way cleared and sprayed during the 14 month Review Period is the equivalent of the size of 19,000 football fields, since a football field approximates one acre in size.
I think the trees are screaming! Can you hear them?
So, what should you do about all this? Participate in any upcoming opportunities for public comment!
You also need to support your underfunded Consumer Advocate, who is run ragged trying to protect consumer interests in all these smaller, frequent rate increases.
But that effort was criticized by the Consumer Advocates Division, which said the move set a bad precedent and weakened the traditional rate making policies of the PSC, where nearly all facets of a utility’s business were considered in a single rate case.
At that time, Jackie Roberts, the CAD director, said allowing electric companies to assess additional surcharges to customers’ bills for tree trimming programs was just the most recent step in a trend toward companies filing a number of smaller rate cases.
According First Energy’s testimony, the company is expected to receive an 8.19 percent return on the cash expenditures under the program before taxes.
In these cases, Roberts said the commission needs to weigh what is needed for the utility to provide safe and reliable service against the customers interest in having reasonable rates.
“On its face, it certainly appears this filing would fail that test,” she said.
And wait... we're not done yet! The Gazette article mentions another rate increase that has not yet received much public scrutiny... MonPower and Potomac Edison customers are being asked to pay an additional $85 million between 2017 and 2036 in order to save the financially-troubled Grant Town Power Plant in Marion County
through a new power purchase agreement. Here we go again with the WV PSC saddling ratepayers with additional costs to prop up West Virginia's coal industry through over-priced power produced by old, inefficient, coal-burning power stations.
Just hand over your wallets, little ratepayer, and nobody gets hurt. Except when they can't pay their electric bill...
Will enough ever be enough for FirstEnergy?
Because the rest of us are grossed out by such barbaric behavior.
But it does help us to assign nicknames. So that when someone refers to "Nosepicker" in a sidebar, no further description is needed. We all saw you do it. Numerous times.
FirstEnergy tries to block filmmakers at hearing.
Yes, we're laughing at you.
"Doesn't have timeline" or just doesn't have time? I got the "doesn't have time" excuse from the horse's mouth back in 2011
when he was running for Governor and I asked him why he was waiting to fill a PSC seat. "Too busy campaigning." Right. Along with the lies, I also noticed his smile was completely fake... it didn't reach his eyes. He needs to take some lessons on fake smiling from pro fake-smiler Joe Manchin. But, I digress.
Tomblin has been "too busy" to either re-appoint Commissioner Jon McKinney, or appoint a replacement for him since 2011. That's FOUR YEARS that McKinney served at the daily whim of Tomblin. Now McKinney has finally left the utility stable, and Tomblin is content to leave his seat open.
PSC Commissioners that are appointed are supposed to be insulated from political influence by becoming independent once appointed. The appointer (Governor) supposedly loses power over the Commissioner once he/she is appointed. However, by allowing appointments to expire, and the expired Commissioner to continue to serve, a Governor may control the day-to-day decisions of the Commissioner as long as this lasts (4 long years!). If the expired Commissioner makes one misstep, he can be gone the next day if the Governor suddenly decides to appoint someone else. This is a filthy practice that should be illegal. But it's also how Governor-schmoozing corporate utility companies continue to stomp on West Virginia ratepayers.
It's not like Tomblin "doesn't have time" to make any appointments to the PSC. He managed to promptly re-appoint utility lawyer Michael Albert in 2013, when his second term expired. He also managed to appoint Brooks McCabe to the empty seat of former Commissioner Ryan Palmer, when he left in 2014. McCabe is a former legislator who has absolutely no background or education in utilities regulation or consumer protection.
So, who shall fill McKinney's seat, now that it's finally vacated? That's what the Gazette-Mail investigated:
Gov. Earl Ray Tomblin has no plan to appoint a third member to the West Virginia Public Service Commission, even though several people have expressed interest in the position or recommended others they believe would fit the post.
Emails and communications obtained through a Freedom of Information Act request show that numerous people have contacted the Governor’s Office since January, asking Tomblin to confirm them for the post or to consider their preferred candidates.
The list of people seeking the governor’s attention include a former state senator, a city mayor, a retired engineer, a member of the state’s rural water association, a managing member at one of Charleston’s largest law firms and a lobbyist for First Energy, the parent company of MonPower and Potomac Edison, two of the state’s largest electric utilities.
Hmm... sounds like a bunch more utility puppets, political favors, and inexperienced stooges. Don't we have anyone in West Virginia with a background in consumer issues?
Here's two people you DO NOT want to see appointed:
An undated note left for the governor shows that Sammy Gray, the state affairs director and a registered lobbyist for First Energy, called to recommend two people for the commission spot. According to the note, Gray called to let Tomblin know that he supported Mike Castle, the Department of Environmental Protection’s director under Gov. Cecil Underwood, and Sam Cann, a former Democratic state senator from Harrison County, for the seat.
And what experience do these two have with consumer protection? None. However,
When contacted about his recommendations, Gray sent the request for an interview on to communication officials at First Energy.
“We believe both individuals possess solid experience with policy and energy matters that would help them make rulings in complex regulatory cases,” Todd Meyers, MonPower and Potomac Edison’s external communications manager, wrote in an email response. “Of course, the ultimate decision on who is appointed rests solely with the governor.”
First Energy’s recommendation of candidates for a utility commission, which ultimately regulates the company, is not out of the ordinary, according to Meyers.
“In the past, we have recommended individuals whom we believe to be qualified candidates for similar positions, both in West Virginia and elsewhere in our service territory,” Meyers wrote. “Again, others ultimately make the decisions on who is selected.”
Of course. The utilities that own the governor own his appointments to the PSC, however the utility recommendations protect the utilities, not consumers.
Who else has been recommended?
In an email from April, Michael Basile, a managing member at Spilman Thomas & Battle, a Charleston law firm that represents clients like the West Virginia Energy Users Group in front of the PSC, asked the governor to consider attorney Susan Basile, his wife.
In the 1990s, Michael Basile worked for Gov. Gaston Capterton, the Attorney General’s Office, the West Virginia Development Office and later assisted in the transitions of Gov. Bob Wise and Gov. Joe Manchin. Basile, who has served as chairman of the Charleston Area Alliance and the Charleston Regional Chamber of Commerce, also is a registered lobbyist at the state capitol, where he has represented companies like DuPont, Chevron, Chesapeake Energy, DIRECTV and Dish Network.
In his email, Basile credited his wife’s qualifications and said she was a “big fan/supporter of GERT,” apparently referencing an acronym for Governor Earl Ray Tomblin.
Right... because being a fan of "GERT" translates to utility experience and a background in consumer protection. Not.
Amy Swann, director of the West Virginia Rural Water Association, suggested the governor should consider one of her longtime colleagues and former PSC employee, Dina Foster.
Swann said Foster — now the manager of the Pea Ridge Public Service District, in Cabell County — has first-hand experience in utility issues and has the personal characteristics needed to make a good commissioner. With so many important issues being decided by the PSC, Swann said, Foster would be a valuable addition to the commission.
When Bill Wooten, a former Democratic state senator from Raleigh County, contacted the Governor’s Office earlier this year, he was hopeful he would be appointed.
With his experience in utility regulation from a legal and legislative policy perspective, Wooten thought he was qualified for the position, and he believed in his ability to weigh the needs of utility companies and their customers.
And then there's
John Manchester, the mayor of Lewisburg, also submitted his credentials for consideration.
Manchester, who previously worked for the Tennessee Valley Authority and has dealt with utility regulation as Lewisburg’s mayor, said his experience has prepared him for the position.
“I pride myself on being a mediator, a man who tries to find solutions to issues,” Manchester said.
Allan Tweddle, a resident of Kanawha City and a semi-retired engineer, put his name in after having several people ask him to apply.
In his communications with the Governor’s Office, Tweddle listed a long list of people who could testify to his “commitment” and “open-mindedness.” While Tweddle worked with Southern California Edison, an electric utility on the West Coast during his career, he said he has absolutely no connection to any regulated utility in the state.
Which one is your favorite? Or would you just like someone who's not part of the utility industry, a captured regulator, or a political favor? Here's an idea:
“We urge you to appoint a new commissioner as quickly as possible so that this investigation can be resolved,” Cathy Kunkel, a member of the Advocates for a Safe Water System’s steering committee, wrote in a letter to the governor in April. “Furthermore, we hope that anyone you appoint to the Public Service Commission will have experience in utility regulation and be independent of West Virginia’s major utility interests.”
"While the utilities are experts at running their business, it doesn’t always mean that they are right,” said Jacqueline Roberts, director of the consumer advocate division.
And they're definitely not right for West Virginia's utility consumers, because utility guys will always view any conflict from the perspective of the utility.
We've got enough utility influence from Chairman Albert already. And we've got our political favor in Commissioner McCabe. Now it's time to appoint one for the consumers.
Tell "GERT" to get off his dead ass and get busy. Maybe your suggestion can be featured in a future Gazette-Mail article?
This ESP has been controversial. The reason is because FirstEnergy, as part of its plan, has asked the PUCO to pass a fee through to its ratepayers to support its subsidiary’s struggling coal and nuclear generation. The subsidy would be supported by all of FirstEnergy’s Ohio distribution customers, regardless of whether they acquire their generation from FirstEnergy’s subsidiary. The subsidy would be assessed through a rider that is based upon a power purchase agreement (PPA), pursuant to which the ratepayers would guarantee for 15 years a price for the electricity generated, regardless of market conditions.
What I want to focus on now is the tactic FirstEnergy has used to assimilate support for its ESP. In my January blog, I noted that FirstEnergy had assembled what Edward “Ned” Hill, the then-dean of Cleveland State University’s Maxine Goodman Levin College of Urban Affairs, called a “redistributive coalition.”
A redistributive coalition, according to Professor Hill, exists when a small group of stakeholders band together to seek mutually favorable policy treatment at the expense of the public at large. Typically, the coalition incurs little cost in coordinating its efforts. However the public, being heterogeneous and widely dispersed, incurs great cost and difficulty in organizing a response.
FirstEnergy was able to induce companies to support its ESP by including special rates or programs for the coalition members — with the costs therefore borne by the ratepayers. In his original testimony, Hill pointed that the redistributive coalition was assembled to present to the commission (and the public) the appearance of not only broad support for the ESP, but also a broad range of benefits that would flow to varying classes of customers, including those with low income. However, Hill demonstrated that the benefits would only flow to the members of the coalition — a very small group.
The audience: Mostly ignorant!
But what really caught my attention in Hill’s testimony was his discussion of another concept that FirstEnergy cynically exploits: “rational ignorance.” Rational ignorance is the term used to describe reasonable disengagement by a public unable to digest complex technical arguments set forth by more knowledgeable industry experts.
In this context, Hill noted that FirstEnergy looks to exploit the general public’s inability to understand the nuance of the coalition support. On its face, the coalition seems to be asking for policy that the public should support — things such as price breaks for the poor, energy efficiency programs for small businesses, and so forth.
But under close examination, it turns out that the programs are narrowly crafted to help only those in the coalition. Why, for instance, would we only support the city of Akron and no other urban areas in northern Ohio? And why only support the members of the Council of Small Enterprise and not other small businesses?
Utilities AEP and Duke also sought PPAs. Yet neither sought to assemble redistributive coalitions for PPAs to try to fool or confuse the public. But then again, they were unsuccessful in their applications.
Break a leg, fellas (or any other parts necessary to enable quarterly dividends)!