A "media tour" is a public relations tactic used to control the way the media frames a certain story so that only one point of view is presented, and differing viewpoints are not mentioned. A media tour can take many forms, but one involves schlepping an executive or "expert" around to different reporters in a city or region for face-to-face meetings with news reporters/editors. The idea is that a reporter will connect with the executive, and more sympathetic press will be created.
Media tours rely on the card stacking propaganda technique whereby only one side of an issue is presented to the audience. Opposing viewpoints, or facts that don't support the proponent's argument, are omitted from the discussion. Because the media tour provides a one-sided rendition of fact, the stories produced can often take the form of "puff pieces." A puff piece is a distorted story that only presents a glowing review of the proponent's product. In contrast, a balanced article examines both sides of an issue and the reporter talks with leaders on both sides to present their views.
Because it was getting absolutely pummeled in the Missouri media by a fresh-faced amateur, Clean Line's Grain Belt Express project has concocted a new media plan. The first item appears to be a media tour starring Clean Line president Michael Skelly. This guy rarely shows up in the localities affected by his planned projects, and when he does he's always described as incredibly arrogant and out-of-touch with local sentiment, priorities and values. Therefore, to drag him through a media tour in Mayberry, Missouri, informs that Clean Line is in real trouble in the all-so-important court of public opinion.
So, how did it go? I think this reporter was wise to him.
Mr. Skelly’s visit comes amid an upsurge in opposition to the project. And the true nature of that opposition is reported:
Opponents recently have banded together in a bid to thwart Grain Belt Express, with some sessions held in Buchanan and Clinton counties. They contend landowners are being coerced into signing easement agreements. So Skelly starts telling some unbelievable whoppers:
However, Clean Line believes it is gaining more supporters rather than detractors and say the process in Kansas already has erased doubts.
“We’re having those conversations in Missouri,” Mr. Skelly said. “We’re out there having negotiations with landowners ... We find out that people get more comfortable with it.” Check out the comment from an actual Kansas landowner at the bottom of the article:
I can tell you how negotiations with landowners in eastern Kansas is going. They're telling Skelly where he can put his power line, to put it mildly. The vast majority of landowners in eastern Kansas have resolved to not even negotiate with Clean Line until they get regulatory approval in Missouri and Illinois. The routing approval handed down by the KCC last fall was contingent upon them gaining regulatory approval in these two states. Why would anyone want to sign an easement agreement with a company that will more than likely sell the easement pre-construction to a foreign interest like National Grid, and not even be around when and if construction ever begins. Erasing doubts. Right, Mikey.
But Mikey's media tour to "defend his project" got completely upstaged by the opposition when the Missouri Farm Bureau put out a release about its intention to intervene in the Grain Belt Express case at the Missouri PSC at the same time. The Farm Bureau opposes the use of eminent domain for this project.
In addition, the university that Clean Line schmoozed with promises of pizza parties in exchange for signatures on a petition supporting the project has taken the initiative to exercise their journalistic muscles with some balanced reporting.
And another opposition op-ed got published.
What was that you said, Mikey? I can't hear youuuuuuu... and neither can anyone else you were trying to convince with that lame media tour.
I guess he will just have to concentrate on the other tactic Clean Line has recently re-deployed, the "community roundtable" and "governmental and environmental organization" private meetings that attempt to inspire advocacy in unaffected and uninterested populations.
But, don't worry, citizens of Missouri, there are some public meetings where your participation and opinion are valued.
Meanwhile, another Grain Belt Express spokesman recently buggered things up further by cluelessly insulting Missouri lawmakers by stating that they are merely "dabbling in legislation" that affects his project and he's "paying attention" to their interference with his plans in their state. What an idiot!!!
It's not going to work. Give up, Clean Line. You've been bested in Missouri and there is no recovery from public knowledge of your true intentions.
Eminent domain. Two ugly little words.
Here's two more: Clean Line.
Mary Mauch of BlockRICL was on the radio this afternoon talking about Clean Line's proposals to take 3,000 miles of new transmission line right of way through eminent domain in numerous states across the Midwest.
Historically, we haven't spent too much time worrying about the right of public utilities to take private property using eminent domain. It was a necessary evil to bringing electric service to every citizen in the last century.
But, let's take a look at where we are now in order to understand that transmission line eminent domain has reached the tipping point, where revolution is imminent.
It's no longer about bringing electricity to Mr. Smith's remote farmstead so he can read seed catalogs after the sun sets. It's about trading electricity as a commodity, as new transmission lines get bigger and costlier. It's no longer about providing a necessary service, it's about supporting markets and investor profits.
Transmission lines "ordered" by regional grid planners for reliability, economic or environmental reasons are bad enough, but one could argue that they are still ostensibly serving a "public" purpose by stabilizing the grid, the market, or saving the planet. These projects are paid for by all users of the electric grid, therefore there is some justification for the use of eminent domain in order to keep ratepayer cost in check.
And then we have the merchant transmission projects, like Clean Line. This company is proposing transmission that has not been vetted or approved by regional grid planners. They simply want to build a transmission line because it would be profitable. Merchant projects are paid for entirely by their owners. The merchant recovers its costs by selling capacity on the line to generators or load serving utilities (who then pass it on to the users of the project). The merchant enterprise depends on the cost of building the line being less than the amount of profit to be derived from selling capacity. If the cost of the line is greater than the profits, then it isn't an economic endeavor and it won't be built.
A merchant transmission developer has an interest in keeping its costs low to increase profit and make the project economic. But a merchant transmission project isn't a public necessity. It's a profit center, plain and simple. That a successful merchant project would transmit electric power for purchase by utilities if the price is right does not a "public purpose" make.
Clean Line proposes that state regulators anoint it with public utility status and its attendant power of eminent domain so that it may take whatever property it needs for its project at a low price. This would keep the costs low for Clean Line, so that it could increase the amount of profit it may derive from operation of its line.
This is where the disconnect starts. A merchant project that depends purely on economics for its purpose should be required to operate completely on an economic basis. If Landowner A requires 150% market value for property, then that is the cost of the transmission line. An economic project absolutely cannot rely on the power of the state to make itself profitable.
Landowners across Iowa, Illinois, Kansas, Missouri, Indiana, Oklahoma, Arkansas and Tennessee have taken a stand. No eminent domain for privately financed economic projects. The landowners are becoming highly educated about electric transmission, property rights and civic engagement. And it's spreading like wildfire.
As a result, we are reaching the tipping point where absolutely NO transmission is going to be built, even that which may be needed.
The urban decision-makers with their quarter acre plots maintained by hired landscapers and gardeners simply cannot understand a farmer's or rancher's connection to his land. Or why they are prepared to fight for their livelihood.
A new round of press has developed about Powhatan Energy Fund's assertive and very public defense of an on-going FERC market manipulation investigation. This one is particularly entertaining: Two things that you can say about the Federal Energy Regulatory Commission, as a market regulator, are:
It produces the most incomprehensible prose of any market regulator, and
Its markets have an unusual tendency to be gamed in embarrassing ways.
I suspect these facts are related. I posit that almost nobody, including at the FERC or its various regional power markets, can actually figure out how those markets' rules work. So they work badly. And while you have to be very smart to figure them out -- say, at the level of Blythe Masters, or electrical engineering Ph.D. Alan Chen -- once you have figured them out, they become comically easy to game. FERC builds markets with so many bells and whistles and buttons and valves that some of the buttons end up having no function but to dispense money. If you can find those buttons, what you do is just keep pressing them until the FERC notices and gets mad at you and starts scolding you incomprehensibly. My friend Scott in Mayberry refers to FERC's secret language as "FERCenese." It's possible that a secret decoder ring can only be earned by selling your soul. Or something.
While Dominion has been doing a great job with directly affected landowners, the company has completely failed to disseminate any information about its project to the greater community. As if folks don't notice the access roads, the helicopters, the construction traffic, the road closures, the implosive splicing... I've gotten mighty tired of having to reassure people that this is not the PATH project, that this is a permitted activity, and that the world is not exploding. But I do it, not for Dominion, but for the people who are the victims of Dominion's "secret" rebuild project.
Mt. Storm - Doubs (MSD) is a smarter, better solution than building the PATH project ever was. So, let's get 'er done, fellas, so that I can stop having this distraction sitting on the edge of a rather full plate.
The MSD transmission line begins in Mt. Storm, West Virginia and ends at the Doubs substation in Frederick County, Maryland. The 96 miles of the line located in West Virginia and Virginia are owned by Dominion. The last 3 miles of the line in Maryland are owned by FirstEnergy. Each company is responsible for permitting and constructing its own segment of this project. Dominion has been working on its portion of the project for more than 4 years. FirstEnergy only recently got off it's corporate ass to do its part on the last three miles.
Well, yay, FirstEnergy! You da man! Fourteen transmission towers and 3 miles of line? Awesome! Put Toad Meyers in a hardhat and push the "on" button. That should ameliorate your billing and meter reading fiasco, right?
Wrong.
Back in 2010, while the PATH was still madly attempting to get it's 300 mile, 765kV transmission line sited and permitted on new right of way, Dominion dropped a bombshell on transmission planner PJM Interconnection. Dominion proposed several alternatives to the PATH project (which was never actually "needed"). One of the alternatives involved rebuilding MSD because of deteriorating towers. A rebuilt and modernized MSD would increase the thermal capacity of the existing line 66% and make the addition of PATH's capacity unnecessary. Both PJM and PATH partners FirstEnergy and AEP tried to deny the proposal and insist that PATH was still necessary. That was the beginning of the end for PATH. The Virginia SCC got mighty suspicious and ordered PJM to re-run some data on the necessity for PATH if MSD was rebuilt. Low and behold, the data showed that there really wasn't a need for PATH after all and PJM suspended (and later cancelled) the PATH project. PATH withdrew all its project applications and went into hiding, after wasting a quarter billion dollars of consumer funding on the project.
Ahhh... good times! :-)
Now FirstEnergy says "look at me!" and give me credit for modernizing the electric grid.
Kind of makes you wish that someone would drop a load of insulators on Toad's hard hat, doesn't it?
Oh, what would I do if I didn't have this little outlet...
FirstEnergy's frequent financial fiascos aren't Tony's fault!
Poor management pointed the finger at everyone else yesterday during some silly Chamber of Gladhanders event.
The quotes in the news article were bad enough, but check out the full text of the fairy tale here.
If Tony actually believes any of this stuff, he needs to exit stage left:
"All of us have been challenged by the economy over the last few years."
Well, except for you and your 1% pals, right? After all, how much of a struggle is it to survive on $23M a year? Almost as hard as it is to survive locked out of your job for months because your employer is a union buster, I'm sure.
"For example, in FirstEnergy’s six-state service area, our 2013 utility sales were below 2007 levels – and, during that period, wholesale energy prices dropped by more than 40 percent. While this isn’t the first time we’ve faced tough economic conditions, this is the longest period of economic stagnation I’ve seen in my 40 years in the industry. We will ultimately work through this… and as the economy grows, so will the use of electricity."
It's called energy efficiency, Tony. It's permanent.
"But quite frankly, the challenges we now face from government interference in the electric business are far more intrusive and disruptive, and I believe far more significant to our industry’s future, and to your future. That’s because whether it impacts our traditional regulated business or our competitive operations, government policy is now aimed at stifling the growth and use of electricity – and picking winners and losers in the competitive marketplace."
Oh, puh-leeze. FirstEnergy was singing a different tune when the West Virginia government puppets at the PSC "interfered" in FirstEnergy's scheme to sell a dirty, old coal plant to itself and charge West Virginia ratepayers over a billion dollars for it. Not only was having FirstEnergy's dirty trash dumped on ratepayers intrusive and disruptive to the amount we pay for electricity, it's effect is going to last well into the future. The mistakes of FirstEnergy's competitive operations got dumped into its regulated business, and that stifles economic growth and use of electricity in West Virginia. Worst of all, the PSC allowed FirstEnergy to pick winners and losers in the competitive marketplace. Yeah. FirstEnergy wins, we lose.
"Or, would you think it is fair to face competition from a supplier who can be indifferent to price… since all of its costs, including a return on investment, are guaranteed?"
What? Every stinking penny of FirstEnergy's $121M dollar investment in its unneeded PATH project was earning a 14.3% return on investment, and recovery of its sunk costs are guaranteed in the event of abandonment. FirstEnergy spent generously because it was indifferent to the ultimate quarter billion dollar abandoned price to ratepayers.
In addition, FirstEnergy is well on its way to plunking its "transmission spend" into a whole bunch of dubious projects, just to earn a big return on the investment. That's not "fair." Right.
"The industry has invested more than $840 billion… employs more than 500,000 workers… and pays billions of dollars in taxes."
But FirstEnergy earns a return on its investment, treats its workers like garbage, and doesn't pay any taxes!
"Thomas Sowell, a noted economist and commentator at Stanford, summarized a broader trend, now playing out in our nation’s energy policy, when he said, quote: “Much of the social history of the western world, over the past three decades, has been a history of replacing what worked with what sounded good.”
In the electric utility industry, energy efficiency, renewable power, distributed generation, micro grids, roof-top solar and demand reduction are examples of what “sounds good” – and while they may all play some role in meeting the energy needs of customers, they are not substitutes for what has worked to sustain a reliable, affordable and environmentally responsible electric system. And, the mandates and subsidies needed to force their use have far-reaching consequences for our customers and our economy."
Energy efficiency, renewable power, distributed generation, micro grids, roof-top solar and demand reduction sounds like a workable, and inevitable, future to me. Tony can either get in the backseat or get left behind. His choice.
Thomas Sowell quote? Really? "Consider the fact that you can no longer buy a 100-watt incandescent light bulb in the United States, but you can purchase a 500-horsepower vehicle." Oh, the horrors! Wanna bet that Tony is an incandescent bulb hoarder? He probably sits in his underground bunker with huge stack of them, crying quietly. "Or that electric customers are being forced to pay additional costs for subsidized, unneeded generation." Is he talking about Harrison?
"Or that these policies and others – designed to achieve a social agenda that has little, if anything, to do with maintaining electric service – are shifting the fixed costs of the system to customers who can least afford it… and are undermining our nation’s competitive position." "So why are we engaged in this effort to experiment with the electric system by taking away customer choice… increasing prices… and jeopardizing reliability?" Why are you doing that to West Virginia, Tony, WHY? "Quite frankly, I believe state and federal policymakers are manipulating the supply and demand, and distorting markets for electricity, to further advance the “war on coal.” Well, quite frankly, I believe FirstEnergy is manipulating the supply and demand and distorting the markets for electricity, to further advance corporate profits. "Some generating units were off-line as natural gas was used to meet higher priorities – and the entire market was affected by a substantial increase in the price of natural gas. To put this price increase in perspective, it was the equivalent of paying about $85 per gallon of gasoline!" And one of FirstEnergy's nuke plants was also off-line, right? And then prices went up, and FirstEnergy charged more than 2 million customers a "polar vortex fee" that's now under investigation by more than one state regulatory commission. "As President Ronald Reagan stated in a letter to Congress on July 17, 1981, “Our national energy plan should not be a rigid set of production and conservation goals dictated by government… When the free market is permitted to work the way it should, millions of individual choices and judgments will produce the proper balance of supply and demand our economy needs."
Because the only thing more trite than a Ronald Reagan quote is comparing your issue to the Holocaust, right?
Remember that ambiguous "energy agreement" that New England states signed back in December? Its meaning is now beginning to take shape, not as a true energy plan, but as a ratepayer-funded transmission developer feeding frenzy.
Instead of "making investments in local renewable generation, combined heat and power, and renewable and competitively-priced heating for buildings that will support local markets and result in additional cost savings, new jobs and economic opportunities, and
environmental gains," it looks like some of the states are depending on this "agreement" to satisfy their energy appetites at the expense of the other states.
Here's how the states plan to implement their agreement:
In the next few months, the governors are expected to issue requests for proposals for 1,200 to 3,600 megawatts of transmission capacity that could carry wind and hydroelectric power from the northern reaches and Canada. Massachusetts is plowing ahead with legislation ordering utilities to solicit bids for up to 2400 MW of "clean" energy.
Instead of fostering the development of renewable energy within their own borders, or tapping the incredible resource right off their own shores, the energy hog southern New England states plan to import renewables from another country and run transmission lines through the northern New England states to deliver it.
What's in it for the northern states? Part of the bill!
Massachusetts and Connecticut are driving the push to bring clean hydropower from Canada to help the states meet their clean-energy goals. But the other four states — Vermont, New Hampshire, Rhode Island and Maine — agreed through the New England States Committee on Electricity, made up of state utility officials from the six states. They have agreed to share the costs because they would benefit from the overall reduction in energy costs, although the details of how that would be done remain to be worked out. Northern state landowners will also be required to sacrifice privately owned land or be subject to eminent domain condemnation and takings. They will also have to live with these 200-foot tall extension cords zig-zagging through their communities and unspoiled vistas.
Because Massachusetts and Connecticut don't want any of that nastiness mucking up their views.
This "agreement" was never about true diversification of generation. It's about increasing centralized generation and reliance on imported energy. And it's about corporate schemes to make money by smoothing the way to build more long distance transmission.
"Many of the proposals have been talked about in utility circles for some time..."
Of course they have, but the transmission developers needed cover to spring their plans on a wary public, and a way to broadly socialize the costs so that the burden on any one customer would be overlooked as minor.
The transmission developers and their pet Governors are even rewriting history, putting the egg before the chicken by pretending that the past winter's delivery issues were the impetus for the "agreement" that was signed before the problems occurred.
Adding to the charlie foxtrot are Big Green, who sanctimoniously oppose this new transmission plan, worrying that it "could crash the regional power market and kill off other needed energy-generating resources." Funny... these are the same green hypocrites who are cheering Clean Line Energy's plan to cover the Midwest with wind turbines and HVDC transmission lines. No worries about that crashing the regional power market and killing off other needed energy-generating resources. Right.
So, a whole stable of eager transmission developers are chomping at the bit to have their project selected as the winner of the ratepayer-guaranteed profits. Several proposals have been made. In addition to stupid overhead projects like the parasitic Northern Pass, Anbaric has proposed a project that it says will be buried, both on land and offshore.
A 300-mile power cable would be buried on land in Maine and then run across the Atlantic Ocean floor to greater Boston under a proposal to tap Canada’s plentiful hydropower to meet the needs of power-hungry southern New England.
Maybe Anbaric thinks that battling the opposition that is sure to develop against an overhead project isn't worth the time, money and headaches, preferring to spend a little more to bury its project for fast approval, while the competition languishes for years on the regulatory battlefield. Anbaric could teach some other "clean" energy developers a lesson. But then again, Anbaric is counting on ratepayers to finance its project, including the extra cost to bury the cable.
Other "clean" energy companies operating under a merchant model are caught in a desperate cost control game in order to keep their projects cost competitive. Merchant transmission projects depend on energy markets for their existence. If a merchant transmission owner can cover its own expenses to ship energy long distance and make a profit, then it is economic to build. However, if a merchant transmission company's cost of service increases because it has to spend more to bury cable to make landowners happy, then it is no longer economic and will not be built. Sounds fair, right? But, what if the merchant developer wanted the power of eminent domain to take land cheaply for an overhead route, instead of having to please landowners during a fair, open market right of way negotiation process that could include the requirement to spend more money burying the line? That would be the best of both worlds for the transmission developer -- depending on the artificial influence of eminent domain to keep its project costs in check to ensure market competitiveness. This is perhaps the single biggest flaw in Clean Line Energy's plan. Merchant projects should NEVER be granted a utility's eminent domain authority because they are not needed for reliability or economic purposes and depend completely on the economics of the market for existence, therefore they should also be forced to compete in unfettered real estate markets to bring their projects to reality. If it costs too much to obtain right of way in a free market, then the project is not economic.
But, I digress.
New England has a lot of work to do to craft a real, sustainable energy plan that does not depend on inflicting social and environmental injustice on people in other states or other countries.
the states will hold public meetings to present the region's plan in preparation for bidding process. The meetings will include stakeholders, including environmental groups and developers. It is unclear whether these "meetings" will include citizens, landowners and ratepayers, the most important "stakeholders" of all.
Now you've gone and done it, FirstEnergy! One of those customers on your polar vortex hit list is the Chairman of the Pennsylvania PUC! Ooopsie!
Chairman Powelson had this to say about FirstEnergy and its polar vortex fee:
"I think there's a stench associated with the request put forward by this company to recover these costs," Powelson told a hearing Tuesday of the Pennsylvania Senate Consumer Protection and Professional Licensure Committee. Yes, it's the stench of money! Lots of it!
Do you smell what FirstEnergy's cookin'?
Have you read NRG CEO David Crane's manifesto of consumer empowerment in the electricity sector?
You should.
Crane envisions a sustainable future where energy consumers become energy producers. His "manifesto" provides the road map for how he intends to get there. Here's one of his ambitious thoughts:
Just a few years ago, the prevailing wisdom was that the path to a clean energy economy depended on our collective willingness to build a nationwide high-voltage transmission system in order to transport electricity in vast quantities from the relentlessly windy and brutally sunny parts of the country, where people generally don't live, to the more temperate places where Americans tend to congregate.
The folly of that idea thankfully was realized before anyone actually began to build such an expensive and pointless white elephant. Now we are headed for the same goal, but in the opposite direction: down the path toward a distributed-generation-centric clean energy future featuring individual choice and the empowerment of the American energy consumer. While I fully share his enthusiasm, a whole bunch of transmission developers don't seem to have gotten Crane's memo on this. They persist in attempts to cover the Midwest with wind turbines and transmission lines.
But, the biggest monsters always do seem to go out with a final, terrible roar. Hang on, transmission opponents, the monster is weakening and the future is coming!
We expect to be soon to market with a robust platform offering rooftop solar to homes and businesses and other forms of sustainable and clean generation that will offer our customers the ability to dramatically reduce their dependence on system power from the centralized grid. I bet Michael Skelly wishes he'd thought of this back in 2009...
That's what former Secretary of Energy Steven Chu had to say about claims that distributed solar was making the grid unstable.
“That’s another bullshit argument,” said Chu, a Nobel Prize winning physicist who served as energy secretary from 2009 to April, 2013. Solar installations don’t threaten grid stability until they approach 20 percent of the customer base, Chu said. Finally released from officialdom, Chu is no longer telling utilities what they want to hear, but what they need to hear. Feels, good, doesn't it, Dr. Chu?
Chu has some sage advice for utilities: To ward off the inevitable "death spiral," they need to get into the rooftop solar business.
Chu said his advice has been met by utilities one of three ways:
“Tell us what to do.”
“Deer in the headlights.”
“We’re going to fight this.” What was your utility's response?
Isn't it refreshing that former high ranking energy officials are loosening up and telling the truth now that they can? Former FERC Chairman Jon Wellinghoff is also under fire for giving away energy industry "secrets" about the vulnerability of our centralized electric generation and transmission system.
This isn't just some random crackpot who overdosed on the Metamucil, but two guys who had their finger on the pulse of our electric system for years. It's rather telling that the industry and governmental officials are screaming foul when two of their own finally break rank and spill. The regulated and the regulator are way too cozy in this country. Denying the advice of those who know the system best, when they are finally free to give it, is a head in the sand approach to disaster.
Customers in the deregulated states of Illinois and Ohio are up in arms about FirstEnergy's plan to stick it to them with a $5 - $15 one-time charge to pay for what it says are "unexpected costs incurred during the polar vortex."
"FirstEnergy Solutions is preparing to bill about 2 million of its 2.7 million retail customers a surcharge for expenses the company will soon have to pay for reserve power it needed when temperatures plummeted below zero." 2,000,000 x $15 = $30M
That's $30M being transferred from consumers pockets into the pockets of FirstEnergy. A company spokeswoman opined, “We consider that pretty nominal.”
I wonder if she also considers CEO Tony Alexander's annual $23M compensation "nominal." If the big guy took a pay cut, it would almost cover the cost of the "polar vortex," wouldn't it?
Crain's described the reason for the charge like this:
"The company confirmed that it will impose a one-time charge of between $5 and $15 on customer bills in June to recover a portion of its power-purchasing costs made through PJM Interconnection LLC's regional grid, which serves 61 million people in all or part of 13 states from northern Illinois to the Mid-Atlantic, as well as Washington. In January, PJM — which acts as a market referee for power generators — lifted caps on the price natural gas-fired power plant operators could charge as the cost of gas soared due to record demand, and electricity consumption likewise spiked."
The Plain Dealer described the reason for the charge like this:
"When the arctic blast hit the region in early January, demand for electricity spiked - and simultaneously dozens of power plants failed because of the weather, mechanical problems or because of fuel problems.
About 20 percent of the PJM region's power plant capacity went down, he said, threatening the stability of grid. And because the cold was widespread and lasted many days, PJM grid operators found that they could not import power from other areas.
Wholesale power prices then skyrocketed. PJM reduced voltages by 5 percent, asked for voluntary conservation and even briefly considered rolling brownouts to avoid a grid collapse and blackout.
But PJM also ordered more expensive power plants to begin generating, just to keep the system stable, he said."
But here's another reason:
FERC compounded the problem by lifting a $1000 price cap and allowing these greedy corporate entities to further game PJM's malfunctioning markets. FERC has allowed generators to charge whatever they want, and is in denial about any "harm" that may result:
"FERC said PJM's proposal met the commission's criteria for approving waivers, as doing so would remedy a 'concrete problem,' would not harm third parties and would be limited in scope."
It's really not sounding very "limited in scope," is it?
In addition, FirstEnergy ended up purchasing so much expensive power because many of its generation plants were out of service. Where does FirstEnergy's fault in that end and the consumer's responsibility for the charges begin?
Not all electric companies are passing these "polar vortex" charges on to their customers, however. But, FirstEnergy is shuckin' and jivin' like a champ on a "special website" the company has set up to serve you some koolaid, as well as in the media:
"Francis of FirstEnergy Solutions declined to say how much her company has been billed by PJM, except to describe the amount as unprecedented. She said the company is passing on only a portion of the charge to customers."
FirstEnergy also said the company has no idea how much it will have to pay.
"Ms. Francis declined to say how much in unanticipated vortex-related costs FirstEnergy Solutions must pay, saying that figure was confidential. FirstEnergy will know next month precisely how much the surcharge will be, she said."
Yes, it seems that the real cost to FirstEnergy is going to remain a deep, dark secret, not even revealed to the company's investors.
That's because:
"We thought it was necessary to pass through these costs to customers where contracts allow,” FirstEnergy spokeswoman Diane Francis said."
Necessary? FirstEnergy thought using the fine print in its contracts to stick it to customers in deregulated states was so very funny during its last earnings call.
Steve Fleishman - Wolfe
Yeah. Hi, good afternoon.
Tony Alexander - President & CEO
Hi, Steve.
Steve Fleishman - Wolfe
Hi, Tony. I guess this question might be for Leila. I think you mention the PJM ancillary cost that some of those get pass through the customers?
Leila Vespoli - EVP, Markets, and Chief Legal Officer
Yes.
Steve Fleishman - Wolfe
Is that just in certain states or how does that work? How do we know which areas get pass through or not?
Leila Vespoli - EVP, Markets, and Chief Legal Officer
It is pursuant to contract in a specific language within the contract so it is not a state by state kind of thing, Steve.
Steve Fleishman - Wolfe
Okay. So it is certain types of your customer classes?
Leila Vespoli - EVP, Markets, and Chief Legal Officer
In?
Steve Fleishman - Wolfe
In a retail business?
Leila Vespoli - EVP, Markets, and Chief Legal Officer
It is not even the same throughout particular classes.
Steve Fleishman - Wolfe
Okay.
Leila Vespoli - EVP, Markets, and Chief Legal Officer
It is as that contract language was developed for that particular customer or grouping of customer. So there is no way I can even give it to you by segment.
Steve Fleishman - Wolfe
Okay. So some of the cause when you get this data come up will be cause that you absorb but some of those would be available to essentially pass through your contracts to the customers?
Leila Vespoli - EVP, Markets, and Chief Legal Officer
Correct.
Steve Fleishman - Wolfe
And in the future, do most of your contracts have that clause, so new ones do or not older ones or vice versa?
Leila Vespoli - EVP, Markets, and Chief Legal Officer
I think it would be safe to say that we are going to be adding that language where we can in the future.
Steve Fleishman - Wolfe
Got it. Okay. Thank you. Just want to clarify that.
Leila Vespoli - EVP, Markets, and Chief Legal Officer
Okay. So, if you don't want to get stuck with these kind of charges in your deregulated electric bill again, do like the City of Rockford and look for a new supplier ASAP.
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