PATH finally got around to posting its 2013 Projected Transmission Revenue Requirement on PJM's website today (despite what they said in their Notice of Meeting yesterday). Guess what? PATH intends to continue to collect project costs from you just like nothing happened!
PATH will collect $19,978,284 from PJM electric consumers in 2013 unless someone stops them. Yes, that's almost an additional TWENTY MILLION DOLLARS for a project that no longer exists. Really, PATH? Really?
"On August 24, 2012, the PJM Board of Managers ("PJM Board") decided to terminate the
Potomac-Appalachian Highline Transmission ("PATH") Project and remove it from the PJM Regional
Transmission Expansion Plan. In accordance with the Federal Energy Regulatory Commission's
("Commission") order authorizing the PATH Companies to recover prudently-incurred costs associated
with abandonment of the PATH Project for reasons beyond their control, the PATH Companies intend to
file, pursuant to Section 205 of the Federal Power Act, revisions to the PATH Formula Rate to allow for
recovery of prudently-incurred abandoned plant costs associated with the PATH Project. Following
Commission action on the Section 205 filing, the PATH Companies will revise the 2013 PTRR to reflect
changes authorized by the Commission."
Translation: We're going to make a filing to ask FERC's permission to recover our stranded investment when we get around to it, but in the meantime, we're going to continue to milk you like nothing happened. We'll settle up later (as in much).
PATH wants to float itself a $20M loan from ratepayers at .2735% interest because it has NO IDEA IN THE WORLD how to calculate a rate for 2013 right now. I don't know about you, but I've got better places to invest my money in 2013.
PATH's impudence is stunning. PATH's recovery of its stranded investment is far from the "sure thing" that's presented in the letter. Here's what FERC actually ordered: "recovery of 100 percent of prudently-incurred costs associated with abandonment of the Project, provided that the abandonment is a result of factors beyond the control of PATH, which must be demonstrated in a subsequent section 205 filing for recovery of abandoned plant."
When PATH makes its section 205 filing, in which PATH has the legal burden of proving prudence and reason for abandonment, other parties can (and will) intervene and present arguments against PATH's contentions. There is no guarantee that PATH will be able to successfully carry its burden and recover anything.
In addition, PATH's incentives, such as a 12.4% ROE, CWIP in rate base, recovery of pre-construction costs, and hypothetical capital structure, were granted for the duration of the project on the condition that PATH was included in PJM's RTEP. Incentives are NOT a reward for failure. No project, no RTEP = no incentives!
So, what's in PATH's 2013 PTRR that adds up to $20M? A return (profit) of an additional $12,051,167 that it's not entitled to. Administrative and General expenses of $1,964,529 that it's not entitled to. "Miscellaneous Transmission Expense" of $237,785 that it's not entitled to. There are also allowances for taxes and other expenses that add up to $20M. But there is no PATH Project in 2013! How can there be any expenses? Because PATH still wants you to pick up a share of their parent company expenses that have nothing to do with the PATH Project. Starting to see how you've been ripped off all along now?
PATH's 2013 PTRR is not not only outrageous, it's also shocking, disgraceful, scandalous, atrocious, appalling, monstrous, heinous, evil, wicked, abominable, terrible, horrendous, dreadful, foul, nauseating, sickening, vile, nasty, odious, loathsome, unspeakable, beastly, far-fetched, (highly) unlikely, doubtful, dubious, questionable, implausible, unconvincing, unbelievable, incredible, preposterous, extravagant, excessive, flamboyant, gaudy, ostentatious, shameless and brazen.