After a week of vacation, I've finally had time to read through PATH's PATH-etic sec. 205 filing to recover an additional $121M of investment in their abandoned project.
In their filing, PATH says: "The project management structure provided the PATH Companies with a “forest and trees” assessment of daily activities and expenditures to ensure their reasonableness and prudence."
PATH's "forest" was continually in flames because their project was an unneeded economic-based project intended to increase the use of coal-fired electricity on the east coast that was masquerading as a reliability project. The daily activities and expenditures were designed to continually shore up their rapidly deteriorating reliability case, denigrate feasible alternatives, and desperately attempt to build advocacy for the project by making it "too big to fail."
It was never about reasonableness or prudence, it was about spending whatever was necessary to continue the charade. And now PATH expects 60 million PJM ratepayers to pay for their planning errors and bungling of state approvals.
Worse yet, PATH seems to be in a big hurry to convince FERC to rubber stamp their PATH-etic proposal without modification, suspension or hearing.
PATH wants to recover $121M over 5 years. They say they need 5 years to try to sell all that property they imprudently purchased at inflated prices so they can credit the proceeds to the amount they intend to recover. PATH also claims there will be additional expenses to close down the project added over the 5 year recovery period. What has PATH been doing with themselves during the 18 month "abeyance," at the beginning of which "all contractors and suppliers were told to cease activity on the Project and to prepare their final invoices?"
PATH also believes they should be allowed to collect a 10.9% annual return on equity for the unrecovered balance, in addition to carrying costs. Although PATH so graciously offered to forgo the 150 bonus point ROE adder (1.5%) FERC granted them as an incentive, they want to continue to collect the 50 point adder (.5%) for their continued participation in PJM. What benefit do ratepayers receive from the continued PJM membership of a soon-to-be-dead company that owns an already-dead project? The 50 points for PJM participation was an incentive that PATH is no longer entitled to receive and PATH's continued membership in PJM is pointless.
And about those land purchases, PATH says:
"As described in the testimony of Mr. Pokrajac, the PATH Companies propose to mitigate the overall Abandonment Costs included in the Filing by selling or transferring the parcels of fee land purchased for construction of the 765 kV transmission line, and the proposed Welton Spring and Kemptown Substations. As we explained earlier, due to the large scale of the PATH Project and PJM’s aggressive development schedule, the PATH Companies had to begin acquiring property that would be needed for the PATH Project in advance of CPCN authorizations. The PATH Companies attempted to negotiate the most reasonable price possible for all real estate purchases, but as noted previously, the location and size of property with respect to the needs of the Project were necessary considerations that impacted the purchase price. Approximately $30 million of total Abandonment Costs incurred by the PATH Companies are costs incurred to purchase twenty parcels of land as sites for construction of the PATH Project. More than half of these land purchase costs are for acreage acquired for construction of the proposed Welton Spring and Kemptown Substations.
The PATH Companies expect to transfer or sell all of the parcels of land acquired for the PATH Project to mitigate the Abandonment Cost, but completion of these transactions could not be accomplished prior to the filing. The property will be sold or transferred at fair market value, and Mr. Pokrajac explains how the sales or transfer price will be credited to mitigate the overall Abandonment Costs."
Quit laughing, little PATH opponents, PATH is spinning this yarn with a straight face. :-)
PATH continues to hide behind PJM's skirts, blaming them for the poor planning and constantly delayed in service dates for the project. It just never occurred to PATH that their project could be cancelled, although it was continually delayed due to decreased demand, increased demand response and new generation on the east coast, so PATH continued to blindly spend generously on their project. Although the in service date never got any closer than 5 years, PATH continues to whine about how "aggressive" the construction schedule was. But, that didn't stop PATH's continual requests to toll or withdraw the three state CPCN applications, did it? Maybe PATH should have taken out their "aggression" getting their legal ducks in a row, instead of tossing away the ratepayers' money on property options and purchases, as well as public relations dreck that included front groups, lobbying and advertising.
Go ahead, read PATH's filing -- it's the perfect punchline to their joke of a project.
If you think PATH is all wet and want to intervene and protest PATH's plan to collect their investment in the abandoned project, you can join the ranks of entities who have already intervened, such as Exelon, PJM Industrial Customer Coalition, Dominion, PSE&G and the Maryland PSC, by filing your own petition and/or protest, which should follow this format, and be filed through FERC's e-filing system. FERC has set a deadline for interventions, protests and comments on docket ER12-2708 of 5 p.m. on October 19.
Or, you can just sit back and watch the show, however only parties to this docket will have a seat at the table if FERC can be convinced to set this matter for hearing and possible settlement.
In their filing, PATH says: "The project management structure provided the PATH Companies with a “forest and trees” assessment of daily activities and expenditures to ensure their reasonableness and prudence."
PATH's "forest" was continually in flames because their project was an unneeded economic-based project intended to increase the use of coal-fired electricity on the east coast that was masquerading as a reliability project. The daily activities and expenditures were designed to continually shore up their rapidly deteriorating reliability case, denigrate feasible alternatives, and desperately attempt to build advocacy for the project by making it "too big to fail."
It was never about reasonableness or prudence, it was about spending whatever was necessary to continue the charade. And now PATH expects 60 million PJM ratepayers to pay for their planning errors and bungling of state approvals.
Worse yet, PATH seems to be in a big hurry to convince FERC to rubber stamp their PATH-etic proposal without modification, suspension or hearing.
PATH wants to recover $121M over 5 years. They say they need 5 years to try to sell all that property they imprudently purchased at inflated prices so they can credit the proceeds to the amount they intend to recover. PATH also claims there will be additional expenses to close down the project added over the 5 year recovery period. What has PATH been doing with themselves during the 18 month "abeyance," at the beginning of which "all contractors and suppliers were told to cease activity on the Project and to prepare their final invoices?"
PATH also believes they should be allowed to collect a 10.9% annual return on equity for the unrecovered balance, in addition to carrying costs. Although PATH so graciously offered to forgo the 150 bonus point ROE adder (1.5%) FERC granted them as an incentive, they want to continue to collect the 50 point adder (.5%) for their continued participation in PJM. What benefit do ratepayers receive from the continued PJM membership of a soon-to-be-dead company that owns an already-dead project? The 50 points for PJM participation was an incentive that PATH is no longer entitled to receive and PATH's continued membership in PJM is pointless.
And about those land purchases, PATH says:
"As described in the testimony of Mr. Pokrajac, the PATH Companies propose to mitigate the overall Abandonment Costs included in the Filing by selling or transferring the parcels of fee land purchased for construction of the 765 kV transmission line, and the proposed Welton Spring and Kemptown Substations. As we explained earlier, due to the large scale of the PATH Project and PJM’s aggressive development schedule, the PATH Companies had to begin acquiring property that would be needed for the PATH Project in advance of CPCN authorizations. The PATH Companies attempted to negotiate the most reasonable price possible for all real estate purchases, but as noted previously, the location and size of property with respect to the needs of the Project were necessary considerations that impacted the purchase price. Approximately $30 million of total Abandonment Costs incurred by the PATH Companies are costs incurred to purchase twenty parcels of land as sites for construction of the PATH Project. More than half of these land purchase costs are for acreage acquired for construction of the proposed Welton Spring and Kemptown Substations.
The PATH Companies expect to transfer or sell all of the parcels of land acquired for the PATH Project to mitigate the Abandonment Cost, but completion of these transactions could not be accomplished prior to the filing. The property will be sold or transferred at fair market value, and Mr. Pokrajac explains how the sales or transfer price will be credited to mitigate the overall Abandonment Costs."
Quit laughing, little PATH opponents, PATH is spinning this yarn with a straight face. :-)
PATH continues to hide behind PJM's skirts, blaming them for the poor planning and constantly delayed in service dates for the project. It just never occurred to PATH that their project could be cancelled, although it was continually delayed due to decreased demand, increased demand response and new generation on the east coast, so PATH continued to blindly spend generously on their project. Although the in service date never got any closer than 5 years, PATH continues to whine about how "aggressive" the construction schedule was. But, that didn't stop PATH's continual requests to toll or withdraw the three state CPCN applications, did it? Maybe PATH should have taken out their "aggression" getting their legal ducks in a row, instead of tossing away the ratepayers' money on property options and purchases, as well as public relations dreck that included front groups, lobbying and advertising.
Go ahead, read PATH's filing -- it's the perfect punchline to their joke of a project.
If you think PATH is all wet and want to intervene and protest PATH's plan to collect their investment in the abandoned project, you can join the ranks of entities who have already intervened, such as Exelon, PJM Industrial Customer Coalition, Dominion, PSE&G and the Maryland PSC, by filing your own petition and/or protest, which should follow this format, and be filed through FERC's e-filing system. FERC has set a deadline for interventions, protests and comments on docket ER12-2708 of 5 p.m. on October 19.
Or, you can just sit back and watch the show, however only parties to this docket will have a seat at the table if FERC can be convinced to set this matter for hearing and possible settlement.
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