PATH tells the Commission that although it has the ability to suspend proposed changes to existing rates, that PATH's changes to the Formula Rate (which is PATH's rate) aren't changes to its rate after all. PATH also urges the Commission to hurry up and approve the changes to its Formula Rate without hearing because PATH has submitted a fraudulent 2013 Projected Transmission Revenue Requirement that they need to revise before January 1, 2013.
PATH believes the Commission should summarily reject protests that the company had control over the abandonment of its project, otherwise, PJM's authority will be undermined! Would that be a bad thing, really? PJM's imprudent actions brought about by its Project Mountaineer initiative to build new transmission to increase the use of coal-fired resources, and intended to provide significant profit to its favored incumbents, has just cost millions of consumers in its region a quarter billion dollars for the failed PATH project alone, not to mention the additional amount wasted on the also-cancelled MAPP project. How much more will PJM's erroneous and failed initiatives be permitted to steal from struggling electric consumers if this costly failure is swept under the rug and not examined?
PATH believes that it is entitled to receive an extra half of a percent interest on its abandoned plant during the amortization period. The extra interest is a reward for membership in PJM. PATH states that it intends to remain a member until the consumers finish paying for its project, although it does not intend to own any transmission during that time. PATH is simply maintaining its membership to receive the extra interest. Is this really prudent? PATH whines that the Commission should not discriminate against it for the business structure it voluntarily constructed. "Revisiting the 50 basis point ROE adder would deny AEP and FirstEnergy an opportunity to apply the ROE-based incentive adder to their abandoned plant investment in the PATH Project merely because of the business structure they chose as a vehicle for fulfilling the construction obligations assigned to them by PJM." Bingo! Ya know what, PATH? Life ain't fair. You set up that business structure voluntarily because it benefited you and now you're stuck with it. Quit your sniveling and take your lumps. Your parent company memberships in PJM do not make PATH eligible to receive this incentive either. That was really PATH-etic!
PATH has 121 million excuses for why its spending wasn't imprudent. After asking the Commission to set the issue of prudence for a hearing wherein the prudence of its expenses can be debated, PATH wastes page after page trying to justify its spending on things like property and option purchases. So, PATH, do you want a hearing or do you want the Commission to rule here? It's hard to tell. PATH falsely accuses protestors of not providing any "basis or support" for prudence challenges and proceeds to neglect to provide any "support or basis" for its own contentions that the spending was prudent, except for the ridiculous assertion that AEP and FE routinely buy property before a permit is received. PATH holds its parent companies up as the industry standard in the face of evidence showing that one of these same parents doesn't buy land prior to the issuance of a permit. So, was AEP lying to the Department of Energy earlier this year or are they lying to FERC now? Inquiring minds want to know.
PATH attempts to color all its property purchases the same. The reality is that PATH was split into two different companies, PATH-West Virginia (owned 50-50 by AEP and FE) and PATH-Allegheny (owned 100% by FE). PATH-WV made minimal land purchases for substation sites and was slower to option property. However PATH-Allegheny purchased lots of property that had nothing to do with substations and was quick to option property long before the permit process had even begun rolling. This is a distinction that most likely has roots in the two different corporate philosophies behind the PATH project. Now AEP gets to help FE hold its little doggie bag of imprudence, however. Didn't your mommy ever tell you that you will be known by the company you keep, AEP?
PATH goes out of its way to admit that its property purchases in River's Edge were for the purposes of forcing the release of a conservation easement. PATH goes into a long diatribe attempting to justify its imprudent property purchases as cost saving measures. Yes, that's right, if PATH had not attempted to nullify a conservation easement in which Loudoun County had invested taxpayer funding, it would have cost more to re-route the line around it (using the most destructive route possible in an attempt to make releasing the conservation easement and allowing PATH's preferred route look preferable). This same theme continues in flimsy justifications for other purchases. PATH claims if it had not bought certain properties, it would have had to route its line around them in order to avoid homes or other obstacles. Is this what PATH told landowners? That if they didn't prefer to voluntarily sell their property that PATH would simply route their line around the property? No, of course not. PATH told landowners that if they didn't sell voluntarily that the company would take the property by eminent domain or simply "run the line right over the top of your house." So, now PATH wants to test its word against that of thousands of landowners? Isn't this going to be fun?
PATH also points out to the Commission that other abandoned projects that requested much, much smaller recoveries were not RTO-ordered projects. So, I guess PATH's point must be that when there is some risk to the transmission owner that spending is prudently curtailed. However, in PATH's case it was a giant, bleeding spend-a-thon because PATH believed that ratepayers were on the hook for all of it. Now when the specter of shareholders being responsible for some or all of PATH's spending spree rears its ugly head, all of a sudden the amount of spending becomes a big deal. Don't you just love karma?
So, now it's up to the FERC Commissioners to wade through the facts presented and make a decision that ensures that PATH's rates are just and reasonable.