Remember those silly PATH TV commercials that screamed:
"More people, more appliances, more gadgets, more equipment, what do they all need to keep going? MORE ELECTRICITY!"
Fact: Our gadgets have become more efficient. Our lighting has become more efficient. Our appliances have become more efficient. Our manufacturing has become more efficient. We have become more efficient, and we're using less power than ever. Demand will never snap back to pre-recession levels. Perhaps even PATH has given up that impossible dream lately.
"Nick Akins, CEO of American Electric Power Co., which has the nation's biggest high-voltage transmission network, said he is focused on projects that can be built quickly, mostly connecting utilities it owns in 13 states.
"Mr. Akins said he wants to avoid the bruising battles that delayed or doomed big projects in the past, like the 275-mile Potomac-Appalachian Transmission Highline project from West Virginia to Maryland. AEP and partner FirstEnergy Corp. dropped development plans for the complex project in 2011. [Not voluntarily, Rebecca, they were "ordered" to abandon the project by regional grid operator PJM Interconnection due to dropping electric demand.]
"Sometimes, we were just dreaming" that the companies could get enormous power lines built across multiple states, Mr. Akins said. He said AEP now is focusing on shorter projects blessed by federal regulators that eliminate grid bottlenecks. "It's where you want to put your money," he said."
Ahhhh... Ha ha ha ha ha ha ha! I'm sure a hundred million or so will heal Little Drummer Boy's bruise just fine. The entire cost of the PATH Project will be reimbursed to AEP and its project partner, FirstEnergy, by electric consumers in 13 states, plus 10.4% interest annually for the next 5 years. It didn't cost him a dime.
So, how's an investor-owned utility supposed to make money these days?
"Many utilities with regulated and unregulated operations are redirecting spending to their regulated side, where regulators practically guarantee them a profit."
Right, like AEP and FirstEnergy "selling" their unregulated coal plants into West Virginia's regulated environment, where captive customers will end up paying off billions of dollars of debt for years to come, plus 10.5% interest annually.
"Some companies, including Public Service Enterprise Group Inc. and Northeast Utilities, are pouring money into high-voltage transmission lines—superhighways for electricity—because federal regulators are allowing them to collect above-average returns from customers on those outlays to encourage new investment in the nation's aging power networks.
Ralph Izzo, the company's CEO, recently told investors that he likes spending on power transmission, because "it's not dependent on [electricity] load growth." Part of his motivation is the return on equity of 11.7% to 12.9% set by the Federal Energy Regulatory Commission."
Right, those FERC transmission incentives are just like a free trip to the candy store, aren't they? What's that you say? Transmission lines aren't dependent on load growth? That's right, they're all about "reliability," or "economic congestion," or "public policy," or simply padding the investor-owned utility balance sheet.
Seven years ago, PJM Interconnection dreamed up an initiative to build four new transmission lines to increase the import of coal-fired generation to the east coast by 5,000 MW. Turns out none of that transmission was needed after all, however, consumers have shelled out billions for one completed project (TrAIL), another still persisting at construction attempts (Susquehanna Roseland), and two other projects that have since been abandoned (PATH and MAPP).
Today, the utilities, FERC, the regional transmission planners, environmental organizations and a bunch of get-rich-quick yahoo cowboy merchant transmission builders have dreamed up an initiative to increase the export of wind energy from the midwest to both coasts. How much consumer funding is going to be poured into the "Saudi Arabia of wind" rathole before that initiative is also determined to be another costly boondoggle?
We don't need all this new transmission! $300B of new transmission will only serve to increase prices paid by consumers and line investor pockets. Meanwhile utilities continue to cut operations & maintenance spending on existing infrastructure and our grid becomes more and more unreliable.
Stop the crazy train! I want to get off!