And like all good utility money-making schemes, West Virginia's out-of-state utility tedious twins go head-to-head to see which one can make the most money doing it fastest and "bestest."
Last week, FirstEnergy's Tony the Trickster made some big deal about a new transmission money making scheme approved by FirstEnergy's Board of Bamboozlers. This $2.8B "transmission spend" was given cover by being dubbed the "Transmission Reliability Excellence Plan 2014-2017," like it's all about reliability and not about "target[ing] annual transmission Net Income growth of 20+%." At what point do the reliability needs of customers intersect with FirstEnergy's need to make money? Wow, serendipity! FirstEnergy's system is going to be as "unreliable" as needed to grow income 20+%. The more "unreliable" FirstEnergy's system is, the more money FirstEnergy makes!
But, wait a tick, how much of this "need" for re-building has been caused by FirstEnergy's long-term failure to maintain its system, and therefore should properly fall under the category of ordinary maintenance expense that the company has already been reimbursed for? If it were this easy, utilities could simply refuse to perform any maintenance on their transmission systems, and then wrap all the ordinary course repairs into some fancy package called a "Transmission Reliability Excellence Plan" and get reimbursed for it separately (and at higher rates) when a need to grow income arises. This isn't "reliability," it's a ratepayer shakedown. If FirstEnergy gets away with it, the company plans to increase their "reliability" to the tune of $12B "over time."
FirstEnergy reasons: The majority of these projects located in the ATSI region will target 69kV lines, which are outside of the RTEP approval process, and that construction would occur on land where most rights- of-way are already secured. But, assets assigned to TrAILCo must receive PJM RTEP approval and operate at 100kV and above, therefore these will be secondary to the low-hanging fruit in ATSI.
You'll be happy to know that public-money-sucker Burns & McDonnell has been hired to manage the engineering, procurement, construction and completion of the capital portfolio created for the plan and has established an office in Akron, OH. It's full steam ahead to spend as much of your money as fast as possible, little ratepayer!
FirstEnergy plans to put all its "transmission spend" eggs into its FERC jurisdictional formula rate baskets -- ATSI with a return of 12.4%, and TrAILCo, with a return of 11.7% for non-TrAIL projects and 12.7% for rebuilds and upgrades to the two-year old TrAIL line.
Is this really about "energizing the future by improving the health, capacity, and reliability of the transmission system for existing and new customer loads," or is it more about "energizing the future by improving the health, capacity, and reliability of the FirstEnergy balance sheet for existing and new shareholders"?
Meanwhile, not to be outdone, AEP has also announced its own plan to spend around $5B on the "reliability" of its transmission systems over the next 3 years.
AEP CEO Nick Akins said the company’s infrastructure investments will be aimed at improving the reliability of electric service to customers. He said the company expects to invest nearly $5 billion in its AEP Transmission Holding Co. unit through 2016, adding the holding company’s contribution to earnings will nearly double in 2014 alone.
Both companies have also submitted numerous bids on the first two PJM transmission project bidding windows.
Which transmission investment business plan will be the winner? And how much is this going to cost us before regulators catch on to the "reliability" scam and challenge it? And what if someone goes after the companies' FERC ROEs? The fun is only just beginning...
Maybe we should distract their attention by challenging these two companies to see which one of them gets into the solar business first? How much money is there to be made putting solar on every residential roof and then charging the customers "rent" for the investment? Or will they continue pumping the transmission "reliability" well until it runs dry before taking any positive action to make themselves relevant in a brave, new, distributed generation world?