Yesterday, the Commission granted rehearing on its previous order denying PATH the continued benefit of a .5% return on equity incentive for membership in PJM during the amortization period for recovery of abandoned plant.

So, what does this mean?  Not much.  It simply means PATH is hog-tied and can't proceed on appeal to the D.C. Circuit and waste even more of our money having a legal tantrum over .5% interest that it's not entitled to.

The Commission will take another look at its previous decision and decide whether or not to change its mind.  There's no time limit on how long the Commission can take to make its decision.  It could be years.  Meanwhile, PATH can shut up and sit down.

If the Commission had denied the request for rehearing, PATH would have been given the green light to appeal FERC's decision in federal court.  Now PATH can't proceed until the Commission reconsiders and issues another order on the issue.  The Commission can change its mind, or simply confirm its original decision.

Here's the issue:  In the Energy Policy Act of 2005, Congress instituted certain financial incentives to encourage investment in transmission for the purposes of benefiting consumers.  Congress tasked FERC with coming up with policy and awarding incentives.  One of the incentives Congress specifically mentioned was financial reward for a transmission builder who joined a regional transmission organization and turned control of its facilities over to the organization.  FERC put this into practice in the form of an additional .5% interest on each project that applied for it, if the owner joined or continued an existing membership in an RTO.  Therefore, a company with membership in an RTO could be awarded this incentive on each project it owned as long as it maintained its membership.

AEP and Allegheny (now FirstEnergy) set PATH up as a joint venture and created a bunch of single-purpose shell companies.  The parent companies did this because a "new" company produced tax and financial benefit and it could be awarded a higher incentive return on equity because this independent "start-up" company was taking a greater risk than it would if each established parent company owned its own portion of the project.  PATH tried to pretend it was an independent company whose stock just happened to be owned by its parents.  PATH chose this corporate structure because it benefited the parent companies.  Nobody forced PATH to do it.

Now that PATH's one and only project has been abandoned without being built, the Commission determined that the company will never have anything to turn over to an RTO, and there is no benefit to consumers from PATH's continued membership in PJM, and therefore denied continuation of this incentive.

PATH is arguing that the Commission is punishing it for its choice of business construct.  PATH says that its parent companies have other transmission projects that have been turned over to PJM, so therefore the parent company actions entitle PATH to the same benefit.  All of a sudden, PATH wants to be a part of its parent companies.  But wait... PATH separated itself from its parent companies when it benefited financially.  Now PATH wants to be included with its parent companies when it can financially benefit from that construct.  Can you smell the desperation?

PATH also complains that the Commission is being inconsistent because other transmission projects that have been abandoned managed to keep the RTO membership incentive, therefore PATH is entitled to do so as well.  PATH feels it should have been put on notice that it would lose this incentive if it abandoned the project.  *sniff, sniffle, whine*

Other transmission projects have kept this incentive because they aren't single-purpose entities and their companies will continue to exist and maintain membership in an RTO.  There is no point to PATH's continued membership in PJM because it doesn't own any transmission and will cease to exist as soon as the abandoned plant debt is paid off.

Despite a rule prohibiting answers to requests for rehearing, the Joint Consumer Advocates filed an answer supporting the Commission's original decision and arguing against continuation of this incentive.

The Commission's granting of rehearing won't affect the scheduled settlement conference coming up at the end of February, since that issue was never set for hearing but decided in the original Order.  However, parties will be aware that a reversal of the Order could grant PATH an additional .5% return at any time in the future and may keep that in mind while negotiating a settlement.  Happy now, PATH? :-)

In exchange for approving a permit allowing utilities PSEG and PPL to destroy the Delaware Water Gap National Recreation Area with their proposed Susquehanna Roseland transmission line, Department of the Interior Secretary Ken Salazar and the National Park Service extorted $66 million from the utilities.  The $66 million is to be placed in a fund administered by a private conservation organization, who is supposed to use the money to buy and preserve inferior land on the fringes of the park.

The utilities and the Park Service have been quite secretive about the private conservation organization, how the money will be used, and what properties are being scoped for purchase.

The Pocono Record has been investigating this secret, unholy alliance to come up with some answers for the public.

Conservationists try to short-circuit power line project in Del. Water Gap park

Conservation fund eyes 4 properties near Delaware Water Gap National Recreation Area

The private conservation organization who will administer this fund, while scooping off a hefty percentage for themselves, is corporate greenwasher The Conservation Fund, whose Director is compensated at the rate of nearly half a million dollars a year.

The Pocono Record has identified five parcels of land, out of many, to be purchased.  Why the secrecy?

The "mitigation fund" extorted from the utilities will be reimbursed to them by all electric consumers in the 13-state PJM region, plus a 12.93% yearly return on equity on the unpaid balance.  The utilities are using YOUR money to pay their "blood money" bribes needed for permission to destroy YOUR park, and earning interest on it.

Johnson said the rate of return is in fact 12.93 percent and said it is true PSE&G would earn a rate of return on the land purchase.
"The current rules say the cost of a project such as this will be shared by electric customers who will benefit," she said.

This $66M "secret" mitigation fund is YOUR money.  Where's the required transparency in electric rates you are charged when amounts spent are mired in secrecy?  Why is no one holding the utility feet to the fire and utilizing existing transparency processes to dispel all this secrecy?

Continued secrecy will only build on public suspicion and contempt.  It's time for PSEG and PPL to come clean, before the public is forced to use due process to uncover these juicy secrets.

What are you trying to hide, PSEG & PPL?

Here's another ignorant blogger who insists "you’ll need a lot -- try 25,000 miles -- of new high voltage transmission lines" in order to cut carbon emissions. 

At an average cost of about $12M per mile to construct new transmission, that's a whopping $295 BILLION dollars worth of new capital investment in transmission.  And if all these projects end up over budget, as most do, it could be much, much more.  And we must also add yearly operations and maintenance costs, taxes, and incentive rates of return for these transmission lines to the cost, bringing the yearly additional cost to consumers to fund new "renewable" transmission to a whopping $62 BILLION.

Where did the blogger get such an outrageous idea to embrace new transmission without any consideration of the reality of its cost?  He drank the koolaid at a wind industry propaganda session put together by the "Americans for a Clean Energy Grid."  There are no real "Americans" in this astroturf front group posing as the widespread support of an independent uprising of disinterested people.  "Americans for a Clean Energy Grid" is composed entirely of companies that stand to profit from industrial-scale wind farms, the building of new transmission lines, or are environmental groups funded by private "foundations" that more closely resemble a Russian Matryoshka doll.  Inside the doll is another doll, and inside that doll is another doll, etc.  When you peel the layers of "initiatives" and "foundations" away, you're going to find self-interested corporate money.

The blogger is being played by one of the oldest tricks in the ol' propaganda arsenal, the one known as card stacking.  Real Americans are being fed a pack of lies, however it looks like some Americans aren't buying what this front group is selling, judging from the comments on the subject blog post.  One commenter goes into a long-winded explanation about how distributed generation is going to obviate most of this new transmission.  But, another commenter cuts right to the bald truth:

"In our country, attention is relentlessly kept on BIG systems because that's where BIG corporations make their BIG money, and that's where they want focus to remain. I have long wondered why environmental organizations have not taken this obvious issue on BIG time. Perhaps because there are no BIG donations behind that cause?"

Of course, she's right.  This article spells it out:

"A great deal of regulatory and political muscle stands behind modernizing the U.S. electricity grid. Unlike Entergy, many traditional utilities are getting deeper into the business.

For example, earnings from high voltage transmission climbed 41% at Northeast Utilities (NU) in the first nine months of 2012 and contributed 23 cents a share to the nine-month EPS of 66 cents. An enthusiastic Northeast Utilities CEO Thomas May told analysts at the third-quarter conference call, “Deregulation was something many of us in the industry fought… It is the best thing ever to happen to you, our shareholders, because it set off this [high voltage transmission] building boom.”

Retail utilities owning transmission lines, which must be available to competitors, potentially creates conflicts of interest and a regulatory thicket. ITC, as an independent transmission company with no retail business, doesn’t have that problem. It’s a pure play in a regulated, political popular industry."

But when the nesting dolls are taken apart to their smallest member, who will Americans find?

The fossil fuel industry, of course.

So, if we examine the dolls we have pulled apart here, we have Americans being fooled by industry hiding behind front groups funded by corporations who are being fooled by other corporations. 

Americans need to wake up, because that $62 BILLION electric bill will soon be in everyone's mailbox.

Note:  This post has been updated Jan. 22 to include even more bad news for FirstEnergy!

FirstEnergy may have intended its purchase of naming rights to a football stadium as a "regional branding opportunity [that] makes good business sense...," however the transaction will probably be written in the history books as a public relations fail of epic proportions instead.

Reaction has been swift and cutting.  There's been derision, anger, mockery and suspicion, but I have yet to find one public comment that says, "Wow!  Isn't that great?  Now I'm going to switch my service to FirstEnergy because the company's name on a football stadium means I will receive economical, reliable, electric service."  Nope, not one comment praising the deal anywhere.

Rather than excitement, the people want to know:

How much did this cost and is it going to find its way into my electric bill?

Despite FirstEnergy refusing to disclose details of the transaction, it didn't take long for the press to fish out that the deal cost $102 MILLION over 17 years -- that's $6M every year that FirstEnergy will pay to have its "brand" displayed all over the stadium so that sports commentators and fans alike can make sneering comments about the company.  This begs the question... Just how out of touch with the real world are FirstEnergy's executives that they wouldn't see this kind of reaction coming?  There may be only 274 other CEOs who think this is a great idea.  The rest of us?  Yeah, not so much.

FirstEnergy fails to understand that it differs from other corporations who have made similar deals because it will always be viewed by the public as providing service in a monopoly construct.  Any unnecessary frills will always be seen as excess passed to captive customers.

Nice going, knuckleheads.

Jan. 22:  Update!  Jefferies Downgrades FirstEnergy to Underperforms on Rating Agency Headwinds

"We are downgrading FirstEnergy to Underperform based on growing rating agency pressure to enhance the company's credit metrics and regulatory exposure in rate proceedings in West Virginia and New Jersey."

Perhaps FE should rethink their recent actions attempting to dump uncompetitive assets into WV's regulatory system and milk ratepayers in NJ.  But then again, that doesn't raise cash and improve the old balance sheet, does it.

But, back to FirstEnergy's public relations fail of epic proportions...

Some knucklehead thought it would be a good idea to give The Akron Beacon Journal an exclusive "behind the scenes" look at the Cleveland Browns naming-rights deal.  Was that supposed to help the public identify with FirstEnergy execs.?  If so, massive fail, again.

The article is so bad it makes FirstEnergy look like a bunch of extras from The Godfather.  Chatty Chuck (who raked in $4.7M in 2011) tries to be a "regular guy" by proving his humility:

“I do a lot of entertaining and a lot of politicking and a lot of community work. Not at Browns games. When I go there, I go as a fan,” he said. “But having said that, this was a business decision.”

And where does he do his "politicking?":

"Even now, when FirstEnergy has a suite at the stadium, Jones sits in seats outside."

Oh yeah, slummin' with the hoi polloi.  It's just too far beyond belief, especially when followed up with a little exercise in threatening/bribing the wait staff at the restaurant where the deal went down:

"Jones and Ross said there was a little damage control to do after that meeting, since it was pretty clear to the wait staff what the diners were talking about. Ross said at one point, a server came in to say that the chef was a huge Browns fan and wanted to come in to say hello. The diners declined.

“We actually thought the next day we could be talking to” the media after a leak, Jones said.

Said Ross: “I don’t know what happened. Somehow they didn’t call sports radio or the newspapers.”

Said Jones, “Let’s just say we figured out how to keep it under wraps.”

First of all, Chatty Chuck needs a little education:  NEVER, and I do mean NEVER, piss off the people who are preparing and handling your food.  Second, your condescending attitude toward restaurant staff is not endearing to the rest of us and actually showcases your arrogance.  Revolting.

Football stadiums aside, the article is also a frighteningly accurate picture of the art of the corporate deal.  This is how politicians get elected, regulatory cases are decided, and laws are "put in place," as our pal Michael Morris once phrased it.  It all happens out of view of the public, through wining and dining, persuading and dealing, and all done on your dime through the bill you must pay for a necessary service, like electricity.

Looks like FirstEnergy's public relations band-aid "tell all" confessional only added to the public derision they are currently facing.  Once again, nice going knuckleheads, and thanks for the delicious helping of schadenfreude!

"First Energy, why not cut consumers a break instead?"

In an escalation of hostilities today, electricity giants Utility Rampaging Pig Megacorp. (NYSE:  URP) and FirstUpyours (NYSE:  FU) filed competing claims of ownership of wind and sunshine resources worldwide with the U.S. Patent and Trademark Office (USPTO).

URP and FU have been locked in mortal combat over market share in the shrinking "traditional" generation market.  FU has stolen many of URP's retail customers but is now choking on the below-market prices it promised those that would switch providers.  URP, on the other hand (because there's always another hand), is having problems digesting the lump of designer coal it originally hoped to fob off on unsuspecting ratepayers in a neighboring state.  

At the same time, both companies are looking for creative ways to establish themselves as renewable energy players, in order to reassert control of generation resources and consumers' lives.

URP's argument in its filing is that 99% of the world's wind energy is generated by its own executives.  It attached photos of URP executives standing on a hillside and blowing their own horns as proof that they were the source of the wind.

FU's claim was even more novel.  The company argued that its executives are so evil they generate darkness and in order to allow the sun to shine they shut themselves in a secret underground bunker, smoking cigars and playing pinochle.   Therefore, they are solely responsible for allowing sunshine, thus controlling it.  And since "control is 90% of the law," FU argued, it owns all sunshine.

Reaction has been swift and furious from some unusual quarters.  The Albuquerque Hot Air Balloon Festival, for instance, immediately filed for an injunction in Federal Court arguing they should have grandfathered status because their festival began when wind and sunshine were free.  The National Kite Flyers' Association called on its members for a national day of rage, encouraging them to fly kites in front of both corporate headquarters.  "We'll untangle our lines later," said Hyram Puffnagle, President of the association.  "These companies are running roughshod over the very traditions that made America great."  

Even China has weighed in, calling for an emergency meeting of the U.N. Security Council.  Fo Bo Ho, China's ambassador, said that the only hope for dissipating the smog that is overcoming Beijing is the Chinese military plan to divert the jet stream over his country.  "These capitalist dog companies hope to achieve the world domination that their own government fails to secure," he said.

Electricity consumers are mystified.  "There was a song, 'The Moon Belongs to Everyone, the Best Things in Life are Free,' but I guess fresh air and a sunny day are now corporate assets," remarked Bubba Puffnagle (no relation) of Moosecud-on-the-Mississippi, Minn.

Representatives of URP and FU declined a request for comment.

The Atlantic Wind Connection announced the other day that it will proceed with the first stage of its plan for an undersea transmission backbone located 12 miles off the Atlantic Coast.  In addition to providing a super highway for offshore wind generation to reach the east coast population centers, AWC also offers additional transmission capacity to import cheaper generation into northern New Jersey, where rates are higher.  Addition of transmission capacity to import cheaper generation is the basis for this first leg of a project that is proposed to extend from northern New Jersey to southern Virginia.  Once completed in whole, AWC is intended to connect up to 7,000 MW of offshore wind, enough power to serve approximately 1.9 million households.

However, AWC has faced, and will continue to face, the caterwauling of incumbent generators and transmission owners and the stone face of the PJM cartel, who have been doing their best to kill the project.

AWC directly competed with PATH and MAPP and spent years sitting on the sidelines while the incumbent transmission owners behind these misguided attempts to increase transmission capacity to New Jersey wasted around a half billion dollars of electric ratepayer funding on their loser projects.

Now AWC is ready to roll up its sleeves and get started.  However, the PJM cartel is still behaving badly and doing its best to sideline the project.  In addition to having to face the hurdle of having AWC designated a required transmission upgrade in PJM's expansion plans, there's a whole lot of nonsense underway about who is going to pay for the project.  For years, PJM's incumbent transmission owners thought nothing of having their projects intended to import cheaper coal-fired generation to the east coast socialized throughout PJM's 13-state region.  Now that a company who's not a part of the incumbent club wants to socialize the cost of its project, the incumbents are making fools of themselves at FERC arguing about cost allocation.

Although it's really not that complicated, clueless blogger Matt Wald at the NY Times can't grasp transmission cost allocation issues.  He screws it up in this article, and then follows with a more confused "explanation" in this one.

Here's what Matt doesn't understand.  Historically there have been only two drivers that necessitated transmission expansion within PJM:  1)  Reliability, where a project is necessary for continued reliable operation of the grid; and 2) Economic, where a project is necessary to import cheaper generation to an area with high generation prices in order to lower prices.  Any projects meeting either (or both) criteria were included in the regional plan and the costs were socialized among all consumers in the region.  A new driver has now emerged -- individual state renewable power policy goals.  PJM has, so far, stood firm behind the states' insistence that renewable drivers become the financial responsibility of the state or states whose policies trigger them.  However, there's a proposal in the works that would define a multi-driver project cost allocation method to equitably assign costs.

The problem is that nobody can agree on an equitable split and many parties continue to build on previously flawed cost allocation practices known as "postage stamp."  Postage stamp cost allocation socializes the cost of a big transmission project to all consumers in the region under the premise that they all benefit equally from the project.  This is never true, but transmission owners, PJM and FERC have pretended it is by making up regional benefits that can't quite be calculated.

When applied to reliability projects, region-wide benefits are slippery simply because PJM is so large.  A reliability problem necessitating upgrades in Baltimore or Newark wouldn't really provide a benefit to consumers in Chicago, except that without it, if the PJM grid massively fails, cascading outages could possibly affect them.

However, when postage stamp is applied to economic projects, it completely fails.  An economic project lowers prices for a subset of regional customers, however all customers in the region pay to construct and operate it.  Adding insult to injury, when prices are lowered via new transmission lines it also increases electric prices at the other end of the line.  Solving economic problems with transmission simply levelizes prices so that all consumers pay a relatively similar price.  Now how is that just and reasonable for a larger region to pay for the privilege of increasing their prices to benefit only a smaller subset of the region?  It's not, and this argument has been dragging on in the courts and at FERC for years.

Now throw in renewable drivers.  Would it be just and reasonable for the larger region to pay to meet the renewable policies of a smaller subset of the region such as one state?  Of course not.  Policy in one state cannot legally become the financial responsibility of citizens of a different state.

The more broadly the cost of billion dollar transmission projects can be socialized, the better their chance of success.  While most consumers are so blissfully unaware of the steady increase in their electric rates caused by new transmission because it only amounts to a couple bucks, if the real beneficiaries of a transmission project had to pay for it by themselves, they would certainly notice because the cost would be astronomical.  In fact, the cost of the project would obviate any savings and perhaps cause state policy revisions prohibiting imported renewables that come with expensive transmission project price tags.  Therefore, those who stand to profit from exporting renewables are trying to hide the huge costs of their projects by socializing them among consumers who do not benefit.  This has led to ridiculous claims that projects driven solely by a need for imported renewables provide additional reliability and economic benefits for the entire region and therefore should be widely socialized.  But for the renewable driver, these projects would not exist, therefore any "benefits" are unnecessary, sort of like getting a bill for a Christmas fruitcake.  You didn't ask for it, you didn't want it, and now they're asking you to pay for it?

This is the cost allocation problem that Matt Wald doesn't understand.  AWC understands, and while testimony submitted with a recent FERC filing explains how the project will provide more than renewable energy benefits, it toes the line of believability.  This testimony was attached to a rather painful, long winded brief written mostly in FERCenese (thanks, Scott!) so I have spared you that part of it.  Just read the testimony -- same facts, less words... and even some pictures.

While a lot of what's in the testimony has validity, AWC just can't resist trying to sweeten the pot and make crap up.  I wish they'd just stick to the easy truth.  They almost had me, until I found this quote on their website: 

"The AWC project not only reduces the need to build many lower-capacity transmission lines, but relieves grid congestion in one of two National Interest Electric Transmission Corridors which were deemed to have significant transmission network congestion and need speedy creation of transmission capacity."

Psst... AWC, the National Interest Electric Transmission Corridors were vacated back in 2011.  Fix your stuff!

If AWC manages to get a seat at the big-boys' table at PJM and overcome the cost allocation issues, the U.S. may finally move ahead with offshore wind and create a vibrant renewable energy economy in nearby east cost states.  However, acceptance of AWC's cost socialization schemes could also provide a doorway for other renewable transmission projects proposing to build thousands of miles of new transmission lines coast-to-coast to export inferior wind resources from the midwest.  That proposal makes no sense, economically or physically.  And we simply cannot afford both.

Choices.  We all make them every single day.  Sometimes we make good choices, and then there are those other choices that we make which leave onlookers scratching their heads and saying, "What were you thinking?"

So, what were you thinking, FirstEnergy?  Last Friday, Goldman Sachs downgraded FirstEnergy.  This comes on the heels of concerns about cash flow from UBS Securities last month.

So, FirstEnergy cheers itself up with a little shopping spree to buy the naming rights to Cleveland Browns Stadium?  Who does that, FirstEnergy, honestly!!??!!!  Okay, so I'm a big fan of retail therapy myself and, in fact, my last "treatment" was actually necessitated by the actions of a FirstEnergy subsidiary and required a box of European chocolate cookies, a paperback novel and a new blazer to cure, but I had the cash to pay for it all.

FirstEnergy continues to throw its money away on stupid stuff and make bad choices.  Where does FirstEnergy think its cash is going to come from?  From the sale of its uncompetitive coal plants into the West Virginia regulatory system?  I wouldn't bet on it.  How about from Tony's "transmission spend?"  No, not there either.  Maybe they can make it up by stealing all AEP's Ohio customers?  Not with those margins.  Perhaps they can raise some cash by killing AEP's Ohio solar farm deal and hundreds of jobs for veterans?  Oh, wait, that's just spite, not a source of cash for FirstEnergy.

I know!!!  Maybe FirstEnergy could sell one of its subsidiaries after milking it for every last penny!  Mon Power and Potomac Edison could be put up for sale in order to raise much needed cash to pay for stadiums, cigars, and state regulatory commissioners.  Inflation, you know, prices are going up for everything these days.

But take comfort, little consumer.  The Plain Dealer reminds:

"Whatever FirstEnergy is paying for the naming rights, by law the company cannot pass that cost on to its customers by increasing rates. FirstEnergy's delivery rates are determined by the the Public Utilities Commission of Ohio and reflect what it is spending on wires, transformers and the like, not what it spends on advertising or lobbying. The price of the electricity itself is determined by auctions and then reviewed by the state."

Ha ha ha ha ha.  Apparently The Plain Dealer hasn't seen this pile of discovery responses sitting on my desk.  Laws are only as good as the folks who enforce them, and certain companies cheat when they think nobody is watching.

Where's my box of cookies?

A fierce energy battle over authority to site and permit new high-voltage interstate transmission lines has been underway for years inside the Beltway.  Now the battle has moved to your state capitol, and if you ignore it, you may just end up with a transmission line right in the middle of your living room, and your rights to property ownership and due process obliterated.

Electric transmission permitting and siting has historically been the responsibility of states.  This has caused problems for utilities who want to increase their profits by building new lines because the states may deny applications for lines where need is not proven, or where the state's citizens receive no benefit from the project.  Your state public service commission is the ONLY authority who is looking out for you.

The utilities who build transmission lines would much rather have the federal government site and permit interstate transmission lines.  The federal government would champion national interests.  Under federal authority, all decisions would be made in D.C. by politically appointed regulators and you would be disenfranchised from any meaningful participation.

The utilities and their bought and paid for congressional representatives, along with certain federal agencies, have been trying to take authority from the states for years, but their aggression has been as yet unsuccessful.  The Energy Policy Act of 2005 (Cheney's Secret Energy Task Force) put several vehicles to usurp state siting authority into law.  One was to give "backstop" siting authority to FERC in the event that a state failed to act on a transmission line application for more than one year.  FERC defined "failure to act" to also include denial of an application, however their backstop authority was neutralized through the courts.  Another vehicle to usurp state authority that has not been seriously utilized until now is the authority granted to states by the EPAct to form interstate compacts to site and permit transmission lines on a regional, instead of a state-by-state, basis.

Now the utilities, federal agencies, and their "corporate bill mill" are asking states to voluntarily relinquish their authority by passing interstate transmission siting compacts into law.  They intend to accomplish this through the use of an "education" (indoctrination) campaign targeted at state legislators and "model legislation" to be introduced by state legislative puppets and shepherded through approval by corporate lobbyists.  The corporate bill mill behind it is one of the "mini-ALECs," known as The Council of State Governments (CSG).

CSG has announced that "a new transmission line siting compact developed by The Council of State Governments’ National Center for Interstate Compacts is ready to be introduced in state legislatures across the country."

The idea here is for states to voluntarily relinquish their authority to site and permit transmission to a larger regional body made up of "member" states who have passed the interstate compact "suggested" legislation written by utilities and slipped into your legislature as the work of a sponsoring legislative member of CSG.  Your state legislative sponsor didn't write this bill, in fact, he or she probably didn't even read it before submitting it.  That's the way these corporate bill mills work.

While the public's attention has been focused on FERC's Order No. 1000 attempts to regionalize planning and cost allocation for interstate transmission projects, the interstate compact bill has been quietly honed to a razor-edge and is now ready to pass unnoticed through your state legislature.  The interstate compact bill will do much more damage to your due process rights than anything FERC can dream up and must be stopped.

This secret scheme of utilities, CSG and the federal government to neutralize state authority has been underway since 2010.  Meetings, "hosted by the Office of FERC Commissioner Philip Moeller," were held in 2010 and 2011 that included CSG personnel, FERC personnel, and utility representatives.  The interests of citizens and electric consumers were not represented, except as a discussion of "NIMBY Challenges."  That's all you are to these people - "NIMBYs."  According to the PATH transmission attorneys, "NIMBY refers to "Not In My Back Yard," a common position taken by certain opponents whereby the opponents do not necessarily protest the specific proposal but, rather, protest the location of the specific proposal as being too close to their own property."  "NIMBY" is a propaganda tactic known as "name-calling" whereby a negative connotation of an idea or group is used instead of an argument.  Name-calling is a substitute for rational, fact-based arguments against a group, idea or belief, based upon its own merits, and becomes an argumentum ad hominem -- a way of removing participants from an argument.

According to a white paper written by the working group after the first meeting, the whole premise behind this is based on this lie:

"There are two key reasons why a more collaborative and efficient approval process is needed: First, the demand for electrical energy has grown and is projected to continue growing across the nation – even with investment in energy conservation/efficiency. Second, low cost electricity that is environmentally responsible will be particularly attractive to consumers and businesses."

Electrical demand is not growing.

But wait, the white paper also reveals the real reason for interstate compacts:

"The multiyear application review process and separate evaluations by multiple jurisdictions constitutes a growing burden for transmission companies..."

Regulation is a "burden" to transmission companies earning more than 10% yearly on their investment in new lines.  But new transmission lines are an even bigger burden to electrical consumers who pay for them and sacrifice their properties through eminent domain takings to create new transmission line rights-of-way.

The group identified challenges to transmission line siting, including those pesky NIMBY Challenges:

"One of the greatest challenges to increased transmission line siting comes from NIMBYism (not-in-my-backyard), where local municipalities, environmental groups, and others oppose having lines run through their respective areas. Such opposition—while warranted in certain cases—can lead to costly delays that potentially impact grid reliability and loses sight of the over-all regional or national benefits of a more robust transmission grid."

The white paper goes on with this description of due process:  "NIMBY groups often seize upon the competing interests of the stakeholders to frustrate the regulators with overlapping jurisdictions."

And finishes with this thought:  "It is important to note that there are two forms of NIMBY, each of which involves a different response—the first is one comprised of local geographic issues, such as landowners. The second type of NIMBY is environmental and is often represented by outside groups. Each group’s concerns will need to be addressed during the pre-application phase in order to ensure a smooth process."

News flash:  There's now a third form of "NIMBY."  It's the consumer who will pay for all this transmission, have property taken through eminent domain, and would prefer to consume locally-produced renewable power.  Smooth that, while you manage to be both arrogant and clueless at the same time.

Another "challenge" is the statutory responsibility of a state to determine whether a proposal is needed by its citizens.

"Another stumbling block to siting transmission is that states consider their local interests, not those of the regions they inhabit. In turn, regions often neglect to consider the needs of other regions, and the nation, as a whole, in maintaining reliability and bringing new energy to market."

When are the "regions" and the nation going to consider providing for their own needs instead of constantly taking from consumers, taxpayers and landowners under the guise of "the needs of the many trump the rights of the few?"

So, here's what the group decided an interstate compact needed to do:

1.    "Need" findings would be regional so that pass-through states who do not benefit would be forced to find a project "needed."

2.    Create an interstate siting board to overrule reluctant states and "facilitate a smoother process."

3.    The interstate siting board would have sole authority to site the line in all affected states.

4.    Form "partnerships" and sign Memorandums of Understanding with relevant federal agencies to "streamline the siting process."

5.    Make it nearly impossible for a state that feels railroaded to "opt out" of the compact.

6.    Approval by the interstate siting board would bestow individual state eminent domain authority to transmission owners.

What do the transmission owning corporations behind this scheme think about interstate compacts?

“Clearly, we haven’t made any progress on federal siting legislation” since EPAct05, he said, “so if the states can think more broadly in terms of a compact, I think that’s a good start,” Jimmy Glotfelty, executive vice president of external affairs for Clean Line Energy Partners, told
TransmissionHub. “There are a lot of things a compact could do.”

Yes, an interstate compact can strip a pass-through state like Illinois of its permitting authority so that Jimmy can build his unneeded Rock Island Clean Line project and make a bundle of money.

So, where's the "model" legislation?  Despite hosting a page of information and links about interstate compacts, CSG fails to display the proposed legislation anywhere on its website.  What is CSG trying to hide?

Here's the "model legislation" as it was introduced in the Washington state legislature on December 31.

Features of the proposed interstate compact:

1.    Creation of an interstate "Commission" consisting of:   "...from each member state, three (3) representatives: one appointed respectively by the governor, the legislature, and the state agency with siting authority or as otherwise prescribed by the adopting state."  The expertise of your state public service commission will no longer be needed to review and approve transmission projects -- political appointees who know nothing about utility regulation will now make all the decisions.

2.    "In member states, federal backstop permitting under section 215 of the Federal Power Act (FPA) may not be requested."  This is the big selling point for interstate compacts, however, there is no more "federal backstop permitting," it was previously nullified by two different federal court decisions!  While sec. 215 still contains the language, the "backstop" has been so diluted as to be worthless.

3.    "Public notification of the application and the proposed line shall be provided to each involved state by the convening state."  Notice is given to states, not to the affected public.  You may never know a transmission line is coming through your front yard until the bulldozer shows up.

4.    "Once a route is certified by the combined state application review board, eminent domain shall be based on each state's existing authority."  The "Commission's" approval of a project will trigger eminent domain in member states.  But wait...  you haven't even been "notified" yet!

5.    "Affected federal agencies and tribes shall be notified and the "Commission" shall include one advisory
representative for federal agencies (if federal land is involved) and one representative for all federally
recognized tribes (if tribal land is involved) who shall serve in an ex-officio capacity."  Ex-officio in this instance means in a non-voting capacity.

6.    "The first "Commission" hearing shall occur within 90 days of the initial filing and is intended to assess the
completeness of the application. A second "Commission" meeting will occur no more than 30 days after the initial
decision. The second meeting will assess the merits of the application, including, but not limited to the
proposed route, regional and national energy needs, and costs."  That's 120 days - 4 months - between filing of an application and evidentiary hearing.  No more technical reviews, no more quasi-legal process!

7.    "The "Commission" at their initial meeting shall establish procedures by which interveners may participate in developing the formal record for the application review.
The "Commission" shall hold at least one public comment hearing in each of the involved member states. These public comment hearings must be completed within 120 days after the initial application filing."  Here's where you fit in, little NIMBY.  The "Commission" will decide what your rights are and limit your participation to as little as public comment at one hearing somewhere in your big, wide state, probably located as far away from the project area as possible.

8.    "Commission" meetings are open to the public, unless the "Commission" votes to close them.  Then it's too bad for the public.

9.    "The "Commission" will issue conditional or final approval based on the record within 270 days of the filing of the application unless the applicant and the "Commission" agree to a different timeline. The "Commission" shall outline the required actions in instances where conditional approval is granted.
All decisions of the "Commission" will be based on majority vote, with each involved state having one vote as determined by a majority vote of each State Project Review Panel.
A state, based upon the rules of the involved states, may alter the route for the transmission line within its
boundaries by assuming incremental costs."
The only outcome for an application before the "Commission" is approval or conditional approval.  Denial is not an option.  In that case, why even bother with this kangaroo court at all?  If a state doesn't like the route and wants to change it, they do so at their own expense (which will probably be prohibitive).

10.    Your only right to appeal a decision of the "Commission" is to petition for rehearing within 90 days.  If still not satisfied, you may appeal to the D.C. Circuit Court (as in Washington, D.C., folks, no matter where in this big, ol' country you may happen to live).  Isn't that convenient for the ordinary landowner?  If you appeal and lose, you will be responsible for all legal fees and court costs of the "Commission" and the transmission owner.  This could be hundreds of thousands, or even millions, of dollars.  Ordinary citizens don't have this kind of money, therefore, ordinary citizens will be disenfranchised from the appeals process.

11.    The "Commission" can make up or change its own rules at any time during the process.

12.    If a member state "defaults" on the compact as determined by the "Commission," the "Commission" can  assess fines or penalties or take other action against the state (paid for by taxpayers, of course).

13.    "The "Commission" may accept contributions and other forms of funding from federal agencies,  compacting states and other sources."  You mean like the transmission owners whose application is being reviewed?  No, that wouldn't present a conflict of interest at all...

14.    "Withdrawal from this compact shall be by the enactment of a statute repealing the same, but shall not
take effect until the later of either the final determination of a pending application involving that state or one (1) year after the effective date of such statute and until written notice of the withdrawal has
been given by the withdrawing state to the Governor of each other member jurisdiction."  In the interest of full disclosure, this should probably be dubbed the Hotel California bill.  States may check out, but they may never leave.

15.    This has to be my personal favorite provision:  "All member states' laws conflicting with this compact are superseded to the extent of the conflict."  So, if any of your state laws conflict with anything the "Commission" wants to do, the "Commission" rules!

Why would any state agree to an interstate compact like this?  CSG plans to persuade states through propaganda, half-truths and lies as indicated in this presentation.  Some minor "disadvantages" states forming interstate compacts must overcome include:

"Loss of individual state sovereignty and delegation of state regulatory authority to interstate entities."

That about sums it up.

The model legislation is based on two lies that its proponents will spin:

1.    States will be subject to federal backstop siting without a compact.  Federal backstop siting has been nullified by more than one federal court decision.  There is no federal backstop siting to be worried about.

2.    The transmission siting/permitting process is "broken."  There's nothing wrong with our current state-based approval processes.  Projects are being approved and built within 5 years.  Others take longer due to transmission owner incompetence.  This is not the fault of the states.  State authority is the only process that protects the due process rights of citizens and must be maintained.

How does CSG predict its "suggested state legislation"  will fare in state legislatures this year?

“It’s always a little hard to predict [but] a ‘pretty good’ response rate during [the first] legislative session is somewhere in the neighborhood of 10 to 12 states,” Crady deGolian, director of the CSG’s National Center for Interstate Compacts, told TransmissionHub. “Given the fact that probably most of the focus will be in the West and in the Midwest ... I think we could probably hope to achieve somewhere in the neighborhood of seven to 10 states [during the first legislative session] if things go well.”

Only if YOU allow it to happen, and I would strongly urge you not to.  Pay attention to what's going on in your state legislature this year, especially if you live in the west or midwest.  Find it.  Kill it.  And spread the word to all your friends in other states.  Together we can prevent the creation of this corporate-created, jackbooted "Commission" who proposes to strip you of your due process rights, your property, your money and your pursuit of happiness.  Just say no to corporate governance.

I came across an editorial the other day with some thoughtful ideas about reforming an out-of-control federal regulatory system that often forgets that it is supposed to serve the consumers.  Reforming FERC is the work of Tyson Slocum, who the publication fails to inform you is with Public Citizen.

Slocum is just the latest to criticize the Regional Transmission Organization structure that FERC has created that, as Slocum puts it, "delegated sweeping Federal Power Act authority to [RTOs], creating private organizations on the front lines of federal law enforcement with little accountability to the public."

Indeed, there is no public accountability at regional transmission organizations, despite their claims of transparency and "stakeholder participation."  In fact, the vast majority of electric consumers do not even know these organizations exist. 

"Governance is also a problem. The RTOs assign voting shares to different stakeholders. PJM, NYISO and the others tilt the voting rights heavily in favor of generators, power marketers and utilities. End users always have a tiny minority of the voting shares, and therefore no influence. Sure, the RTOs have dozens of working groups that meet hundreds of times on an array of market topics, but at the end of the day, the RTO votes on policies, and the outcome of the election is rigged against the consumer's interest." 

As a friend recently observed, "The only way these organizations will ever be "stakeholder-driven" is when they get stakes driven through them by the holders!"  Must we gather our torches and pitchforks and storm the castle?

FERC's little experiment with allowing the industry to regulate itself through the formation of self-interested cartels is about an inch from failure and must be reformed.

Because they have been free to operate and "answer to no one" for years, it's been a very slippery slope.  Just as an unsupervised child toes the line to see what he can get away with, the RTOs are getting bolder and bolder.  One doesn't have to spend much time riffling through FERC dockets to find numerous examples of RTOs behaving badly.

For instance, PJM's recent revisions to the Minimum Offer Price Rule (Docket ER13-535) were concocted during secret meetings that purposely excluded state consumer representatives.  The new rule is intended to prevent the construction of new gas-fired generation ordered by two east coast states.  It doesn't take much imagination to determine that new generation will cut into incumbent generator profits, and incumbent generators and their affiliated investor-owned utilities hold huge "stakeholder" voting blocks.

In another example, one utility has filed a request for rehearing (Docket ER12-1178) of FERC's approval of recent planning scenario changes that allow for "PJM’s engineering expertise and experience as the transmission planner and operator for the PJM region" to be a mysterious surprise factor when selecting transmission upgrades through a "transparent" planning process.

And lest you think I'm just picking on poor, persecuted PJM, this "engineering judgment" black box decision making is also going on in other RTOs.  There's a dispute going on between a Wisconsin generator and MISO (ER12-1928) wherein MISO has "used its engineering judgment" to decide three years after the generator went into service that it is now responsible for new transmission builds as part of its interconnection agreement.  If MISO gets its way, no generator is safe from being assigned millions of dollars of transmission upgrades in order to continue to operate.  The generator actually pondered whether it would ultimately be cheaper to just retire its brand new wind farm than continue to operate and risk being ordered to pay for future upgrades that come out of MISO's "engineering judgment" black box.

This kind of railroading of the "stakeholder" process and black box decision making is plainly ridiculous and should serve as a wake-up call for FERC to re-examine its RTO construct.

Another suggestion Slocum makes is to establish a consumer advocate office at FERC.  There is currently nobody looking out for consumer interests in the federal regulatory world.  It's pointed out that state consumer advocates are underfunded and overworked and rarely get involved at FERC.  This does not mean that consumers cannot protect their own interests at FERC, however. 

Personally, I have no complaints about the way FERC treats consumers, however, it is extremely rare that a common end user dares to penetrate the barrier presented by a complicated regulatory process with an extremely steep learning curve.  Despite PATH's dire warnings to FERC that if it found consumers to have standing under Sec. 206 of the Federal Power Act that millions of consumers would storm the agency and file complaints, it just isn't going to happen.  Nobody else is lining up to put in the hundreds of hours of volunteer labor required to examine transmission rates, even though their learning curve would be substantially less steep than the one Ali and I faced.  Other transmission owners who may fudge their revenue requirements are probably quite safe from consumer intervention for the time being.

Slocum says, "Congress never expressly authorized the private organizations that run power markets; rather, FERC created them as voluntary organizations under Orders 888/889/2000."

Perhaps it's time for Congress to act, because it's highly unlikely that FERC will initiate Slocum's suggestion to "open an investigation into whether or not RTOs are producing just and reasonable rates."  Sometimes the truth is a bitter pill to swallow.

Well now, it's time to hand the Captain Obvious Award to The Wall Street Journal for this article, U.S. Electricity Use on Wane.  Reporter Rebecca Smith makes the stunning revelation that despite the fact that we're using more gadgets than ever, electric use continues to fall.  Gee, how original!  However, AP's Jonathan Fahey beat her to it more than 15 months ago.

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!