When PATH filed their "Status Update" with FERC on March 7, they made the following statement:

"PATH LLC is evaluating the financial impact of PJM's suspension of the Project on the 2011 Projected Transmission Revenue Requirement ("PTRR") to determine whether a revised 2011 PTRR should be implemented to reflect the suspension of development activities."

The PTRR is PATH's estimate of yearly costs that are subsequently recovered from all ratepayers in the PJM region to finance their project.  The money is collected from you over the year as part of your monthly electric bill and given to PATH to finance their activities.  After the year ends, PATH goes through a true-up process whereby the PTRR is compared to the Actual Transmission Revenue Requirement (the actual amount they spent).  An under recovered balance is added to your electric rates the following year.  An over recovered balance is refunded to you in your electric rates the following year.  Both over and under recovery are subject to payment of interest at the average monthly interest rate of.... 0.2900%.  Yeah, don't spend all that money in one place, little ratepayer!

It's been a month now, and PATH is still "evaluating."  C'mon, it doesn't take a rocket scientist to "determine" that the cost of the PATH project in an active state is more than the cost of the PATH project in a "suspended" state.

PATH's PTRR filed on September 1, 2010 projected a revenue requirement of $40.5 million.  That's how much they will collect from you and other ratepayers in 2011.  This was based on, "Major projected activities in 2011 include receipt of CPCN approvals, continue securing ROW options, increased engineering and permitting activities, and start of Amos substation modifications."

None of that is going to happen this year.  PATH won't be spending your money on any of that, however, they will continue to collect money from you as if they were.  Oh, they'll give it back to you in 2013, with .2900% interest, but meanwhile they're going to float themselves a $40.5 million dollar loan for two years from the PJM Ratepayer Savings & Loan, better known as your wallet.

Let's compare the .29% ROE you're going to earn on the loan you're giving PATH to the yearly 14.3% ROE PATH earns on all of their money that they are "loaning" to you ratepayers to finance the cost of "your" transmission line.

PATH's rate/finance department needs to pony up and quit dithering.  We're not your piggy bank!*

*PowerMAD, cue the appropriate music! (snort, snort)

The Powerline has a great post about PJM's recent "strawman" presentation.  I've been going back and forth with Bill about it since I dug that thing up yesterday.  He does a great job of explaining it, and that is definitely his forte.

The cynic in me just can't get over the name PJM gave it.  "Strawman".  Are we talking about a straw man, or are we talking about a strawman proposal?  More dumbness (or perhaps arrogance) from the cartel?

Guess what?  AEP supports the cartel's strawman to consider possible changes to the RTEP.

If you're a PATH opponent, you need to pay attention to what's going on at PJM.  We've all experienced what happens when we fail to babysit the children... they run wild!  Keep an eye on PJM's website (it's really not as confusing as it looks) and perhaps show up for one of their meetings to hear what goes on behind your back.

Make no mistake.  PATH is not over for them.

They're trying to keep their FERC incentives alive.

They're trying to keep their federal EIS application alive.

They're trying to keep the battle for approval of the Mt. Airy substation alive.

And keep in mind what AEP's big cheese said on the day of the "suspension":

"We remain convinced that the project will be needed and plan to move forward with it when PJM completes its review," Morris said.

Vigilance.

Here's a copy of a letter PATH has been sending out to landowners they have been harassing to sign easements and options for the past 2 years.  Not only are they not telling landowners the whole story of their "suspension", but they're using weasel words, just in case they "accidentally" do something they claim they won't do.  The letter tells landowners that they have "suspended nearly all activities on the project including efforts to acquire easements, survey work and other field activities involving the proposed route."  So, if you take them at their word, they're not going to be bothering you anymore.  But the weasels just can't resist throwing in the word, "nearly."  We know that their land agents are still in our communities, more than a month after their "suspension."  Why?  I've heard lots of reasons why from various people.  I guess those activities are covered by "nearly."

Meanwhile, back at the PATH ranch, the "Status Update" sent to FERC states that, "some non-development activities and non-capital cost expenditures will necessarily continue..."

It seems that quite a few of PATH's Option Agreements are due to be renewed (at PATH's discretion, of course, remember PATH wrote these Options and coerced landowners into signing them without the benefit of legal advice).  Renewal of an option requires another payment to the landowner.  The option payments to landowners are a capital expense.

Is PATH lying to the Federal Energy Regulatory Commission, or are they going to let the options expire?  Or, the most likely explanation -- Will PATH continue to be an uncoordinated, mismanaged mess where they say one thing and do another and when they're caught, they say, "ooops!"?

Gosh, I just love political season!  Okay, I'm being sarcastic.  I HATE it!  So much disgusting schmoozing, it's enough to make your eyes roll back in your head, your head spin 360 and to begin speaking in tongues (hey, don't laugh, it gets me out of political fundraisers and functions)!

The first batch of campaign finance reports have been filed for the Governor's primary.  No real surprises there, but a few familiar friends.  Here in WV it helps to read the campaign finance reports before voting so that you can put your vote behind the corporation, oops, I mean candidate you want to run our state. 

Here's a news story about AP's analysis of the reports.  It pretty much checks out with what I got from skimming the reports, but just doesn't give the personal detail I like.  So, here's what I've dug up that I found interesting:

Tomblin's donors include:

Coal, gas & drilling companies, including Massey
The American Electric Power Committee for Responsible Government (yes, the irony here always makes me laugh)
West Virginians 4 Coal (sounds like a front group, doesn't it?)
Dominion's PAC
Other energy PACs
Charles Town Races and Slots (I thought they were a "casino" now?)
Now, here's where it gets really entertaining for us PATH opponents: 
Jon McKinney, PSC Commissioner
Jackson Kelly's PAC and a personal donation from our favorite drama queen, Phil Melick
Bill Raney & Chris Hamilton from the WV Coal Assoc.
a Charles Ryan Associates employee
and a personal donation from the owner of their little front group facilitator Brown Communications

Kessler's donors include:

Some oil & gas reps.
Consol's PAC
Dominion's PAC
AEP's "responsible government" PAC
Labor union
Health care employees

Tennant's donors include:

A ton of small individual donors
AEP's "responsible government" PAC
Chesapeake Energy's PAC
Insurance company PAC

Perdue's donors include:

A bunch of small individual donors
A whole bunch of State Treasurer's office employees -- either they really love him or they really love the idea of getting rid of him if he's elected Governor.

Thompson's donors include:

Teachers' unions
Labor unions
Jackson Kelly PAC
Quite a few donations from individuals employed by Waco Oil & Gas
Lots of attorneys
and, of course, those "responsible" guys at AEP's PAC

As far as the Republicans go, I only skimmed Ireland's.  The rest aren't raising serious money and probably don't stand a chance anyhow.  The only interesting thing in Ireland's report was.... wait for it.... the American Electric Power Committee for Responsible Government PAC.  They want to be sure they can own our state, no matter who wins!  Well, unless that AEP-bashing John Perdue gets elected...

Remember to vote, folks!

What is PR?  “Public relations helps an organization and its publics adapt mutually to each other,” according to the Public Relations Society of America.  Do not confuse PR with advertising, we'll cover that topic in another chapter of "Best Practices."  Good PR is stealthy, invisible and is all about control.  It teaches you what to think, instead of how to think.  Stealth PR is spin.  PR spin corrupts public debate and policy and creates a public perception controlled by corporate interest.  Spin uses deceptive tactics to influence public opinion through fear, distortion and outright lies.  Stealth PR distracts you from the real issue, generates fear, and pumps out rhetoric that splits communities and pits groups and individuals against one another.  PATH's spin encouraged people to believe that there was a looming electricity crisis.  This "crisis" wasn't based in reality or scientific fact, but was entirely manufactured with the goal of warping public understanding to suit power company initiatives.  Those that believed the hype were being emotionally manipulated by PATH's fabricated spin.  PATH's PR campaign also attempted to neutralize and harass opponents (NIMBY, NIMBY, NIMBY), undermine their truth-based counter-campaign, and persuade the public that PATH is "needed".

This isn't to say that all PR is unethical, but because today's corporations will spend whatever it takes to win, many PR companies will sell their soul when the promised financial reward is big enough.  Once they've danced with the devil, their loyalty to the client outweighs the public's right to truth.  Any for-profit corporation that tells you there is no underlying financial self-interest in its agenda is lying to you.  PATH was never about electric grid "reliability", "congestion" or "need", it was always about a huge profit to be made by Allegheny/FirstEnergy and American Electric Power.  Large corporations will spend millions of dollars on PR spin when they stand to garner billions in return, and PATH is no exception.  However, there is one fundamental difference between other corporations undertaking spin campaigns and PATH doing so.  PATH used money that belonged to millions of electric customers in 13 states to finance their great deception, thanks to FERC-granted incentives.  It cost them nothing, and if they had been good at it, they may have gotten away with it.  But PATH hired Charles Ryan Associates for "performance of communications and public relations services relating to the siting and construction of the PATH Allegheny 500 kV transmission line."

Another component of a good spin campaign includes a charm offensive, which attempts to bolster the corporate image.  When they are "charming", they are trustworthy, responsible, public benefactors, doing the "right" thing, contributing to the economy, and are part of the solution to a societal problem.  PATH tried to be charming, but it more closely resembled one of those funny birthday cards where the hot guy/girl on the front turns into a grinning chimpanzee when you open it.  This didn't stop them from trying though.  PATH's "charm" made good use of ratepayer money to practice "corporate stewardship".  They also tossed a mere pittance of the profit they were making from the ratepayers back into our communities by making "donations".  They also promised jobs and increased tax revenue, and then proceeded to have the properties they had purchased for $4.5M in Loudoun County, Va. removed from the tax rolls.

The crooked PR companies use a closely-guarded Playbook to influence legislators and regulators through the manipulation of public opinion, all to benefit the corporations they work for.  Not surprisingly, most of the tricks in the Playbook come from the king of spin, the tobacco industry, who pioneered and developed these techniques over many years.  Because they were so successful, other industries wanted in on tobacco's success and now the business of spin is firmly entrenched in corporate culture.  Other recent examples of corporate-funded spin include BP and climate change.

Now that you know why they create front groups as part of a PR spin campaign, let's examine the way these front groups operate.  Front groups are the most prevalent form of the third party propaganda technique.  When a corporation is not held in high esteem and the public's trust in them ranks low, as is the case with AEP and FirstEnergy, the corporations revert to creation of front groups to manipulate favorable opinion they cannot create honestly.  The industry lacks true grassroots support.  Front groups give the illusion that disinterested individuals have thrown their support behind a project.  But why would any citizens enthusiastically support a corporate initiative that is going to cost them more money?  The front group attempts to drum up a massive amount of support for the corporate initiative.  Even if they fail, they still try to create at least the appearance of immense support.  The front group carries out a disinformation campaign with the goal of defusing or deflecting negative commentary and discrediting opponents.

In the Playbook, any public opinion counter to corporate goals is dealt with by creating front groups.  PR firm Burson-Marsteller is responsible for many of the tobacco industry front groups.  It should come as no surprise that PATH partner Allegheny Energy used Burson-Marsteller to create front groups for the TrAIL project.  PATH admitted in discovery, "Burson-Marsteller was originally contracted to perform these services for the TrAIL Project and once the PATH Project was initiated, it was determined that since the coalitions promote energy infrastructure development in general, the PATH Project should also contribute to the coalitions."  Unfortunately for the power companies, the front groups were subsequently transferred over to Charles Ryan Associates, under whose poor management they were exposed during the PATH fight.

From the Playbook, here are the steps corporations take to set up a successful front group:

1.  Hire a big, well-connected PR firm known for deception and spin.

2.  Throw the PRSA Code of Ethics out the window.  The speed with which ethics are abandoned can be directly correlated to the amount of money offered.

3.  The PR company sets up front groups, choosing a name that also works as a message, such as "Coalition for Reliable Power", in the case of PATH.  The best name will be misleading and make the public feel good about their choosing to join the coalition.  Obviously, "Shills for Increased Corporate Profit" wouldn't be a good name, although it describes a front group's purpose correctly.

4.  The PR company coerces and coordinates allies by recruiting third party "members" from business groups, unions, and Chambers of Commerce (who have a long history of cooperating with stealth PR initiatives on behalf of corporations).  These business and political allies are used as shills to spread the front group's message and to help recruit even more members from their business contacts.  Ideally, recruited members will be a mix of different types:  small businesses, citizens, other corporations, other front groups and paid "experts."  As the newly recruited members get further and further from the original "grasstops", the coalition members are being manipulated just as much as the public.  The majority of "members" have no idea who funds their "coalition" or why.

5.  The PR company creates messages for the group based on propaganda and manipulation of public opinion.  This tactic is right out of Mein Kampf.

6.  The corporation launders money through the PR firm so funding of front group activities cannot be traced back to the corporation.  A front group never mentions the source of their funding!  Corporations must keep their financial support of front groups hidden or else the credibility of the coalition tanks and public knowledge of the deception causes even more public backlash and distrust of the corporation.  PATH took it one step further, creating two degrees of separation by having their PR contractor, CRA, hire a local sub-contracting PR company to run the front group in each state.

In the case of PATH's front groups, the three sub-contractors managed by CRA were:

Note:  Read the complete contracts and purchase orders for additional tasks involved in running these front groups.

1.  For the Marylanders for Reliable Power, The Artemis Group, who was contracted to:  develop and implement a public advocacy campaign; develop third party support and champions; develop "grasstops" (a few key friends who are in on the scheme); and coalition development and recruitment.

2.  For the West Virginians for Reliable Power (or Energy), Brown Communications (note how they are "proud members of the PRSA"!), who was contracted to:  assist PATH-WV grow and promote the West Virginians for Reliable Power (WVRP) coalition in order to build support for rebuilding and expanding West Virginia and the nation’s aging electric infrastructure.  The extensive list of tasks is footnoted as follows:  *These tactics and activities would be timed around key dates associated with the approval process for the PATH-WV project.

3.  For the Virginians for Reliable Energy, Charles Ryan Associates, who was directed to sub-contract with  McGuireWoods Consulting to:  coordinate efforts to facilitate PATH Allegheny’s involvement and activity in Virginia regarding the PATH project and the management of a Reliable Power Coalition in Virginia.  Subcontractors, including McGuireWoods Consulting will be utilized in this effort.

If you want to have a little fun, here are a couple of ways to spot a front group:

1.  Their website domain name is owned by a PR company.  Real grassroots groups are short on funding and are never represented by PR professionals.  Real grassroots websites are a "do it yourself" job.

2.  Their website doesn't provide a physical address or phone number, or if there is a phone number, it's a cell phone or a phone number belonging to a PR company.  If an address is provided, it may be a mail drop or the office address of the PR firm.

3.  The "spokesperson" for the front group is employed by a PR firm.  Check the name of the spokesperson against employee rosters of suspect PR firms.

4.  The front group is not a legal entity.  Check with the state entity responsible for corporate registration.  PR firms cannot create legal entities for front groups because that leaves a money trail. 

Back to the Playbook - here are the next steps once the group is created and has a "membership":

7.  The PR firm writes Letters to the Editor and op-ed pieces and places them in local newspapers, using a member's name as the author.  The member doesn't have to do a thing except allow their name to be used!  The letter or editorial conveys a message that the corporation cannot without appearing self-serving.

8.  To make this work, the PR firm must have connections/relationships with editors, publishers and newspaper staff. 

9.  Because the PR firm has connections, they can also influence tone and content of articles.

This part didn't work for PATH because their main PR firm, Charles Ryan Associates, didn't have the connections to pull it off.  The PATH battle for the public's ear took place in the local news sources for communities affected by the project.  Even CRA's sub-contractors didn't have the right connections because they were based in Charleston, Annapolis and Richmond, far removed from the majority of the opposition and area of concern.

However, the Playbook tactics do work when applied correctly.  This is because credible news sources are declining while corporate spending on PR spin initiatives is rising dramatically.  It is hard for the public to decipher truth from spin.  Objective news is fact based and essential to democracy.  PR spin is advocacy based and is the enemy of democracy.  But, because newspaper advertising revenue is declining, staff and salaries have decreased.  Investigative reporting is all but dead due to the amount of time it requires.  Instead of independent, original and credible reporting, the "news" is increasingly dependent on PR spinners and corporate press releases.  It requires almost no time to create "news" using these sources and it's often used without fact checking.  The PR firms have learned how to manipulate the media.  As long as corporate profits created by multi-million dollar PR spin campaigns continue to rise, and traditional news sources are squeezed for funding, the threat to democracy remains.  Support your local newspaper!

One last item in the Playbook worth mentioning here:

8.  To reinforce the corporate point-of-view, conduct a bogus "survey".  Slice and dice the data so you can lie with statistics.  You can also use junk science "studies".  Utilize paid "experts" to lend your coalition or spin initiative authority and credibility.  PATH spent generously on former regulators and influential members of the business community to act as their "expert" shills.

Let's talk about the "seven common propaganda devices" made famous by the ill-fated Institute for Propaganda Analysis:

1.  Glittering generalities - PATH used these to create positive emotions.  The PATH project is "needed" to support your way of life!  Heavy use of euphemisms to disguise negative effects, for example, "we will work with property owners to negotiate prices paid" when "we will take your property by eminent domain if you don't cooperate" was closer to the truth.

2.  Testimonials - PATH utilized the business community in their advertisements to produce these.

3.  Name-calling - NIMBY, need I say more?

4.  Plain folks - PATH ads featured landowners, business people, and power company employees claiming, "we live in your communities."  No, they don't.

5.  Bandwagon - Everyone else supports PATH, and so should you!

6.  Transfer - PATH's paid "experts" from industry and the regulatory community were used to transfer respect for these individuals to something undeserving of respect -- the PATH project!  Transfer also discredits legitimate groups, spreads misinformation, distorts the truth, and instills fear.

7.  Card stacking - PATH held their front group and PEAT "educational forums" only before private, invitation-only audiences so they could emphasize their point-of-view and repress the point-of-view of the opposition.

PATH also used fear (standard of living, blackouts, public health and safety, jobs, economy) to vilify the opposition as "self-centered NIMBYS concerned about their scenic views".

PATH's public relations contractors failed in their mission.   There are many ways in which we countered their spin campaign, but obviously I'm not going to give away all my secrets here.  Email me if you're fighting a transmission project and need to know more.  Throwing money at a public relations contractor who can't perform isn't really "best" after all.

The real grassroots opposition made PATH's "just a statistic" victims come alive with names, faces, and personal stories.  We're just like you!  And until people like us demand corporate responsibility, corporate power will continue to rise until democracy becomes a faded memory... and propaganda wins.

The 20th century has been characterized by three developments of great political importance: The growth of democracy, the growth of corporate power, and the growth of corporate propaganda as a means of protecting corporate power against democracy.
-- Alex Carey, Australian social scientist who pioneered the study of corporate propaganda

 

It has suddenly occurred to me that today marks the one year anniversary of our release of the StopPATH media campaign TV commercials.  The campaign was made possible by a grant from the National Trust for Historic Preservation, and with cooperation from The Sierra Club and the West Virginia Highlands Conservancy, and funding from many concerned citizens of Jefferson County.  In honor of this occasion, go give the commercials another look!

That was our little April Fool joke on PATH last year.  We went on the offensive and quit playing defense... and we haven't stopped since.  It seems like eons ago to me now, but look at what we've accomplished!  The tables have definitely turned and PATH is now running away with its tail between its legs and we're all in hot pursuit with a can of RAID.  What goes around always comes around.

It's April.  FirstEnergy got fooled!

Remember the TrAILCo request to FERC for recovery of costs of the abandoned Prexy facilities portion of their project?

Today was the deadline to intervene in that case.  Let's check to see how our team line-up panned out.

We already know that Exelon and the Maryland PSC have intervened.  Since then, the opposing team has added American Municipal Power, PSEG, Mid American Energy Holdings and, just before the deadline, Dominion.

Couple of humorous musings on the "team", in honor of this day...

American Municipal Power was one of the intervenors in PATH's FERC incentive filing back in 2008.  They objected rather vigorously to just about everything PATH was asking for, and they did some great work on PATH's Formula Rate Protocols that eventually made our work on the Challenge easier.  I'm thinking they really don't like the former Allegheny Energy very much.

Dominion is FirstEnergy's "partner" on TrAIL.  However, it is a vastly different kind of partnership than AEP & Allegheny entered into on PATH.  The project construction and finances were never mixed, and the TrAILCo shell company belonged solely to Allegheny.  The Dominion guys called it a "meet-up" project.  Dominion constructed their portion, and Allegheny constructed their portion, separately.  Dominion doesn't hold any stake in this cost recovery.  And I got the distinct impression from the Dominion guys after talking with them on several occasions that Allegheny wasn't one of their favorite friends.

Also, Exelon filed this comment on the docket today.  Gosh, it's a real breath of fresh air to see a power company attorney who isn't a dunce -- Exelon's counsel makes a great point!  The problem is that PJM has removed the existing cost allocation for the Prexy facilities from their most recent update.  Exelon wants to know who is supposed to be paying for the recovered costs, if granted.  Postage stamp rates only apply to facilities 500kV or above.  Only a portion of the proposed Prexy facilities was a 500kV line; it also included other 138kV lines and substations.  TrAILCo can't be thinking that they can foist all of this off onto all the PJM ratepayers, can they?  Exelon also brings up the 7th Circuit remand to FERC.  Until the Commission makes a decision on that, Exelon wants the decision on TrAILCo delayed.  Makes perfect sense to me, since the 7th circuit decision called into question PJM's postage stamp cost allocation that will apply to the portion of Prexy that was at 500kV.

FirstEnergy really should have checked the Allegheny Energy horse's teeth before buying...

by "PowerMAD"

I've been following the letters sent to FERC arguing against PATH being allowed to “suspend” the project so it can continue to collect that 14.3% Return on Equity and keep some maintenance level of activity going. So far, 31 individuals and one organization have submitted comments, every single one of them objecting to PATH's attempt to create a new project category - “No Plan to Build But You Already Promised Us the Money” (NP2BYPU$, for short).

You know what's missing? Where are all the “citizens” (Affiliated Construction Trades Foundation, intervenor in favor of PATH) who supported PATH, and all the “experts” (Dan Ervin) who wrote pro-PATH op-eds, and the U.S. Chamber of Commerce “leaders” (Bill Kovacs, SVP for Environment, Technology and Regulatory Affairs, USCofC) who just argued that PATH is a critical project?

They're MIA.

In fact, if you look at the FERC docket for PATH, you might notice that even PJM hasn't filed anything to support PATH's argument that it gets to keep collecting our money.

Do you think that might be because it's one thing to pay “experts” to spout the corporate line to the public, but quite another to lie to the federal agency that regulates your industry?

Editor's Note:  The above is a submission written by one of our regular readers who goes by the screen name "PowerMAD".  We do accept submissions -- send yours here.