Here's PATH's response to the Preliminary Challenge that was served on them on November 23, 2011. No surprises here, PATH corrected around $10K of charges that were "erroneously" charged to ratepayers and which they had already admitted were wrong during discovery.... eventually, over the course of several months, until the light bulb finally came on.
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FirstEnergy's TrAILCo transmission company (whose books are kept by same crack team of accountants as PATH's) filed a revision with FERC the other day to correct its 2010 & 2011 revenue requirements for merger costs that were "inadvertently" included in the revenue requirements and collected from ratepayers like you.
"On December 19, 2011, Trans-Allegheny Interstate Line Company submitted to the Commission, for informational purposes, a revised reconciliation of the annual transmission revenue requirement for the 2010 Rate Year and a revised annual transmission revenue requirement for the 2011 Rate Year to reflect the removal of merger-related costs inadvertently included in the original version filed in May 2011." Ooops! What's a couple million between friends, anyhow? Is anyone keeping track of all FirstEnergy's accounting mistakes that cost you money? According to TrAILCo's letter, "As part of an internal review, TrAILCo personnel discovered that merger-related costs were inadvertently included in the original 2010 Reconciliation ATTR and 2011 Forecasted ATTR." Was that "internal review" FirstEnergy's version of their "oh sh*t" moment when they got busted for including merger costs in PATH's revenue requirement during PATH's Open Meeting conference call back in July. Yeah, FE, we were there. ;-) This sentence in the letter creates such a scary visual that I want to simultaneously throw up and laugh hysterically. "The merger was consummated on February 25, 2011, and, at that time, FirstEnergy Corp. became the ultimate parent of TrAILCo." Keep the comedy coming, FirstEnergy, we're paying dearly for it, apparently. I feel for our friends at Stop the Lines in New Jersey, who have been riding a roller coaster lately regarding approvals for one of PJM's other Project Mountaineer transmission projects.
Down: Susquehanna-Roseland is approved by the PA PUC and the NJ BPU. Up: Appeals are filed in New Jersey. Up: New Jersey's BPU gets into a battle of wills with PJM and FERC over it's desire to build new gas-fired generation in New Jersey in order to lower electricity prices in the state. NJ BPU's position is that in-state generation is better than importing electricity via new transmission lines like S-R. NJ-BPU is likely to deny S-R and use it as a bargaining chip to get what it wants from PJM & FERC, if it is remanded back to the BPU on appeal. Down: S-R is named one of Obama's "Rapid Response" Transmission Projects so it can be rammed through approvals. Rumor has it that the fix is in at the highest levels for the NPS to approve PSE&G's application to cross the Delaware Water Gap National Recreation Area. Up: The Public Employees for Environmental Responsibility (PEER) release a statement exposing the collusion and corruption going on between the NPS, the White House, and PSE&G. Up: The NPS recently came out with a "no build" recommendation. Down: In this article (one of the most poorly-written articles I've ever seen!) Delaware Water Gap National Recreation Area Superintendent John Donahue implies that if power company project owner PSE&G proffers a big enough "mitigation package" (aka BRIBE) that he will bend over and grease up the park for annihilation by the Susquehanna-Roseland project. I'm not sure who Donahue thinks will be paying the cost of the "mitigation package," but it won't be PSE&G. The cost of project approvals will be borne by all electric ratepayers in the 13-state PJM Region. That means YOU! The bigger the bribe, the higher your future electric bill, and the bigger the profit for PSE&G. Donahue is willing to sacrifice publicly owned assets to a private, for-profit corporation in exchange for that same public gaining a financial/land grab that is ultimately paid for by them. We pay ourselves to end up with a ruined national park, and PSE&G makes a big profit. So, what can you do to prevent paying for PSE&G's bribe? Submit your comments on the NPS EIS for the S-R Project online. The Public Utilities Commission of Ohio has cut the proffered rate hike settlement reached by AEP and other parties in half.
Ouchies, AEP! :-) This will make for an interesting future earnings call... "[FirstEnergy] fundamentally no different than the corporations that drove our economy off a cliff"12/16/2011 According to Rep. Dennis Kucinich (D-OH), who thinks FirstEnergy's re-start of their creaky Davis-Besse nuke isn't all it's cracked up to be:
“We should be looking at this. The corporations that run nuclear power plants are fundamentally no different than the corporations that drove our economy off a cliff. They will cut corners to maintain or increase profits in the absence of sufficient incentives to act differently. They must be sufficiently and carefully regulated. The consequences of failing to do so are simply unthinkable. I hope we will reflect on the NRC’s position here and help to achieve a culture of independence, objectivity, public interest over corporate interest and will have complete dedication to safety.” Read the whole statement available at the link and cross your fingers that FirstEnergy doesn't cause a nuclear disaster, because that's about all you can do right now. It shouldn't come as any surprise. StopPATH WV and The Power Line have been reporting on this issue since last spring, but here's a new article that wraps it all together.
At a recent DOE "congestion study workshop" utility schmoozers, their PJM and MISO lap dogs, and government officials came together to further their goals of building a whole bunch of unneeded transmission to transport midwest wind to east coast load centers. “Illinois, Indiana and now northwestern Ohio are seeing a tremendous growth in wind integrations,” said Bob Bradish, head of American Electric Power’s transmission planning group. “A lot of that is now starting to show in the way of congestion on our system out there.” AEP could also build transmission and pay for it itself, he noted. But the nature of eastern demand is such that a congestion issue identified and addressed in the western part of the PJM system, for example, will lead to other points of congestion. “East economics are so that they want to pull everything from the west; you fix something, they just pull more, so congestion comes back up again,” Bradish said. Why should you be worried? Because it's the same stupid plan as Project Mountaineer -- west to east power flows that require new, expensive, destructive transmission lines, now cloaked in the "green" of wind. Of course, all those lines "for wind" will also be tied to the existing grid connected to AEP's (and other dirty generators') coal-fired plants. And as PATH taught us, you can't separate "clean" from "dirty" electrons. By the time that "wind" lights up a flat-screen TV in Annapolis, it's going to be the same old "coal" that's been doing it for years, however the consumer is now being fooled into believing they're using renewable power. If you live around PATH's proposed "Kemptown" substation site and have been wondering why they persist in dragging the zoning issues through the courts, this is why. The property is attractive as a target for other "wind" transmission projects. So, keep an eye on how DOE's congestion study plays out and the progress of off-shore wind, which will turn the west to east flow paradigm completely around and will end up being the cheapest and most efficient solution. Remember those rumors about AEP merging with Entergy that were floated around the press earlier this year? Well, that's not going to happen now.
Entergy made a deal last week with ITC Holdings Corp. in which it will divest itself of its transmission assets. All those snapping, buzzing, money-making transmission lines and AEP didn't get a single one. Big frowny face for AEP :-( !!! So, who's left on AEP's merger shopping list now? How about Dominion merging with AEP so that AEP's next transmission project in Virginia won't get back-stabbed by Dominion and end up on the cutting room floor at PJM? Sneaky, back-stabbing birds-of-a-feather are often very happy together... FirstEnergy made the Top Ten!
The top ten POWER PLANT TOXIC AIR POLLUTERS LIST, that is. FirstEnergy's Bruce Mansfield Power Plant (the one that created the Little Blue Run Poison Pond -- now more poisonous than ever!) came in at Number 9 on The Environmental Integrity Project's AMERICA’S TOP POWER PLANT TOXIC AIR POLLUTERS report for 2011 for emissions of Arsenic, Chromium, Lead, and Mercury. Congratulations, FirstEnergy. P.S. Three-eyed fish and asthmatic kids think you suck. This story illustrates a great example of how investor owned utilities use socialized cost recovery to make themselves a bundle of money at your expense. In the example, the Virginia SCC allowed an AEP subsidiary to recover up to 50% of the cost of their charitable contributions from captive ratepayers. The amount approved for recovery by the SCC was $250,000. A spokesman for the company said that it equated to "two pennies on a $100 bill," and that any other company would roll the cost of their charitable contributions into the cost of their product. Two pennies? No big deal to you personally, right? Maybe, but to the investor owned utility on the receiving end of those two pennies it's a very big deal. Every utility customer needs to take a fresh look at those two pennies. Your "two pennies" are added to the "two pennies" of millions of other individual ratepayers until they form one gigantic pile of pennies. That gigantic pile of pennies is what Uncle Scrooge McDuck, the CEO of the investor owned utility, swims around in daily. That's exactly the point I made to a reporter last year while doing publicity on the Formal Challenge filed with FERC. Dividing the amount challenged by the 51 million ratepayers in the PJM region who paid it only amounted to roughly a nickel per ratepayer. However, on the receiving end, the PATH Companies ended up with a roomful of 51 million nickels. Go ahead, try to imagine what that would look like, and instead of Uncle Scrooge McDuck diving in, you've got a couple of ultra-rich investor owned utility CEOs quacking and swimming around in their ill-gotten gain.
It's also the same point the Maryland Office of People's Counsel made in their recent comments on FERC Docket No. ER12-269. The amount that the PATH Companies are wrongly recovering from ratepayers is not great enough for any single entity to spend the time and money to hire consultants to examine PATH's annual formula rate filings to find the errors, therefore no one is examining them and the PATH Companies are free to get away with recovering all sorts of costs they are not entitled to. As far as the utility's other argument, which is that every other corporation rolls the cost of their charitable contributions into the ultimate cost of their product, there is a distinction that argument fails to make. Any other corporation is subject to the whims of competition when pricing their product. If they make too many charitable contributions that they must roll into the cost of their product, and it raises the ultimate cost of their product higher than the cost of a competitor's product, then the consumers will buy the competitor's product and the corporation who makes too many charitable contributions will lose market share and revenue. This is part of the system of checks and balances that powers the engines of capitalism and is known as cost accounting. In the case of a regulated utility, however, the corporation's customers are captive, which means that they MUST buy their product from a certain corporation, no matter how much it costs. This is the argument Commissioner Christie made in his dissent. If AEP really wants to "roll charitable contributions into the cost of their product," they ought to roll those contributions into their cost of generation... and then give freely. Since the cheapest generation is dispatched first we'd all breathe a little easier. So, when "The AEP Foundation" makes those wonderful, charitable contributions, do they take all the credit for the charity? Of course they do! And when tax time rolls around, do they take the deduction for the charitable contribution? Of course they do! Who really paid for the charitable contribution? You did! That $250,000 that Appalachian Power recovered from Virginia ratepayers is just another dump truck full of nickels and dimes to pour into the ol' corporate money bin. Since the AEP Foundation would have made the contribution anyhow, the amount they are permitted to recover from ratepayers is 100% pure profit. The investor owned utilities have the act of pulling the wool over your individual ratepayer eyes down to a science, and it's working, as long as you think about it as "just two pennies." But, take a minute to think about the big picture. ... and checking it twice. Gonna find out who's... ut-oh, AEP, you've been naughty this year!
I take back my snarky comments about this reporter after his silly "evil twin" story about new AEP CEO Little Drummer Boy. Dan Gearino of The Columbus Dispatch actually did some investigative journalism about AEP's sneaky rate hike deal with Ohio's Public Utilities Commission. The deal could raise electric rates for small businesses by more than 30%, while lowering rates for big, industrial energy hogs. Check out the results of the reporter's investigation here. AEP is going to raise the electric rates of Kentucky Power customers 31% to installer scrubbers on their Big Sandy plant so that it can continue to burn lots of MTR coal far into the future instead of switching fuel sources. Keep in mind that the power companies always ask for more than double the rate increase they actually need because they know the state utilities commission is going to hack it up until it resembles something just and reasonable. Could AEP be padding the cost of this upgrade to support Mikey's EPA "train wreck" fantasy? I hope the Kentucky utilities commission checks AEP's claim that installing the scrubber is truly the least cost option over the long term instead of switching fuels, or other options. If you're an Appalachian Power customer in Virginia, you can now start giving those Santa suit clad bell ringers the hand on your way into Wal-Mart because the Virginia SCC has now made AEP your charitable contributions coordinator. In a split decision, the SCC has allowed Appalachian Power to recover the cost of their charitable contributions from their customers. Dissenting Commissioner Mark Christie gets it right when he says recovery of charitable contributions have no place in a monopoly franchise. The company can deduct these contributions from their taxes, but they'd much rather recover them from their customers and take credit for the "charity." Outrageous! And last, but not least, check out this episode of The Keystone Cops that ensued when Appalachian Power held a storm response drill in West Virginia. APCO would do better to just spend some of that money they received in rate increases to repair and maintain their crumbling distribution system instead of playing storm games. Be sure to check out the comments -- hysterical -- AEP will next practice filing for more rate increases! :-) Ho Ho Flippin' Ho, AEP! |
About the Author Keryn Newman blogs here at StopPATH WV about energy issues, transmission policy, misguided regulation, our greedy energy companies and their corporate spin.
In 2008, AEP & Allegheny Energy's PATH joint venture used their transmission line routing etch-a-sketch to draw a 765kV line across the street from her house. Oooops! And the rest is history. About
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