The Jefferson County Commission voted 3 - 2 this morning to pass a Resolution Opposing FirstEnergy's Proposed Intra-Company Sale of the Harrison Power Plant.  This makes the third West Virginia county to pass a Resolution opposing FirstEnergy's scheme to dump the risk and financial responsibility of a 40-year old coal plant on West Virginia's captive ratepayers.

It took us four Commission meetings to get there, but our Commission has once again demonstrated that it stands with the citizens who elected them to carry out the county's business.

Public comment supporting the Resolution was given by George Rutherford, Patience Wait, and Keryn Newman.  Public comment opposing the Resolution was given by FirstEnergy's public relations guy from some other part of the state, Mr. Charlie Frid-lee (or whatever his name is, as if it matters).  Mr. Frid-lee launched into a line by line attack of the Resolution.  It pretty much went this way:  This statement is incorrect.  There's no basis for this statement.  This statement is speculation.  Our experts filed testimony at the PSC saying something else.  About halfway through, he stumbled over the item about whether or not Harrison would continue to operate if the sale is not approved.  Apparently, according to Mr. Frid-lee, merchant generators operate differently than fully regulated ones.  He helped bang home the point I had just made to the Commission, that FirstEnergy was not willing to take a risk on its merchant coal plants and has recently announced the closure of two more plants.  However, the company wants to dump the risk of Harrison on West Virginians.  If FirstEnergy wouldn't take the business risk of continuing to operate old coal plants, why should West Virginia's ratepayers?  Mr. Frid-lee was saved by the bell about halfway through the resolution.  Turns out he had friddled away his 3-minute speaking allowance before getting even halfway done.  The Commission was not willing to bend the rules for Mr. Frid-lee and he was cut off.  Frid-lee friddle FAIL, FirstEnergy!

The Commission made Mr. Frid-lee cool his heels for another hour before they got to the agenda item about the Resolution.  Chairman Manuel moved that the Resolution be adopted.  Commissioner Tabb seconded.  Discussion ensued.

Commissioner Pellish said the Resolution was political correctness, did not contain facts, and was just a "feel good" resolution not based on facts.  He would not support the language as written.  He did, however, offer to support a plain statement simply opposing the plant without all the "whereas" stuff.

Commissioner Noland said that she had been wrestling with not having enough info. to back the Resolution as written.  But then she read Jamie Van Nostrand's blog post and started to think the plant purchase maybe wasn't such a good idea.  But, in the end, Commissioner Noland can't make this kind of decision because she doesn't have enough info and has not seen any facts.

Commissioner Tabb said she originally did not have enough info., but she took the initiative to do the research and become informed.  Commissioner Tabb knows what it's like to be the ordinary citizen getting run over by the huge corporation from personal experience, and therefore she voted for the resolution, as the voice of the people who elected her to the Commission.

Chairman Manuel said that he supported the Resolution because few in West Virginia are standing up for consumers anymore and that he wanted to do so.

Commissioner Widmyer closed the show by supporting the Resolution and stating that two other counties in West Virginia had passed a similar resolution opposing the purchase of Harrison.  She pointed out that was in direct contradiction to Mr. Frid-lee's statement that "only a few individuals" were against the plant sale. 

I guess Mr. Frid-lee's statement was incorrect, had no basis, and was pure speculation.

The Resolution of the Jefferson County Commission Opposing FirstEnergy's Proposed Intra-Company Sale of the Harrison Power Plant was adopted by a 3 - 2 vote.

Thank you for supporting your citizens, Jefferson County Commission!

Potomac Edison customers are already familiar with the flat $5.00/month "customer fee" they are paying for fixed cost services such as distribution line maintenance, a customer care center to cheerfully answer their billing questions, and a staff of meter readers who will come to their home every 2 months to read their electric meters.  Potomac Edison has been collecting this $5 fee from every customer, every month, although the company has completely failed to actually provide the services, and has instead been pocketing the money to add a few pennies to the stockholder dividend.

Now the investor owned utilities and their trade association, Edison Electric Institute (EEI), have cooked up a new way to increase your monthly "customer fee," or to put in place huge new fees for new or departing customers.

A report issued by EEI back in January recognizes an emerging threat to the electric utility business model that will ultimately be its undoing.  Investor owned utilities are scared spitless and have been scrambling for ways to dig their hand into your pocket permanently.

Simply put, small scale renewable electricity generation developed at point of use is going to make the utility's centralized generation and transmission of electricity about as useful as teats on a bull.  Rooftop solar, battery storage, fuel cells, geothermal energy systems, wind, micro turbines, and electric vehicle enhanced storage are becoming what the industry calls "disruptive challenges."  A "disruptive challenge" is defined as “an innovation that helps create a new market and value network, and eventually goes on to disrupt an existing market and value network (over a few years or decades), displacing an earlier technology. The term is used in business and technology literature to describe innovations that improve a product or service in ways that the market does not expect, typically first by designing for a different set of consumers in the new market and later by lowering prices in the existing market.”  An example of this would be cell phones, which have made made traditional land line phones all but obsolete as technology marches relentlessly onward.  The report notes that it only took 10 years for cell phones and deregulation to destroy the telephone company business model.

The graphic on page 12 of the report tells the story at a glance.  Technology Innovation and Energy Efficiency combine to produce lost revenue for the company.  This requires the company to raise rates to continue to make money and pay stockholder dividends.  As rates rise, customers assess the cost of implementing additional energy efficiency or investing in their own point of use generation system against continued passive purchases from the company's centralized system.  As customers cut their usage or simply check out of the utility's system altogether, lost revenues result.  Back to square one.  It's a vicious cycle, and it's one the utility cannot win.

In order to survive, the utility industry needs to find new products and services that customers need in this brave, new, point of use renewables world, such as positioning themselves as solar leasing companies.  But that's only one of the options presented to investor owned utilities in EEI's report.  Much higher on the list are tactics such as:

1.    Instituting a monthly service charge to make sure that the company can continue to recover its fixed costs and investments, even when customers use less electricity.  Right now, these costs are being recovered through a cost of service rate scheme where customers pay a portion based on their share of system use (per kwh).  Switching these costs over to a monthly service charge allows the utility to collect a fixed cost for a service it does not provide, such as Potomac Edison's current $5/month service charge.

2.    Accelerate the recovery of investment.  In current ratemaking schemes, the cost of utility assets are recovered from customers over the asset's useful life (30 or more years).  This makes the monthly cost to each ratepayer very low.  But, because the utilities fear those customers may disappear before the asset is fully depreciated and paid for, it proposes to accelerate the repayment period and charge you much more each month.

3.    Institute a "stranded cost charge" for each customer who departs.  In that case, you would pay a big fee to stop your electric service.

4.      Institute a "customer advance in aid of construction" fee, which is nothing more than a big fee you would need to pay up front before starting electric service.  Unlike a security deposit however, this fee is not refundable when you move or stop taking service from the grid.

EEI advises its member utilities to begin putting these new regulatory structures in place in your state right now.  I advise you to oppose them.

Not a day goes by anymore without an email, phone call, or website comment from an unhappy Potomac Edison customer.  Yesterday, I found this in my email (and it's by far the funniest complaint I've heard to date!):

Just how hated must FirstEnergy/Potomac Edison be for sassy seniors like Martha to do something like this?  Do busy ladies usually pose with apes holding derogatory signs when they're happy?  I don't think so!

After reading FirstEnergy's response to the WV PSC's initial twelve General Investigation questions, I gotta admit, Martha has a point!  Among other spurious responses that I'm just not going to deal with here (Potomac Edison can figure this crap out on their own without my help this time), FirstEnergy assures the PSC that:

1.    There were only 420 complaints about billing/excessive estimates from 522,882 customers in 2013.  Only 420 customers were unhappy enough to complain to the company.

2.    Potomac Edison/Mon Power have 5 more meter service personnel now than they did back in 2011, before the Allegheny/FirstEnergy merger.

3.    Mon Power and PE obtain actual meter readings, in accordance with their tariffs, on a bi-monthly
basis.

4.    FirstEnergy believes that the short term integration issues have been remedied and that customer complaints should decline over the remaining part of 2013. FirstEnergy is continuing to investigate all customer complaints and proactively contacting customers with known concerns.  (How does a "concerned" customer make himself known?  Is there some special mental telepathy signal distressed customers emit that can be picked up by company equipment?)

5.    Customer satisfaction:  A combined 73% of WV customers rated FirstEnergy with 9 or 10 with 10 being the highest. (Scale is 1 to 10).

Say what??  73% of FirstEnergy's West Virginia customers give the company a 9 or 10?  Where are these folks?  I could stand on any sidewalk in Jefferson County and ask 10 people if they've had problems with their electric bill, and if all 10 of them don't say yes, the ones who haven't had a personal problem know someone else who has.  I think FirstEnergy needs some new customer satisfaction statistics.  Can you help them out?

...and by the end of FirstEnergy's little inquisition before the Jefferson County Commission this morning, Sammy was looking a little gray.

The real Jefferson County small town community "family" turned out this morning to defend their community and their wallets against FirstEnergy's stuffed suits from elsewhere pushing the company's plan to increase rates by 6% to pay for the purchase of the Harrison power station.

First item on the Jefferson County Commission's agenda this morning was a presentation by Charlene Gilliam of FirstEnergy intended to provide the Commission with more information regarding the carried over agenda item known as "First Energy Resolution regarding opposing the "Intra-Sale" of Harrison Power Plant for possible adoption - Discussion/Action.  Charlene either wasn't prepared, or simply wasn't permitted, to present anything to the Commission because she never said a word.  Instead, Charlene's two corporate suit "daddies" (Charlie Friddle, Director, External Affairs at FirstEnergy Corp. and Sammy Gray, Manager State Affairs, WV, FirstEnergy Corp.) were clearly making a desperate attempt to bamboozle the Jefferson County Commission like they were an easily handled gaggle of insipid rubes.

However, before Charlie took the microphone to demonstrate his complete cluelessness about Jefferson County and its citizens, the public was allowed to make comment.  At least five people spoke against the Harrison plant transfer, and no one showed up to speak for it.  Also at issue was Potomac Edison's lack of concern for its customers in Jefferson County, and the sad fact that despite a whole lot of lip service from the company about how its merger with Allegheny Energy would provide benefit for West Virginians, and that we're all just one big, happy "family," customers have experienced nothing but insult and injury since the merger.  The community, and the Commission, is a long, long way from forgiving FirstEnergy for blowing off the Citizens' Public Hearing in Charles Town on May 22.

Charlie told the Commission that the invitation the company received only mentioned billing, and that billing is an individual issue that can't be solved at a group meeting.  Charlie also told the Commission that the company knew well before the May 22 hearing that the PSC would be opening an investigation.  Then he tried to point the finger at the PSC in order to take the heat off himself in a most juvenile manner -- "But the PSC didn't show up either!" *whiiiiiiiiiiiiiiineeeeeeeeeeeeeee*

Let's dissect this LIE.  The invitation mentioned both the billing AND Harrison transfer.  But FirstEnergy couldn't be bothered to send a representative to explain it to the community until a resolution from the Commission opposing the transfer was imminent?  FirstEnergy just doesn't give a crap about any of you unless you reach over and grab their hand that's worming its way into your pocket to steal you blind.  As well, revealing a customer's personal billing information publicly is okay when it suits FirstEnergy's purposes.  And finally, the PSC had emphatically stated that it would not open an investigation prior to the public hearing.  If the PSC was in cahoots with Potomac Edison attempting to head off an imminent investigation before the May 22 hearing, I'm sure we'd all like to hear more about that, Charlie.

Next, Charlie told the Commission that there wasn't enough time to explain all the facts to them and insinuated that they were too stupid to ever understand the transaction anyhow, and therefore, *pat, pat, on the head* go away and let the experts at the power company and the PSC handle the matter.  Charlie feels that FirstEnergy's PSC testimony proves that the transaction is needed.  (Did Charlie watch the same evidentiary hearing the rest of us did?  Because I saw FE's case and witnesses getting shredded).  Charlie basically told the Commission that it's up to the PSC to make a decision, and the Commission should mind their own business.  Last time I checked, West Virginia was still a democracy, and if Jefferson County has an opinion on a matter before the PSC, they are free to express it.  The PSC does not have to clear their decision with Jefferson County, so I'm really not sure what all the hoo-haw was about this morning.  Why did FirstEnergy waste all that time and money this morning trying to prevent a simple resolution from Jefferson County opposing their proposal before the PSC?  Have we lost sight of the prize, Charlie and Sammy?  News Flash!  Next week, I'm thinking of passing my own personal resolution against your plant transfer.  Why don't you three stooges come on over and we'll have a party?

Charlie informed the Commission that his company was "pursuing excellence through quality" and attempting to increase business and economic development.  Charlie assured the Commission that "everything has a cost" and proceeded to go on a crazed rant against energy efficiency programs in Ohio.  Yes, we know FirstEnergy has been trying to kill efficiency programs in Ohio, but why should we care?  Charlie said that Ohio consumers have been charged half a billion dollars for a 2.3% reduction in consumption and that energy efficiency is too expensive.*  The only problem is that nobody who spoke really belabored the fact that energy efficiency should be an important part of a properly prepared integrated resource plan, and is always the cheapest resource when compared to buying or building new generation. 

Charlie also called the Commission's attention to the handout he had given them before the meeting showing that West Virginia's electric rates are lower than those in surrounding states.  I'm not really sure how this bolstered his case that West Virginians should support unnecessary increases, such as the 6% increase this transfer will cause to their electric bills.  Charlie whined that nobody who spoke mentioned the 5% rate decrease that went into effect on January 1.  Would this be the same decrease that FirstEnergy proposed that the PSC not approve, and instead let the company keep as a promise payment on the Harrison scheme that had not yet been approved?  The 5% decrease only came about because the PSC turned down FirstEnergy's proposal to steal your 5% decrease.  That decrease, Charlie?

Charlie finished up by telling the Commission that lots of groups supported the Harrison sale, and so should they.  Charlie was proud to share that the WV Coal Association and Consol supported the proposal.  Just where in West Virginia did you think you were this morning, Charlie?  Brilliant!  I'm proud that our Commissioners were polite enough not to laugh in his face.

And then it was time for the Commission to ask FirstEnergy questions and make comment.  Every one of them chewed Charlie a new one for the company's failure to show up for the citizens' public hearing and complete and utter failure to address the billing and meter reading issues.  Commissioner Pellish went on a particularly vicious rant (although Pellish didn't bother to show up at the public hearing either!).  He called FirstEnergy's decision to blow off the hearing a "public relations disaster" and opined that "someone should have lost their job" for making that decision.  That's okay, Walt, I hear Sammy is a short-timer now anyhow...

Charlie finally admitted what I know a lot of you have been waiting to hear... "We blew it!"  But then he turned right around and started again with the computer system malfunction and storm excuses, which he characterized as "the perfect storm" for which the company should be held blameless.  Look, Charlie, this isn't a couple of teenaged geeks blowing up an old useless microsoft laptop in the garage, ooops!  This is the careless incompetence of one of the largest electric utilities in the country that has caused severe injury to its customers. OOOOPS!

So, let's get to the vote.  There wasn't one.  The resolution got tabled until the next meeting because some of the Commissioners still didn't have enough information to approve it as written.  The Commissioners will consider revisions to the resolution before trying again at the next meeting.

Charlie said that his frustrated little trio would be present at the next meeting, although when asked if they would be better prepared next time, he stomped off like he was mad or something.  Do have a nice trip back to wherever you drove in from and be sure to visit us in Jefferson County again soon, fellas!

*Addendum:  A friend of mine in Ohio has identified a verbatim match between Charlie's energy efficiency rant today and the April 2013 Testimony before the Ohio Senate Public Utilities Committee of Leila L. Vespoli, Executive Vice President and General Counsel, FirstEnergy, entitled "Revisiting Ohio’s Energy Efficiency Mandates":

"I’m sure your constituents would be surprised to learn that since 2009, Ohio’s electric customers have paid more than a half-billion dollars in monthly charges for energy efficiency programs. And so far, this mountain of customer charges has only achieved a 2.3 percent reduction in usage..."

This has got to be today's ultimate insult to the Jefferson County Commission.  FirstEnergy didn't even think enough of them to spend the time preparing an original presentation for today.  They just recycled old material and called it good enough.  No wonder it struck me as odd, disjointed and irrelevant.  Thanks for the heads up, D.!

On February 25, 2011, Allegheny Energy was merged into and swallowed up by Ohio-based, investor owned utility, FirstEnergy.  As a result, the "Allegheny Power" dba company name West Virginia and Maryland customers had gotten used to ceased to exist.  FirstEnergy reverted the operating companies to their historical legal names.  Maryland and West Virginia's eastern panhandle became known as "Potomac Edison," which is a name old-timers may remember from the 1980s.  It's still the same company.  Nothing much has changed, except for the company's top management and profit goals.

Just two short months after the merger, Mark Clark, Chief Financial Officer and Executive Vice President, had this to say about the "benefits" of the merger to the company's shareholders during a May 3, 2011, earnings call with investment analysts:

Let's translate this out of "1% speak" and make it understandable.  The benefits of the merger were expected to provide shareholders with earnings in excess of $1B in the first 3 years after the merger.  The company was also looking to reduce its "O&M" between $75M and $175M.  O&M is the acronym for operations and maintenance expense.  Operations and maintenance expense is the company's cost of operating and maintaining their systems.  In the case of a regulated electric company, like Potomac Edison, this means expenses for things like maintaining their distribution lines, operating their customer service center, sending you monthly bills, and reading your electric meter in accordance with their legal obligations as a regulated utility in the state of West Virginia.  A regulated utility is permitted to recover its cost of service, plus a reasonable return on its investment, from its customers.  A utility's cost of service includes O&M expense. 

Now let's take a look at how this amount is recovered from you and why a reduction in the amount spent would be a benefit to shareholders and increase their earned dividend.  A utility recovers its fixed costs through its base rate.  Fixed costs are the costs that remain the same year after year, such as the company's investment in a power station like Harrison.  O&M is a fixed cost.  The amount Potomac Edison is collecting from all of you for O&M was set in its last rate base case in 2007.  A base rate case also sets the company's rate of return, the amount of interest it is permitted to collect from you on its fixed costs.  Potomac Edison's rate of return in West Virginia is 10.5%.  A company is not required to file base rate cases on a regular basis.  A company will do so when it can financially benefit from doing so.  The rate set in 2007 will continue to be collected until the company takes the initiative to file a new base rate case.  A new base rate case will trigger a new battle over the current 10.5% return, most likely setting it lower.

The utility is collecting a fixed amount from you to be used to operate and maintain its system.  If it doesn't spend all it collects in one month, it can set it aside to spend later.  Conversely, some months it must spend more than it collects.  It's supposed to roughly equal out eventually, however, there is no true up mechanism that ensures that the company actually spends every penny on actual O&M expenses.  If a company ends up with a positive O&M balance at the end of the quarter, it adds that amount to its profit (dividend).  Therefore, whatever Potomac Edison can save on operating and maintaining its system is a direct profit.

So, FirstEnergy's first order of business after the merger was to cut O&M to produce more profit from the combined business.  During a subsequent earnings call on February 29, 2012, Mark Clark had this to say:

Right, Mark.  Don't do anything crazy like reorganize and cut your meter reading positions because something like that could have unforeseen consequences that squander Potomac Edison's community goodwill and put the company at a longer-term risk.  After all, an unhappy customer base could do something unexpected, like turn out in record numbers to oppose a proposed generation transfer that was planned as part of the company's strategy to "...expect asset sales in the range of $800 million to $900 million per year, and we expect to reduce debt by $1.5 billion to $2.2 billion over this time period."  Remember, you must always place FirstEnergy in the best possible forward position!

Fast forward another year.  The company's penny-pinching has reduced/reorganized its meter reading staff to less than half of its former level.  The company is still collecting the same amount of O&M, but now they're spending half the amount!  The extra gets added to the dividend to show the shareholders a profit.  Shareholders are the only ones who truly matter.  Its not about responsibly providing a needed service in a monopoly construct.  Because the company has reduced its staff by more than half, meters are only getting read less than half as often as they should.  This means that the company is relying on more estimates to calculate monthly bills.  Perhaps the company thinks that it can train its customers to read their own meters and call it in to the company, allowing for more accuracy while also maintaining the meter reading staff cuts.  But that's not what happens... oh, no.  Some customers simply refuse to do the job they are paying the company to do, and the inaccurate usage estimates continue to pile up.  You all know what happens when you add too many inaccurate numbers to an equation -- the answer becomes hopelessly skewed.  And that's exactly what has happened to customers' bills.  Depending on the number of actual v. estimated readings currently in the queue of averaged billings, bills can swing wildly from month to month, resulting in some customers receiving outrageous bills for thousands of dollars that they simply cannot pay.  Potomac Edison's customer service staff simply doesn't care.  Pay up or be cut off.  And then the service shut-offs begin...

And the community took action.

The WV PSC opened an investigation into the company's business practices on June 7.  The West Virginia legislature announced its own parallel, independent investigation of the company on June 13.

All of this stemmed from the cost of a very small staff of meter readers?  How much did they save?  How much does a meter reader cost?  Recently, Potomac Edison placed a help wanted ad on Craig's List for temporary meter readers.  Yes, Craig's List!  Always my first choice when job hunting...anyhow... I guess they're even too cheap to advertise in more mainstream venues, or perhaps they don't really intend to actually hire anyone.  They certainly don't intend to hire anyone to solve the problem long term, after the regulators quit breathing down their neck.  The fewer people who see the ad, the fewer applicants Potomac Edison has to blow off.  Potomac Edison is offering a starting wage of $12.31 per hour for a meter reader in Frederick, Maryland.  That's about $24K per year.  Frederick's average per capita income is $36K per year.  Compare the meter reader's salary with the recently approved annual compensation of FirstEnergy CEO Tony Alexander of $23M for 2013.

Meter reader:          $12.31/hr.
Tony Alexander:    $11,454.18/hr.

I think we've found the place where cuts can be made to place FirstEnergy in the best possible forward position.  More meter readers, less Tony Alexander.

But will the company turn a corner and put sincere effort into righting its wrongs?  Or will it continue to make excuses for its failure, and continue to lie to regulators and the community?  What's it going to be, FirstEnergy, truth or consequences?

Put on your hip waders, Potomac Edison customers, the fertilizer is getting mighty deep!

Today, Potomac Edison's Director of Public Relations, Charlie Friddle, told a concerned customer that "...they had provided sufficient information that they were involved in an ongoing investigation and could not participate" in the Citizens' Public Hearing in Charles Town on May 22.

LIAR, LIAR, Pants on Fire!

But, wait a tick... the investigation was not announced by the PSC until May 31.  How was Potomac Edison "involved in an ongoing investigation" on May 22?

According to Cagey Charlie, the company "was investigating billing practices themselves" on May 22, so technically, Charlie believes his statement was correct.

Not even close.  Potomac Edison just plain old blew you all off.  The company's scientific estimate of how many citizens with genuine problems would show up, and who would show up to listen to these irate customers, was about as accurate and their monthly electric usage estimates. 

Why not just admit that you severely screwed up, Potomac Edison?  We'd be a little more forgiving of a company that admitted its mistakes and put forth an honest effort to right its wrongs.  Instead, Potomac Edison just keeps piling up the lies and flimsy excuses.  Nobody's buying it, and this dishonest company is only digging its hole deeper and deeper.

Potomac Edison's excuse for not attending the Citizens' Public Hearing prior to May 22 was:

"We appreciate the invitation to participate in the public hearing scheduled for May 22, regarding billing practices and future generation, but respectfully decline.  Should you have individual questions regarding your service, please feel free to contact me or our customer contact center at 1-800-686-0011."

Do you see anything in there about conducting an internal investigation, Charlie?  Yeah, me neither.

Liar, liar, pants on fire!  Next time we invite you to an event, you're going to show up, right?  We'll be sure to invite you personally, Charlie.

I hope someone saved Blinky!

Round two of FERC's attempt to create a cost-socialized coast-to-coast electricity trading market has begun.  On May 28, a motley collection of strange bedfellows filed a petition for review of Order No. 1000 in the D.C. Circuit of the U.S. Court of Appeals.  To make it even more fun, a whole bunch of parties intervened in the matter, in support of either the petitioners or FERC, depending on where their interests lie.

The petitioners include publicly owned power providers and co-ops, investor owned utilities, states, an ISO, trade associations, and an informal "coalition" of utility interests.

Intervenors include ISOs, states, investor owned utilities, public power and co-ops, well-meaning but sadly misguided environmental groups, and trade associations.

Objections to Order 1000 have finally been boiled down to three basic arguments (although the briefs go on and on and throw in all sorts of supporting arguments).

1.    Whether FERC has the authority to mandate transmission planning and take other actions to force what it characterizes as “facilitating the development of more efficient and effective transmission expansion plans.”

2.    Whether FERC has the authority to order broad socialization of cost responsibility for the building of new transmission lines.

3.    Whether FERC can dispose of a utility's right of first refusal to build new transmission in its service territory.

Order 1000 concluded we need “transmission planning and cost allocation processes so that the transmission grid can better support wholesale power markets and thereby ensure that Commission-jurisdictional services are provided at rates, terms and conditions that are just and reasonable and not unduly discriminatory or
preferential.”

FERC got downright silly mincing words to create its authority to do what it did, and the briefs get into some really ridiculous debate of grammatical construction and the meanings of phrases and words.  There's also discussion that brings to mind the old "if it ain't broke, don't fix it" idiom.  According to petitioners, FERC did not have sufficient reason to "fix" transmission planning and cost allocation because it did not have a compelling reason to conclude that there was anything to "fix," nor that its "fix" would be an improvement.

In justifying its new "beneficiary pays" requirements to more broadly socialize the cost of transmission to ratepayers across multiple regions, FERC failed to define "benefit," which allows very loose interpretation of perceived "benefit" in exchange for cost responsibility.  FERC determined that it was preventing "free ridership," whereby some beneficiaries did not pay for new transmission.  The petitioners argument hinges on the fact that FERC cannot create cost responsibility between parties who do not have a contract for the service being provided.  In addition, FERC may only approve rates proposed by companies it regulates, or fix the same when they are unjust or unreasonable.  It cannot create and set rates on its own initiative.

That's all fine and good, however the REAL reason for broader cost socialization is to hide the true cost of this transmission building craze from the billions of electric consumers who will finance it.  The broader the cost is spread, the smaller the impact on each individual.  Who in West Virginia is going to notice a couple extra cents on their monthly electric bill for new transmission lines in Kansas?  However, if the cost is spread over a smaller pool of true "beneficiaries" closer to the actual transmission lines, it would cause greater monthly increases that would definitely be noticed and contested.  In this way, federal regulators, and the for-profit generators and transmission owners they serve, are tricking you into failing to notice the immense profits you are paying to these companies in exchange for building new transmission of questionable necessity.  It's not supposed to be about continued forced support of a dying, centralized energy paradigm, but about citizens' ability to consciously invest in smart, efficient and reliable energy systems of their own choosing.  Long-distance transmission lines will soon be as necessary as land line phones, however we may be stuck with the huge investment we were forced to make in them now for many years after they cease to be useful to us.

But wait... FERC wields the interstate commerce club that they have been quietly swinging behind their back for the past couple of years to trump any naysayers to Order 1000.  FERC possesses authority to regulate “the transmission of electric energy in interstate commerce” and “the sale of electric energy at wholesale in interstate commerce.”  However, Congress has repeatedly mandated that states retain the authority to permit transmission lines within their borders.  This state/federal conflict has been going on for years, and the interstate commerce club makes its first appearance in the 7th Circuit MISO MVP decision I wrote about earlier this week.  Will it be enough to club states into submission?

I still can't muster up the energy to care about the investor owned utilities excitement over losing their long standing right of first refusal ("ROFR"), and the arguments petitioners put forward are nothing short of humorous.  The IOUs purport that elimination of the ROFR "...would negatively affect reliability, impede planning, and substantially harm consumers."  The ROFR that was eliminated allowed utilities to have first dibs on any new transmission lines in their service territory that were determined to be needed by the regional planning authority.  In possessing this "right," the IOU was given the ability to determine the cost of the new transmission without competition.  I'm not sure how that ever protected the consumers who pay for transmission.  It didn't.  FERC's elimination of the ROFR now provides that once a need for a transmission upgrade is identified, anyone can submit a bid to build it.  Only through this kind of price competition will consumers be assured that needed transmission is built most cost-effectively.

One of the side-shows going on under the authority to mandate transmission planning category involves FERC's determination that "public policy" requirements be considered in regional planning.  "Public policy" requirements are individual state or local laws or goals requiring jurisdictions to obtain a certain percentage of their power from renewable resources.  In placing regional planners in the position of interpreting and fulfilling the laws of states or localities, FERC seriously oversteps its authority.  Only the jurisdiction that enacts a public policy requirement has authority to implement and enforce the requirement.  It is not up to FERC or regional planners to decide what a government may have meant by a certain requirement, or how the government will implement and meet it.  As well, the cost of regional mandates to build transmission that would satisfy individual "public policy" requirements cannot be socialized among residents of other localities whose laws don't require it, or conflict in some way with the "public policy" being satisfied with the new transmission.  But wait... here comes that interstate commerce sledgehammer again!  The 7th Circuit ruled that the Commerce Clause of the Constitution trumped state autonomy to reject fees mandated by another state's law over which it has no control.

If you're a geeky freak who enjoys pouring through lengthy legal briefs for occasional giggles, here are links to the ones filed at the D.C. Circuit:

1.    Statement of Facts Brief (contains general housekeeping stuff and the most basic summary of the issues you're going to find.  If you only read one, make it this one.)

2.    Cost Allocation Brief (enough detail of the cost allocation arguments to lull you to sleep even after an entire pot of coffee!)

3.    Threshold Issues Brief (why FERC has no authority to do what it did - ad nauseam).

Well, haven't they all created a fine mess for consumers when left unsupervised?  This is going to drag on for years, but ultimately will determine how your electricity is generated, how it gets to you, and how much you're going to pay for it.  Obviously your best interests are not being represented by any of these parties.  You're going to have to speak up and let your elected representatives know what you want.

The West Virginia Legislature is not satisfied that the state's Public Service Commission will get the job done with its general investigation of FirstEnergy subsidiaries Potomac Edison and Mon Power, and has announced its own independent, parallel investigation of electric utility billing practices in the state.  The Joint Standing Committee on Government Organization's investigation will give the hairy eyeball to all electric utilities in the state.  So, other companies, like Appalachian Power, can give a great, big "thank you" to their compatriots at FirstEnergy who made all this possible.

Read breaking news by Pam Kasey in The State Journal.

Briefs filed in federal court by environmental groups seeking to have a National Park Service permit to destroy the Delaware Water Gap National Recreation Area overturned contained some damning quotes from minutes of meetings between Secretary of the Interior Ken Salazar, Park Service Officials and representatives of investor-owned utilities PSEG and PPL, owners of the proposed Susquehanna Roseland transmission line.

During an August 4, 2011 meeting, Salazar is quoted as saying: 

"So here's the deal: I want $60 m [million] and I want it now."

An expose in the New Jersey Herald tells what happened next:

And guess whose money the companies were giving away?  Yours, little ratepayer, your $60M in increased electric bills, plus 12.9% interest yearly.

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.  PSEG representative Karen Johnson explains:

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.

Want to challenge the possible collection of bribe money in your electric bill?  PSEG recently filed its trueup of 2102 rates at the Federal Energy Regulatory Commission and the filing is open to your examination and questions.  Any bribe money that was paid in 2012 would be contained in this filing.  FERC does not review and audit the filing.  If you want to ask questions and challenge it, you must take the initiative.

And be sure to sign up to continue to question the components of the utility's transmission rate going forward, because you're going to continue to pay for Salazar's bribe for many, many years to come.

This kind of shakedown perpetrated on the public by government officials and regulated utilities is nothing short of completely outrageous!