The Federal Energy Regulatory Commission has added reconsideration of PATH's request for rehearing of the Commission's denial of its RTO membership incentive adder to the agenda of its monthly meeting scheduled for Thursday.
It's been so long since the Commission granted rehearing on this limited matter, it's been nearly forgotten in the ensuing shuffle.
At issue is PATH's request to continue to collect a half a percent of extra incentive return on equity for its membership in PJM Interconnection. When the Commission granted PATH a whole bunch of incentives back in 2008, it also granted it an additional 50 basis points for joining PJM. PATH proposed that it be allowed to continue to collect this incentive after it abandoned the PATH project, by continuing its membership in PJM until it had finished collecting its abandoned plant.
The Joint Consumer Advocates answered PATH's request for rehearing, and pointed out that the stated purpose of section 219 is to provide incentive-based rate treatments that benefit consumers by ensuring reliability and reducing the cost of delivered power. The PATH project has not benefited consumers by ensuring reliability because it was never built. And it certainly never reduced the cost of delivered power. Quite to the contrary, PATH increased the cost of delivered power by leaving ratepayers on the hook for its $121M of development costs even though it never even put a shovel in the ground.
In other words, even though PATH will never be built, and the PATH companies will cease to exist as soon as their abandoned plant is collected from ratepayers, PATH wants to be financially rewarded for continuing its pointless membership in PJM. A membership in PJM allows the member to participate in the PJM transmission planning process. Since PATH won't be built, and since the PATH companies were single purpose entities that will never plan or build another transmission project, what's the point of their continued membership in PJM?
I think the point is to continue to collect an additional half a percentage point of return (or interest) on the slowly dwindling $121M abandoned plant balance that PJM ratepayers must pay for.
It will be interesting to see what the Commission does to dispose of this matter.
It's been so long since the Commission granted rehearing on this limited matter, it's been nearly forgotten in the ensuing shuffle.
At issue is PATH's request to continue to collect a half a percent of extra incentive return on equity for its membership in PJM Interconnection. When the Commission granted PATH a whole bunch of incentives back in 2008, it also granted it an additional 50 basis points for joining PJM. PATH proposed that it be allowed to continue to collect this incentive after it abandoned the PATH project, by continuing its membership in PJM until it had finished collecting its abandoned plant.
The Joint Consumer Advocates answered PATH's request for rehearing, and pointed out that the stated purpose of section 219 is to provide incentive-based rate treatments that benefit consumers by ensuring reliability and reducing the cost of delivered power. The PATH project has not benefited consumers by ensuring reliability because it was never built. And it certainly never reduced the cost of delivered power. Quite to the contrary, PATH increased the cost of delivered power by leaving ratepayers on the hook for its $121M of development costs even though it never even put a shovel in the ground.
In other words, even though PATH will never be built, and the PATH companies will cease to exist as soon as their abandoned plant is collected from ratepayers, PATH wants to be financially rewarded for continuing its pointless membership in PJM. A membership in PJM allows the member to participate in the PJM transmission planning process. Since PATH won't be built, and since the PATH companies were single purpose entities that will never plan or build another transmission project, what's the point of their continued membership in PJM?
I think the point is to continue to collect an additional half a percentage point of return (or interest) on the slowly dwindling $121M abandoned plant balance that PJM ratepayers must pay for.
It will be interesting to see what the Commission does to dispose of this matter.
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