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Pardon me, PJM, your bias is showing... again!

6/24/2011

9 Comments

 
PJM Interconnection is a cartel of energy companies who have control of transmission planning for a 13-state region roughly proximate to the mid-Atlantic states.  Because PJM is a cartel of corporations who individually stand to benefit from the group planning decisions made, it is preposterous to even toy with the idea that decisions will be independent, fair or unbiased.

PJM and its decisions are controlled by the financial interests of their largest and most powerful members to the detriment of smaller, weaker members.  PATH partner AEP was PJM's largest member for a long time, but AEP's reign of terror is lately challenged by the FirstEnergy empire that recently swallowed AEP's little buddy and PATH partner, Allegheny Energy.  We're not very far from the elementary school playground social pecking order at PJM, are we?

PATH opponents have identified many instances of blatant PJM bias in favor of the PATH project, and against any alternatives, during the past 3 years.  But, it's not just us.  Last year, eight Consumer Advocates from various states joined together to accuse PJM of bias in evaluating alternatives to the PATH project.

We got so curious once, we drove to Delaware to sit through a couple hours of one of PJM's meetings.  I couldn't help comparing PJM to a dysfunctional Jerry Springer Show family.

Now PJM has been accused of bias once again.  A group of smaller members calling themselves the Competitive Markets Coalition has accused PJM's Members Committee of unfair and biased actions that could cause PJM to "become an exclusive club which only traditional utilities and large companies can afford to join."   According to the Coalition, "This would greatly reduce
market competition and market liquidity, resulting in higher consumer electricity prices and a far more volatile market."

I'm not going to get into an analysis of the issues here.  The PJM behavioral aspects of this latest complaint are quite telling and much more interesting.  Although it was a different meeting, different committee, the Coalition describes some of the exact same behavior I observed last year.

  1. "The stakeholder process used here demonstrated a pattern of favoring powerful and well-established groups in PJM..."
  2. "...this meeting was a sham. The Chairman did everything possible to prevent a full and fair Stakeholder consideration and voting process at the meeting. Unfortunately PJM Staff sat silently, allowing Stakeholder rights to be ignored and violated. It is noteworthy that the PJM sponsored proposal was the beneficiary of this grossly unfair Stakeholder process."
  3. "My presentation of the Coalition proposal was repeatedly interrupted and frustrated by the Chairman."
  4. "Further, on several occasions he spoke over me and other Stakeholders in an effort to prevent our saying anything negative about the PJM proposal;"
  5. "Stakeholder comments and questions, either in support of the Coalition proposal or questioning the PJM proposal, were severely limited by the Chairman. No Stakeholder discussion of the PJM proposal was permitted beyond a few "clarifying" questions. In one case a questioner on the phone was simply cut off."
  6. "It is hard to view what occurred as anything other than an ambush."
  7. "Finally, when both AEP and a group of municipality members submitted their own Officer Certification proposals at the meeting, the Chairman raised no objections to these proposals being voted on, and did not interrupt their presentations."
  8. "Perhaps most troubling, at no time did anyone from PJM intervene..."
  9. "As this summary shows, the Members Committee meeting on June 14th was no Stakeholder process at all. It appeared to be a meeting "wired" in advance to make sure no actual debate or discussion on the competing proposals could occur, and that the PJM proposal would prevail."
  10. "Not only was the meeting inconsistent with the consideration process directed by FERC in Order 741 but, like the PJM proposal itself, had the effect of disenfranchising many smaller companies and new market entrants in PJM."

How many different individuals need to yell "FIRE!" in a crowded theater before someone notices that the curtains are ablaze?

It's nice to see that the small and weak are banding together to overthrow their oppressor.  Shall we all sing for them? 

The cartel dynamic isn't working.  It's time for a change in how we plan our electric grid before we're all sitting in the dark while PJM's "children" bicker and stab each other in the back.
9 Comments
JustMe
6/24/2011 04:30:08 pm

There it goes again! My hit parade of useless words. I'm with you on everything here K but my suggestion is that "stakeholder" be broken down into what the speaker really means -- shareholder, competitor, consumer, taxpayer, ratepayer, incumbent utility, political supporter, advocate of x,y,z....etc. The English language and even legalese is so much better than this! We all must cease from using these robustly muddy terms. Love the new coalition...hate that they have adopted this terminology.

Reply
spykid2
6/24/2011 04:35:24 pm

GAME OVER!

Reply
bh link
6/24/2011 08:46:54 pm

Thank you, JM. Unlike the other words you listed, "stakeholder" is wide open to a range of meanings because it literally means one who holds a stake in the outcome of a certain situation. This tells you nothing about what that stake is. A shareholder owns a certain percentage of a company which is worth a certain amount of money. This defines the interest of the shareholder.

In other words, the best definition of "stakeholder" is that it is BS.

Clearly, PJM's claims of transparency are quite simply lies. The word stakeholder covers those lies with its meaninglessness that sounds good but isn't.

FERC's policy of trying to transform regional transmission operators like PJM into "neutral" managers of the deregulated electricity industry is an utter failure. We cannot build a new, reliable electrical industry until FERC's RTO promotion is dismantled and the cartels exposed for what they are.

Reply
PJM farce
6/24/2011 08:51:11 pm

PJM will continue to cost the end users of electricity money until FERC cracks down on them. I thought FERC was supposed to be monitoring them more closely but obviously they didn't sit in on this meeting. Whining to PJM management is an exercise in futility.......they are in on the scam too. But maybe this group is just marking their trail to FERC complaint. PJM is biased bullshit that needs to be reined in.

Reply
bh link
6/24/2011 09:12:07 pm

Most, if not all of the companies in the Competitive Markets Coalition appear to be small electricity trading companies that don't like PJM's rules requiring members to have a certain net worth and credit background in order to trade in PJM markets on an equal footing with the biggest members like AEP.

As Keryn points out above, the points at issue are really private business concerns of these companies. As Keryn also points out, this controversy does reveal, once again, PJM's primary functions as a cartel.

The small member issues will become important as small renewable energy companies and community cooperatives grow within PJM. As often happens, this different fight will lay the ground work for important changes that must happen in PJM as electricity consumers start thinking and acting like producers.

Reply
JustMe
6/25/2011 12:40:21 am

Reply
JustMe
6/25/2011 12:42:13 am

The most important change that must happen at PJM is dissolution.

Reply
Frau
6/25/2011 04:14:56 am

Maybe we can get them a spot on Jerry Springer with Dr. Evil and Scott to solve their family issues.
And thanks for the song. Now it is stuck in my head.

Reply
Steak Holder link
6/25/2011 04:17:11 am

Pardon me...........could you pass the A-1?

Reply



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    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
    StopPATH Blog

    StopPATH Blog began as a forum for information and opinion about the PATH transmission project.  The PATH project was abandoned in 2012, however, this blog was not.

    StopPATH Blog continues to bring you energy policy news and opinion from a consumer's point of view.  If it's sometimes snarky and oftentimes irreverent, just remember that the truth isn't pretty.  People come here because they want the truth, instead of the usual dreadful lies this industry continues to tell itself.  If you keep reading, I'll keep writing.


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