Corporate America is never satisfied when there's a buck left on the table that could be in its own pocket instead.  That's why the corporations who stand to profit financially from building hundreds of billions of dollars of new high voltage transmission lines from coast-to-coast are constantly attempting to tinker with laws and regulations put in place to protect the consumers who fund new transmission.  No matter how many times their ambitious plans to preempt state authority with federal control are foiled, corporate America bounces right back like one of those inflatable punching clowns.

This time it's The BiPartisan Policy Center banging corporate America's greedy drum with a new report:  Capitalizing on the Evolving Power Sector: Policies for a Modern and Reliable U.S. Electric Grid.

The report is being pushed on the public by well-compensated industry spokespuppets Rick Boucher and Curt Hebert, who are joined by environmental patsy Allison Clements to recommend:

"Proposing an improved federal backstop siting authority for interstate transmission lines to replace the authority provided in EPAct 2005 – the authority is linked to transmission lines chosen through an Order 1000-compliant planning process, ensures states have a more significant role in determining the outcome of proposed transmission lines, and provides adequate protection of federal lands."

But here's what the Clueless "report" actually says:

"Congress should replace the existing backstop siting
authority in § 216 of the Federal Power Act with a
new, targeted backstop siting authority. In particular,
this new authority should provide that FERC may
grant a requested federal permit approving a
multistate HVDC or 765+ kV AC transmission project
within a state if: (1) the state siting authority (a) has denied the project without offering an alternative
route that is consistent with relevant state law, or
(b) has not issued a decision within 18 months
of receiving a completed application, or (c) has
insufficient authority to grant such an application;
and (2) the project has been approved by a state
siting authority in another state."

This isn't giving states a "more significant role in determining the outcome of proposed transmission lines," this is preemption of state authority in its entirety.  Under this proposal, states have only one choice -- issue a permit or have the federal government do it for them.  But this is nothing new.  Former FERC Commissioner Suedeen Kelly said it quite succinctly in her 2007 dissent:
 
"The authority to lawfully deny a permit is critically important to the States for ensuring that the interests of local communities and their citizens are protected. What the Commission does today is a significant inroad into traditional state transmission siting authority. It gives states two options: either issue a permit, or we’ll do it for them. Obviously this is no choice. This is preemption."

Notice also that the Clueless recommendation only includes bestowing FERC backstop authority over HVDC or 765kV AC transmission lines.  Why do you suppose that is?  It's because the "task force" was stacked with American Electric Power executives, and AEP is the only company who builds 765kV lines.  HVDC lines are favored by fake "renewable" transmission projects proposed by green shysters Clean Line Energy, whose "clean lines" will also carry fossil fueled electricity masquerading as "clean" energy.  Clueless "environmental" organizations like NRDC have taken a big, long, drink of Clean Line's kool aid and think that by assisting corporate America in preempting regulation in order to build a whole bunch of new transmission will usher in a 100% renewable energy future.  Not going to happen, so get out of bed with the devil.  How did Obama's "Rapid Response Transmission Team" to ramrod the building of "renewable" transmission lines work out for you environmental groups?  Aren't you all suing the National Park Service over its dirty decision to destroy the Delaware Water Gap National Recreation Area with a 500kV transmission line?  How many times are you cleaniacs going to get duped by a greedy, dishonest industry before you wise up?

And how about this recommendation featured in the Clueless report:

"FERC should issue policy guidance clarifying
that regional transmission expansion plans may
appropriately include – and provide cost allocation
for – projects with capacity that will not be utilized
immediately if such projects: 1) enable the efficient use
of scarce rights of way, or 2) serve location-constrained
generation, and the projects will provide regional
benefits (including transmission access for future
renewable development) over their lifetimes."

So, the Clueless think that consumers should finance an overbuilding of transmission, just in case there's a need for it later?  CONSUMERS CAN'T AFFORD THIS!  How about you all "enable the efficient use of" existing rights of way by rebuilding and increasing the capacity of existing transmission lines all within existing rights of way first before building new lines on new "scarce" rights of way?  And don't give me that "location constrained renewables" line either.  Why is there absolutely no mention of offshore wind in your Clueless report?  Why does your version of the wind map not include offshore resources?  Is that because development of offshore wind doesn't require the building of a whole bunch hugely profitable new transmission lines by corporate America?  Right.

The Clueless also refuse to examine a clue that's right under their noses.  We may not need ANY of this new transmission they're in such a hurry to permit and build.  In a 2012 "report" of its own, Failure to Act: The Economic Impact of Current Investment Trends in Electricity Infrastructure, the American Society of Civil Engineers said:

“Anticipated future changes regarding the feasibility and implementation of distributed generation and smart grid technologies also add uncertainty about what future infrastructure system will look like. As the  cost-effectiveness of small-scale generation equipment increases, there is a potential for more ‘distributed generation,’ with ‘microgrids’ that can reduce the need for future investment in large central generation plants and associated transmission lines serving them. As sophisticated 'smart grid' computer systems become more available to digitally monitor and instantaneously shift demand or reroute power (to offset equipment failures or other sudden supply and demand changes), there is also a potential for change in future needs for transmission and distribution investments.”

Or perhaps we should focus on the Clueless love for a bigger, more fragile grid to integrate huge quantities of unreliable, variable resources.  Bigger does NOT mean more reliable.

So, what do others think about the Clueless report?  The National Association of Regulatory Utility Commissioners (NARUC) issued a press release stating:

“NARUC strongly opposes the recommendations calling for the expansion of the federal government’s authority to site transmission facilities. The report recommends that Congress give federal regulators permission to overrule a legitimate State decision determining that a power line is unnecessary if a nearby State with different needs and resources says that it is. Essentially this policy would give one State de-facto siting authority over another, which is certainly against congressional intent. Moreover, where current law limits the Federal Energy Regulatory Commission’s backstop authority to power lines in so-called ‘National Interest Electricity Transmission Corridors,’ the report recommends greatly expanding FERC’s authority nationwide. Therefore, this recommendation abandons the existing law’s goal of improving the efficiency of the transmission network by reducing congestion in favor of policies that increase rates for retail customers who receive little or no benefits, without necessary and proper oversight by the States."

NARUC also stated that they do not endorse any of the recommendations of the Clueless report.  The real shocker here is that NARUC was included as a "contributing organization" to the report, but its advice and recommendations were completely disregarded by the industry and "environmental" sycophants who wrote the report.

NARUC failed to drink the kool aid and should be commended for standing up for the rights  and wallets of the consumers they represent, who are the ultimate financiers and supposed beneficiaries of all this proposed new transmission. 

NARUC says we don't need the Clueless recommendations.  State authority to site transmission projects is NOT broken and the states are the ONLY ones looking out for the interests of consumers.

PATH properties.... get yer PATH properties... in the market for some dirt-cheap but poorly maintained real estate, or maybe some completely useless land with a burned out trailer or falling down shack?  PATH's real estate agent can help you with that, and she "offers something extra!"  I can't imagine what that "something extra" might be, but I'm sorta frightened by the offer.

PATH went ahead and listed some of its property for sale, despite the Federal Energy Regulatory Commission's November 30, 2012 Order that set the disposal of property for hearing:

"Because PATH has not completed the sale and transfers of land and other assets, we cannot determine based on the record whether self-dealing or cross-subsidization will occur as a result of these future transfers to  affiliates, and whether the proposed prices for sales to third parties are reasonable. As part of the hearing and settlement proceedings, we therefore direct parties to consider the reasonableness of such transfers and sales, including whether future transfers and sales of real property should be reported in periodic reports that identify the parties, date and price of each transaction. Parties in the hearing and settlement proceedings may also consider whether the formula rate should be modified to include such information, which would allow review of the asset sales and transfers under the  formula rate annual update process."

So, how "reasonable" are PATH's "fair market value" sale prices compared to "fair market value" amounts PATH spent purchasing each property?

PATH purchased this property for $50,000 in April of 2010.  It's on sale today for only $9,000!

PATH purchased this property for $64,000 in April of 2009.  It's on sale today for only $12,000!

PATH purchased this property for $307,185 in March of 2009.  It's on sale today for only $229,900!

Let's add up the difference between PATH's purchase price and PATH's sale price, because that is the amount PATH wants YOU to pay for its little unnecessary and overly generous property buying spree:  $170,285!  Even if PATH sells these properties at list, that's how much of a loss PATH expects ratepayers to absorb for just these three properties.  And it's going to get worse, much worse.

Bargain basement prices for unneeded properties - get yer worthless PATH properties today - and if you find out what Tammy's "something extra" is, do let us know.

The transmission industry, safely ensconced in its self-congratulatory echo chamber dream world, continually perpetuates poor performance, execution mistakes, and bad ideas.  In the real world where the rest of us live, successful "public participation in transmission line siting" is based on successfully interacting with the public to convince them that a project is needed, and to maintain  effective communication with the public as a project proceeds through approvals.  It's all about what the public deems successful, since they are the ones who are "participating" in said project information sessions.  It really does no good for other deaf and blind transmission owners to judge whether their transmission-owning peer's transmission projects are successfully participating with the public.  This blind leading the blind self-contratulatory echo chamber reaches a pinnacle every year with EUCI's (that's Electric Utility Consultants, Inc., whose sole existence is derived from getting the utilities to participate in its continuing "education" seminars) Public Participation in Transmission Siting Conference.  During this conference, utility employees make presentations crowing about their "success" participating with the public, even when the reality is that said utility employees are piloting a rapidly sinking Titanic of a failed public relations program.  For example, PATH's PR laughing stocks presented this little gem just 6 short weeks before withdrawing project applications and giving up, after being thoroughly trounced by that "entrenched opposition":

LEVERAGING LESSONS LEARNED

Tom Holliday, Director of Communications Services, American Electric Power

Doug Colafella, Manager, External Communications, Allegheny Energy

American Electric Power and Allegheny Energy are applying best practices to help gain approvals for the Potomac-Appalachian Transmission Highline (PATH), a 765-kV project extending 275 miles through West Virginia, Virginia, and Maryland. Learn how the two companies are working together to apply successful strategies for grassroots outreach, community involvement, and public education while contending with project delays, entrenched opposition, and the economic downturn.

So, what are participants at EUCI's conference really learning?  How to congratulate each other for failure, apparently.  Yee-Hawwww!

This year's conference upped the fun factor by adding a special award to the festivities:
 
EUCI will debut the EUCI Excellence in Public Participation in Transmission Siting Award! The 2013 award will focus on the most engaging, creative, and useful websites. Websites serve as a foundation for sharing project information with the public. EUCI wants to recognize and share the industry's most engaging transmission line siting websites. Finalists will present at the conference and winners will be chosen by the conference attendees.

Wowzers!  It's almost like winning the lottery, huh?  In addition to this great honor, tell the audience what the winner will receive, Rod Roddy...

Rod Roddy:  Winners will receive:

Highlight of website and award announcement in EUCI Energize Weekly newsletter

Web banner recognition for winning website

Award Plaque for your office !!!

What do you get when you combine a bunch of self-congratulatory airheads taking nominations for their website award with two successful transmission opponents who never miss a chance to tell the industry the fearful truth?

Ta-Daaaaa!

We thought our entry would be immediately tossed in the cyber trash, after all, we didn't attempt to hide anything.  It was just a little laughter over a couple of beers.

Apparently there's dumb and then there's EUCI dumb.

I do have to hand it to them for running a "fair" contest and making sure all "entries" were judged inside the self-congratulatory transmission echo chamber by public relations shysters in denial:  a panel of industry experts to include RES Americas, PEPCO, American Transmission Company, Allegheny Energy, Southern California Edison, and The Wilderness Society.  Just a little FYI observation... some of the transmission project judging species are much dumber than others...

So, did we win?  Of course not!  EUCI and their transmission owner stable don't want to feature and award any "public participation" that actually got its hands dirty participating with the public (to stop an unnecessary transmission project).  Therefore, in the spirit of EUCI's self-congratulatory echo chamber, we hereby award ourselves the FIRST ANNUAL EFFECTIVE PUBLIC PARTICIPATION IN THE REAL WORLD TRANSMISSION PROJECT OPPOSITION WIN! Award.

It's just as valid and just as satisfying as any award from EUCI's echo chamber, and best of all, the industry stays safely separated from any real world truth so they can keep making the same "public participation" mistakes that doom transmission projects.

So, which websites won the "contest" and were judged "most engaging, creative and useful for the public?"  I can't speak to three of the nominees, but one of the websites nominated was Clean Line Energy's Rock Island Clean Line website.  Useful?  Creative?  The last time I checked, Clean Line was busy deleting comments from and banning "the public" from participating on their websites.  Not very "effective" participation with the public in my book.  RICL's opposition seems to be doing a better job here and here.  Maybe I'll make Block RICL its very own special little website ribbon to compete with RICL's... sort of a People's Choice Awards vs. The Oscars thing.  

Thanks for the laughs, EUCI, your organization plays a great straight man!  And thanks for sending "Allegheny Energy" our contest entry so that our little coal fella could have a panicked moment wondering if his peer judges were laughing at him (and yes, indeed they were!)  And thanks for making sure that none of that nasty ol' reality confronts any of your precious transmission owners and makes them question their bag of stale "public participation" best practices that are easily neutralized by reality-based opposition.  

Yesterday, the Commission granted rehearing on its previous order denying PATH the continued benefit of a .5% return on equity incentive for membership in PJM during the amortization period for recovery of abandoned plant.

So, what does this mean?  Not much.  It simply means PATH is hog-tied and can't proceed on appeal to the D.C. Circuit and waste even more of our money having a legal tantrum over .5% interest that it's not entitled to.

The Commission will take another look at its previous decision and decide whether or not to change its mind.  There's no time limit on how long the Commission can take to make its decision.  It could be years.  Meanwhile, PATH can shut up and sit down.

If the Commission had denied the request for rehearing, PATH would have been given the green light to appeal FERC's decision in federal court.  Now PATH can't proceed until the Commission reconsiders and issues another order on the issue.  The Commission can change its mind, or simply confirm its original decision.

Here's the issue:  In the Energy Policy Act of 2005, Congress instituted certain financial incentives to encourage investment in transmission for the purposes of benefiting consumers.  Congress tasked FERC with coming up with policy and awarding incentives.  One of the incentives Congress specifically mentioned was financial reward for a transmission builder who joined a regional transmission organization and turned control of its facilities over to the organization.  FERC put this into practice in the form of an additional .5% interest on each project that applied for it, if the owner joined or continued an existing membership in an RTO.  Therefore, a company with membership in an RTO could be awarded this incentive on each project it owned as long as it maintained its membership.

AEP and Allegheny (now FirstEnergy) set PATH up as a joint venture and created a bunch of single-purpose shell companies.  The parent companies did this because a "new" company produced tax and financial benefit and it could be awarded a higher incentive return on equity because this independent "start-up" company was taking a greater risk than it would if each established parent company owned its own portion of the project.  PATH tried to pretend it was an independent company whose stock just happened to be owned by its parents.  PATH chose this corporate structure because it benefited the parent companies.  Nobody forced PATH to do it.

Now that PATH's one and only project has been abandoned without being built, the Commission determined that the company will never have anything to turn over to an RTO, and there is no benefit to consumers from PATH's continued membership in PJM, and therefore denied continuation of this incentive.

PATH is arguing that the Commission is punishing it for its choice of business construct.  PATH says that its parent companies have other transmission projects that have been turned over to PJM, so therefore the parent company actions entitle PATH to the same benefit.  All of a sudden, PATH wants to be a part of its parent companies.  But wait... PATH separated itself from its parent companies when it benefited financially.  Now PATH wants to be included with its parent companies when it can financially benefit from that construct.  Can you smell the desperation?

PATH also complains that the Commission is being inconsistent because other transmission projects that have been abandoned managed to keep the RTO membership incentive, therefore PATH is entitled to do so as well.  PATH feels it should have been put on notice that it would lose this incentive if it abandoned the project.  *sniff, sniffle, whine*

Other transmission projects have kept this incentive because they aren't single-purpose entities and their companies will continue to exist and maintain membership in an RTO.  There is no point to PATH's continued membership in PJM because it doesn't own any transmission and will cease to exist as soon as the abandoned plant debt is paid off.

Despite a rule prohibiting answers to requests for rehearing, the Joint Consumer Advocates filed an answer supporting the Commission's original decision and arguing against continuation of this incentive.

The Commission's granting of rehearing won't affect the scheduled settlement conference coming up at the end of February, since that issue was never set for hearing but decided in the original Order.  However, parties will be aware that a reversal of the Order could grant PATH an additional .5% return at any time in the future and may keep that in mind while negotiating a settlement.  Happy now, PATH? :-)

In exchange for approving a permit allowing utilities PSEG and PPL to destroy the Delaware Water Gap National Recreation Area with their proposed Susquehanna Roseland transmission line, Department of the Interior Secretary Ken Salazar and the National Park Service extorted $66 million from the utilities.  The $66 million is to be placed in a fund administered by a private conservation organization, who is supposed to use the money to buy and preserve inferior land on the fringes of the park.

The utilities and the Park Service have been quite secretive about the private conservation organization, how the money will be used, and what properties are being scoped for purchase.

The Pocono Record has been investigating this secret, unholy alliance to come up with some answers for the public.

Conservationists try to short-circuit power line project in Del. Water Gap park

Conservation fund eyes 4 properties near Delaware Water Gap National Recreation Area

The private conservation organization who will administer this fund, while scooping off a hefty percentage for themselves, is corporate greenwasher The Conservation Fund, whose Director is compensated at the rate of nearly half a million dollars a year.

The Pocono Record has identified five parcels of land, out of many, to be purchased.  Why the secrecy?

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.

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.

This $66M "secret" mitigation fund is YOUR money.  Where's the required transparency in electric rates you are charged when amounts spent are mired in secrecy?  Why is no one holding the utility feet to the fire and utilizing existing transparency processes to dispel all this secrecy?

Continued secrecy will only build on public suspicion and contempt.  It's time for PSEG and PPL to come clean, before the public is forced to use due process to uncover these juicy secrets.

What are you trying to hide, PSEG & PPL?

Here's another ignorant blogger who insists "you’ll need a lot -- try 25,000 miles -- of new high voltage transmission lines" in order to cut carbon emissions. 

At an average cost of about $12M per mile to construct new transmission, that's a whopping $295 BILLION dollars worth of new capital investment in transmission.  And if all these projects end up over budget, as most do, it could be much, much more.  And we must also add yearly operations and maintenance costs, taxes, and incentive rates of return for these transmission lines to the cost, bringing the yearly additional cost to consumers to fund new "renewable" transmission to a whopping $62 BILLION.

Where did the blogger get such an outrageous idea to embrace new transmission without any consideration of the reality of its cost?  He drank the koolaid at a wind industry propaganda session put together by the "Americans for a Clean Energy Grid."  There are no real "Americans" in this astroturf front group posing as the widespread support of an independent uprising of disinterested people.  "Americans for a Clean Energy Grid" is composed entirely of companies that stand to profit from industrial-scale wind farms, the building of new transmission lines, or are environmental groups funded by private "foundations" that more closely resemble a Russian Matryoshka doll.  Inside the doll is another doll, and inside that doll is another doll, etc.  When you peel the layers of "initiatives" and "foundations" away, you're going to find self-interested corporate money.

The blogger is being played by one of the oldest tricks in the ol' propaganda arsenal, the one known as card stacking.  Real Americans are being fed a pack of lies, however it looks like some Americans aren't buying what this front group is selling, judging from the comments on the subject blog post.  One commenter goes into a long-winded explanation about how distributed generation is going to obviate most of this new transmission.  But, another commenter cuts right to the bald truth:

"In our country, attention is relentlessly kept on BIG systems because that's where BIG corporations make their BIG money, and that's where they want focus to remain. I have long wondered why environmental organizations have not taken this obvious issue on BIG time. Perhaps because there are no BIG donations behind that cause?"

Of course, she's right.  This article spells it out:

"A great deal of regulatory and political muscle stands behind modernizing the U.S. electricity grid. Unlike Entergy, many traditional utilities are getting deeper into the business.

For example, earnings from high voltage transmission climbed 41% at Northeast Utilities (NU) in the first nine months of 2012 and contributed 23 cents a share to the nine-month EPS of 66 cents. An enthusiastic Northeast Utilities CEO Thomas May told analysts at the third-quarter conference call, “Deregulation was something many of us in the industry fought… It is the best thing ever to happen to you, our shareholders, because it set off this [high voltage transmission] building boom.”

Retail utilities owning transmission lines, which must be available to competitors, potentially creates conflicts of interest and a regulatory thicket. ITC, as an independent transmission company with no retail business, doesn’t have that problem. It’s a pure play in a regulated, political popular industry."

But when the nesting dolls are taken apart to their smallest member, who will Americans find?

The fossil fuel industry, of course.

So, if we examine the dolls we have pulled apart here, we have Americans being fooled by industry hiding behind front groups funded by corporations who are being fooled by other corporations. 

Americans need to wake up, because that $62 BILLION electric bill will soon be in everyone's mailbox.

Note:  This post has been updated Jan. 22 to include even more bad news for FirstEnergy!

FirstEnergy may have intended its purchase of naming rights to a football stadium as a "regional branding opportunity [that] makes good business sense...," however the transaction will probably be written in the history books as a public relations fail of epic proportions instead.

Reaction has been swift and cutting.  There's been derision, anger, mockery and suspicion, but I have yet to find one public comment that says, "Wow!  Isn't that great?  Now I'm going to switch my service to FirstEnergy because the company's name on a football stadium means I will receive economical, reliable, electric service."  Nope, not one comment praising the deal anywhere.

Rather than excitement, the people want to know:

How much did this cost and is it going to find its way into my electric bill?

Despite FirstEnergy refusing to disclose details of the transaction, it didn't take long for the press to fish out that the deal cost $102 MILLION over 17 years -- that's $6M every year that FirstEnergy will pay to have its "brand" displayed all over the stadium so that sports commentators and fans alike can make sneering comments about the company.  This begs the question... Just how out of touch with the real world are FirstEnergy's executives that they wouldn't see this kind of reaction coming?  There may be only 274 other CEOs who think this is a great idea.  The rest of us?  Yeah, not so much.

FirstEnergy fails to understand that it differs from other corporations who have made similar deals because it will always be viewed by the public as providing service in a monopoly construct.  Any unnecessary frills will always be seen as excess passed to captive customers.

Nice going, knuckleheads.

Jan. 22:  Update!  Jefferies Downgrades FirstEnergy to Underperforms on Rating Agency Headwinds

"We are downgrading FirstEnergy to Underperform based on growing rating agency pressure to enhance the company's credit metrics and regulatory exposure in rate proceedings in West Virginia and New Jersey."

Perhaps FE should rethink their recent actions attempting to dump uncompetitive assets into WV's regulatory system and milk ratepayers in NJ.  But then again, that doesn't raise cash and improve the old balance sheet, does it.

But, back to FirstEnergy's public relations fail of epic proportions...

Some knucklehead thought it would be a good idea to give The Akron Beacon Journal an exclusive "behind the scenes" look at the Cleveland Browns naming-rights deal.  Was that supposed to help the public identify with FirstEnergy execs.?  If so, massive fail, again.

The article is so bad it makes FirstEnergy look like a bunch of extras from The Godfather.  Chatty Chuck (who raked in $4.7M in 2011) tries to be a "regular guy" by proving his humility:

“I do a lot of entertaining and a lot of politicking and a lot of community work. Not at Browns games. When I go there, I go as a fan,” he said. “But having said that, this was a business decision.”

And where does he do his "politicking?":

"Even now, when FirstEnergy has a suite at the stadium, Jones sits in seats outside."

Oh yeah, slummin' with the hoi polloi.  It's just too far beyond belief, especially when followed up with a little exercise in threatening/bribing the wait staff at the restaurant where the deal went down:

"Jones and Ross said there was a little damage control to do after that meeting, since it was pretty clear to the wait staff what the diners were talking about. Ross said at one point, a server came in to say that the chef was a huge Browns fan and wanted to come in to say hello. The diners declined.

“We actually thought the next day we could be talking to” the media after a leak, Jones said.

Said Ross: “I don’t know what happened. Somehow they didn’t call sports radio or the newspapers.”

Said Jones, “Let’s just say we figured out how to keep it under wraps.”

First of all, Chatty Chuck needs a little education:  NEVER, and I do mean NEVER, piss off the people who are preparing and handling your food.  Second, your condescending attitude toward restaurant staff is not endearing to the rest of us and actually showcases your arrogance.  Revolting.

Football stadiums aside, the article is also a frighteningly accurate picture of the art of the corporate deal.  This is how politicians get elected, regulatory cases are decided, and laws are "put in place," as our pal Michael Morris once phrased it.  It all happens out of view of the public, through wining and dining, persuading and dealing, and all done on your dime through the bill you must pay for a necessary service, like electricity.

Looks like FirstEnergy's public relations band-aid "tell all" confessional only added to the public derision they are currently facing.  Once again, nice going knuckleheads, and thanks for the delicious helping of schadenfreude!

"First Energy, why not cut consumers a break instead?"

In an escalation of hostilities today, electricity giants Utility Rampaging Pig Megacorp. (NYSE:  URP) and FirstUpyours (NYSE:  FU) filed competing claims of ownership of wind and sunshine resources worldwide with the U.S. Patent and Trademark Office (USPTO).

URP and FU have been locked in mortal combat over market share in the shrinking "traditional" generation market.  FU has stolen many of URP's retail customers but is now choking on the below-market prices it promised those that would switch providers.  URP, on the other hand (because there's always another hand), is having problems digesting the lump of designer coal it originally hoped to fob off on unsuspecting ratepayers in a neighboring state.  

At the same time, both companies are looking for creative ways to establish themselves as renewable energy players, in order to reassert control of generation resources and consumers' lives.

URP's argument in its filing is that 99% of the world's wind energy is generated by its own executives.  It attached photos of URP executives standing on a hillside and blowing their own horns as proof that they were the source of the wind.

FU's claim was even more novel.  The company argued that its executives are so evil they generate darkness and in order to allow the sun to shine they shut themselves in a secret underground bunker, smoking cigars and playing pinochle.   Therefore, they are solely responsible for allowing sunshine, thus controlling it.  And since "control is 90% of the law," FU argued, it owns all sunshine.

Reaction has been swift and furious from some unusual quarters.  The Albuquerque Hot Air Balloon Festival, for instance, immediately filed for an injunction in Federal Court arguing they should have grandfathered status because their festival began when wind and sunshine were free.  The National Kite Flyers' Association called on its members for a national day of rage, encouraging them to fly kites in front of both corporate headquarters.  "We'll untangle our lines later," said Hyram Puffnagle, President of the association.  "These companies are running roughshod over the very traditions that made America great."  

Even China has weighed in, calling for an emergency meeting of the U.N. Security Council.  Fo Bo Ho, China's ambassador, said that the only hope for dissipating the smog that is overcoming Beijing is the Chinese military plan to divert the jet stream over his country.  "These capitalist dog companies hope to achieve the world domination that their own government fails to secure," he said.

Electricity consumers are mystified.  "There was a song, 'The Moon Belongs to Everyone, the Best Things in Life are Free,' but I guess fresh air and a sunny day are now corporate assets," remarked Bubba Puffnagle (no relation) of Moosecud-on-the-Mississippi, Minn.

Representatives of URP and FU declined a request for comment.

The Atlantic Wind Connection announced the other day that it will proceed with the first stage of its plan for an undersea transmission backbone located 12 miles off the Atlantic Coast.  In addition to providing a super highway for offshore wind generation to reach the east coast population centers, AWC also offers additional transmission capacity to import cheaper generation into northern New Jersey, where rates are higher.  Addition of transmission capacity to import cheaper generation is the basis for this first leg of a project that is proposed to extend from northern New Jersey to southern Virginia.  Once completed in whole, AWC is intended to connect up to 7,000 MW of offshore wind, enough power to serve approximately 1.9 million households.

However, AWC has faced, and will continue to face, the caterwauling of incumbent generators and transmission owners and the stone face of the PJM cartel, who have been doing their best to kill the project.

AWC directly competed with PATH and MAPP and spent years sitting on the sidelines while the incumbent transmission owners behind these misguided attempts to increase transmission capacity to New Jersey wasted around a half billion dollars of electric ratepayer funding on their loser projects.

Now AWC is ready to roll up its sleeves and get started.  However, the PJM cartel is still behaving badly and doing its best to sideline the project.  In addition to having to face the hurdle of having AWC designated a required transmission upgrade in PJM's expansion plans, there's a whole lot of nonsense underway about who is going to pay for the project.  For years, PJM's incumbent transmission owners thought nothing of having their projects intended to import cheaper coal-fired generation to the east coast socialized throughout PJM's 13-state region.  Now that a company who's not a part of the incumbent club wants to socialize the cost of its project, the incumbents are making fools of themselves at FERC arguing about cost allocation.

Although it's really not that complicated, clueless blogger Matt Wald at the NY Times can't grasp transmission cost allocation issues.  He screws it up in this article, and then follows with a more confused "explanation" in this one.

Here's what Matt doesn't understand.  Historically there have been only two drivers that necessitated transmission expansion within PJM:  1)  Reliability, where a project is necessary for continued reliable operation of the grid; and 2) Economic, where a project is necessary to import cheaper generation to an area with high generation prices in order to lower prices.  Any projects meeting either (or both) criteria were included in the regional plan and the costs were socialized among all consumers in the region.  A new driver has now emerged -- individual state renewable power policy goals.  PJM has, so far, stood firm behind the states' insistence that renewable drivers become the financial responsibility of the state or states whose policies trigger them.  However, there's a proposal in the works that would define a multi-driver project cost allocation method to equitably assign costs.

The problem is that nobody can agree on an equitable split and many parties continue to build on previously flawed cost allocation practices known as "postage stamp."  Postage stamp cost allocation socializes the cost of a big transmission project to all consumers in the region under the premise that they all benefit equally from the project.  This is never true, but transmission owners, PJM and FERC have pretended it is by making up regional benefits that can't quite be calculated.

When applied to reliability projects, region-wide benefits are slippery simply because PJM is so large.  A reliability problem necessitating upgrades in Baltimore or Newark wouldn't really provide a benefit to consumers in Chicago, except that without it, if the PJM grid massively fails, cascading outages could possibly affect them.

However, when postage stamp is applied to economic projects, it completely fails.  An economic project lowers prices for a subset of regional customers, however all customers in the region pay to construct and operate it.  Adding insult to injury, when prices are lowered via new transmission lines it also increases electric prices at the other end of the line.  Solving economic problems with transmission simply levelizes prices so that all consumers pay a relatively similar price.  Now how is that just and reasonable for a larger region to pay for the privilege of increasing their prices to benefit only a smaller subset of the region?  It's not, and this argument has been dragging on in the courts and at FERC for years.

Now throw in renewable drivers.  Would it be just and reasonable for the larger region to pay to meet the renewable policies of a smaller subset of the region such as one state?  Of course not.  Policy in one state cannot legally become the financial responsibility of citizens of a different state.

The more broadly the cost of billion dollar transmission projects can be socialized, the better their chance of success.  While most consumers are so blissfully unaware of the steady increase in their electric rates caused by new transmission because it only amounts to a couple bucks, if the real beneficiaries of a transmission project had to pay for it by themselves, they would certainly notice because the cost would be astronomical.  In fact, the cost of the project would obviate any savings and perhaps cause state policy revisions prohibiting imported renewables that come with expensive transmission project price tags.  Therefore, those who stand to profit from exporting renewables are trying to hide the huge costs of their projects by socializing them among consumers who do not benefit.  This has led to ridiculous claims that projects driven solely by a need for imported renewables provide additional reliability and economic benefits for the entire region and therefore should be widely socialized.  But for the renewable driver, these projects would not exist, therefore any "benefits" are unnecessary, sort of like getting a bill for a Christmas fruitcake.  You didn't ask for it, you didn't want it, and now they're asking you to pay for it?

This is the cost allocation problem that Matt Wald doesn't understand.  AWC understands, and while testimony submitted with a recent FERC filing explains how the project will provide more than renewable energy benefits, it toes the line of believability.  This testimony was attached to a rather painful, long winded brief written mostly in FERCenese (thanks, Scott!) so I have spared you that part of it.  Just read the testimony -- same facts, less words... and even some pictures.

While a lot of what's in the testimony has validity, AWC just can't resist trying to sweeten the pot and make crap up.  I wish they'd just stick to the easy truth.  They almost had me, until I found this quote on their website: 

"The AWC project not only reduces the need to build many lower-capacity transmission lines, but relieves grid congestion in one of two National Interest Electric Transmission Corridors which were deemed to have significant transmission network congestion and need speedy creation of transmission capacity."

Psst... AWC, the National Interest Electric Transmission Corridors were vacated back in 2011.  Fix your stuff!

If AWC manages to get a seat at the big-boys' table at PJM and overcome the cost allocation issues, the U.S. may finally move ahead with offshore wind and create a vibrant renewable energy economy in nearby east cost states.  However, acceptance of AWC's cost socialization schemes could also provide a doorway for other renewable transmission projects proposing to build thousands of miles of new transmission lines coast-to-coast to export inferior wind resources from the midwest.  That proposal makes no sense, economically or physically.  And we simply cannot afford both.

Choices.  We all make them every single day.  Sometimes we make good choices, and then there are those other choices that we make which leave onlookers scratching their heads and saying, "What were you thinking?"

So, what were you thinking, FirstEnergy?  Last Friday, Goldman Sachs downgraded FirstEnergy.  This comes on the heels of concerns about cash flow from UBS Securities last month.

So, FirstEnergy cheers itself up with a little shopping spree to buy the naming rights to Cleveland Browns Stadium?  Who does that, FirstEnergy, honestly!!??!!!  Okay, so I'm a big fan of retail therapy myself and, in fact, my last "treatment" was actually necessitated by the actions of a FirstEnergy subsidiary and required a box of European chocolate cookies, a paperback novel and a new blazer to cure, but I had the cash to pay for it all.

FirstEnergy continues to throw its money away on stupid stuff and make bad choices.  Where does FirstEnergy think its cash is going to come from?  From the sale of its uncompetitive coal plants into the West Virginia regulatory system?  I wouldn't bet on it.  How about from Tony's "transmission spend?"  No, not there either.  Maybe they can make it up by stealing all AEP's Ohio customers?  Not with those margins.  Perhaps they can raise some cash by killing AEP's Ohio solar farm deal and hundreds of jobs for veterans?  Oh, wait, that's just spite, not a source of cash for FirstEnergy.

I know!!!  Maybe FirstEnergy could sell one of its subsidiaries after milking it for every last penny!  Mon Power and Potomac Edison could be put up for sale in order to raise much needed cash to pay for stadiums, cigars, and state regulatory commissioners.  Inflation, you know, prices are going up for everything these days.

But take comfort, little consumer.  The Plain Dealer reminds:

"Whatever FirstEnergy is paying for the naming rights, by law the company cannot pass that cost on to its customers by increasing rates. FirstEnergy's delivery rates are determined by the the Public Utilities Commission of Ohio and reflect what it is spending on wires, transformers and the like, not what it spends on advertising or lobbying. The price of the electricity itself is determined by auctions and then reviewed by the state."

Ha ha ha ha ha.  Apparently The Plain Dealer hasn't seen this pile of discovery responses sitting on my desk.  Laws are only as good as the folks who enforce them, and certain companies cheat when they think nobody is watching.

Where's my box of cookies?