Is it time again already for the Allegheny Energy Earnings Call bag-o-fun? Yes, indeed! All quotes from the Q2 2010 Allegheny Energy Earnings Call If you're unfamiliar with the earnings call, you're in for a treat! This is where the power companies (in this case, Allegheny) try to sell themselves to their investors. Everything is always superb! Money coming in faster than they can count! Every project going according to plan and every plan on schedule! Read one to see the way these guys talk so freely out of the other side of their mouth to a different audience. If PATH wasn't a money-maker, would it even be worth mention in these calls? Of course not!!
But, here's the $2.1 billion dollar question -- are these investors stupid enough to believe the lies they are told? Of course not! And that, ladies and gentlemen, is where the humor comes in!
First, let's have a question from Daniele Seitz – Dudack Research Just a quick one. The PATH transmission line when do you anticipate construction to start and major expenditures would start?
Paul Evanson
Well, we just got the confirmation from PJM that June 1, 2015 is the date that they want it in service, in fact, no later than June 1, 2015. So, we have really focused a lot now on our filings or state filings.
Daniele Seitz – Dudack Research
So you don’t anticipate much expenditures for the near term? It will start in a year or two?
Paul Evanson
No. There will be some, and I think we have some of that spending laid out I believe in the…
Kirk Oliver
If you look at slide number 40, we have it laid out. I think we’re looking at, Daniele, about $40 million or $50 million this year just to give you an idea.
Paul Evanson
Yes, recently the Roseland line delayed because of the federal sighting, but I can tell you we’ve been very focused and diligent on that right from the beginning, back when the project first came up and we’ve been extremely sensitive to it. It’s very important in terms of sighting and we have it down to like there’s only 2.5 miles within federal boundaries within several boundaries within 276 miles on the entire project, and we’ve started that process back two years ago. So we think that our federal review is on track and shouldn’t cause any delay in meeting that June 1, 2015 date.
Do you think that Danielle already knows exactly when PATH's "need by" date is? Of course she does. She's waiting for Evanson to tell her about any anticipated delays or cost issues. However, everything in Paul's world is going perfectly, despite the real truth that the PATH project is floundering badly and lately looking more like a project being shepherded through approvals by The Three Stooges. It's like attending one of those glitzy-fake cocktail parties with all "the beautiful people". In addition, I just can't get the image out of my mind of this in cartoon form, with Mr. Burns playing Evanson and Kirk Oliver as the eternal toadie, Smithers. When Mr. Burns gets stymied and even Smithers can't feed him anything positive to say, he quite jaggedly changes the subject and begins telling Danielle a fairy tale about PATH's performance on the required Environmental Impact Statement Application (which won't be completed until the fall of 2012, btw). I wouldn't call what happened several weeks ago in WV, VA & MD "focused and diligent". Why doesn't Paul tell her that hundreds of citizens showed up in person (none of them in favor of PATH) and many hundreds or thousands more have submitted their comments in writing? It would probably be akin to dropping a turd in the punch bowl to admit that PATH was caught and exposed for attempting to intimidate citizens at a federal public meeting. In fact, their performance was so bad, it may have screwed the whole thing up beyond repair. Don't worry, I'm sure Danielle Seitz of Dudack Research is more than capable of finding these things out on her own. Why else does she consistently ask these PATH questions every time? Smart Girl! Danielle knows...
Read more after the break
But, here's the $2.1 billion dollar question -- are these investors stupid enough to believe the lies they are told? Of course not! And that, ladies and gentlemen, is where the humor comes in!
First, let's have a question from Daniele Seitz – Dudack Research Just a quick one. The PATH transmission line when do you anticipate construction to start and major expenditures would start?
Paul Evanson
Well, we just got the confirmation from PJM that June 1, 2015 is the date that they want it in service, in fact, no later than June 1, 2015. So, we have really focused a lot now on our filings or state filings.
Daniele Seitz – Dudack Research
So you don’t anticipate much expenditures for the near term? It will start in a year or two?
Paul Evanson
No. There will be some, and I think we have some of that spending laid out I believe in the…
Kirk Oliver
If you look at slide number 40, we have it laid out. I think we’re looking at, Daniele, about $40 million or $50 million this year just to give you an idea.
Paul Evanson
Yes, recently the Roseland line delayed because of the federal sighting, but I can tell you we’ve been very focused and diligent on that right from the beginning, back when the project first came up and we’ve been extremely sensitive to it. It’s very important in terms of sighting and we have it down to like there’s only 2.5 miles within federal boundaries within several boundaries within 276 miles on the entire project, and we’ve started that process back two years ago. So we think that our federal review is on track and shouldn’t cause any delay in meeting that June 1, 2015 date.
Do you think that Danielle already knows exactly when PATH's "need by" date is? Of course she does. She's waiting for Evanson to tell her about any anticipated delays or cost issues. However, everything in Paul's world is going perfectly, despite the real truth that the PATH project is floundering badly and lately looking more like a project being shepherded through approvals by The Three Stooges. It's like attending one of those glitzy-fake cocktail parties with all "the beautiful people". In addition, I just can't get the image out of my mind of this in cartoon form, with Mr. Burns playing Evanson and Kirk Oliver as the eternal toadie, Smithers. When Mr. Burns gets stymied and even Smithers can't feed him anything positive to say, he quite jaggedly changes the subject and begins telling Danielle a fairy tale about PATH's performance on the required Environmental Impact Statement Application (which won't be completed until the fall of 2012, btw). I wouldn't call what happened several weeks ago in WV, VA & MD "focused and diligent". Why doesn't Paul tell her that hundreds of citizens showed up in person (none of them in favor of PATH) and many hundreds or thousands more have submitted their comments in writing? It would probably be akin to dropping a turd in the punch bowl to admit that PATH was caught and exposed for attempting to intimidate citizens at a federal public meeting. In fact, their performance was so bad, it may have screwed the whole thing up beyond repair. Don't worry, I'm sure Danielle Seitz of Dudack Research is more than capable of finding these things out on her own. Why else does she consistently ask these PATH questions every time? Smart Girl! Danielle knows...
Read more after the break
Once Danielle opens the door, another question sneaks in before Smithers can make the cutting motion to the operator to end the call. This next one comes from Edward Heyn – Catapult Just a follow-up on some of Daniele’s questions about PATH. Another thing that we had seen, I guess, about a month ago, was that Dominion had, I guess, not a competing line, but a line that went to address some of the same issues that PATH did and that showed up on an RTEP presentation. I was wondering if you could just give some commentary on do you see that as a threat to the PATH line and if so, when would decisions be made on that?
Mr. Burns slumps over in his chair when his brain shortcircuits and Smithers dashes into action on the pedal-powered brain wave generator behind his chair. As Mr. Burns reanimates, Smithers pedals madly and punches the button labeled "Make something up".
Paul Evanson
Yes, I don’t see it as a threat to the PATH line at all myself. I mean PJM and their RTEP has evaluated a whole series of possible lines and one was a proposal that Dominion had some time ago and which they rated those and PATH, clearly, came out number one meeting all the needs going forward for an extended period. Dominion has made now some changes to what they have re-proposed.
So the PJM RTEP is looking at it, but it is really focused on one line only. This is Mt. Storm to Doubs line, which is a rebuild of an existing line. So it’s not very easy and simple to do. We have to take out the line at certain periods, put it back. It solves one issue.
I think PATH is certainly the more robust long-term solution creating an entirely additional high voltage corridor that will help power flow throughout the whole system providing capacity for the whole system. So we’re going forward full speed ahead with PATH, and PJM, we’ll look at that one. It might be a nice supplemental one, but to me it’s really not a threat and the PJM hasn’t even decided what to do with that particular line even though Dominion makes some comments perhaps suggesting something otherwise.
Thankfully, Smithers finally gets the attention of the Operator, who has been busy painting her toe nails and tweeting about Itchy and Scratchy over in the corner, by throwing one of Mr. Burn's slippers at her.
Operator
Ladies and gentlemen, this concludes the question-and-answer session for today’s conference.
Edward Heyn knows all about Dominion's proposal already. He knows Dominion's proposal includes four alternatives with a staged multi-year construction schedule that can be phased in as needed. Dominion's 'rebuild of an existing line' will increase it's thermal capacity 65% and the new TrAIL line will make it possible to take this line out of service long enough for the rebuild without problems.
Okay, so Paul doesn't think that's a threat. How about this other PATH alternative, the Liberty Line? Maybe Edward knows the PATH alternatives are coming out of the woodwork fast and furious now because everyone is beginning to realize that PATH is headed nowhere (except Mr. Burns). Even PJM seems to be entertaining the idea of abandoning it.
Of course Edward Heyn of Catapult Capital knows there are viable, cheaper alternatives to PATH. He's probably sitting in on the Earnings Calls of their companies next week and will be getting the same wash, wax and blowdry about how their projects are more "robust" and therefore more worthy of capital investment.
Ah, what silly games we play! My advice -- invest the capital in Simpsons collectibles. They never lie to you.
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