Five citizens from West Virginia and Maryland attended PATH's 2011 PTRR meeting this morning in DC, while several more attended via conference call from all three states.
Attending from their side were PATH attorneys Randy Palmer and Monique Kennedy, Milo Pokrajac from PATH's Regulatory Finance something or other, an attorney from Pillsbury Winthrop (where the meeting was held) and Dennis somebody-or-other from AEP's Ratemaking something. Yeah, I was paying attention ;-)
On the phone, in addition to citizens, were some AEP people, a guy from Dominion Power, a guy from Old Dominion Electric Cooperative and Anne Johnson and Gary Alexander from Maryland's Office of People's Counsel.
Here's a link to what PATH presented, in case you're into that stuff. When asked what the $36.9M revenue requirement would cost the "average" (1,000kwh per month) Allegheny Power customer in West Virginia, Dennis whats-his-name came up with the figure of about 5 cents per month. Doesn't sound like much -- but they don't even have proper applications in 2 of the 3 states yet, much less a permit or anything constructed!
The sound system in the room didn't work, so we ended up with Randy playing Jerry Springer walking around the room with the lone working microphone. When I think about how much this meeting cost the ratepayers, the least we could have gotten was a working sound system. Is that too much to ask?
First question came from WV's Patience Wait who pointed out a serious flaw in the protocol whereby the PTRR's Attachment 4 references a FERC Form 1 that doesn't exist. Watching them dance around this was fun, but not a one of them thought it should be corrected. This was related to Randy's Resentful Rule #1, "Participants may ask questions and seek information regarding the 2011 PTRR. To the extent that the PATH Companies’ participants do not have the information available during the meeting to answer a question or information request posed during the meeting, participants may submit written information requests pursuant to the PATH formula rate protocols set forth in Attachment H-19B of the PJM Tariff." The best part about this is that Randy was notified in advance that this question would be asked. So he made up the rule and purposely didn't bring it. Not to worry, I'll get the information eventually, although I should have had it before the meeting, except I got out-lawyered by a lawyer. I hope it strokes his ego just right, because it didn't affect mine at all.
WV's Steven Smith next made Milo explain the Unamortized Regulatory Asset (which is all their costs that were incurred prior to receiving their ability to recover costs as incurred from FERC), Accumulated Deferred Income Taxes and Working Capital. I'm not going to explain all that here. Do you really want to know? Probably not.
WV's Dan Lutz asked a question that they really didn't answer to his satisfaction.
Next I asked them why all the advertising for next year was placed into the "Safety, Education, Siting and Outreach" category when the advertising didn't even exist yet. It's because all the ads they do are "educational", don't you know? I don't know about you, but I never feel "educated" after coming across a PATH ad -- I feel more like going to take a shower. Here's the real reason: because that's the only kind of advertising that the ratepayers are on the hook for! God forbid they would have to pay for their own propaganda, huh? I was also told that the definition was in FERC's Uniform System of Accounts (it's not) and then Monique tried to tell me that the definition is somehow sprinkled around FERC's case law and that I should call them. Nothing I was saying was registering, but at that moment WV's Ali Haverty jumped in over the phone and informed Monique that she had already called FERC and been told that advertising should not be placed directly into SESO without a determination of its nature being made first and that to do so "raised a red flag". Monique made a face and tried to look skeptical.
And while we're on this subject, the body language and expressions were an exquisite pleasure! Almost made it worth the commute to DC to witness it.
I can't remember how it started, but at one point Gary Alexander started ranting at Randy about how he should send me the H-19B protocols so I could request further information, and he was reluctant to relinquish his soapbox, which was obviously stomping on Randy's main nerve before he could manage to get a word in edgewise to tell Gary that both Ali and I had already been availing ourselves of H-19B's protocol!
I believe it was Maryland's Esther Brinkmann who brought up the expenses of a lobbyist that showed up in BOTH PATH's Outside Services and Advertising accounts in 2009. Monique was very proud of herself to announce that they had noticed and corrected it and it was only around $4,000. Sorry, Monique, but it actually totaled $11,334.00 and you only noticed it because of our discovery requests. If we weren't all over you like stinkbugs looking for a place to hibernate, the ratepayers would still be paying for this expense that's not allowed. Monique claimed it was just an error, and those happen in accounting all the time. At PATH, that's the truth -- they happen all the time and result in millions of dollars of expense annually put upon the ratepayers that should not be allowed under FERC's US of A. Here's an idea -- why doesn't Monique find all the rest of PATH's "errors" and save me the trouble of taking this to formal challenge before FERC. Please? I've never seen such a screwed up mess. I'd almost be embarrassed for PATH, if all the "errors" weren't sticking it to the ratepayers and costing them money. To top it all off, they claimed that these expenses are audited by both internal and independent auditors (Deloitte and Touche). Really??
Moving right along, I posed the following question: Since PATH was originally proposed, its permitting process has been delayed three years, which is entirely PATH's fault. How much extra has this delay cost the ratepayers?
Randy had to take offense and state that it wasn't PATH's fault. Milo then answered that it has cost the ratepayers three years worth of O & M, taxes, return on rate base, etc. Monique then had to repeat that it wasn't PATH's fault. Ali Haverty took exception to that and reminded them that every delay in the case has been at PATH's request.
I also asked Milo about PATH's $2.1B price tag. $2.1B is the cost of PATH's physical components (towers, wire, etc.) and the land it's going to sit on. That's it. In actuality, the ratepayers are also on the hook for O & M, pre-construction costs (that regulatory asset mentioned earlier), taxes, return (PATH's hefty profit), and every other expense imaginable associated with the project. Milo agreed that this was correct. Conclusion: The true cost to the ratepayers will be staggering! We can't afford PATH!
Great meeting -- we should do this more often! Well, maybe not. Getting up at 4 a.m. to commute into the city is a bad habit that I gave up many years ago. Tomorrow morning I'm going to punch the alarm and roll over.
Attending from their side were PATH attorneys Randy Palmer and Monique Kennedy, Milo Pokrajac from PATH's Regulatory Finance something or other, an attorney from Pillsbury Winthrop (where the meeting was held) and Dennis somebody-or-other from AEP's Ratemaking something. Yeah, I was paying attention ;-)
On the phone, in addition to citizens, were some AEP people, a guy from Dominion Power, a guy from Old Dominion Electric Cooperative and Anne Johnson and Gary Alexander from Maryland's Office of People's Counsel.
Here's a link to what PATH presented, in case you're into that stuff. When asked what the $36.9M revenue requirement would cost the "average" (1,000kwh per month) Allegheny Power customer in West Virginia, Dennis whats-his-name came up with the figure of about 5 cents per month. Doesn't sound like much -- but they don't even have proper applications in 2 of the 3 states yet, much less a permit or anything constructed!
The sound system in the room didn't work, so we ended up with Randy playing Jerry Springer walking around the room with the lone working microphone. When I think about how much this meeting cost the ratepayers, the least we could have gotten was a working sound system. Is that too much to ask?
First question came from WV's Patience Wait who pointed out a serious flaw in the protocol whereby the PTRR's Attachment 4 references a FERC Form 1 that doesn't exist. Watching them dance around this was fun, but not a one of them thought it should be corrected. This was related to Randy's Resentful Rule #1, "Participants may ask questions and seek information regarding the 2011 PTRR. To the extent that the PATH Companies’ participants do not have the information available during the meeting to answer a question or information request posed during the meeting, participants may submit written information requests pursuant to the PATH formula rate protocols set forth in Attachment H-19B of the PJM Tariff." The best part about this is that Randy was notified in advance that this question would be asked. So he made up the rule and purposely didn't bring it. Not to worry, I'll get the information eventually, although I should have had it before the meeting, except I got out-lawyered by a lawyer. I hope it strokes his ego just right, because it didn't affect mine at all.
WV's Steven Smith next made Milo explain the Unamortized Regulatory Asset (which is all their costs that were incurred prior to receiving their ability to recover costs as incurred from FERC), Accumulated Deferred Income Taxes and Working Capital. I'm not going to explain all that here. Do you really want to know? Probably not.
WV's Dan Lutz asked a question that they really didn't answer to his satisfaction.
Next I asked them why all the advertising for next year was placed into the "Safety, Education, Siting and Outreach" category when the advertising didn't even exist yet. It's because all the ads they do are "educational", don't you know? I don't know about you, but I never feel "educated" after coming across a PATH ad -- I feel more like going to take a shower. Here's the real reason: because that's the only kind of advertising that the ratepayers are on the hook for! God forbid they would have to pay for their own propaganda, huh? I was also told that the definition was in FERC's Uniform System of Accounts (it's not) and then Monique tried to tell me that the definition is somehow sprinkled around FERC's case law and that I should call them. Nothing I was saying was registering, but at that moment WV's Ali Haverty jumped in over the phone and informed Monique that she had already called FERC and been told that advertising should not be placed directly into SESO without a determination of its nature being made first and that to do so "raised a red flag". Monique made a face and tried to look skeptical.
And while we're on this subject, the body language and expressions were an exquisite pleasure! Almost made it worth the commute to DC to witness it.
I can't remember how it started, but at one point Gary Alexander started ranting at Randy about how he should send me the H-19B protocols so I could request further information, and he was reluctant to relinquish his soapbox, which was obviously stomping on Randy's main nerve before he could manage to get a word in edgewise to tell Gary that both Ali and I had already been availing ourselves of H-19B's protocol!
I believe it was Maryland's Esther Brinkmann who brought up the expenses of a lobbyist that showed up in BOTH PATH's Outside Services and Advertising accounts in 2009. Monique was very proud of herself to announce that they had noticed and corrected it and it was only around $4,000. Sorry, Monique, but it actually totaled $11,334.00 and you only noticed it because of our discovery requests. If we weren't all over you like stinkbugs looking for a place to hibernate, the ratepayers would still be paying for this expense that's not allowed. Monique claimed it was just an error, and those happen in accounting all the time. At PATH, that's the truth -- they happen all the time and result in millions of dollars of expense annually put upon the ratepayers that should not be allowed under FERC's US of A. Here's an idea -- why doesn't Monique find all the rest of PATH's "errors" and save me the trouble of taking this to formal challenge before FERC. Please? I've never seen such a screwed up mess. I'd almost be embarrassed for PATH, if all the "errors" weren't sticking it to the ratepayers and costing them money. To top it all off, they claimed that these expenses are audited by both internal and independent auditors (Deloitte and Touche). Really??
Moving right along, I posed the following question: Since PATH was originally proposed, its permitting process has been delayed three years, which is entirely PATH's fault. How much extra has this delay cost the ratepayers?
Randy had to take offense and state that it wasn't PATH's fault. Milo then answered that it has cost the ratepayers three years worth of O & M, taxes, return on rate base, etc. Monique then had to repeat that it wasn't PATH's fault. Ali Haverty took exception to that and reminded them that every delay in the case has been at PATH's request.
I also asked Milo about PATH's $2.1B price tag. $2.1B is the cost of PATH's physical components (towers, wire, etc.) and the land it's going to sit on. That's it. In actuality, the ratepayers are also on the hook for O & M, pre-construction costs (that regulatory asset mentioned earlier), taxes, return (PATH's hefty profit), and every other expense imaginable associated with the project. Milo agreed that this was correct. Conclusion: The true cost to the ratepayers will be staggering! We can't afford PATH!
Great meeting -- we should do this more often! Well, maybe not. Getting up at 4 a.m. to commute into the city is a bad habit that I gave up many years ago. Tomorrow morning I'm going to punch the alarm and roll over.
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