After FirstEnergy recently claimed that AEP "wants a billion dollar bailout" in their just plain ol' annoying amateur-hour commercials, AEP has upped the ante by claiming that FirstEnergy "wants a 7 billion dollar bailout."  What's next?  Will FirstEnergy claim that AEP wants a 14 billion dollar bailout and raise the bet in this silly game?

Who cares?  AEP gets bonus points for introducing the dreaded school lunch ladies to the fray (with a snapping glove for an extra shot of horror), and coming up with a better version of FirstEnergy's brain-dead message and using it to confuse people.  AEP = creative win!

Oh, but wait... FirstEnergy fires back with a placed editorial in their local paper whining about AEP's kickin' commercials.  Yes, we get it, AEP is now using your message against you, FE.  Wahhhh!!!  C'mon FE, you buncha wimps, we want to see some creative commercials.... get busy!

Update:  It appears FirstEnergy finally took a lesson!  See their newest commercial here.

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Yesterday, attorneys for environmental groups, along with attorneys for the utilities and the BPU, presented arguments before a New Jersey Court of Appeals on the BPU's approval of the Susquehanna-Roseland transmission project.  The Court now has to decide whether to let the BPU's decision stand, or remand the case back to the BPU for further consideration or a whole new hearing.

I wonder what the BPU would do with the S-R line if it came back under their jurisdiction at this point in time?  I'm guessing it could get pretty interesting!

The article says that the arguments centered on whether S-R is still needed in light of lowered demand. 

"But neither PJM nor the BPU can rely on future events, attorney Marc Lasky told the judges in his arguments on behalf of PSE&G.

"PJM determined whether there was a need for some project to address reliability issues," he told the panel. "It was not PSE&G which decided on its own Roseland-Susquehanna was needed."

He said neither the regional operator nor the utility can "rely on wishes and hope. Does one put the reliability of the entire power grid at risk by wishes and hopes?"

PJM uses "wishes and hopes" to predict need for projects like S-R in the future, and how much of PJM's
"wishes and hopes" RTEP is based on old (or manufactured) data?  Would a new, honest evaluation show that other cheaper, faster solutions to any remaining violations may now be a more viable alternative to an increasingly expensive transmission over-build that relies on Project Mountaineer's 2005 "wishes and hopes" to increase the import of Ohio Valley coal-fired electric generation to the east coast by 5,000 MW?  The economic scenario upon which Project Mountaineer relied no longer exists.  Coal-fired generation is no longer "cheaper."  Are electric consumers in the PJM region truly being served by PJM's transmission planning process here?  I'm thinking not.

PSE&G probably thinks their project is "too big to fail" at this point in time.  After all, they have sprinkled over $70M of your money around to various groups and entities in order to silence any opposition to their project and grease certain strategic wheels. 

Here's a list of the publicly admitted "financial inducements" the utilities have agreed to pay to date:

$40M to The Nature Conservancy to perform "mitigation" in exchange for approval by the National Park Service of the destruction of The Delaware Water Gap National Recreation Area and The Appalachian Trail.

$20M to the NJ Highlands Council in exchange for dropping their opposition to S-R.

A total somewhere in the neighborhood of $4M to various New Jersey towns for "mitigation" in exchange for the towns dropping their opposition to S-R.

$1.5M to the Montville Board of Education for "mitigation" of S-R's EMF on a school.

$1M to the Fredon School for "mitigation" of EMF at the school.

An "undisclosed amount" to the Saw Creek community in Pennsylvania in exchange for dropping their opposition to the project.

An unknown amount for strategic property purchases and other expenditures (estimated in the millions).

Totaling up just the known amounts, the utilities have already spent around $70M of their project's estimated $1B cost.  How much did the utilities budget for these kinds of "financial inducements" in their cost estimates?  When a cost estimate for S-R that includes this $70M of "inducements" is compared to other other alternatives, is S-R still the most cost effective solution?  What alternatives were even considered in the first place?

The cost of the S-R project, including all these "inducements," will be repaid to the utilities, along with a 12.9% yearly return, by the 60 million electric consumers in the 13-state PJM region.  The press persists in wrongly claiming that the utilities are paying these "inducements."  They're not.  The utility is merely "loaning" you the money for "your" transmission project now, and and will be well paid by you for doing so.  And the more they spend, the more they make!

But now, a court stands in their way.  They wouldn't be so bold as to try to "induce" a court, now would they?  I wonder how much something like that would cost?  Can someone contact John Grisham and let him know that we may have the plot of his next novel forming here?

The more new transmission lines we rush to build, the more interconnected, and therefore unstable, the grid becomes.  Just a little FERC-logic for this Thursday morning (hey, if they can do it, so can I!)

FERC & NERC released their report on the cause of the Sept. 2011 SoCal blackout the other day.  The report found that the blackout was caused by operator error and lack of planning.  It had NOTHING to do with the age or number of high voltage transmission lines.  That comes as no surprise to us, however it may come as a big surprise to industry, who tried to use the blackout as justification for the building of new transmission lines.

Building new transmission lines diverts available utility capital from the existing system upgrades and maintenance that will prevent future blackouts.  Because of federal rate incentives, new transmission has become a profit center for investor owned utilities.  They can earn more on the same dollar when it is invested in a new line than they can by investing that same dollar in performing maintenance and/or improvement to the existing transmission grid.  Investor greed (and the fact that IOU decisions are profit-driven) has made our grid unstable and subject to widespread blackouts.  The industry wants you to believe that we need to build more transmission to stabilize the grid because that meme garners more profits.  The building of new transmission projects, while allowing our existing grid to crumble and fail, is like cutting a hole and installing a brand new window right next to a broken one, instead of simply repairing the window by replacing the broken pane.  Which repair do you think is more expensive?  FERC & NERC proved this with their investigation and report/recommendations.  They found:

"The September 8, 2011, event showed that the system was not being operated in a secure N-1 state. This failure stemmed primarily from weaknesses in two broad areas—operations planning and real-time situational awareness—which, if done properly, would have allowed system operators to proactively operate the system in a secure N-1 state during normal system conditions and to restore the system to a secure N-1 state as soon as possible, but no longer than 30 minutes."

FERC and NERC also compared the 2011 blackout to the 2003 blackout and determined that they were of vastly similar fault:

"Although the August 2003 and September 2011 blackouts were triggered by different initiating events—tree touches in 2003 compared to a switching error in 2011—both blackouts had common underlying causes. First, affected entities in both events did not conduct adequate long-term and operations planning studies necessary to understand vulnerabilities on their systems. Second, affected entities in both events had inadequate situational awareness leading up to and during the disturbances. In addition to these two underlying causes, both events were exacerbated by protection system relays that tripped facilities without allowing operators sufficient time to take mitigating measures. These similarities are highlighted below, with excerpts from both reports to illustrate specific comparisons."

However, even FERC has been guilty of using the 2003 blackout as a driver for new transmission projects.  As you can see, it just isn't logical.  So, the next time you see some industry shyster or coal-fired caveman use blackouts as proof of the need for new transmission lines, feel free to reference FERC & NERC's report... and use the broken window analogy. 

And now it's time for the entertainment section of this blog, currently featuring the corporate dogfight going on in Ohio between American Electric Power and FirstEnergy.  In our latest entertaining episode, we find the champion, AEP, grinning wickedly from their lemonade stand, while the challenger, FirstEnergy glares cluelessly from the opposite corner.

AEP has released a follow-up to their untruthful, but very entertaining, lemonade stand commercial.  The new commercial uses a game of dodge ball to paint FirstEnergy as a bunch of unfair bulllies beating up on poor, wimpy children.  AEP has also stepped up their game by petitioning to intervene in FirstEnergy's Ohio rate case, in order to become as much of a legal pest to FE as FE has been to AEP in all of AEP's recent rate cases. 

FirstEnergy attempted to make some improvements  to their sickly counter campaign.  They tried to come up with a memorable character/image that consumers could relate to that would give their campaign a boost.  In their two new TV commercials here and here, FirstEnergy bets the farm on a couple of annoying, cheezy, bad actors who are pretending (too hard) to be angry at AEP for "taking away their right to shop."  Apparently there really wasn't a winner to be found between Li'l CoalFella's molars, just a couple of chewed up landowners and ratepayers he has neglected to properly (and privately!) floss out since the PATH failure.  Perhaps some of the other FE flacks might find something in their own dental work that doesn't just annoy the living spit out of people.  It's worth a pick or two, because FE's current ad campaign is a big loser.

FirstEnergy should take a gander at the creativity and simplicity of AEP's messages and website.  It's simple, memorable, and although it isn't exactly humorous, it's creative enough to make people watch the ads, instead of just being annoyed by FE's whiny monologues, which make a person want to change the channel!

There's way too much junk on FE's website, and still no clear message.  AEP isn't taking away a "right to shop," they're just making it less profitable for FE when shopping occurs.  If FE wants to run an effective counter-campaign, they need to answer AEP's message, not create some other confused and angry message.

What FE needs in their campaign is a little humor, such as we previously suggested, by having the little lemonade waif cross the street and demand that Mr. First Energy suit pay up for selling on "her" corner.  To demonstrate the power of humor in effective messaging, and inspired by a chilled six-pack of Raging Bitch Ale, here are a few ideas Patience and I came up with:

1. Spark some retro satire!  Portray the AEP bigwigs as downtrodden, homeless panhandlers lined up on a busy city street (perhaps LittleDrummerBoy can play for spare change!) Suddenly, the little lemonade girl walks past them all, shedding a gigantic tear at how far they have fallen because of FirstEnergy's "unfair" practices, spoofing the iconic crying Indian.  Poor, poor AEP!  It's a crying shame!
   
2. FE needs to make their characters more sympathetic.  Instead of an annoying, nasal-sounding, "angry" woman in her fake-beautiful kitchen, how about some teddy bears, unicorns or funny clowns pointing out how AEP is ripping consumers off? Seniors and women love that stuff! Let's get happy here, FE!
3. How about portraying AEP as a masked cat burglar  going door-to-door, personally delivering AEP's monthly electric bill to unsuspecting consumers?  "This is a stick-up!" (hint:  get some talented actors, the ones you have now SUCK!)
4. Now, for AEP, here's an idea for your next commercial.  FE portrays themselves as the white knight whose only objective is to save consumers money.  How fast do you suppose FE would beat feet when there's not as much profit in re-selling your capacity?  FE pretends like they don't like to make money, but they're making a bundle at your expense, aren't they?
5. For both companies:  How about some face time with the CEO(s)?  After all, a little plain folks propaganda isn't too hard to pull off.  Have them show the public how they're "just like you," and  shed that "faceless corporation" identity you're carrying like a lead weight around your ankles.
6. FE: Why not show a little kid selling candy door to door, and this big, scary man comes up and lifts the kid upside down and shakes him 'til all his money comes out of his pocket?

And then, here are the commercials Ohio consumers should produce.  You know, ones that portray the REAL facts:

1. AEP's dodgeball commercial:  Start the commercial as is, however,  as the teams face off before the game starts, the sound mutes and action stops as the camera focuses on a quarter that falls out of someone's pocket and rolls slowly into the center of the gym floor, and lands, *Plink*. Sound and action suddenly resumes as both teams abandon the game and rush toward a new, greedy, vicious, individual battle to capture the wayward quarter and be the one to pocket it.
2. Another take on the dodgeball commercial: Start the commercial as is, but have an audience sitting on the bleachers. A referee blows the starting whistle for the game, and both the geeks and the jocks turn and pummel the audience (ratepayers, of course - keep up, people, keep up!).
3. The little girl at the lemonade stand gets into a real hair-pulling, scratching and biting fight with the big bad bully; but then they realize there's a crowd standing around watching and laughing their heads off. (And they all look like Keryn ...)
   

While watching these two claw and scratch is highly entertaining (and makes kissing and making up to partner on a reanimated PATH project much more unlikely), it isn't helping either company in their Ohio case.  Everyone still hates AEP and thinks they're greedy.  And nobody really cares to champion FirstEnergy's money-making "right to shop" schemes, either.  I'm gonna make a prediction here... PUCO is gonna split the baby and come up with a capacity price somewhere in the middle.  PUCO recently got caught with AEP's hand up their skirt and they're not going to end up with egg on their face again.  The public is ANGRY!  Unfortunately, neither one of these companies knows diddly-squat about harnessing that anger to champion their corporate profit-making cause.  First, they would have to make people relate to them and like them.... and that's never going to happen.  Corporations aren't people!!!  Perhaps the power companies should get busy forming more fake grassroots "coalitions" to testify for them at PUCO.  Oh wait, that doesn't work either!  Too bad, so sad.  Fight on, fellas, we're enjoying the show!

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The WV PSC Commissioners are lazy and don't really care how utilities under their jurisdiction rip you off.  The WV PSC prefers to play the role of hapless victim to the actions of PJM and FERC when it comes to planning and cost allocation decisions that affect you.

While FERC (and now PJM with their new State Commissions committee) expect the states to play a proactive role in transmission planning and review of FERC formula rates that are collected from their consumers, the WV PSC can't be bothered to protect your interests.  They prefer to completely ignore all that stuff and let the power companies do whatever the heck they want.  This costs you money every month in your electric bill and subjects you to needless and costly transmission project proposals, such as PATH, that are not in the best interests of West Virginians.

Yesterday, the PSC demonstrated this by issuing an order allowing TrAILCo an exemption to state code that requires the company to submit to PSC approval of the sale of utility property.  TrAILCo can now proceed with their plans, except...

"The Commission has not reviewed the TrAILCo Transmission Tariff or formula rate calculations, but if Nonutility Property is not included in Rate Base under the FERC approved Formula Rate and TrAILCo inadvertently recorded the properties in question to some other account that is included in rate base, TrAILCo should make any true-up and adjustments that are appropriate in accordance with FERC ratemaking requirements."

Yeah, they should, shouldn't they?  We know the accounting wasn't done properly, don't we, TrAILCo?  Of course, the WV PSC lapdog is never going to bother to check up on that.  They would rather that FERC just audit TrAILCo every once in a while.

If you want to see the letters and TrAILCo's answer that were submitted in this case, go here, here, here and here.  Who can put their finger on the part of TrAILCo's answer that gives the inappropriate accounting away?  Are you brighter than the WV PSC?

Jackson Kelly should be thanking Patience and I for upping their billable hours here by taking a few minutes to submit a couple of letters that threw a monkey wrench in TrAILCo's plans.  And TrAILCo should get busy making the proper accounting adjustments...

Yesterday was the deadline for FirstEnergy to submit ordered information regarding their WV plant closures to the PSC.  FirstEnergy didn't really provide any new information.

I couldn't help but notice the way FirstEnergy avoided answering the PSC's questions related to FE's scheme to enrich themselves with higher capacity prices as a result of their wave of coal plant closures.  FE told the PSC, "It's not prudent to speculate..."  FE isn't doing that great a job hiding the real reason for the plant closures, are they?

Too bad the PSC didn't ask them about how their premature plant closures could pad FE's bottom line by forcing some tasty RMR contracts.  (RMR = Reliability Must Run - payments FE will receive to keep 5 of their Ohio units slated for closure available until transmission improvements are completed.) 

FE told the WV PSC that they have no authority to order the plants to stay open.  And we all know who wears the pants at the WV PSC, don't we?  They put on a good act, but it's quite obvious they're nothing but Tony the Trickster's lapdog.  Nobody is fooled anymore.

FE is quite a bit smarter than AEP, however.  While AEP wasted time and money bellyaching over plant closures, Tony the Trickster was scheming up a way to make a bunch of money on plant closures.  Of course, that's only smarter if FE doesn't get caught....

Yesterday, FERC conditionally accepted PJM's new planning scheme.  However, it seems that FERC is also a bit suspicious about those mysterious "modeling assumptions and scenario planning analyses" that PJM wants to rely on to cook their RTEP determinations and has ordered a compliance filing.  Dance, PJM, dance!

"We find that PJM’s proposed revisions to its RTEP process that enable PJM to identify and evaluate potential transmission system needs through sensitivity studies, modeling assumption variations, and scenario planning analyses that will consider public policy, are reasonable. We, however, find persuasive protesters’ arguments claiming that PJM’s proposed revisions lack sufficient detail, and, therefore, accept PJM’s proposed revisions subject to a compliance filing, made within 30 days of this order. In the compliance filing, we direct PJM to submit tariff revisions that broadly clarify how sensitivity studies, modeling assumption variations, and scenario planning analyses will be utilized in its RTEP process."

FERC also rejected the arguments of certain states that inclusion of "public policy objectives" in planning criteria are vague and not a good idea: