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Where is FirstEnergy's EPRI Report?

1/14/2014

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During the West Virginia Public Service Commission's evidentiary hearing on the Potomac Edison/Mon Power Billing, Meter Reading and Customer Service Practices General Investigation, company witness Kaye Julian told the Commissioners that the EPRI report would be completed on January 6.
Q. Okay. All right. And you mentioned EPRI and the EPRI study, and I know that you --- while we’re on the subject, on page 11 of your testimony, your Direct testimony, you’d made a change at line eight. You state that the EPRI study is now expected to be completed by January 6th, 2014; correct?
A. Correct.
Q. Do you know why it’s been pushed back from December 31st?
A. I received an e-mail this morning from them requesting a little bit more time, because they’ve been meeting with the teams that actually were on site, and after they’ve had a couple of their meetings, they just feel like they’re going to need a little more time.
Q. Now, do you participate in these meetings? A. I have been.
Q. I’m sorry, you have been?
A. Yes.
Q. Okay.
A. Now, I have not been making every single one of them, but ---.
Q. I mean, they’re weekly meetings?
A. That’s right. Recently they had me come daily.
Q. Okay. When did this --- when did the EPRI review begin? I mean, it’s been several months now in the making; correct?
A. Yeah, I believe we signed the statement of work with them in July.
Q. And what are you --- what specifically are you --- are the Companies having EPRI look at? I mean, what is the purpose?
A. What we’re doing is we’re trying to simulate the estimation routine with having lots of good data, and then going through and creating all those scenarios of every other estimate --- every other month estimate, two months in a row estimate, three months in a row estimate, and letting the routine take that data and determining --- I guess we’re trying to figure out where are those checkpoints that we might need. Are we not applying something appropriately that we should be? So we’re more or less --- we’re calling it forensics. That’s basically what they’re doing for us, trying to help us determine, you know, with the data available where we see some issues or breakdown and how can we improve our routine.
Q. And is EPRI going to tell you how it should be improved, assuming it finds breakdowns?
A. Yes.
Q. Okay. Now, is the Company’s plan to implement whatever correction EPRI recommends?
A. I think it’s a little early for me to say that, because I don’t know all of the expense associated with what they would ask us to implement or recommend we implement.
Q. Okay. So there’s a chance that EPRI may say you need to do these 20 things, for example, and the Company says we don’t have the money or the resources to do any of those; we’re just going to disregard your recommendation? That’s a possibility; correct? A. Anything’s possible.
January 6 has come and gone, with the EPRI report still missing from the public information on the case docket.

I guess we should prepare ourselves for "possible."
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Getting the Water Back On - Who Pays?

1/14/2014

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There's been a plethora of great media coverage of the Freedom Industries pollution of WV American Water's supply for 300,000 customers in nine West Virginia counties.  Read The Power Line's comparison of the public water system to West Virginia's dangerously centralized electrical system, or today's call to action for citizens.  I have no intention of adding to what has already been very succinctly written.  But, discussion with affected individuals sparked a conversation that I haven't seen the media get to... yet.

As the ban on water use is slowly lifted, area by area, water customers are being urged to flush their system.  This isn't more debate about whether the water is still safe for use, but looks forward to future grief over who will pay for all the water used to flush customer plumbing.

This article instructs water customers on flushing their system by turning on faucets and water using appliances and cycling tainted water from the system.  With the exception of outdoor spigots, tainted water is being flushed into the sewer system.

Customers pay for water and sewer usage.  West Virginia American Water rates allow for a minimum base charge for 1,500 gallons per month per customer.  Usage over that amount is based on gallons used.  Usage over the base amount is charged at the rate of $10.2911 for the first 1,000 over the base amount, up to 28,500 gallons over the base amount.  Because the company has agreed to credit customers for the cost of 1,000 gallons for flushing their system, we can assume that the cost of water necessary for flushing comes at a price of $10.2911 per customer.
At this time, West Virginia American Water reported it is prepared to offer a credit of 1,000 gallons of water to its residential customers.

“That’s not a number we just pulled out of the air,” McIntyre said, explaining that the credit should cover about 10 times the water amount necessary for customers to complete a proper flushing of their water tanks.
That sort of depends on who the customer is.  Your number of faucets, spigots and appliances to be flushed can increase or decrease your flushing usage quite significantly.

But that's not the real problem here.  All that flushing water comes at a cost.  1000 gallons per customer @ $10.2911 x 300,000 customers = $3,087,330 worth of water that WV American Water will credit on customer bills this month.

Do you think that WV American Water is just going to make that cost disappear?  Of course not.  It all has to be accounted for on the company's books.  The company could write it off as some sort of donation or goodwill, but that's unlikely.  Other options include deferring it in a special holding account to be dealt with later.  This would create a deferred regulatory asset.  This simply means the company would defer recovery of this amount until a later date.  The company will begin accruing interest on the deferral immediately.  Options for recovery would be through a claim against Freedom Industries, or a request to the WV Public Service Commission to recover it from ratepayers at a later date.  The easiest course for the company is to recover it through its West Virginia regulated rates. 

So, not only will you most likely end up paying for your 1,000 gallons of flushing water, you'll end up owing interest on it at some future time when the company and the WV PSC think you've forgotten all about the incident and they can take care of this business without your notice.

Ditto on your sewage rates for disposing of the excess water.
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Frederick County Asks Potomac Edison to Donate Maryland PATH Substation Site

1/14/2014

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WFMD reports:
Frederick County Commissioner Billy Shreve is asking Potomac Edison to donate some land for a park; specifically, the 150-acre Browning Farm, where the utility was planning to build a substation for the Potomac Appalachian Transmission Highline.

He called it a win-win for First Energy and county citizens.
Frederick County citizens commenting on the article agree.  Potomac Edison has a lot of public image issues in Maryland right now stemming from the Maryland PSC's investigation of its billing and meter reading practices.

What do you think about the county's proposal?
5 Comments

How "Big Wind" Wants to Manage its Opposition

1/10/2014

13 Comments

 
It's no surprise that the Center for Rural Affairs supports lots of new transmission lines across the Midwest.  The CFRA wants to maximize economic development in agricultural areas.  But, are they tossing the baby out with the bathwater?

"Farming" wind by covering prime farmland with wind turbines, and then selling the product to distant urban areas, is big money.  The profit potential is huge.  However, it is not a sustainable practice.  It requires a conscious choice to designate winners and losers.  In order to pull in income for a winning farmer hosting turbines, many other farmers must lose some or all of the current value of their farm operation by allowing the wind farm owner a right-of-way through their factory to ship the wind to the desired market.  This is a non-starter and cannot be remedied through one-time "market value" payoffs or hostile takeovers of productive operations.  Just like any unwanted intrusion into your income stream, many landowners vehemently oppose being burdened by new transmission lines. 

In many instances, a farm's heritage simply isn't for sale at any price.  This presents a big, big problem for the farms and communities who want to profit by hosting turbines, and they just don't want to take "no" for an answer.

In that vein, the CFRA has attempted to find some middle ground in the debate by identifying contentious issues and recommending solutions in a new report, From the Ground up:  Addressing Key Community Concerns in Clean Energy Transmission.  Not a bad premise, however the CFRA went about it in exactly the wrong way.  Instead of communicating openly with transmission opponents and actually listening to their concerns, the CFRA based their report on news stories, and then made assumptions about the thought process and motivation of opponents they had never met. 

I've spent a lot of time over the past 5 years communicating with many of the opponents of the projects CFRA studied, as well as other projects, and I think CFRA got it so wrong that their report comes off as arrogant and out of touch with reality.  It is something to be scoffed at and rejected, and it may only ratchet up the anger, instead of ameliorating it.

CFRA begins with an incorrect premise that transmission must be built.
The nation’s most abundant wind resources reside in the remote regions of the Upper Midwest and Great Plains. Residents of these areas routinely enjoy the benefits of wind production in the form of lease payments, jobs, economic development, and tax revenue. But these same lightly populated communities demand only a small amount of electricity, making it imperative that a new generation of transmission infrastructure be put in place to move this energy from where it’s produced to where it’s needed most.
This is where the failure starts... right at the beginning.

The nation's most abundant wind resources reside offshore, on the east and west coasts and in the Great Lakes.  Coincidentally, this is also close to the population centers.  In addition, communities across the country are increasing their desire to keep their energy dollars at home, not to send them to Midwestern states, or overseas to transmission owners/developers in foreign countries who want to invest in America's infatuation with "big wind."  It's just a non-starter when there is no market for the product.

As technology improves, how we produce and use energy is changing rapidly.  The promise of energy storage changes the equation considerably.  These "lightly populated communities" will soon be able to store wind energy to be used locally. 

Booming distributed generation of small-scale, on-site renewables and more reliable micro-grids are making long distance transmission obsolete.

However, that doesn't provide a profit stream for transmission developers and investors, and local energy prices will be lower than those achievable in urban markets.  What's driving this relentless desire for new transmission is pure and simple greed.

Here's an example of just one of the things CFRA got completely wrong:
Need
Concerns over need are more difficult to address than some other stakeholder issues. The concern over need often relates back to a concern over who will ultimately benefit from the project—is a transmission project needed for this area, or is the area merely a means to connect a generating source to a distant community? Localizing benefits of a transmission line can be a difficult task, especially if the developer is not in need of any materials or services that a community can provide.
Another option to address this is to make clear the benefits of improving the aging transmission infrastructure that runs across the country. Showing how upgraded transmission can affect consumer’s rates and reliability may be a good tact for developers. Although this doesn’t necessarily improve the local economy, it does show stakeholders that they are not taking on a transmission project without any sort of reward.
Concerns over need cause an affected individual to trace the project back to its source.  Who says this is needed and what is their motivation?  Of course, the motivation is always money, and that's where the individual's belief in the project developer or planner's information ends and the opposition begins.  There is no "good tact" for developers at this point.  They have lost all credibility.

CFRA believes that even flimsier need arguments will convince entrenched opposition, but that merely makes the presumption that opponents are a bunch of easily fooled Mayberry rubes, adding insult to injury. 

My advice to transmission developers would be to toss this report in the recycling pile along with the Sunday comics.  It's strictly bush league. 

The CFRA concludes:


In order to improve the transmission system in the Midwest and across the country, it is important that developers and advocates confront the concerns of those affected.
I would recommend that any company attempting this actually find out what the true concerns are by listening the those affected, and not by reading a reporter-filtered version in the newspaper.

My advice to newly-minted transmission opponents?  There's nothing wrong or shameful about your opposition.  Other affected individuals share your thoughts and feelings.  What the transmission developer proposes is not okay, and you don't have to accept it.
13 Comments

PJM Wants You to Practice Energy Efficiency Today

1/7/2014

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Our friends at RTO Insider bring us the news that PJM is having issues managing peak demand caused by today's frigid temperatures.  (If you're a business and you hit RTO Insider's paywall, maybe it's time to get a subscription?)

Today's peak is supposed to be 142,000 MW this evening, when folks come home from work and start turning things on.  PJM hopes they will have sufficient resources, however, I've been bombarded with emails this morning with stories featuring PJM's plea for folks to conserve. 

RTO Insider tells us:
Officials said they could be forced to issue a second voltage reduction or brief rolling blackouts if conservation efforts and imports fail to make up any shortfalls this evening.  “We do not expect to take that [load shed] action,” Executive Vice President for Operations Mike Kormos said during a media call today.

PJM and state regulators urged consumers to reduce energy use during the emergency. “Every little bit helps,” Kormos said. “There’s 60 million people in our footprint. If everyone does their part, that could easily add up to one nuclear plant, which is 1,000 MWs.”

“We’re very close [to generation limits],” Kormos added. “The last couple hundred megawatts could allow us to not have to take any forced interruptions.”
If you only take a temporary action (such as dialing your electric heat back 2 degrees) to avoid your lights going out today, that's reactive.  If, instead, you take a small action today that you continue tomorrow and the next day, and the day after, then you're practicing energy efficiency.  As Kormos points out, if everyone does their part, that could add up to avoiding the cost of building one new 1,000 MW power plant.  It could also avoid the need to tear up valuable farmland with miles and miles of wind farms and transmission lines.

Maybe West Virginia's regulators should also encourage energy efficiency, instead of encouraging us to use more power to support the continued use of antique coal-fired generators that provide profits to out-of-state energy corporations.

So, if "everyone" changes just one incandescent bulb to a comparable LED today, can we all stay warm and happy?  Or will the stockpilers have us all sitting in the dark tonight because they don't like change?
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Heroes and Zeroes in Kansas

1/7/2014

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I'm not sure what's gotten into the tea across the pond, but The Guardian has named Kansas Republican Governor Sam Brownback a "Climate Change Hero."
Sam Brownback, Republican Kanas Governor, and lawmakers in a dozen other US states who fought off cynical attacks to repeal state Renewable Portfolio Standards, which have catalysed thousands of wind and solar projects across the country and generated hundreds of thousands of jobs.
But, maybe it's some other Sam Brownback, the one who's the Governor of "Kanas?"  The Sam Brownback who's the Governor of Kansas is no hero, for the climate or the people of Kansas.  Sam Brownback is the "hero" of the corporations who fund his political campaigns, and just because it now happens to be wind energy corporations does not a "hero" make.
hero |ˈhi(ə)rō|
noun (pl. heroes)
1 a person, typically a man, who is admired or idealized for courage, outstanding achievements, or noble qualities: a war hero.
Four years ago, Sam the "Climate Change Hero" said:
The recent disclosure of the manipulation of scientific evidence by climate researchers is exactly the kind of important information that needs to be brought to light. The emails and documents recently disclosed paint an alarming picture of the state of climate research. In the emails that have been disclosed we’ve seen evidence of manipulation, efforts to avoid freedom of act information requests, abuse of the peer review process and a research process that that is driven more by a political agenda than a quest for truth. [Brownback, DeMint, Ensign, Isakson, Vitter, and Wicker, 12/8/09]
Right, it's more about a political agenda than a search for truth.  So, what's the truth?  The truth is that it looks like the hugely profitable land based wind industry has convinced Sam that covering Kansas with wind turbines and transmission lines and selling the electricity produced to "states farther east" would cut his state in on the fortune to be made with "green" branding and "Saudi Arabia of Wind" claims.

For that, Sam has tossed his former campaign financiers in the oil & gas industry under the bus.  Because he's a "hero."  Right.  I'll believe Sam's climate change epiphany after examining his campaign finance reports for 2014.

"Big wind" continues to lie to politicians like Sam, encouraging him to lay waste to his own state so that energy corporations may profit producing electricity there and selling it to other states.  Isn't that what happened in West Virginia more than 100 years ago?  Look at how fine that worked out for the people of West Virginia.

The "truth" will reveal itself in the voting booth later this year.

Now let's move on to the zeroes...

The benighted Kansas Corporation Commission has intervened in the Grain Belt Express "Clean" Line application for negotiated rate authority at the Federal Energy Regulatory Commission.


Remember, the KCC failed to hire any experts to vet GBE's application for a siting permit in Kansas, instead relying on the testimony of GBE, verified by a couple of in-house electrical engineers opining way outside their areas of expertise.

However, the KCC found funds to hire deep-pocket law firm Andrews Kurth to represent its interests in GBE's application at FERC.
 

And hilarity ensued...


Due to an exceptional amount of pressing business, the KCC inadvertently failed to notice the subject proceeding until after the date for timely intervention had passed.

...the KCC’s failure to file a timely intervention was based upon factors outside of its control.
"Pressing business?"  What state public service commission isn't constantly embroiled in "pressing business?"  An "inadvertent failure to notice the subject proceeding" isn't really "a factor outside [KCC's] control."  But, whatever... it gets funnier....
[KCC] is the regulatory agency that has jurisdiction over the wholesale and retail rates that will be impacted by the proposed formula rate and incentive rate adders filed for approval in this docket.
Layperson Internet Energy Blog Education Moment for the KCC and Andrews Kurth:

There is no formula rate or incentives applied for in this docket!  It's an application for negotiated rate authority filed by a merchant transmission project.  That means that the developer of the project is responsible for all costs of building and operating its project and will recover them directly from customers through rates it is asking FERC for permission to negotiate, NOT FROM RATEPAYERS, in Kansas or elsewhere.  And GBE is not eligible to apply for incentives because it is not part of any coordinated transmission expansion plan, nor planning to be.

What a stupid waste of time and billable hours.

3 Comments

Residential Power Use Expected to Fall Again in 2014:  Utilities Continue Pollyanna Plans

1/4/2014

7 Comments

 
Remember Jonathan Fahey?  He wrote an article in 2011 headlined Shocker: Power demand from US homes is falling that pioneered the idea that even though we're using more electric "gadgets" than ever, power use is dropping.  Well, now he's back with a similar article, Home electricity use in US falling to 2001 levels.
The trend Fahey first reported in 2011 continues, more than 2 years later.

Have utilities gotten any smarter since then?  Partially.  It took them forever to admit that dropping demand wasn't tied to the economy and that a rebound of electric use wasn't just over the horizon.  However, some utilities have simply moved on to other unsound business plans that continue to bank on the same old ideas that are no longer sustainable. 

Now utilities have moved on to transmission investments as their savior.  This is pretty puzzling, considering that long-distance transmission champion AEP concluded a year ago that enormous projects built across multiple states were an impossible dream.
Mr. Akins said he wants to avoid the bruising battles that delayed or doomed big projects in the past, like the 275-mile Potomac-Appalachian Transmission Highline project from West Virginia to Maryland. AEP and partner FirstEnergy Corp. dropped development plans for the complex project in 2011.

"Sometimes, we were just dreaming" that the companies could get enormous power lines built across multiple states, Mr. Akins said. He said AEP now is focusing on shorter projects blessed by federal regulators that eliminate grid bottlenecks. "It's where you want to put your money," he said.
The transmission investment gravy train has also left the station.  The sheer number of new transmission projects proposed combined with today's ease of online information sharing and social media tools has led to an explosion of knowledgeable, interconnected transmission opposition groups who are combining resources across the country to delay or stop unneeded projects altogether.

Instead of embracing innovation and new technology to make the existing grid smarter, some utilities are intent on merely building more of the same old dumb grid, or actively attempting to stifle innovation by forcing us all into an historic "consumer" position where we must funnel money to incumbent utilities in order to survive.  Ultimately, this plan will also fail, because technology marches relentlessly on. 

How we produce and use electricity is also changing.  Not only is producing our own electricity locally better for our economy, it's also much more reliable.  Hurricane Sandy was one of the biggest wake-up calls we've had recently, and the inevitable Monday morning quarterbacking of that disaster reveals that increasing long distance, aerial transmission from remote generation is simply dangerous.
  Making our grid more reliable isn't about building more transmission.  It's about change:
This includes traditional tactics, such as upgrading power poles and trimming trees near power lines. But it also encompasses newer approaches, such as microgrids and energy storage, which allow operators to quickly reconfigure the system when portions of the grid go down. Implicit to such plans is the need to ensure uninterrupted power to critical sites such as oil and gas refineries, water-treatment plants, and telecommunication networks, as well as gasoline stations, hospitals, and pharmacies.

Some of the nation’s leaders seem receptive to such approaches.
Elected officials, progressive regulators, energy producers, energy consumers, and innovative companies embracing new technology are also increasingly joining forces to move our energy economy forward and away from the dated centralized generation and transmission business plan of the past.  Companies who continue to deny the inevitable will ultimately be the ones left behind in irrelevance.
7 Comments

Citi Says Sell FirstEnergy

1/3/2014

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Sell, sell, SELL!

Do you suppose the Citi analyst knows that FirstEnergy subsidiary Potomac Edison's crappy customer service was the #2 story in 2013 in its West Virginia service territory?
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I Know It's True Because I Saw It On the Internet

12/30/2013

1 Comment

 
Potomac Edison finishes up 2013 as a big joke in The Herald-Mail:
Citizens also are concerned about their power bills, as the state Public Service Commission investigates allegations that Potomac Edison has not been reading residential meters in accordance with state law. The case follows customer complaints that the company cut back on its staff of professional readers and replaced them with a band of turbaned gypsies who gaze into the meters and estimate power usage.

Citizens tell the PSC they became suspicious when a bill came with a note predicting that the customer would “find an apple tree with seven apples and after eating one would grow three stag horns and find his flesh separated from his bones.”
1 Comment

Is AEP Leading on Ideas or Dragging Around A Huge Anvil?

12/30/2013

7 Comments

 
The Columbus Dispatch and a couple of investment analysts gushed all over AEP CEO Nick Akins for "leading on ideas" yesterday.

What's Nick's idea?  Getting out of the generation business and betting AEP's future on long-distance transmission.

Bad idea.
...a transformation of the company’s structure and a shifting notion of what AEP needs to do to remain relevant in a changing energy landscape.

In doing so, the company is de-emphasizing what was once a crown jewel, the fleet of Ohio power plants, and putting a greater focus on developing an interstate network of power lines.

“The less we have to spend on centralized generation, the better off we are,” he said in a recent interview.

When he says “centralized generation,” he means big power plants. AEP will be closing more plants than it is building.

The company is shifting resources so it can expand its transmission system, made up of the high-voltage power lines that carry electricity across state lines and between metro areas.
Maybe ol' Nick missed the EEI report earlier this year, Disruptive Challenges: Financial Implications and Strategic Responses to a Changing Retail Electric Business.  The report cautioned electric utilities to avoid "that Kodak moment" for investors by embracing new technology and addressing competitive threats.

While getting out of the competitive centralized generation business "addresses" the threat that AEP may lose some of it's golden eggs in an unpredictable market, AEP is not embracing new technology or making itself relevant in a changing energy landscape.  It's simply putting even more of its golden eggs into a business plan that it will help to make obsolete. 

As competitive centralized generation closes, it is being replaced by independently owned distributed generation.  Distributed generation doesn't need new transmission.  Nick won't be collecting any eggs if he kills all the chickens.

A better idea to embrace new technology and establish future relevance was adopted by competitive generation company NRG earlier this year.
...NRG is installing solar panels on rooftops of homes and businesses and in the future will offer natural gas-fired generators to customers to kick in when the sun goes down, Chief Executive Officer David Crane said in an interview.
AEP loves regulated businesses.  It's a guaranteed revenue stream for a bulky, staid, not-particularly-innovative company.
AEP, which was reluctant to split its Ohio operations, has responded by focusing on the delivery business.
Meanwhile, the Ohio power plants are a shrinking asset. Because of environmental rules and the age of some of the plants, the company has announced a series of shutdowns that will occur over the next few years.

Also, AEP is in the process of transferring two plants away from Ohio regulation. The plants, both of which are in West Virginia near the Ohio line, will be regulated in nearby states that allow a utility to sell electricity directly to consumers.

Once the moves are complete, AEP will have 8,668 megawatts of power-plant capacity in the new Ohio power-plant subsidiary, which will be down from 11,652 megawatts today.

Akins says the company is responding to an economic climate in which there is little reason to build power plants in Ohio. The state’s electricity demand has been flat, and the regulatory structure provides no clear way to pay for plant construction.
So, dumping competitive, centralized generation is a smart idea, but increasing investment in long distance transmission to support a shrinking pool of centralized generators is not sustainable.

While AEP is banking on federally regulated interstate transmission to nearly double earnings from transmission activities from 2013 to 2014, AEP seems to have forgotten what happened with its PATH project.  Big, interstate transmission projects with long lead times lead to big failure.  That's because "need" for these projects is constantly shifting, and if opposition can delay them long enough, they become obsolete.  Opposition is growing by leaps and bounds.  AEP ain't seen nothing yet!

It's a risky proposition and I don't think it's a particularly good idea.
Akins says he’s having fun and is eager to see the work of the past two years come to fruition.

“We are now at a point where we can start defining our success,” he said. “Before, we had a huge anvil we were dragging around, whether it be environmental expense or whether it be other things we were dealing with that were reactionary. We’re finally at a point where we can map out the strategy of this company going forward. It is exhilarating.”
We'll be "having fun" too, supporting companies embracing the new technology of distributed generation, and dragging the progress of AEP's transmission projects down like a huge anvil.  Although AEP can ignore growing public discontent, it ultimately cannot be denied.
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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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