If you pay an electric bill, there is a recent series of excellent articles in The Columbus Dispatch that you simply must read.

Power Play:  Politics in Ohio Utility Oversight is the work of an investigative journalist who dug deeply into the Ohio Public Utility Commission to find out why electric rates are increasing so rapidly.  What he uncovered through FOIA requests and interviews with current and former state officials didn't smell so good.

Corruption, collusion and regulatory capture aren't unique only to Ohio, however.  The exact same thing happens in every state in the nation, including West Virginia, Maryland and Virginia (but it only works for you there if your parent company name is Dominion Resources, right, PATH?).  It also happens at the federal level, where power company lobbyists constantly whisper in FERC's ear.

This is why PATH was spending YOUR money on a program of increasingly unsavory deeds intended to influence the state utility commissions considering their applications for the project.  These costs PATH recovered from you have produced two Formal Challenges to FERC by consumers, one for their 2009 expenses and one for their 2010 expenses.

Because this is how the regulatory game is played, you will never succeed at playing it by their rules.  And the corporate buyout of regulatory agencies happens because you've been conditioned to think of it as only a nickel or a dime, or a handful of pennies. 

"Tut, tut, tut, little ratepayer, don't worry your pretty little head about such complicated concepts as ratemaking -- we make that confusing on purpose so you will just shrug your shoulders, pony up your monthly nickel, and leave us in peace with the public officials who are supposed to be looking out for your interests but are really in our pockets instead."

And the energy corporations will continue to book record profits until you consumers start to care enough to make some changes.  Look me up when you're on board and we'll set sail...

A second Formal Challenge to PATH's 2010 Annual Transmission Revenue Requirement was filed at FERC this morning by Keryn Newman and Ali Haverty.  As you will remember, they also filed a Formal Challenge to PATH's 2009 Revenue Requirement back in January of this year.

The new Challenge disputes revenue collected from all PJM electric ratepayers in the amount of $2,437,540.94.  If you're one of the PATH victims, not only does this represent money out of your pocket, but it is a documented history of PATH's activities that directly affected you in 2010.  The Challenge details PATH's activities running "reliable power coalition" front groups, their PEAT "team" who told the media that they had "the real facts" about the project (insinuating that you didn't), PATH's memberships in various Chambers of Commerce and lobbying groups, including their antics with the Maryland Chamber of Commerce that culminated in the Chamber petitioning to intervene out of time in the Maryland PSC case to support PATH's application.  There's also more about what Access Point Public Affairs was up to in Loudoun County, Virginia, attempting to influence the Board of Supervisors to release the conservation easement by playing neighbor against neighbor.  And more NWTF -- the National Wild Turkey Federation -- a favorite of people last year due to its rather unfortunate acronym.  New this year are the expenses of PATH lobbyist Larry Puccio, former Chief of Staff of our "friend" Joe Manchin.  Puccio is the one who signed up as a lobbyist a week after leaving his job at the Governor's office, which triggered a new state law about waiting periods for lobbyists coming out of state government jobs.  Puccio also got a mention in the federal investigation going on last year about road contracts and shady deals in WV.  Finally, our friend Larry is also the Chairman of the WV Democratic Party.  That's convenient, isn't it?  Another new section deals with R.L. Repass & Partners -- the ones responsible for those phone surveys and focus groups in Jefferson County last year.  I know lots of you got the phone calls (and some actually attended the focus group) so if you're remotely curious about how much that cost you, it's all in the Challenge.

The Challenge also includes a section about PATH's advertising in 2010 and details how Charles Ryan Associates utilized recognized propaganda techniques, and NOT "education," in PATH's advertising.  If you saw or heard those commercials and print or internet ads and felt your skin crawling but weren't exactly sure why, you'll probably find this pretty interesting.

We'll have much more about this after the holidays, but for now, happy holidays and happy reading!

PATH 2010 ATRR Formal Challenge
PATH 2010 ATRR Formal Challenge Exhibits (big file of Exhibits used in the Challenge)

Here's PATH's response to the Preliminary Challenge that was served on them on November 23, 2011.  No surprises here, PATH corrected around $10K of charges that were "erroneously" charged to ratepayers and which they had already admitted were wrong during discovery.... eventually, over the course of several months, until the light bulb finally came on.

FirstEnergy's TrAILCo transmission company (whose books are kept by same crack team of accountants as PATH's) filed a revision with FERC the other day to correct its 2010 & 2011 revenue requirements for merger costs that were "inadvertently" included in the revenue requirements and collected from ratepayers like you.

"On December 19, 2011, Trans-Allegheny Interstate Line Company submitted to the Commission, for informational purposes, a revised reconciliation of the annual transmission revenue requirement for the 2010 Rate Year and a revised annual transmission revenue requirement for the 2011 Rate Year to reflect the removal of merger-related costs inadvertently included in the original version filed in May 2011."

Ooops!  What's a couple million between friends, anyhow?  Is anyone keeping track of all FirstEnergy's accounting mistakes that cost you money?

According to TrAILCo's letter, "As part of an internal review, TrAILCo personnel discovered that merger-related costs were inadvertently included in the original 2010 Reconciliation ATTR and 2011 Forecasted ATTR."

Was that "internal review" FirstEnergy's version of their "oh sh*t" moment when they got busted for including merger costs in PATH's revenue requirement during PATH's Open Meeting conference call back in July.  Yeah, FE, we were there. ;-)

This sentence in the letter creates such a scary visual that I want to simultaneously throw up and laugh hysterically.

"The merger was consummated on February 25, 2011, and, at that time, FirstEnergy Corp. became the ultimate parent of TrAILCo."

Keep the comedy coming, FirstEnergy, we're paying dearly for it, apparently.

I feel for our friends at Stop the Lines in New Jersey, who have been riding a roller coaster lately regarding approvals for one of PJM's other Project Mountaineer transmission projects.

Down:  Susquehanna-Roseland is approved by the PA PUC and the NJ BPU.

Up:  Appeals are filed in New Jersey.

Up:  New Jersey's BPU gets into a battle of wills with PJM and FERC over it's desire to build new gas-fired generation in New Jersey in order to lower electricity prices in the state.  NJ BPU's position is that in-state generation is better than importing electricity via new transmission lines like S-R.  NJ-BPU is likely to deny S-R and use it as a bargaining chip to get what it wants from PJM & FERC, if it is remanded back to the BPU on appeal.

Down:  S-R is named one of Obama's "Rapid Response" Transmission Projects so it can be rammed through approvals.  Rumor has it that the fix is in at the highest levels for the NPS to approve PSE&G's application to cross the Delaware Water Gap National Recreation Area.

Up:  The Public Employees for Environmental Responsibility (PEER) release a statement exposing the collusion and corruption going on between the NPS, the White House, and PSE&G.

Up:  The NPS recently came out with a "no build" recommendation.

Down:  In this article (one of the most poorly-written articles I've ever seen!) Delaware Water Gap National Recreation Area Superintendent John Donahue implies that if power company project owner PSE&G proffers a big enough "mitigation package" (aka BRIBE) that he will bend over and grease up the park for annihilation by the Susquehanna-Roseland project.  I'm not sure who Donahue thinks will be paying the cost of the "mitigation package," but it won't be PSE&G.  The cost of project approvals will be borne by all electric ratepayers in the 13-state PJM Region.  That means YOU!  The bigger the bribe, the higher your future electric bill, and the bigger the profit for PSE&G.  Donahue is willing to sacrifice publicly owned assets to a private, for-profit corporation in exchange for that same public gaining a financial/land grab that is ultimately paid for by them.  We pay ourselves to end up with a ruined national park, and PSE&G makes a big profit.

So, what can you do to prevent paying for PSE&G's bribe?  Submit your comments on the NPS EIS for the S-R Project online.

It shouldn't come as any surprise.  StopPATH WV and The Power Line have been reporting on this issue since last spring, but here's a new article that wraps it all together.

At a recent DOE "congestion study workshop" utility schmoozers, their PJM and MISO lap dogs, and government officials came together to further their goals of building a whole bunch of unneeded transmission to transport midwest wind to east coast load centers.

“Illinois, Indiana and now northwestern Ohio are seeing a tremendous growth in wind integrations,” said Bob Bradish, head of American Electric Power’s transmission planning group. “A lot of that is now starting to show in the way of congestion on our system out there.”

AEP could also build transmission and pay for it itself, he noted. But the nature of eastern demand is such that a congestion issue identified and addressed in the western part of the PJM system, for example, will lead to other points of congestion.

“East economics are so that they want to pull everything from the west; you fix something, they just pull more, so congestion comes back up again,” Bradish said.

Why should you be worried?  Because it's the same stupid plan as Project Mountaineer -- west to east power flows that require new, expensive, destructive transmission lines, now cloaked in the "green" of wind.  Of course, all those lines "for wind" will also be tied to the existing grid connected to AEP's (and other dirty generators') coal-fired plants.  And as PATH taught us, you can't separate "clean" from "dirty" electrons. By the time that "wind" lights up a flat-screen TV in Annapolis, it's going to be the same old "coal" that's been doing it for years, however the consumer is now being fooled into believing they're using renewable power.

If you live around PATH's proposed "Kemptown" substation site and have been wondering why they persist in dragging the zoning issues through the courts, this is why.  The property is attractive as a target for other "wind" transmission projects.

So, keep an eye on how DOE's congestion study plays out and the progress of off-shore wind, which will turn the west to east flow paradigm completely around and will end up being the cheapest and most efficient solution.

This story illustrates a great example of how investor owned utilities use socialized cost recovery to make themselves a bundle of money at your expense.  In the example, the Virginia SCC allowed an AEP subsidiary to recover up to 50% of the cost of their charitable contributions from captive ratepayers.  The amount approved for recovery by the SCC was $250,000.  A spokesman for the company said that it equated to "two pennies on a $100 bill," and that any other company would roll the cost of their charitable contributions into the cost of their product.

Two pennies?  No big deal to you personally, right?  Maybe, but to the investor owned utility on the receiving end of those two pennies it's a very big deal.  Every utility customer needs to take a fresh look at those two pennies.  Your "two pennies" are added to the "two pennies" of millions of other individual ratepayers until they form one gigantic pile of pennies.  That gigantic pile of pennies is what Uncle Scrooge McDuck, the CEO of the investor owned utility, swims around in daily.

That's exactly the point I made to a reporter last year while doing publicity on the Formal Challenge filed with FERC.  Dividing the amount challenged by the 51 million ratepayers in the PJM region who paid it only amounted to roughly a nickel per ratepayer.  However, on the receiving end, the PATH Companies ended up with a roomful of 51 million nickels.  Go ahead, try to imagine what that would look like, and instead of Uncle Scrooge McDuck diving in, you've got a couple of ultra-rich investor owned utility CEOs quacking and swimming around in their ill-gotten gain.

It's also the same point the Maryland Office of People's Counsel made in their recent comments on FERC Docket No. ER12-269.  The amount that the PATH Companies are wrongly recovering from ratepayers is not great enough for any single entity to spend the time and money to hire consultants to examine PATH's annual formula rate filings to find the errors, therefore no one is examining them and the PATH Companies are free to get away with recovering all sorts of costs they are not entitled to.

As far as the utility's other argument, which is that every other corporation rolls the cost of their charitable contributions into the ultimate cost of their product, there is a distinction that argument fails to make.  Any other corporation is subject to the whims of competition when pricing their product.  If they make too many charitable contributions that they must roll into the cost of their product, and it raises the ultimate cost of their product higher than the cost of a competitor's product, then the consumers will buy the competitor's product and the corporation who makes too many charitable contributions will lose market share and revenue.  This is part of the system of checks and balances that powers the engines of capitalism and is known as cost accounting.  In the case of a regulated utility, however, the corporation's customers are captive, which means that they MUST buy their product from a certain corporation, no matter how much it costs.  This is the argument Commissioner Christie made in his dissent.

If AEP really wants to "roll charitable contributions into the cost of their product," they ought to roll those contributions into their cost of generation... and then give freely.  Since the cheapest generation is dispatched first we'd all breathe a little easier.

So, when "The AEP Foundation" makes those wonderful, charitable contributions, do they take all the credit for the charity?  Of course they do!  And when tax time rolls around, do they take the deduction for the charitable contribution?  Of course they do!  Who really paid for the charitable contribution?  You did!

That $250,000 that Appalachian Power recovered from Virginia ratepayers is just another dump truck full of nickels and dimes to pour into the ol' corporate money bin.  Since the AEP Foundation would have made the contribution anyhow, the amount they are permitted to recover from ratepayers is 100% pure profit.

The investor owned utilities have the act of pulling the wool over your individual ratepayer eyes down to a science, and it's working, as long as you think about it as "just two pennies."

But, take a minute to think about the big picture.

... and checking it twice.  Gonna find out who's... ut-oh, AEP, you've been naughty this year!

I take back my snarky comments about this reporter after his silly "evil twin" story about new AEP CEO Little Drummer Boy. Dan Gearino of The Columbus Dispatch actually did some investigative journalism about AEP's sneaky rate hike deal with Ohio's Public Utilities Commission.  The deal could raise electric rates for small businesses by more than 30%, while lowering rates for big, industrial energy hogs.  Check out the results of the reporter's investigation here.

AEP is going to raise the electric rates of Kentucky Power customers 31% to installer scrubbers on their Big Sandy plant so that it can continue to burn lots of MTR coal far into the future instead of switching fuel sources.  Keep in mind that the power companies always ask for more than double the rate increase they actually need because they know the state utilities commission is going to hack it up until it resembles something just and reasonable.  Could AEP be padding the cost of this upgrade to support Mikey's EPA "train wreck" fantasy?  I hope the Kentucky utilities commission checks AEP's claim that installing the scrubber is truly the least cost option over the long term instead of switching fuels, or other options.

If you're an Appalachian Power customer in Virginia, you can now start giving those Santa suit clad bell ringers the hand on your way into Wal-Mart because the Virginia SCC has now made AEP your charitable contributions coordinator.  In a split decision, the SCC has allowed Appalachian Power to recover the cost of their charitable contributions from their customers.  Dissenting Commissioner Mark Christie gets it right when he says recovery of charitable contributions have no place in a monopoly franchise.  The company can deduct these contributions from their taxes, but they'd much rather recover them from their customers and take credit for the "charity."  Outrageous!


And last, but not least, check out this episode of The Keystone Cops that ensued when Appalachian Power held a storm response drill in West Virginia.  APCO would do better to just spend some of that money they received in rate increases to repair and maintain their crumbling distribution system instead of playing storm games.  Be sure to check out the comments -- hysterical -- AEP will next practice filing for more rate increases!  :-)

Ho Ho Flippin' Ho, AEP!

Today, Maryland's Office of People's Counsel filed their comments in PATH's Section 205 filing to change the definition of "interested party" at FERC.

Here's a quote:

"What seemingly prompted the instant filing is that PATH was piqued at the temerity of some individuals who (in related cases) filed a formal -- and at least partially valid - challenge to PATH’s annual rate update in compliance with the governing rules and procedures."

(They are referring to PATH's admission to FERC that errors were found by "interested parties" during discovery last year and subsequently corrected by PATH in a revised filing with FERC before the Formal Challenge was filed.  These admitted errors are in addition to the $3.4M Formal Challenge.  OPC didn't have the temerity to assume whether the Challenge is valid or not -- that's FERC's job.)

You can download and read OPC's comments here.