Two West Virginia citizens have filed a new complaint with the Federal Energy Regulatory Commission (FERC), alleging that the PATH Transmission Company subsidiaries of FirstEnergy (formerly Allegheny Energy) and American Electric Power have continued to improperly charge millions of dollars in promotional expenditures to ratepayers in 13 states and the District of Columbia.  With this complaint, PATH’s overcharges total nearly $5.8 million over the past two years, when combined with the first complaint filed in January 2011.

Keryn Newman, a Shepherdstown resident, and Alison Haverty, of Chloe, filed their second Formal Challenge to the Potomac-Appalachian Transmission Highline, LLC 2010 Annual Transmission Revenue Requirement, on December 23 with FERC. Their review of 2010 project costs reveals a propaganda pattern, using funds inappropriately recovered from ratepayers, to influence state regulators, as well as a large number of simple accounting errors.  The complaint asks that FERC reject PATH’s Annual Update filing and begin a broader investigation of more overcharges by the power companies.

“We contend that the Commission never intended to hand PATH a blank check signed by electric ratepayers in 13 states to use as they see fit to promote their for-profit endeavor,” said Newman.

The PATH Companies recovered expenses of nearly $1 million for an advertising campaign utilizing recognized propaganda techniques and more than $1 million to create and manage fraudulent “grassroots” groups and an advocacy program carried out with private groups and inappropriately billed as “public education.”  The recovery of these costs from electric ratepayers violates FERC regulations.

Bill Howley, of The Power Line blog, has been covering PATH for the last three years.  “The fact that ratepayers in PJM Interconnection are being charged for a dead PATH project is bad enough.  The PATH companies should not be allowed to get away with sloppy accounting and dishonest representation of their promotional costs as 'public education,'” Howley said.

The citizen complainants discovered improperly recovered expenses related to lobbying by West Virginia Democratic Party Chairman Larry Puccio, and attempts to exert influence on the Loudoun County, Va., Board of Supervisors to release a conservation easement along PATH’s proposed route – by creating a more destructive route around the easement and pitting neighbor against neighbor. 

Also detailed in the complaint are efforts by PATH lobbyists to interfere in the Maryland Public Service Commission’s consideration of PATH’s application through the intervention of the Maryland Chamber of Commerce, which received a $20,000 “platinum sponsorship” from PATH that was charged to ratepayers’ electric bills.  The Challenge also details generous payments to former state regulators and prominent local businessmen along PATH’s proposed route in exchange for their support of the project, as well as over $100,000 spent on public opinion surveys and focus groups. 

“This Challenge is not about the contemptible acts which PATH performed as they were trying to get approvals for their project.  This Challenge is about who should pay for those acts.  The electric bill which my family works to pay every month should not include these charges, and neither should yours,” said Haverty.

Newman and Haverty have been examining PATH’s costs for the past two years using rules designed to provide public transparency.  Despite PATH’s attempts this year to suppress the release of information, the women have persisted in examining the company’s accounting practices, and support for their efforts was recently expressed in comments filed by regulators from both Illinois and Maryland, and an amicus letter from the Sierra Club, EarthJustice, Piedmont Environmental Council and National Resources Defense Council.  On December 30, FERC issued a decision finding that, “…the consumers have demonstrated that they have a direct interest in the PATH Companies’ rates that will be flowed through to them.”

The PATH Companies have 20 days from the filing date to produce their answer to the Commission. Exhibits to the Formal Challenge can be found here.

Background

The Potomac-Appalachian Transmission Highline (PATH) project originally was to run 275 miles from the John Amos coal-fired generation plant in St. Albans, WV, to a new 42-acre substation in Frederick County, Md., passing through Loudoun and Frederick counties in Virginia. After more than two years and multiple hearings in three states, the project was “suspended” in 2011 by regional grid operator PJM Interconnection after opponents demonstrated it was not needed.  The utility companies then withdrew their applications before state regulatory agencies.

Despite PATH's suspension, AEP and FirstEnergy are allowed to recover project costs, collected since 2008 from the 54 million ratepayers in the PJM region – all or parts of Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and the District of Columbia. This cost recovery will continue at a level “necessary to maintain the project in its current state” until the project is officially abandoned at FERC.  PATH also was guaranteed the right to apply for 100% recovery of abandoned project costs as part of an incentives package they were granted by FERC in 2008.

A copy of the recent complaint and related filings can be viewed on FERC dockets ER08-386 and ER12-269.

Effective tomorrow, all West Virginia electric customers of Potomac Edison and Mon Power will pay more for electricity.

A press release from the PSC says: 

"The ENEC process does not involve the recovery of profit, rate of return on investment, or salaries and wages."

This is a lie.  The ENEC process involves power company recovery of transmission costs billed to them by PJM Interconnection, the operator of the regional electric grid.  In those transmission charges from PJM are West Virginians share of all transmission projects 500kV and above anywhere in the 13-state region, as well as 100% of the the cost of any transmission lines below 500kV owned by FirstEnergy.  Within the costs of these transmission lines are profit (12.4% for PATH, 12.7% for TrAIL, 12.8% for MAPP and 12.9% for Susquehanna-Roseland) which is the calculated return on investment for their power company owners.  These charges also include salaries and wages of power company employees working on these projects... and if you've read the recently filed Formal Challenge, you know there's much, much more wrapped into these charges.

These charges also include costs for the TrAIL project that were allocated to the PATH project's FERC revenue requirement and recovered from West Virginia electric consumers in violation of TrAILCo settlement stipulations.  Also mixed in your increased bill are the costs of the Allegheny Energy and FirstEnergy merger, despite the fact that the companies promised the WV and MD PSCs and FERC that they would not recover any of these costs from electric consumers.

Is the WV PSC that dumb that they don't know what's included in the cost of transmission?  Perhaps that's because the only ones watchdogging transmission owners at FERC are two private citizens...

When are we going to see some true reform at our PSC whereby the agency realizes that their first responsibility is to the public, and not to their out-of-state corporate masters and their pet West Virginia politicians whose pockets are lined with some of that ill-gotten gain that comes from your pocket in the form of more electric rate increases.

In a decision worthy of Solomon, FERC cut the baby in half in an order issued today.

If you will recall, PATH made a Sec. 205 filing with FERC to change the definition of "interested party" in their Formula Rate Protocols.

This filing was made for the express purpose of excluding Keryn & Ali (and by extension, all of the 54 million ratepayers in the PJM region) from participation in the examination of PATH's semi-annual Formula Rate filings for the purposes of cost recovery of their project expenses from electric ratepayers in 13 states and the District of Columbia.

Keryn and Ali petitioned to intervene in this proceeding at FERC and filed protests.  PATH objected to our participation as parties in the case, insisting we did not have standing because our interests as consumers were "indirect."

FERC accepted Keryn & Ali as parties in the Order because, "Protesters are retail consumers in an area whose rates may be affected by the rates charged under the PJM OATT. As such they have a sufficient direct interest in the proceeding under Rule 214 and their interventions are granted."

FERC's Order accepts PATH's tariff revision, however it does them no good for their intended purpose:  to prohibit the participation of consumers in the procedures set out in the Protocols for examination of PATH's Formula Rate filings that set transmission rates charged through PJM's tariff.

So, PATH loses by winning.  Congrats to the room full of expensive lawyers who dreamed this up and thanks for making that Sec. 205 filing and forcing the issue with FERC. ;-)

By finding that:

"...our regulations recognize that consumers that are not direct wholesale customers may have a sufficient direct interest in proceedings that affects their retail rates, but a determination of the standing of those seeking to challenge such formula rate filings will need to be made on a case-by-case basis."

FERC recognizes that consumers (that's you!) do have a direct interest in proceedings at FERC that affect the amount they pay for transmission in their electric bills.

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.