One of the surest ways to win any battle is to sit back smugly and watch while your enemies exhaust themselves attacking each other.  Ohio electric customers could see cheaper bills when the dust finally settles in an epic battle going on that pits 3 different power companies against each other and Ohio's PUC.

AEP and FirstEnergy have been busy trying to undercut each other and lock in a bunch of new customers.  The Ohio Consumers' Counsel is against AEP's plan to lock in a bunch of customers and overcharge them.

FirstEnergy is trying to do away with a state-ordered all-electric discount.  Oh, and by the way, they want to steal AEP's customers by offering them lower rates.

Now Duke Energy jumps in and wants to undercut FirstEnergy's "savings."

Isn't "competition" great, fellas? 

Deregulation = not really saving the consumer any money, but the show is pretty entertaining to watch!

Here's more on the situation between the New Jersey BPU, PJM and FERC and industry manipulation of New Jersey's energy market.

As reported last week, New Jersey wants to site several new gas fired generation plants in New Jersey in order to bring down the price of electricity in the state.  The high prices are caused by lack of generation near load.  PJM pretends that the markets it runs encourage market solutions, such as siting of new generation in areas of high load, to reduce cost.  These load pockets experience higher prices because they don't have enough local generation and must rely on long-distance transmission lines to supply enough power.  The more power these load pockets demand, the more "congested" transmission lines become.  When generation is sited near load, "congestion" on transmission lines disappears.  But then so do the enormous profits for the power companies that supply that high-priced electricity via "congested" transmission lines.  "Congestion" also keeps the old, decrepit, dirty coal plants these energy supply companies own on standby to provide generation via transmission lines at times of peak load through "reliability must run" contracts.  These generators are paid handsomely to keep their plants available to supply generation just a few days a year.  They essentially get paid to sit idle.  This "congested" situation is a huge financial windfall to coal-lovin' companies like FirstEnergy and AEP, who also score big profits by building more new transmission to supply more of their coal-fired generation to relieve "congestion" in areas of high load.

If another company builds a gas-fired plant in New Jersey near load, then FE & AEP's profits from RMR contracts, as well as both existing and new transmission lines, goes bye-bye.  PJM has a history of favoring AEP & FE and other big energy corporations in their decisions.  Therefore, PJM is fighting with New Jersey to prevent these new plants from being built.  FERC has weighed in on PJM's side of the argument and New Jersey is now being held hostage by all this market manipulation being carried out by the very entities tasked with ensuring that energy markets are fairly run.

Maryland has also experienced a similar situation where they were prohibited from building new generation near load.

Now, New Jersey says they are not going to tolerate it any longer.  A new transmission line project that will bring more coal-fired power into the state, which was approved by the BPU last year, is now being appealed.  New Jersey's BPU is no longer in favor of the project.  If their earlier decision is kicked back to them, they are free to reconsider.  They could reverse their approval of the Susquehanna Roseland transmission line in the hope of forcing PJM and FERC to acquiesce. 

Who will win this game of chicken?

And I like a little help now and again digging up juicy web tidbits such as, Orphans & Executives at American Electric Power…  Although it was originally written in March, it's still quite interesting, in a barf-a-licious, trainwreck, kind of way.

Be sure to click on that link to AEP's proxy form to see lots more enlightenment that the article doesn't mention, such as how all the AEP executives had their perquisites snatched from them in 2010  :-(  Well, except for Mikey, who was wily enough to get his promise of free personal use of the corporate jet penciled into his employment contract, along with a lot of other goodies.

Why are some senior citizens having to choose between paying their AEP subsidiary electric bill or paying for medication on a monthly basis?  I guess they won't be playing canasta with Mikey down at the Senior Center any time in the near future...

Guess what, "Potomac Edison" and "Mon Power" customers?  FirstEnergy wants you to pay more for electricity in 2012.  The company filed for another ENEC rate increase on September 1, 2011.

According to their filing with the WV-PSC,

"The Companies propose a $31,909,406 annual increase in rates effective January 1, 2012, representing an overall increase of 2.7%.    This amount is comprised of an actual $57,313,276 under-recovery balance at June 30, 2011, offset by a projected $22,903,870 over- recovery for the 2012 rate period at current rates and a $2,500,000 reduction to rates during 2012 to share synergy savings resulting from the merger of Allegheny Energy, Inc. and FirstEnergy Corp. earlier this year."

Here's a translation:

Total amount of increase:  $31,909,406 -- 2.7%

They hadn't recovered enough to pay their costs of providing electricity to you when evaluated on June 30, 2011 (despite all those previous increases in the past couple of years).  This is due to the high cost of fuel (coal) used to produce all their electricity.  The cost of coal, and burning coal to produce electricity, is only expected to go up even higher in the future.

If they don't raise our rates on January 1, 2012, but continue with current rates, they will end up overcharging us nearly $23M for the year.  However, this surplus will be used to offset that under recovered balance from prior years of $57M, still leaving us with a balance due to the power company of around $34M.

That $34M is slightly reduced by the $2.5M "synergy savings" (where do they get these stupid phrases?) that were our consolation prize for the WV-PSC approving the merger of Allegheny Energy and First Energy last year.  As you can see, $2.5M sounds like a lot, but it's really just chump change to the power company in the grand scheme of things.

In addition to those "synergy savings," FirstEnergy was also required to launch an Energy Efficiency program in West Virginia.  According to their filing for a proposed program, that will cost us an additional $11M in rate increases over the next 5 years.  This case is running in parallel to the ENEC rate case and is expected to be combined with it to create just one increase to our bills, therefore, we need to add the cost of the EE plan to the $32M ENEC rate increase to come up with an even bigger jump in rates.

The Energy Efficiency program that FirstEnergy is proposing will provide the following benefits for low-income residential customers:

CFL lightbulbs, water saving devices like faucet aerators and shower heads, and new energy efficient refrigerators.

The program will also provide rebate incentives for commercial/industrial customers to install energy efficient lighting in their facilities.

The program will be paid for by all residential and commercial customers.  Industrial customers (who use the lion's share of the electricity and pay the highest bills) are exempt from paying for the program, but they are still eligible to receive benefits under the program.  However, if a lot of industrial customers take advantage of it, they may be charged for a portion of it in the future.

There are many things wrong with FirstEnergy's Energy Efficiency plan.  First, they set the bar too low.  This plan is much weaker than existing plans FirstEnergy runs in neighboring states.  In addition, FirstEnergy will recover all the costs of this program, including administrative and marketing costs, from residential and commercial ratepayers, many of whom are not eligible for any benefits under the plan.  However, FirstEnergy will offer benefits to industrial customers, who will not pay for the plan.  FirstEnergy will also collect their "lost revenue" caused by the program saving customers money on their electric bills.  This "lost revenue" is overestimated by around 250% in the plan by way of some really creative math.  The low-income residential program is available for both homeowners and tenants in rental property.  The refrigerator replacement program is ripe for abuse by shifty landlords trading used appliances for new ones, then selling the new ones, and replacing them with cheaper used ones, repeat, repeat, repeat, over and over again.  It also looks like FirstEnergy will be paying a contractor to haul away the old refrigerators that are replaced.  As StopPATH's Steve Smith can tell you, there's big money in recycling old metal appliances, like refrigerators.  Steve made over a thousand bucks for our organization by recycling old appliances.

Fortunately, there are two grassroots citizens groups who will be working at the PSC to protect your interests in these two, parallel rate increase cases.  Energy Efficient West Virginia and The Coalition for Reliable Power have teamed up to take on FirstEnergy.  However, we're going to need your involvement to succeed!  Visit The Coalition for Reliable Power and join the organization to receive news updates, action alerts and notification of our public forums that explain ratemaking, energy efficiency programs and how citizens can become involved to protect their interests.  It's free (unlike anything FirstEnergy wants to "give" you).  Also visit Energy Efficient West Virginia to read more about the issues and join their list to get updates and notices of upcoming events.

There's also one more step you can take to make sure that the rate increase that's put into effect will be the lowest one possible, and that's to effect change at the WV-PSC!  The Coalition for Reliable Power is supporting the appointment of Robert Rodecker to the Commission to fill the expired seat of Jon McKinney, but they need YOUR help to get this accomplished!  The Coalition asks that you contact Governor Tomblin by phone at 1-888-438-2731 and tell them, "I support the appointment of Robert Rodecker to the Public Service Commission."  Alternatively, you can use the Governor's email submission form available here.  It will only take you one minute!  Do it right now!

Being an informed and active consumer is our only defense against continued rate hikes by out-of-state energy conglomerates!

"Socialized Cost, Privatized Gain," read one of StopPATH WV's PATH protest signs that took up real estate in my garage for several years until we burned them all in a symbolic bonfire during our PATH Funeral Victory Party this past May.

This phrase succinctly describes the business model of high voltage transmission line developers.  Electric consumers finance these projects through their electric bills, but receive none of the tremendous profits that transmission owners rake in with these projects.  Transmission lines are owned by corporations that intend to make a profit on their product, electric transmission, so let's compare the electric transmission industry's business model to the business model of other corporations who sell products for profit.

We'll use a hypothetical example of a fictional company to flesh out a typical business plan.  The Widget Company makes and sells widgets.  They sell their product for more than it costs them to make it, therefore, they make a profit.  The amount of profit is called their profit margin.  Some companies rely on a small margin on a large number of product sales, while others make a large margin on a smaller number of sales.  However, this particular aspect of profit margins will end up being irrelevant in this example.

The Widget Company needs to determine how much to charge customers for their new SuperWidget.  They must take into account the parts used to build it, the cost of obtaining the parts (shipping, purchasing, accounting functions, storage and handling of parts, the cost of the manufacturing facilities and equipment), the cost of labor necessary to produce the SuperWidget (including all costs related to employees, such as insurance and other benefits, and the labor of the human resources department to administrate it) and the cost of storing, selling, shipping and billing for their finished product.  But wait, that's not all.  The Widget Company still needs to pay a salary to its CEO, rent an office, and make sure there's plenty of fresh coffee for the employees when they arrive to make SuperWidgets every morning.  Every penny that The Widget Company spends on anything must be accounted for and an appropriate share of those costs assigned to the cost of producing the SuperWidget.  Every penny that a corporation spends has to be accounted for and applied to the cost of the products they sell so they can pay their expenses and develop a profit margin that will allow them to make an overall profit.

Now let's suppose the CEO of The Widget Company gives himself a million dollar raise, replaces the coffee with Dom Perignon, and sends all the employees on all-expense-paid vacations to the French Riviera every summer.  He's got to cover the costs of these purchases, so he will have to raise the price of the SuperWidget, and other products, or reduce the profit margin.  If the new price of the SuperWidget ends up being higher than the price of a competitor's MegaWidget because of excess corporate spending, he will not sell enough SuperWidgets to make a profit and the The Widget Company will collapse.  This is why a corporation pays attention to how much they spend, because it all ends up in the price of their product.

Guess what?  You now have a working knowledge of the sub-set of accounting known as Cost Accounting -- these are the guys who figure out prices and profit margins based on company expenses.  If I'd told you this post was about cost accounting, you wouldn't have read past the first sentence, would you?  But now that I've tricked you into reading this far, please keep reading to find out what's different about the electric transmission industry's business model.

The cost of building a high voltage transmission line is shifted to electric consumers through federal and state ratemaking processes.  It exists to provide you with a service, transportation of electricity to your home or business.  When a new transmission line is needed, the transmission owner raises enough capital to cover the cost of building the line (or uses their own capital, but often it's a combination of both).  This capital pays for the physical components of the new line, the purchase of necessary land and rights-of-way, the design and engineering, the cost of necessary capital, and the cost of the regulatory process to gain approval to build.  This capital will be tied up for at least 70 years because electric ratepayers will reimburse the transmission owner for their invested capital little by little, over the useful life of the transmission line.  Therefore, the Transmission Owner is guaranteed a certain profit margin to make it worth their while to tie up their capital in a transmission project.  The Transmission Owner is also reimbursed for other non-capital expenses as they are incurred, such as the cost of marketing, the cost of employees whose time is spent on the project, and other non-capital items and expenses necessary to complete the project.

Now that you're an official cost accountant for a day, you'll be appalled that the Transmission Owner isn't held to the same standards as The Widget Company when it comes to cost accounting.  It doesn't matter how much the Transmission Owner spends because it never affects their profit margin!  Since they aren't selling a product when they're building a new transmission line, it doesn't matter how much it costs to produce one.  They can give their CEO a million dollar raise, serve Dom Perignon in the lunchroom and send their employees on expensive vacations because the ratepayers are picking up the tab and none of those type of expenses are considered "capital" and therefore won't affect budget for the estimated cost of the project (in PATH's case $2.1B).  These expenses are a free-for-all!

The Transmission Owner will make their profit by selling transmission service.  Here's where they are finally subject to an actual profit margin like a normal corporation.  However, the cost of producing their product, the transmission line, is free.  It would compare to The Widget Company obtaining SuperWidgets free from The Sucker Corporation and then selling them for a profit.  Since The Widget Company paid zero for the SuperWidgets, whatever profit they make comes in at 100%, so they have plenty of latitude for Dom Perignon and gold-plated urinals in the Men's Room, and can still make a killer profit.  Of course, The Sucker Corporation has already gone completely bankrupt by then.

A real corporation utilizing the transmission industry's business model would not only go broke, they would find themselves in debt for years because maintaining a decent profit margin does not serve as an important safeguard to control outrageous corporate spending in this business model.  Corporate spending that ends up in the construction cost of a transmission project has no limit, it's a blank check signed by ratepayers.  And as we have found out, there's no one paying the least bit of attention to Transmission Owner spending.

Socialized Cost - Privatized Gain.  Now you know how the electric transmission industry's business model could drive a cost accountant crazy.  It's actually more outrageous than you ever imagined! 

Today was the due date for PATH to file it's 2012 Projected Transmission Revenue Requirement.  The revenue requirement is the amount ratepayers in the 13-state PJM region will collectively pay to finance the PATH project during 2012.  These amounts are collected from your electric provider and passed through to you in your monthly bill.  In Potomac Edison's WV territory, these are not a separate line item, so you never notice it.  It's a mystery brought to you through the federal and state ratemaking processes.

Although the PATH project is "suspended," we still pay to keep it on life support at the federal level as long as the "suspension" goes on.  We are responsible for paying PATH a yearly return on the amount of capital they have invested in the project.  In addition, we cover their taxes on income (including that return), their taxes on the real estate they continue to hold, their operating and maintenance costs for the project.  It looks like there isn't a lot of planned spending in 2012 that would indicate they intend to do anything other than linger in a zombie state in 2012.  This zombie state will earn them a $14,675,718 profit on their investment in 2012.

PJM and PATH told us that their project would be re-evaluated this fall and a determination made on the future need for it under the new planning scheme.  That's not going to happen.  PJM's new planning process has been delayed until sometime next year, according to the latest update I've heard.

Other items of interest in the PTRR -- CWIP balances will fall for both operating companies.  This indicates that the forfeiture of property purchase options will most likely continue on both sections of the line, northeast and southwest of the proposed Welton Springs substation.  PATH is dead, dead, dead along its entire formerly planned route.

As part of the publication of this proposed budget, PATH is required to hold an "Open Meeting" to explain it to "interested parties," and answer your questions.  You are an "interested party."  Don't think you have to be an accountant to participate -- the discussions can get pretty general.  We got a really good group participating in PATH's 2010 ATRR meeting in July, and we look forward to even more participation this time. 

Once again, PATH has chickened out on holding a live, in-person meeting in D.C.  It must be pretty hard to look into the eyes of real people who are personally affected by your company's greed.  The meeting, on October 19 at 10:00 a.m., will be held via conference call -- dial in and ask a question, or merely listen in as others grill PATH, and hear PATH's attorneys sputter, deny and make stuff up.  It's quite entertaining!  :-)

In order to attend, you must send in a R.S.V.P. to PATH's counsel either via email or telephone before October 13.  Instructions are here.

If you're in the tri-state and want to come to a live, in-person, PATH Open Meeting breakfast party on the patio that day, just let me know sometime before the meeting.  Last time we had a lot of fun -- before, during and after the "meeting," which we jointly participated in via speaker phone.

Good news for everyone who pays an electric bill in the 13-state PJM region today!  Potomac-Appalachian Transmission Highline and Trans-Allegheny Interstate Line have recently filed required financial reporting forms with the Federal Energy Regulatory Commission (FERC) that show a rebate of over a million dollars coming to ratepayers via the companies' FERC Revenue Requirements.

As you regular readers may recall, during an "Open Meeting" to discuss PATH's revenue requirement filing in July, I mentioned to PATH's attorneys and accountants that I had found merger charges which were recovered from ratepayers reflected in PATH's 2010 Revenue Requirement.  These merger expenses, related to the FirstEnergy/Allegheny Energy merger in February of this year, were prohibited from being passed through to ratepayers by stipulations in the companies' settlements with the Public Service Commissions of both West Virginia and Maryland.

I'm glad to see that they did their due diligence after the phone conference and located and re-classified these amounts to other FERC accounts that are not collected from ratepayers.  By removing these expenses from the amounts we were charged in our electric rates in 2010, and adding them to another account that acts as an income deduction (write-off) and is not collected from ratepayers, means that they now owe PJM's ratepayers a rebate of an additional $1,086,487 in over-recovered billings, with interest.

PATH's FERC Form 3Q for the second quarter 2011 included this note:

Schedule Page: 114 Line No.: 4 Column: d
Reflects a reclass of merger costs of $99,318 from Outside Services (FERC 923) to Other
Deductions (FERC 426.5).

TrAIL's FERC Form 3Q for the second quarter 2011 included this note:

Schedule Page: 114 Line No.: 49 Column: d
Reflects a reclass of merger costs of $987,169 from Outside Services (FERC 923) to Other
Deductions (FERC 426.5).

I will try to get copies of the actual forms up a little later today, but right now I have an appointment with an "old friend" that I need to rush off to.  Perhaps I'll elaborate on that later, depending on outcome.  ;-)

Now that's some real "energy efficiency" from the folks at FirstEnergy!

In a previous post, we told you about FERC's new plan to take over NIETC designation in an attempt at trumping state authority to site new transmission projects.  This isn't a new plan, but simply another attempt at a plan that has been kicking around for more than two years.  In fact, the plan seems to have been born right around the time former FERC Commissioner Joseph Kelliher left the Commission and went to work as a lobbyist for NextEra Energy, Inc.  When current FERC Chairman Jon Wellinghoff was appointed, he was handed Kelliher's torch to federalize transmission siting and neutralize state authority. 

In the wake of the U.S. 4th Circuit decision in Piedmont Environmental Council v FERC that found FERC could not exercise its "backstop authority" and take over siting of a transmission line in the event a state issued a denial, FERC and the industry went back to Congress to "put in place" new legislation that created interregional planning and cost allocation to promote utility scale renewables and also made PEC v FERC moot by specifically granting FERC backstop authority in the event of a state's denial of a transmission line.   As discussed in an Energy Law Journal article from 2009, page 454, The 2009 Waxman-Markey bill H.R. 2454, Reid's S. 539, and Bingaman's S. 2454 were supposed to take care of FERC's and the industry's "little problem". 

Chairman Wellinghoff even testified before Congress during this time, begging for federal control of transmission siting in order to transport utility scale renewables great distances to load centers.  He also mentioned the need for interregional planning and cost allocation in order to achieve this huge, expensive grid build out.

"In summary, to achieve the Nation’s renewable energy goals, Congress and Federal and state regulators, including the Commission, must address in a timely manner the issues of transmission planning, transmission siting and transmission cost allocation. Congressional action to address all three of these related areas, particularly additional siting authority to build EHV transmission lines to accommodate high quality, location-constrained renewable energy, would provide greater ability to achieve these important goals. For example, both the bill that you, Mr. Chairman, have circulated and the bill introduced by Senator Reid last week address all three of these areas. I would be happy to work with the Congress as you consider legislation to provide a regulatory framework for tackling the challenging energy issues that we face, and to provide Commission staff technical assistance respecting any legislation the Committee may consider."

However, none of these pieces of legislation succeeded.  FERC and the industry had to find another way to federalize transmission siting in order to build their desired "national grid."

When their initiatives in Congress failed, FERC and the industry began to explore achieving their goals through manipulation of existing laws in order to bestow FERC with the authority it was not granted by Congress. 

Last fall, the Congressional Research Service was tasked with creating a report that "looks at the history of transmission siting and the reason behind the movement toward an increased federal role in siting decisions, explains the new federal role in transmission siting
pursuant to EPAct, and discusses legal issues related to this and any potential future expansions of the federal role."

According to this report, "The location and permitting of electricity transmission lines and facilities have traditionally been the exclusive province of the states, with only limited exceptions. However, the increasing complexity of the interstate transmission grid, as well as widespread power outages in recent history, has resulted in calls for an increased role for the federal government in transmission siting in an attempt to enhance reliability."

Get familiar with this theme, because it's prevalent throughout all the documents I've linked in this post.  Those "widespread power outages" apparently refers to the 2003 blackout in parts of the Northeast.  What's missing from this equation is the fact that the wide geographical reach of the blackout was caused by the increasing complexity and interconnected nature of our ever-expanding grid.  The blackout was caused by human error and lack of transmission line right-of-way maintenance as determined by a joint U.S.-Canadian task force.  It was not caused by lack of transmission infrastructure, therefore, building new transmission lines won't prevent another blackout.  A future blackout will only be exacerbated by addition of new transmission lines.

In addition, where are those "calls for an increased role for the federal government in transmission siting" coming from?  They're obviously not coming from the states or the citizen stakeholders, so they must be coming from the industry or the federal government itself. 

"The Energy Policy Act of 2005 (EPAct; P.L. 109-58) established a role for the Department of Energy (DOE) and the Federal Energy Regulatory Commission (FERC) in making transmission siting decisions. The act directed DOE to create “transmission corridors” in locations that would help to ease strain on the interstate electricity transmission grid. The act also granted FERC secondary authority over transmission siting in the corridors. This new federal role in a decisionmaking process that had previously been the province of state governments was predictably met with resistance from those seeking to protect local and regional interests. However, the process of creating “transmission corridors” and increasing the federal role in transmission siting has moved forward. Indeed, there have been calls for further expansion of the federal role in transmission siting by some policymakers and commentators. This report looks at the history of transmission siting and the reason  behind the movement toward an increased federal role in siting decisions, explains the new federal role in transmission siting pursuant to EPAct, and discusses legal issues related to this and any potential future expansions of the federal role."

Policymakers?  What is that word supposed to mean?  Who are these people?  Please read the entire report yourself.  I guarantee it will be a real eye opener.

"One of the most prominent commentators on transmission siting policy has been former FERC Chair Joseph Kelliher. Kelliher served as a FERC commissioner for five years and as FERC chair for three years. In a letter written to Senator Bingaman dated January of 2009, Kelliher, in the midst of his departure as FERC chair, wrote that Congress should grant FERC “exclusive and preemptive federal siting for transmission facilities used in interstate commerce.” Kelliher stressed the importance of expanding transmission facilities in order to address reliability concerns, encourage competitive wholesale markets, and respond to climate change concerns (by allowing “green” energy sources increased access to the grid). Kelliher was critical of the existing framework for electric transmission facility siting, including the EPAct transmission corridor scheme, saying that it “promises years of litigation, while diffusing responsibility for siting electric transmission facilities.”

And Kelliher scored a cushy, new job with a Midwest wind producer, NextEra Energy, who needed new transmission lines to move their product around the country, and are the ones who originally proposed this power grab to preempt state authority to FERC.  What a coincidence!

The CRS report concludes that the legal problem presented by state authority to site transmission lines can be solved through use of the Commerce Clause of the Constitution, giving Wellinghoff the green light for this new coup designed to put federal transmission siting in place.

"Legal precedent suggests that federal involvement with transmission siting would likely pass constitutional muster, assuming a connection to interstate commerce is shown." 

As both StopPATH WV and The Power Line told you in the spring, there is a huge race going on between midwest wind and offshore wind to corner the immensely profitable renewables market in the huge, coastal load centers.  However, energy corporations looking to profit from midwest wind need a $220B "national grid" to win the race.  Offshore wind is lagging behind, but it doesn't require a bunch of new land-based transmission due to its proximity to coastal load centers.  The concept of transporting midwest renewables thousands of miles to load centers doesn't make sense, physically or economically, when a different, more promising, renewable potential is located near load and is expected to be available in the very near future.  It looks like FERC has chosen to side with land-based wind by attempting to enable their necessary "national grid" that is going to be unjustly expensive to consumers and necessitate hundreds of thousands of citizens to sacrifice their properties for new transmission line rights-of-way.

The Energy Law Journal article comes to a conclusion that NIETC corridors and FERC backstop authority have not been effective in encouraging new transmission, and it has nothing to do with P.E.C v FERC.  In fact, new transmission was on the rise, even before the EPAct 2005.  The article concludes that the real driver has been FERC's transmission incentives.  In fact, they quote AEP as saying, "the Commission‘s incentive policies are the single biggest contributor to rapidly growing investor interest in new interstate transmission investment."  FERC currently has an open NOI on their transmission incentives policy.  Don't miss your opportunity to comment on the single biggest factor driving expensive and unnecessary transmission projects -- deadline is September 12.

Former FERC Commissioner Suedeen Kelly's dissent of Order No. 689 (2006) summed up the problem with federal transmission line siting quite well:

"The authority to lawfully deny a permit is critically important to the States for ensuring that the interests of local communities and their citizens are protected. What the Commission does today is a significant inroad into traditional state transmission siting authority. It gives states two options: either issue a permit, or we’ll do it for them. Obviously this is no choice. This is preemption."

Chairman's Wellinghoff's "three issues" mentioned in his 2009 testimony before Congress (planning, cost allocation and siting) are now being accomplished by doing an end run around Congress.  FERC Order No. 1000 took care of the planning and cost allocation.  It's not surprising that a review of the more than 60 requests for rehearing filed on the Order contain accusation after accusation that FERC has overstepped its statutory authority.  Now the last piece is being achieved by FERC's recent plan to assume DOE's authority to create NIETCs and wield the sledgehammer of interstate commerce to prevent any further meddling by states, environmental groups or citizens.  FERC's recent self-annointed "authority" will most likely be tied up in the courts for many years, which will allow offshore wind to catch up and ultimately allow sanity to prevail.

As long as energy corporate "persons" are permitted to continue unfettered lobbying of both Congress and FERC to advance their financial interests, we'll continue to see higher energy costs, a more vulnerable electric grid, eminent domain land grabs, increased federal preemption, a slow economic recovery in coastal states that are prevented from developing their own local renewables, and subversion of your individual rights.

The Power Line has the scoop on FERC's new plan to utilize DOE's failed NIETC designation power to usurp the authority of state Public Service Commissions to site new transmission lines.  This means that the power companies will be back to playing the FERC backstop authority joker card in state approval processes in an attempt to force state authorities to approve applications for new transmission projects.

Here's a link to FERC's plan.

The NIETCs (National Interest Electric Transmission Corridors) were a product of the industry-designed 2005 EPAct that was supposed to ease opposition to new transmission projects.  The DOE was tasked with developing "congestion" corridors that were creating a supposed transmission emergency necessitating new projects to ensure reliability and alleviate "congestion."  Under the original plan, a project sited in one of these corridors could not be denied by a state, or authority to site the line and grant the power of eminent domain to the power company would be given to FERC, removing the project from state authority and control.  In the PATH case, the power companies continually played this joker card on the state commissions as a way to make the states go along with numerous PATH-requested delays, lest they lose any control of siting.

However, the language of the EPAct only gave FERC backstop authority in the event that a state failed to make a decision within one year of application.  It did not give FERC backstop authority in the event that a transmission application was denied within one year.  This is a fine example of the industry trying to pervert existing law to suit their purposes.  The Piedmont Environmental Council took them on at the U.S. 4th Circuit in 2009, and won.

In February of this year, the U.S. 9th Circuit vacated the NIETCs that DOE had created and remanded the case back to DOE for another "congestion" study.  This effectively made FERC's backstop authority useless as a tool for PATH, which was sited in one of the vacated corridors.

Now FERC wants to take over designation of NIETCs and thinks they can do it better than DOE did.  They're trying to frame it as a "national security" issue -- just one step above the power company propaganda machine that's been screeching about "brownouts and blackouts" in an attempt to scare the American people into allowing new transmission projects that do nothing but increase corporate shareholder profits.  FERC's mission is to regulate utilities to benefit the interests of consumers.  FERC's getting a little far afield in their conspiracy with the energy corporations to build a "national grid" that the consumers don't want or need and cannot afford.

This is an industry attempt, aided by FERC, to subvert your state's authority to protect your interests.  If you think driving 6 hours to Charleston to defend yourself against eminent domain and the inherent health risks of living in close proximity to transmission lines is burdensome, along with spending your life savings on a lawyer and experts to protect your interests, imagine how much stress and money it's going to cost you to defend yourself at FERC when your state PSC is bound and gagged over in the corner and can't do anything to help you.

FERC is also trying to get control of the NIETCs while state authorities are still spinning and filing requests for rehearing of their recent Order No. 1000 and aren't paying attention to the other shoe that has dropped.  NARUC (National Association of Regulatory Utility Commissioners) recently filed their request for rehearing, stating:

The National Association of Regulatory Utility Commissioners, which had cautioned FERC about preserving states' rights in the proposed rule, argues in its request for rehearing that the order "oversteps FERC's jurisdiction, fails to recognize the states' decision-making authority, and may have the unintended consequence of actually stalling transmission planning and cost allocation."

If they're complaining about Order No. 1000 usurping states' rights... they need to refocus their attention on this issue!

It's all part of the industry's grand scheme to federalize transmission siting and run roughshod over those "NIMBYS", environmental organizations, and state authorities who have been effectively preventing costly, unneeded transmission projects from being built.  If you're a regular blog reader here, you've heard all this before.

Now they've got a plan from FERC to take over transmission siting, not by changing the law, but by manipulating the existing law.  And now it's all about midwest wind so that the environmental organizations that fought the manipulation of law in the past will be mollified into not challenging them this time.  If manipulation of law was wrong last time, it's still wrong this time, no matter the color of the electricity flowing through unneeded transmission lines. 

By eliminating one enemy, the industry is left with only opposition by states and citizens, so polish up your army boots and prepare for battle. 

UPDATE:  Click here to read more about this issue!

Victory today for the opponents of the MAPP project!  A news release says that PJM has determined that the project will not be needed until sometime in the 2019 - 2021 time frame.  Well, isn't that quite scientific?

"The letter states that PJM's action "does not constitute a directive by PJM to cancel or abandon the MAPP project," and also directs PHI to proceed with those development efforts "reasonably necessary to allow the MAPP project to be quickly re-started..."

Sound familiar, PATH opponents?  Yes, it's the same mushy-mouthed crap PJM said when they "suspended" the PATH project.

MAPP has asked for delays from the MD-PSC and the VA-SCC.

What this means is that the MAPP project is also a dead fish, however Pepco wants to continue to hold their FERC incentives and continue to collect a 12.8% return year after year on their investment in the project from all PJM ratepayers. 

"The notification also states that PJM will be using a new stakeholder process to evaluate its transmission planning methods, which could lead to changes in PJM's assessment of MAPP's in-service date. PJM does not expect the new evaluation to be completed until sometime in 2012."

This is the new planning "stakeholder process" that was supposed to re-evaluate the PATH project before the end of this year.  Looks like they're not planning to have it completed until sometime next year now.

Here's a link to PJM's letter holding MAPP in abeyance.  Looks like PJM learned a thing or two from our reaction to the PATH "abeyance."  They have not removed MAPP from the RTEP, but given it a new in-service date of "2019 - 2021."  Since when does an RTEP have such unclear in-service dates?  Oh, that's right, it's just PJM protecting another one of its pet projects...

Another Project Mountaineer failure that will linger on and cost the consumers money and provide absolutely no benefits.  MAPP opponents should join is in insisting that FERC take action on these "suspended" white elephants and derail their gravy train in the pursuit of just and reasonable electric rates.