Just got this FERC order.  I'll admit I haven't read the entire thing or studied it much yet, but it looks significant when I jump around and cut to the chase.

The Commission orders:

(A)    The Settlement Agreement is hereby approved, as discussed in the body of this order.
(B)    Rehearing and/or clarification of the February 29 Order is hereby granted, in part, and denied, in part, as discussed in the body of this order.
(E)    Pursuant to the authority contained in and subject to the jurisdiction conferred upon the Federal Energy Regulatory Commission by section 402(a) of the Department of Energy Organization Act and by the Federal Power Act, particularly sections 205 and 206 thereof, and pursuant to the Commission’s Rules of Practice and Procedure and the regulations under the Federal Power Act (18 C.F.R. Chapter I), a public hearing shall be held concerning PATH’s proposed base ROE. However, the hearing shall be held in abeyance to provide time for settlement judge procedures, as discussed in Paragraphs (F) and (G) below.

If you find this stuff boring, cut to the chase yourself by reading the end of the document first.  Looks like PATH's sweet deal, predatory ROE is about to be sliced by FERC's axe.  Ouch, direct hit right to PATH's weak spot, it's wallet!

And speaking of public hearings... "the public" -- that's us!  Here's a new democratic process to get involved in, now that the BZA decision has been made.  When PATH gets on a losing streak, they do a great job!  Congratulations, PATH, good luck in that great "business plans that have failed" graveyard!

Link to FERC News Release

Since we're on this campaign finance kick, how about a little update about PATH's senatorial shopping list?

As reported back in August, Joe Manchin's campaign has been the recipient of huge amounts of power company money, and the donations have continued at a steady pace.  Check out the list of his donors available here.

Under "Committees Who Gave To This Candidate" don't miss the hysterically-named "THE AMERICAN ELECTRIC POWER COMMITTEE FOR RESPONSIBLE GOVERNMENT".  Ha ha ha!  *wiping away the tears*  I don't see "bought and paid for" in any known definition of the word "responsible".  Puh-leeze!

In order to be fair here, John Raese also received corporate campaign contributions, although not much from power companies.  See his list here.

And then there's Jesse Johnson.  See his list.  I promise it won't take much time since, "No Committees Gave To This Candidate".

Remember to vote November 2!

I received the above postcard in the mail over the weekend.  While the postcard poses the question, "Selling Out Almost Heaven?", we'd never have to ask this question if the PATH companies weren't seriously abusing their FERC-granted cost recovery system.

These questionable campaign contributions are almost certainly one of PATH's claimed income deductions for 2010 under FERC's Uniform System of Accounts in account 426.4, Expenditures for certain civic, political and related activities.  The PATH parent companies are using every opportunity, excuse or "error" to shove company expenses into PATH project accounts so they become the financial responsibility of all the ratepayers in the 13-state PJM region.

The FERC USoA definition for 426.4 states:

"This account shall include expenditures for the purpose of influencing public opinion with respect to the election or appointment of public officials, referenda, legislation, or ordinances (either with respect to the possible adoption of new referenda, legislation or ordinances or repeal or modification of existing referenda, legislation or ordinances) or approval, modification, or revocation of franchises; or for the purpose of influencing the decisions of public officials, but shall not include such expenditures which are directly related to appearances before regulatory or other governmental bodies in connection with the reporting utility's existing or proposed operations." 

Since the entire PATH project is a proposed operation of the reporting utility (which for the purposes of cost-recovery is Potomac Appalachian Transmission Highline, LLC, and not American Electric Power, Allegheny Energy or other parent company), should PATH be allowed to deduct these kinds of political bribes from their project income?

Let's examine what these contributions were intended to accomplish -- defeat of SB614, which provided for notification of property owners whose property would be subject to eminent domain in PSC cases involving the siting and construction of electric transmission lines in time to petition to intervene and become legal parties to the case.  The only thing SB614 provides for is individual notice and an opportunity to become a legal party to the case in order to try to defend individual property rights.  I guess the power companies don't like to fight fair  -- they want to have the power of eminent domain while shutting the property owner out of the process.  They want to silence the property owner's voice.  How much of your money will they spend in order to rob you of your right to have a voice?

According to Senator Unger, the power company lobbyist said, "We are sending Senator Unger a message".  Well, I have a personal message of my own for American Electric Power --  see you at FERC!  PATH's Formula Rate Tariff provides for a process by which their expenses can be examined and challenged by interested parties.  If they're going to spend my money this way, I'm certainly interested.

What do you think?  Post your comments and be sure to send your own message to PATH on November 2.  Despite their best efforts to influence our political process with handfuls of YOUR cash, they can't cast a vote.  Do your part to take our state back from the corporate interests who continue to stuff our politicians' pockets with cash in exchange for selling out the citizens' rights.

Five citizens from West Virginia and Maryland attended PATH's 2011 PTRR meeting this morning in DC, while several  more attended via conference call from all three states.

Attending from their side were PATH attorneys Randy Palmer and Monique Kennedy, Milo Pokrajac from PATH's Regulatory Finance something or other, an attorney from Pillsbury Winthrop (where the meeting was held) and Dennis somebody-or-other from AEP's Ratemaking something.  Yeah, I was paying attention ;-) 

On the phone, in addition to citizens, were some AEP people, a guy from Dominion Power, a guy from Old Dominion Electric Cooperative and Anne Johnson and Gary Alexander from Maryland's Office of People's Counsel.

Here's a link to what PATH presented, in case you're into that stuff.  When asked what the $36.9M revenue requirement would cost the "average" (1,000kwh per month) Allegheny Power customer in West Virginia, Dennis whats-his-name came up with the figure of about 5 cents per month.  Doesn't sound like much  -- but they don't even have proper applications in 2 of the 3 states yet, much less a permit or anything constructed!

The sound system in the room didn't work, so we ended up with Randy playing Jerry Springer walking around the room with the lone working microphone.  When I think about how much this meeting cost the ratepayers, the least we could have gotten was a working sound system.  Is that too much to ask?

First question came from WV's Patience Wait who pointed out a serious flaw in the protocol whereby the PTRR's Attachment 4 references a FERC Form 1 that doesn't exist.  Watching them dance around this was fun, but not a one of them thought it should be corrected.  This was related to Randy's Resentful Rule #1, "Participants may ask questions and seek information regarding the 2011 PTRR. To the extent that the PATH Companies’ participants do not have the information available during the meeting to answer a question or information request posed during the meeting, participants may submit written information requests pursuant to the PATH formula rate protocols set forth in Attachment H-19B of the PJM Tariff."  The best part about this is that Randy was notified in advance that this question would be asked.  So he made up the rule and purposely didn't bring it.  Not to worry, I'll get the information eventually, although I should have had it before the meeting, except I got out-lawyered by a lawyer.  I hope it strokes his ego just right, because it didn't affect mine at all.

WV's Steven Smith next made Milo explain the Unamortized Regulatory Asset (which is all their costs that were incurred prior to receiving their ability to recover costs as incurred from FERC), Accumulated Deferred Income Taxes and Working Capital.  I'm not going to explain all that here.  Do you really want to know?  Probably not.

WV's Dan Lutz asked a question that they really didn't answer to his satisfaction.

Next I asked them why all the advertising for next year was placed into the "Safety, Education, Siting and Outreach" category when the advertising didn't even exist yet.  It's because all the ads they do are "educational", don't you know?  I don't know about you, but I never feel "educated" after coming across a PATH ad -- I feel more like going to take a shower.  Here's the real reason:  because that's the only kind of advertising that the ratepayers are on the hook for!  God forbid they would have to pay for their own propaganda, huh?  I was also told that the definition was in FERC's Uniform System of Accounts (it's not) and then Monique tried to tell me that the definition is somehow sprinkled around FERC's case law and that I should call them.   Nothing I was saying was registering, but at that moment WV's Ali Haverty jumped in over the phone and informed Monique that she had already called FERC and been told that advertising should not be placed directly into SESO without a determination of its nature being made first and that to do so "raised a red flag".  Monique made a face and tried to look skeptical.

And while we're on this subject, the body language and expressions were an exquisite pleasure!  Almost made it worth the commute to DC to witness it. 

I can't remember how it started, but at one point Gary Alexander started ranting at Randy about how he should send me the H-19B protocols so I could request further information, and he was reluctant to relinquish his soapbox, which was obviously stomping on Randy's main nerve before he could manage to get a word in edgewise to tell Gary that both Ali and I had already been availing ourselves of H-19B's protocol!

I believe it was Maryland's Esther Brinkmann who brought up the expenses of a lobbyist that showed up in BOTH PATH's Outside Services and Advertising accounts in 2009.  Monique was very proud of herself to announce that they had noticed and corrected it and it was only around $4,000.  Sorry, Monique, but it actually totaled $11,334.00 and you only noticed it because of our discovery requests.  If we weren't all over you like stinkbugs looking for a place to hibernate, the ratepayers would still be paying for this expense that's not allowed.  Monique claimed it was just an error, and those happen in accounting all the time.  At PATH, that's the truth -- they happen all the time and result in millions of dollars of expense annually put upon the ratepayers that should not be allowed under FERC's US of A.  Here's an idea -- why doesn't Monique find all the rest of PATH's "errors" and save me the trouble of taking this to formal challenge before FERC.  Please?  I've never seen such a screwed up mess.  I'd almost be embarrassed for PATH, if all the "errors" weren't sticking it to the ratepayers and costing them money.  To top it all off, they claimed that these expenses are audited by both internal and independent auditors (Deloitte and Touche).  Really??

Moving right along, I posed the following question:  Since PATH was originally proposed, its permitting process has been delayed three years, which is entirely PATH's fault.  How much extra has this delay cost the ratepayers?

Randy had to take offense and state that it wasn't PATH's fault.  Milo then answered that it has cost the ratepayers three years worth of O & M, taxes, return on rate base, etc.  Monique then had to repeat that it wasn't PATH's fault.  Ali Haverty took exception to that and reminded them that every delay in the case has been at PATH's request. 

I also asked Milo about PATH's $2.1B price tag.  $2.1B is the cost of PATH's physical components (towers, wire, etc.) and the land it's going to sit on.  That's it.  In actuality, the ratepayers are also on the hook for O & M, pre-construction costs (that regulatory asset mentioned earlier), taxes, return (PATH's hefty profit), and every other expense imaginable associated with the project.  Milo agreed that this was correct.  Conclusion:  The true cost to the ratepayers will be staggering!  We can't afford PATH!

Great meeting -- we should do this more often!  Well, maybe not.  Getting up at 4 a.m. to commute into the city is a bad habit that I gave up many years ago.  Tomorrow morning I'm going to punch the alarm and roll over.

The PATH companies have submitted their Projected Transmission Revenue Requirement for 2011.  They are projecting a 2011 revenue requirement of $36,895,492 for recovery of dollar for dollar costs such as O & M and income taxes.  They also recover a return.  The big spending, however, ends up in the rate base.  The amount of the yearly revenue requirement will be collected beginning January 1, 2011 from the 51 million rate payers in the PJM region.  That means you!  PJM pays the PTRR to PATH and then bills this amount to your electric service provider, who passes the cost on to you in your monthly bill.

The formula rate set by FERC is administered by PJM through the Open Access Transmission Tariff (OATT) Attachment H-19A & B.  PATH is required to submit a complicated-looking set of documents twice a year to first collect their projected revenue requirement, and then to report actual spending when the year ends.  At that time, the actual is compared to the projected amount which has been collected throughout the year and an over recovery is refunded, or an under recovery is added to the next year's recovery (process known as "true up").

Now, herein lies the problem.  Nobody pays any attention to how much they spend or whether or not it should be an allowable expense!  That is the job of "interested parties" like you (and your state PSC, who doesn't pay attention either).  This "business as usual" scenario has been going on forever and is costing you money.  Want to do something about it?  Here's how:  Wednesday, October 6 at 10:00 a.m., an "Open Meeting" on PATH's 2011 PTRR will be held at Pillsbury Shaw Winthrop Pittman, 2300 N Street, Washington DC.  If you cannot attend in person, you may attend via conference call.  This is your opportunity to have PATH's proposed spending explained to you by Allegheny Energy's Assistant General Counsel, and your opportunity to ask questions.  We are urging all citizens to get involved in how your money is being spent! To attend the meeting either in person or by phone, here's what you need to do:  RSVP to [email protected] by September 30 with  your name, address, name of person or entity you are representing, and whether you will attend in person or via phone.  You may also RSVP via phone at 724-838-6894.

Here's just a sample of what may be discussed at one of these meetings:  "Safety, Education, Siting and Outreach Advertising".  This expense ends up in the O & M total. This is the cost of all PATH's propaganda advertising that you've seen and continue to see.  Ever wonder how much that costs and who's paying for it?  In 2009, PATH recovered $2.1 million for advertising costs.  In 2010, they are collecting $1.78 million.  In 2011, they project only $400,000 in advertising costs.  But, what happens if they spend more?  No biggie -- they just collect it from you the next year if the true-up reveals they didn't collect enough. Interested enough to send in your RSVP yet?  I guarantee you the questions for Randy Palmer are going to get a lot harder this time.

Petition to intervene in the Allegheny Energy/First Energy merger case before the West Virginia Public Service Commission has been filed by counsel for Jefferson County Intervenors Group.  

PATH does  not exist in a bubble.  I wonder how interested First Energy would be in Allegheny Energy without the future potential for PATH to rake in the bucks?  Hopefully, we'll soon find out.

Jackson Kelly's (PATH's counsel) response to JCIG's petition to intervene seems a bit vexed, with an undertone of "poor me" undeserved persecution.  Melick even goes so far as to show everyone how the truly evil mind works with a completely unfounded accusation that JCIG is intervening simply to delay the PATH case or to force the applicants into a bargaining situation.  Wouldn't Freud have fun with the transference going on here?  

How many specious arguments can Melick create to try to keep us out of this case?

1.  Our interests are already represented by the Consumer Advocate Division.

The response gathers JCIG members into a group of residential electric customers, despite the fact that the reason for JCIG's intervention is clearly stated in their petition as, "The members of JCIG are concerned about how the merger proposed in this proceeding relates to, or will otherwise impact, the construction and operation of PATH and future transmission facilities."  Nowhere in the petition are residential electric rates mentioned, therefore stating that CAD is already representing JCIG's interests is false.

2.  JCIG's concerns are being adequately handled in the PATH case.

In their response, counsel for joint applicants states that JCIG's concerns "may (or may not) bear on PATH's certification under W. Va. Code 24-2-11a".  Since this same counsel has denied many requests for information in the PATH case as falling in the "may not" camp, I suspect (and they actually imply) that their answer to these requests would be the same.  They reach too far in assigning motives and relevancy to JCIG's concerns... which looks like the scrabbling, death claw of the desperate.

3.  JCIG's concerns are with Federal policy, which the WV PSC has no jurisdiction over.

The classic "do as I say, not as I do".  Joint petitioners are quick in attempts to prevent other parties from raising Federal/PJM/NERC issues, while they use the same as the basis for their "need" argument and continually play the FERC card in an attempt to bully the three state commissions into granting their wishes.  This is the behavior of a petulant child and should be dealt with the same way these bratty, controlling children are disciplined in real life.  Call their bluff and try not to laugh as their supposed "power" fails to materialize!

He did get one part right, however, "Joint Petitioners acknowledge that JCIG members are sincere in their opposition to PATH".  And we're not going away either. But wasn't there a better word in their thesaurus than "sincere"?  I'm truly disappointed by the lack of creativity in the vocabulary used here.

Why is PATH so resistant to answering these questions? How can we feel that this merger will be a good thing for the average electric consumer and a good thing for potential PATH victims when their counsel gets his knickers in a knot over a simple petition to intervene in the case?  Did we hit the tender spot?  Got something to hide?  Maybe this merger is something everyone should object to rather strenuously.


Update:  Just wanted to add this link I was sent regarding First Energy's fault in the 2003 blackout.  We've got links to the bigger report referenced in this article around the website, but this article is short and sweet and worth reading.  "It wasn’t until the lights went out in the First Energy control room that the First Energy personnel had a solid indication that the problem was indeed in their service territory (and not somewhere else)."

Around a dozen citizens from West Virginia, Virginia and Maryland attended PATH's 2010 Annual Update Rate meeting in DC on July 14.  Despite PATH's dire warnings about "limited space", we were the ONLY ones who showed up, aside from the Allegheny, AEP and Pillsbury, Winthrop, Shaw, Pittman (another one of PATH's many attorneys) representatives on the other side of the table. It sure would have been lonely without us!  We also had a bunch of citizens from the different states attend the meeting via conference call, along with some Allegheny employees, AEP employees, one guy from a PSC and someone from Old Dominion Electric Cooperative.

This meeting's purpose was "an explanation and clarification of the 2010 Annual Update of the PATH formula filed with the Federal Energy Regulatory Commission in Docket No. ER10-1363-000 and will provide meeting participants with information and clarification concerning the 2010 Annual Update, the Actual Transmission Revenue Requirement, the True-up Adjustment, input data and cost detail associated with the Annual Update."

In plain English, this is where they presented their actual PATH expenses vs. the estimate they collected for 2009, with either an under recovery being added to rates, or an over recovery being refunded to rates (both with interest).

I'm not going to get into the complicated accounting going on here.  I'm sure you don't want to read it.  But overall I got the impression that maybe it's not all that carefully done since one of the first things we were told was that a revision had just been filed the previous day to correct a $460,000 error where they moved costs to a different account (credit) without a corresponding subtraction (debit) from the original account, essentially doubling the expense which continued to reside in both accounts.  C'mon, I know mistakes happen in accounting (I worked in the field for a number of years), but that kind of mistake is ridiculous!  It was especially precious to have the accounts explained to us ignorant citizens as "buckets" where expenses are placed (because "account" is just such a hard word to comprehend?)  Oh yes, they were prepared for us.

The second half of the meeting was devoted to an explanation of the PJM Interconnection, LLC, FERC Electric Tariff's Attachment H-19B, which provides for Informal and Formal Challenges of recovered expenses by interested parties.  This seemed to be necessary because the "cost detail associated with the Annual Update" wasn't really available.  They either didn't know or didn't have the information when they were asked about specific expenses such as PATH sponsorship of sporting events and financing of astroturf front groups.

The only attendees who asked questions were the citizens, and the gentleman from Old Dominion Electric Cooperative. Seems like it would have been quite the dud without the presence of the citizen "interested parties".  There is no real oversight of how much they spend (and no definition of "prudent" cost) -- PATH spends and then has these meetings that no one attends or comments on, and if no one files a challenge, they add their costs to your electric bill.

We had a truly great group of attendees who asked pertinent questions and pretty much refrained from straying into the forbidden territory of asking questions that didn't have to do with the subject matter.  AEP's attorney, however, had to be reminded of the rules by the attendees when she began to hold forth about how much PATH is "needed".

So, who wants to go again in September for PATH's 2011 projected revenue requirement?  Someone other than the fox needs to watch the hen house.

Allegheny Energy will be holding an open meeting for interested parties regarding PATH’s 2010 Annual Update filed for informational purposes with the Federal Energy Regulatory Commission on June 1, 2010 in the offices of one of their attorneys in DC this Wednesday, July 14 at 10 a.m.  A copy of the meeting announcement is below. Randy Palmer, Allegheny's general counsel, has informed Patience Wait in response to her meeting RSVP via email that citizens - that's us! - can attend the meeting, but we must provide our names by 10 a.m. tomorrow (for security purposes). Several representatives from WV, VA and MD citizen groups are planning on attending this meeting in person. If you'd like to go - either with us or meeting us there - you MUST RSVP to Palmer before 10 a.m. on July 13.  If you cannot attend in person, you may attend via phone (instructions are in the meeting announcement).  Meeting materials are currently unavailable on PJM's website -- please ask Palmer for a copy when you send in your RSVP.  See this post for a link to another copy of the financial information that is the subject of this meeting. The citizens who are making the trip to DC for this meeting ask that you support us by taking advantage of the call-in option and asking questions (or simply listening in).  Allegheny Energy is spending YOUR money -- let them know that you are paying attention! 
---------------------------------------
From PJM's website, here's the meeting notice:
To Interested Parties:
 
In accordance with the formula rate implementation protocols, PATH will host an open meeting among interested parties regarding PATH’s 2010 Annual Update filed for informational purposes with the Federal Energy Regulatory Commission on June 1, 2010.
 
Date/Time: Wednesday, July 14, 2010 at 10 am ET
 
Location: Pillsbury Winthrop Shaw Pittman LLP
2300 N Street NW
Washington, D.C. 20037-1122
 
To accommodate those who are not able to travel to DC, we are offering a call-in option. The call in number is 202-663-9333; access code 6639120#. To ensure that we have enough phone lines reserved, please RSVP to [email protected]. By sending an RSVP, we can make sure you have any handouts prior to the call.
 
Should you need further assistance please contact Randall B. Palmer, Assistant General Counsel – Federal and State Regulatory and Chief Compliance Officer, at:
 
Allegheny Energy, Inc.
800 Cabin Hill Dr.
Greensburg, PA 15601
(724)-838-6894

Okay, I promise, last post tonight about Allegheny Energy's Q1 2010 Earnings Call transcript, but I've been waiting to have this thing in quotable, linkable form since May.  It's like a bottomless bag of nasty little M&M's...

Amount spent on PATH so far:  $55 - 60 million. 
Additional amount expected to be spent in 2010:  $65 million.  Total- $125 million, and they haven't even got pending applications accepted in two of the three states yet, much less constructed anything.

Sounds like we're a little off budget, doesn't it, Paul?

"So you’ll see some spending, but the big spending would be in the last two or three years of the project."

Danielle Seitz - Dudack Research: And I am assuming that when you get the date, the estimates will have changed and you will adjust the estimate?

Paul J. Evanson - Chairman, President and CEO: We will, yes. And we’ll get much and we’ll start kind of fine tuning the estimate. I mean, that a billion two costs that we have was done two, two and a half years ago. So that’s brings the change. And we’ve learned a lot in building out the TrAIL project. So that may turn out to be a little conservative number.

HOW MUCH IS THIS GOING TO COST THE RATEPAYERS, PAUL?