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Duke's Western Carolinas Transmission Project Draws Community Opposition

10/4/2015

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When does cleaning up your dirty habits turn into an even bigger problem?  When you're beleaguered dirty energy maven Duke Energy, and you try to profit from cleaning up your mistakes.  And the folks in the western Carolinas are having none of it.

Duke's audacious plan is to shut down a 368MW coal-fired generator in North Carolina, replace it with a 650MW gas-fired generator, then build a new 230kV transmission line from the upgraded plant to a new super-sized substation in South Carolina so it can ship out all that excess generation for big profits.

Except the good people of North and South Carolina have come together to oppose the project.  And they don't seem to be getting the least bit tired, or distracted by Duke's efforts to divide and conquer them by fomenting local routing battles between neighbors.

Word is that Duke had to fast-forward its initial routing comment period after it received more than 9,000 comments in just a few short months.  What's going to happen when 9,000 people show up to oppose Duke's plan during regulatory commission hearings?

Get more information, and sign on as a supporter, at the website of the Carolina Land Coalition.  Becoming a supporter is free, and you don't have to be from the local area.  You just have to have a healthy skepticism for any utility's plan to overbuild generation and transmission to fatten its own balance sheet.

More fun to come...
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Dominion's Skiffes Creek Project Is Up The Proverbial Creek

10/3/2015

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What's been happening in transmission news this week?  The Virginian Pilot took a look at Dominion's Skiffes Creek 500kV transmission project... and it sort of looks like the project itself is up the creek.  Dominion has lots of excuses for why it needs to build a ginormous transmission line across the James River, but none of them are exactly logical.  Skiffes Creek is not really the only option to ensure reliability, it's just the one that regional grid planner PJM Interconnection approved a long time ago in an uncompetitive environment.  If the transmission project is not approved by the U.S. Army Corps of Engineers, then PJM will have to go back to the drawing board and re-engineer another solution to what it views as a reliability problem.

Gotta wonder... if this problem was put out for bid in PJM's new competitive transmission process, would other companies have better solutions?  Solutions that solve the problem without creating an eyesore and river hazard of an aerial crossing of the James River?  Probably.
Dominion contends that the technology doesn't exist to run a reliable line of the caliber and kind needed under 4 miles of riverbed - at least not without a price tag in the billions.
Oh, baloney, Dominion!  Take a look at the Artificial Island project that is proposed to cross underneath the Delaware River just a couple states to the North.  When transmission solutions are evaluated in a competitive environment, a submarine crossing suddenly becomes viable, not only from a cost standpoint, but also with an eye toward "constructability," a measure of the ease of getting a project approved and constructed with minimal opposition.  In the case of the Artificial Island project, PJM ultimately selected a proposal by LS Power that uses a 3.5 mile submarine crossing of the river in which the company capped its construction costs.  Dominion needs to re-evaluate its submarine options.

The Skiffes Creek project is a cash cow for incumbent utility Dominion.  Under PJM's old, pre FERC Order No. 1000 transmission project selection process, the incumbent was allowed to propose all solutions.  The incumbent could propose only those solutions that would provide a healthy shot to its balance sheet.  FERC recognized that this process didn't necessarily inspire the best and cheapest solutions and has revolutionized the way regional grid planners select new transmission projects.

Dominion tries to hide behind an aura of concern for ratepayer issues.


Curtis said the Skiffes over-the-river plan, at $60 million, is indeed on the lower cost end of the dozens of routes and options the company considered. Whatever the expense, though, customers will reimburse Dominion. Rate hikes are automatically allowed for utilities that build infrastructure to strengthen the grid.

"So these are rate-payer dollars, not Dominion dollars," Curtis said. "But the opposition is still committed to the conspiracy theory."
Curtis tells only part of the truth here.  The part he leaves out is that Dominion will be earning a double-digit return on its $60M investment in the project over its useful life of approximately 40 years.  The more the project costs, the more Dominion makes in pure profit.  Dominion is hardly agnostic about ratepayer costs.   Also, if Dominion had to compete to build this reliability solution, it would face giving up this potential profit entirely to another company with a cheaper, less intrusive proposal.  There IS a conspiracy... because the investment is Dominion's dollars, not ratepayer dollars.  And Dominion earns a healthy return on every dollar it invests in this project.

So, are there other solutions?  Opponents accuse Dominion of not examining and considering all options. 
"What's frustrating is that people think we're being disingenuous," Curtis said. "They don't believe we've looked at all the alternatives, or they think we're only concerned about making the most money for our shareholders."
The article reveals
Several lines already feed outside power to the Peninsula, but it won't be enough without the Yorktown plant, which Dominion says is too costly to upgrade in the face of new federal clean-air standards.
Did Dominion consider upgrading and rebuilding the existing lines to increase capacity before settling on an entirely new transmission line?  C'mon, Dominion, you're no stranger to this plan... after all, your plan to rebuild the 500kV Mt. Storm-Doubs transmission line to increase its capacity is what killed the entirely new 300-mile PATH transmission line.  Or are much cheaper rebuilds only considered when Dominion finds itself in a competitive environment?

How much time and money will Dominion's effort to keep itself from being propelled "up the creek" with Skiffes Creek cost ratepayers?  Dominion's blind pursuit of this project in the face of better alternatives is what may cause "rolling blackouts" on the peninsula.  The longer Dominion delays by backing a lame horse, the closer the peninsula gets to a genuine reliability issue.  Get with it, Dominion, and switch to a solution that everyone can agree upon.  Don't you have a legal obligation to keep the lights on?  Or only one to increase shareholder dividends every quarter?
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FERC ALJ Rules PATH Must Refund Costs of Influencing Public Officials

9/16/2015

19 Comments

 
My challenge partner, Ali Haverty, reminded me this morning of a Facebook meme we shared months ago.  It's a photo of two owls on a branch, and says, "Sometimes I just want someone to hug me and say, 'I know it's hard.  You're going to be okay.  Here is chocolate and 6 million dollars.'"

And that's what we got.  Of course, the 6 million dollars belongs to the 61 million ratepayers in the PJM region.  Our personal share is probably about a nickel.

On Monday, FERC ALJ Philip Baten issued his ruling on the PATH case that was heard back in the spring.

Ali and I were seeking the refund of just over $6M in expenses for the purposes of influencing the decisions of public officials that PATH incurred and recovered from PJM ratepayers in 2009, 2010 and 2011.  Judge Baten ruled that all of the expenditures were not recoverable in PATH's rates and must be refunded.

This is my favorite part:
As a general proposition, the cases that are discussed above suggest that when utilities are seeking selection or CPCN approvals from governmental entities, the utilities should rely on the established governmental approval processes to persuade the officials and not indulge in collateral efforts such as public education, outreach, and advertising activities.  If a utility should rely on  these collateral activities while pursuing selection or CPCN processes, then it will risk the chance that these costs may not be recovered from ratepayers.  If the selection or CPCN application has merit, the governmental selection process provides a sufficient vehicle for the utilities to present their engineering, marketing and economic studies and thereby hope to merit the vote of approval from these officials.  In this regard the PATH Companies spent over $8 million on attorney fees to prosecute the CPCNs before the respective governmental bodies, which begs the need for these collateral expenses.
The judge's decision must now go before the Commission, who may affirm or deny, in whole or in part.  That decision is several months down the road, at least, and requires another round of briefs.

Meanwhile...  more chocolate.  And champagne.  And music.  Let there be music!

19 Comments

Important Preparation

9/12/2015

2 Comments

 
More silly utility "educational" seminars.  This one came in the mail yesterday.  The Financial Accounting Institute has invited me to attend its Utility Finance & Accounting seminars in Las Vegas.

Well, woo hoo, party in Vegas!  Except this party costs $1995, plus travel and expenses.  Sad face.  I guess I'll just have to learn utility finance & accounting on my own.

FAI will be teaching its students all sorts of utility accounting concepts, such as how to tell the difference between capital and expense, and "motivations of managers and top management with respect to the issue."  Wait... let me guess, it's because capital expenses earn a bit, fat, juicy return?  Therefore everything should be capital?

But here's the best part of the whole seminar... one of those really great "role playing exercises."  Who doesn't love a good role playing exercise to introduce just the right amount of realism into your learning experience?
The utility can never be sure their position will prevail?  Well, then the utility isn't doing something right!  See section about "ethics considerations" where you can learn about unethical behavior at some utility companies.  I wonder who's going to play that role?

Why should certain costs not be included in rates?  Because they're below-the-line costs.  Will FAI be providing some sort of effective strategy for the "utility CEO" to use to argue that below-the-line costs should be included in a rate?  And since when does a utility CEO or CFO actually show up to argue anything during a rate case?  For that matter, when does a consumer advocate or large industrial ratepayer show up to argue that below-the-line costs should not be included in rates?  FAI can probably dispense with those roles entirely and replace them with a couple of honey badgers.
Now that's realism!
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Key Transmission Challenges in the Midwest

9/12/2015

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Who's a key transmission challenge in the Midwest?

You're a key transmission challenge in the Midwest!  The biggest "challenge" to building transmission in the Midwest is the people who are expected to sacrifice their businesses, their homes, their retirement, for benefit of the illusive "communities that have a strong demand for renewable power."

Electric Utility Consultants, Inc. (EUCI) is having another "educational" shindig to discuss you "challenges," and once again, you're not invited.

On November 9 and 10, EUCI will be gathering its fattened cows to the trough in Indianapolis to be "educated" about the following:
Transmission as a Market Enabler:  Today's "conservative" approach to transmission planning exposes customers and other market participants to greater risks and costs because by understating the benefits of and risks addressed by transmission, valuable investments in transmission facilities are either not made or delayed.
This session will address a study paid for by WIRES, "The Voice of The Electric Transmission Industry."  WIRES is made up of corporations who stand to profit from building new transmission.  Apparently we're not planning enough transmission for their balance sheets.  Awwww.....

But then there's this:
State Regulatory Viewpoint on Transmission Developments in the Region

State Regulators will share their perspectives on:
Balancing priorities
The role of stakeholder involvement
How different states are looking at the challenges involved to collaborate with other states
The benefits and challenges that competition for regionally cost-shared transmission projects creates for the PUCs and the ratepayer.

Adam McKinnie, Chief Utility Economist, Missouri Public Service Commission
Did anyone tell EUCI that the Missouri Public Service Commission recently denied Clean Line's Grain Belt Express application for a 700-mile transmission line through the state?  Fun times!  I hope they're planning to create some space between that guy and...

KURT ALERT!  Amy Kurt, Clean Line Energy Manager for the development of the Grain Belt Express Clean Line, will be "educating" participants about "The Challenges of Renewable Energy Integration," including the sub-topic "Maintaining grid security and reliability while integrating increased penetrations of renewable energy."  I wonder when Amy got her engineering degree that qualifies her to expound on grid security?  Maybe she's been doing it online, in secret?  Or maybe Hans Detweiler taught her how to be an "engineer?"  At any rate don't let Amy sit with Adam at lunch!  "A" is for awkward!

Participants will learn about "Embracing New Communication Technologies."  Good to see that Amy isn't teaching this one, because her communication skills haven't been working too well on the people of Missouri.  Did I mention that the MO PSC denied the Grain Belt Express application Amy "managed" because its benefits didn't outweigh the harm to Missouri citizens? 

So, what "new technologies" will be embraced?
Communicating with the public is a critical element to successfully building new transmission line projects. Strategic communication requires teams to go beyond traditional outreach tools by embracing new techniques including zip-code targeted social media ads (Facebook and Twitter), electronic communication, videos, online comment collection, and Story Maps. For the busy public, an online open house provides access to open house materials, information videos, interactive maps, and input opportunities. With tight project budgets, it's time to embrace new tactics to communicate and stretch dollars and gain the input necessary to identify smart routes and communicate with all stakeholders throughout the project construction process.
What?  No unit on using change.org to send supportive (but off-topic) comments from your Mommy and Little Sis into a regulatory process?  Well, maybe there's a role for Amy after all!

Unfortunately, the "busy public" interested in transmission isn't interested in a corporate-slanted version of web "facts."  The "busy public" gets its facts from equally busy "public" opposition groups... live and in person, via email, via social media, etc.  Hot time in the ol' tool shed tonight!  Nobody trusts the corporation to be honest, with good reason.
Don't miss Amy discussing:
Illinois is home to two of Clean Line's projects, the Rock Island Clean Line and the Grain Belt Express Clean Line. The Rock Island Clean Line received its regulatory approval from the Illinois Commerce Commission (ICC) in November of 2014. The Grain Belt Express Clean Line filed its application with the ICC this April. This presentation will provide an overview of Clean Line's approach to developing multi-state, direct current, transmission lines to deliver renewable energy to market.
Be sure to bring your own copy of the "Motion for Leave to File Complaint for Order of Prohibition" pending before the Illinois Supreme Court so you can follow along.
Sounds like a real party, doesn't it?  Unfortunately, it's going to cost you $1195, plus travel and expenses, to get inside.  But who needs to get inside to be a "challenge?"
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When a "Grant" is Not a Bribe

9/10/2015

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...because it's simply an appetizer for a bigger "grant" down the line?

Folks in New Hampshire are suspicious about "grant" money being handed out by Northern Pass Transmission and its sponsor, Eversouce.  And one organization has returned the money when the "grant" didn't smell right.

“All our other grant awards come with letters of congratulations, including reporting requirements and specifications on how the funder would like to be recognized in Rec Center publicity,” she said, noting that the CCJCA award “came with no such letter.”

Morann said her board had recommended “that we apply for it (the CCJCA grant) and then wanted to see what the conditions were.”

“We were never able to discern the conditions” and whether they included giving public support to the CCJCA and Northern Pass, Morann said, “and after the check had been cut and I attended the ceremony at the request of the board of directors, the board met (Thursday) and decided to return the money.”
Grants are made for specific purposes, and usually the grant funder requires the recipient to make some demonstration that the grant funds were used for grant purposes, not simply pocketed for personal profit, or spent on things unrelated to the grant program.

There's lots of press about Eversource sprinkling "grant" money around the proposed route of its transmission project.

But, of course, there are no strings attached to the money.
The money came by way of the Coös County Jobs Creation Association, which was created by Eversource, formerly known as Public Service of New Hampshire.

John Gallus, who chairs the Coös County Jobs Creation Association and is a former state senator and representative from Berlin, said there were absolutely “no strings attached” to the CCJCA awards, other than they be used to create or keep jobs in Coos County.

While Eversource is the financial resource behind it, the jobs creation association is independent, said Gallus, who is disappointed that the recreation center returned the grant.

“They knew where the money came from,” Gallus said. “The grants aren’t based on how anybody feels about Northern Pass and nowhere on our application did it say you had to sign up to great feelings about Northern Pass. We would give money to the biggest opponent of that project if they were creating jobs in Coos County.”
But if there are no instructions, and no reporting requirements, how will the "Coos County Jobs Creation Association" ensure that the money is actually spent creating jobs?  More importantly, HOW is the money supposed to create jobs?  Will it fund a bunch of temporary, make-work "jobs" that aren't supported by any economic need in the county?  How many permanent jobs would actually be created?

Is the "Coos County Jobs Creation Association" actually a legal entity that files an annual tax return?  Or is it just an informal conduit to funnel this money into the community?  Ut-oh, rabbit hole ahead!

The Coos County Job Creation Association is registered with the State of New Hampshire, to further the objects and purposes of the promotion and support of job creation for the growth and prosperity of the cities, etc. of Coos County.  However, the organization doesn't seem to be registered with the IRS, or to have filed a tax return for 2014.  How does New Hampshire keep track of its "non-profit" corporations if they don't file tax returns?

Even curiouser, there already seems to be an organization in Coos County that serves the same purpose.  The Coos Economic Development Corporation has been in existence for many years and its purpose is to promote economic growth that fosters a strong and diverse workforce, sustainable employment, and a thriving business community in Coos County.

The documents show that a past president of CEDC was one of the initial directors of the CCJCA, but seems to have been omitted from the CCJCA's most recent annual state filing.

Why does Coos County need two separate non-profits doing the same thing?  No wonder the Rec Center seemed uneasy and gave the money back.

Anyhow... the $200,000 in "grants" that the CCJCA has handed out with no strings attached, are just the tip of the iceberg, an appetizer if you will, for the $7.3M more the CCJCA will receive if the transmission project is approved and built.
Eversource has awarded grants to improve cellular service, and in founding the jobs creation association, it provided the entity with $200,000 in seed money while also pledging $7.3 million more if and when the transmission project is approved and built.
So, if Coos County wants more, it would be in its interest to make sure the project gets approved and built?  No strings attached, of course.

How did Eversource "pledge" this additional funding?  Is there a written legal agreement that this money will change hands?  And I notice that Eversource also "founded" and "created" the CCJCA, according to this news source.  If that's so, why is Eversource not mentioned anywhere in the company's Articles filed with the State of New Hampshire?

There's big money to be had for communities that support invasive infrastructure projects, not just in New Hampshire, but nationwide.  It's an opportunity for those not directly affected to throw their neighbors under the bus for a little scratch, as long as the project is "not in my backyard."  This reverse-NIMBY scenario causes unrest and bickering in the community, and pits neighbor against neighbor.  It's divide and conquer in its purest form, often engineered by out-of-state corporations for their own profit.  Greed is an enticing motivator.

And, finally, one organization stands up and says no.  Bravo!  There's a lesson to be learned here by other communities who care for each other and the long-term well-being of their community as a whole, and not their own immediate personal gain.

There ain't no such thing as a free lunch.  How much is your personal integrity in the community worth?
3 Comments

Renewable Energy Lies

9/6/2015

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Stop being dumb about energy, America!
The average person doesn't think twice when they flip the light switch.  The lights come on.  It's magic!  No, it's not, but the energy corporations have made you believe it is over the years.

Now the energy corporations have made you believe something else that's just not true.  All but the most flat-earth cretin believes in global warming, right?  It's politically correct to be environmentally conscious, and to "do your part" to save the earth.  The corporations have trained you to want...  CLEAN ENERGY NOW!


Under the guise of CLEAN ENERGY NOW!
the energy corporations have made you a soldier in their CLEAN ENERGY NOW! army.  You've become so good at marching to the beat of their drum, that you'll support just about any energy project they propose, as long as they tell you it will bring you CLEAN ENERGY NOW!  They've even brainwashed you to serve their purposes in their campaign against "dirty" energy.  Fossil fuels are "bad" and CLEAN ENERGY NOW! is "good"!

Well, guess what?  You've been used.  Isn't it high time that you educate yourself about democratic energy and wean yourself off the media mind control of the energy corporations?
  What if you had the power to produce energy for your own use?  But let's be realistic... unless you want to live with the capital costs and inconvenience of running your own power plant, you're still going to be somewhat dependent upon the common infrastructure system that the energy corporations have built.  What happens when the wind stops blowing, or the sun goes down?  The light switch magic stops, and you're once again dependent on the energy corporations.  We've yet to develop a cost-effective, reliable, renewable, democratic energy system.  That doesn't mean we can't be smart about energy though.  Indeed, it's imperative that you to be smart about your energy future.

Think having your CLEAN ENERGY NOW! provided by energy corporations
is a responsible and thoughtful way to be smart about your energy future?  It's not.  There are better ways to get to a cleaner, more democratic energy future than simply moving from one corporate trough to another.

If we believe that coal, oil, and gas are bad sources of energy and work toward eliminating the corporations that cling to them, what shall replace them?  Do we want to replace them gradually with local, democratic sources of energy?  Or do we want to spend billions building new centralized energy sources for our CLEAN ENERGY NOW! corporate overlords?  The environmental community has become so goal-oriented and dependent on grant money (and where does grant money come from?  energy corporations, of course!) that it wants CLEAN ENERGY NOW! at any price.  The wants of the environmental community do not align with democratic energy, or your pocketbook.  Going all in on CLEAN ENERGY NOW! supplied by energy corporations is going to be wildly expensive, and at the end of the day, it does nothing to revolutionize the way we produce and use energy.

After fighting the traditional energy corporations for years, the environmental community has suddenly found itself in bed with a bunch of new energy corporations
, CLEAN ENERGY NOW! corporations.  And these new corporations stand to make a bundle if you continue to demand CLEAN ENERGY NOW! in any form.  Many of the new energy corporations are owned by foreign interests.  They're not interested in cleaning up your air, they're interested in making money building centralized renewable energy generation and transmission for a society practically shrieking for CLEAN ENERGY NOW!

One such company is Clean Line Energy Partners.  Riding the CLEAN ENERGY NOW! wave, this company wants to build more than 2,000 miles of new energy infrastructure across the country.  In order to get there, Clean Line has been trying to keep you stupid by repeating the worst renewable energy lies.  The more times a lie is repeated, the more it's believed.
  It's time you learned the truth.
  • The best wind energy resources are located in the middle of the country.
No, they're not.  Clean Line is using the wrong map, one that conveniently omits offshore wind potential.  Here's a comprehensive map that shows true U.S. wind energy potential.  Notice that the strongest winds are located just offshore on both coasts and in the Great Lakes, conveniently near the biggest population centers.  We don't need 2,000 miles of new transmission to harvest these wind resources.
  • Population centers are demanding clean energy from the Midwest.
No, they're not.  While Clean Line has been pushing its projects for six years, not one eastern utility has signed an agreement to purchase Midwest wind power via a "Clean Line."  In fact, other areas of the country are busy developing their own renewable energy resources that can provide jobs and economic development at home.
  • Exporting wind energy brings jobs and tax revenue to Midwestern states.
But at what cost?  Wind power is highly subsidized, both federally and at the state level.  Wind farms may pay little in the way of taxes in your state or locality, because the state is so focused on jobs and economic development that it may make a deal to abate tax responsibility for a number of years, hand out additional state tax credits, or some other economic development scheme where the wind farm doesn't pay.  The federal production tax credit allows big tax credits - $4B per year, according to some recent press.  Who do you think pays that $4B of taxes that wind generators don't?  You do.  When electricity is sold across state borders, it becomes interstate commerce and cannot be taxed.  Exporting energy causes your local energy prices to go up through the simple principle of supply/demand.  Once you open new pipelines to ship energy to higher priced markets, that's where locally produced energy will go first.  If you want some, you're going to have to pay the same export price.  For every penny new transmission lowers east coast energy bills, it raises yours by the same amount.  New transmission levelizes energy prices between source and use.  New transmission lines lower the taxable value of real estate, meaning less local property tax revenue. Still think new transmission is a good deal for your community?  Why?
  • Clean Line will build its transmission lines in "fallow" or empty spaces not currently generating income.
No, it won't.  Clean Line is proposing to build its transmission lines across some of our best farmland.  Farmland is already economically useful terrain.  New transmission takes prime farmland out of production and increases the cost of farming around it.  Lower yields and higher costs lead to lost agricultural jobs and revenue, and harms local economies.  Clean Line is proposing its transmission lines to cross farms that have been in production for centuries.  People live and work on these farms that have been handed down through many generations.  Much of a farmer's wealth is wrapped up in his land, so it's not a stretch to compare Clean Line's eminent domain taking of farmland to dipping their hand into your retirement fund.  How much of your retirement would you donate to CLEAN ENERGY NOW!?  The highest and best use of this land is farming. 
  • Transmission right-of-way payments are a highly sought-after source of income for farmers, so supporting transmission helps struggling farmers.
No, they're not.  Paying "market value" for a strip of land through a larger parcel devalues the entire parcel, not just the strip of land.  Nobody wants their land devalued... nobody.  The payments offered by CLEP are insulting.  Farmers have overwhelmingly rejected CLEP's offers.  That is proof in itself.  Clean Line's projects hurt struggling farmers, the same way having your retirement account cleaned out to provide energy and economic development to other states would hurt you.
  • Transmission is like a highway or a railroad.
No, it's not.  There are already plenty of transmission "highways" in use, developed through a coordinated planning process and paid for by all electric ratepayers.  If these highways are old or inefficient, then they should be upgraded by their owners.  Building a new "railroad" next to an existing one is wasteful.  Building a new "railroad" and not allowing the communities bypassed to use it is unfair.  Building new "railroads" to places that nobody wants to travel, and then hoping that some customers develop, is a folly.
  • State denial of a transmission permit can be appealed to the federal government.
No, it can't.  States have full authority to site and permit transmission within their borders.  There is no federal override.  However, an untested section of the 2005 Energy Policy Act allows the federal government to "participate" in a privately-funded transmission project sited within the set geographic reach of two federal power marketers.  When the federal government participates, it may be able to use federal eminent domain to take land for the project from unwilling sellers.  That's it.  Bundy Ranch on steroids.  There is no federal transmission permitting process.  Clean Line wants the federal government to strong arm land acquisition, and then it plans to build its projects without permits of any kind.
  • Clean Line is privately funded so ratepayers won't have to pay for it.
All transmission is privately funded!  There is no pot of "public" money used for other transmission projects.  It's all private capital!  All transmission projects are paid for by ratepayers (users).  Other transmission projects are regulated and their profits are set by regulators.  Clean Line will be unregulated  -- its profits are set by market forces.  Clean Line will charge users whatever rates it can get away with.  The sky's the limit on Clean Line's profit, no wonder it's attracted big, foreign investors who believe the incredible riskiness of Clean Line is overcome by huge returns.  While regulated transmission projects must submit their costs to public scrutiny, Clean Line can roll whatever costs it wants into the rates it charges for service.  Every penny Clean Line spends on lobbying and influence, public relations and front groups, pulled pork and bouncy houses, will end up in the rates it charges.  And who pays those rates?  Whoever buys the energy transmitted over the line, possibly you!
We have been conditioned to believe that we must demand CLEAN ENERGY NOW! without taking the time to examine why or how, thinking a fairy tale image of a couple of wind turbines gently turning in a field of golden grain.  We've been taught that this fantasy is a "good" way to control our energy future.

It's not.  It's simply a way to transfer corporate energy control from one group of owners (fossil fuel companies) to another (clean energy companies).  It enables them to collect billions keeping you captive and stupid about energy.  Renewable energy isn't necessarily sustainable energy.  Sustainable energy does no harm to others.  Clean Line's plans are unsustainable and economically harmful.  Take ownership of your energy future and seek out local, sustainable solutions.  Break the energy corporate chains, America!
0 Comments

What's An Appropriate Penalty?

9/3/2015

1 Comment

 
Couple of interesting complaints at FERC recently.

First, one that doesn't take a whole lot of explaining.  Electric ratepayer Eric Morris filed a complaint against The North American Electric Reliability Corporation (NERC) and SERC Reliability Corporation (SERC) for violating the NERC Rules of Procedure (ROP) Appendix 4B Sanction Guidelines in NERC Full Notice of Penalty regarding Entergy, FERC Docket No. NP15-31 filed July 30, 2015.

In essence, the issue here is that
NERC has filed a settlement for your  [Commission] review and approval in NP15-31 regarding Entergy. The settlement
involves six separate violations for two reliability standard requirements. The total penalty is $55,000. These violations had durations of multiple years.
The appropriate penalty (sanction) should be:
This violation is classified as Medium/Moderate on the VRF/VSL Table, which would associate to a base penalty range of $4,000 to $100,000 pursuant to Appendix A of NERC ROP App 4B.
For each day the violation persisted.  SERC determined the duration of the violation to be from June 18, 2007, the date the Standard became mandatory and enforceable, through June 30, 2015, when Entergy completed its Mitigation Plan.  Mr. Morris calculates that should amount to:
By my math, that is eight years and twelve days, or 2,934 days. Therefore, the base range should be $11,736,0004 to $293,400,000.
But FERC and the parties are okay with just $55,000.  After all, penalties cannot be recovered from ratepayers and must be borne by utility stockholders.

Mr. Morris filed his complaint because he is not and cannot be a party to the settlement, however he has calculated that this egregious wrong could personally cost him $0.0179, therefore he has standing to file the complaint.

What I want to know is why FERC is okay with a measly $55K penalty for Entergy violating reliability standards that affected millions of people, while they went for the maximum penalty against Powhatan Energy Fund?  Are there different standards for different market participants?  Is reliability much less of a concern to FERC than traders profiting by exploiting a loophole in its loose market regulations?  FERC fined Powhatan something north of $30M for what it says was $4M in unjust profits that should have gone to certain big utilities.  Where's the logic?

Or is it just that FERC serves the interests of utilities, not consumers?  I guess we'll find out if we watch Docket EL15-93.  I really hope FERC can pull itself out of the gutter to restore consumer confidence in the fairness of its regulatory actions.  Call me a dreamer.
1 Comment

The Hackers Have Been To Your Valley And Now They Want To Be Paid

9/1/2015

3 Comments

 
More uproar this morning as word spreads that yesterday FirstEnergy subsidiaries Potomac Edison and Mon Power filed for ANOTHER 3.6% (Residential) rate increase to cover the cost of its vegetation management program ordered by the PSC in 2013.

Just like the ENEC case filed mid-August, this rate increase is simply the result of more bad decision-making by the WV PSC.  The vegetation management program (VMP) has already been ordered and the company has already spent this money.  They will recover it.  What remains to be seen is how much.

According to FirstEnergy's filing, the Commission decided to cover the cost of the VMP with an additional surcharge, instead of including it in base rates.  However, the surcharge didn't go into effect until 2015, so now FirstEnergy wants to collect all the money it spent before the surcharge, the amount of the surcharge it undercollected to date, and the amount of the surcharge it is predicted to undercollect in 2016 and 2017 if the surcharge rate remains unchanged.  Total for you:  $75.8M.

So, what's in this filing, and what are you getting for your money?

FirstEnergy says its program has increased your reliability by demonstrating "a remarkable decline in the
customers affected per mile from tree-related outages."

And it demonstrates with a evidentiary slide show of some before and after photos of its tree hacking prowess.  Here's just one example of the work FirstEnergy did on its unfortunately named circuit "Hacker Valley."  Indeed!

Prior to the VMP surcharge, the company recovered its cost of maintaining rights-of-way through its base rates.  Base rates are determined in periodic filings, where the company demonstrates its costs.  A fixed rate is set allowing the company to recover the costs.  The rate is not changed until the company files another base rate case at their own prerogative.  In between base rate cases, nobody is minding that the company is actually spending its base rates on what it said it was spending them on.  Therefore, a company can cut services, while still recovering the cost of them, and increase its profits. 

So, you may be asking yourself... how did the rights-of-way get so overgrown that they were seriously affecting reliability?  What in the hell was the company doing with all the tree-trimming money it was collecting in base rates?  Obviously, not trimming trees.

Instead of asking this question, the PSC acted proactively to fix the problem by making ratepayers responsible for the cost of all this unperformed maintenance.  FirstEnergy got off scott-free in terms of financially owning up to its years of neglect.  However, the PSC, in removing VMP costs to a surcharge, are now going to be monitoring that your money is actually spent on tree-trimming.  Hurray!  So now you will notice how much it actually costs.

How much does it cost?  Customers have reported, "...they cut HEALTHY trees for no reason on our driveway. Some sat in the truck hidden back on the power lines for hour at a time waiting for quitting time."  Yup, plenty of job milking going on by the tree contractors.  In addition, FirstEnergy says that their costs to begin this program were high because it needed to double its work force in order to actually do something, and it was in competition with rival power company Appalachian Power to find new workers for this new program.  Because of that, FirstEnergy needed to import tree hackers from out-of-state and pay them travel costs and per diem.  Also, the company had been paying its contractors on a time & materials basis, instead of a firm bid, job-based contract.

But don't you worry, little hack-ee, FirstEnergy has been looking out for your interests by finding ways to reduce the cost of the VMP.  They have now switched to 70% firm bid contracts, have managed to train all the new employees (and supervisors, you know, those guys who sit in the truck and sleep) and are diligently looking for ways to cut costs.

And if you believe that, I've got a bridge to sell you.  That's because the cost of the VMP is projected to be split almost evenly between captial costs and operations and maintenance costs.  An  O&M cost is reimbursed dollar for dollar as incurred.  However, capital costs are depreciated over the life of the line trimmed, taking many years to pay off.  And guess what?  Capital costs will earn FirstEnergy 8.19 percent interest yearly!  The more "capital" they spend, the more profit they make!  Who's minding the capital and expense split?  Nobody.

FirstEnergy also says they will cut costs by increasing the amount of herbicide spraying they do vs. manual clearing.  Get ready for lots more dead, brown, right-of-way strips and overspray killing adjacent vegetation and polluting your water supply.  But don't worry, your government would NEVER let a company use chemicals that could harm you.

FirstEnergy has also changed its tree hacking game plan, to include many new trees outside its right-of-way that could fall on the line... maybe... if the stars align... or something.  So this means they're widening their rights-of-way without paying the property owners for this additional taking.  Tsk, tsk!


As of June 15, the company has trimmed over 1.8 million trees, removing over 400,000 trees and
controlling/clearing over 19,000 acres of rights of way
.  To provide some perspective, the 19,308 acres of right of way cleared and sprayed during the 14 month Review Period is the equivalent of the size of 19,000 football fields, since a football field approximates one acre in size.

I think the trees are screaming!  Can you hear them?


So, what should you do about all this?  Participate in any upcoming opportunities for public comment!


You also need to support your underfunded Consumer Advocate, who is run ragged trying to protect consumer interests in all these smaller, frequent rate increases.
But that effort was criticized by the Consumer Advocates Division, which said the move set a bad precedent and weakened the traditional rate making policies of the PSC, where nearly all facets of a utility’s business were considered in a single rate case.

At that time, Jackie Roberts, the CAD director, said allowing electric companies to assess additional surcharges to customers’ bills for tree trimming programs was just the most recent step in a trend toward companies filing a number of smaller rate cases.

According First Energy’s testimony, the company is expected to receive an 8.19 percent return on the cash expenditures under the program before taxes.

In these cases, Roberts said the commission needs to weigh what is needed for the utility to provide safe and reliable service against the customers interest in having reasonable rates.

“On its face, it certainly appears this filing would fail that test,” she said.
And wait... we're not done yet!  The Gazette article mentions another rate increase that has not yet received much public scrutiny... MonPower and Potomac Edison customers are being asked to pay an additional $85 million between 2017 and 2036 in order to save the financially-troubled Grant Town Power Plant in Marion County through a new power purchase agreement.  Here we go again with the WV PSC saddling ratepayers with additional costs to prop up West Virginia's coal industry through over-priced power produced by old, inefficient, coal-burning power stations.

Just hand over your wallets, little ratepayer, and nobody gets hurt.  Except when they can't pay their electric bill...

Will enough ever be enough for FirstEnergy?
3 Comments

Governor Earl Ray Tomblin Uses Public Service Commission Appointments as Political Favors:  Consumers Suffer

8/31/2015

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The only surprising thing about Saturday's Gazette-Mail story about Governor Tomblin's political game-playing with PSC appointments is that it happened at all.  Bravo to the Gazette and reporter Andrew Brown for this informative article, "Governor doesn’t have a timeline for filling Public Service Commission seat"!
"Doesn't have timeline" or just doesn't have time?  I got the "doesn't have time" excuse from the horse's mouth back in 2011 when he was running for Governor and I asked him why he was waiting to fill a PSC seat. "Too busy campaigning."  Right.  Along with the lies, I also noticed his smile was completely fake... it didn't reach his eyes.  He needs to take some lessons on fake smiling from pro fake-smiler Joe Manchin.  But, I digress.

Tomblin has been "too busy" to either re-appoint Commissioner Jon McKinney, or appoint a replacement for him since 2011.  That's FOUR YEARS that McKinney served at the daily whim of Tomblin.  Now McKinney has finally left the utility stable, and Tomblin is content to leave his seat open.

PSC Commissioners that are appointed are supposed to be insulated from political influence by becoming independent once appointed.  The appointer (Governor) supposedly loses power over the Commissioner once he/she is appointed.  However, by allowing appointments to expire, and the expired Commissioner to continue to serve, a Governor may control the day-to-day decisions of the Commissioner as long as this lasts (4 long years!).  If the expired Commissioner makes one misstep, he can be gone the next day if the Governor suddenly decides to appoint someone else.  This is a filthy practice that should be illegal.  But it's also how Governor-schmoozing corporate utility companies continue to stomp on West Virginia ratepayers.

It's not like Tomblin "doesn't have time" to make any appointments to the PSC.  He managed to promptly re-appoint utility lawyer Michael Albert in 2013, when his second term expired.  He also managed to appoint Brooks McCabe to the empty seat of former Commissioner Ryan Palmer, when he left in 2014.  McCabe is a former legislator who has absolutely no background or education in utilities regulation or consumer protection.

So, who shall fill McKinney's seat, now that it's finally vacated?  That's what the Gazette-Mail investigated:
Gov. Earl Ray Tomblin has no plan to appoint a third member to the West Virginia Public Service Commission, even though several people have expressed interest in the position or recommended others they believe would fit the post.

Emails and communications obtained through a Freedom of Information Act request show that numerous people have contacted the Governor’s Office since January, asking Tomblin to confirm them for the post or to consider their preferred candidates.

The list of people seeking the governor’s attention include a former state senator, a city mayor, a retired engineer, a member of the state’s rural water association, a managing member at one of Charleston’s largest law firms and a lobbyist for First Energy, the parent company of MonPower and Potomac Edison, two of the state’s largest electric utilities.
Hmm... sounds like a bunch more utility puppets, political favors, and inexperienced stooges.  Don't we have anyone in West Virginia with a background in consumer issues?

Here's two people you DO NOT want to see appointed:
An undated note left for the governor shows that Sammy Gray, the state affairs director and a registered lobbyist for First Energy, called to recommend two people for the commission spot. According to the note, Gray called to let Tomblin know that he supported Mike Castle, the Department of Environmental Protection’s director under Gov. Cecil Underwood, and Sam Cann, a former Democratic state senator from Harrison County, for the seat.
And what experience do these two have with consumer protection?  None.  However,
When contacted about his recommendations, Gray sent the request for an interview on to communication officials at First Energy.

“We believe both individuals possess solid experience with policy and energy matters that would help them make rulings in complex regulatory cases,” Todd Meyers, MonPower and Potomac Edison’s external communications manager, wrote in an email response. “Of course, the ultimate decision on who is appointed rests solely with the governor.”

First Energy’s recommendation of candidates for a utility commission, which ultimately regulates the company, is not out of the ordinary, according to Meyers.

“In the past, we have recommended individuals whom we believe to be qualified candidates for similar positions, both in West Virginia and elsewhere in our service territory,” Meyers wrote. “Again, others ultimately make the decisions on who is selected.”
Of course.  The utilities that own the governor own his appointments to the PSC, however the utility recommendations protect the utilities, not consumers.

Who else has been recommended?
In an email from April, Michael Basile, a managing member at Spilman Thomas & Battle, a Charleston law firm that represents clients like the West Virginia Energy Users Group in front of the PSC, asked the governor to consider attorney Susan Basile, his wife.

In the 1990s, Michael Basile worked for Gov. Gaston Capterton, the Attorney General’s Office, the West Virginia Development Office and later assisted in the transitions of Gov. Bob Wise and Gov. Joe Manchin. Basile, who has served as chairman of the Charleston Area Alliance and the Charleston Regional Chamber of Commerce, also is a registered lobbyist at the state capitol, where he has represented companies like DuPont, Chevron, Chesapeake Energy, DIRECTV and Dish Network.

In his email, Basile credited his wife’s qualifications and said she was a “big fan/supporter of GERT,” apparently referencing an acronym for Governor Earl Ray Tomblin.
Right... because being a fan of "GERT" translates to utility experience and a background in consumer protection.  Not.

Nexxxxxxt.....
Amy Swann, director of the West Virginia Rural Water Association, suggested the governor should consider one of her longtime colleagues and former PSC employee, Dina Foster.

Swann said Foster — now the manager of the Pea Ridge Public Service District, in Cabell County — has first-hand experience in utility issues and has the personal characteristics needed to make a good commissioner. With so many important issues being decided by the PSC, Swann said, Foster would be a valuable addition to the commission.
Nexxxxt....
When Bill Wooten, a former Democratic state senator from Raleigh County, contacted the Governor’s Office earlier this year, he was hopeful he would be appointed.

With his experience in utility regulation from a legal and legislative policy perspective, Wooten thought he was qualified for the position, and he believed in his ability to weigh the needs of utility companies and their customers.
And then there's
John Manchester, the mayor of Lewisburg, also submitted his credentials for consideration.

Manchester, who previously worked for the Tennessee Valley Authority and has dealt with utility regulation as Lewisburg’s mayor, said his experience has prepared him for the position.

“I pride myself on being a mediator, a man who tries to find solutions to issues,” Manchester said.
And also
Allan Tweddle, a resident of Kanawha City and a semi-retired engineer, put his name in after having several people ask him to apply.

In his communications with the Governor’s Office, Tweddle listed a long list of people who could testify to his “commitment” and “open-mindedness.” While Tweddle worked with Southern California Edison, an electric utility on the West Coast during his career, he said he has absolutely no connection to any regulated utility in the state.
Which one is your favorite?  Or would you just like someone who's not part of the utility industry, a captured regulator, or a political favor?  Here's an idea:
“We urge you to appoint a new commissioner as quickly as possible so that this investigation can be resolved,” Cathy Kunkel, a member of the Advocates for a Safe Water System’s steering committee, wrote in a letter to the governor in April. “Furthermore, we hope that anyone you appoint to the Public Service Commission will have experience in utility regulation and be independent of West Virginia’s major utility interests.”
Because
"While the utilities are experts at running their business, it doesn’t always mean that they are right,”  said Jacqueline Roberts, director of the consumer advocate division.
And they're definitely not right for West Virginia's utility consumers, because utility guys will always view any conflict from the perspective of the utility.

We've got enough utility influence from Chairman Albert already.  And we've got our political favor in Commissioner McCabe.  Now it's time to appoint one for the consumers.

Tell "GERT" to get off his dead ass and get busy.  Maybe your suggestion can be featured in a future Gazette-Mail article?
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    About the Author

    Keryn Newman blogs here at StopPATH WV about energy issues, transmission policy, misguided regulation, our greedy energy companies and their corporate spin.
    In 2008, AEP & Allegheny Energy's PATH joint venture used their transmission line routing etch-a-sketch to draw a 765kV line across the street from her house. Oooops! And the rest is history.

    About
    StopPATH Blog

    StopPATH Blog began as a forum for information and opinion about the PATH transmission project.  The PATH project was abandoned in 2012, however, this blog was not.

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