Pam Kasey did a great article about the PATH Formal Challenge in today's State Journal.  Easily one of the brightest and most knowledgeable reporters I have been interviewed by regarding the Challenge, Pam also asked the most pointed questions.  She spent a little time reading some of the background documents and investigating before calling.  She's a shining example of true investigative journalism.

I love the way she ended with my favorite quote from PATH's Answer.  Yeah, Randy, we'll see just who "fails to grasp the distinction between efforts to influence decision makers during the process of obtaining approval to construct a transmission project, and broad-based activities and distribution of information intended to educate government officials, business and community leaders, and the public at large...," won't we?

PATH has been so busy painting a pretty picture of their bookkeeping prowess for FERC that they neglected to look over their shoulder and see where they were headed -- right into a corner.

See Keryn & Ali's Response to PATH's latest Answer (answer to an answer to an answer to an answer).  The exhibit to the Response can be found here.

Unfortunately, it gets pretty far afield into the technical, accounting weeds, but if you've been following along, it might just click.  In summation, if PATH's previous X = Y equation is true, they've got a lot of explaining to do, and continuing to file Answers before the Commission is the wrong procedure to reveal and correct PATH's continual errors.  Challengers end with another request for FERC to audit PATH's "books and records."

Now let's see what happens when PATH tries to tippy-toe out of that corner they have painted themselves into...

PATH filed an Answer to Ali & Keryn's Response to PATH's Answer to the Formal Challenge on Friday (if you're keeping score this is an answer to an answer to an answer).

In this Answer, PATH explains that they (purportedly) cheated themselves out of $12K in 2010.

Subtlety is lost on these ninnies.  I guess someone is going to have to clobber them over the head with it.  How embarrassing for PATH!  Color me exasperated.

But, I'm sure you'll all be thrilled to know that Ali has been elevated to one-name celebrity status with this filing!  That's right, she's now to be known simply as "Alison."

More to come...

A Response to PATH's Answer to the Formal Challenge was filed at FERC today.

PATH's got lots of problems, but probably the simplest to explain here is that their accountants don't know whether to add or subtract.  It does make a difference!

Instead of learning when to add and when to subtract, PATH wastes the Commission's time whining that:  "Clearly, Challengers Newman and Haverty are individuals who are opposed to the PATH Project. (Footnoted:  Challenge p. 14 ("the PATH Project can no longer be justified."); see also http://www.stoppathwv.com/stoppathwv-blog.html. (Stop PATH WV, Inc. is an organization comprised of citizens who object to the PATH Project)." PATH should be ashamed of themselves for incorrectly quoting small portions of larger sentences without proper indication, and for calling the "wahhhhmbulance" again.  The complete quote that they cherry picked from reads "Stop PATH WV, Inc. is a registered 501(c)4 social justice grassroots organization comprised of ordinary citizens who object to the Potomac-Appalachian Transmission Highline because it is not needed, it is not wanted, it is destructive to West Virginia, and it is an obstacle to meaningful reform of U.S. energy policy." And the page they got it from (which was not the Blog) contains the title "www.stoppathwv.com - Jefferson County, WV" (not Calhoun Co., WV).

Perhaps PATH should spend more time learning proper format for quotes in legal documents and the difference between debits and credits, and less time reading StopPATHWV Blog.  Does anyone's opposition to the PATH Project cause Allegheny/FirstEnergy to make incredibly stupid accounting mistakes?  No, they make those all on their own.  The only assistance they get from StopPATH is a little publicity. 

Newman and Haverty have filed both Formal Challenges pro se, as individuals.  Neither are representing StopPATH WV, Inc. in the matter, because then they'd have to be lawyers.  StopPATH WV, Inc. has NOTHING to do with any of PATH's problems at FERC.  While Newman is a member of StopPATH WV, Inc., Haverty is not.  But, both Challengers are also members of lots of other organizations that PATH failed to mention, and for which they did not provide the FERC Commissioners with web links.  PATH's lawyers need to do a little more research, in order to find other member organizations to which Challengers belong and whine about those organizations too in their legal filings.

PATH seems to think that we go out of our way to make them look bad when the reality is that PATH manages to look bad all by itself, no assistance needed.  Finding errors in PATH's financial filings is like shooting fish in a barrel.

Yesterday was the deadline for PATH to try to defend itself and answer the Formal Challenge of $2.5M of their claimed $24.6M 2010 revenue requirement at FERC.
Here's what PATH filed.  (Note:  3.9MB file -- give it time to load.  It's the best I could do to clean up the 10MB file PATH submitted, but that's another story.)

If you've read and understand the Formal Challenge that was filed on December 23, get ready to laugh.  PATH counsel insults the Commission's intelligence by pretending:  1) the Commission didn't read the Challenge; 2) the Commission didn't understand the legal basis of the Challenge; and 3) the Commission didn't see or understand any of the evidence submitted as exhibits to the Challenge.  PATH's attempt at performing a Vulcan mind meld on FERC's Commissioners fails miserably.  This is PATH.

It's almost like PATH is embarrassed by their "Answer" and doesn't want anyone to see it.  Why else would they have turned a 20 page word document and a two page spreadsheet exhibit into a 10MB pdf image file that chokes FERC's e-library and takes forever to download?  PATH printed paper copies of the files and then ran them through a copy machine to result in a humongous, unweildy 10MB file that was uploaded to FERC.  At least they didn't go so far as to "serve" it on the 80+ parties on the docket's service list and choke up everyone's email, but one could question whether "service" was actually effected ("I hereby certify that I have this day served the foregoing document by electronic service a copy of this filing...") by "serving" parties with a link to FERC's e-library that didn't work.

I'm not going to get into an analysis of just how bad PATH's "answer" is, but I will point out the funniest line in the whole document:

"In the wake of highly orchestrated and vocal opposition to the Project, PATH had a responsibility as the Project's developer to educate government officials, civic, community and business leaders, and the public at large, about the reliability benefits of improved transmission infrastructure in general, and the PATH Project in particular."

To fully appreciate the humor here, you've got to consider how PATH uses the term "highly orchestrated."
Orchestrate:  arrange or direct the elements of (a situation) to produce a desired effect, esp. surreptitiously.  Now isn't that the pot calling the kettle black?

And with that, we'll leave it in FERC's capable hands...
 

I know there's another topic started for this list, but it's slipped quite a ways down the page, thanks to TrAILCo's shenanigans, so let's start another one because the weeklies are publishing now.

Here's an article in The Shepherdstown Chronicle.  Reporter Kelly Cambrel does a great job with a difficult subject, but contrary to what's stated in the article, the January 2011 Challenge detailed 2009 expenses, and the December 2011 Challenge detailed PATH's 2010 expenses.  We haven't gotten to their 2011 expenses yet.

Here's an article in The Spirit of Jefferson.

"An official with American Electric Power said the company is entitled to recover reasonable
expenses of the PATH project.
"It is certainly their right to intervene. They have a different view on recoverable expenses," said Geri Matheney, a director of corporate communications for Appalachian Power, a subsidiary of American Electric Power. "It is certainly their right to question the expenses.  FERC will decide whether there is merit in their complaints or not. We are entitled to recover
the reasonable and prudent expenses of the PATH project.'"

Well, that certainly blows a few holes in all Randy's legal efforts at FERC over the past 3 months, insisting that we don't have standing and are not interested parties.  Now we find out that AEP doesn't agree with Randy and PATH's legal team.  Isn't that refreshing news?  Maybe Jeri should take a few notes from Todd "the school girl" Meyers and adopt the "no comment" thing.  But then again, she's probably not likely to get stuck in an elevator or accidentally meet up in the Men's Room with Mr. Personality either.  Jeri just doesn't know when to shut up.  :-)

More to come...

Once again, the FERC Challenge of PATH's over collection of expenses from electric consumers in 13 states and the District of Columbia has been picked up by the Associated Press.

The same basic article is breaking in news outlets all over the country.  Here's a version of it that just popped up on The Washington Post:

Power line foes in W.Va. file new challenge of PATH charges for ads, PR campaigns

For a longer story, see today's article in the Frederick News-Post.

Story in the Hur Herald featuring Ali Haverty.  Yes, she does look like Julia Roberts (and now you're thinking "Erin Brokovich" and how she doggedly fought for a bunch of ordinary folks and brought a huge energy corporation to justice, right?  Is there really any such thing as coincidence?)

This one's a giggle:  See this article and this article in the ultra-exciting "Transmission Hub."

Lots more to come...

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

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

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

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

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

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

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

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

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

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

Background

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

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

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

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

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

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

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

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

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

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

By finding that:

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

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

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

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

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

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

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