The natives are getting restless!  In addition to Maryland and New Jersey going after PJM's jugular, the Attorneys General, Offices of Consumer Counsel, and Public Utilities Commissions of 6 New England states filed a formal complaint with FERC last Friday.

In their complaint, they allege that the Base ROE FERC set for all New England ISO transmission owners in 2007 is much too high.  The 11.14% ROE was based on a very different 2004 - 2006 pre-recession market.  The complainants provide expert testimony whereby a more reasonable 9.2% is arrived at through an updated DCF analysis.  This Base ROE is the rate of return (or interest) transmission owners will earn on their investment in new transmission projects.  The Base ROE is exclusive of any transmission incentive adders, which were dealt with separately in a joint filing in the transmission NOI.  It wasn't lost on me that the same law firm, Spiegel McDiarmid, seems to be behind both filings.  As I mentioned last month when all the NOI comments began flooding in, pay particular attention to the comments Spiegel McDiarmid wrote for various clients.  They really get it.

Therefore, ratepayers in New England are being overcharged.  How much?

"The Complainants calculate that, assuming a forecasted 2011 investment base of $6.309 billion, New England electric consumers would be required to overcompensate New England Transmission Owners by $113 million annually under the current 11.14 percent Base ROE, compared to rates using the recommended ROE of 9.2 percent.  With New England’s Pool Transmission Facility investment base expected to increase to approximately $11.474 billion by 2015, that overpayment would increase to $206 million annually."

Here's a copy of the complaint.  For the sake of file size efficiency, I have stripped off the exhibits.  If your idea of fun is reading the supporting DCF analysis, get yourself on over to FERC's e-library and search for Docket EL11-66 and download the whole complaint.

If you've read and understand FERC's PATH decisions, you'll appreciate all the snide little references to PATH in the complaint, which were used to bolster the case.  PATH will live in on infamy for a long, long, long time in FERC's legal world.

While one could argue that this complaint is collateral damage resulting from FERC's Transmission Incentives NOI, it also represents another symptom of a bigger problem.  FERC's favored RTO model and its attendant bias toward the interests of a particular RTO's most powerful members, to the detriment of smaller industry players and consumers, is coming under increasing scrutiny.  Yet to be factored into the larger argument is the way FERC is stomping on state authority with its end run around Congress in an attempt to claim federal transmission siting authority.  Retaliatory complaints and other issues related to FERC's power grab haven't even begun yet.

This complaint is another concrete example that the transmission party is over for FERC, the RTOs and the industry players who have been making a bundle of cash at ratepayer expense.  There ARE cheaper, easier and smarter non-transmission alternatives that will ultimately be deployed, and that's where the energy policy train is now heading.  All aboard!!!

In 2010, the New Jersey Board of Public Utilities approved PSE&G's Susquehanna Roseland 500kV transmission project.  That approval is currently being appealed.

Susquehanna Roseland is one of four transmission lines dreamed up as part of PJM Interconnection's 2005 Project Mountaineer, a scheme to transport 5000 MW of coal-fired electric generation from the Ohio Valley to the Eastern Seaboard.  This plan was a money-making conspiracy between coal companies, coal-dependent generators such as Allegheny Energy (now FirstEnergy) and American Electric Power, PJM Interconnection, and West Virginia Governor (now Senator) Joe Manchin, along with other politicians, and FERC officials.

The New Jersey BPU and Attorney General filed comments last week on FERC's Promoting Transmission Investment Through Pricing Reform.  In their comments, they finally admit the truth, which opponents of Susquehanna Roseland and other Project Mountaineer transmission lines have been contending from the beginning:

"The NJ BPU, however, is concerned that while
new transmission lines delivering mostly coal-powered electricity from older plants may reduce
the delivered cost of power, they do so at the cost of increased air emissions from these older,
less efficient plants."

And now New Jersey wants to get tough:

"Coal plants produce a significant portion of the greenhouse gas emissions that impact New Jersey. While coal plants have historically provided reliable electrical service and have balanced the technology mix of generation resources in New Jersey, coal is a major source of CO2 emissions and, therefore, New Jersey will no longer accept dirty coal as a new source of power for the State."

The NJ BPU finally sees the light:

"The NJBPU submits that building clean generation can eliminate or lessen the need for new transmission lines and upgrades, and therefore, on March 29, 2011, the Board awarded contracts under its Long Term Capacity Agreement Pilot Program ("LCAPP") to three CC  generators."

However, the coal-dependent generators, PJM and FERC are fighting them all the way.  This is because a self-reliant New Jersey power market cuts into the profit margins of FirstEnergy and American Electric Power.

New Jersey finally realizes that its captivity to the industry-favoring decisions of FERC-endorsed PJM are what keeps electricity prices artificially high for their consumers.  PJM is a transmission planner, therefore all "problems" have transmission solutions, even when cheaper, smarter solutions are readily at hand.

"The NJ BPU notes that federal incentives to encourage
the development and construction of new transmission facilities to address reliability issues that utilize state-of-the art technologies is encouraged by and acceptable to the Commission, but, efforts to encourage the development of new state-of-the-art, efficient, environmentally friendly gas-fired generation to address reliability needs through incentives has been thwarted and impeded by the Commission by its recent ruling on the Minimum Offer Pricing Rule ("MOPR"),which specifically discriminates against this technology.

"There are, however, other ways besides simply building new transmission lines to address these potential reliability issues and the related congestion costs created by load pockets."

Looks like the state of New Jersey has finally had enough of the PJM cartel's heavy-handed, self-interested control of their energy future.  Will Susquehanna Roseland's approval be overturned on appeal?  Denial of a new coal-fired electric transmission line into New Jersey in favor of new, in-state, gas-fired generation solutions would be just desserts for FE, AEP, PJM and FERC.  It would also put New Jersey back in the driver's seat in setting their own smart energy policy, lower electricity prices for New Jersey consumers and give a nod toward a cleaner environment.

American Electric Power, FirstEnergy, PJM Interconnection and FERC ought to be embarrassed by the boldness of their Project Mountaineer conspiracy, which is on record as a FERC technical conference held on May 13, 2005 in Charleston, West Virginia.

Maybe other states will wake up and join New Jersey in their insurrection against the FERC-endorsed stranglehold of PJM on their energy markets.  FERC's recent federal transmission siting power grab certainly isn't making them any friends at the state level.

According to this article in Platts, Congressman Bingaman has sent a letter to the Dept. of Energy stating that Congress specifically separated authority by giving NIETC designation to DOE and backstop permitting authority to FERC.  Wellinghoff (and industry lobbyist Kelliher) are WRONG when they posit that having all authority with one agency was the intent of Congress.

Bingaman strongly cautions FERC against their recent scheme to have DOE designate their authority to FERC for siting NIETC corridors.  FERC's plan even takes it one step further and intends to let transmission owners designate NIETCs.  The end result will be the industry essentially "regulating" itself and calling all the shots about siting and paying for new transmission lines.  FERC is just a little too close to the industry it supposedly regulates.  This costs consumers higher electric rates resulting from the financial goodies FERC keeps handing to its favored industry pets.

Bingaman says:

"The Commission papers appear to be based upon, or at least inspired by, a third paper prepared by former FERC Chairman Joseph Kelliher.  In his paper, Mr. Kelliher asserts that section 216 “was not well conceived or well drafted,” that it “unnecessarily bifurcated the federal role between” the Department and the Commission, and that this “bifurcation of the federal role between two agencies was a mistake.”  Congress’s legislative mistake, he suggests, can be fixed by administrative “re-implementation” of the law."

FERC's mission is to ensure just and reasonable utility rates in the public interest.  Since when is taking direction from industry lobbyists like Kelliher in the public interest?

Although Bingaman is a big fan of federal transmission siting authority and a bunch of other things that aren't good for the public, he at least has the decency to tell FERC and DOE that doing this would be a BIG mistake.

"Rewriting section 216 under the guise of reinterpreting it, as the Commission proposes, is extremely ill-advised.  It would do serious harm to our efforts to strengthen the federal siting role through legislation."

So, now we have a Congressman who worked on Sec. 216, numerous states, the National Association of Regulatory Commissioners, Piedmont Environmental Council and the public telling Wellinghoff to scrap this stupid idea and save face.  However, the industry is whining in his other ear about how they "need" new transmission to make a bundle of money at the expense of the public.  Give up, FERC, you've been had.

As so often happens in the political world, your "friends" are also your enemies.  This paragraph of Bingaman's letter should give everyone the willies:

"As one of the principal authors of section 216, I am writing to express my serious concerns with the Commission’s proposal.  I do so as one who has long supported giving the Commission greater authority to site electric transmission facilities.  I agree that section 216 is flawed and has proved ineffective.  I wish Congress had gone further than it did when it enacted section 216, and I have authored legislation, which has yet to be enacted, to strengthen section 216 and correct many of its shortcomings."

I've just spent way too much time I didn't have to waste trying to find any current legislation, but I continually came up empty handed.  There's plenty of old, failed attempts by Bingaman on record, but nothing recent.  If anyone can find this referenced legislation "which has yet to be enacted," send it over.

Bill also posted this thoughts about a New York Times article that was published yesterday.  This article is the first time that information about FERC's power grab from the states has been made available to the general public.  As Bill and the article point out, "...the new strategy was spearheaded by NextEra Energy, North America's largest wind and solar power developer. NextEra Executive Vice President Joseph Kelliher, a former FERC chairman, is leading the campaign for the new strategy."

When policy change which results from FERC conspiracy with industry lobbyists is hidden from other "stakeholders" and only revealed publicly two days before the deadline to submit comments, one wonders what they're trying to hide.

According to comments filed by NARUC (National Association of Regulatory Utility Commissioners), they weren't notified of the proposal until just before a meeting in mid-August.

"Given that our members remain the primary transmission siting authorities, we are disappointed that we were not privy to the details or even informal conversations about this proposal prior to the above-referenced meeting, especially since the proposal has been under discussion since June and was vetted with industry stakeholders long before it was even revealed to us."

Apparently FERC and the industry have been discussing the best way to ram this through since June, but it was only recently that FERC began a series of conference calls with other "stakeholders" such as states and environmental groups.  And, of course, they NEVER consulted the most important "stakeholder" of all -- you!  As an electric consumer, property owner and citizen, YOU will be the ones who pay for new transmission, sacrifice your property and well-being to new transmission line rights-of-way, and must live with the consequences of FERC and industry's heavy-handed determination of where renewable energy will develop.  This will ensure that development of renewables will only occur at utility scale and be concentrated in a handful of Midwestern States.  Instead of each individual state getting a piece of the economic/jobs boom expected to result from renewable resources and developing their own local renewables to meet their own in-state goals, they will be forced to buy high-priced renewables from other states.  Still other states will be forced to live with new transmission lines crossing their state which are intended to deliver renewables to their neighboring states, without receiving ANY benefit from the transmission line project.  This should concern another group of "stakeholders" who were not consulted:  your local and state elected officials.  Give them a call and make sure they know!

The root of this problem is a couple of greedy energy corporations and a few Midwestern states who are trying to corner the renewable energy markets of the entire U.S. before other, perhaps more viable, resources have a chance to fully develop.  Earlier this year, FERC granted incentives to a company to develop an offshore backbone intended to support development of wind farms along the Atlantic coast.  These offshore wind farms are ideally sited to provide renewables to the huge load centers along the coast, with a minimum of new transmission capacity required.  Earlier reports said that no new land based transmission will be required.  This would make offshore wind a cheaper resource for the East Coast.

Take a look at these maps from a recent PJM planning document.  They show two different scenarios regarding integration of different amounts of offshore wind into the transmission system.  The first slide shows improvements they think will be needed if they base planning on 20GW of offshore wind.  Those fat, orange lines on the coast are new 500kV transmission lines.  For some inexplicable reason, it looks like they intend to bring back the MAPP project to transport wind power from the coast to the Washington, DC area.  MAPP's original purpose was to transport power produced in Virginia and Maryland to New Jersey.  PJM is desperately trying to find a "need" for MAPP.  Since MAPP was not designed to distribute offshore wind power, it's probably not the most efficient or cost-effective way to do so.  PJM is just throwing Pepco a bone here.  If we're going to invest $5B in an offshore backbone, PJM needs to scrap all old projects and go back to the drawing board and create the most efficient and cost effective method of injecting this new generation into the existing grid.  Look at the map.  Does that even make sense?  Maryland and Delaware don't need any of that transmission.  The second slide shows what happens when the amount of integrated offshore wind drops to 4GW.  All the new transmission lines are in the western PJM region, with no new transmission lines needed on the coast.  This is because all the wind will be coming from the west, instead of the east.  This is what FERC and their industry pets want to see happen.  Most of those 765kV lines aren't even in PJM territory (indicated by the gray shaded areas).  So, who do you suppose will be able to lobby and influence PJM to embrace their particular version of where PJM renewables will come from?  Remember, it's not about planning or regulation or what's good for the grid, it's about who has the most influential lobbyists.

Now that FERC's scheme with the industry has been publicly exposed, the battle lines are being drawn.  On the DOE's website dedicated to this proposal, which was just recently constructed, you can read comments from industry (for the proposal) and from state regulators (against the proposal).  In addition, there are some comments from a couple of environmental groups who are inexplicably in favor of the proposal.  In their quest for renewable power at any cost, they are being duped into going along with a plan that hurts consumers and citizens and subverts states' rights.

Since you weren't given a chance to express your views, the states and organizations like NARUC are fighting for your interests.

"Siting is inherently a local issue that impacts local environments, local landowners, local businesses and local communities. The best decisions come after complete due process where every interested neighbor, farmer and businessperson has an opportunity to be heard. People who know the landscape must be able to participate in the transmission siting processes to minimize negative environmental and economic impacts. Federal siting authority makes local participation less accessible, more expensive, and therefore less likely. State siting processes that enable local engagement may take time (although often less time than the combined pre-filing and filing processes at FERC), but they do not conflict with regional or national interests. On the contrary, local processes are essential to accomplish those interests, and the federal government should not create a short cut around local engagement."

NARUC wants to know what the "problem" is:

"...we would appreciate a specific articulation of the problem the delegation intends to solve and how the delegation will solve the problem identified."

This "if it ain't broke, don't fix it" theme is prevalent in all the comments from state regulators as well.  The same question was repeatedly asked of Chairman Wellinghoff during one of those "stakeholder" calls this week.  He never answered it.  I guess nothing's broke afterall.

This is setting up to be an epic battle involving states, Congress and the courts, and it's root cause is industry lobbying influence on an agency that is supposed to regulate them.  FERC is on the road to disaster and is going to end up strangling "the precious" that it's sticking its neck out to protect -- new transmission.  NARUC sums it up well:

"To the extent that this proposal is motivated by a desire to reduce barriers to transmission, it fails. It relies on a tortured reading of the statute that would cause uncertainty, litigation, damage to State and federal relations, and delays in transmission development."

FERC is attempting to enable the building of billions of dollars worth of new high voltage transmission lines to transport utility scale renewables from the Midwest to both coasts in order to fulfill individual state renewable portfolio standard goals.  They are doing this through a regulatory framework they simply don't have the authority to construct.  Two years ago, Congress said "no" to their ideas for federal transmission planning, cost allocation and permitting.  Now FERC is sneaking in the back door and creating new regulatory processes that they hope will enable their end goal.  FERC Order No. 1000 set up the planning and cost allocation, and now FERC wants to take over DOE's NIETC designation authority in order to make new use of the "backstop authority" FERC was granted in concert with DOE's designation of corridors.  FERC envisions its desired NIETC designation and backstop authority overruling state denial of a transmission line project and utilizing the Commerce Clause to overturn Piedmont Environmental Council vs. FERC.  While this power grab is a bad idea because it usurps state authority to site transmission lines, it's also a bad idea from an economic standpoint.

The idea of transporting renewable energy hundreds of miles is uneconomic.  It also makes decisions for individual states about where the renewable energy that meets their state goals is produced.  When states set their renewable portfolio goals, the idea was to foster their own economic growth with in-state renewable energy projects providing jobs and economic growth within their own borders.  Now FERC wants to decide for them how their RPS goals will be met with renewable resources from other states, and force them to pay for the privilege.  FERC wants to pick winners and losers in the renewable energy business and thereby decide where renewable energy economic development will occur.

But, what if states insist on sticking with their original plans to develop renewable resources within their own borders to meet their own goals?  That's what's happening in California, much to the chagrin of Nevada, who thought they were going to make a bundle exporting renewable energy to California to meet its RPS goals.  In fact, California is looking at a potential surplus themselves and wants to export excess renewables to other states.  This great Midwestern transmission building renaissance FERC is envisioning enabling has no market!

While FERC proceeds merrily along with their enabling of new transmission lines, they fail to objectively consider the costs of this new infrastructure, which is going to be enormous (hundreds of billions of dollars).  In Texas, a huge grid build out to transport renewable energy from wind has far exceeded its original estimated cost and maybe isn't so economical after all.  Electric consumers are going to be left holding the bag on hundreds of billions of dollars of debt for a transmission line build out from which they'll never derive any benefit.

The states need to give FERC a wake-up call before this disaster gets underway and the debt starts piling up.

The Coalition for Reliable Power filed their comments on FERC's Promoting Transmission Investment Through Pricing Reform Notice of Inquiry on Friday.

Click here to read the Coalition's comments.  These comments center on how FERC can utilize existing state transmission project approval processes to assist them in evaluating projects when granting incentives.  It's too bad FERC is considering usurping state authority and making transmission project siting a federal process because they could make great use of the state processes already in place, which are the result of many years of experience in evaluating and siting transmission projects.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Here's a link to FERC's plan.

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

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

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

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

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

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

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

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

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

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

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

UPDATE:  Click here to read more about this issue!

Apparently the utility industry has been sitting around twiddling their thumbs all summer and now they don't have time to file requests for rehearing on Order No. 1000 and comment on transmission incentives all in the same week!

Therefore, FERC has extended the deadline again until September 12.

But that also gives you extra time to get your comments in, so get busy!