Tom Johnson, NJ Spotlight's Energy & Environment reporter, quotes analyst Paul Patterson of Glen Rock Associates in this recent article. 

He also captures a great quote from PSEG's recent earnings call.

"Our assessment is that it's difficult in the current market to find projects that meet our threshold for adequate returns," Caroline Dorsa, the company’s chief financial officer told analysts on a conference call. "Some of the returns that we see some of these solar projects clearing are not the kind of returns that we think make senses for shareholders on a risk-adjusted basis."

The utility business is no longer about providing a needed service at just and reasonable rates to benefit consumers.  The main objective has become to provide "adequate returns" to company shareholders.

That's what is behind FERC Order No. 1000, the push for federal control of project siting and current transmission incentives.  FERC is tasked with ensuring that electric rates are just and reasonable, however they have been utterly captured by the industry they are supposed to regulate.

This costs you money every month when you pay your electric bill.  It also expects a sacrifice on the part of those unfortunate individuals who become ground zero for new transmission projects.  And it's being done simply to increase corporate shareholder returns.

Tell FERC what you think.

The investor owned utilities, with American Electric Power leading the pack, think that you have the I.Q. of a kindergarten student.  As if NEMA's "Chutes and Ladders"-themed push for federal transmission line siting and permitting authority isn't bad enough, now the Center for Rural Affairs follows on with its "Connect the Dots" Report.

FERC's recent Order No. 1000 set interregional planning and cost allocation in motion.  The effect of Order No. 1000 will be to enable a vast, new, interstate transmission build-out and spread the estimated costs of over $200 billion to as many electric customers as possible in order to dampen its effect and draw little attention or public opposition.  This push for a "national grid" isn't anything new.  Utilities such as AEP have been lobbying for a coast-to-coast transmission backbone that utilizes their 765-kV technology for many years.  This national grid plan was modeled after Eisenhower's interstate highway plan of the 1950 and 60s.  Just five years ago, the national grid was going to transport "cheap" coal-fired electricity to population centers on the coast with projects like their I-765 plan.  Now that coal is politically gauche, the utilities have shifted the focus of the national grid to take advantage of public sentiment supporting renewables by utilizing Midwest wind as a much more palatable driver of the need for their hugely profitable endeavor.  Don't be fooled, nothing has changed except the color of the sheep costume AEP is wearing.

Transmission lines don't categorize the electrons flowing through them by source.  All that "renewable" wind power being transported to the coasts via this new transmission backbone will be liberally mixed with good, old fashioned, coal-fired generation by the time it reaches coastal states and ostensibly fulfills their public policy RPS goals.  Land-based wind is intermittent and must be supplemented with fossil fuel generation to maintain an evenly sustained supply to the grid.  It will also travel more than a thousand miles through a transmission network being constantly fed with AEP and other investor owned utilities' Ohio Valley coal-burning power generating stations.  The "national grid" won't make your electric supply any "greener."  The only thing getting "greener" here is the pile of money the investor owned utilities are going to rake in if they succeed.

However, interregional planning and cost allocation won't accomplish the investor owned utilities' goal all by itself.  In order to get the national grid built, the utilities are going to need federally-controlled siting and permitting.  This second initiative is well under way and expensive propaganda advocating for federal control that is being championed by various organizations is permeating the media and sucking away your ability to think for yourself.  The industry's extensive use of the third-party propaganda technique relies on the seven common propaganda techniques:  Name-calling; Glittering generalities; Transfer; Testimonial; Plain folks; Card stacking and Bandwagon.

Federal control of transmission siting and permitting will subvert your right to due process, help itself to your property through eminent domain and make a mockery out of environmental reviews, just for starters.  Don't play the utilities' kindergarten games and believe that federal control of transmission siting & permitting will do anything other than grease the skids for a quick and regulation-free permitting system that will fill our landscape with unneeded, monstrous transmission towers & wires that we'll all be paying for in our electric bills for the next 70 years, or more.  It will also guarantee the investor owned utilities access to a reliable supply of too-good-to-be-true profit for the next 70 years through the use of FERC-granted transmission incentives and federal cost and rate control systems that are free of oversight.

It can best be summed up by this one sentence buried deep in the Center for Rural Affairs' report on page 21.

"To this end, FERC has issued a proposed rule that would remove much of an individual state’s siting power, instead requiring transmission planning to be handled regionally."

Since they deign to insult our intelligence by using a kindergarten classroom leitmotif in their propaganda, it's only fitting that we continue the pattern in our warning to you.   This is the real game we will be playing and losing if all the pieces of the investor owned utilities' plan come together with a streamlined federal regulatory process.  You may not even notice that you're stuck tight in Molasses Swamp while the utilities are feasting at King Kandy's Castle until it's too late.

It was a dark and stormy night...

Isn't that how all the best scary stories start?  Well, get your security blanket and your flashlight, little ratepayers, and settle in for a tale of terror!

Back in the early 2000s, Dick Cheney gathered his "secret energy task force" to set the stage for a hugely profitable transmission grid build out intended to bring coal-by-wire to every household in the U.S.  The Energy Policy Act of 2005 brought the regulatory plan to fruition.  Since then, the energy companies' scheme has been slowly dismantled piece-by-piece.  The 4th Circuit Court of Appeals watered down FERC's "backstop" authority to overrule state decisions and take over siting and permitting of transmission lines (Thanks, Piedmont Environmental Council!).  The 7th Circuit Court of Appeals remanded regional cost allocation back to FERC (and FERC answered with its recent Order No. 1000).  The 9th Circuit Court of Appeals vacated DOE's National Interest Electric Transmission Corridors (Thanks, Sierra Club!).  The effect of this has left plans for a "national grid" stymied.

Not to be discouraged, the energy companies began setting another plan in motion.  The first part of their plan is now complete with issuance of FERC's Order No. 1000, which has brought us interregional transmission planning and cost allocation.  Bill has an excellent analysis of the lone article I've seen that actually gets to the truth behind Order No. 1000.  Dressed in a costume of "you won't pay if you don't benefit," Order No. 1000 now makes it easier for industry cartel Regional Transmission Organizations to find excuses for massive new transmission lines and a way to make you pay for the "national grid's" $220B cost.

So, what else do the energy companies need to pull off their plan?  They need to cut individual states and citizens out of the permitting process because all that burdensome citizens' rights stuff is getting in their way.  The National Electrical Manufacturers Association (NEMA) lays out the second part of the industry's sinister plan very colorfully for you in Siting Transmission Corridors— A Real Life Game of Chutes and Ladders.  (I wonder if they got permission from Hasbro to use their trademarked name for that cutsie poo presentation?) 

It's all about establishing a streamlined federal transmission project permitting process that will make constructing new transmission lines a snap.  Maybe they can even install a drive-thru at 888 First Street N.E., Washington, D.C., for even faster service for greedy corporations!  NEMA's plan:  "Federal authority over transmission planning, siting, and cost allocation will significantly increase the likelihood that needed facilities will be constructed in a timely manner".  It will also increase the likelihood that transmission lines will be constructed anywhere and everywhere with no rules, oversight or forethought, except that of increased corporate profits (and that's where your wallet comes in!)

NEMA also wants to put FERC in charge of environmental reviews!  That sounds like a great plan, as long as they'll agree to let my auto mechanic perform their next open heart surgery.  Don't worry, NEMA, he's really good with mechanical things like engines and hearts...

Keep in mind what Bill said about the industry and FERC trying to "greenwash" another great transmission build-out renaissance.  It's all a bunch of propaganda and corporate public relations spin.  This is all about corporations making a HUGE profit constructing something that the American public doesn't need or want, AEP's "national grid."

So, what's in it for NEMA?   "Founded in 1926 and headquartered near Washington, D.C., its approximately 450 member companies manufacture products used in the generation, transmission and distribution, control, and end-use of electricity."  $$$

The industry wants to toss costly and time-consuming due process, state sovereignty, need determination and environmental reviews out the window because it's screwing up their plans to make a whole bunch of money. 

But NEMA isn't the only organization penciling "federally controlled transmission siting & permitting" in on their wish list for Santa Claus this year, though.  We've seen something very similar from the Chamber of Commerce recently.  And there are more, lots more!  It's sneaky and pervasive, and it's everywhere!  How many instances of expensive corporate spin pushing for federal jurisdiction over transmission permitting can you find?  Post them in the comments.

Keep your eye on this one and join us for a round or two of the opposition's favorite game, Whac-A-Mole, where we begin dismantling their new regulations again as fast as they create them.

For more about how AEP and other investor owned utilities are using propaganda to greenwash their sinister plan, here's some further reading.  And keep checking back here at StopPATH WV's blog to read the latest as AEP's scheme is uncovered and neutralized.

I've been trying to plow through FERC's Order No. 1000 that was released last Thursday, but with all the other things I've got going on right now, it's not going to happen anytime soon.  Therefore, here's what I've gleaned from it in the little time I had available.  All the news reports so far have been disappointing.  None of these reporters have actually read Order No. 1000, but are depending on the CliffsNotes version provided by FERC's press release and the statements of the Commissioners.  I'd be an idiot if I was satisfied that these stories provided all the details I needed to decide if Order No. 1000 was a good thing or a bad thing (or somewhere in between).

Bill has a pretty good general overview over on TPL.  This is his initial reaction to the order, and it echos mine as well.  While it appears that this order is going to work against the PATH project, it's encouraging AEP's "national grid" fantasy.  FERC believes we need a whole bunch of new transmission lines hundreds of miles long to pump western renewables to coastal population centers and to increase long distance energy trading (Enron?  Hello?).  As you all know, spending billions to transport power hundreds of miles, when local renewables that don't require new transmission lines are available, is inefficient and uneconomic.  Off-shore wind is located within 10 miles of population centers, and I read something recently that said existing transmission networks can handle the additional power generated by off-shore projects.  Instead of the east coast's power traveling from the west, it should come from the east.  Of course, that would spell disaster for our coal-burning buddies, wouldn't it?  Heh, heh, heh!!

FERC states that their new transmission planning and cost allocation order will "...benefit consumers by enhancing the grid’s ability to support wholesale power markets and ensuring transmission services are provided at just and reasonable rates."  However, think about it while applying a little logic.  FERC is promoting billions of dollars worth of new transmission infrastructure (plus incentive payoffs to the energy companies) that needs to be paid for.  It's going to be paid for by YOU.  The first place I went in Order No. 1000 was the Commission Determination on their new cost allocation process.  Here are the six new principles of cost allocation:

1. Costs are to be allocated to those who benefit roughly commensurate with identifiable benefits received.  Some of these benefits are:  reliability & sharing reserves, production cost savings, congestion relief and meeting public policy goals.  Sounds great, doesn't it?  However here are a couple of things that bug me.  First, FERC prattles on about the "benefits of an interconnected transmission grid."  Scared yet?  Here's another:  In determining "benefits," power companies/RTOs can use "likely future scenarios."  To quote the Order, "Scenario analysis is a common feature of electric power system planning, and we believe that public utility transmission providers are in the best position to apply it in a way that achieves appropriate results in their respective transmission planning regions."  Now you're crouched in the corner doing some primal screaming, aren't you?  That's right, they can make up some fictional "scenario" whereby you might "benefit" from their project and assign you costs NOW.  That sounds fair, doesn't it?
2. No involuntary allocation of costs to non-beneficiaries.  A beneficiary is one who causes costs, or benefits from the facility (transmission line).  No, this doesn't mean you can refuse to pay your electric bill, this is all going on between the power companies, the RTOs and FERC.  Nobody cares what you think, little ratepayer stakeholder.
3. The benefit to cost ratio for selecting projects by an RTO cannot be higher than 1.25.  This means that your "benefits" must be at least .25 higher than the cost of the project that is selected.  However, this is no guarantee because this principle is merely intended to ensure that RTOs don't set too high a threshold for competing projects.  I just can't wait to see what kind of "PATH MATH" (lying with numbers) turns up in these benefit/cost ratios.
4. Costs cannot be allocated to another region without voluntary agreement. (Again, not YOUR agreement, silly!)
   
5. The method for determining benefits/beneficiaries must be transparent and provide adequate documentation that will allow stakeholders to determine how it was applied.  (Again, you're not a "stakeholder"!)
6. Different cost allocation methods may be created for different types of facilities (projects):  Reliability, Congestion or Public Policy.

A "public policy" project is driven by individual state (or federal if that ever happens) Renewable Portfolio Standards.  So, say Maryland needs additional renewables to meet their RPS.  PJM will want to build a gigantic new transmission line from the midwest to bring wind power to Maryland, because we know transmission is the PJM-preferred solution to EVERY problem.  It wouldn't matter if Maryland is planning to construct their own in-state renewables or hook up to the Atlantic wind backbone, PJM would propose a transmission line.  Said transmission line would traverse several other states on its course and "benefit" people along the way.  That way, laws being enacted in the state of Maryland by Maryland legislators will also affect citizens of other states who had no say in their creation.  Landowners in these other states will also have their property taken by eminent domain to satisfy Maryland's laws.  Kind of sticks in your craw, doesn't it?  I expect to see this one in court in the near future.

Anyhow, that's only the tip of the iceberg.  I'm sure there's lots more goodies in Order No. 1000 I haven't gotten to yet.  I hear there's some "backstop" provision in the planning section that will cause an evaluation of alternatives in the event of a stalled project.  Sounds good... probably will end up being bad, but that's fodder for another day when I find the time to finish reading Order No. 1000.  My advice... get yourself off the grid ASAP!  That's where I'm heading and I hope you join me in my monthly giggle-fest when I don't get a whopping electric bill that pays for Mikey's "national grid."  If we make our off-the-grid club big enough, there won't be anyone left to pay for the national grid and all the power companies left holding the bag will go belly-up.  You don't have to finance this ludicrous expenditure.  Your own power generating system is within your grasp.

In other news:  Today the WV PSC Consumer Advocate Division filed a scathing rebuttal to the power companies' answers to the Staff's Petition to require a report of the condition of their transmission systems in our state.  Bill has the scoop here.  I'm trying to decide what my favorite part is.  Initially, I got a kick out of how he lambasted PJM for their bias, but maybe that's only because I was right at the point in the draft of StopPATH's Transmission Incentives NOI comments where I call PJM a cartel...  That Transco thing was pretty good too...  What's your favorite?

And speaking of Transmission Incentives comments to FERC, are you working on yours?  They are due a month from today, so get busy!!  If you need help, go here.  As you can see, FERC needs a little consumer education from the consumers and it appears that this NOI is actually a spin-off from Order No. 1000.  Get writing, folks!

And finally, go check out Bill's analysis of what's going on with PJM's strawman planning process.  Thanks, Bill!  One less thing for me to do!  As he points out in his post, The Sierra Club, Piedmont Environmental Council and EarthJustice are acting on our concerns at PJM.  So, if you're a PATH opponent who is wondering what to do with your money now that the project is stalled and we're no longer funneling all our spare cash to a lawyer and experts, why not show these organizations a little love of the green variety?  Bill's got his comments turned on now -- you can post a comment (unless, like me, you suddenly find yourself speechless).

And last, but not least, come check out what's going on at the Coalition for Reliable Power.  We're planning a series of public meetings next month intended to empower "Potomac Edison" customers to improve that farce of an energy efficiency program they proposed in WV.  Hope to see you all there!

And now I'm going to go crawl back in my hole and get back to work on all these rotten projects sitting on my desk.  Thanks, PATH, you're a real PAL!

Another year, another PATH "Open Meeting" to discuss the true-up of PATH's formula rate project costs by comparing what they collected from ratepayers with what they actually spent for the year 2010.

Instead of an actual meeting, this year it was done via conference call.  Although I missed watching PATH's twitching (and I'm sure there was a lot of twitching this morning!), I didn't have to get up at 4:00 a.m., suit up and slog to the train.  And we polished off a pitcher of Mimosas during the meeting.  Much tastier than PATH's "free breakfast," and it helps make PATH's prevarication a little easier to swallow.

Here's PATH's presentation from the meeting.  They over collected another $5M from ratepayers again in 2010.  This is getting so old.  I think they're into us for something like $13M overall right now.  Robin Huyett Thomas from Jefferson Co., WV, questioned PATH along these lines during the call and was still left with a few lingering questions, which I explained to her after the call was over.  Here's how it works:  Each September, PATH submits a Proposed Transmission Revenue Requirement for the following year.  This is their estimate of how much you're going to pay for PATH the following calendar year.  The rates go into effect on January 1.  Each month, PJM bills your load serving entity (whoever you pay your electric bill to) for its monthly share of PATH's yearly estimated cost.  Your LSE pays PJM, who hands the money over to PATH, and your LSE adds your personal share to your electric bill.  When the calendar year ends, the estimate is compared to the actual amount spent, the ATRR Annual Update.  When PATH makes a bad estimate and collects too much (and conversely if they collect too little, but this never happens) the over/under collection, plus a paltry amount of interest, is rolled into the rates you will be charged for the following year.  For example, the amount you were overcharged in 2009 will be returned to you in 2011, however in 2011, you are also paying for PATH's estimated 2011 costs all year, so it's not like you're ever going to see a refund or reduction in your bill.

Jefferson County's Dan Lutz asked a question that PATH didn't answer to his satisfaction, and when PATH couldn't explain themselves, Dan got a little peeved that they tried to dismiss him.  Dan, I got so side-tracked by your little argument with Randy that I can't even remember your original question, but if you email it to me, I'll try to give you a real answer.  And I'll never tell you to shut up
;-)

I confirmed with PATH that both the WV and MD settlement agreements in the FirstEnergy/Allegheny Energy merger cases stipulated that no merger costs would be passed on to ratepayers.  I then asked them if any merger costs were reflected in the 2010 ATRR.  Milo said there were no merger costs in the ATRR.  I advised Milo that he might want to take a look at the discovery responses I have received from PATH because there are merger costs included in the 2010 ATRR that have been recovered from ratepayers.  So, happy hunting, fellas!  If you think it's bitchy of me not to tell them exactly where these charges appear, consider that it would have been even bitchier of me to keep quiet and not allow them this chance to fix their "mistake."  I could have just included them in a future Formal Challenge at FERC, if it was all about making PATH look bad.  Honestly, why do I have to do their accounting for them every year?  Don't they have a staff who's being paid to do their accounting correctly in the first place?

I also asked PATH if any costs were included in the 2010 ATRR that are the same as costs that were originally included in the 2009 ATRR "in error," and were subsequently removed from the ATRR by PATH in a Dec. 28, 2010 correction they filed at FERC.  You'd think that PATH wouldn't fall for this one again, right?  Well, you'd be wrong... they stepped right into it again and confirmed that none of the 2009 "errors" were made again in 2010.  So, once again I asked that they look at the discovery responses they had sent me because the same "errors" have shown up again in 2010.  Once is an "error," twice is "on purpose."  Of course, they had to take issue with that statement and plead that PATH makes lots of mistakes and never over recovers on purpose.  Good one!  If you believe that, I've got this bridge in Brooklyn that's for sale....  Again, happy hunting, fellas!

Esther Brinkmann from Frederick Co., MD, asked PATH if another Challenge is filed in January 2012 regarding the 2010 cost recovery, would FERC combine the two Challenge filings?  PATH didn't have an answer for that.  Esther... very funny!  :-)  Time for another Mimosa!

PATH then made another little presentation about the Formula Rate Implementation Protocols, PJM OATT Attachment H-19B, that governs their filings, these "meetings," and the discovery and challenge procedures.  Becky Bruner, PATH's outside counsel, said that PATH had the responsibility to work with interested parties to resolve conflicts in the time period between Preliminary and Formal Challenge filing dates.  Before the call was over, I asked Becky why PATH didn't fulfill its responsibility to work with Ali Haverty and myself to resolve the issues identified in our Preliminary Challenge before we filed the Formal Challenge.  Randy took over at this point (didn't he ever tell Becky that we had filed a Preliminary?) and said they were not required to work with us because PATH didn't agree with any of our issues in the Preliminary.  I reminded Randy that he filed a correction to PATH's 2009 ATRR on December 28 that included "mistakes" we had identified either through discovery or Preliminary, and PATH made no attempt to notify us that some corrections had been made until the resolution period was over.  All that aside, isn't the whole point of the resolution period to resolve issues where PATH and Challengers don't agree?  Maybe not when you're Randy and you think you're right, even when you're wrong, and the word compromise isn't in your vocabulary.

Patience Wait from Jefferson County began to ask PATH about "costs necessary to maintain the project in its current state" but quickly got off on a discussion about property purchase options.  PATH verified that they are releasing options when they become due for another payment at the renewal date.  Randy says that they are just going to repurchase the same options again later.  Patience asked if he thought he would be able to secure the options again at the same price.  I don't think Randy answered this, but here's the scoop.  PATH has already made at least an initial payment to secure these options.  When the option is released, all payments already made to property owners become wasted money.  PATH gets NOTHING for the money they spent and the property owner gets to keep their property.  If the options have to be repurchased, PATH will have to re-negotiate the price, make another initial payment, any payments due at renewal, and the final purchase payment to exercise the option.  PATH is tossing OUR money away by releasing the options now and planning to spend more of our money repurchasing them later.  Look up the word "imprudence" in the dictionary.  Randy got all defensive and tried to hide behind the discovery process, so Patience plans to pursue the issue through that process.  If you have questions for PATH that you didn't get a chance to ask this morning, contact me and I'll hook you up on the whole discovery thing.  The more ratepayers getting involved in discovery, the better!

Ali Haverty from Calhoun Co., WV, questioned PATH about which FERC dockets they had filed the 2010 ATRR in.  Becky and Randy insisted that it was filed on both ER08-386 and ER09-1256.  Ali tried to convince them that it had, indeed, not been filed in 1256.  Becky and Randy informed Ali that FERC doesn't do a docket notify for something like an ATRR filing because it is an "informational filing" and insisted the filing in 1256 had already been made.  Low and behold, less than a hour after the conference call concluded, I got a docket notify email from FERC informing me that PATH had just now filed the ATRR in 1256.  Are you keeping track of the number of lies?  I hope so, because I've lost count.

This whole issue of which docket PATH filed the ATRR in is only relevant because Ali is currently engaged in battle with PATH at FERC over confidentiality issues in discovery.  To see the Motions and Objections, go here and search for Docket ER08-386 and separately ER09-1256, because PATH has pulled a docket switcheroo.  PATH is attempting to alter H-19B through use of a Protective Order and by attaching senseless statements to their discovery responses.  H-19B can only be changed through a proper Section 205 filing with FERC on Docket ER08-386.  If PATH is successful here, the ratepayers will be shut out of knowing how their money is being spent by PATH because interested parties like Ali and myself will be required to keep all discovery and related challenges confidential and the rest of you ratepayers won't be able to view any of it unless you do your own discovery and challenge and sign a Protective Agreement.

So, PATH continues to rip us off and now wants to hide the evidence.

Here's your quick reference guide to the resources available at StopPATH WV to assist you in crafting your comments on FERC's Notice of Inquiry Promoting Transmission Investment Through Pricing Reform.  Hopefully this contains everything you need to know, but if you have additional questions, email me.  You can also leave comments in the individual blog entries, but there's no guarantee I will see them in a timely fashion.

Extended comment deadline - August 25, 2011
How to submit your comments
General Overview of NOI

Overarching Questions pp. 1-10
Sec. 219(a) Statutory Threshold (Rebuttable Presumption) pp. 10-12
Additional Goals in Sec. 219 pp. 12-14
The Nexus Test pp. 14-19
Interrelationship of Incentives pp. 19-20
The Role of Cost Estimates pp. 20-21
Incentive ROE Adders pp. 23-27
Abandonment pp. 27-30
CWIP in Rate Base pp. 30-33
Hypothetical Capital Structure pp. 33-34
Pre-Commercial Cost Recovery p. 34-36
Accelerated Depreciation and Advanced Technology pp. 36-40

We encourage both groups and individuals to submit comments.  For individuals, it might be easier to concentrate on just one aspect of the NOI.  Detailed comments on a particular incentive or aspect are better than generalized comments on the entire NOI.  We are encouraging groups to combine resources and file a comprehensive set of comments.

FERC's Transmission Incentives are the "root of all evil" and the impetus for all the unneeded transmission projects that we've been plagued with.  These projects have cost consumers and landowners hundreds of thousands of dollars in defensive legal costs, years of stress and aggravation, and in some unfortunate cases caused complete financial ruin.  If you want to put a stop to this nonsense once and for all, don't miss this fortuitous opportunity to have a voice.

In the NOI, Promoting Transmission Investment Through Pricing Reform, FERC is seeking comments about the effect of its incentives on promoting transmission.  If you're going to comment, you need to understand what the incentives are, and what they are intended to do.

Beginning on Page 9 of the NOI, the Commission poses some general, overarching questions regarding the effect their incentives have had on the goals set forth in Section 219.  Read the introduction and history on pages 1 - 9, and consider all the other aspects of the transmission incentives covered in the NOI, and let FERC know what you think the effect has been.

The incentives have caused a "gold rush" to new transmission projects, while our existing transmission grid withers and fails from neglect.  Because of the excessive profit to be made with new projects that FERC created with their incentives policies, the original intent of Sec. 219 has been completely perverted.  The ultimate outcome of this is that the consumers have been saddled with an incredible amount of debt while energy corporations rake in an incredible amount of profit.

If you found this helpful in crafting your comments, you are encouraged to browse the entire FERC Transmission NOI category at StopPATHwv.com for other useful material.  You don't have to comment on all aspects of the NOI if that's too burdensome.  In fact, if you want to concentrate in detail on just one aspect that interests you and about which you have strong feelings, that's a perfectly acceptable approach to producing effective comments.

In the NOI, Promoting Transmission Investment Through Pricing Reform, FERC is seeking comments about the effect of its incentives on promoting transmission.  If you're going to comment, you need to understand what the incentives are, and what they are intended to do.


FERC wants your thoughts regarding "additional goals in Section 219," specifically the imbalance that exists between what FERC believes are differing goals in 219(b)(1) and 219(b)(3).

219(b)(1) calls for the Commission to promote "reliable and economically efficient transmission and generation of electricity by promoting capital investment in the enlargement, improvement, maintenance, and operation of all facilities for the transmission of electric energy in interstate commerce..."  FERC believes "the enlargement" includes construction of new facilities.

219(b)(3) encourages "deployment of transmission technologies and other measures to increase the capacity and efficiency of existing transmission facilities and improve the operation of the facilities."

FERC wants to know why the vast majority of transmission projects applying for incentives have focused on new transmission lines (the enlargement) and few have focused on improvement of existing transmission lines.

It seems to me that BOTH sections of 219 are, in reality, pointing to the upgrade of existing transmission.  However, the power companies have figured out that promoting projects that call for the addition of new, totally separate transmission projects are more lucrative to their bottom line.  Modernizing existing transmission (average age 40 years) just doesn't cost as much and doesn't provide as much wiggle room for padding of expenses.  Because the power companies earn a very high return on the amount invested, the more they invest, the more they profit.

FERC has stated that the "reliability benefits of operation and maintenance capital spending are obvious, and we expect applicants incurring this type of capital spending will be able to demonstrate reliability benefits and thereby be eligible for incentive treatment."  However, the power companies are not interested in improving existing transmission.  They may become interested eventually, when they have over built all the new transmission they can get away with and have to content themselves with the leftover crumbs, but it will take a whole bunch of improvement projects to equal the profit to be had on one new project.

In the meantime, our landscape is littered with aging, inefficient transmission lines that are increasingly subject to failure, which decreases reliability.  The argument that aging transmission causes the need for supplementation by new transmission is a self-fufilling prophecy.  Instead, if the focus was pushed toward rebuilding of existing transmission, it could obviate the need for new transmission.  We witnessed this happening with the PATH project.  For reasons I'm not going to get into, Dominion proposed the rebuilding of two existing transmission lines as an alternative to the new PATH transmission project.  However, their proposal was given the run-around at PJM, who attempted to sweep it under the rug.  PJM's favoritism of the PATH project (and thereby the PATH parent companies' financial gain at the expense of PJM's ratepayers) aptly demonstrated their bias and agenda to produce profit for their members, instead of their supposed mission of ensuring a reliable transmission system.  I don't know what goes on in the other RTOs, but PJM demonstrated why improvement of existing transmission is not being proposed in PJM.

For these reasons, perhaps FERC should require an independent (and because of demonstrated bias, this would not include PJM) evaluation of new transmission projects to determine if upgrades to existing transmission would serve the same purpose quicker and cheaper before granting incentives.  This would also satisfy the requirement that incentive projects benefit consumers and the whole "just and reasonable rates" mission.

Transmission owners should be required to evaluate their existing lines with an eye toward replacement before proposing new transmission projects, just as the staff of the WV PSC has suggested in their recent petition.  I realize that some new transmission may still be needed to connect new generation, however new long-distance transmission like PATH, intended to increase existing power flows parallel to existing, but "congested"and inefficient, transmission lines won't be needed.

Now that you've contemplated new vs. existing transmission, go look at FERC's questions beginning on page 13 of the NOI and formulate your comments/suggestions for FERC.  I'm sure you creative consumer "stakeholders" can make suggestions that the industry won't even ponder.  The industry will be letting FERC know how they can and should sweeten the pot even further for them.  It's up to you to provide balance with a little real world sanity.

If you found this helpful in crafting your comments, you are encouraged to browse the entire FERC Transmission NOI category at StopPATHwv.com for other useful material.  You don't have to comment on all aspects of the NOI if that's too burdensome.  In fact, if you want to concentrate in detail on just one aspect that interests you and about which you have strong feelings, that's a perfectly acceptable approach to producing effective comments.

In the NOI, Promoting Transmission Investment Through Pricing Reform, FERC is seeking comments about the effect of its incentives on promoting transmission.  If you're going to comment, you need to understand what the incentives are, and what they are intended to do.

We all know about budgets.  People live within their own financial comfort zone, and even corporations and governments must operate within certain set budgets (no, we're not starting a political debate!)  Failure to stay within budget causes personal financial problems, and in the case of corporations and governments, failure to stay within budget can turn a project into financial disaster.  Imagine a product that costs more to make than can be recouped through sale.  You wouldn't stay in business long if you were unable to properly budget.

FERC believes that transmission projects that receive incentives should not be limited by a budget.  In FERC's world, the cost of a project will never outweigh its benefits to consumers.  This is unrealistic because there is always a tipping point when the cost becomes greater than the benefit.  Now FERC ponders if there is a role for cost estimates in their transmission incentives policy.  However, they worry that limiting incentives to original budgeted amounts could be punitive when escalating costs are beyond the control of the transmission owner. 

FERC is under the assumption that the regional planning process places some weight on cost estimates when evaluating projects.  During the PATH battle, we have heard that there is no price too high at which point building PATH would become uneconomical.  The cost of PATH played no role in PJM's selection and stubborn loyalty to this project, even when faced with less costly alternatives, such as the Liberty Line and Dominion's Alternative One.  In fact, PJM went so far as to evaluate the cost of the Liberty Line in a biased manner that created a conflict of interest, in order to make the cost of PATH appear "economical".  We know that PJM is incapable of rationally utilizing cost estimates in selection of projects.  FERC gives them way too much undeserved credit.

FERC should limit transmission incentives to budgeted amounts only.  Their current system encourages unbridled spending because the more the project costs, the greater the financial reward for the transmission owner.  A project should be re-evaluated if cost estimates change.  FERC needs to remember the consumer whose cost of delivered power is being reduced by the transmission project because there will come a point at which project costs actually increase, instead of reduce, the consumer's cost of delivered power.

Now that you've contemplated the role of cost estimates, go look at FERC's questions beginning on page 21 of the NOI and formulate your comments/suggestions for FERC.  I'm sure you creative consumer "stakeholders" can make suggestions that the industry won't even ponder.  The industry will be letting FERC know how they can and should sweeten the pot even further for them.  It's up to you to provide balance with a little real world sanity.

If you found this helpful in crafting your comments, you are encouraged to browse the entire FERC Transmission NOI category at StopPATHwv.com for other useful material.  You don't have to comment on all aspects of the NOI if that's too burdensome.  In fact, if you want to concentrate in detail on just one aspect that interests you and about which you have strong feelings, that's a perfectly acceptable approach to producing effective comments.

In the NOI, Promoting Transmission Investment Through Pricing Reform, FERC is seeking comments about the effect of its incentives on promoting transmission.  If you're going to comment, you need to understand what the incentives are, and what they are intended to do.

FERC says that the granting of an incentive to a transmission project does not preclude the same project from receiving other incentives.  Therefore, they often grant multiple incentives and create a total incentive package that involves absolutely no risk for the transmission owner and their shareholders, and the promise of big financial rewards if a project is completed.  For example, the abandonment incentive allows the transmission owner to recover 100% of prudently incurred costs if the project is abandoned through no fault of their own.  Right there, all risk is removed from the transmission owners and investors and put upon the ratepayers, who shoulder all the burden without any stake in the process.  Once all risk is removed by the granting of this incentive, are any others necessary? 

A project can also receive the CWIP in rate base incentive, which allows them to begin earning a return immediately, while the project is in the planning and construction stages.  And about that return, it's very lucrative, with incentive ROE adders in addition to an already generous base rate.  After that,  FERC can also add in a generous hypothetical capital structure and recovery of pre-commercial costs, and then let the transmission owner recover their rewards at a faster rate through accelerated depreciation.  The effect of all this creates a sickeningly sweet feast that no corporation can resist. 

Because they can't lose, transmission owners will propose all sorts of projects that aren't needed and then try to hold on to them long after they should have rightfully been abandoned.  The transmission owners feel justified to go to whatever devious lengths and stoop to whatever nefarious deeds are necessary to obtain right-of-way and get needed state project approvals because the promised rewards are huge and there is no financial risk involved in failure.

As you contemplate the interrelationship of multiple incentives, keep in mind that FERC is attempting to strike an acceptable balance between consumer and investor interests and reduce your cost of delivered power!  On the investor side of the scale you have zero risk and huge financial incentives and on the consumer side of the scale you have all the risk of badly planned and executed transmission projects and huge financial costs.  Where's the balance?

In the real world, we know that too much of a good thing often has catastrophic results.  You need to explain that to FERC, in as plain a manner as possible.  On page 19 of the NOI, FERC asks a few questions about the interrelationship of incentives.  I'm sure you creative consumer "stakeholders" can make suggestions that the industry won't even ponder.  The industry will be letting FERC know how they can and should sweeten the pot even further for them.  It's up to you to provide balance with a little real world sanity.

If you found this helpful in crafting your comments, you are encouraged to browse the entire FERC Transmission NOI category at StopPATHwv.com for other useful material.  You don't have to comment on all aspects of the NOI if that's too burdensome.  In fact, if you want to concentrate in detail on just one aspect that interests you and about which you have strong feelings, that's a perfectly acceptable approach to producing effective comments.