Another entity has joined the litany of complaints against FirstEnergy subsidiary Potomac Edison.  The Jefferson County Commission unanimously and enthusiastically voted last Thursday to send a letter to the West Virginia Public Service Commission asking the regulator to open an investigation of the company's billing and meter reading practices.

The Commission heard from WV Delegate Stephen Skinner during the meeting, as well as public comments from three different citizens, regarding the outrageous, unjust, and unreasonable Potomac Edison business practices customers had been subject to over the past year or so.

Delegate Skinner has been a vocal advocate for his constituents, many of whom have been hit hard by bills up to 1000% more than usual that are the product of the company's failure to read meters every other month as required by law, as well as both human and computer error on the part of the company.  As a regulated monopoly, Potomac Edison has obligations to its customers, and Delegate Skinner intends to do all he can to ensure Potomac Edison meets those obligations.

Since he began questioning Potomac Edison's practices, Skinner has been contacted by the company's government affairs person, who made all sorts of excuses, and promises that have failed to materialize.  The complaints continue.

Commissioner Widmyer expressed her disappointment with the company's "robo-call" method of attempting to connect with and mollify angry "real people" customers.

Meanwhile, the WV Attorney General pretends he is looking out for consumers by making a "hotline" number available for angry customers to call the company.  There's already a customer service number on your bill, little consumer.  The Attorney General recommends you call it.  Personally, I'd rather call Delegate Skinner or the Jefferson County Commission for some real help.

The parade of perturbed Potomac Edison patrons persists.

On April 9, 2013, the Maryland Public Service Commission opened an official investigation into FirstEnergy subsidiary Potomac Edison's meter reading, usage estimation and billing practices.

The MD-PSC is responding to the complaints of Mr. Richard Tufts and Sugarloaf Conservancy that were filed last year.  It looks like the PSC has heard its consumers loud and clear and has had enough of Potomac Edison's comedy of errors excuses.  Nobody is buying Potomac Edison's lies any more.

I've been circling round this issue in my spare time looking for the company's motivation for this continual incompetence, which coincided with the Allegheny Energy/FirstEnergy merger.  What's in it for FirstEnergy?

Potomac Edison's response to Mr. Tufts' complaint finally explains the game.

Potomac Edison has been losing money on its meter reading function to the tune of $700,000 per year.  This could be easily remedied by filing a new rate case with the Maryland PSC to collect this difference.  However, the filing of a new rate case could also cause Potomac Edison to lose substantially more than $700,000 per year by setting a new rate of return for the company.  The rate of return that the company is allowed to earn on fixed costs in Maryland is currently set at 11.9%, and is the second highest ROE in FirstEnergy's distribution affiliate stable.  If Potomac Edison filed a new rate case, the ROE would be updated and adjusted to today's financial realities.  It is in FirstEnergy's financial interest to continue to collect rates set in the 1993/1994 settlement.  If it were not, the company would file a new rate case.  It has not done so.

The annual loss on meter reading expense compared to the risk to ROE stemming from a new rate case was a loss Allegheny Energy was willing to accept.  But when Allegheny Energy merged with FirstEnergy, apparently that was no longer true.  FirstEnergy wanted the best of both worlds -- collection of the full amount of meter reading costs AND the 1993/94 rate case ROE.  But because FirstEnergy couldn't collect more for meter reading AND maintain an 11.9% ROE, FirstEnergy opted to simply cut the cost of meter reading by slimming down their meter reading staff and not performing scheduled meter readings required by law.  If Potomac Edison cut their meter reading expense to match the amount they were collecting, the loss would stop and the company could keep its 11.9% ROE, having its cake and eating it too!

But now it appears the game is up.  If I were the Maryland PSC, I would require Potomac Edison to issue a refund to customers amounting to the difference between what Potomac Edison spent and what it would have cost to perform meter readings as required by law (around $700K per year, according to Potomac Edison.)  And then, as a punitive measure, I would make them file a new rate case.  :-)  How about it, FirstEnergy?

FirstEnergy has also been pulling the same stunt in other states in which it operates.  West Virginia's ROE is 10.5% and was set in 2007.  Pennsylvania's ROE is 11.5% set in 1994. These jurisdictions are where FirstEnergy affiliates have also been failing to read meters.  Coincidence?  I think not.

West Virginia legislators are not happy with Potomac Edison's excuses.  Could an investigation by the West Virginia PSC also be on the horizon?

The authority to site and permit high-voltage transmission lines has historically rested with the states.  However, the federal government has been trying to wrest this authority from the states for years.

The states consider local need and issues when evaluating a project.  Affected stakeholders are afforded due process to participate in the debate at the state level.  Occasionally, a state will deny an application for a transmission project that provides no benefit to the state.  The feds, and the investor owned utilities who relentlessly lobby them, want to remove consideration of new transmission projects to Washington, DC, where due process will be smothered by national policy goals. 

But it hasn't been smooth sailing for the feds.  Congress has repeatedly declined to federalize transmission permitting and siting, preferring to leave authority with the states.  But the feds and the utility lobbyists have found other ways to try to gain what they haven't been granted by Congress. 

The Energy Policy Act of 2005 hid a few little wormholes for the feds to override states and claim eminent domain to site transmission under certain conditions.  One was Section 1221, the creation of National Interest Electric Transmission Corridors and backstop siting authority for FERC to site transmission in these corridors in the event a state failed to act.  That section has been neutralized by the courts.

But, a second federal eminent domain tool that has not yet attracted much attention is about to be deployed through Section 1222, Third-Party Finance, in order to execute one of the worse abuses of federal eminent domain authority in history.  Section 1222 provides:

WAPA and SWPA are federal power marketing agencies set up to sell and deliver hydropower across central, western and southern states.  WAPA and SWPA, as federal agencies, are endowed with federal eminent domain authority to take private property for use in their systems.  Doesn't sound so bad, does it?  However, Section 1222 allows the Secretary of Energy to utilize WAPA's & SWPA's eminent domain authority for benefit of third-party projects in the agencies' territories that are not connected or necessary to their systems.  And this is where the slippery slope starts, friends.  Congress tried to prevent this kind of bad behavior by including qualifying standards for third-party projects, such as being approved in a regional transmission plan or equivalent, which would prevent duplication of projects, and requiring a finding of increased demand necessitating such a project.  Congress also put a cap on the amount of money WAPA and SWPA could accept from third parties.

And Congress also stipulated that Section 1222 could not override existing state laws.

But, personal relationships between DOE personnel and leadership of a private, for-profit corporation made things just so cozy that an RFP for Sec. 1222 projects was issued in 2010 that coincided with the development of this company's long-haul HVDC projects. 

And the next thing you know, Clean Line Energy Partners became the first and only transmission developer to respond to DOE's RFP for third-party financed projects under Sec. 1222.  Clean Line submitted a voluminous application for its Plains & Eastern Clean Line merchant transmission project in July 2010.  In its application, Clean Line made it clear that its only interest in participating under Sec. 1222 was the ability to have SWPA condemn land for its project:

Clean Line Energy Partners is a privately held company owned by Michael Zilkha and ZAM Ventures that is proposing to build four HVDC merchant transmission projects originating in the midwest.  A merchant transmission project is a for-profit venture that is paid for entirely by its owner.  In exchange for investing billions, Clean Line's super-rich owners will earn a hefty return on their capital by selling transmission capacity on the transmission lines to both generators and load serving entities.  Merchant transmission projects are speculative ventures that are proposed and built outside the regulated regional transmission planning process.  Merchant lines proposed outside a planning process have not been determined to be needed by anyone other than their owners.  If a transmission project is needed for reliability, economic or public policy reasons, it is approved by and included in the plan of a regional transmission operator.  A merchant transmission project is the wildcatter of the transmission business.

Without Section 1222 and SWPA's ability to take land for Clean Line via eminent domain, the company would have to apply for and receive public utility status and the power to condemn private property for its private gain from each individual state that it crosses.  This could prove onerous to the super-rich and muck up or delay their profit.

In exchange for stealing private property from citizens to be used for a private company's gain, SWPA could be granted a certain amount of transmission capacity on Clean Line's project, however, SWPA isn't in the wind business.  But DOE can use authority it was granted under Sec. 1222 to pick winners and losers in the renewable energy business, and Clean Line's investors put together a team with strong DOE connections.  Coincidence?  Probably not.

So, does Clean Line's project meet the requirements of Sec. 1222?

(1)(A) is located in an area designated under section 216(a) of the Federal Power Act [16 U.S.C. 824p(a)] and will reduce congestion of electric transmission in interstate commerce; or
(B) is necessary to accommodate an actual or projected increase in demand for electric transmission capacity;

Sec. 216(a) has been nullified by the courts, so (A) isn't even an option.  Here's Clean Line's justification for qualifying for (B) from their application: 

"In addition to the general demand for more transmission oriented to renewables, there is and will be a specific demand for transmission to address the following concerns:
Additional Transmission is Needed to Develop Wind Resources in the Southwest Power Pool;
Additional Transmission is Needed to Relieve Congestion in Western SPP;
Additional Export Capability is Needed from SPP; and
Additional Transmission is Needed to Import Power in the Southeast.
The Plains & Eastern Clean Line meets each of these needs."

No actual projected demand for the project from any official authority tasked with determining same was included.  The company points to bits and pieces of out-of-date studies that it feels justifies its desire to build this project, along with studies privately commissioned by the company.  I don't think this is the kind of "actual or projected increase in demand" that Congress had in mind.  It's pure posturing of the worst kind.

Other requirements stipulate that the project:

(2) is consistent with--
(A) transmission needs identified, in a transmission expansion plan or otherwise, by the appropriate Transmission Organization (as defined in the Federal Power Act [16 U.S.C. 791a et seq.]) if any, or approved regional reliability organization; and (5) will not duplicate the functions of existing transmission facilities or proposed facilities which are the subject of ongoing or approved siting and related permitting proceedings.

Clean Line's idea of compliance with this requirement?

"SPP repeatedly has identified the need to build additional transmission to fully develop wind potential in
the region and to export it to neighboring regions."  Right, but SPP did not identify Clean Line as the solution in its transmission expansion plan, or otherwise determine its project was needed.

Clean Line also relies on:

"The Plains & Eastern Clean Line is consistent with transmission needs identified in the Joint Coordinated
System Plan 2008 (JCSP). The JCSP was the first inter-regional transmission planning effort in the
Eastern Interconnection. The JCSP was a collaborative effort and involved most of the major
transmission operators in the Eastern Interconnection, including, MISO, SPP, PJM Interconnection, TVA,
Mid-Continent Area Power Pool and several key members of SERC."

And this 5 year old plan has been scrapped.  Also not what Congress had in mind for this requirement.

When DOE questioned Clean Line's eligibility under Sec. 1222, the company submitted an "updated application" that contained the same old lack of convincing evidence of qualification.

Nevertheless, DOE issued a letter entering into an agreement with Clean Line to move forward with the NEPA process.  DOE has not completely committed to the project yet, but if it does:

• Clean Line will agree that eminent domain authority would be used only as a last resort after negotiations in good faith have concluded with all affected landowners;
• Clean Line will agree that the Department will retain the option to select and oversee any land acquisition company required for the Project.

In that case, DOE needs to take a look at the complete and utter mess Clean Line has made out of the public information and land acquisition process.  Clean Line's idea of good faith negotiations with landowners, according to its updated application, put landowner notification last.  Clean Line makes much of meeting with "stakeholders" such as environmental organizations, state agencies, state legislators, members of the governors’ teams, and federal congressional delegations.  But only after all these entities, who are not personally affected and will not have to live with a Clean Line in their own backyard, have drunk the Clean Line Koolaid, does Clean Line consult with landowners:

"After the workshops, Clean Line will host public
open houses to gather feedback on the preferred and alternative routes from landowners and other
affected parties. These outreach efforts are designed to assure that relevant stakeholders have early and multiple opportunities to provide feedback..."  except for landowners.  Landowners are not considered "relevant stakeholders" by Clean Line.

DOE should think long and hard about making the federal government liable for the legal mistakes of a private company.  Just because the feds were successful in asserting federal eminent domain in another dissimilar situation, does not mean that helping the rich get even richer at the expense of the common man is a good idea.  How much money does Congress have budgeted for another federal court beatdown over eminent domain takings?

And DOE needs to take a good, hard, objective look at Clean Line's "qualifications" under Sec. 1222.  The company doesn't qualify without torturing the language in the statute, and a finding that it does qualify is also likely to lead to a separate, but equally vicious, court showdown.

Sometimes, it's just not worth the risk to help your "friends" by overstepping your legal authority and bending federal law.  Maybe the incoming Energy Secretary needs to do a little housekeeping before Congress does it for him, or he finds himself explaining DOE's taking of ordinary citizens' private property for use by super-rich investors.  Congress has resolutely rejected federal transmission siting authority over and over again and will likely continue to do so.

FirstEnergy is up to no good in the state of Ohio, where the company is telling large businesses that they will save money on their electric bills if they sign FirstEnergy's pre-written form letter asking legislators to kill Ohio's energy efficiency standards.

Why?  Perhaps this picture from the folks at Ohio Beyond Coal explains things:

Scary, huh?  Evil personified up there is just begging for you to draw some horns and a tail on him to complete the picture.

"The Akron power company tried but failed to get the standards scuttled or frozen just before Christmas by asking legislators to slip an amendment into unrelated legislation. But lawmakers scattered when the tactic was publicly revealed.

This time, FirstEnergy is sending a form letter written by its lobbyists to some of its larger commercial and industrial customers, asking them to fill in their company's name and send it by Friday to the Ohio Senate, which is trying to decide whether to tinker with the efficiency rules.

The company defended its tactic to gin up support for its position.

"FirstEnergy remains concerned that meeting the state's energy efficiency goals will continue to place burdensome costs on our customers, particularly Ohio businesses," the company said in a prepared statement."

Why does FirstEnergy want to do away with energy efficiency programs in Ohio?  It's hurting their bottom line and working as intended to save consumers money.  More money in consumer pockets through energy efficiency, less money in FirstEnergy's pocket.  Investments in energy efficiency cost much less than investments in new power plants.  The cheapest resource is the one you never have to build.

"FirstEnergy CEO Anthony Alexander [aka "Satan"] has said in public meetings that the rules have interfered with normal market growth, already made tough by the recession."

Right... and FirstEnergy thinks its customers are dumb enough to hurt their own bottom line by signing form letters opposing energy efficiency programs.  Good luck with that, FirstEnergy, your arrogance is stunning.  Some things just can't be fixed by lying to your customers, legislators, regulators and the media.

The City of Boulder, Colorado has been engaged in battle with private, investor-owned utility Xcel for the past several years.  In 2011, the City passed a referendum to form its own municipal electric utility and give utility giant Xcel the boot.  Since then, the City has been negotiating with Xcel to give the utility one last chance to shape up or get kicked out.

A recent article in the New York Times discusses the pros and cons of municipal utilities.

"Roughly 70 percent of the nation’s homes are powered through private, investor-owned utilities, which are allowed to earn a set profit on their investments, normally through the rates they charge customers. But government-owned utilities, most of them formed 50 to 100 years ago, are nonprofit entities that do not answer to shareholders. They have access to tax-exempt financing for their projects, they do not pay federal income tax and they tend to pay their executives salaries that are on par with government levels, rather than higher corporate rates.

That financial structure can help municipal utilities supply cheaper electricity. According to data from the federal Energy Information Administration, municipal utilities over all offer cheaper residential electricity than private ones — not including electric cooperatives, federal utilities or power marketers — a difference that holds true in 32 of the 48 states where both exist. In addition, they can plow more of their revenue back into maintenance and prevention, which can result in more reliable service and faster restorations after power failures."

Not only have municipal utilities proven themselves more reliable during recent extreme weather events, they're also cheaper.  While the private utility mega-corporations have touted their "economies of scale" as more cost effective, that's no longer true.  With increasing pressure to turn a profit and pay shareholder dividends every quarter, these corporations are increasingly looking for ways to increase profits and cut expenses.  Reliability and service suffers first, instead of cutting exorbitant executive salaries, lobbying budgets, and "corporate stewardship" waste, such as buying naming rights to football stadiums and other ridiculous expenditures.  The fundamental problem is that shareholders don't care where the profits come from, as long as they show up every quarter.  Company executives are loathe to dip into their ever-increasing perks, so the customers are the ones who take a hit for the team.

When the corporate baggage of multi-million dollar salaries and frivolous executive waste are taken out of the picture, a municipal utility may more than make up for any "economies of scale."  Check it out in your local area!

"The evidence is clear that generators are profiting excessively from RTO power markets, and that sellers’ rates are not ‘just and reasonable’ as the law requires. Consumers are paying the price, to their detriment and that of the overall economy."

That's the conclusion of a report on FERC's restructured regional electricity markets published in December by Elise Caplan of American Public Power Association and Stephen Bobeck of the Consumer Federation of America.

The report takes a look at how FERC has restructured regulation of wholesale power to rely on market based rates and regional transmission organizations.  "FERC has chosen to rely on supposed market “competition” to ensure that prices are “just and reasonable,” as required under the Federal Power Act."

Do these markets work to protect consumers?  No.  The report opines that, "Instead, evidence is mounting that customers have been harmed by the markets."

Despite repeated attempts to get FERC to do some sorely needed analysis and adjustment to its competitive market experiment, "FERC has still not undertaken such an analysis. But there is a wealth of data available to support the conclusion that consumers actually have been harmed by the restructuring of wholesale electricity markets and that access to alternative retail suppliers does not solve the fundamental problems of the wholesale market from which those suppliers must purchase power."

In the report, "...we discuss specific RTO rules and structure that have provided opportunities for excess generator earnings at the expense of consumers."

In uncompetitive RTO cartel electricity markets, "Offers into the energy market need not reflect the sellers’ actual costs of generation, as FERC would have required under a traditional cost-of-service ratemaking regime. Rather, the sellers set their own price offers, regardless of their actual costs, subject only to review and possible adjustment by the RTOs’ market monitors. In PJM, the market monitor typically mitigates less than one percent of the energy offers in both the real-time and day-ahead markets."

Thanks, Market Monitor!  Always looking out for my interests, aren't you?  It's just too bad that PJM's attempt to replace the Market Monitor isn't intended to provide more protection for consumers, but LESS.

And here's another problem we've written about before that pops up in the report:  "The conceptual basis for LMP is that these differential prices will send “price signals” to indicate where there is a need for new generation or additional transmission capacity, or to reduce load through conservation or shifting the times when energy is consumed. As discussed below, this theory has not borne fruit in practice."

In PJM, new transmission is always proposed before new generation has a chance to happen, and demand side resources aren't given serious consideration.  This is why consumers are now paying half a billion dollars for two failed transmission projects -- transmission projects that were approved and intended to be quickly rammed through before demand side resources and new generation could be recognized.  Ultimately, PJM's Project Mountaineer scheme failed, along with the transmission projects, when demand side resources and generation developed despite PJM's best efforts to squelch them.

"The theory behind locational pricing is to provide price signals indicating where new transmission and generation is most needed. But in reality, new resources have not developed to respond to higher prices in these markets. Instead of inducing new resource development, the higher prices provide a financial incentive for incumbent generation owners to keep supplies constrained, or at least to ensure that prices bid by new market entrants remain high.

The financial benefits of constrained supplies can be seen in the candid presentations by merchant generation owners to the financial community wherein the potential closure of coal plants is touted as a benefit to their earnings."

You know... like how FirstEnergy's wave of coal plant closures last year provided the company with jacked up capacity prices in ATSI and a whole bunch of new transmission projects in which to invest its "transmission spend" to increase the company's earnings.  Remember that?

So, what protections are built into RTO markets, and do they work?  "FERC relies solely on market monitors for each RTO to determine whether the wholesale electricity markets are competitive. These market monitor analyses are based on a limited frame of analysis that ignores evidence, such as the profitability data presented later in the report, which raises questions about the competitive nature of these markets. Moreover, the reports issued by the market monitors do not always support a definitive finding of competition. For example, in the most recent State of the Market Report for PJM, the market monitor found that the local market structure in the energy market and both the local and aggregate market structure in the capacity market were not competitive, as was the structure and the performance in the regulation market."

Go ahead, click through and read this analysis: 

"Prior to examining the empirical evidence of the effects of RTO markets on electricity prices paid by utility customers, this section describes the structural flaws in RTO markets – conceptual problems that have led to higher prices than would have occurred absent such markets. These fundamental features of RTO markets, discussed below, provide both incentives and opportunities for merchant generators to earn excess revenues at the expense of consumers".

How does PJM "fix" their markets when things go awry?  "When a given market structure does not achieve its goal of providing satisfactory revenue to RTO generators, the response – prompted by generators, many of them the spun-off affiliates of formerly vertically-integrated utilities – has been to induce the RTO to add a new, more complex market or a rule to prop up prices, such as a tightening of the minimum offer price rule in PJM."  This kind of "make the rules up as you go" is the basis for the most recent bickering over new MOPR rules secretly concocted by PJM and its incumbent generators.  This is the behavior of a cartel, not a competitive market.

If competitive markets save money for consumers, why do "RTO generation owners’ 10-K reports to the Securities and Exchange Commission list restrictions on competition as a potential risk to their earnings?"

The evidence examined in the report "lead[s] to a conclusion that the restructured RTO-operated markets have increased prices above what would be seen in the absence of restructuring."

How much?  "...a possible $12 billion excess payment from consumers to generating companies that do not face genuine market competition – demonstrates the scope of restructuring’s negative impact."

And this about sums it up: 

"The greatest beneficiaries of restructuring have been not consumers, as was promised, or innovative companies that were expected to emerge, but the “usual suspects” – owners of previously regulated, largely depreciated generating units."

How do we fix this mess?  "It is crucial that FERC, as the regulator responsible for ensuring under law that wholesale prices are just and reasonable, determine whether RTO markets are achieving their cost-reducing potential, and, if not, to implement needed reforms."

Don't hold your breath.  FERC refuses to even examine the results of their RTO experiment, much less take any action to fix it.  Perhaps it's time for Congress to step in.

Legislation requiring West Virginia's electric utilities to perform Integrated Resource Planning was introduced in the House today.

Integrated Resource Planning (IRP) legislation requires our power companies to submit long-term plans to the Public Service Commission every two years to determine the mix of resources to best meet future energy needs. Power companies would be required to give investments in energy efficiency  (reducing demand) equal consideration to investments in traditional power plants, which they currently do not do. Over half the states in the country currently require their utility companies to use IRP. Learn more at EEWV's website.

Integrated Resource Planning is also supported by James Van Nostrand, Director of WVU College of Law's Center for Energy and Sustainable Development, in this report.

Integrated Resource Planning will help to keep your electric bills manageable by optimizing the mix of resources needed to provide electric service at least cost. 

It would also prevent further scurrilous schemes from our out-of-state investor owned utilities to dump their uncompetitive, antiquated resources into West Virginia's captive rate base where YOU will continue to pay the utility a profit on resources that are long past ripe for retirement.

Here's what you need to do:  Visit EEWV's Action Alert page here and click the link to email Delegate Morgan to show your support for the bill.  All you have to do is add your name and click "send."  Three clicks to keep your electric rates low.  It couldn't be simpler.  Do it now!

It's not rocket science.  The longer the distance between generation and load, the more unreliable the "grid" becomes.  Long haul transmission lines provide opportunity for all sorts of failure... or mischief.

Apparently the Chinese military is hard at work compromising the security of the U.S. electric grid.  No big surprise.  Investor-owned utilities don't want to waste precious shareholder pennies on silly stuff like cybersecurity when there are memberships to The Duquesne Club to be purchased instead!

No matter how much the industry insists that it can regulate itself on the honor system, there is no honor among thieves.  Looks like Congress is going to have to intervene and bestow authority to FERC to regulate cybersecurity of the grid.  Just imagine how much this is going to cost when the obvious solution is so much cheaper and quicker -- stop "expanding" the grid and making it more vulnerable.  We don't need a whole bunch of new transmission, and a bigger, more interconnected grid exposes larger and larger geographic areas to one massive failure instigated by the click of a single key somewhere in China.

Thanks, Jimmy!

Corporate America is never satisfied when there's a buck left on the table that could be in its own pocket instead.  That's why the corporations who stand to profit financially from building hundreds of billions of dollars of new high voltage transmission lines from coast-to-coast are constantly attempting to tinker with laws and regulations put in place to protect the consumers who fund new transmission.  No matter how many times their ambitious plans to preempt state authority with federal control are foiled, corporate America bounces right back like one of those inflatable punching clowns.

This time it's The BiPartisan Policy Center banging corporate America's greedy drum with a new report:  Capitalizing on the Evolving Power Sector: Policies for a Modern and Reliable U.S. Electric Grid.

The report is being pushed on the public by well-compensated industry spokespuppets Rick Boucher and Curt Hebert, who are joined by environmental patsy Allison Clements to recommend:

"Proposing an improved federal backstop siting authority for interstate transmission lines to replace the authority provided in EPAct 2005 – the authority is linked to transmission lines chosen through an Order 1000-compliant planning process, ensures states have a more significant role in determining the outcome of proposed transmission lines, and provides adequate protection of federal lands."

But here's what the Clueless "report" actually says:

"Congress should replace the existing backstop siting
authority in § 216 of the Federal Power Act with a
new, targeted backstop siting authority. In particular,
this new authority should provide that FERC may
grant a requested federal permit approving a
multistate HVDC or 765+ kV AC transmission project
within a state if: (1) the state siting authority (a) has denied the project without offering an alternative
route that is consistent with relevant state law, or
(b) has not issued a decision within 18 months
of receiving a completed application, or (c) has
insufficient authority to grant such an application;
and (2) the project has been approved by a state
siting authority in another state."

This isn't giving states a "more significant role in determining the outcome of proposed transmission lines," this is preemption of state authority in its entirety.  Under this proposal, states have only one choice -- issue a permit or have the federal government do it for them.  But this is nothing new.  Former FERC Commissioner Suedeen Kelly said it quite succinctly in her 2007 dissent:
 
"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."

Notice also that the Clueless recommendation only includes bestowing FERC backstop authority over HVDC or 765kV AC transmission lines.  Why do you suppose that is?  It's because the "task force" was stacked with American Electric Power executives, and AEP is the only company who builds 765kV lines.  HVDC lines are favored by fake "renewable" transmission projects proposed by green shysters Clean Line Energy, whose "clean lines" will also carry fossil fueled electricity masquerading as "clean" energy.  Clueless "environmental" organizations like NRDC have taken a big, long, drink of Clean Line's kool aid and think that by assisting corporate America in preempting regulation in order to build a whole bunch of new transmission will usher in a 100% renewable energy future.  Not going to happen, so get out of bed with the devil.  How did Obama's "Rapid Response Transmission Team" to ramrod the building of "renewable" transmission lines work out for you environmental groups?  Aren't you all suing the National Park Service over its dirty decision to destroy the Delaware Water Gap National Recreation Area with a 500kV transmission line?  How many times are you cleaniacs going to get duped by a greedy, dishonest industry before you wise up?

And how about this recommendation featured in the Clueless report:

"FERC should issue policy guidance clarifying
that regional transmission expansion plans may
appropriately include – and provide cost allocation
for – projects with capacity that will not be utilized
immediately if such projects: 1) enable the efficient use
of scarce rights of way, or 2) serve location-constrained
generation, and the projects will provide regional
benefits (including transmission access for future
renewable development) over their lifetimes."

So, the Clueless think that consumers should finance an overbuilding of transmission, just in case there's a need for it later?  CONSUMERS CAN'T AFFORD THIS!  How about you all "enable the efficient use of" existing rights of way by rebuilding and increasing the capacity of existing transmission lines all within existing rights of way first before building new lines on new "scarce" rights of way?  And don't give me that "location constrained renewables" line either.  Why is there absolutely no mention of offshore wind in your Clueless report?  Why does your version of the wind map not include offshore resources?  Is that because development of offshore wind doesn't require the building of a whole bunch hugely profitable new transmission lines by corporate America?  Right.

The Clueless also refuse to examine a clue that's right under their noses.  We may not need ANY of this new transmission they're in such a hurry to permit and build.  In a 2012 "report" of its own, Failure to Act: The Economic Impact of Current Investment Trends in Electricity Infrastructure, the American Society of Civil Engineers said:

“Anticipated future changes regarding the feasibility and implementation of distributed generation and smart grid technologies also add uncertainty about what future infrastructure system will look like. As the  cost-effectiveness of small-scale generation equipment increases, there is a potential for more ‘distributed generation,’ with ‘microgrids’ that can reduce the need for future investment in large central generation plants and associated transmission lines serving them. As sophisticated 'smart grid' computer systems become more available to digitally monitor and instantaneously shift demand or reroute power (to offset equipment failures or other sudden supply and demand changes), there is also a potential for change in future needs for transmission and distribution investments.”

Or perhaps we should focus on the Clueless love for a bigger, more fragile grid to integrate huge quantities of unreliable, variable resources.  Bigger does NOT mean more reliable.

So, what do others think about the Clueless report?  The National Association of Regulatory Utility Commissioners (NARUC) issued a press release stating:

“NARUC strongly opposes the recommendations calling for the expansion of the federal government’s authority to site transmission facilities. The report recommends that Congress give federal regulators permission to overrule a legitimate State decision determining that a power line is unnecessary if a nearby State with different needs and resources says that it is. Essentially this policy would give one State de-facto siting authority over another, which is certainly against congressional intent. Moreover, where current law limits the Federal Energy Regulatory Commission’s backstop authority to power lines in so-called ‘National Interest Electricity Transmission Corridors,’ the report recommends greatly expanding FERC’s authority nationwide. Therefore, this recommendation abandons the existing law’s goal of improving the efficiency of the transmission network by reducing congestion in favor of policies that increase rates for retail customers who receive little or no benefits, without necessary and proper oversight by the States."

NARUC also stated that they do not endorse any of the recommendations of the Clueless report.  The real shocker here is that NARUC was included as a "contributing organization" to the report, but its advice and recommendations were completely disregarded by the industry and "environmental" sycophants who wrote the report.

NARUC failed to drink the kool aid and should be commended for standing up for the rights  and wallets of the consumers they represent, who are the ultimate financiers and supposed beneficiaries of all this proposed new transmission. 

NARUC says we don't need the Clueless recommendations.  State authority to site transmission projects is NOT broken and the states are the ONLY ones looking out for the interests of consumers.

A fierce energy battle over authority to site and permit new high-voltage interstate transmission lines has been underway for years inside the Beltway.  Now the battle has moved to your state capitol, and if you ignore it, you may just end up with a transmission line right in the middle of your living room, and your rights to property ownership and due process obliterated.

Electric transmission permitting and siting has historically been the responsibility of states.  This has caused problems for utilities who want to increase their profits by building new lines because the states may deny applications for lines where need is not proven, or where the state's citizens receive no benefit from the project.  Your state public service commission is the ONLY authority who is looking out for you.

The utilities who build transmission lines would much rather have the federal government site and permit interstate transmission lines.  The federal government would champion national interests.  Under federal authority, all decisions would be made in D.C. by politically appointed regulators and you would be disenfranchised from any meaningful participation.

The utilities and their bought and paid for congressional representatives, along with certain federal agencies, have been trying to take authority from the states for years, but their aggression has been as yet unsuccessful.  The Energy Policy Act of 2005 (Cheney's Secret Energy Task Force) put several vehicles to usurp state siting authority into law.  One was to give "backstop" siting authority to FERC in the event that a state failed to act on a transmission line application for more than one year.  FERC defined "failure to act" to also include denial of an application, however their backstop authority was neutralized through the courts.  Another vehicle to usurp state authority that has not been seriously utilized until now is the authority granted to states by the EPAct to form interstate compacts to site and permit transmission lines on a regional, instead of a state-by-state, basis.

Now the utilities, federal agencies, and their "corporate bill mill" are asking states to voluntarily relinquish their authority by passing interstate transmission siting compacts into law.  They intend to accomplish this through the use of an "education" (indoctrination) campaign targeted at state legislators and "model legislation" to be introduced by state legislative puppets and shepherded through approval by corporate lobbyists.  The corporate bill mill behind it is one of the "mini-ALECs," known as The Council of State Governments (CSG).

CSG has announced that "a new transmission line siting compact developed by The Council of State Governments’ National Center for Interstate Compacts is ready to be introduced in state legislatures across the country."

The idea here is for states to voluntarily relinquish their authority to site and permit transmission to a larger regional body made up of "member" states who have passed the interstate compact "suggested" legislation written by utilities and slipped into your legislature as the work of a sponsoring legislative member of CSG.  Your state legislative sponsor didn't write this bill, in fact, he or she probably didn't even read it before submitting it.  That's the way these corporate bill mills work.

While the public's attention has been focused on FERC's Order No. 1000 attempts to regionalize planning and cost allocation for interstate transmission projects, the interstate compact bill has been quietly honed to a razor-edge and is now ready to pass unnoticed through your state legislature.  The interstate compact bill will do much more damage to your due process rights than anything FERC can dream up and must be stopped.

This secret scheme of utilities, CSG and the federal government to neutralize state authority has been underway since 2010.  Meetings, "hosted by the Office of FERC Commissioner Philip Moeller," were held in 2010 and 2011 that included CSG personnel, FERC personnel, and utility representatives.  The interests of citizens and electric consumers were not represented, except as a discussion of "NIMBY Challenges."  That's all you are to these people - "NIMBYs."  According to the PATH transmission attorneys, "NIMBY refers to "Not In My Back Yard," a common position taken by certain opponents whereby the opponents do not necessarily protest the specific proposal but, rather, protest the location of the specific proposal as being too close to their own property."  "NIMBY" is a propaganda tactic known as "name-calling" whereby a negative connotation of an idea or group is used instead of an argument.  Name-calling is a substitute for rational, fact-based arguments against a group, idea or belief, based upon its own merits, and becomes an argumentum ad hominem -- a way of removing participants from an argument.

According to a white paper written by the working group after the first meeting, the whole premise behind this is based on this lie:

"There are two key reasons why a more collaborative and efficient approval process is needed: First, the demand for electrical energy has grown and is projected to continue growing across the nation – even with investment in energy conservation/efficiency. Second, low cost electricity that is environmentally responsible will be particularly attractive to consumers and businesses."

Electrical demand is not growing.

But wait, the white paper also reveals the real reason for interstate compacts:

"The multiyear application review process and separate evaluations by multiple jurisdictions constitutes a growing burden for transmission companies..."

Regulation is a "burden" to transmission companies earning more than 10% yearly on their investment in new lines.  But new transmission lines are an even bigger burden to electrical consumers who pay for them and sacrifice their properties through eminent domain takings to create new transmission line rights-of-way.

The group identified challenges to transmission line siting, including those pesky NIMBY Challenges:

"One of the greatest challenges to increased transmission line siting comes from NIMBYism (not-in-my-backyard), where local municipalities, environmental groups, and others oppose having lines run through their respective areas. Such opposition—while warranted in certain cases—can lead to costly delays that potentially impact grid reliability and loses sight of the over-all regional or national benefits of a more robust transmission grid."

The white paper goes on with this description of due process:  "NIMBY groups often seize upon the competing interests of the stakeholders to frustrate the regulators with overlapping jurisdictions."

And finishes with this thought:  "It is important to note that there are two forms of NIMBY, each of which involves a different response—the first is one comprised of local geographic issues, such as landowners. The second type of NIMBY is environmental and is often represented by outside groups. Each group’s concerns will need to be addressed during the pre-application phase in order to ensure a smooth process."

News flash:  There's now a third form of "NIMBY."  It's the consumer who will pay for all this transmission, have property taken through eminent domain, and would prefer to consume locally-produced renewable power.  Smooth that, while you manage to be both arrogant and clueless at the same time.

Another "challenge" is the statutory responsibility of a state to determine whether a proposal is needed by its citizens.

"Another stumbling block to siting transmission is that states consider their local interests, not those of the regions they inhabit. In turn, regions often neglect to consider the needs of other regions, and the nation, as a whole, in maintaining reliability and bringing new energy to market."

When are the "regions" and the nation going to consider providing for their own needs instead of constantly taking from consumers, taxpayers and landowners under the guise of "the needs of the many trump the rights of the few?"

So, here's what the group decided an interstate compact needed to do:

1.    "Need" findings would be regional so that pass-through states who do not benefit would be forced to find a project "needed."

2.    Create an interstate siting board to overrule reluctant states and "facilitate a smoother process."

3.    The interstate siting board would have sole authority to site the line in all affected states.

4.    Form "partnerships" and sign Memorandums of Understanding with relevant federal agencies to "streamline the siting process."

5.    Make it nearly impossible for a state that feels railroaded to "opt out" of the compact.

6.    Approval by the interstate siting board would bestow individual state eminent domain authority to transmission owners.

What do the transmission owning corporations behind this scheme think about interstate compacts?

“Clearly, we haven’t made any progress on federal siting legislation” since EPAct05, he said, “so if the states can think more broadly in terms of a compact, I think that’s a good start,” Jimmy Glotfelty, executive vice president of external affairs for Clean Line Energy Partners, told
TransmissionHub. “There are a lot of things a compact could do.”

Yes, an interstate compact can strip a pass-through state like Illinois of its permitting authority so that Jimmy can build his unneeded Rock Island Clean Line project and make a bundle of money.

So, where's the "model" legislation?  Despite hosting a page of information and links about interstate compacts, CSG fails to display the proposed legislation anywhere on its website.  What is CSG trying to hide?

Here's the "model legislation" as it was introduced in the Washington state legislature on December 31.

Features of the proposed interstate compact:

1.    Creation of an interstate "Commission" consisting of:   "...from each member state, three (3) representatives: one appointed respectively by the governor, the legislature, and the state agency with siting authority or as otherwise prescribed by the adopting state."  The expertise of your state public service commission will no longer be needed to review and approve transmission projects -- political appointees who know nothing about utility regulation will now make all the decisions.

2.    "In member states, federal backstop permitting under section 215 of the Federal Power Act (FPA) may not be requested."  This is the big selling point for interstate compacts, however, there is no more "federal backstop permitting," it was previously nullified by two different federal court decisions!  While sec. 215 still contains the language, the "backstop" has been so diluted as to be worthless.

3.    "Public notification of the application and the proposed line shall be provided to each involved state by the convening state."  Notice is given to states, not to the affected public.  You may never know a transmission line is coming through your front yard until the bulldozer shows up.

4.    "Once a route is certified by the combined state application review board, eminent domain shall be based on each state's existing authority."  The "Commission's" approval of a project will trigger eminent domain in member states.  But wait...  you haven't even been "notified" yet!

5.    "Affected federal agencies and tribes shall be notified and the "Commission" shall include one advisory
representative for federal agencies (if federal land is involved) and one representative for all federally
recognized tribes (if tribal land is involved) who shall serve in an ex-officio capacity."  Ex-officio in this instance means in a non-voting capacity.

6.    "The first "Commission" hearing shall occur within 90 days of the initial filing and is intended to assess the
completeness of the application. A second "Commission" meeting will occur no more than 30 days after the initial
decision. The second meeting will assess the merits of the application, including, but not limited to the
proposed route, regional and national energy needs, and costs."  That's 120 days - 4 months - between filing of an application and evidentiary hearing.  No more technical reviews, no more quasi-legal process!

7.    "The "Commission" at their initial meeting shall establish procedures by which interveners may participate in developing the formal record for the application review.
The "Commission" shall hold at least one public comment hearing in each of the involved member states. These public comment hearings must be completed within 120 days after the initial application filing."  Here's where you fit in, little NIMBY.  The "Commission" will decide what your rights are and limit your participation to as little as public comment at one hearing somewhere in your big, wide state, probably located as far away from the project area as possible.

8.    "Commission" meetings are open to the public, unless the "Commission" votes to close them.  Then it's too bad for the public.

9.    "The "Commission" will issue conditional or final approval based on the record within 270 days of the filing of the application unless the applicant and the "Commission" agree to a different timeline. The "Commission" shall outline the required actions in instances where conditional approval is granted.
All decisions of the "Commission" will be based on majority vote, with each involved state having one vote as determined by a majority vote of each State Project Review Panel.
A state, based upon the rules of the involved states, may alter the route for the transmission line within its
boundaries by assuming incremental costs."
The only outcome for an application before the "Commission" is approval or conditional approval.  Denial is not an option.  In that case, why even bother with this kangaroo court at all?  If a state doesn't like the route and wants to change it, they do so at their own expense (which will probably be prohibitive).

10.    Your only right to appeal a decision of the "Commission" is to petition for rehearing within 90 days.  If still not satisfied, you may appeal to the D.C. Circuit Court (as in Washington, D.C., folks, no matter where in this big, ol' country you may happen to live).  Isn't that convenient for the ordinary landowner?  If you appeal and lose, you will be responsible for all legal fees and court costs of the "Commission" and the transmission owner.  This could be hundreds of thousands, or even millions, of dollars.  Ordinary citizens don't have this kind of money, therefore, ordinary citizens will be disenfranchised from the appeals process.

11.    The "Commission" can make up or change its own rules at any time during the process.

12.    If a member state "defaults" on the compact as determined by the "Commission," the "Commission" can  assess fines or penalties or take other action against the state (paid for by taxpayers, of course).

13.    "The "Commission" may accept contributions and other forms of funding from federal agencies,  compacting states and other sources."  You mean like the transmission owners whose application is being reviewed?  No, that wouldn't present a conflict of interest at all...

14.    "Withdrawal from this compact shall be by the enactment of a statute repealing the same, but shall not
take effect until the later of either the final determination of a pending application involving that state or one (1) year after the effective date of such statute and until written notice of the withdrawal has
been given by the withdrawing state to the Governor of each other member jurisdiction."  In the interest of full disclosure, this should probably be dubbed the Hotel California bill.  States may check out, but they may never leave.

15.    This has to be my personal favorite provision:  "All member states' laws conflicting with this compact are superseded to the extent of the conflict."  So, if any of your state laws conflict with anything the "Commission" wants to do, the "Commission" rules!

Why would any state agree to an interstate compact like this?  CSG plans to persuade states through propaganda, half-truths and lies as indicated in this presentation.  Some minor "disadvantages" states forming interstate compacts must overcome include:

"Loss of individual state sovereignty and delegation of state regulatory authority to interstate entities."

That about sums it up.

The model legislation is based on two lies that its proponents will spin:

1.    States will be subject to federal backstop siting without a compact.  Federal backstop siting has been nullified by more than one federal court decision.  There is no federal backstop siting to be worried about.

2.    The transmission siting/permitting process is "broken."  There's nothing wrong with our current state-based approval processes.  Projects are being approved and built within 5 years.  Others take longer due to transmission owner incompetence.  This is not the fault of the states.  State authority is the only process that protects the due process rights of citizens and must be maintained.

How does CSG predict its "suggested state legislation"  will fare in state legislatures this year?

“It’s always a little hard to predict [but] a ‘pretty good’ response rate during [the first] legislative session is somewhere in the neighborhood of 10 to 12 states,” Crady deGolian, director of the CSG’s National Center for Interstate Compacts, told TransmissionHub. “Given the fact that probably most of the focus will be in the West and in the Midwest ... I think we could probably hope to achieve somewhere in the neighborhood of seven to 10 states [during the first legislative session] if things go well.”

Only if YOU allow it to happen, and I would strongly urge you not to.  Pay attention to what's going on in your state legislature this year, especially if you live in the west or midwest.  Find it.  Kill it.  And spread the word to all your friends in other states.  Together we can prevent the creation of this corporate-created, jackbooted "Commission" who proposes to strip you of your due process rights, your property, your money and your pursuit of happiness.  Just say no to corporate governance.