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Regulatory Capture - The Industry-funded Puppet Dance

11/3/2012

I've been following a blog written by an experienced and well-respected utility regulation attorney that has been doing a monthly series on regulatory capture. This week, I finally read the last article in the series.

“REGULATORY CAPTURE” III — AVOIDING AND ESCAPING provides useful advice for captured regulators like West Virginia's Public Service Commission and the government officials who perpetuate this scenario. Most importantly, it provides a road map for affected citizen consumers to create their own plan of action to effect change in Charleston and put a stop to the practices that hold them captive to out-of-state utility money-making schemes.

Read the first two installments in the regulatory capture series here, along with other interesting topics. Time well spent!

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WV Passes Electric Consumer Debt Bond Legislation

3/10/2012

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West Virginia's penny wise and pound foolish legislators have passed a bill that would enable the Public Service Commission to approve the issuance of bond debt which would allow Appalachian Power to recover its cost of coal over the past 4 years. The long-term debt will be repaid by electric consumers in their monthly bills over the next decade. Coal prices are expected to continue to increase in the future.

I'm not going to harp on why this is completely wrong anymore. I'll turn it over to an expert - James M. Van Nostrand, Director, Center for Energy and Sustainable Development and Associate Professor of Law, West Virginia University College of Law. Read his analysis of West Virginia's big mistake here. When our legislators and Public Service Commission won't listen to learned experts, but instead choose to buy into the pie-in-the-sky promises of corporate lobbyists, it's time to clean the state house, before we go bankrupt trying to stay warm in our own house.

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Legislative Scorecard

2/27/2012

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SB162, Least Cost Planning, died in committee today. So ends my involvement with legislation this year. Now I can get back to the things I do best, like, oh I don't know... maybe researching and reporting on corporate campaign donations?

Many thanks to the many of you who made phone calls and wrote emails. Once again, our collective efforts produced the biggest response to a piece of legislation and made our corporate representatives at the Capitol distinctly uncomfortable. Unfortunately, it wasn't enough to drown out the "free speech" of the electric and coal corporation campaign cash. This will most likely continue until we hold "our" elected representatives accountable for their actions and make them earn our respect. As my poor mother was fond of saying many years ago, "I brought you into this world, and I can take you out!" The current status quo will only survive as long as you allow it. The power is in your hands.

So, the next time your electric rates go up (hey, that's this Thursday for you ApCo customers -- they're going to file for ANOTHER rate increase), you can send your personal thanks to the members of Senate Judiciary who tabled the least cost planning bill. It turns out that the problem was that the coal companies were scared that when their power company friends were forced to put real numbers on a public piece of paper, maybe coal wouldn't be the cheapest fuel to generate electricity going forward. Therefore, the corporations and their friends in the Senate decided it was better to kill the bill and hope that the consumers never find out that their electric bills keep going up in order to subsidize West Virginia's coal industry.

This is far from the end for least cost planning, however, it merely served as a launch pad. There's much more to come!

On the positive side, we scored a huge victory in the House by limiting Appalachian Power's Consumer Debt Bond Bill to only one bailout for the company.

Sometimes the victory is immediate and obvious. Sometimes it's a long term process, but a victory all the same.

Heroes

Del. Nancy Guthrie, who amended Appalachian Power's Consumer Debt Bond Bill to limit it to a one-time occurrence to bail APCo out of its current precarious situation.

Sen. Dan Foster, who sponsored the Least Cost Planning bill and continued to support it to the bitter end.

Zeros

Well now, that just wouldn't be "nice," would it? ;-) I don't really need to put a list of names here, do I?

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AEP CEO Says EPA Caused Rate Increases in WV

2/18/2012

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I think someone handed the Little Drummer Boy the wrong script a couple weeks ago when he sat down with a reporter from the State Journal.

LDB says, "APCO – this territory – has borne the brunt of pretty sizable (rate) increases, and it's mainly due to environmental retrofitting of coal units. Still, the rates are lower than they are in other parts of the country, but that doesn't matter to the people paying the bills. The fact is that we've gotten ahead at APCO, so it should moderate future increases."

He also says that 35% rate increases are "needless."

But last week, AEP's spokes-flack said the rate increases were caused by coal that has already been burned:

"We have already bought the coal, we have already made the power and customers have already used that power," Matheney said. "We're facing this large amount of money that has already been spent."

I'd like to introduce you to

You two should get together some time and get to know each other.

Or, maybe the rate increases are caused by excessive AEP executive salaries

"The first step is for AEP's executive types to take some nice, big pay cuts and share in some of this pain the rest of us are feeling every month when we get their bill. Let that happen first, then we'll talk about selling some bonds."

Or maybe the rate increases are caused by zombies?

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Charlie Patton and Billy Mays - Separated at Birth?

2/16/2012

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Appalachian Power's glad-handing lobbyist was very busy today handing out advertisements for the company's "Consumer Rate Relief Bonds" to legislators. Why, thanks, we needed some comic relief!

I think Charlie Patton has missed his calling. He's got a great future on television, pitching Ginsus and Potty Patches* to witless insomniacs at 3 a.m. now that Billy Mays has left the sound stage.

Charlie says, "...we're looking at everything we can to keep costs under control." Well, everything except Integrated Resource Planning and diversifying generation. Charlie's version of "everything" includes taking out a mortgage in your name to pay for the cost of the electricity he's supplying you with today. Charlie also says that, "Securitization is an innovative tool we can use to help mitigate or ELIMINATE increases for the recovery of previously incurred fuel and purchased power costs." Eliminate? Does that mean that Charlie doesn't want his $350M of under recovered fuel costs back? That's awful nice of good ol' Charlie, don't you think? Charlie wants to sweep your current debt under the rug so that your kids can pay for it 10 years from now when it has a bunch of interest charges tacked on to it. Why, electricity can be yours today, little Appalachian Power customer, and you can pay for it in 120 easy monthly installments of only one cent each!!

Personally, I'd rather just give Charlie 120 pennies scavenged from underneath my car seats and under my couch cushions today. How about you?

Something just doesn't add up here... I think it might be those nifty charts on his advertisement. Charlie thinks that if he can "securitize" your rate increase, it will magically disappear! It won't though. That 30 - 40% rate increase will still be hanging over your head, along with all the other future rate increases that you will continue to incur every time you flip that light switch. Eventually, Charlie's house of cards is going to collapse, and then you're going to be stuck with a gigantic balloon payment to make just to keep your lights on. Or perhaps the state or federal government will have to bail Appalachian Power's ratepayers out of the financial mess Charlie has made with his magical disappearing rate increase trick.

Charlie doesn't really care what happens to you. He just wants to avoid any bad PR that may stick to him, his company, the Public Service Commission or your legislators because once again, Appalachian Power's imprudent planning decisions have made electricity cost more than you can afford to pay. Hiding another big rate increase will not make it go away.

*If you don't have the time or inclination to walk your dog on real grass to do its business, you probably shouldn't have a dog.

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Powering America for Tomorrow Act HR 3280 Wants to Put a Transmission Line in Your Backyard

11/22/2011

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What is it about "no" that industry lobbyists don't understand? HR 3280, the Powering America for Tomorrow Act, was introduced by electric utility pet Rep. Jim Sensenbrenner (R-Wis.) last month.

I finally got around to reading this legislative Charlie Foxtrot. Here's what it intends to do for you!

It establishes "Regional Transmission Planners" as approved by FERC. In our region, that would be our biased friends at PJM Interconnection, who lied about the "need" for the PATH project for years.

These "Regional Transmission Planners" would apply to FERC for a federal Certificate of Public Convenience and Necessity for the projects they "approve," and "substantial deference" by FERC would be given "to any proposed finding of public convenience and necessity by a regional transmission planner in a regional transmission plan" during a FERC "notice and opportunity for hearing." This completely cuts out any role for your state public service commission for any lines 230KV or higher. The bill says your state PSC still has "siting authority," unless they "den[y] a complete application seeking approval for the siting of the transmission facility." In other words, if your state PSC says "no," then FERC can overrule them and issue a permit. What kind of a role is that for the states?

Once FERC issues their permit, "A proposed finding by a regional transmission planner of public convenience and necessity regarding a regional transmission project is excluded from review under the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.), provided an environmental assessment or environmental impact statement is required to be prepared by the Commission under such Act." That's right, FERC is going to do away with any environmental reviews and allow transmission projects to plow right through your backyard, or wherever else they please.

Well, isn't that special? This bill allows FERC, Regional Transmission Planners and Electric Utilities to operate outside the law, usurp existing state authority, and make sure you don't have a voice in what happens to your property. You also get to pay for these transmission projects as well, with delightful double-digit rates of return for the electric utilities.

According to this article, "Rob Thormeyer, a spokesman for the National Association of Regulatory Utility Commissioners, said his group opposes the legislation. “It takes the local element out of siting, shutting out consumers and landowners,” he said in an email. “It would create a larger federal bureaucracy likely resulting in the unnecessary and inefficient building of transmission.”

The bill is currently in the House Subcommittee on Energy and Power (second committee listed on the page). Entertain yourself by calling up the members of this Committee and letting them know that you think this bill is a very bad idea. These representatives and the electric utilities must think we're morons. What a hoot!

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Industry Lobbyists Try Again To Give FERC Transmission Permitting Authority With H.R. 3280

10/31/2011

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I'll give the investor owned utilities credit for their persistence. They simply refuse to give up on the idea of putting FERC in charge of high voltage electric transmission permitting and siting.

Less than three weeks ago, the Department of Energy declined to officially delegate their authority to designate National Interest Electric Transmission Corridors to FERC. This stunningly bad idea was the brainchild of former FERC Commissioner and current NextEra Energy lobbyist Joe Kelliher as a way to provide free transportation for his company's wind power resources to coastal load centers. Transmission lines aren't paid for by the utilities who invest their capital in the project, they are ultimately paid for by the ratepayers, with delicious double-digit incentive rates of return for the energy companies. Building unneeded new transmission lines is a cash cow for the utilities.

Today, Platts reports that new House legislation has been introduced that will give FERC the authority to site transmission lines and repeal the DOE's NIETC authority and replace it with a new FERC authority to designate transmission planning regions. Same stupid idea, different game plan.

This version of the game is credited to Jim Hoecker, former FERC chairman and lobbyist for the WIRES front group. Those former FERC Commissioners now raking in the millions by returning to the industry that spawned them in the first place are a dime a dozen.

Here's how it's supposed to work:

"These regions would then propose for FERC's approval high-votage transmission projects already included in the planning process.

Regional transmission planners could propose that FERC grant certificates for specific projects and the bill would require the commission to give these planners "substantial deference" for such requests.

The proposal also would permit FERC to issue permits to build interstate transmission lines.

The issuance of FERC certificates is modeled on FERC's gas pipeline siting authority, but the bill stops short of giving the commission eminent domain to order the construction of any line over the objection of affected landowners.

It also would retain states' authority to make decisions in the siting of local transmission lines."

Okay, so they have given FERC the authority to issue permits, and then "retain states' authority" by making them the bad guys who grant eminent domain to the power companies. No matter how they sugar-coat it, THIS PREEMPTS EXISTING STATE AUTHORITY, just like the industry lobbyists' last plan!

Once again, the investor owned utilities who stand to rake in huge profits with a new, free and easy, FERC-run, national siting and permitting policy state that:

"Sensenbrenner (who sponsored this wonderful *awful* idea) "appears to recognize that the national interest transmission corridor designation process is broken," Hoecker said."

And

"There is latitude on the part of the agencies but this would be a departure from the broad geographic approach implemented under the Energy Policy Act of 2005 and therefore would likely draw congressional attention," Plaushin said."

Awww... cut the false modesty. It's going to draw lots more attention than just that of Congress...

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Who Needs to Pay a Lobbyist When the WV PSC Will Do It For Free?

9/14/2011

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My disappointment with the WV PSC continues to build. Today, WV PSC Commissioner Jon McKinney, whose term expired on June 30, 2011, will testify before a House Energy and Commerce Committee meeting that enforcement of new EPA clean air rules will cause a reliability crisis and huge rate increases in West Virginia.

As noted earlier over on the Coalition for Reliable Power, McKinney has been accused by Clean Air Watch of sponsoring a NARUC Resolution against the EPA rules that was ghost written by AEP.

The TRAIN Act that McKinney is supporting today has been labeled "lobbyist mischief" and part of an AEP spin campaign to delay implementation of the rules by Reuters.

In his testimony, McKinney relies on a "study" commissioned by the coal front group American Coalition for Clean Coal Electricity:

"The American Coalition of Clean Coal Electricity (ACCCE) recently asked NERA Economic Consulting to model the economic impacts of the proposed CATR and MACT Rule together. Overall the analysis shows that in 2016 electricity rates will increase by 11.5% in the US generally, and by another 12.9% in WV. Moreover, net job losses are projected to be 1.44 million for the total US and 38,500 for WV."

ACCCE is a well-known industry front group that was caught sending fake letters to Congress in 2009 asking them to vote against climate change legislation.

Commissioner McKinney is also confused about what caused the extended power outage in southern West Virginia during a blizzard in 2009.

"The WV Commission is tasked with ensuring that the WV consumers receive reliable power. We have learned recently that reliability is king and that concerns about reliable service are one of the greatest concerns to customers. During a recent severe blizzard in southern WV over the Christmas holidays, during peak demand, power was interrupted for many residents for an extended period. Obviously, in very cold weather this is a dangerous situation and we and the electric companies were swamped with complaints from ratepayers, county commissions, legislators, and emergency response providers. My concern is that the new EPA rules will denigrate reliability leading to more major interruptions during peak electrical usage."

The blizzard was caused by lack of maintenance on local distribution lines by American Electric Power. It was not caused by lack of coal-fired electricity generation.

Despite the fact that McKinney is using his position to try to influence legislation on behalf of Ohio-based AEP, PJM recently said there would be little to no reliability problems with the regional grid due to upcoming retirements. Is he ensuring that the needs of the citizens of West Virginia are being met, or is he ensuring that the corporate earnings needs of an out-of-state corporation are being met? Are West Virginians really being served by Commissioner McKinney?

Commissioner McKinney's position about a reliability crisis is in direct contrast to other expected testimony from FERC Commissioners. Check out all the filed testimony for today's hearing here.

Let Governor Tomblin know that you support the appointment of a new PSC Commissioner, who will work for the citizens of West Virginia, to fill the expired seat of Commissioner McKinney and not spend his time lobbying for AEP on Capitol Hill.

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Another Colossal West Virginia Public Service Commission Failure

9/13/2011

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Another epic FAIL for the West Virginia Public Service Commission this week. Yesterday was the deadline for submitting comments on FERC's Notice of Inquiry on reevaluating transmission incentives.

These incentives have been given out like candy for 5 years and cost consumers billions of dollars in higher electric bills every year.

Numerous other state public service commissions submitted strong comments against current incentives policies and suggesting workable changes. These states included other PATH-affected neighbors, such as Maryland and Virginia, who are looking out for the interests of their citizens, but West Virginia failed to make any effort whatsoever.

We can only assume that the WV PSC approves of FERC's ridiculous over-compensation of energy corporations that has driven expensive, destructive, unneeded transmission projects in our state, such as PATH and TrAIL, and steadily increases the electric bills of West Virginians. I'm very disappointed.

West Virginians deserve a public service commission that is working in their interests, and not kowtowing to the profit initiatives of out-of-state corporations. Let Governor Tomblin know you demand change at the PSC.

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The West Virginia Public Service Commission Isn't Doing Their Job

9/7/2011

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The WV PSC issued an order today denying Staff's petition to require FirstEnergy and American Electric Power to provide an assessment of the condition of their high voltage transmission facilities in the state within 30 days.

The Staff's petition was filed in accordance with a WV legislative Resolution that urged that the West Virginia Public Service Commission act to review the condition of the Pruntytown to Mt. Storm 500kV transmission line owned by Monongahela Power, a subsidiary of FirstEnergy, and order the rebuilding and reconductoring of that transmission line as soon as is practical. It was also expanded to include all AEP and FirstEnergy facilities in the state in order to seize the opportunity that currently exists to take some lines out of service for rebuilding and modernizing. This opportunity currently exists due to decreased demand and the recent energizing of the TrAIL line, providing enough slack in the system to get the necessary work accomplished. This opportunity isn't going to last forever.

Rebuilding of existing lines that are over 40 years old will not only provide a safer environment for the West Virginians who live in the vicinity of this decrepit infrastructure, it will also increase the capacity and improve the efficiency of these transmission lines and save energy that is currently wasted due to line loss on these antique facilities. Improving transmission lines in West Virginia will also serve as a proactive step toward preventing future proposal of new transmission lines, such as PATH, in the state.

Both of the power companies agreed to evaluate their facilities and provide reports to the PSC, however they wanted more time -- 120 days instead of 30.

The WV PSC denied the petition and in its place reaffirmed their 2008 decision in the TrAIL case directing TrAILCo and its corporate affiliates to submit a plan for reconductoring or otherwise upgrading their respective transmission facilities within one year of the in-service date of TrAIL. TrAIL was energized on May 19, 2011, which would make FirstEnergy's report due on May 19, 2012. Note that the TrAILCo order only applied to TrAILCo corporate affiliates (the FirstEnergy companies) and lets AEP completely off the hook for any responsibility to evaluate the condition of their own aging transmission facilities.

The WV PSC is utterly abandoning their statutory responsibility to ensure that utilities under their jurisdiction provide safe and reliable service to the citizens of West Virginia. If our current Commissioners don't want to do their jobs, it is incumbent upon our Governor to appoint ones who will serve the citizens of this state.

The term of Commissioner Jon McKinney expired on June 30, 2011. Obviously, he doesn't want to do the job anymore, so the only responsible thing to do is for Governor Tomblin to promptly name his replacement and relieve him of his duties. West Virginia utility attorney Robert Rodecker was suggested to Governor Tomblin by The Coalition for Reliable Power and endorsed by members of the legislature back in June, before the expiration of McKinney's term. Roedecker's nomination was also enthusiastically endorsed by numerous citizens who contacted the Governor's office expressing their support. Despite this, Tomblin has failed to act, and the PSC is now shirking their statutory responsibilities.

It's time for YOU to act! Please call or email (or, for good measure, do BOTH) Governor Tomblin and let him know that you support the appointment of Robert Rodecker to fill the expired term of Commissioner McKinney effective immediately. The Governor's office may be reached at 1-888-438-2731 or by submitting an email at this link. DO IT NOW!

The WV PSC and Governor Tomblin are clearly ignoring the will of the citizens that has been expressed through their elected representatives and changes need to be made. Change begins with YOU!

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Forward>>

Regulatory Capture - The Industry-funded Puppet Dance

WV Passes Electric Consumer Debt Bond Legislation

Legislative Scorecard

AEP CEO Says EPA Caused Rate Increases in WV

Charlie Patton and Billy Mays - Separated at Birth?

Powering America for Tomorrow Act HR 3280 Wants to Put a Transmission Line in Your Backyard

Industry Lobbyists Try Again To Give FERC Transmission Permitting Authority With H.R. 3280

Who Needs to Pay a Lobbyist When the WV PSC Will Do It For Free?

Another Colossal West Virginia Public Service Commission Failure

The West Virginia Public Service Commission Isn't Doing Their Job

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