Remember all the fun we had last year with AEP's "Principles of Business Conduct"? 

Well, now it's FirstEnergy's turn to sing, dance and make us laugh with their improbable "Code of Business Conduct."

According to FirstEnergy CEO Anthony "Tony" Alexander,

"Maintaining high ethical standards builds trust with our customers, shareholders, fellow employees, and the communities we serve.  Our Code of Business Conduct communicates the fundamentals of ethical behavior in the workplace and provides important guidelines to ensure we maintain our high standards."

FirstEnergy?  Ethical?

I'm not going to analyze the whole thing this time -- I've got better things to do, but here's a real whopper from Tony the Trickster.

"Corporate Records – Ensure you accurately record all financial transactions in a timely manner in accordance with prescribed accounting principles. Make full, fair, accurate, timely and understandable disclosure of financial and nonfinancial information as required by law and regulation. Never knowingly record false or misleading information on any Company record, report, or document, including those reports and documents submitted to any government agency, including but not limited to the Securities and Exchange Commission."

Their Q & A section is a laugh a minute!

Q: Why do I need a Code of Business Conduct since honesty is common sense?
A: We all must maintain the highest standards of honesty and integrity. Even honest individuals are sometimes not sure of what is appropriate business conduct since not everyone shares the same perspective and values. The Code of Business Conduct provides guidelines for appropriate business conduct and a formal method of establishing accountability for noncompliance.

Does this mean that Mr. Burns and Tony the Trickster are short on common sense?

This one is my favorite:

Q: What are some warning signs that actual or contemplated business activities may be contrary to the Code of Business Conduct?
A: If you hear any of the following types of statements, there could* be a problem:
• "Shred those documents immediately."
• "No one will ever be the wiser."
• "This sounds too good to be true."
• "I know it's not totally above board, but it's the only way to get the results we need."
• "Everybody does it."
• "It never happened. Right?"
• "OK, but just this once."
• "I don't care how you do it, just make it happen within the deadline."
• "A little white lie won't hurt anything."

*This means that you may hear these statements regularly at FirstEnergy, but that doesn't necessarily mean there's a problem.  After all, where do you think they got these quotes from if not from their daily business interactions?

Was Allegheny Energy-FirstEnergy planning to buy themselves another CPCN for an unneeded transmission project from West Virginia's Governor and Public Service Commission?  Of course they were.

This page from a Morgan Stanley presentation about the "inve$tment opportunitie$" to be had in the hugely profitable high voltage transmission line business indicates that one of PATH's "key challenges" was:

"Obtaining a CPCN in West Virginia or costly concessions with WV to receive the CPCN"

In other words, if they couldn't prove their transmission line was needed and obtain the necessary permit the honest way, they planned to buy it by offering economic inducements and "donations" to West Virginia by engineering another deal with the Governor whereby he would put pressure on state officials to approve an unneeded transmission project in exchange for financial "concessions" by PATH's corporate parents.

That's the lesson Allegheny Energy was taught during the CPCN process for their unneeded TrAILCo transmission line.  When the WV PSC was on the verge of denying Allegheny Energy's application for that project, Governor Joe Manchin stepped in at the urging of his good buddy, Allegheny Energy CEO, Paul Evanson.  What resulted was a backroom deal whereby Allegheny Energy, by virtue of its status as an incumbent utility in the state, was able to offer pay offs, such as having their West Virginia affiliates' absorb their customers' share of TrAILCo costs for approximately seven years, while other West Virginia electric customers of other utilities, such as AEP, paid for the line, along with electric ratepayers in 12 other states and the District of Columbia.

Watch this video of WV Consumer Advocate Byron Harris explaining how a "balance" was struck whereby the unneeded TrAIL project was granted a CPCN in exchange for "economic incentives."  Don't miss Byron's "deer in the headlights" look and stuttering when asked what part the Governor's Office played in this sale of West Virginia.  Perhaps Byron knows that what Governor Manchin did was illegal.  This video never gets old!   

Another pay off in exchange for the CPCN was construction and staffing of a new Allegheny Energy Transmission Headquarters in Fairmont.  If you have any doubt that Joe Manchin sold West Virginians to Pennsylvania corporation Allegheny Energy, this article and accompanying photo will put it to rest.  Although most of the article is now behind a paywall, I happen to have the money quotes (remember when the news used to be free?):

"The transmission headquarters was part of Allegheny Energy’s settlement with the Public Service Commission of West Virginia, one of a number of concessions the utility provided in return for PSC staff dropping its contention that the need for the Trans-Allegheny Interstate Line had not been demonstrated."

“I got a call one day from Gov. Joe Manchin. He suggested that maybe we locate the building in West Virginia,” said Allegheny CEO Paul Evanson at Wednesday’s ribbon-cutting ceremony for the transmission center.
Evanson said Manchin was very persuasive as he laid out the pros of locating such a facility in the state. After carefully considering the matter, Evanson said he told Manchin that the company would locate the new facility in North Central West Virginia.
A short time later, Evanson got “another call” from Manchin. The governor suggested Fairmont as the best location.
Evanson said there were several locations, including Morgantown, under consideration, but the company hadn’t made a decision. About a week later, Manchin called him again and asked if there had been any decision about Fairmont.
Evanson said he soon realized that Fairmont’s proximity to major power lines crisscrossing North Central West Virginia made it the best choice for the transmission center.
“Three phone calls and here we are,” Evanson said.
When Manchin stepped to the podium, he joked “that it really took four phone calls, not three.”

Four phone calls.  That's all it took to make the sale of TrAILCo's CPCN from the WV PSC.  The purchase of PATH's CPCN probably would have taken less, if not for the efforts of the citizens of West Virginia.

However, instead of this:

"A crowd of dignitaries laughed as they listened to Manchin’s remarks while assembled on the front porch of Allegheny Energy’s $52 million transmission facility."

the citizens of West Virginia had the last laugh this time.

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

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

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

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

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

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

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

According to this "information" hand out from Allegheny Energy created, managed and funded (with YOUR monthly electric bill) astroturf front group, The Marylanders for Reliable Power, the "rolling blackouts" were to begin in Maryland in 2011.  This was because "Maryland is running out of electricity!"

Now here we are on the other side in 2012 and none of Allegheny Energy's cries of "wolf" have come true.  There never was any wolf, just an investor-owned utility who set out to make a bunch of money.

And they did it in a duplicitous fashion.

If Allegheny Energy had publicly owned all their fear-mongering, ridiculous claims of predicted future "rolling blackouts" and "frequent and extended loss of power in less than three years," while applying for approval of their for profit endeavor, they would have been in a lot of regulatory hot water.  So, they created "... a coalition of businesses and organizations working to ensure that Maryland's future electricity needs are met through conservation, additional generation of electricity from traditional and renewable energy sources, and improvement of transmission capacity," so that blame for the lies and unnecessary public panic would be pinned on some phantasmic, "grassroots" group completely lacking in verisimilitude.

And they used millions of dollars of ratepayer funding to perpetrate their consumer fraud.

But, it looks like the Sierra Club's experts and the citizen opponents were right way back in 2008... dropping demand, conservation and demand side management obviated any "need" for Allegheny Energy's great transmission rip-off.  There have been no "rolling blackouts," Maryland has not "run out of electricity," and no shortages are predicted for the near future.  In fact, Dominion has recently shut down their Mt. Storm-Doubs 500kV transmission line, one of two major 500kV lines transporting dirty coal-fired electricity to east coast load centers, while they rebuild it to increase its capacity, but no current electricity crisis in Maryland has resulted.

However, electric customers are never going to get their millions back.  That money is gone for good, into the pockets of perfidious public relations companies, charlatan former public service commissioners and other paid "experts" who parroted Allegheny Energy's lies in exchange for personal gain, industry and trade groups such as Chambers of Commerce and the WV Coal Association that joined in perpetrating Allegheny Energy's "grassroots" fraud and helped them spin it, and into the pockets of lobbyists like WV Democratic Party Chairman Larry Puccio, whose support is for sale to the highest bidder.

The claims of "rolling blackouts" were nothing but a lie.

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

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

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

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

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

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

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

By finding that:

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

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

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

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

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

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

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

Remember those rumors about AEP merging with Entergy that were floated around the press earlier this year?  Well, that's not going to happen now.

Entergy made a deal last week with ITC Holdings Corp. in which it will divest itself of its transmission assets.

All those snapping, buzzing, money-making transmission lines and AEP didn't get a single one.  Big frowny face for AEP :-( !!!

So, who's left on AEP's merger shopping list now? 

How about Dominion merging with AEP so that AEP's next transmission project in Virginia won't get back-stabbed by Dominion and end up on the cutting room floor at PJM?  Sneaky, back-stabbing birds-of-a-feather are often very happy together...

Alison Haverty and Keryn Newman filed a Preliminary Challenge amounting to around $2.3M of PATH's recovered 2010 Revenue Requirement with PATH Counsel today.

You can view the Challenge here.

PATH now has 21 days from the expiration of the review period (which is sometime next week) to work with the parties to resolve the issues raised.  If issues are not resolved in within that time frame, Interested Parties will have an additional 21 days to file a Formal Challenge with the Commission.

Four of StopPATH's "out-of-towners" attended the PATH Mt. Airy substation appeal of the Board of Zoning Appeals denial of PATH's application for a special exception in Frederick County Circuit Court this morning.  Oh, how we've missed our out-of-state instigations over the past year!  Imagine our surprise to still be warmly welcomed by our friends in Frederick, which is more than we can say for PATH's out-of-town stable of non-clock watching attorneys (who bill by the hour).  And Frederick still has great beer!

PATH began by asking Judge Dwyer to reverse the BZA decision, not remand it.  While there "may" be a question of need for the substation, it is not out of place as an industrial use and the whole donut hole concept is completely wrong, according to PATH, who displayed a zoning map prop.  According to PATH, their gigantic eyesore is allowed by special exception in 13 out of 14 zoning districts, and "it's the rule rather than the exception."  Uh huh, and that's why it's called a "special exception," right?  PATH thinks that the BZA's decision was made under public pressure and general compatibility isn't a BZA issue.  They prattled on about their monstrosity's inherent adverse effects as being allowed and contended that the opposition would have had to prove there were additional adverse effects.  And... size is irrelevant (remember this one, we'll come back here).  Because the site is much larger than the 42 acre substation, that somehow "minimizes" the size of it.  PATH... blah... blah... blah.... *snore*  Finally the powers that be had enough of their senseless posturing and shut off the lights.  No, really, all the lights went off and since the courtroom had no windows and was pitched into blackness, we were granted a merciful recess.  Honestly, PATH went on way too long repeating themselves over and over, nothing new, and trying to score points that defied common sense.  When they finally got the lights back on, the judge remarked that PATH's planned 30 minutes (which ended up nearer to 60) were "the longest half hour" he'd experienced.  Gotta wonder if he has a power cut-off switch under the bench for situations just like today's hearing.

Here are a couple more examples of the really stupid things they said, because I can't bear to dwell on it any longer or I'll fall asleep too:

1.  The BZA let outspoken opposition steer their decision.

2.  A gigantic substation is already presumed to be in harmony with a residential and/or agricultural zone.

3.  The Board should have weighed only PATH's evidence in reaching a decision because the opposition failed to provide substantial evidence, reports or studies (or bought & paid for "experts") undermining PATH's evidence.  Umm... were these guys at the same hearings I attended last fall?

4.  The Board's decision was based upon "lather whipped up by NIMBYs," who provided nothing but opinions under the guise of cross exam.

5.  The farm doesn't belong to the NIMBYs and they don't pay taxes on it.  Guess what, PATH?  You don't really own it either and we know you don't pay taxes on it!  Electric ratepayers in 13 states paid for it, and continue to pay the reduced tax rate on this "utility" property.

6.  Because two existing transmission lines crossing the farm were there before the 1350 homes were built, the neighborhood was "started as a utility neighborhood" and all those homes came later (like out-of-towners).

7.  Building the substation will add to the forest!

8.  PATH needs to preserve their "rights" (while they stomp all over those of the residents of Frederick County and two other states).  PATH believes that the substation is still needed although they have no current CPCN application.  They also believe in Santa Claus, the Easter Bunny and the Tooth Fairy... hey, wait, who put that in my notes?

The attorneys representing CAKES, Sugarloaf Conservancy and Frederick County did a great job making PATH look foolish, however I missed a great deal of it when I had to leave the room to take a phone call.  The notebook got passed before I stepped out, so if this next bit is inexact, feel free to provide correction to my bad transcription.

Where there is a mix of law and fact, the court is to use the "fairly debatable" standard -- whether reasonable people can come to different conclusions.

Regarding the "nature and intensity," PATH said size doesn't matter (here it comes again), but the opposition submits that it does, and it did to the BZA -- size is a measure of intensity.

The substation will cause inherent adverse effects on property values, vistas and viewsheds of surrounding properties, all of which can be considered according to Maryland courts.

Non-governmental utilities are to appear consistent with surrounding neighborhoods.  Evidence showed that 1300 homes made up the neighborhood, not the two existing transmission lines.  The substation did not have an appearance consistent with the surrounding neighborhood in the minds of the BZA.

The extent of harm or disturbance makes special exception "debatable."

Size matters!  This case is about something that has never existed in Maryland before.

The purpose of an agricultural zone is "to preserve agricultural land, character & quality scaled to meet rural needs."  PATH's substation would not serve the needs of the rural community.  It is illogical to think that the County Commission envisioned something of this size in an agricultural or resource conservation zone.  The only reasonable interpretation is a non-governmental utility that is compatible with and furthers the mission of the zone.

Frederick County's attorney then addressed the fact that PATH's appeal is moot since PATH has been abandoned.  That woke the PATH suits up -- great rustling of papers and arrogant appearance of great outrage because PATH has only been "suspended."  Riiiiiiight... and that's why they are releasing purchased property options in Frederick County.  We all know PATH is perched on the cliff of abandonment and the ground is crumbling beneath their feet.  Chomel pointed out that even if PATH was granted their special exception, it would expire in one year and they don't plan to construct it before November 2012 when they don't have an active application before the Maryland PSC.  Judge Dwyer had many questions for PATH, which had their attorney sputtering amidst a shower of notes being thrown at him from the rest of the herd.  Nice job of looking cornered, fellas!

Judge Dwyer refused to rule from the bench on the matter and he can take as long as he likes to issue a decision.  I wonder if he can outlast PATH's pretension that their project is still viable?

Frederick News Post article.  I see Ed Waters is still Ed Waters.  Sigh.

Bill has the news on The Power Line here.

Sierra Club, Piedmont Environmental Council, Earth Justice and National Resources Defense Council have filed a brief at FERC.

Now if you'll pardon me, I'm going to go stick my toes back in the sand and order another fruity drink with a little umbrella in it.