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.

PATH properties.... get yer PATH properties... in the market for some dirt-cheap but poorly maintained real estate, or maybe some completely useless land with a burned out trailer or falling down shack?  PATH's real estate agent can help you with that, and she "offers something extra!"  I can't imagine what that "something extra" might be, but I'm sorta frightened by the offer.

PATH went ahead and listed some of its property for sale, despite the Federal Energy Regulatory Commission's November 30, 2012 Order that set the disposal of property for hearing:

"Because PATH has not completed the sale and transfers of land and other assets, we cannot determine based on the record whether self-dealing or cross-subsidization will occur as a result of these future transfers to  affiliates, and whether the proposed prices for sales to third parties are reasonable. As part of the hearing and settlement proceedings, we therefore direct parties to consider the reasonableness of such transfers and sales, including whether future transfers and sales of real property should be reported in periodic reports that identify the parties, date and price of each transaction. Parties in the hearing and settlement proceedings may also consider whether the formula rate should be modified to include such information, which would allow review of the asset sales and transfers under the  formula rate annual update process."

So, how "reasonable" are PATH's "fair market value" sale prices compared to "fair market value" amounts PATH spent purchasing each property?

PATH purchased this property for $50,000 in April of 2010.  It's on sale today for only $9,000!

PATH purchased this property for $64,000 in April of 2009.  It's on sale today for only $12,000!

PATH purchased this property for $307,185 in March of 2009.  It's on sale today for only $229,900!

Let's add up the difference between PATH's purchase price and PATH's sale price, because that is the amount PATH wants YOU to pay for its little unnecessary and overly generous property buying spree:  $170,285!  Even if PATH sells these properties at list, that's how much of a loss PATH expects ratepayers to absorb for just these three properties.  And it's going to get worse, much worse.

Bargain basement prices for unneeded properties - get yer worthless PATH properties today - and if you find out what Tammy's "something extra" is, do let us know.

The transmission industry, safely ensconced in its self-congratulatory echo chamber dream world, continually perpetuates poor performance, execution mistakes, and bad ideas.  In the real world where the rest of us live, successful "public participation in transmission line siting" is based on successfully interacting with the public to convince them that a project is needed, and to maintain  effective communication with the public as a project proceeds through approvals.  It's all about what the public deems successful, since they are the ones who are "participating" in said project information sessions.  It really does no good for other deaf and blind transmission owners to judge whether their transmission-owning peer's transmission projects are successfully participating with the public.  This blind leading the blind self-contratulatory echo chamber reaches a pinnacle every year with EUCI's (that's Electric Utility Consultants, Inc., whose sole existence is derived from getting the utilities to participate in its continuing "education" seminars) Public Participation in Transmission Siting Conference.  During this conference, utility employees make presentations crowing about their "success" participating with the public, even when the reality is that said utility employees are piloting a rapidly sinking Titanic of a failed public relations program.  For example, PATH's PR laughing stocks presented this little gem just 6 short weeks before withdrawing project applications and giving up, after being thoroughly trounced by that "entrenched opposition":

LEVERAGING LESSONS LEARNED

Tom Holliday, Director of Communications Services, American Electric Power

Doug Colafella, Manager, External Communications, Allegheny Energy

American Electric Power and Allegheny Energy are applying best practices to help gain approvals for the Potomac-Appalachian Transmission Highline (PATH), a 765-kV project extending 275 miles through West Virginia, Virginia, and Maryland. Learn how the two companies are working together to apply successful strategies for grassroots outreach, community involvement, and public education while contending with project delays, entrenched opposition, and the economic downturn.

So, what are participants at EUCI's conference really learning?  How to congratulate each other for failure, apparently.  Yee-Hawwww!

This year's conference upped the fun factor by adding a special award to the festivities:
 
EUCI will debut the EUCI Excellence in Public Participation in Transmission Siting Award! The 2013 award will focus on the most engaging, creative, and useful websites. Websites serve as a foundation for sharing project information with the public. EUCI wants to recognize and share the industry's most engaging transmission line siting websites. Finalists will present at the conference and winners will be chosen by the conference attendees.

Wowzers!  It's almost like winning the lottery, huh?  In addition to this great honor, tell the audience what the winner will receive, Rod Roddy...

Rod Roddy:  Winners will receive:

Highlight of website and award announcement in EUCI Energize Weekly newsletter

Web banner recognition for winning website

Award Plaque for your office !!!

What do you get when you combine a bunch of self-congratulatory airheads taking nominations for their website award with two successful transmission opponents who never miss a chance to tell the industry the fearful truth?

Ta-Daaaaa!

We thought our entry would be immediately tossed in the cyber trash, after all, we didn't attempt to hide anything.  It was just a little laughter over a couple of beers.

Apparently there's dumb and then there's EUCI dumb.

I do have to hand it to them for running a "fair" contest and making sure all "entries" were judged inside the self-congratulatory transmission echo chamber by public relations shysters in denial:  a panel of industry experts to include RES Americas, PEPCO, American Transmission Company, Allegheny Energy, Southern California Edison, and The Wilderness Society.  Just a little FYI observation... some of the transmission project judging species are much dumber than others...

So, did we win?  Of course not!  EUCI and their transmission owner stable don't want to feature and award any "public participation" that actually got its hands dirty participating with the public (to stop an unnecessary transmission project).  Therefore, in the spirit of EUCI's self-congratulatory echo chamber, we hereby award ourselves the FIRST ANNUAL EFFECTIVE PUBLIC PARTICIPATION IN THE REAL WORLD TRANSMISSION PROJECT OPPOSITION WIN! Award.

It's just as valid and just as satisfying as any award from EUCI's echo chamber, and best of all, the industry stays safely separated from any real world truth so they can keep making the same "public participation" mistakes that doom transmission projects.

So, which websites won the "contest" and were judged "most engaging, creative and useful for the public?"  I can't speak to three of the nominees, but one of the websites nominated was Clean Line Energy's Rock Island Clean Line website.  Useful?  Creative?  The last time I checked, Clean Line was busy deleting comments from and banning "the public" from participating on their websites.  Not very "effective" participation with the public in my book.  RICL's opposition seems to be doing a better job here and here.  Maybe I'll make Block RICL its very own special little website ribbon to compete with RICL's... sort of a People's Choice Awards vs. The Oscars thing.  

Thanks for the laughs, EUCI, your organization plays a great straight man!  And thanks for sending "Allegheny Energy" our contest entry so that our little coal fella could have a panicked moment wondering if his peer judges were laughing at him (and yes, indeed they were!)  And thanks for making sure that none of that nasty ol' reality confronts any of your precious transmission owners and makes them question their bag of stale "public participation" best practices that are easily neutralized by reality-based opposition.  

In exchange for approving a permit allowing utilities PSEG and PPL to destroy the Delaware Water Gap National Recreation Area with their proposed Susquehanna Roseland transmission line, Department of the Interior Secretary Ken Salazar and the National Park Service extorted $66 million from the utilities.  The $66 million is to be placed in a fund administered by a private conservation organization, who is supposed to use the money to buy and preserve inferior land on the fringes of the park.

The utilities and the Park Service have been quite secretive about the private conservation organization, how the money will be used, and what properties are being scoped for purchase.

The Pocono Record has been investigating this secret, unholy alliance to come up with some answers for the public.

Conservationists try to short-circuit power line project in Del. Water Gap park

Conservation fund eyes 4 properties near Delaware Water Gap National Recreation Area

The private conservation organization who will administer this fund, while scooping off a hefty percentage for themselves, is corporate greenwasher The Conservation Fund, whose Director is compensated at the rate of nearly half a million dollars a year.

The Pocono Record has identified five parcels of land, out of many, to be purchased.  Why the secrecy?

The "mitigation fund" extorted from the utilities will be reimbursed to them by all electric consumers in the 13-state PJM region, plus a 12.93% yearly return on equity on the unpaid balance.  The utilities are using YOUR money to pay their "blood money" bribes needed for permission to destroy YOUR park, and earning interest on it.

Johnson said the rate of return is in fact 12.93 percent and said it is true PSE&G would earn a rate of return on the land purchase.
"The current rules say the cost of a project such as this will be shared by electric customers who will benefit," she said.

This $66M "secret" mitigation fund is YOUR money.  Where's the required transparency in electric rates you are charged when amounts spent are mired in secrecy?  Why is no one holding the utility feet to the fire and utilizing existing transparency processes to dispel all this secrecy?

Continued secrecy will only build on public suspicion and contempt.  It's time for PSEG and PPL to come clean, before the public is forced to use due process to uncover these juicy secrets.

What are you trying to hide, PSEG & PPL?

Note:  This post has been updated Jan. 22 to include even more bad news for FirstEnergy!

FirstEnergy may have intended its purchase of naming rights to a football stadium as a "regional branding opportunity [that] makes good business sense...," however the transaction will probably be written in the history books as a public relations fail of epic proportions instead.

Reaction has been swift and cutting.  There's been derision, anger, mockery and suspicion, but I have yet to find one public comment that says, "Wow!  Isn't that great?  Now I'm going to switch my service to FirstEnergy because the company's name on a football stadium means I will receive economical, reliable, electric service."  Nope, not one comment praising the deal anywhere.

Rather than excitement, the people want to know:

How much did this cost and is it going to find its way into my electric bill?

Despite FirstEnergy refusing to disclose details of the transaction, it didn't take long for the press to fish out that the deal cost $102 MILLION over 17 years -- that's $6M every year that FirstEnergy will pay to have its "brand" displayed all over the stadium so that sports commentators and fans alike can make sneering comments about the company.  This begs the question... Just how out of touch with the real world are FirstEnergy's executives that they wouldn't see this kind of reaction coming?  There may be only 274 other CEOs who think this is a great idea.  The rest of us?  Yeah, not so much.

FirstEnergy fails to understand that it differs from other corporations who have made similar deals because it will always be viewed by the public as providing service in a monopoly construct.  Any unnecessary frills will always be seen as excess passed to captive customers.

Nice going, knuckleheads.

Jan. 22:  Update!  Jefferies Downgrades FirstEnergy to Underperforms on Rating Agency Headwinds

"We are downgrading FirstEnergy to Underperform based on growing rating agency pressure to enhance the company's credit metrics and regulatory exposure in rate proceedings in West Virginia and New Jersey."

Perhaps FE should rethink their recent actions attempting to dump uncompetitive assets into WV's regulatory system and milk ratepayers in NJ.  But then again, that doesn't raise cash and improve the old balance sheet, does it.

But, back to FirstEnergy's public relations fail of epic proportions...

Some knucklehead thought it would be a good idea to give The Akron Beacon Journal an exclusive "behind the scenes" look at the Cleveland Browns naming-rights deal.  Was that supposed to help the public identify with FirstEnergy execs.?  If so, massive fail, again.

The article is so bad it makes FirstEnergy look like a bunch of extras from The Godfather.  Chatty Chuck (who raked in $4.7M in 2011) tries to be a "regular guy" by proving his humility:

“I do a lot of entertaining and a lot of politicking and a lot of community work. Not at Browns games. When I go there, I go as a fan,” he said. “But having said that, this was a business decision.”

And where does he do his "politicking?":

"Even now, when FirstEnergy has a suite at the stadium, Jones sits in seats outside."

Oh yeah, slummin' with the hoi polloi.  It's just too far beyond belief, especially when followed up with a little exercise in threatening/bribing the wait staff at the restaurant where the deal went down:

"Jones and Ross said there was a little damage control to do after that meeting, since it was pretty clear to the wait staff what the diners were talking about. Ross said at one point, a server came in to say that the chef was a huge Browns fan and wanted to come in to say hello. The diners declined.

“We actually thought the next day we could be talking to” the media after a leak, Jones said.

Said Ross: “I don’t know what happened. Somehow they didn’t call sports radio or the newspapers.”

Said Jones, “Let’s just say we figured out how to keep it under wraps.”

First of all, Chatty Chuck needs a little education:  NEVER, and I do mean NEVER, piss off the people who are preparing and handling your food.  Second, your condescending attitude toward restaurant staff is not endearing to the rest of us and actually showcases your arrogance.  Revolting.

Football stadiums aside, the article is also a frighteningly accurate picture of the art of the corporate deal.  This is how politicians get elected, regulatory cases are decided, and laws are "put in place," as our pal Michael Morris once phrased it.  It all happens out of view of the public, through wining and dining, persuading and dealing, and all done on your dime through the bill you must pay for a necessary service, like electricity.

Looks like FirstEnergy's public relations band-aid "tell all" confessional only added to the public derision they are currently facing.  Once again, nice going knuckleheads, and thanks for the delicious helping of schadenfreude!

"First Energy, why not cut consumers a break instead?"

The Atlantic Wind Connection announced the other day that it will proceed with the first stage of its plan for an undersea transmission backbone located 12 miles off the Atlantic Coast.  In addition to providing a super highway for offshore wind generation to reach the east coast population centers, AWC also offers additional transmission capacity to import cheaper generation into northern New Jersey, where rates are higher.  Addition of transmission capacity to import cheaper generation is the basis for this first leg of a project that is proposed to extend from northern New Jersey to southern Virginia.  Once completed in whole, AWC is intended to connect up to 7,000 MW of offshore wind, enough power to serve approximately 1.9 million households.

However, AWC has faced, and will continue to face, the caterwauling of incumbent generators and transmission owners and the stone face of the PJM cartel, who have been doing their best to kill the project.

AWC directly competed with PATH and MAPP and spent years sitting on the sidelines while the incumbent transmission owners behind these misguided attempts to increase transmission capacity to New Jersey wasted around a half billion dollars of electric ratepayer funding on their loser projects.

Now AWC is ready to roll up its sleeves and get started.  However, the PJM cartel is still behaving badly and doing its best to sideline the project.  In addition to having to face the hurdle of having AWC designated a required transmission upgrade in PJM's expansion plans, there's a whole lot of nonsense underway about who is going to pay for the project.  For years, PJM's incumbent transmission owners thought nothing of having their projects intended to import cheaper coal-fired generation to the east coast socialized throughout PJM's 13-state region.  Now that a company who's not a part of the incumbent club wants to socialize the cost of its project, the incumbents are making fools of themselves at FERC arguing about cost allocation.

Although it's really not that complicated, clueless blogger Matt Wald at the NY Times can't grasp transmission cost allocation issues.  He screws it up in this article, and then follows with a more confused "explanation" in this one.

Here's what Matt doesn't understand.  Historically there have been only two drivers that necessitated transmission expansion within PJM:  1)  Reliability, where a project is necessary for continued reliable operation of the grid; and 2) Economic, where a project is necessary to import cheaper generation to an area with high generation prices in order to lower prices.  Any projects meeting either (or both) criteria were included in the regional plan and the costs were socialized among all consumers in the region.  A new driver has now emerged -- individual state renewable power policy goals.  PJM has, so far, stood firm behind the states' insistence that renewable drivers become the financial responsibility of the state or states whose policies trigger them.  However, there's a proposal in the works that would define a multi-driver project cost allocation method to equitably assign costs.

The problem is that nobody can agree on an equitable split and many parties continue to build on previously flawed cost allocation practices known as "postage stamp."  Postage stamp cost allocation socializes the cost of a big transmission project to all consumers in the region under the premise that they all benefit equally from the project.  This is never true, but transmission owners, PJM and FERC have pretended it is by making up regional benefits that can't quite be calculated.

When applied to reliability projects, region-wide benefits are slippery simply because PJM is so large.  A reliability problem necessitating upgrades in Baltimore or Newark wouldn't really provide a benefit to consumers in Chicago, except that without it, if the PJM grid massively fails, cascading outages could possibly affect them.

However, when postage stamp is applied to economic projects, it completely fails.  An economic project lowers prices for a subset of regional customers, however all customers in the region pay to construct and operate it.  Adding insult to injury, when prices are lowered via new transmission lines it also increases electric prices at the other end of the line.  Solving economic problems with transmission simply levelizes prices so that all consumers pay a relatively similar price.  Now how is that just and reasonable for a larger region to pay for the privilege of increasing their prices to benefit only a smaller subset of the region?  It's not, and this argument has been dragging on in the courts and at FERC for years.

Now throw in renewable drivers.  Would it be just and reasonable for the larger region to pay to meet the renewable policies of a smaller subset of the region such as one state?  Of course not.  Policy in one state cannot legally become the financial responsibility of citizens of a different state.

The more broadly the cost of billion dollar transmission projects can be socialized, the better their chance of success.  While most consumers are so blissfully unaware of the steady increase in their electric rates caused by new transmission because it only amounts to a couple bucks, if the real beneficiaries of a transmission project had to pay for it by themselves, they would certainly notice because the cost would be astronomical.  In fact, the cost of the project would obviate any savings and perhaps cause state policy revisions prohibiting imported renewables that come with expensive transmission project price tags.  Therefore, those who stand to profit from exporting renewables are trying to hide the huge costs of their projects by socializing them among consumers who do not benefit.  This has led to ridiculous claims that projects driven solely by a need for imported renewables provide additional reliability and economic benefits for the entire region and therefore should be widely socialized.  But for the renewable driver, these projects would not exist, therefore any "benefits" are unnecessary, sort of like getting a bill for a Christmas fruitcake.  You didn't ask for it, you didn't want it, and now they're asking you to pay for it?

This is the cost allocation problem that Matt Wald doesn't understand.  AWC understands, and while testimony submitted with a recent FERC filing explains how the project will provide more than renewable energy benefits, it toes the line of believability.  This testimony was attached to a rather painful, long winded brief written mostly in FERCenese (thanks, Scott!) so I have spared you that part of it.  Just read the testimony -- same facts, less words... and even some pictures.

While a lot of what's in the testimony has validity, AWC just can't resist trying to sweeten the pot and make crap up.  I wish they'd just stick to the easy truth.  They almost had me, until I found this quote on their website: 

"The AWC project not only reduces the need to build many lower-capacity transmission lines, but relieves grid congestion in one of two National Interest Electric Transmission Corridors which were deemed to have significant transmission network congestion and need speedy creation of transmission capacity."

Psst... AWC, the National Interest Electric Transmission Corridors were vacated back in 2011.  Fix your stuff!

If AWC manages to get a seat at the big-boys' table at PJM and overcome the cost allocation issues, the U.S. may finally move ahead with offshore wind and create a vibrant renewable energy economy in nearby east cost states.  However, acceptance of AWC's cost socialization schemes could also provide a doorway for other renewable transmission projects proposing to build thousands of miles of new transmission lines coast-to-coast to export inferior wind resources from the midwest.  That proposal makes no sense, economically or physically.  And we simply cannot afford both.

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.

Well now, it's time to hand the Captain Obvious Award to The Wall Street Journal for this article, U.S. Electricity Use on Wane.  Reporter Rebecca Smith makes the stunning revelation that despite the fact that we're using more gadgets than ever, electric use continues to fall.  Gee, how original!  However, AP's Jonathan Fahey beat her to it more than 15 months ago.

Remember those silly PATH TV commercials that screamed: 

"More people, more appliances, more gadgets, more equipment, what do they all need to keep going?  MORE ELECTRICITY!"

Fact:  Our gadgets have become more efficient.  Our lighting has become more efficient.  Our appliances have become more efficient.  Our manufacturing has become more efficient.  We have become more efficient, and we're using less power than ever.  Demand will never snap back to pre-recession levels.  Perhaps even PATH has given up that impossible dream lately.

"Nick Akins, CEO of American Electric Power Co., which has the nation's biggest high-voltage transmission network, said he is focused on projects that can be built quickly, mostly connecting utilities it owns in 13 states.

"Mr. Akins said he wants to avoid the bruising battles that delayed or doomed big projects in the past, like the 275-mile Potomac-Appalachian Transmission Highline project from West Virginia to Maryland. AEP and partner FirstEnergy Corp. dropped development plans for the complex project in 2011. [Not voluntarily, Rebecca, they were "ordered" to abandon the project by regional grid operator PJM Interconnection due to dropping electric demand.]

"Sometimes, we were just dreaming" that the companies could get enormous power lines built across multiple states, Mr. Akins said. He said AEP now is focusing on shorter projects blessed by federal regulators that eliminate grid bottlenecks. "It's where you want to put your money," he said."

Ahhhh... Ha ha ha ha ha ha ha!  I'm sure a hundred million or so will heal Little Drummer Boy's bruise just fine.  The entire cost of the PATH Project will be reimbursed to AEP and its project partner, FirstEnergy, by electric consumers in 13 states, plus 10.4% interest annually for the next 5 years.  It didn't cost him a dime.

So, how's an investor-owned utility supposed to make money these days?

"Many utilities with regulated and unregulated operations are redirecting spending to their regulated side, where regulators practically guarantee them a profit."

Right, like AEP and FirstEnergy "selling" their unregulated coal plants into West Virginia's regulated environment, where captive customers will end up paying off billions of dollars of debt for years to come, plus 10.5% interest annually.

"Some companies, including Public Service Enterprise Group Inc. and Northeast Utilities, are pouring money into high-voltage transmission lines—superhighways for electricity—because federal regulators are allowing them to collect above-average returns from customers on those outlays to encourage new investment in the nation's aging power networks.

Ralph Izzo, the company's CEO, recently told investors that he likes spending on power transmission, because "it's not dependent on [electricity] load growth." Part of his motivation is the return on equity of 11.7% to 12.9% set by the Federal Energy Regulatory Commission."

Right, those FERC transmission incentives are just like a free trip to the candy store, aren't they?  What's that you say?  Transmission lines aren't dependent on load growth?  That's right, they're all about "reliability," or "economic congestion," or "public policy," or simply padding the investor-owned utility balance sheet.

Seven years ago, PJM Interconnection dreamed up an initiative to build four new transmission lines to increase the import of coal-fired generation to the east coast by 5,000 MW.  Turns out none of that transmission was needed after all, however, consumers have shelled out billions for one completed project (TrAIL), another still persisting at construction attempts (Susquehanna Roseland), and two other projects that have since been abandoned (PATH and MAPP).

Today, the utilities, FERC, the regional transmission planners, environmental organizations and a bunch of get-rich-quick yahoo cowboy merchant transmission builders have dreamed up an initiative to increase the export of wind energy from the midwest to both coasts.  How much consumer funding is going to be poured into the "Saudi Arabia of wind" rathole before that initiative is also determined to be another costly boondoggle?

We don't need all this new transmission!  $300B of new transmission will only serve to increase prices paid by consumers and line investor pockets. Meanwhile utilities continue to cut operations & maintenance spending on existing infrastructure and our grid becomes more and more unreliable.

Stop the crazy train!  I want to get off!

As 2012 draws to a close, let's take a look at the decrepit corpse of the PATH project.  Although it's true that PJM officially cancelled the project in August and PATH will never be built, our little zombie continues to shamble about feeding on consumer wallets.

Back in 2008, FERC awarded several financial incentives to the PATH project.  One of the incentives was the ability to apply at FERC to recover 100% of prudently incurred expenses from consumers in the event the project was abandoned (cancelled).  Although you've been paying a yearly revenue requirement for PATH's Operations & Maintenance expenses and return (profit) every year since 2008 (grand total through Dec. 31, 2012 = $95M), PATH has been spending its own money on project capital expenses such as land, engineering, permitting, etc.  These expenses get tucked away in PATH's rate base as "Construction Work in Progress" where they have been earning a return of 12.4% yearly.  The amount PATH has invested in their project totals $121M.

In January and December of 2011, two West Virginia consumers filed formal challenges to PATH's yearly revenue requirements for the years 2009 and 2010 (part of that $95M).  In September of this year, FERC granted the two formal challenges and set them for hearing.  Expenses challenged include PATH's advertising and dishonest public relations activities totaling around $6M.

A week after FERC set the Challenges for hearing, PATH made their abandonment filing with the Commission, seeking to recover their $121M investment without any examination of the actual costs incurred.  Then PATH turned right around and asked the Commission to consolidate the abandonment with the formal challenges for settlement and hearing.

More than 30 parties intervened in PATH's abandonment filing, including a dozen consumers from West Virginia and Maryland.  FERC found that PATH was entitled to collect prudently-incurred project investment, however it set the prudence of the actual expenses for settlement and hearing.  FERC also denied PATH's request to retain part of the incentive return on equity they were granted in 2008. 

In its filing, PATH voluntarily agreed to forfeit 1.5% of the incentive rate of return they were granted in 2008.  However, PATH asked to retain the extra .5% return FERC granted them as an incentive for joining the PJM cartel.  Several parties protested this rather bald money-grab by PATH.  Because the PATH shell companies were created by parent companies AEP and FirstEnergy (Allegheny Energy) as single-purpose entities to construct and own ONLY the PATH project, and the PATH project has now been cancelled, there is no purpose to PATH's continued membership in PJM, except to collect an additional .5%  interest from consumers every year.  PATH will never build, own or turn over any transmission infrastructure to the PJM cartel.  PATH is simply limping along trying to maximize its profit on its failed endeavor.  PATH's proposal was found to be unjust and unreasonable by the Commission, and PATH was denied the extra .5% interest, which reduced its yearly return to 10.4%.

FERC also ordered PATH to provide the cost detail that was missing from its abandonment filing.  PATH asserted that its expenses were prudently-incurred and that no detail of how it spent $121M was necessary.  Ridiculous much?  Other abandonment filings have all included cost detail.  Turns out that PATH had not even sorted its costs before filing for abandonment and needed another 45 day extension to get their act together.  But we were supposed to believe that everything was prudently-incurred ;-)

Today, PATH filed a request for rehearing on the abandonment, claiming that FERC had made legal errors in their Order denying that .5% PJM cartel membership incentive.  *sniff*  *sniffle* *whiiiiiiiiiiiiiiiine*  Pretty revolting, I've seen better tantrums from 3-year olds.

Just remember, all this legal nonsense is being paid for by all 60-some-odd million consumers in PJM's 13-state "region."  No big deal for PATH to continue to stomp its feet and demand more money, it won't cost them a dime.  So, just how much money are we talking about here?  Around $240K in 2013, with lesser amounts in each of the following 4 years PATH has proposed as the amount of time given to ratepayers to pay off project debt.  Wanna bet PATH wastes more of our money on legal fees whining about that .5% interest than it stands to gain overall?

So, here's where PATH stands at the end of this year:

$121M in abandoned project costs + $6M in prior O&M expenses set for settlement and hearing at FERC.  Currently, settlement conferences are scheduled to begin at the end of February, 2013 and will continue as long as negotiations are productive.  If settlement ultimately fails, some or all issues may actually proceed to hearing, adding another couple years and mounting legal fees to consumer misery. 

The PATH zombie -- the gift that keeps on giving!

Bad behavior always catches up with you.  It looks like FirstEnergy's day of reckoning has finally arrived!

On Monday, a federal judge approved a plan ordering FirstEnergy to shut down its Little Blue Run Poison Pond, pay $800,000 in fines, set up air and water monitoring systems, replace water supplies that the company has polluted and submit its plan to close the site by March 31.  In addition, FirstEnergy is subject to additional fines ranging from $5,000 to $25,000 for failure to meet its agreement with the Pennsylvania Department of Environmental Protection.

Yesterday, the West Virginia Public Service Commission denied FirstEnergy's plan to absorb a rate decrease due to its West Virginia customers and apply it to the company's desperate plan to sell one of its unwanted coal plants to West Virginia ratepayers.  Bill has the details over on The Power Line.

So, let's add all this up:

1.  Little Blue Run liability and expense of new coal ash disposal site.
2.  WV rate decrease.
3.  Plan to sell coal plant to WV regulated subsidiary falling apart.
4.  $109M judgment in in Pennsylvania negligence case.
5.  Ohio electricity market manipulation probe.
6.  $6.6M risk in PATH rate challenge case at FERC.
7.  $121M risk in PATH abandonment case at FERC.
8.  FE subsidiary rate case in New Jersey where folks are screaming about poor performance during Hurricane Sandy.
9.  FE must raise $500M in cash to pay off looming debt.
10.  Investors are getting nervous. 

Oh, FirstEnergy, it just sucks to be you, huh?  Quit your sniveling, you brought it all upon yourself.

Ha ha ha!