Although FERC rules prohibit an answer to a protest, PATH has 121 million reasons to ignore the rule and waste everyone's time simply rehashing and reiterating its original section 205 filing to collect its stranded $121M investment in its failed PATH project.  Exceptions can be made by the Commission if the answer provides new information that informs the Commission's decision.  Did PATH bother to provide any new information in its answer?  Perhaps they should have highlighted any actual "new" information to make it more easily detected among all the flimsy excuses and incorrect information.

PATH tells the Commission that although it has the ability to suspend proposed changes to existing rates, that PATH's changes to the Formula Rate (which is PATH's rate) aren't changes to its rate after all.  PATH also urges the Commission to hurry up and approve the changes to its Formula Rate without hearing because PATH has submitted a fraudulent 2013 Projected Transmission Revenue Requirement that they need to revise before January 1, 2013.

PATH believes the Commission should summarily reject protests that the company had control over the abandonment of its project, otherwise, PJM's authority will be undermined!  Would that be a bad thing, really?  PJM's imprudent actions brought about by its Project Mountaineer initiative to build new transmission to increase the use of coal-fired resources, and intended to provide significant profit to its favored incumbents, has just cost millions of consumers in its region a quarter billion dollars for the failed PATH project alone, not to mention the additional amount wasted on the also-cancelled MAPP project.  How much more will PJM's erroneous and failed initiatives be permitted to steal from struggling electric consumers if this costly failure is swept under the rug and not examined?

PATH believes that it is entitled to receive an extra half of a percent interest on its abandoned plant during the amortization period.  The extra interest is a reward for membership in PJM.  PATH states that it intends to remain a member until the consumers finish paying for its project, although it does not intend to own any transmission during that time.  PATH is simply maintaining its membership to receive the extra interest.  Is this really prudent?  PATH whines that the Commission should not discriminate against it for the business structure it voluntarily constructed.  "Revisiting the 50 basis point ROE adder would deny AEP and FirstEnergy an opportunity to apply the ROE-based incentive adder to their abandoned plant investment in the PATH Project merely because of the business structure they chose as a vehicle for fulfilling the construction obligations assigned to them by PJM."  Bingo!  Ya know what, PATH?  Life ain't fair.  You set up that business structure voluntarily because it benefited you and now you're stuck with it.  Quit your sniveling and take your lumps.  Your parent company memberships in PJM do not make PATH eligible to receive this incentive either.  That was really PATH-etic!

PATH has 121 million excuses for why its spending wasn't imprudent.  After asking the Commission to set the issue of prudence for a hearing wherein the prudence of its expenses can be debated, PATH wastes page after page trying to justify its spending on things like property and option purchases.  So, PATH, do you want a hearing or do you want the Commission to rule here?  It's hard to tell.  PATH falsely accuses protestors of not providing any "basis or support" for prudence challenges and proceeds to neglect to provide any "support or basis" for its own contentions that the spending was prudent, except for the ridiculous assertion that AEP and FE routinely buy property before a permit is received.  PATH holds its parent companies up as the industry standard in the face of evidence showing that one of these same parents doesn't buy land prior to the issuance of a permit.  So, was AEP lying to the Department of Energy earlier this year or are they lying to FERC now?  Inquiring minds want to know.

PATH attempts to color all its property purchases the same.  The reality is that PATH was split into two different companies, PATH-West Virginia (owned 50-50 by AEP and FE) and PATH-Allegheny (owned 100% by FE).  PATH-WV made minimal land purchases for substation sites and was slower to option property.  However PATH-Allegheny purchased lots of property that had nothing to do with substations and was quick to option property long before the permit process had even begun rolling.  This is a distinction that most likely has roots in the two different corporate philosophies behind the PATH project.  Now AEP gets to help FE hold its little doggie bag of imprudence, however.  Didn't your mommy ever tell you that you will be known by the company you keep, AEP?

PATH goes out of its way to admit that its property purchases in River's Edge were for the purposes of forcing the release of a conservation easement.  PATH goes into a long diatribe attempting to justify its imprudent property purchases as cost saving measures.  Yes, that's right, if PATH had not attempted to nullify a conservation easement in which Loudoun County had invested taxpayer funding, it would have cost more to re-route the line around it (using the most destructive route possible in an attempt to make releasing the conservation easement and allowing PATH's preferred route look preferable).  This same theme continues in flimsy justifications for other purchases.  PATH claims if it had not bought certain properties, it would have had to route its line around them in order to avoid homes or other obstacles.  Is this what PATH told landowners?  That if they didn't prefer to voluntarily sell their property that PATH would simply route their line around the property?  No, of course not.  PATH told landowners that if they didn't sell voluntarily that the company would take the property by eminent domain or simply "run the line right over the top of your house."  So, now PATH wants to test its word against that of thousands of landowners?  Isn't this going to be fun?

PATH also points out to the Commission that other abandoned projects that requested much, much smaller recoveries were not RTO-ordered projects.  So, I guess PATH's point must be that when there is some risk to the transmission owner that spending is prudently curtailed.  However, in PATH's case it was a giant, bleeding spend-a-thon because PATH believed that ratepayers were on the hook for all of it.  Now when the specter of shareholders being responsible for some or all of PATH's spending spree rears its ugly head, all of a sudden the amount of spending becomes a big deal.  Don't you just love karma?

So, now it's up to the FERC Commissioners to wade through the facts presented and make a decision that ensures that PATH's rates are just and reasonable.

The following is an essay written by a good friend of mine in Wisconsin who is a local elected official.  The essay provides an inside look at how transmission company process and propaganda is received by honest elected officials who are trying to do right by the citizens who elected them.

By Bev Vaillancourt
Chair, Town of La Valle, Sauk County, Wisconsin

Over 100 units of local government in Wisconsin have passed resolutions asking American Transmission Company (ATC) to provide a cost/benefit analysis of the Badger-Coulee High Voltage Transmission line before it submits its application to the Wisconsin Public Service Commission. To date, ACT’s short answer is that it is not required to justify the project to the public. And, so I went looking for some answers, since the Town of La Valle is among those 100 local government resolutions, as are other towns in Sauk County, and the county itself. I heard that Consumer Energy Alliance was holding a conference titled Energy, the Economy and the Election. It seemed like a good way to gain another perspective and balance my understanding of why the energy industry is spending millions of dollars to promote the building of high voltage transmission lines across the state of Wisconsin. My interest was especially piqued when I discovered that Phil Montgomery, Chair of the Wisconsin Public Service Commission, was slated to present at the conference. And, so I went, and I listened, and learned.

Commissioner Montgomery spoke of the need to keep electricity affordable. He said that the economy is in rough shape and there is a need to establish growth. I wondered how asking people to pay some $450 million to build the Badger-Coulee Transmission line from La Crosse to Madison, along with maintenance and operation fees for the next 40 years, and then asking them to pay again to build 7 additional transmission lines in Wisconsin, not to mention their cost share of the numerous transmission lines planned in the Midwest region, would accomplish the dual goals of an improved economy and growth. I wondered what assurance there could be that ratepayers’ electric rates would be lowered, or that the lines would improve the economy of communities, or improve property values, or create any permanent jobs. But, I tried to keep an open mind.

The next day I attended a meeting at the Capitol with nine other citizens from counties west of Sauk County along with three representatives of the Public Service Commission. The meeting had been arranged by the offices of Senator Jen Shillings and Senator Dale Schultz, and for those of us who had been asking for the opportunity to meet with the Wisconsin Public Service Commission (PSC), it was a most welcomed opportunity to listen and learn.  Both Senator Shillings and Senator Schultz and staff members also attended the four hour meeting.

It was obvious from the start that Senator Schultz had done his homework. He articulated concerns of citizens, asked quite pointedly if the Public Service Commission represented the energy industry or the citizens of Wisconsin, and once again requested that “public” be put back into the Public Service Commission. I explained to the PSC that, as town chair, my first concern is the vitality of my town. I told them that I currently am engaged in developing the town’s 2013 budget, and that when town residents are asked to pay more each month on their utility bill to build transmission line infrastructure, less is available to help pay for town roads, fire and police service, and other valued workings of local government. There is only so much in one’s pocket, and that must be spent wisely and to the greatest good. I also explained that the issue becomes more acute when it is understood that Wisconsin is being used as a conduit for energy headed to other states, that demand has nearly flat lined and is projected to remain so even with an improved economy, and that the lines, in fact, harm communities by significantly impacting property values and quality of life, and tourism – the lifeblood of many small communities.

The PSC clearly stated that transmission lines in the state are approved for economics and to meet the needs of the consumer. Two things are important to understand in all of this. Consumer is not you, the end user of electricity. Consumers are the “stakeholders,” meaning the utilities. Economics is not concerning your livelihood or household budget. Economics is the wholesale energy market. Are transmission line companies assured of a rate of return when they install 15+ story high towers and transmission lines in Wisconsin? Yes. Does that mean you will pay less for electricity? No. Does that mean you will pay to build the transmission line infrastructure through monthly increases on your utility bill? Yes. Moreover, the 2005 “Montgomery” bill (yes, this is the same Phil Montgomery who is now Commissioner of the Wisconsin Public Service Commission) allows for the condemnation of both public and private property to acquire a 150’ right of way across private land (presumably for public convenience) by private utility companies, which in effect is a “taking” of land. Another important lesson for me was that these 15- story high towers can be sited within 75’ of a home or barn. A most disconcerting footnote to siting is that federal lenders will not approve a loan for a home within the fall zone of a transmission tower.

We asked if the PSC considered the advantages of energy efficiencies and utilization of technologies that lessen dependence on a centralized power grid in deciding whether a high voltage transmission line should be sited. The answer was, “No.”  Why? Because in their estimation efficiencies and new technologies could not be counted on while high voltage transmission lines bring “reliability” to the system. This all sounds good until one gives some deeper thought to the issue, and listens to the results of study after study that touts the economic benefits of energy efficiency. In the industry’s desire to capture and sell all of the energy it can, to “keep the lights on,” should the PSC not protect the public by considering the benefits of competition in the market place, more efficient use of available energy, and conservation of energy, or at least have a smarter response to demand? For example, can all the lights in large stores be lowered in intensity during times of high demand (demand response) to reduce or level the consumption of energy? There are simple things all of us can do to significantly reduce the need to spend billions of dollars to build new transmission lines, costs that all of us incur whether we like it or not, whether we work hard to conserve or not.

But there was more to learn. Two days after the meeting with the PSC, I participated in a phone conference between Representative Kind’s office, Senator Kohl’s office, a person representing the Citizens Energy Task Force, and three high ranking individuals from the Federal Energy Regulatory Commission (FERC) in Washington, D.C. Like the meeting with the PSC, it takes official intervention for citizens to meet with individuals from governmental agencies, and coordinating a meeting with FERC was truly no small task. Senator Kohl’s office is to be commended in facilitating this meeting. Since FERC has regulatory power over MISO (which includes Wisconsin) and other regional energy groups, we hoped to listen and learn. And, we learned a lot.

FERC requires competition in the energy market place. It also encourages consideration of alternatives to high voltage transmission lines. To that end, New England’s energy efficiency and conservation programs have curtailed reliance on high voltage infrastructures. States are taking the lead. Massachusetts, ranked first in the nation in energy efficiency programs, supports reliance on clean energy, including wind, solar, and sustainable biomass, with the dual benefit of better management of its water utilities and landfills. Back here in the Midwest, competition is defined by competing transmission line companies vying to build the same transmission line. Thus, you now hear about Xcel Energy becoming part of American Transmission Company’s (ATC) “team,” when in reality, American Transmission Company LLC (ATC) is challenging FERC’s decision to give Xcel Energy Service Inc. a share in ATC’s transmission line projects.[i]

  Which brings me back to the meeting with the PSC. I mentioned to the PSC that I often hear from those who seem to have the inside track on things that the Badger-Coulee line is a “done deal.” “Not at all,” was the PSC’s response. However, the conversation then returned to the need to ensure “economics” in energy planning in Wisconsin. We were back to the profit margin of the wholesale energy market. So, I asked how the public becomes part of the discussion. Well, it doesn’t until after ATC files its application for the Badger-Coulee line, after which the “public” can file for intervenor status, and hope to get some money from the state to cover the cost of such status. Being an intervenor first requires filing a multiple page application and showing that you have some knowledge to add that ATC has not already considered. Thus, money is needed for an attorney to complete the application and represent the intervenor in testimony before the PSC. “Not going to happen,” I told the PSC fellows. My town has no money for such things. The PSC attorney suggested that towns pool together to file as an intervenor, sharing the costs and hoping for money back from the state to cover the costs. It was all too obvious that the PSC does not understand the constraints on local government.

I find all of this painful learning in light of my readings of the Public Utility Commissions and Energy Efficiency  (August 2012) handbook written by the Center for Climate Change Law at Columbia Law School. It states on page 10 that “…another contributing impediment to energy efficiency is that we have a highly regulated electric utility sector that remains, in most states, insulated from competition as a presumed natural monopoly. Electric utilities are the primary interface between the electric wholesale market and electricity consumers, and are therefore in the best practical position to promote energy efficiency measures to consumers. However, under a traditional regulatory model, they have little incentive to encourage consumers to invest in energy efficiency, given that such measures would lower their electricity sales and, thereby, revenues.” Senator Schultz’s question to the Wisconsin PSC as to whether it represents the utility companies or the people of Wisconsin resonates every time I read through the Columbia Law School document or other white paper studies on the relationship between cost savings and efficiencies. It just seems so common sense that every little bit of energy savings helps, and ultimately prevents the outlay of billions of dollars in costs to all of us in ways that reduce what people have to pay for other essential needs. A little common sense can go a long, long way.

My last learning came in attending ATC’s informational open house in Mauston, Wisconsin. There I learned that, though ATC has proposed two routes for the Badger-Coulee line, both of which have been moved north of most of Sauk County, the PSC ultimately chooses the route, so no “inactive” route truly is inactive. One must wonder how such an important, community shattering decision can be so convoluted. I watched people walk out of ATC’s meeting looking disenchanted, discouraged, and disheartened. I saw people shaking their heads. They expressed how uninformative and vague ATC’s information was. I truly saw no one come out of ATC’s open house smiling. Many of these people then talked with individuals who are coordinating efforts to oppose construction of high voltage transmission lines in Wisconsin. These individuals are farmers, small business owners, and other land owners, highly educated and down-home common sense individuals who have put a great deal of time, effort, and study into understanding both the economics of the energy industry and the impacts of building 15+ story high towers and stringing high voltage transmission lines across Wisconsin. I watched people sign petitions and take information to send to their state legislators. I watched people demonstrate hope in the system that is supposed to serve and protect them.

Foremost, I also witnessed an empowerment of the peoples’ will to stand up for the spirit of democracy by making their voices heard. They spoke of the ills of corporate greed and their belief that those in government should care more about the people of Wisconsin than those who seek to plunder from what others have worked so hard to build. And, they mentioned the great burden these infrastructures will place on their children and grandchildren as they look to the 40 year costs of transmission line infrastructure and their built in obsolescence. These are individuals who have frac sand mining at their doorstep and wonder where and why government has failed to represent their lives and property. Such united efforts took me back to the statement made to the PSC that opposition to building new transmission line infrastructure in Wisconsin is no longer limited to what happens in my backyard; that people across the state are connecting and caring, and that the effort to bring common sense to the problem of energy reliability has become a national effort, networks of people and information across state lines.  

As I have told both the Public Service Commission and American Transmission Company several times, it is my job as Town Chair of La Valle to stand up for the best interests of the people of La Valle. That’s what I was elected to do, and I take the job quite seriously. And, with Senator Schultz in agreement, I also told the PSC that it is the job of state legislators to protect the interests of the people of Wisconsin. That’s what we elect them to do. That’s their job. I’m not sure who the PSC currently represents. I know that the PSC will decide if and then where the Badger – Coulee line will be built. The process will not be debated within the state legislature. State representatives will not have a voice in the process, and thus neither will the public. There will be no public hearing process like what is required to pass a local ordinance where the voice of the people rightly plays a pivotal role.

The truth is, Wisconsin can put the public back into the Public Service Commission. It can respond to the voice of local government resolutions and petitions of the people and place a moratorium on approval of high voltage transmission lines. Time is needed to weigh alternatives; time is needed to define a vision not blocked by gargantuan metal transmission towers that hover over landscapes, rusting and aging and placing huge cost burdens on future generations. Instead, Wisconsin can look to energy independence models intelligently put into place by other states to see how they improve their economies through job growth based on energy alternatives, renewables, and efficiencies. Most importantly, Wisconsin can infuse the public into the process in the form of true public hearings. We the People can have a voice, and must.

The state of Wisconsin should have the political will to encourage innovation and entrepreneurship to meet our energy needs. It should be looking for low voltage alternatives that build upon systems already in place and Wisconsin should offer incentives for creativity and cost savings – something other states are doing well. Wisconsin has a goal of reliance on 10% renewables by 2015. It’s the lowest percentage among the Midwest states. One has to wonder why.

We have to become smarter in how we view solutions. Wisconsin is filled with creative, innovative, figure-it-out individuals. The state legislature needs to believe in its people to find viable solutions and to open the door to innovation. To promote construction of transmission lines as a foremost solution to tomorrow’s energy needs is a lazy route with an expensive price tag. Wisconsin can do better. We owe it to ourselves to demand the chance to be better. Together we can. Wisconsin can become a leader in the Midwest in clean energy innovation, creating jobs, protecting our state’s environment, and supporting our hard working farmers and our communities. We can, and we should. This is what I learned by listening.


[i] Xcel Energy Services Inc., 140 FERC ¶ 61,058 (2012) and American Transmission Company LLC v. Midwest Independent Transmission System Operator, Inc., et al., Docket No. EL13-9-000 (October 1, 2012)

©Beverly Vaillancourt 2012

After years of telling people that the depreciation of PATH-Allegheny's Plant in Service was related to PATH's ROW office that they opened in Martinsburg before the project died, today the truth finally came out during PATH's 2013 PTRR Open Meeting.

After Maryland Office of People's Counsel's Gary Alexander verified with PATH that they never "put a shovel in the ground" PATH turned right around and told me that the depreciation was linked to amounts PATH spent to clear land at the old chicken farm they bought as a site for their mid-point Welton Springs substation.  I guess it technically wasn't "a shovel"... more like a backhoe or a bulldozer.

PATH never had a permit to do any construction (or destruction) of any kind in West Virginia, so what were they doing clearing land and recording the expense in their construction accounts that they now want to recover from 60 million PJM ratepayers?

Although all this will be dealt with later, I'm sure you CAKES folks can consider yourself really lucky that PATH never showed up and razed the farm they purchased for their "Kemptown" substation during the permitting process.

Silly PATH!  Never thought your project wasn't going to happen, did you?  Ut-oh!  That's probably going to cost you...