Around 100 townsfolk managed to find out about and invade the PSC's "public" hearings on Potomac Edison's proposed 17.2% rate increase in Shepherdstown yesterday.  Several dozen made public comment to Commissioner Jon McKinney, who was the only one to show up to listen.  Of course, that's really not remarkable, since there are currently only 2 commissioners and Commissioner Albert seems to fear for his own safety where townsfolk gather with their scary torches and pitchforks out here in the real world.

Despite announcing that the hearing wasn't a two-way conversation where he would directly interact with the commenters, Commissioner McKinney sure was argumentative with a handful of the people who gave testimony.  He took offense at comments that he believed were not factual, instead of simply listening.  I wonder why he thought it was his job to defend FirstEnergy like that?  The first thing Commissioner McKinney began to argue with a commenter about was the percentage of the proposed rate increase.  McKinney insisted that it was a 14% rate increase.  After much confusion and back and forth, PSC staff attorney John Auville managed to prevail on the fact that the rate increase for residential customers will be 17.2%.  This is the number Commissioner McKinney kept denying.  However, it is also the number listed on the rate increase pamphlet that FirstEnergy sent out in recent bills to customers.  I find it rather alarming that Commissioner McKinney refuses to admit the true magnitude of this rate increase on residential customers.  Commissioner McKinney's 14% increase figure included the average increase among different customer classes (residential, commercial and industrial).  Residential customers pay the highest rates, so their increase will be much higher.  Yesterday's public hearing attendees were all residential ratepayers.  Commercial and industrial customers hire lawyers and directly intervene in these kinds of cases.  Residential ratepayer participation is limited to public hearing commentary because the Commission believes residential ratepayers may only be formally represented by the state's Consumer Advocate and cannot protect their own interests in rate cases.  Therefore, the only number that mattered at yesterday's public comment hearing is:

17.2%

But this isn't the only "fact" Commissioner McKinney felt compelled to correct in his defense of FirstEnergy.... there were many other commenters who were informed that their public comments were incorrect as they made their way back to their seats.

Here's a nice summary of the comments made at the afternoon session.

And a TV news story.

It seems that The Journal is the only outlet that covered the evening session, where the Commission heard sharp criticism from Delegate Stephen Skinner.  Senator John Unger was understandably dismayed that neither the PSC nor the company bothered to notify him of the public hearing and he was unable to attend.  Senator Unger will follow-up with written comments.

Where were the rest of our legislators?  Better check those campaign finance reports for big FirstEnergy donations...

After listening to several dozen articulate and energetic commenters at both sessions, I've gotta say my favorite speaker was Robert Whalen, UWUA Local 102 President.   He spoke at length about FirstEnergy's many failures, from its skimping on maintenance to its refusal to hire enough workers.  He said that FirstEnergy only wants to spend on capital projects that earn a return, while attempting to avoid maintenance projects.  FirstEnergy is paid a fixed amount for maintenance work.  If the company doesn't spend all it collects, then that extra can be used to inflate earnings.  Whalen even voiced suspicions that work reported as maintenance is changed to capital by corporate management.  Is that sort of like cooking the books?  Whalen made many very constructive suggestions for ways that the Commission could work with the union to improve service.  As he succinctly put it... if you want to know the truth about FirstEnergy, you should ask the workers.

The Commission will hold formal evidentiary hearings on the rate increase later this month.  Your rates will go up next spring... it's only a matter of how much.

If you missed the public hearings, you can still file a written comment with the PSC here.

FERClitigation.com has published a new letter to the U.S. Department of Energy's Inspector General from Senators Collins and Barrasso.

The Senators are asking the same questions that have been stinking up the FERC's aura for months.

1.    Are parties who "do not otherwise appear frequently before FERC" held to different standards than the utilities who are part of the daily scenery at FERC?

2.    Are there clear rules about what constitutes market manipulation?  Are market participants given adequate notice about what constitutes a violation and treated fairly during an investigation?  Is FERC pursuing "market manipulation" that was perfectly legal when it occurred?

3.    Are deals made with utilities that could be construed as quid pro quo enforcement settlements in order to receive FERC approval for a different transaction?

Tough questions.  Where are the answers?

You don't have to be one of the "white shoe" FERC regulars to think that something's off here.  There's been enough written to make even common consumers question whether our recently politicized FERC plays favorites with its incumbent utility friends while saving its scary investigations and worst punishments for energy "outsiders" that dare to venture into its lair.

The Wall Street Journal gets right to the point:

Does FERC's mindless pursuit of settlements really serve consumers?  Or is it all about the occasional big headline to draw the passing attention of the common consumer and give him a false sense of security that regulation is working to protect his interests? 

Does FERC play footsie with gigantic utility holding companies?  Case in point:  FirstEnergy's 2012 scheme to drive up capacity prices in ATSI, which cost consumers hundreds of millions of dollars.  Regulators didn't bat an eye because what FirstEnergy did was legal when they did it.  But, not so for some of FERC's red-headed step children that aren't regulars at the Sunrise Cafe.  Their ignorance of FERC's mysterious enforcement methods has cost them dearly.

Will DOE's Inspector General shake some of the political rot and decay out of 888 First Street and restore the public's respect and trust in the important work of the Federal Energy Regulatory Commission?

I hope so.

On August 19, the U.S. Department of Energy issued its long overdue "National Electric Transmission Congestion Study" for public comment.  You're the public!  Serendipity!

I'm not sure what DOE is trying to hide, but I didn't get any notice about this study, although I participated in one of the webinars, and usually get 15 copies of these kinds of notices forwarded to me from lots of different folks when they get them.  Nope.  *crickets*

Maybe it's because I've been engrossed in the project from hell and not paying attention to much else?

Virtual paper cuts be damned, I happened across it the other day while putting together some links for a transmission opposition group.  Serendipity, again!

It looks like the DOE really didn't pay much attention to the comments it received before writing this study.  They still seem to think that we need more transmission to make sure that every electron produced can be used anywhere else, no matter how far from the generation source.

The DOE is supposed to do a triennial congestion study.  That means every three years.  But after it got the stuffing kicked out of it in the 9th Circuit over its 2009 designation of National Interest Electric Transmission Corridors (NIETCs) without properly consulting the states, and without performing a proper environmental review of said corridors, we can understand why DOE is only just now getting around to the triennial study it was supposed to complete in 2012.  It's taken them this long to venture timidly out of their cave.  I'll guess that this "study" is only a tentative foray back into the game, since it states that another study will be completed in 2015, to keep to the original triennial schedule.  It's September, 2014 now, right?  DOE moves at a glacial pace...  Seriously?  What's the point of this year's study?

Anyhow... please do read the 175 page study, paying particular interest to your particular geographic area, or transmission project of concern.

And I'd like to mention a few special things that DOE said in this report that you should be thinking about while crafting your comments.

The first is a particular pet peeve of mine.  Perhaps in my next life I'll finally find time to do the full accounting of the TRUE cost of building new transmission that I've been constructing in my head over the last few years while listening to how transmission proposals affect hundreds of opponents across the country.  Maybe we can start making a dent in it by addressing it here.  DOE says:

Transmission developers are all about tossing made up, speculative, or fantasy "benefits" onto the table in order to make their projects appear to pass a cost-benefit analysis.  But no one has ever quantified the REAL cost of transmission.  I'm not talking about a project's total capital spend, or its annual revenue requirement. I'm talking about the very real costs to landowners who are unlucky enough to be picked to sacrifice their homes, businesses, retirement, health, peace of mind and countless other intangible COSTS for the benefit of the electricity-slurping public in some far off city.  Market value payments for the involuntary sale of transmission right of way only attempt to compensate for the value of the land, not all the other costs to the landowner's way of life that can't be... in DOE-speak... "readily quantified."

Also, the DOE still seems to think that offshore wind is experimental. 

Maybe you can give DOE a link to its own map showing the best utility-scale renewable potential located just a few miles offshore, conveniently near load centers?  Quit tinkering, Einstein, and get 'er done!

And how about this? 

Maybe you could let the DOE know about the economic benefits that come with LOCALLY-produced renewable energy?  Jobs, tax revenue and economic development happen where renewables develop.  States that buy, rather than create their own, renewables are only exporting their energy dollars to other states or regions and hurting their own communities.

Oh, and let's make this next part a fun scavenger hunt... can you find all the little hidden mentions of the Clean Line projects in this report?

So, what's the point here?  The DOE is going to use this draft and the comments it receives to create the final report.  From that report it may designate National Interest Electric Transmission Corridors (NIETCs).  NIETCs are very bad news, and a stupid idea left over from the 2005 energy policy act (don't ya wish your congress-person would get off their tookus and fix that mess?)

No.  No.  NOOOO!

So, what can you do?  Read the report.  Write a comment.  Send it here.  Do it now!  Comments are only going to be accepted until October 20.  If you don't participate, no one's going to care what you think later...

They're not fooling Len Chidester of Montrose, West Virginia.  He's heard some nasty rumors about the shoddy way FirstEnergy treats its linemen, neglects maintenance of equipment, and fails to read electric meters.  Apparently this is all being done under the mandate of some company named PJ+M. 

Mr. Chidester believes PJ+M is in bed with FirstEnergy.  If they breed, the child would probably behave a lot like this one:

Mr. Chidester concludes that FirstEnergy bought Mon Power and Potomac Edison.  FirstEnergy is bleeding these companies for every nickel they can squeeze by their phoney meter reading process, doing minimal repairs, and who knows what other practices.  And he advises that a very major investigation be launched into exactly what the power companies, FirstEnergy, Mon Power, Potomac Edison and the company PJ+M have been and are continuing to do.

He's exactly right!

The WV Public Service Commission issued an Order today scheduling public comment hearings on Potomac Edison's proposed 17.2% rate increase.

Two local hearings will be held in Shepherdstown at the Shepherd University Frank Center on October 6, 2014.  The first hearing begins at 1:00 p.m. and will be followed by a second hearing beginning at 6:00 p.m.

Customers are strongly encouraged to attend and sign up to speak briefly about how the proposed rate increase will affect you.  If you can't make the start time, that's okay, late arrivals will still be permitted to speak as long as they arrive before the hearing concludes.

This hearing is also the place to tell the Commission how you feel about its decision to make you pay the $7.5M cost of Potomac Edison's monthly meter reading ordered as a result the General Investigation into the company's meter reading and billing practices.

See you there!

Silly schemes and misleading names were in high gear during yesterday's FirstEnergy Q2 2014 Earnings Call.  You know you're in for a treat when Tony the Trickster opens the festivities with another one of his *heavy sighs*.

FirstEnergy announced its new plan to make Ohio consumers assume all the risk of its unregulated, competitive generation fleet and called it, "Powering Ohio's Progress."  But, let's get real here, FirstEnergy should really call it "Powering Our Profits," because that's its purpose.

And I blame the birth of this ridiculous scheme on the West Virginia Public Service Commission, who set up West Virginia's consumers to absorb the company's risk on its Harrison power station last year.  In that scheme, West Virginia customers took on the burden of paying the operating costs of the Harrison power station by purchasing all its generation.  In turn, FirstEnergy would sell any excess power into regional markets and return the profit it earned doing so to the consumers.  Sounds great, right?  However, the cost of owning and operating Harrison is greater than any profits that may be derived from selling excess power into the market, therefore, consumers would end up paying more.  But, the WV PSC added one important term to its crazy plan that required the company to use the profits from market sales of power to pay down the "acquisition adjustment" fee of acquiring Harrison that was added to rates.

It is because the WVPSC allowed FirstEnergy to foist the risk of owning and operating Harrison onto its consumers that FirstEnergy got so encouraged to attempt to foist the risk of two of its other competitive plants onto Ohio consumers. 

But, the big difference here is that West Virginia is a fully regulated state, while Ohio is a competitive state.  In Ohio, electric customers can choose their generation supplier, but not their distribution provider.  The electric distribution system is owned and operated by the utility who traditionally served the customers.  Even deregulated states cannot change that, unless they allow other companies to construct their own separate distribution system to serve customers, and that's neither economic nor logical.  Therefore, even in deregulated states, customers are still served by, and receive a bill from, their regulated distribution provider.  Where generation is competitive, the distribution company simply adds the charge from your generation company to your bill and passes the costs through to you.

FirstEnergy's Powering Our Profits surcharge would be tied to its regulated distribution affiliates in Ohio.  The charge is non-bypassable, which means that it would be part of your distribution service and you would pay it no matter who your generation provider is.

So, let's look at this...  FirstEnergy Solutions is the FirstEnergy subsidiary that owns the competitive generators.  As the owner, FES must cover the entire cost to own and operate the plants, and in return it keeps any profits or absorbs any losses that result from selling the generation into the competitive power market.  But, market prices have been low and are not expected to recover any time soon.  This means that FES has been subject to more losses than profits from the generators it owns.  So, FirstEnergy's scheme will force its regulated distribution companies to enter into a contract to purchase all the power generated by FES's plants at a set price that will cover FES's costs and pay it an 11% profit.  Suddenly, FES's generators are profitable and risk-free!  But the distribution customers have a bunch of very expensive power they have purchased.  Can they use it?  No!  FirstEnergy's POP plan requires the distribution companies to sell the generation they have purchased into the competitive power market at whatever price it can get.  FirstEnergy says that in the first three years, where prices can be predicted, the distribution companies and their ratepayers will take a loss on the sale of power.  However, FirstEnergy says that its crystal ball predicts that power prices will rise in the remaining years of the 15 year contract and that a profit will be made selling purchased power into the market.  Gotta ask... if FirstEnergy is so certain there's a profit for these competitive generation plants just over the horizon, why don't they hold on them?  Because there isn't.  It's all smoke and mirrors, hopes and dreams.

FirstEnergy wants to hand the risky hot potato of owning uncompetitive generators to its Ohio distribution customers so that they can absorb the risk of market prices.

What a bunch of crooks!

Well, it looks like the wild and crazy X Partay going on between the California Public Utilities Commission and utility PG&E has come to an end, for now.

Fierce Energy reports that the City of San Bruno and the CPUC have reached a settlement in the City's suit over CPUC's violations of the public records act.  In exchange for dropping its suit and agreeing to assume its own legal expenses, the City will finally get access to the documents it's been requesting for more than a year.

CPUC thinks it's scored big time in the settlement because it always intended to hand over the documents anyhow:

So, what was in the documents?

Time to clean house at the CPUC, and about a thousand other captured regulatory agencies.