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PATH responds to your FERC letters

4/15/2011

11 Comments

 
PATH has responded to the flood of letters asking FERC to take action on their "suspension."

PATH still isn't telling FERC the whole story, only that PJM determined that the need for the PATH project has "moved several years into the future."  But, what PATH presented at the VA-SCC hearing showed that the need actually moved so far "into the future" that PATH fell off the far side of PJM's 15-year planning horizon.  PATH tells FERC that PJM says PATH is currently not needed, so they are conducting "more analysis" -- more open-ended, uncertain nonsense.  PATH wants FERC to know that their March 7 letter was FYI only, and FERC should not take any action.  That's what the kid always says when they get caught with their hand in the cookie jar, isn't it?  However, PATH is concerned because your letters are "inaccurate" and "reflect a misunderstanding" of:  Commission orders, PJM's RTEP, the PATH project, and the Formula Rate.  In other words, you don't know nothin'!

For any comments that can be remotely related to the Formal Challenge, PATH hides behind their Answer.

And PATH says that FERC has no business interfering in the PJM planning process or "second guessing" PJM's decisions.  PATH's a little late here... it's already happened.  And PATH also contradicts themselves (or PJM) here.  Despite the fact that their letter states that PJM has placed PATH in abeyance for the 2011 RTEP, they further claim PJM will report the results of its "more rigorous analysis" of PATH as part of its 2011 RTEP.  So, which is it?

PATH says the Kemptown substation is going to happen, despite Frederick County's local government jurisdiction.  According to PATH, Frederick County's actions are "not final and are not binding."  PATH thinks the MD-PSC can preempt the County's authority.

PATH thinks that FERC has no business revisiting their incentives and formula rate cost recovery system.  They base this on the Commission's 2008 decision, but fail to consider more recent events, such as PATH no longer being part of PJM's RTEP.  Being an approved RTEP project was a requirement for the incentives PATH received in 2008.

PATH whines because not all persons who commented fully understand all the legal and financial/accounting intricacies of their formula rate and some of you used the word "cancel."  The word should have been "abandon", and PATH thinks all comments should be tossed aside for that reason.  Here's the deal... if the project is abandoned (what you would call canceled), then PATH would have to file with FERC to collect its stranded capital costs.  All costs would have to be prudent and the abandonment cannot be through any fault of the PATH companies.  This would be a separate filing from anything going on right now and up to FERC to decide, however, just like a PSC case, parties can intervene and present a case regarding why the expenditures are not prudent or why abandonment was PATH's fault.  What is at issue right now is that PATH is refusing to abandon their unneeded project, and pretending that they can merely "suspend" it indefinitely.

PATH thinks FERC should proceed with on-going ROE proceedings, even though their project died, and your concerns about the 14.3% ROE are "without merit."

PATH says they need to continue to spend money on their dead project.  These expenditures are doubly necessary apparently:  "...incurring reasonable and necessary expenditures necessary to maintain..."  PATH's continued expenditures include things like writing their letter to FERC, so you all are at fault for causing them to spend more money!  The rest of the money is going to be spent on those mysterious "non-development activities" (like front groups?)  And besides, PJM ordered them to continue to spend your money on their failed project.

The concerns about the vacated NIETC designations have no relevance to rate recovery, according to PATH.  As I recall, they were mentioned relevant to incentives, not rate recovery, a distinction PATH failed to grasp.  PATH also wants you to know they are not "receiving financial assistance," since they are recovering their own money invested in the ratebase.  However, they are also receiving financial assistance with their project expenses directly from ratepayers for their non-capital costs, and also a hefty return on the capital costs in the ratebase every year.  I guess since they don't like the term "financial assistance," perhaps they would prefer the term "corporate welfare?"  I dunno...

Now, here's the part you're going to love most of all!  All those stories you told FERC about misconduct on the part of PATH are FALSE.  PATH told the Commission you are all a bunch of liars.  Be sure to have a tissue handy when you read PATH's rendition of how wonderful they have been to all of you.  It's positively heart-breaking how unappreciated they have been by you.  PATH even goes so far as to vouch for PJM's credibility in their letter. 

PATH claims that their project will not harm your health or your property values and your concerns are unfounded.  Aside from that, it's none of FERC's business.

So, what should you do now?  You can let PATH have the last word, or you can answer them with another letter to FERC.  You all probably know the drill by now, but here's a link to the instructions.  If you haven't sent a letter to FERC yet, but would like to, just follow the instructions.

The tone and content of PATH's letter aren't anything new... it's the third time I've seen the same basic arrogance & denial from PATH before FERC.  PATH must think FERC is really dumb.
11 Comments
bh link
4/15/2011 05:20:48 pm

PATH keeps claiming that they have all these "costs" they need to keep incurring. The first thing FERC needs to do is to have them make public a list of exactly what these costs are.

This ain't rocket science. If FERC doesn't want to "cancel" cost recovery, they should at least place PATH in "abeyance" and prevent them from recovering any costs incurred while PJM keeps PATH in abeyance. If PATH's costs are "non-developmental," as PATH claims, then they certainly aren't eligible for the 14.3% incentive.

Oh, and about the substation - how can the MD PSC claim that the substation is a part of PATH when the substation will be servicing at least four other power lines? The only basis for the PSC's jurisdiction, which the PSC itself has argued, is that the substation is a part of the PATH project.

This argument will get about as far in court as the US DoE got in the US Ninth Circuit arguing that they didn't have to do an Environmental Impact Statement for their "congestion" study that created the NIETCs.

Reply
Keryn
4/15/2011 08:36:04 pm

The first step to making a public list of "non-development costs" would be to submit a revised 2011 PTRR, but PATH isn't doing that. On purpose?

Whose fault is the "abeyance?" Certainly not the ratepayers, but they'll be the ones to pay for it. The entire PATH project from day one was nothing but a scam to increase corporate profits. It was never "needed." PJM has been in on the scam since day one also. Now PATH and PJM find themselves in a pickle and must proceed with trying to get this project built or else the power companies have created a huge financial loss and the PJM cartel will lose face.

PATH calls their costs "non-developmental," but that term has no meaning. Earlier they were calling them "non-capital," but when faced with actual expenditures they realized that's not true at all. The costs for the federal EIS they want to "suspend" are capital costs. The purchase options that are up for renewal require a capital cost payment to landowners to extend. All their legal costs related to regulatory matters (and this would include FERC, PSC, and civil costs for the substation) are capital expenses. Additional capital expenditure increases the amount in the ratebase upon which they earn that yearly 14.3% return. So, during the 15 year "suspension" they will keep dumping more expense in the ratebase and increasing their return.

If the project is abandoned, they have to mitigate the amount in the ratebase by selling assets. It wouldn't be fair for them to profit by continuing to own the assets that have become unnecessary for the project, while the ratepayers continue to pay for these assets. When the project is abandoned, these assets are no longer needed and their sale is credited back to the ratebase to decrease the amount the ratepayers are left on the hook for. PATH's accumulated assets are mostly land at this point. What if PATH had to sell all the land they had purchased so far?

Abandonment would halt additional expenditure, reduce the amount in the ratebase that ratepayers are responsible for, and set it for recovery over a set period of time. It cauterizes the wound. A suspension allows them to continue spending and building the ratebase and earning a return. It continues the arterial bleeding of our money.

A rock/PATH/A hard place.

Reply
Keryn
4/15/2011 08:45:17 pm

And about that substation... it's moot without PATH. It's not a generation point, so unless PATH or another project delivers a payload to the substation, it's like a dead wall socket and all those other projects planning to hook into the substation will go away. The only exception to this is the Liberty line, which intends to bring power generated in Pennsylvania to the site. And we know Papa PJM don't love Liberty the right way.

Reply
miss-led
4/16/2011 12:38:39 am

but PATH is the one who used the word "cancel" in the first place! "Importantly, the PJM Board has not directed the sponsoring transmission owners to*** cancel*** or abandon the PATH project"
they forget what they said and then complain about what we said

Reply
Pam
4/16/2011 02:21:19 am

I'm so sick and tired of their whining. We aren't running their costs up, we have a right to free speech and to defend our homes and ourselves. Besides, how could Randy justify collecting a big paycheck if he didn't have anything to do. He's got to have billable hours unless he's just on retainer but he would still have to submit his time he's spending on PATH.

Reply
JustMe
4/16/2011 09:40:46 am

PATH is just so easy to pick on I can't resist. Lets take the substation discussion. They are mixing together the Planning Commission (the non-binding advisory body) with the BZA. The BZA's decision WAS final because as any first year law student can tell you that only final administrative actions can be appealed. Furthermore, their statement about PSC preemption over county zoning is an incorrect statement because MD's highest court ruled in 2010 that local zoning trumps state permitting because the two are independent and concurrent functions which must both be satisfied for a project to proceed -- another embarrassing moment at the MD PSC where PATH's dull legal minds forgot to make sure the law they are relying on is still current. So at best their preemption 'theory' is no more than hopeful. And lastly, just because PATH says there is no harm to surrounding homeowners ...doesn't make it so. The residents have not even begun to exhaust their arsenal on that issue. A truthful restatement of their representations to FERC about the substation status is that they lost every battle so far and their only hope is many years on appeal - a forum obviously above the Mo-Ran team's pay grade. And BTW, isn't the statement about their post-'suspension' activities clear and free of qualifiers? That leaves them rather vulnerable to any hypothetical allegations that might show otherwise. Perhaps the fact that this all came in the form of a letter removes it from the purview of statements under oath.

Reply
Da Hillbilly
4/16/2011 08:10:14 pm

Hey "Just Me" it truly is good to know we have the compitent people on our side. The depressing thing is, all my money (and yours) that's being paid out to the baffoons that work against us.

Reply
Dictionary
4/16/2011 08:23:35 pm

several - more than two but not many

15 is not several. It's 15.

Reply
Count on it
4/18/2011 12:14:26 am

Because we all know that the PATH folks (Pathetic, Arrogant, Toxic, Hypocrites) often frequent this blog (hi waaaaaandy), let’s take a moment to make a few things very clear to them. We aren’t going away. We aren’t giving in. We aren’t giving up. We ARE staying focused. We ARE keeping our eyes on you. We ARE stronger than ever. We ARE more informed than ever. We WILL continue fighting you. We WILL be here with even stronger legal support. We WILL have even more case law on our side. We WILL be prepared. We WILL win. (Hell hath no fury like a PATH victim scorned) So really, it’s time to just take your (many) losses and go home with some smidgen of dignity left. Oops, too late for that. Well then it’s just time to go home. Probably better start editing that resume and coming up with some really creative spin since this recent job’s not gonna look so hot on your track record. Word of advice: I wouldn’t be using Charles Ryan for your spin-doctoring. Just sayin’.

Reply
Keryn
4/18/2011 12:38:24 am

That was lovely, count, thank you. :-)

Good advice. Sad that it will most likely be ignored.

Reply
CHARM SCHOOL DROPOUT
4/18/2011 03:09:09 am

I see the ever-charming Counselor Palmer has only managed to anger everyone further with his response, instead of the intimidation effect he was going for. Randy is like a toothless shark: it's ugly and sort of gives you the creeps, but it's completely harmless except to itself.

Reply



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    About the Author

    Keryn Newman blogs here at StopPATH WV about energy issues, transmission policy, misguided regulation, our greedy energy companies and their corporate spin.
    In 2008, AEP & Allegheny Energy's PATH joint venture used their transmission line routing etch-a-sketch to draw a 765kV line across the street from her house. Oooops! And the rest is history.

    About
    StopPATH Blog

    StopPATH Blog began as a forum for information and opinion about the PATH transmission project.  The PATH project was abandoned in 2012, however, this blog was not.

    StopPATH Blog continues to bring you energy policy news and opinion from a consumer's point of view.  If it's sometimes snarky and oftentimes irreverent, just remember that the truth isn't pretty.  People come here because they want the truth, instead of the usual dreadful lies this industry continues to tell itself.  If you keep reading, I'll keep writing.


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