The Tennessee Valley Authority, the government owned independent corporation that supplies electricity to 9 million people in parts of 7 states, signed a Memorandum of Understanding with Clean Line Energy way back in 2011.  The MOU obligated the TVA to "...continue to perform collaborative and/or independent technical wind integration studies to support identification and quantification of benefits to TVA from the Plains & Eastern Clean Line."  And Clean Line has been spinning it as government support for its project ever since, the same way the company has been spinning an agreement with DOE to study whether or not to "participate" in the project and abuse its federal eminent domain authority to take land for the private gain of Clean Line Energy as "support" for its project.  Clean Line has been overeager to encourage the misconception that the federal government backs their project in order to attempt to bully its opposition into submission.

Since the signing of the MOU with the TVA, Clean Line has cut the size of its Plains & Eastern Clean Line project in half.  And now another setback for the project seems to be in the works.

The TVA has announced the preparation of a new integrated resource plan, which is a plan developed to define the short and long term capacity additions (supply side) and demand side management programs that it will undertake to meet projected energy demands.

"TVA spokesman Duncan Mansfield said Friday the 2015 planning session is expected to begin in the fall and likely will last 18 months. Members of the advisory panel have not been selected yet, he said."

If TVA is planning to import Clean Line's 3500 MW of Midwest wind, it would be a big part of this plan, right?  Instead:

"Generally, the agency expects to back off coal and step up nuclear production. But nuclear increases will depend on whether regulators approve plans for new nuclear reactors for the Watts Bar and Bellefonte plants.

Other expected power demands will be met mostly by increased efficiency, Mansfield said.

"Right now, coal makes up about 40 percent of our power generation. That will come down to about one-third, and nuclear will come up to about 40 percent [by 2027]," Mansfield said.

The remaining 30 percent will come mainly from hydroelectric dams, natural gas, efficiency gains and -- to a much lesser degree -- solar and wind energy, Mansfield said."

Looks like Clean Line's puffery about TVA's "support" of  its project didn't fool the most important "stakeholder" of all, the TVA.

So now Clean Line has "...issued a request for information to wind farm owners in the Oklahoma and Texas Panhandles to help gauge their demand for new high voltage transmission capacity to export power."  In other words, Clean Line is now looking to shore up its case with the TVA by collecting data, no matter how dubious, to show that Clean Line's wind energy will be price competitive with all those other resources TVA is intending to include in its plan. 

In keeping with what Skelly probably imagines is his look of "confidence" (that actually more closely resembles puckering up to kiss his project goodbye and have himself a good cry), the company continues to pretend that reality doesn't matter:

"TVA also recently announced that it will update its Integrated Resource Plan (IRP), a framework that specifies target levels for generation types to meet projected electric demand. Rapid developments in the electric sector prompted TVA to update its IRP sooner than expected to account for low natural gas prices, new regulations on coal, and the falling cost of wind and solar. TVA is just beginning its current IRP process, which is on schedule to be finalized by the end of 2014. As part of the IRP, TVA has committed to carry out a detailed review of renewable options. TVA’s recent efforts to incorporate more wind from outside its footprint suggest that it will continue to give low-cost renewable energy due consideration in its IRP. Clean Line expects wind energy from the Great Plains to be highly competitive in this consideration. Also encouraging is the fact that TVA invited Clean Line, along with wind generators and turbine manufacturers to provide data for the current effort. Information gathered from this RFI can help increase TVA’s confidence in additional wind purchases as viable options."

There's no guarantee that any of these wind resources will develop, or will develop at the price submitted in this information response.

"Clean Line acknowledges that none of the information provided by Respondents is binding and that it is provided solely for informational purposes."

So how can the aggregated "information" be verified?

"Clean Line will maintain the confidentiality of all submissions."

I suppose we should just trust Clean Line to be honest about information that can make or break the company?

"Clean Line acknowledges that pricing is indicative, not binding, and provided only for informational purposes."

Then what good is anything produced out of this silly exercise?

And which price do you suppose Clean Line is going to use:  the levelized price with or without the PTC (production tax credit -- taxpayer subsidies)?  Is Clean Line seriously expecting to make the case to TVA that its product is cheaper than other resources because it's being subsidized by taxpayers?

Clean Line is no charity.  It's a for profit enterprise financed by billionaires and a foreign corporation.  Its investors are going to make a bundle of money if Clean Line can glad-hand and hoodwink its way to project completion.  But every speculative venture has its tipping point where even the most patient investors have to cut their losses and fold.

Clean Line asks in its RFI:  Is there an increasing demand for transmission service from the wind resource area of the Oklahoma panhandle?

I think the most obvious answer is no.

PJM Interconnection is behaving like a big, fat, whiny baby, and wasting your money on their big, loud, head-banging, breath-holding tantrum.

PJM describes itself as "..a regional transmission organization (RTO) that coordinates the movement of wholesale electricity in all or parts of Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and the District of Columbia."  PJM is funded by Y-O-U through fees added to your electric bill.

PJM pretends that it is serving your electrical needs through transparent, independent management of transmission planning and operation. 

But when someone decided to publish a website with news about PJM's activities and gave it the apt name "PJM Insider," PJM's lawyers wasted a whole bunch of your money harassing the publication over copyright infringement and a whole bunch of other nonsense.  PJM contends that PJM Insider is "...con­fus­ing you into think­ing we’re con­nected with PJM. PJM also accuses us of “unfair competition.”

Cue the frivolity!  Anyone who has spent more than 10 minutes at a PJM meeting or tried to pry information out of this cliquish cartel would never be so silly as to confuse a publication attempting to share information with PJM's actual behind-closed-doors secret scheming.

Wahhhhhhhhhhhh, PJM, Wahhhhhhhhhhhhhhh!

On February 25, 2011, Allegheny Energy was merged into and swallowed up by Ohio-based, investor owned utility, FirstEnergy.  As a result, the "Allegheny Power" dba company name West Virginia and Maryland customers had gotten used to ceased to exist.  FirstEnergy reverted the operating companies to their historical legal names.  Maryland and West Virginia's eastern panhandle became known as "Potomac Edison," which is a name old-timers may remember from the 1980s.  It's still the same company.  Nothing much has changed, except for the company's top management and profit goals.

Just two short months after the merger, Mark Clark, Chief Financial Officer and Executive Vice President, had this to say about the "benefits" of the merger to the company's shareholders during a May 3, 2011, earnings call with investment analysts:

Let's translate this out of "1% speak" and make it understandable.  The benefits of the merger were expected to provide shareholders with earnings in excess of $1B in the first 3 years after the merger.  The company was also looking to reduce its "O&M" between $75M and $175M.  O&M is the acronym for operations and maintenance expense.  Operations and maintenance expense is the company's cost of operating and maintaining their systems.  In the case of a regulated electric company, like Potomac Edison, this means expenses for things like maintaining their distribution lines, operating their customer service center, sending you monthly bills, and reading your electric meter in accordance with their legal obligations as a regulated utility in the state of West Virginia.  A regulated utility is permitted to recover its cost of service, plus a reasonable return on its investment, from its customers.  A utility's cost of service includes O&M expense. 

Now let's take a look at how this amount is recovered from you and why a reduction in the amount spent would be a benefit to shareholders and increase their earned dividend.  A utility recovers its fixed costs through its base rate.  Fixed costs are the costs that remain the same year after year, such as the company's investment in a power station like Harrison.  O&M is a fixed cost.  The amount Potomac Edison is collecting from all of you for O&M was set in its last rate base case in 2007.  A base rate case also sets the company's rate of return, the amount of interest it is permitted to collect from you on its fixed costs.  Potomac Edison's rate of return in West Virginia is 10.5%.  A company is not required to file base rate cases on a regular basis.  A company will do so when it can financially benefit from doing so.  The rate set in 2007 will continue to be collected until the company takes the initiative to file a new base rate case.  A new base rate case will trigger a new battle over the current 10.5% return, most likely setting it lower.

The utility is collecting a fixed amount from you to be used to operate and maintain its system.  If it doesn't spend all it collects in one month, it can set it aside to spend later.  Conversely, some months it must spend more than it collects.  It's supposed to roughly equal out eventually, however, there is no true up mechanism that ensures that the company actually spends every penny on actual O&M expenses.  If a company ends up with a positive O&M balance at the end of the quarter, it adds that amount to its profit (dividend).  Therefore, whatever Potomac Edison can save on operating and maintaining its system is a direct profit.

So, FirstEnergy's first order of business after the merger was to cut O&M to produce more profit from the combined business.  During a subsequent earnings call on February 29, 2012, Mark Clark had this to say:

Right, Mark.  Don't do anything crazy like reorganize and cut your meter reading positions because something like that could have unforeseen consequences that squander Potomac Edison's community goodwill and put the company at a longer-term risk.  After all, an unhappy customer base could do something unexpected, like turn out in record numbers to oppose a proposed generation transfer that was planned as part of the company's strategy to "...expect asset sales in the range of $800 million to $900 million per year, and we expect to reduce debt by $1.5 billion to $2.2 billion over this time period."  Remember, you must always place FirstEnergy in the best possible forward position!

Fast forward another year.  The company's penny-pinching has reduced/reorganized its meter reading staff to less than half of its former level.  The company is still collecting the same amount of O&M, but now they're spending half the amount!  The extra gets added to the dividend to show the shareholders a profit.  Shareholders are the only ones who truly matter.  Its not about responsibly providing a needed service in a monopoly construct.  Because the company has reduced its staff by more than half, meters are only getting read less than half as often as they should.  This means that the company is relying on more estimates to calculate monthly bills.  Perhaps the company thinks that it can train its customers to read their own meters and call it in to the company, allowing for more accuracy while also maintaining the meter reading staff cuts.  But that's not what happens... oh, no.  Some customers simply refuse to do the job they are paying the company to do, and the inaccurate usage estimates continue to pile up.  You all know what happens when you add too many inaccurate numbers to an equation -- the answer becomes hopelessly skewed.  And that's exactly what has happened to customers' bills.  Depending on the number of actual v. estimated readings currently in the queue of averaged billings, bills can swing wildly from month to month, resulting in some customers receiving outrageous bills for thousands of dollars that they simply cannot pay.  Potomac Edison's customer service staff simply doesn't care.  Pay up or be cut off.  And then the service shut-offs begin...

And the community took action.

The WV PSC opened an investigation into the company's business practices on June 7.  The West Virginia legislature announced its own parallel, independent investigation of the company on June 13.

All of this stemmed from the cost of a very small staff of meter readers?  How much did they save?  How much does a meter reader cost?  Recently, Potomac Edison placed a help wanted ad on Craig's List for temporary meter readers.  Yes, Craig's List!  Always my first choice when job hunting...anyhow... I guess they're even too cheap to advertise in more mainstream venues, or perhaps they don't really intend to actually hire anyone.  They certainly don't intend to hire anyone to solve the problem long term, after the regulators quit breathing down their neck.  The fewer people who see the ad, the fewer applicants Potomac Edison has to blow off.  Potomac Edison is offering a starting wage of $12.31 per hour for a meter reader in Frederick, Maryland.  That's about $24K per year.  Frederick's average per capita income is $36K per year.  Compare the meter reader's salary with the recently approved annual compensation of FirstEnergy CEO Tony Alexander of $23M for 2013.

Meter reader:          $12.31/hr.
Tony Alexander:    $11,454.18/hr.

I think we've found the place where cuts can be made to place FirstEnergy in the best possible forward position.  More meter readers, less Tony Alexander.

But will the company turn a corner and put sincere effort into righting its wrongs?  Or will it continue to make excuses for its failure, and continue to lie to regulators and the community?  What's it going to be, FirstEnergy, truth or consequences?

Put on your hip waders, Potomac Edison customers, the fertilizer is getting mighty deep!

Today, Potomac Edison's Director of Public Relations, Charlie Friddle, told a concerned customer that "...they had provided sufficient information that they were involved in an ongoing investigation and could not participate" in the Citizens' Public Hearing in Charles Town on May 22.

LIAR, LIAR, Pants on Fire!

But, wait a tick... the investigation was not announced by the PSC until May 31.  How was Potomac Edison "involved in an ongoing investigation" on May 22?

According to Cagey Charlie, the company "was investigating billing practices themselves" on May 22, so technically, Charlie believes his statement was correct.

Not even close.  Potomac Edison just plain old blew you all off.  The company's scientific estimate of how many citizens with genuine problems would show up, and who would show up to listen to these irate customers, was about as accurate and their monthly electric usage estimates. 

Why not just admit that you severely screwed up, Potomac Edison?  We'd be a little more forgiving of a company that admitted its mistakes and put forth an honest effort to right its wrongs.  Instead, Potomac Edison just keeps piling up the lies and flimsy excuses.  Nobody's buying it, and this dishonest company is only digging its hole deeper and deeper.

Potomac Edison's excuse for not attending the Citizens' Public Hearing prior to May 22 was:

"We appreciate the invitation to participate in the public hearing scheduled for May 22, regarding billing practices and future generation, but respectfully decline.  Should you have individual questions regarding your service, please feel free to contact me or our customer contact center at 1-800-686-0011."

Do you see anything in there about conducting an internal investigation, Charlie?  Yeah, me neither.

Liar, liar, pants on fire!  Next time we invite you to an event, you're going to show up, right?  We'll be sure to invite you personally, Charlie.

I hope someone saved Blinky!

Round two of FERC's attempt to create a cost-socialized coast-to-coast electricity trading market has begun.  On May 28, a motley collection of strange bedfellows filed a petition for review of Order No. 1000 in the D.C. Circuit of the U.S. Court of Appeals.  To make it even more fun, a whole bunch of parties intervened in the matter, in support of either the petitioners or FERC, depending on where their interests lie.

The petitioners include publicly owned power providers and co-ops, investor owned utilities, states, an ISO, trade associations, and an informal "coalition" of utility interests.

Intervenors include ISOs, states, investor owned utilities, public power and co-ops, well-meaning but sadly misguided environmental groups, and trade associations.

Objections to Order 1000 have finally been boiled down to three basic arguments (although the briefs go on and on and throw in all sorts of supporting arguments).

1.    Whether FERC has the authority to mandate transmission planning and take other actions to force what it characterizes as “facilitating the development of more efficient and effective transmission expansion plans.”

2.    Whether FERC has the authority to order broad socialization of cost responsibility for the building of new transmission lines.

3.    Whether FERC can dispose of a utility's right of first refusal to build new transmission in its service territory.

Order 1000 concluded we need “transmission planning and cost allocation processes so that the transmission grid can better support wholesale power markets and thereby ensure that Commission-jurisdictional services are provided at rates, terms and conditions that are just and reasonable and not unduly discriminatory or
preferential.”

FERC got downright silly mincing words to create its authority to do what it did, and the briefs get into some really ridiculous debate of grammatical construction and the meanings of phrases and words.  There's also discussion that brings to mind the old "if it ain't broke, don't fix it" idiom.  According to petitioners, FERC did not have sufficient reason to "fix" transmission planning and cost allocation because it did not have a compelling reason to conclude that there was anything to "fix," nor that its "fix" would be an improvement.

In justifying its new "beneficiary pays" requirements to more broadly socialize the cost of transmission to ratepayers across multiple regions, FERC failed to define "benefit," which allows very loose interpretation of perceived "benefit" in exchange for cost responsibility.  FERC determined that it was preventing "free ridership," whereby some beneficiaries did not pay for new transmission.  The petitioners argument hinges on the fact that FERC cannot create cost responsibility between parties who do not have a contract for the service being provided.  In addition, FERC may only approve rates proposed by companies it regulates, or fix the same when they are unjust or unreasonable.  It cannot create and set rates on its own initiative.

That's all fine and good, however the REAL reason for broader cost socialization is to hide the true cost of this transmission building craze from the billions of electric consumers who will finance it.  The broader the cost is spread, the smaller the impact on each individual.  Who in West Virginia is going to notice a couple extra cents on their monthly electric bill for new transmission lines in Kansas?  However, if the cost is spread over a smaller pool of true "beneficiaries" closer to the actual transmission lines, it would cause greater monthly increases that would definitely be noticed and contested.  In this way, federal regulators, and the for-profit generators and transmission owners they serve, are tricking you into failing to notice the immense profits you are paying to these companies in exchange for building new transmission of questionable necessity.  It's not supposed to be about continued forced support of a dying, centralized energy paradigm, but about citizens' ability to consciously invest in smart, efficient and reliable energy systems of their own choosing.  Long-distance transmission lines will soon be as necessary as land line phones, however we may be stuck with the huge investment we were forced to make in them now for many years after they cease to be useful to us.

But wait... FERC wields the interstate commerce club that they have been quietly swinging behind their back for the past couple of years to trump any naysayers to Order 1000.  FERC possesses authority to regulate “the transmission of electric energy in interstate commerce” and “the sale of electric energy at wholesale in interstate commerce.”  However, Congress has repeatedly mandated that states retain the authority to permit transmission lines within their borders.  This state/federal conflict has been going on for years, and the interstate commerce club makes its first appearance in the 7th Circuit MISO MVP decision I wrote about earlier this week.  Will it be enough to club states into submission?

I still can't muster up the energy to care about the investor owned utilities excitement over losing their long standing right of first refusal ("ROFR"), and the arguments petitioners put forward are nothing short of humorous.  The IOUs purport that elimination of the ROFR "...would negatively affect reliability, impede planning, and substantially harm consumers."  The ROFR that was eliminated allowed utilities to have first dibs on any new transmission lines in their service territory that were determined to be needed by the regional planning authority.  In possessing this "right," the IOU was given the ability to determine the cost of the new transmission without competition.  I'm not sure how that ever protected the consumers who pay for transmission.  It didn't.  FERC's elimination of the ROFR now provides that once a need for a transmission upgrade is identified, anyone can submit a bid to build it.  Only through this kind of price competition will consumers be assured that needed transmission is built most cost-effectively.

One of the side-shows going on under the authority to mandate transmission planning category involves FERC's determination that "public policy" requirements be considered in regional planning.  "Public policy" requirements are individual state or local laws or goals requiring jurisdictions to obtain a certain percentage of their power from renewable resources.  In placing regional planners in the position of interpreting and fulfilling the laws of states or localities, FERC seriously oversteps its authority.  Only the jurisdiction that enacts a public policy requirement has authority to implement and enforce the requirement.  It is not up to FERC or regional planners to decide what a government may have meant by a certain requirement, or how the government will implement and meet it.  As well, the cost of regional mandates to build transmission that would satisfy individual "public policy" requirements cannot be socialized among residents of other localities whose laws don't require it, or conflict in some way with the "public policy" being satisfied with the new transmission.  But wait... here comes that interstate commerce sledgehammer again!  The 7th Circuit ruled that the Commerce Clause of the Constitution trumped state autonomy to reject fees mandated by another state's law over which it has no control.

If you're a geeky freak who enjoys pouring through lengthy legal briefs for occasional giggles, here are links to the ones filed at the D.C. Circuit:

1.    Statement of Facts Brief (contains general housekeeping stuff and the most basic summary of the issues you're going to find.  If you only read one, make it this one.)

2.    Cost Allocation Brief (enough detail of the cost allocation arguments to lull you to sleep even after an entire pot of coffee!)

3.    Threshold Issues Brief (why FERC has no authority to do what it did - ad nauseam).

Well, haven't they all created a fine mess for consumers when left unsupervised?  This is going to drag on for years, but ultimately will determine how your electricity is generated, how it gets to you, and how much you're going to pay for it.  Obviously your best interests are not being represented by any of these parties.  You're going to have to speak up and let your elected representatives know what you want.

The West Virginia Legislature is not satisfied that the state's Public Service Commission will get the job done with its general investigation of FirstEnergy subsidiaries Potomac Edison and Mon Power, and has announced its own independent, parallel investigation of electric utility billing practices in the state.  The Joint Standing Committee on Government Organization's investigation will give the hairy eyeball to all electric utilities in the state.  So, other companies, like Appalachian Power, can give a great, big "thank you" to their compatriots at FirstEnergy who made all this possible.

Read breaking news by Pam Kasey in The State Journal.

Briefs filed in federal court by environmental groups seeking to have a National Park Service permit to destroy the Delaware Water Gap National Recreation Area overturned contained some damning quotes from minutes of meetings between Secretary of the Interior Ken Salazar, Park Service Officials and representatives of investor-owned utilities PSEG and PPL, owners of the proposed Susquehanna Roseland transmission line.

During an August 4, 2011 meeting, Salazar is quoted as saying: 

"So here's the deal: I want $60 m [million] and I want it now."

An expose in the New Jersey Herald tells what happened next:

And guess whose money the companies were giving away?  Yours, little ratepayer, your $60M in increased electric bills, plus 12.9% interest yearly.

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.  PSEG representative Karen Johnson explains:

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.

Want to challenge the possible collection of bribe money in your electric bill?  PSEG recently filed its trueup of 2102 rates at the Federal Energy Regulatory Commission and the filing is open to your examination and questions.  Any bribe money that was paid in 2012 would be contained in this filing.  FERC does not review and audit the filing.  If you want to ask questions and challenge it, you must take the initiative.

And be sure to sign up to continue to question the components of the utility's transmission rate going forward, because you're going to continue to pay for Salazar's bribe for many, many years to come.

This kind of shakedown perpetrated on the public by government officials and regulated utilities is nothing short of completely outrageous!

The Seventh Circuit of the U.S. Court of Appeals issued a ruling last week that can only be interpreted as one judge's preference for renewables legislating from the bench.

Several years ago, the same court and same judge ruled that FERC and PJM had not done enough to justify the RTO's postage stamp cost socialization scheme.

This time, the court affirmed MISO's MVP cost socialization scheme, and remanded FERC's denial of export pricing to PJM.

This means that all MISO ratepayers will continue to be charged for new transmission to support the integration and export of utility scale, centralized renewables, and FERC must take another look at allowing MISO to charge ratepayers in the neighboring PJM region for a portion of new transmission built entirely in the MISO region.

Forcing ratepayers to subsidize the building of new transmission to the exclusion of other cheaper, localized, and more reliable energy choices effects a forced preference for "big wind" on the energy-consuming public.

Big wind and MISO's broad socialization of its costs are the darlings of the court.  What a difference the color of an electron makes!

PJM's broadly socialized postage stamp rates were all about allocating the costs of new transmission to transport coal-fired electricity.  MISO's broadly socialized MVP rates are all about allocating the costs of new transmission to transport "big wind."  What's the difference?

The judge's personal preferences come through loud and clear in this decision.  He even quotes the opinion of utility mouthpiece Matt Wald in his ruling.  When a court quotes an internet blog, that's when you know for sure that its ruling is based on conjecture, and may not withstand further scrutiny.

There's one thing this decision fails to acknowledge, however, and that's the power of the people.  Planning and building the new MVP transmission lines has attracted the attention and ire of thousands of landowners and ratepayers nationwide who object to the thoughtless and inefficient preclusion of smart energy choices that compulsion to sacrifice land and energy investment dollars committing to long-term transmission assets achieves.  These citizens are coming together in record numbers and will not be silenced.  A citizen-directed energy revolution is under way!

Stay tuned... more federal court shenanigans coming up soon with news about a case recently filed a little closer to home...

It's true, you can't fix stupid.

FirstEnergy subsidiaries Potomac Edison and Mon Power are trying to remedy the public relations disaster they find themselves in, and shore up the companies' dishonest and negligent image, with even more dismissive arrogance.  FirstEnergy just doesn't get it and continues to kick itself in the rear end.

The company has deployed public relations simpleton Todd Meyers on a radio tour where he delivers lawyer-approved statements such as:

What is Todd insinuating here by downplaying the authority of the WV PSC to investigate and fix unjust and unreasonable rates as "just an exercise?"  Is Todd trying to inform the public that the PSC is nothing but the company's stooge and that the investigation is mere political window dressing with a predetermined outcome?

"Our customers" will not be mollified by a token review and slap on the wrist.  "Our customers" want results, and a heaping helping of tasty schadenfreude.

How would y-o-u like to see Potomac Edison punished for all the misery it has caused?  What, if anything, can Potomac Edison do to make it up to you?