Citizens Energy Task Force and Save Our Unique Lands filed a complaint at FERC yesterday alleging that a transmission line approved by the Midwest Independent Transmission System Operator will cause instability of the electric grid.  The complaint asks that FERC:

"...order that the MTEP 08 addition of the Hampton-Rochester-La Crosse transmission line is prohibited because electrical impacts of the addition of this project to the grid were not considered, and that instead of improving the reliability of the system, it contributes to and/or causes electrical system instability, that the Midwest Reliability Organization (MRO) has neglected its duty to preserve the reliability of the system, and that the Commission Order revocation of the Midwest Independent Transmission Service Operator (MISO) approval of the CapX 2020 Hampton-La Crosse transmission project because the addition of the Hampton-Rochester-La Crosse transmission line contributes to and/or causes system instability."

The citizen groups' complaint relies on the segmented approval and construction of the CapX 2020 lines.  While the projects are supposedly parts of a larger plan, the utilities have admitted that construction of the subject segment without an additional transmission line to Madison will bring about instability that will cause the system to "reach a tipping point."  An additional line to Madison has not yet been applied for or approved.

MISO's piecemeal project portfolio will cause system instability if all parts are not built.  Construction has already begun on portions of the project in Minnesota, but without an extension of the line to Madison, it is merely a radial line dumping excess electricity into LaCrosse that has no outlet.  Because the second line has not been approved, there is no guarantee it will be built.  The complainants also point out that previous arguments by the applicants that the two lines are separate projects have clearly violated the National Environmental Protection Act prohibiting the segmentation of dependent projects.

So, which is it?  Are these separate projects or are they integral parts of a single project?  MISO cannot have it both ways.

Will FERC take the initiative to administer some sorely needed discipline upon one of its regional transmission organization darlings?  Or will it continue to let its unruly children run wild until we're all sitting in the dark?

Read more here, here here and here.

Remember Pepco's silly plan to collect a 12.8% incentive ROE on $87.5M of abandoned plant costs for its unneeded MAPP project?

Although it granted Pepco the right to recover its prudently incurred investment yesterday, FERC denied the continuation of MAPP's 150 basis point incentive ROE on abandoned plant.  No big surprise -- Pepco's arguments were absurd.

"We find that the continuation of the additional 200 basis points of incentives, on top of the base ROE, on an abandoned project is not appropriate.  Once a project has been canceled, none of the incentives granted other than the ability to recover prudently incurred abandonment costs continues to apply, as explained below."

FERC also denied Pepco its 50 basis point incentive for continued membership in PJM.  The Commission reconfirmed its determination in the PATH abandonment order:

"We therefore find that the 50 basis point adder for RTO participation is not appropriate for recovery in an abandonment application.  This finding is appropriate in the context of abandonment even though the Commission has found that the RTO participation incentive is unrelated to any particular project but instead is intended as an incentive for joining and remaining in an RTO.  This is because even though the public utility project developer has joined an RTO, the facility at issue in an abandoned plant cost recovery situation will not be transferred to the RTO's control, and therefore the benefits from that project’s inclusion in an RTO will not materialize.

This outcome is consistent with the PATH Abandonment Order, where the Commission clarified that continued recovery of a 50 basis point adder for RTO participation is not appropriate for recovery in an abandonment application."*

Do you think the Commission was clear enough this time?  Greed seems to be interfering with utility understanding of this concept.

In addition, the Commission also determined that Pepco can recover only 50% of its incurred costs prior to issuance of their incentives order in 2008.  Because Pepco incurred these costs before being granted the 100% abandonment recovery incentive, they are only eligible for 50% recovery.  Pepco wasn't greedy enough to ask for amortization of its pre-incentive costs over its construction period like PATH did.  Silly Pepco, that's going to cost ya...

However, the Commission also awarded Pepco a 10.8% ROE on its recovery of abandoned plant, instead of setting ROE for hearing like it did on PATH's abandonment.  Pepco's brazenly ridiculous request to recover an incentive ROE on abandoned plant captured the attention of all the protestors, who failed to advance any arguments against Pepco's base ROE.  You gotta admit, it was pretty smart.  Maybe PATH's counsel could take some lessons from Pepco's.  Or maybe PATH just needs smarter counsel.

As it did with PATH, the Commission set the prudence of MAPP's abandoned plant costs for settlement and hearing.

Before you get all carried away praising the Commission for this Order, remember that it is because the Commission continually fails to enforce any discipline on their little darling PJM that consumers in 13 states and D.C. will have paid nearly half a billion dollars for these two abandoned transmission projects.  PATH and MAPP (and TrAIL and Susquehanna Roseland) were never truly needed.  It was all about increasing the use of coal-fired resources, not reliability or economics.  The utility cartel that is PJM has cost us all higher electric bills that we can ill afford and will not be held accountable for its machinations.

*This bodes well for PATH's rehearing, doesn't it?

FirstEnergy has been swirling round and round the bowl for the past few weeks.

Now the wheels have come off FirstEnergy's poorly executed plan to dump antique coal-fired electricity plants on it's West Virginia customers.

Despite FirstEnergy's desperate pleas for the WV Public Service Commission to approve the company's transfer of coal plant assets from their unregulated (company financed) Ohio subsidiaries to West Virginia's regulated (ratepayer financed) subsidiaries before early May, the PSC issued an order on Feb. 11 setting a procedural schedule that won't hold hearings until the end of May.  A decision won't come until several months later.  FirstEnergy needs to transfer these plants between their subsidiaries to raise over a billion dollars cash that the company desperately needs to pay down its debt.

It's not "to help ensure reliable power for our Mon Power and Potomac Edison customers in West Virginia for many years to come," it's to raise desperately-needed corporate cash that West Virginia's captive ratepayers will be stuck repaying for years to come.  Let's at least be honest about it, shall we, FirstEnergy?

Last week, Fitch cut FirstEnergy's ratings.

On Monday, FirstEnergy reported a loss for the fourth quarter.

Yesterday, FE's stock was downgraded.

Today, FirstEnergy announced a tender offer to buy back some of it's high interest rate debt.  The scheme here is to offer a premium to holders of these high interest rate bonds FE issued so that they will sell their bonds back to the company.  To finance this buy back, the company will borrow money at a lower interest rate than they would have paid the holders of these bonds.

Kind of reminds you of watching sick water buffalo flounder and drown, doesn't it?

Research for another project turned deja vu this morning when I ran across this phrase:

“Awarding a downward-biased ROE by hewing only to a ‘knee-jerk’ application of recent precedent would result in a regulatory ‘gotcha’.”

Now where have I heard that bumptious phrase lately?  Could it be in PATH's "case-in-chief?"

"Now that investors are captive, awarding a downward-biased ROE would result in a regulatory “gotcha” that would violate regulatory standards and undermine the Commission’s own incentive policies."

Yup, same "expert."  How many times will AEP pay this guy to theatrically yell "wolf?"  As many as necessary, since they're using ratepayer funds to pay this "expert" to say the same thing over and over on different cases.

Quick, someone grab a violin, FERC is single-handedly destroying our economy!  *shudders in horror*

I wonder if the Commission's eyes also roll back in their heads every time they read "regulatory 'gotcha"?  Maybe they have a sort of office football pool going where they make bets on when Avera will pop up wailing "regulatory 'gotcha'" in a case.  If not, they should consider it.  Might be fun.  At least more fun than reading Avera's billowing opinions over and over again.

It's not rocket science.  The longer the distance between generation and load, the more unreliable the "grid" becomes.  Long haul transmission lines provide opportunity for all sorts of failure... or mischief.

Apparently the Chinese military is hard at work compromising the security of the U.S. electric grid.  No big surprise.  Investor-owned utilities don't want to waste precious shareholder pennies on silly stuff like cybersecurity when there are memberships to The Duquesne Club to be purchased instead!

No matter how much the industry insists that it can regulate itself on the honor system, there is no honor among thieves.  Looks like Congress is going to have to intervene and bestow authority to FERC to regulate cybersecurity of the grid.  Just imagine how much this is going to cost when the obvious solution is so much cheaper and quicker -- stop "expanding" the grid and making it more vulnerable.  We don't need a whole bunch of new transmission, and a bigger, more interconnected grid exposes larger and larger geographic areas to one massive failure instigated by the click of a single key somewhere in China.

Thanks, Jimmy!

If you've been following PATH's abandonment recovery case at FERC, here's the latest.

PATH filed what it called its "case-in-chief" last week.  Not sure why PATH couldn't have filed its case when it applied to recover its abandonment costs on September 28.  I guess PATH was seriously expecting the Commission would rubber stamp that dreadful mess it filed last year so PATH wouldn't actually have to go to the trouble of filing a case?

At any rate, some of it may be worth a read.  The testimony of Archie Creepyfreak and Snidely Whiplash is worthy of a scoffing snort or two.  The testimony of the accounting ladies and Milo  -- eh, probably over the average person's head and not worth your time.

Don't miss the testimony of PATH's hired ROE "expert," Dr. William Avera because it's the most amusing part of this whole 500+ page filing.  Now, keep in mind that PATH is paying this guy a pretty penny (from YOUR piggy bank, little ratepayer) to blather on for 78 pages about PATH's ROE during the 5-year amortization period.  78 pages!  Plus 24 more pages of exhibits!  One hundred and two pages to say what can be simply paraphrased as:  When we do the DCF analysis, the median that the Commission usually uses is 9.1%.  We even tossed out a bunch of low numbers while keeping in the high ones, but that was the highest we could get it.  But we want 10.4% *stomps feet*!!!  Therefore, the Commission should abandon their usual approach (that provides regulatory certainty) and just give PATH what it wants.  PATH needs a higher number because this ROE is going to be be in place for five whole years, during which time they expect that the cost of equity is going to rise.  Gee, I didn't hear this guy talking about the longevity of PATH's original 14.3% ROE when the cost of equity went down in following years.  PATH's "expert" comes up with several other ways to twist and massage numbers and make crap up that would give the Commission an excuse to award PATH the 10.4% ROE it wants.  And if that doesn't work, Dr. Avera is going to try to confuse you or bore you to death with his financial diarrhea.  I'm betting his testimony (102 pages!) cost more than PATH stands to gain by maintaining the 10.4% ROE, however, you're paying the bill!

Don't bother with the last 350 pages or so.  PATH actually tells the truth for a change when it characterizes the Period I and II data as useless and "trying to fit a square peg in a round hole."

And now parties to the abandonment case have less than two weeks to go through all this before the first settlement conference on Feb. 26.  Happy reading, everyone :-)

This short little news blurb quite effectively epitomizes how and why opposition to transmission projects develops.

It's because the utility shows up with a fully formed "plan," then goes through the motions of "consulting with the community," but completely fails to allow the community any meaningful role in determining its own destiny.

In the example, AEP wants to put up some taller, metal towers on one of its easements.  The affected townspeople want to be involved in concocting a plan that would satisfy any genuine need for this work.  Because a true community consultation process could change the process undertaken to reach a common goal, AEP is resisting the involvement of the town in any actual planning.  AEP's idea is that it alone concocts a plan, then "consults" with the community by informing them of AEP's plan and expecting the community to buy-in and support it.

This will never happen.  Approaching a community with a front-load fait accompli plan is a recipe for creating opposition.

Here's a better method:  Approach the community with a goal.  Present several ways to reach the goal.  Accept and truly consider other ideas contributed by the community during the consultation process.  Allow the community to participate in the decision making to select an alternative that both the community and the company can live with.  Receive community buy-in and support of project.  Build project.  Retain community respect and goodwill.  Simple.

However, it's apparently much too complex a lesson for an arrogant industry with control-freak tendencies to ever learn.  When a community is prohibited from participating in decision-making, there is no buy-in, only resistance.  Stasis or momentum... ultimately the choice is the utility's.

It looks like Clean Line Energy Partners' opposition denial honeymoon is so o-ver!

In addition to the active and vocal BlockRICL opposition that has been giving the Rock Island Clean Line headaches in the states of Illinois and Iowa, now citizens of other Midwestern states, like Oklahoma, Kansas and Missouri, are questioning the Grain Belt Express and Plains & Eastern Clean Line projects and beginning to organize to oppose those projects.

Silly Clean Line, you can't build a transmission line without opposition.  It's not about whether the transmission line is transporting "clean" or "dirty" energy, it's about need for the transmission line.  Affected landowners will always question the determination of need for a new transmission line.  And what does Clean Line have?  "Wind" energy must be transported to east coast states so that wind developers in Kansas, Oklahoma and Iowa can get rich?  Its not about farmers or landowners cashing in, it's all about private, for-profit corporations and their investors making a whole bunch of money off the backs of what they arrogantly consider to be uneducated rube farmers and environmentally conscious but sadly oblivious east coast consumers who are easily fooled by the green-washing Midwest "wind" scheme.

Let's examine some of the propaganda and empty promises Clean Line is utilizing in a rather sad, transparent attempt to build false advocacy for its project with the hope that it will be enough to influence state siting approvals.

1.  Hold "open houses" for local businesses and "collect their information" and tell them they will be notified to bid on project supplies and labor when the time comes.  By making these kinds of empty promises to local businesses, Clean Line buys their support and advocacy for free!  By the time these local businesses realize that there's no role for them in building one of these "clean" lines, it's too late.  The Texas shysters will already have their state approval to take property by eminent domain and build their money-making transmission line with imported labor and supplies.  The fact is that building high voltage transmission is a highly specialized industry and labor will be imported for the duration.  The only "local" jobs may be a few fast food servers or motel housekeepers to serve these professional transmission builders for a few weeks while temporarily housed in your locality building the line.  Supplies and components will be contracted from a handful of large corporations, many of them manufactured in other countries.  If you don't believe me that Clean Line's promises to local businesses are empty, try getting Clean Line to sign a supply or labor contract with your local company today.

2.  Holding "open houses" for landowners and pretending that Clean Line is interested in answering questions and receiving information from affected landowners.  This is a ruse used by the company to evaluate the possibility of opposition and give the appearance of community consultation.  It is also set up to divide and conquer landowners individually by suggesting that cooperation could push the line over onto a neighbor's property *wink, nod.*  Landowners come away with more questions than answers, but most likely the magic has already happened, despite Clean Line's best obfuscating efforts.  The ones who will lead the opposition to the project have already self-selected and made important contacts with like-minded individuals over plates of free Clean Line ham.

"One landowner came with a plastic sack and took about a two-inch width of slices of ham. I looked at him and he said, 'I've got cats,' " Nelson said. "Everybody else was saying, 'We might as well eat. That might be all we get.' "

3.  Pretending that the transmission lines will carry 100% renewable energy desperately wanted and needed in east coast states and that the cost of the lines will not be end up in local electric bills.  These "clean" lines will also carry electricity generated by fossil fuels because the maximum capacity for a variable resource like wind is somewhere around 35%.  Also, federal regulations prohibit Clean Line from banning fossil-fuel generators from buying capacity on the line.  While Clean Line is telling the public that it is a merchant, or privately-financed, enterprise, Clean Line has asked federal regulators to approve broad socialization of merchant lines to those who do not consume the renewable electricity, claiming that new transmission lines create regional "reliability" benefits simply by existing.  If Clean Line and other "renewable" energy benefactors are successful in socializing the cost of their projects across entire regions, we're all going to be paying to transport renewable energy from coast to coast, whether we consume any of it or not.

4.  Bullying of landowners, consumers, citizens and government agencies by Clean Line personnel.  The prospect of a huge profit can make corporate lackeys do despicable things.  Compare this photo of Clean Line President Michael Smelly (in the cast - let's not even think about how that might have happened) "observing" the interaction between the public and federal environmental impact statement personnel during a public scoping meeting with these photos of PATH Transmission personnel "observing" the interaction between the public and federal environmental impact statement personnel during a public scoping meeting.  "Observation" easily degenerates into intimidation when things aren't going to the transmission line company's liking.  Don't be intimidated!

It's time for Texas-based, Wall Street-financed, Clean Line Energy Partners to quit denying its opposition, and come "clean" with the public.  Fact is, Clean Line is applying to states for the right to condemn right of way for its private, for-profit, project through eminent domain.  But, Clean Line hopes you rubes will be good sports and allow yourselves to be taken advantage of by its hired, professional land sharks, err, I mean "land agents," and sell your land early and cheaply.  Don't be foolish, always seek your own legal counsel before signing any agreements.  Your attorney will tell you that the longer you resist land sharks, oops, I mean "agents," the higher the price of your land climbs.  Land owners who resist eminent domain grabs receive, on average, 5 to 6 times the original offer by holding out and settling on the court house steps just before a hearing.

And while you're holding out, you might as well explore whether organized and intelligent opposition can halt the transmission project in its entirety.  Yes, it can.  We killed the PATH project.


Don't get me wrong, I like clean energy as much as the next guy.  However, I'm not expecting Midwest farmers and other electric consumers to sacrifice their land and their money to allow me the privilege of believing that I'm somehow helping the environment when I turn on my centrally generated "green" electricity.  Clean Line is nonsense.  If you want to help the environment, how about making your own personal sacrifice to supply your own, locally-generated renewable power, such as installing solar panels on your own roof?  It is not sustainable to destroy prime farmland to meet your own personal renewable goals. 

The east coast doesn't want or need Clean Line's overpriced "wind" power.  Just say no to Clean Line.

So, if you're asking yourself -- do we really need these "clean" lines for renewable energy (no!); is there other opposition to these projects that I can join (yes!); and can opposition cancel one of these projects (yes!!), you've come to the right place.

Get in touch with the folks at BlockRICL, or email us for more information.

What was it I said last week?  It's going to get worse, much worse?

Tammy "something extra" has now listed all but one of PATH's River's Edge properties in Loudoun County for sale.  Here's how much these deals will cost you, assuming PATH receives full list price for the properties (which is never going to happen).

PATH purchased this property in February 2009 for $689,000, 98% of Loudoun County's assessed fair market value at that time.  It's on sale today for only $630,000.

PATH purchased this property in April of 2009 for $418,000, 102% of Loudoun County's assessed fair market value at that time.  It's on sale today for only $400,000.

PATH purchased this property in April of 2009 for $910,000, 110% of Loudoun County's assessed fair market value at that time.  It's on sale today for only $735,900.

And the big, big loser is this property that PATH purchased in March 2009 for $1,175,000, 246% of Loudoun County's assessed fair market value at that time.  It's on sale today for only $459,000.

Looks like Loudoun County's assessor was a lot more accurate about fair market values than PATH's appraiser back in 2009.  But yet PATH expects ratepayers to pay the difference between purchase and sale price and make the company whole.  Right now, the difference between PATH's purchase prices in River's Edge and their current list prices amounts to $1,021,300.  That's over a million dollars that ratepayers stand to lose on PATH's unnecessary and premature "investment" in real estate, and there's still one PATH-owned River's Edge property that has yet to hit the market, for which PATH paid 123% of market value in 2009.  Ouchies, little ratepayers, ouchies!!!

Let's take a look back at PATH's antics in River's Edge.  Now PATH adds insult to injury of these homeowners and dumps a whole bunch of real estate in their neighborhood at bargain basement prices, which is going to have a significant effect on their own home value and equity.  PATH -- the gift that just keeps on giving.

And PATH is so not done yet... they've still got to unload those substation properties they purchased for millions more than fair market value.  Get out your wallet, little ratepayer...