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Hey, friends, remember PATHTransmission.com? Key word = remember.
Go ahead, click it. Ha ha ha. First one to buy the domain and create a parody website wins 3 boxes of old PATH files and other related junk.
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Citizens of Illinois and Iowa are joining forces to "Block RICL." "RICL" stands for Rock Island Clean Line, "a 500-mile overhead high voltage direct current (HVDC) transmission line that will deliver 3,500 megawatts from northwest Iowa and the surrounding region to communities in Illinois and other states to the east, areas that have a strong demand for clean, reliable energy."
RICL is one of four merchant transmission lines intended to feed "clean" energy from the midwest to the east and west coasts. Click on the different projects available here to see maps of each project's intended service area. RICL and the "Grain Belt Express" are intended to serve the mid-Atlantic coastal states who are not only developing their own in-state renewable resources, but working toward harvesting the excellent off-shore wind resources in the Atlantic. Developing off-shore wind and local resources provides local jobs and boosts the economy in these states. RICL and the Grain Belt Express do nothing but suck money and jobs out of east coast states. RICL - what a stupid idea. RICL opponents are blocking RICL's progress in Illinois with a huge, strong, grassroots organization that is using tried and true transmission opposition tactics developed by other transmission opposition groups (you'll see some things that sound quite familiar on BlockRICL's website), as well as developing new and effective tools for successful opposition. There's also a companion opposition blog, Ridiculous RICL, written by one of the Illinois farmers whose land is proposed to be taken by RICL through eminent domain. Blogger Scott Thorsen isn't buying RICL's lies and shines a little sunshine on RICL's propaganda. BlockRICL is also part of a growing, national grassroots transmission opposition network, coming soon to transmission owners' nightmares from coast-to-coast. See BlockRICL's website here. See RiciculousRICL blog here. A coalition of citizen groups has filed an injunction in federal court asking that construction of the unneeded Susquehanna Roseland 500kV transmission line be halted within 20 miles of the Delaware Water Gap National Recreation Area.
The groups earlier filed a lawsuit against the National Park Service for its issuance of a permit to the power companies to destroy the park in contravention of the NPS's mission to preserve our irreplaceable natural resources. Project owners PSEG and PPL have begun construction of the project in an all-fired big hurry, trying to get it built before legal remedies have been exhausted. Looks like they're very afraid that the lack of need for their project and the underhanded way they went about securing permits will be exposed. And it will, but the companies are hoping the power line will be built before anyone really notices or cares. Too late! The petition asks for an expedited hearing. Will justice finally be done? West Virginia Consumer Advocate Byron Harris was a guest on The State Journal's "Decision Makers" program on Sunday. Here's a link to the video.
While Byron says he opposes FirstEnergy's proposal to sell one of the company's competitive market coal plants to captive West Virginia electric consumers, his main concern seems to be the price of the plant, and not the purchase of the plant. Host Bray Cary gets way off track and Byron doesn't take control of the situation to re-direct back to a coherent argument. Cary is one of those individuals who is so terrified of accounting that he views corporate accountants as "tricky" and "sneaky." He dubs the transaction "corporate hocus pocus" and believes it's "purely bookkeeping." Bookkeeping is a scary concept for people like Bray Cary, who believe bookkeeping doesn't involve real money. However, FirstEnergy's coal plant sale is going to cost you real money. The cost of the plant for West Virginians is a cool $1.102B. This amount represents real cash that will be exchanged between FirstEnergy subsidiaries Mon Power and AE Supply, one of the company's unregulated generation subsidiaries. Of that $1.102B in cold, hard cash, 45%, or $529M, will come from an equity capital investment in Mon Power from parent company FirstEnergy. In exchange for their investment, FE will earn 10.5% return on the money. The other 55%, $573M, will be borrowed at a rate of approximately 5% over a 35 year term. According to the testimony of Steven Staub submitted as part of the company's filing with the WV Public Service Commission: "Power plants are capital intensive assets with long useful lives. The tenor of a debt financing associated with a power plant should complement the useful life of the asset. The financing plan is expected to include new notes that will mature no more than thirty-five years from their dates of issuance. Based on a review of treasury yields and corporate credit spreads for comparably rated issuers over the past year, the newly issued long term debt would be expected to be issued with a coupon of approximately 5%. Rates will fluctuate in the future; thus, the actual cost of debt for the Transaction will be determined when the new long term debt is issued." So, Mon Power and Potomac Edison customers will repay $1.102 BILLION to both parent company FirstEnergy and Mon Power's creditors at an approximate average interest rate of 7.75% for the next 35 years. In the video, Byron states that the cost to the "average residential consumer" will be about $90 per year. That's $90 of cold, hard cash out of your pocket and into FirstEnergy's every year for the next 35 years, for a total of $3,150 per household. That's real debt, real money. Just say no to FirstEnergy's "corporate hocus-pocus" and tell the WV PSC that you do not support FirstEnergy's proposal and do not wish to pay higher rates to subsidize an out of state corporation's financial success by purchasing their unwanted, cast-off, uncompetitive coal plant liability. Click here to submit your comment to the PSC online. The case number is 12-1571-E-PC. In its Order on PATH's abandonment filing last week, FERC tossed thousands of opponents of the Project Mountaineer transmission line projects a bone. It won't reimburse you for all the time and money you've invested fighting transmission projects that were never needed in the first place, and it won't unbuild the TrAIL Project or make affected landowners and consumers whole, and it won't stop the unneeded Susquehanna-Roseland Project from continuing to proceed with stunning haste. But if a little validation and personal satisfaction makes a tasty snack for you, here's your bone:
"The PATH Project concept was originally introduced by PJM in May 2005 at a Commission technical conference as Project Mountaineer- a major east-to-west transmission corridor. In early 2006, AEP and Allegheny separately filed petitions for declaratory order with the Commission requesting transmission incentives to build this multi-corridor concept in their respective zones in Docket Nos. EL06-50-000 and EL06-54-000, respectively. The Commission affirmed abandoned plant recovery for the proposals subject to approval in the PJM Regional Transmission Expansion Plan (RTEP) and requiring a future section 205 filing, among other things. On June 27, 2007, PJM’s Board of Directors approved the projects for inclusion in PJM’s RTEP, changing the route and scope from those originally conceived, combining portions of both AEP and Allegheny’s projects into a single project (the PATH Project) with a requested completion date of June 2012." That's right... FERC says that the PATH Project (and TrAIL, MAPP and Susquehanna-Roseland) originated as a concept in 2005. The Commission technical conference referred to is what we've been calling "The Coal Love Fest." Its goal was to increase the use of coal-fired resources. It wasn't about increased demand, congested transmission lines or reliability. It wasn't until 2007 that PJM created the reliability violations that caused a "need" for the PATH Project under the guise of reliability and "ordered" AEP & Allegheny (now FirstEnergy) to build PATH. 1. Project Mountaineer. 2. Creation of PATH Project concept. 3. Creation of "need" for PATH Project. Nibble slowly, PATH opponents. It's all you're going to get. Of course, this isn't news to any of you. We've been telling you this for the past 4 years. But now FERC agrees with us. The PATH Project is a bit of ugly and expensive history now. However, the lesson could live on. PJM, FERC and the midwest wind industry are busy concocting a new Project Mountaineer right now but instead of coal, this time it's about moving "midwest wind" to both coasts via $300B of new transmission lines. We don't need that anymore than we needed Project Mountaineer in 2005. Those who fail to learn from history are doomed to repeat it. Consumers can't afford another expensive mistake. In an order issued today, FERC set the prudence of every last penny of PATH's claimed $121.5M of abandoned project cost for settlement and hearing.
What this means is that despite PATH's claims in their abandonment filing that all expenses were prudently incurred, and although PATH enjoys a presumption of prudence, contentions and evidence submitted by intervenors in the case raised enough doubt to set the matter for a trial-type evidentiary hearing by a FERC Administrative Law Judge. FERC found that PATH had not demonstrated the prudence of costs it incurred while trying to site and permit its project. Every issue raised by intervenors was set for settlement and hearing. Intervenors raised doubt in every category of cost, therefore, the entire cost will be examined. The only point PATH won was the finding that abandonment of the project was beyond the company's control (blamed on PJM). Therefore, PATH can collect abandonment costs that are prudent. The prudence of PATH's expenses will be examined to determine the amount they will be able to collect from ratepayers over the next 5 years. The ordered hearing has been held in abeyance so parties can attempt a negotiated settlement before spending time and money on a hearing. Settlement conferences will be conducted at FERC, administered by an Administrative Law Judge, and are confidential, so don't expect to be reading any news about what's going on in settlement. Settlement could last a while. In addition to the prudence of expenses, FERC also set the issue of PATH's disposal of land for settlement and hearing, where certain controls can be placed on how PATH disposes of land it currently owns. FERC also found that PATH is no longer entitled to the 50 point adder for continued membership in PJM because the PATH Project will never be built and turned over to PJM, which was the intent of the incentive. The extra half percent interest that this incentive adds to a transmission project's ROE has now been attached to the specific project. If the project is not built and turned over to the RTO for control, then it cannot be continued. PATH was at a distinct disadvantage here because the company had only one project. When the one and only project died, there was nothing to turn over to PJM. This reduces PATH's ROE to 10.4% (from the previous 12.4%). The PATH project has now lost ALL their above-cost incentive ROE adders. No rewards for failure, PATH! FERC was not convinced to consolidate the abandonment with the ongoing formal challenges settlement and hearing in its Order. Instead, the Commissioners punted that off to the Chief Administrative Law Judge to decide in the future. In addition, FERC determined that PATH had made errors in its proposed changes to the formula rate and erred in transferring abandoned plant to create a regulatory asset. FERC ordered PATH to correct its accounting mistakes, submit additional detail of project costs for which PATH had requested a waiver, and resubmit its proposed rate within 30 days. Merry Christmas, PATH! :-) PATH has been reduced to nothing but a contentious battle about money. But isn't that what it's always been about? In an article in the Beckley Register-Herald yesterday, "Mon Power Representative Responds to EEWV Comments," FirstEnergy flack Todd Meyers attempted to convince readers that the company's proposal to offset an upcoming rate decrease with an upcoming rate increase would still result in a rate decrease. "One way or the other, people will get that 5 percent break,” Meyers said."  How did Todd do that? Todd used magical FirstEnergy math to demonstrate that taking away your rate decrease and replacing it with a rate increase would still result in you receiving a rate decrease.
Shazam! Power company magic! Only from FirstEnergy! Midwest utility-scale wind generators who stand to rake in enormous profit, and the big national environmental organization Pollyannas who think these lines will actually be used for renewables, want to broadly socialize the cost of building $300B worth of new transmission lines to export wind energy from the midwest to both coasts. This uneconomic prospect is made possible by "public policy" renewable portfolio standards adopted by some individual states that would require them to purchase renewables at any price. Every state that has adopted a RPS has different goals regarding what qualifies as "renewable" energy, different renewable percentage requirements, and the states even differ on whether the standard is voluntary or mandatory. Some even include carve-outs reserved for in-state renewables only.
Because there is no national standard by which all states must abide, there's no way for federal regulators, regional transmission organizations, or environmental organizations, to force individual states to permit and pay for these new transmission lines. But, that doesn't stop these entities from trying. I came across an article in The Georgetown Law Journal the other day entitled It’s Electric, but FERC’s Cost–Causation Boogie-Woogie Fails To Justify Socialized Costs for Renewable Transmission that discusses why FERC's attempts to socialize the cost of individual state public policy projects ultimately must fail. FERC, or a RTO, cannot force citizens of one state to pay for the public policy goals of another state in which these citizens have no legislative representation. "Where a state has chosen not to adopt a renewable portfolio standard, or a standard as high as MISO’s tariff supports for a given resource, FERC has no “articulable and plausible reason” to approve a regional tariff that permits some states to impose their policy judgments upon states with divergent policy positions. A contrary view raises commandeering and federalism questions. FERC would be deciding what policies benefit a state and then forcing that state’s constituents to pay to support that policy. Although this situation differs from landmark cases, like New York v. United States and Printz v. United States, in that FERC would not be forcing state legislative action or commandeering a state administrative body, the situation raises similar political-accountability concerns. As the Court noted in New York, when the federal government compels state action, “the accountability of both state and federal officials is diminished.” If state citizens wish to change state policy, they may elect state officials who share their view. That view can always be pre-empted under the Supremacy Clause if it is contrary to the national view, but in such a case it is the Federal Government that makes the decision in full view of the public, and it will be federal officials that suffer the consequences if the decision turns out to be detrimental or unpopular." FERC is on the fast track to a nasty federal court battle with states if they continue to coddle midwest wind developers in a misguided attempt to make utility scale renewables "affordable" for consumers thousands of miles away from the point of generation. "It appears that the Commission is overextending its existing power without any supportive legislative augmentation. It is concerning that an independent agency lacking direct political accountability continues to push the envelope into controversial areas. Politically accountable federal legislators would be more appropriate arbiters of these issues in the first instance." The article concludes with this warning: "FERC should be mindful of approving cost-allocation methodologies over the objections of states within a given region. While renewable power is critically important to our country’s energy independence and the health of our environment, a one-size-fits-all socialized cost-allocation methodology might not be the appropriate fit for every region." But, read the entire article for yourself -- it's a great read! Guess what Potomac Edison and Mon Power customers? New parent company FirstEnergy wants to raise your electric rates again effective January 1, 2013! That's right, those sky high bills you've been receiving because Potomac Edison and Mon Power are saving their money by not reading your electric meter are now going to be even more unreasonable!
According to a recent rate filing the companies made at the West Virginia Public Service Commission, your electric rates would actually decrease in 2013 due to lower power prices and the satisfaction of your old debt to the power companies. However, FirstEnergy is proposing that the PSC leave rates at current levels to begin paying for one of their coal plants that they wish to sell to Mon Power, who supplies all Potomac Edison's electricity. But leaving rates at current high levels is only the tip of the iceberg. The price of the Harrison coal-fired generation plant that FirstEnergy's unregulated generation subsidiary wants to sell to their regulated WV subsidiary, Mon Power, is a cool $1.16 Billion. Purchasing this plant will make Potomac Edison and Mon Power rates increase if the transaction is approved. Other options to purchasing this plant do exist and include purchasing currently low-priced power from PJM's electricity market, building a new gas-fired generation plant, decreasing demand through spending on energy efficiency and demand management programs which reduces the need to acquire new generation. However, FirstEnergy refuses to put out a request for proposals to supply needed generation through a bidding process. FirstEnergy has done their own skewed evaluation that they claim shows purchasing this coal plant is the cheapest option. It's hardly an unbiased and arm's length evaluation since parent company FirstEnergy stands make a substantial financial benefit from the transaction. FirstEnergy is selling West Virginians a pig in a poke. The plant is currently owned by FirstEnergy's unregulated generation subsidiary. This means that the plant and its operating cost is paid for by the company in a competitive market. In West Virginia's regulated, uncompetitive environment, the plant and its operating cost will be paid for by Mon Power and Potomac Edison customers. FirstEnergy is shedding an expensive, uncompetitive liability into a regulated market where they are guaranteed full cost recovery plus a return, whether the asset is competitive or not. If this plant was still competitive, FirstEnergy's unregulated generation subsidiary would keep it as a money maker, but because it's not, they want to unload it on you and abscond with over a billion dollars, which you'll be paying off for years to come. In addition, this plant needs several environmental upgrades to comply with EPA regulations. You'll pay for that too in the future, because it will be your plant by then and therefore your financial responsibility. When FirstEnergy merged with Allegheny Energy in February of 2011, the Harrison plant had to be revalued at market value to please federal regulators. This added $589M to the book value of the plant. Now, less than 2 years later, FirstEnergy wants to sell the plant to you at full merger book value. If you had bought the plant before the merger, it would have cost you that much less. FirstEnergy's "merger synergies" have made this transaction even more expensive for Potomac Edison and Mon Power customers. There's lots more detail to be found in the State Journal's news coverage: FirstEnergy: Keep rates the same, use extra to buy coal plants FirstEnergy wants to transfer coal-fired generation to Mon Power How much is FirstEnergy's Harrison power station worth? So, what can you do about it? Tell the WV PSC that you do not support FirstEnergy's proposal and do not wish to pay higher rates to subsidize an out of state corporation's financial success by purchasing their unwanted, cast-off, uncompetitive coal plant liability at twice the pre-merger price. Click here to submit your comment to the PSC online. The case number is 12-1571-E-PC. According to this article, energy efficiency programs in Ohio are too expensive for FirstEnergy's customers. "The power giant says the programs they’ve implemented to incentive customers to reduce electricity use are getting too expensive. Doug Colafella, is a spokesman for First Energy. Colafella: “As these programs become more aggressive, as the goals become more difficult to achieve, the costs for these programs are undoubtedly going to increase.”  I'm not sure where our lil' CoalFella picked that winner from, but I think he may have his hand jammed in the wrong orifice.
After whining about how much energy efficiency is going to cost customers as justification for gutting Ohio energy efficiency mandates, FirstEnergy turns around today and announces the building of a new $45M "transmission control center" in Ohio. Now who do you think is going to pay for Tony the Trickster's new underground lair? You are! Those poor, broke customers who can't "afford" energy efficiency investment that will lower their bills over the long term can afford to pay for a shiny, new office building for the company, according to FirstEnergy. How much energy efficiency could Ohioans buy with $45M? |
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
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