Blog Posts

FirstEnergy West Virginia Coal Plant Sale Necessary to Raise Cash for Company - West Virginia Ratepayers Being Played for Chumps

12/14/2012

Well, well, well, the truth comes out at last!

It seems that "...the company continues to contemplate asset sales to meet its equity needs, which are likely around $500 million, to maintain its corporate credit rating.”

According to a UBS Securities spokesman, and demonstrated by tanking stock prices, FirstEnergy is in trouble with cash flow to pay off looming debt. The company needs to raise some quick cash to pay off "$1.4 billion in debt at its retail power marketing business and about $400 million held by a transmission unit."

In order to do so, FE "has asked West Virginia regulators to allow it to shift ownership of a merchant coal plant to a regulated utility, adding about $1.1 billion to the rate base that determines the utility’s earnings."

It's not about securing adequate generation for Mon Power customers, or any of the other excuses FirstEnergy made to the WV PSC, it's about raising quick cash to prop up a poorly-run company. And it's about lying to the West Virginia Public Service Commission and what the company thinks are ignorant, uninformed customers in West Virginia. Bad plan.

But wait, there's also more bad news for FirstEnergy, "...it may be snared in a probe that Ohio regulators announced yesterday of the state’s retail electric market."

All that lying and buying influence will catch up with a greedy and crooked company eventually and the truth will prevail. Always.

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$109M Loss Would "Barely be Felt" by FirstEnergy

12/12/2012

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FirstEnergy got slapped with a huge judgment the other day when a jury awarded $109M to the family of a woman killed by the company's negligence. This article demonstrates the company's arrogance by gathering a bunch of opinions to say that $109M is nothing to FirstEnergy. Tony the Trickster will still take home $18M this year, and shareholders would each only take a one penny hit.

What's a life worth, FirstEnergy? Just one more reason why corporations aren't people. And corporate counsel just can't be human. How do these filthy henchmen sleep at night? Human beings could never behave in such a vile fashion.

Instead of apologizing profusely and financially compensating the family in the first place, FirstEnergy decided to fight them in court, adding insult to injury. And now that a jury has found FirstEnergy negligent and made a huge award to the family, FirstEnergy is trying to leverage a lower settlement amount using the threat of appeal. Don't you think this family has suffered enough at your filthy, blood-smeared hand, FirstEnergy? You're enough to give a maggot the dry heaves.

But, hey, now that we know $109M is easily managed by FirstEnergy, the PATH abandonment settlement should be a piece of cake, right? ;-)

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Transmission Industry Sycophant Says Coal Plant Retirements Caused PATH Cancellation

12/12/2012

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Now that PATH has died, Patience and I have to find other ways to entertain ourselves. Free energy industry webinars! Some entity or other is always holding one. It's an excuse to fix a fancy luncheon (always served with cold beer), and fire up the laptop for some silly fun listening to blowhards toot their own horns while we make snide remarks, submit loaded questions, and laugh ourselves silly. Sometimes, we even pretend to be two different, independent organizations, while we're really just sitting across the table from each other, each with her own laptop connected to the same webinar. We call this "work" because there are always useful little nuggets to take away, even when the whole exercise is nothing but a spy mission to build our own arsenal (and an excuse to have lunch and drink a cold one).

I'm never going back to a traditional office environment. I figured that out last week at the corporate Christmas party I got roped into attending. Who are these people? And how did I manage to fit into that world for so long? My, how things have changed since I checked out. Apparently it's now the "in" thing to walk up to strangers at these Christmas parties and say, "Hi! My name is Corporate Lackey and I'm in Finance!" What is one supposed to say to that? "I'm still in "Finance" but I don't have to suck up anymore!" *smile* seemed to be a little rude. But, thanks for the great line, current day corporate finance professionals. I think I'll start using it when I do have to put on a suit and go places... "Hi! I'm in Finance -- yours! And something just doesn't smell right with those annual reports you've been submitting to the government." *smile*

Anyhow, today's fun fest was hosted by transmission owner sycophant Transmission Hub (sponsored by Quanta! *insert infomercial here*). Transmission Hub cracks me up... they continually tell these energy execs what they want to hear, not what they need to hear. And I'm sure they're paid handsomely to hold up that mirror in front of energy exec faces and simply repeat the idiot's words back to him or her. It's bogus validation of the highest order!

During the webcast, one of the sycophants told the audience that PATH was cancelled because of coal plant retirements. What? That had noting to do with it! PATH simply wasn't needed in the first place, and tanking demand due to increased energy efficiency, increased demand management, and low gas prices killed it for good.

Patience submitted a "question" calling them out on their misinformation. Much to our amusement, the moderator actually took up the question during the Q & A and admitted that PATH really wasn't cancelled because of coal plant retirements, and then he blamed Herling for the misinformation. Good thing the "mute" button was on because we couldn't stop laughing!

Y'all just keep on telling yourselves all those self-serving lies, now. Meanwhile, we'll be living in our real world "out-of-office" office and concocting your ultimate demise. *smile*

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Web Domain For Sale - Cheap!

12/10/2012

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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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Midwest Transmission Opposition Group Blocks More Unneeded Transmission

12/9/2012

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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.

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Injunction Filed to Stop Susquehanna Roseland Destruction

12/7/2012

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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?

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FirstEnergy's "Corporate Hocus Pocus" Means Rate Increases for Potomac Edison and Mon Power Customers in 2013

12/4/2012

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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.

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FERC Throws PATH Opponents a Bone

12/3/2012

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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.

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FERC Sets PATH Project Abandonment for Hearing

11/30/2012

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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?

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FirstEnergy Magic Math

11/30/2012

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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!

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<<Previous

Forward>>

FirstEnergy West Virginia Coal Plant Sale Necessary to Raise Cash for Company - West Virginia Ratepayers Being Played for Chumps

$109M Loss Would "Barely be Felt" by FirstEnergy

Transmission Industry Sycophant Says Coal Plant Retirements Caused PATH Cancellation

Web Domain For Sale - Cheap!

Midwest Transmission Opposition Group Blocks More Unneeded Transmission

Injunction Filed to Stop Susquehanna Roseland Destruction

FirstEnergy's "Corporate Hocus Pocus" Means Rate Increases for Potomac Edison and Mon Power Customers in 2013

FERC Throws PATH Opponents a Bone

FERC Sets PATH Project Abandonment for Hearing

FirstEnergy Magic Math

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