The Chairman of the Maryland PSC isn't accepting PJM's flimsy excuses for conducting secret meetings to revise the MOPR.  Nazarian's latest letter to PJM says:

"We also are struggling to understand how the process now under way can constitute an appropriate stakeholder process for tariff revisions as significant as these. Stakeholders Manual 34, which authorizes "User Groups" to debate a specific market design problem (see Paragraph 5.5 at p. 14), still requires published notice to all members that the process is to take place, requires that other interested stakeholders be permitted to participate, and requires PJM to post agendas and  summaries of meetings on the PJM webpage. None of  this happened during the secret negotiations. Moreover, the "ad hoc stakeholder group" discussions took place over a period of at least three months - as we  understand it, discussions began in June and continued well into September- during which the invited parties had the opportunity to get detailed input from PJM and the IMM and to analyze different options in depth. The rest of us get less than half that time to understand and analyze and react to a complicated set of revisions that were reduced to proposed tariff pages only last Friday. Put another way, the parties to the exclusive negotiations ran out most of the clock and have left the rest of us to scramble against a deadline driven only by PJM's and the proponents' self-interested desire to have these changes in place for the May 2013 Base Residual Auction."

New Jersey's Director of Rate Counsel, Stefanie Brand, also throws a few logs on the PIG roasting fire.  Her letter gets extra points for snarky use of quotation marks.

"As we understand it, the proposed MOPR changes arose from dissatisfaction on the part of certain suppliers that the previous changes to MOPR, which are currently on appeal in the United States Court of Appeals for the Third Circuit, were insufficient to thwart what they viewed as "outcomes that are inconsistent with a  competitive market." These suppliers then engaged other select PJM members in confidential discussions regarding changes to the MOPR to address their concerns. At some point, PJM itself and the Independent Market Monitor (IMM) were brought into this process and, in joining it, agreed not to inform any other interested PJM members of the discussion or invite them to participate without the agreement of the other group members. Eventually, and apparently with the group's agreement, PJM reached out to a select group of "load" interests to participate. Their participation, too, was  specifically conditioned on agreeing to maintain the secrecy of these discussions. Not surprisingly, the proposal that resulted from this closed-door process addressed the specific concerns of the PJM members who participated in the discussions, at the expense of the interests of the PJM members who were intentionally excluded. Indeed, the discussions were aimed at  developing "solutions" designed specifically to  exacerbate, not resolve, the matters of concern to the excluded PJM members."

and

"...certain members were invited into the process by PJM itself. PJM should not be choosing which members are allowed at the table, particularly when the invitation comes with a requirement that the process be kept secret from other interested members."

and

"That PJM views the interests of 27 large users as more worthy of consideration than the millions of customers represented by the consumer advocates underscores the perception that PJM favors the interests of certain members over others."

and

"While packaged as a series of exemptions and criteria, the intent is obvious: to thwart the actions of those States to address capacity shortages and implement policy judgments about resource choices."

and

"PJM has no business involving itself in efforts by the
incumbent suppliers to control the "competitive" market in which they participate."

And finishes up threatening to "...pursue all remedies to prevent PJM and the proposal's proponents from  usurping the States' role under the FPA."

Update:  The Maryland Office of People's Counsel has also written to PJM.  In their letter the MPC requests that PJM throw the "secret" proposal out the window and start fresh with all stakeholders.  MPC also says:

"MPC is in the process of evaluating the proposal and forming positions on it.  However, it appears that the proposal is founded on the notion that certain actions that  result in new capacity are "legitimate" and some are not. PJM should focus its attention on administering the electricity markets for the resources that participate in those markets and not on deciding which actions are legitimate and which are not.  Furthermore, from the perspective of customers who rely on electricity to meet their daily household and business needs, there is nothing illegitimate about a State directing utilities in its jurisdiction to take action that results in new generation that the State believes is in the long-term best interest of that State. While such an action may affect markets, the creation of rules to prevent such action is not administering the market but attempting to assure certain outcomes. PJM's role should not be to assure price levels or targets."

Well, PJM is certainly scoring some important collaboration points with the states, isn't it?  Just more of the same old lobbying and influence being exerted at the PJM cartel by their profit-hungry power company "members."  This time it's especially egregious because the supposedly "independent" market monitor also jumped aboard the S.S. PIG.  The market monitor probably isn't playing favorites among PJM's unruly children.  However, the market monitor refuses to admit that its market is a complete and utter failure that ends up costing millions of electric consumers extra money every month.

PJM's "market" is supposed to bring you low cost electricity.  Generation and transmission is supposed to be driven by "market" need.  Because the market is not properly stimulating new generation entries, states such as New Jersey and Maryland are paying some of the highest electricity prices in the country.  Instead of waiting for the market to prompt new generation in those states, PJM is instead jumping the gun to provide "low cost" electricity to those areas by importing its incumbent PIG's existing generation via new high voltage transmission lines such as TrAIL, PATH, Susquehanna-Roseland and MAPP.  The "market" never had a chance to work.

New generation in New Jersey and Maryland will be paid for by the consumers in those states.  Transmission lines are paid for by all PJM consumers, including those in states far from New Jersey and Maryland.  This costs you money, if you don't live in New Jersey or Maryland.  However, the big Ohio Valley generators are currently sitting on a glut of generation they can't sell as demand continues to tank.  Companies like AEP and FirstEnergy are in big financial trouble if they can't find new markets for their dirty, coal-fired generation.  FirstEnergy recently scaled back one of its plants because there was no market for it.  Last week, FirstEnergy laid off a whole bunch of employees.  Tough times, FirstEnergy?  Awww... that's too bad :-)

New Jersey and Maryland got tired of waiting for PJM's market to work, so they came up with their own laws to encourage the building of new generation in their own states.  This upset the incumbent generation PIGs, who feared losing a profitable, captive market for their dirty product.  So, the PIGs changed the MOPR (Minimum
Offer Price Rule) to prevent new generation from being built.  The states fought vigorously, but lost when FERC agreed with PJM.  However, even under the new rules, New Jersey's and Maryland's new plants cleared PJM's RPM auction this year.  In response, the greedy little PIGS got together to hold secret meetings to craft even more changes to the MOPR, hoping to stop new generation for good.  Now they've been caught and called out for their scheming.

PJM's "market" doesn't work because its incumbent PIGS won't allow it to work.  Consumers deserve better.

I've been following a blog written by an experienced and well-respected utility regulation attorney that has been doing a monthly series on regulatory capture.  This week, I finally read the last article in the series.

“REGULATORY CAPTURE” III — AVOIDING AND ESCAPING provides useful advice for captured regulators like West Virginia's Public Service Commission and the government officials who perpetuate this scenario.  Most importantly, it provides a road map for affected citizen consumers to create their own plan of action to effect change in Charleston and put a stop to the practices that hold them captive to out-of-state utility money-making schemes.

Read the first two installments in the regulatory capture series here, along with other interesting topics.  Time well spent!

The following is an essay written by a good friend of mine in Wisconsin who is a local elected official.  The essay provides an inside look at how transmission company process and propaganda is received by honest elected officials who are trying to do right by the citizens who elected them.

By Bev Vaillancourt
Chair, Town of La Valle, Sauk County, Wisconsin

Over 100 units of local government in Wisconsin have passed resolutions asking American Transmission Company (ATC) to provide a cost/benefit analysis of the Badger-Coulee High Voltage Transmission line before it submits its application to the Wisconsin Public Service Commission. To date, ACT’s short answer is that it is not required to justify the project to the public. And, so I went looking for some answers, since the Town of La Valle is among those 100 local government resolutions, as are other towns in Sauk County, and the county itself. I heard that Consumer Energy Alliance was holding a conference titled Energy, the Economy and the Election. It seemed like a good way to gain another perspective and balance my understanding of why the energy industry is spending millions of dollars to promote the building of high voltage transmission lines across the state of Wisconsin. My interest was especially piqued when I discovered that Phil Montgomery, Chair of the Wisconsin Public Service Commission, was slated to present at the conference. And, so I went, and I listened, and learned.

Commissioner Montgomery spoke of the need to keep electricity affordable. He said that the economy is in rough shape and there is a need to establish growth. I wondered how asking people to pay some $450 million to build the Badger-Coulee Transmission line from La Crosse to Madison, along with maintenance and operation fees for the next 40 years, and then asking them to pay again to build 7 additional transmission lines in Wisconsin, not to mention their cost share of the numerous transmission lines planned in the Midwest region, would accomplish the dual goals of an improved economy and growth. I wondered what assurance there could be that ratepayers’ electric rates would be lowered, or that the lines would improve the economy of communities, or improve property values, or create any permanent jobs. But, I tried to keep an open mind.

The next day I attended a meeting at the Capitol with nine other citizens from counties west of Sauk County along with three representatives of the Public Service Commission. The meeting had been arranged by the offices of Senator Jen Shillings and Senator Dale Schultz, and for those of us who had been asking for the opportunity to meet with the Wisconsin Public Service Commission (PSC), it was a most welcomed opportunity to listen and learn.  Both Senator Shillings and Senator Schultz and staff members also attended the four hour meeting.

It was obvious from the start that Senator Schultz had done his homework. He articulated concerns of citizens, asked quite pointedly if the Public Service Commission represented the energy industry or the citizens of Wisconsin, and once again requested that “public” be put back into the Public Service Commission. I explained to the PSC that, as town chair, my first concern is the vitality of my town. I told them that I currently am engaged in developing the town’s 2013 budget, and that when town residents are asked to pay more each month on their utility bill to build transmission line infrastructure, less is available to help pay for town roads, fire and police service, and other valued workings of local government. There is only so much in one’s pocket, and that must be spent wisely and to the greatest good. I also explained that the issue becomes more acute when it is understood that Wisconsin is being used as a conduit for energy headed to other states, that demand has nearly flat lined and is projected to remain so even with an improved economy, and that the lines, in fact, harm communities by significantly impacting property values and quality of life, and tourism – the lifeblood of many small communities.

The PSC clearly stated that transmission lines in the state are approved for economics and to meet the needs of the consumer. Two things are important to understand in all of this. Consumer is not you, the end user of electricity. Consumers are the “stakeholders,” meaning the utilities. Economics is not concerning your livelihood or household budget. Economics is the wholesale energy market. Are transmission line companies assured of a rate of return when they install 15+ story high towers and transmission lines in Wisconsin? Yes. Does that mean you will pay less for electricity? No. Does that mean you will pay to build the transmission line infrastructure through monthly increases on your utility bill? Yes. Moreover, the 2005 “Montgomery” bill (yes, this is the same Phil Montgomery who is now Commissioner of the Wisconsin Public Service Commission) allows for the condemnation of both public and private property to acquire a 150’ right of way across private land (presumably for public convenience) by private utility companies, which in effect is a “taking” of land. Another important lesson for me was that these 15- story high towers can be sited within 75’ of a home or barn. A most disconcerting footnote to siting is that federal lenders will not approve a loan for a home within the fall zone of a transmission tower.

We asked if the PSC considered the advantages of energy efficiencies and utilization of technologies that lessen dependence on a centralized power grid in deciding whether a high voltage transmission line should be sited. The answer was, “No.”  Why? Because in their estimation efficiencies and new technologies could not be counted on while high voltage transmission lines bring “reliability” to the system. This all sounds good until one gives some deeper thought to the issue, and listens to the results of study after study that touts the economic benefits of energy efficiency. In the industry’s desire to capture and sell all of the energy it can, to “keep the lights on,” should the PSC not protect the public by considering the benefits of competition in the market place, more efficient use of available energy, and conservation of energy, or at least have a smarter response to demand? For example, can all the lights in large stores be lowered in intensity during times of high demand (demand response) to reduce or level the consumption of energy? There are simple things all of us can do to significantly reduce the need to spend billions of dollars to build new transmission lines, costs that all of us incur whether we like it or not, whether we work hard to conserve or not.

But there was more to learn. Two days after the meeting with the PSC, I participated in a phone conference between Representative Kind’s office, Senator Kohl’s office, a person representing the Citizens Energy Task Force, and three high ranking individuals from the Federal Energy Regulatory Commission (FERC) in Washington, D.C. Like the meeting with the PSC, it takes official intervention for citizens to meet with individuals from governmental agencies, and coordinating a meeting with FERC was truly no small task. Senator Kohl’s office is to be commended in facilitating this meeting. Since FERC has regulatory power over MISO (which includes Wisconsin) and other regional energy groups, we hoped to listen and learn. And, we learned a lot.

FERC requires competition in the energy market place. It also encourages consideration of alternatives to high voltage transmission lines. To that end, New England’s energy efficiency and conservation programs have curtailed reliance on high voltage infrastructures. States are taking the lead. Massachusetts, ranked first in the nation in energy efficiency programs, supports reliance on clean energy, including wind, solar, and sustainable biomass, with the dual benefit of better management of its water utilities and landfills. Back here in the Midwest, competition is defined by competing transmission line companies vying to build the same transmission line. Thus, you now hear about Xcel Energy becoming part of American Transmission Company’s (ATC) “team,” when in reality, American Transmission Company LLC (ATC) is challenging FERC’s decision to give Xcel Energy Service Inc. a share in ATC’s transmission line projects.[i]

  Which brings me back to the meeting with the PSC. I mentioned to the PSC that I often hear from those who seem to have the inside track on things that the Badger-Coulee line is a “done deal.” “Not at all,” was the PSC’s response. However, the conversation then returned to the need to ensure “economics” in energy planning in Wisconsin. We were back to the profit margin of the wholesale energy market. So, I asked how the public becomes part of the discussion. Well, it doesn’t until after ATC files its application for the Badger-Coulee line, after which the “public” can file for intervenor status, and hope to get some money from the state to cover the cost of such status. Being an intervenor first requires filing a multiple page application and showing that you have some knowledge to add that ATC has not already considered. Thus, money is needed for an attorney to complete the application and represent the intervenor in testimony before the PSC. “Not going to happen,” I told the PSC fellows. My town has no money for such things. The PSC attorney suggested that towns pool together to file as an intervenor, sharing the costs and hoping for money back from the state to cover the costs. It was all too obvious that the PSC does not understand the constraints on local government.

I find all of this painful learning in light of my readings of the Public Utility Commissions and Energy Efficiency  (August 2012) handbook written by the Center for Climate Change Law at Columbia Law School. It states on page 10 that “…another contributing impediment to energy efficiency is that we have a highly regulated electric utility sector that remains, in most states, insulated from competition as a presumed natural monopoly. Electric utilities are the primary interface between the electric wholesale market and electricity consumers, and are therefore in the best practical position to promote energy efficiency measures to consumers. However, under a traditional regulatory model, they have little incentive to encourage consumers to invest in energy efficiency, given that such measures would lower their electricity sales and, thereby, revenues.” Senator Schultz’s question to the Wisconsin PSC as to whether it represents the utility companies or the people of Wisconsin resonates every time I read through the Columbia Law School document or other white paper studies on the relationship between cost savings and efficiencies. It just seems so common sense that every little bit of energy savings helps, and ultimately prevents the outlay of billions of dollars in costs to all of us in ways that reduce what people have to pay for other essential needs. A little common sense can go a long, long way.

My last learning came in attending ATC’s informational open house in Mauston, Wisconsin. There I learned that, though ATC has proposed two routes for the Badger-Coulee line, both of which have been moved north of most of Sauk County, the PSC ultimately chooses the route, so no “inactive” route truly is inactive. One must wonder how such an important, community shattering decision can be so convoluted. I watched people walk out of ATC’s meeting looking disenchanted, discouraged, and disheartened. I saw people shaking their heads. They expressed how uninformative and vague ATC’s information was. I truly saw no one come out of ATC’s open house smiling. Many of these people then talked with individuals who are coordinating efforts to oppose construction of high voltage transmission lines in Wisconsin. These individuals are farmers, small business owners, and other land owners, highly educated and down-home common sense individuals who have put a great deal of time, effort, and study into understanding both the economics of the energy industry and the impacts of building 15+ story high towers and stringing high voltage transmission lines across Wisconsin. I watched people sign petitions and take information to send to their state legislators. I watched people demonstrate hope in the system that is supposed to serve and protect them.

Foremost, I also witnessed an empowerment of the peoples’ will to stand up for the spirit of democracy by making their voices heard. They spoke of the ills of corporate greed and their belief that those in government should care more about the people of Wisconsin than those who seek to plunder from what others have worked so hard to build. And, they mentioned the great burden these infrastructures will place on their children and grandchildren as they look to the 40 year costs of transmission line infrastructure and their built in obsolescence. These are individuals who have frac sand mining at their doorstep and wonder where and why government has failed to represent their lives and property. Such united efforts took me back to the statement made to the PSC that opposition to building new transmission line infrastructure in Wisconsin is no longer limited to what happens in my backyard; that people across the state are connecting and caring, and that the effort to bring common sense to the problem of energy reliability has become a national effort, networks of people and information across state lines.  

As I have told both the Public Service Commission and American Transmission Company several times, it is my job as Town Chair of La Valle to stand up for the best interests of the people of La Valle. That’s what I was elected to do, and I take the job quite seriously. And, with Senator Schultz in agreement, I also told the PSC that it is the job of state legislators to protect the interests of the people of Wisconsin. That’s what we elect them to do. That’s their job. I’m not sure who the PSC currently represents. I know that the PSC will decide if and then where the Badger – Coulee line will be built. The process will not be debated within the state legislature. State representatives will not have a voice in the process, and thus neither will the public. There will be no public hearing process like what is required to pass a local ordinance where the voice of the people rightly plays a pivotal role.

The truth is, Wisconsin can put the public back into the Public Service Commission. It can respond to the voice of local government resolutions and petitions of the people and place a moratorium on approval of high voltage transmission lines. Time is needed to weigh alternatives; time is needed to define a vision not blocked by gargantuan metal transmission towers that hover over landscapes, rusting and aging and placing huge cost burdens on future generations. Instead, Wisconsin can look to energy independence models intelligently put into place by other states to see how they improve their economies through job growth based on energy alternatives, renewables, and efficiencies. Most importantly, Wisconsin can infuse the public into the process in the form of true public hearings. We the People can have a voice, and must.

The state of Wisconsin should have the political will to encourage innovation and entrepreneurship to meet our energy needs. It should be looking for low voltage alternatives that build upon systems already in place and Wisconsin should offer incentives for creativity and cost savings – something other states are doing well. Wisconsin has a goal of reliance on 10% renewables by 2015. It’s the lowest percentage among the Midwest states. One has to wonder why.

We have to become smarter in how we view solutions. Wisconsin is filled with creative, innovative, figure-it-out individuals. The state legislature needs to believe in its people to find viable solutions and to open the door to innovation. To promote construction of transmission lines as a foremost solution to tomorrow’s energy needs is a lazy route with an expensive price tag. Wisconsin can do better. We owe it to ourselves to demand the chance to be better. Together we can. Wisconsin can become a leader in the Midwest in clean energy innovation, creating jobs, protecting our state’s environment, and supporting our hard working farmers and our communities. We can, and we should. This is what I learned by listening.


[i] Xcel Energy Services Inc., 140 FERC ¶ 61,058 (2012) and American Transmission Company LLC v. Midwest Independent Transmission System Operator, Inc., et al., Docket No. EL13-9-000 (October 1, 2012)

©Beverly Vaillancourt 2012

Why does my office smell like french fries today?  It must be because I'm camped out at McDonald's... again.  The number and duration of electric outages has been increasing lately.

Over a cup of camp stove coffee this morning, I was treated to front page quotes from my favorite useless FirstEnergy flack:

"We have multiple disciplines for multiple different jobs just ready and waiting to go," Meyers said. "I know you'll begin to see them move into certain areas. Exactly where and when, I can't tell you, because we still need to see where the need will be, but we're pretty confident that we'll be in need."

"Pretty confident that we'll be in need?"  That's probably because continued scrimping on system maintenance has once again caused outages, and those outages are accepted and expected by the utility.

FirstEnergy is charging you money every month under the guise of maintaining their system.  But if they don't spend the entire amount they collect, it gets added to the corporate bottom line to increase quarterly dividends.  FirstEnergy will whine that they spend more than they collect every once in a while to repair storm damage.  But, is anyone keeping track of this to true up what's collected with what's spent?  No, of course not.  And when a storm causes extensive damage, FirstEnergy will go and whine to the WV PSC that they need to collect extra to cover their storm expenses... and the PSC usually grants their request.

Therefore, FirstEnergy increases profits and shareholder dividends by failing to spend money maintaining its system, and maintenance failure causes unnecessary outages.  FirstEnergy is throwing consumers under the bus in order to bow and scrape at the throne of profit.

P.S.  My power is back on.  I guess Todd didn't want to stop by and help us eat our melted ice cream after all.

PATH wants FERC to consolidate its recently-filed request to recover capital in abandoned plant with outstanding Challenges to their expenses in 2009 and 2010 because "administrative efficiency strongly supports consolidation of all issues in Docket Nos. ER09-1256-000 and ER12-2708-000."

The same way oil and water mix to create koolaid, I'm sure.  Read the Motion Opposing Consolidation filed October 29.

In typical PATH fashion, the filing wasn't properly served on parties and wasn't properly docketed in ER12-2708-000, so here's your unofficial notice.

West Virginia Consumer Advocate Byron Harris has a bad case of Halloween-itis.  In his comments on PATH's abandonment cost recovery case at FERC, Harris said of PATH:  "If you set out a big bowl of candy, people are going to reach their hands into it," said Byron Harris, director of the Consumer Advocate Division of the Public Service Commission of West Virginia. "That's what they're doing."

If Byron thinks that the $121M is "candy" that PATH is eating, he's wrong.  The candy got eaten by landowners who sold or optioned property, fancy $500/hr DC lawyers who were only too happy to do PATH's dirty work, government-parasite contractor The Louis Berger Group, snake oil salesman supply company Contract Land Services, perfidious public relations contractor Charles Ryan Associates, gun-jumping land clearing company Supreme Industries, and many other companies and individuals that had their hand in PATH's candy bowl.  They ate the candy and PATH is left with the empty bowl, which they now want to refill at consumer expense.

The $121M Byron is protesting is PATH's money that they (over)spent, without a care in the world.  After all, FERC had granted them an incentive guaranteeing  recovery of whatever they spent.  PATH's project managers, gladhanders and schmoozers neglected to read the fine print, however.  The fine print said "... prudently-incurred expenses if project is abandoned through no fault of the company."

Ut-oh, PATH, UT-OH!

Terry, Terry, quite contrary
How does your RTO grow?
With secret plans
made by incumbent clans;
And transmission towers all in a row.

PJM's Terry Boston has replied to the Maryland PSC's pig roasting missive.

In Terry's world, it's okay to exclude a certain group of stakeholders when conspiring against them, as long as PJM doesn't initiate the conspiracy and simply participates in it.

Oh yes, that's quite "transparent."  That makes it all better, doesn't it?

Yesterday was the deadline for parties to intervene, comment or protest on PATH's proposal to collect its $121M investment in the PATH Project.  This amount is in addition to the $95M PATH has already collected from consumers in 13 states and the District of Columbia since 2008.  In order to collect on the abandonment incentive they were granted by FERC in 2008, PATH has to prove that the abandonment was beyond their control and that all costs they propose to collect were prudently incurred.  The burden is PATH's.  Of course, other parties can intervene and protest PATH's contentions.

And then the flood gates opened.  Thirty parties have intervened and some have filed comments and protests.  Nine state PSCs and/or consumer advocates intervened.  Many filed comments or protests.

The consumer advocates of six states (PA, VA, DE, WV, NJ & MD) filed a joint motion and protest.  In their protest, the Joint Consumer Advocates question the prudence of PATH's expenditures, especially in the last few years in light of the fact that PATH misfiled applications, withdrew and tolled their cases numerous times, and PJM's continuing analysis of the project pointed to serious questions about the need for the project.  The JCA question PATH's $30M expenditure on land in light of the fact that they had no permits to build.  They point out that PATH's proposed 5-year recovery period for the $121M will end up costing consumers an additional $25,782,017 of carrying costs & return.  The JCA dispute PATH's proposed ROE, both the base ROE of 10.4% and the .5% PJM membership adder.  They do some math to show that the amount PATH spent on its project is more than 1,000% higher than similar transmission projects that have applied for abandonment.  They also point out that the Commission has set all these other cases for hearing and therefore must set PATH's for hearing as well.

The Illinois Commerce Commission filed a motion to intervene and comments.  The ICC takes issue with PATH's assertion that costs were prudently incurred.  The ICC wants the Commission to assert some control over PATH's sale or transfer of assets to maximize the sale proceeds, such as requiring PATH to sell them via public auction or requiring PATH to file FMV determination documents before a sale.  The ICC argues that PATH did not make a proper showing that its proposed ROE is just and reasonable.  They also bring up all the same old cost allocation arguments that aren't particularly germane to this proceeding, but still valid arguments.  Then they went a bit crazy talking about having the prudence of PATH's costs challenged yearly through the Formula Rate Protocols.  Obviously they don't understand the process or the fact that the bulk of the costs aren't going to change year to year and that perhaps they should have been involved in the process all along.  Just because PATH filed for abandonment does not mean ICC cannot monitor and challenge the prudence of costs in successive formula rate filings.  The process is still going to be there, and has been there all along.  But ICC isn't the only state that doesn't seem to understand FERC formula rates, and sadly none of the states seem inclined to learn the process.  As long as the states that supposedly protect consumers continue to fail to educate themselves and get involved in this process, transmission owners will continue to rip off consumers.  States complain that they do not have in-house expertise or funds to hire any so therefore they don't get involved.  It ain't rocket science, and if the JCA can get together to file a joint petition in this matter, what's stopping them from joining together to fund joint participation in formula rate filings on a yearly basis?

The Maryland Public Service Commission filed a protest and comments.  The PSC questions the prudence of PATH's expenses and other requests and asks that the Commission set the matter for hearing.  They also take the opportunity to continue their opposition to FERC's transmission incentives policy as "overly generous and incompatible with the risks faced by project developers," and suggest that FERC consider the quarter billion dollar waste of consumer money the PATH project represents as they continue their deliberations about the incentives Notice of Inquiry currently in progress.

The Virginia State Corporation Commission filed a motion to intervene and protest.  The SCC protests PATH's proposed 10.9% ROE and, like the ICC, contends that PATH did not make a showing to support it.  They further argue that that the risks and need to raise capital upon which PATH's original ROE was based have died with the project.  Then the SCC urges the Commission to compel an audit of PATH to ensure the prudence of the $121M to make sure PATH wasn't "throwing good money after bad."  That's what the Formula Rate Protocols are for - the VA-SCC should have been participating all along.  Now because the SCC hasn't been doing its due diligence, they want FERC staff to do it for them.  Perhaps the SCC should raise this issue with FERC enforcement staff because the Commission said in P. 27 of a recent order that only OE decides who to audit when.  The SCC also asks that FERC staff monitor PATH's sale and transfer of assets.

The Indiana Utility Regulatory Commission filed a motion to intervene and protest.  The URC states that PATH has not supported the prudence of their expenses nor explained why it kept moving toward completion of its project despite in-service delays.  They point out that PATH witnesses used the word "aggressive" six times in their testimony to describe the project schedule, but failed to provide a copy of the schedule.  URC believes PATH put the cart before the horse when they purchased land before receiving a CPCN in any state.

In addition, to the above, the Ohio Consumer's Counsel, the Pennsylvania Public Utilities Commission and the West Virginia Public Service Commission filed motions to intervene without comment or protest.

Four consumers from West Virginia and eight from Maryland also filed motions to intervene, some with protests.

Ken Sanders, Dave Fenstermacher, Catherine Combs, Ginny MacColl, Ricky Young, Lisa Jarosinski, Brent Simmons and Mary Ann Aellen from the Frederick area filed petitions to intervene.

Bill Howley of Chloe, WV filed a motion to intervene and protest.  Bill questions whether PATH's abandonment was beyond PATH's control and points out that PATH failed to disclose PJM trends and analysis that undermined their state CPCN cases.  Bill questions whether any of PATH's costs after 2009 were prudent due to PATH's failure to support their cases at the PSCs.  He questions PATH's purchase of the Kemptown substation property before fully exploring Frederick County's zoning requirements.

Patience Wait of Shepherdstown, WV filed a motion to intervene and protest.  Patience contends that PATH has not carried its burden in its filing.  Patience says "...there is evidence to indicate that PATH incurred excessive costs in order to manipulate state-level  regulatory processes, to try to create a sense of “inevitability” to the project and avoid rejection of their application – which would indicate, to a “reasonable person,” that PATH recognized its justification for the project was fatally flawed."  She documents her contentions with examples from each state, including PATH's February 25, 2011 purchase of property in Hardy County, WV (just 3 days before the suspension) and PATH's premature clearing of land at their Welton Springs Substation before PATH had a permit, a violation of WV law.

Alison Haverty of Chloe, WV, filed a motion to intervene and protest.  Ali contrasts PATH's continued project spending to PSEG's curtailment of spending on another project they subsequently abandoned.  Ali states, "PSEG didn't wait for PJM to do their thinking for them."  Ali also contends that PATH did not seek a refund for amounts paid prospectively to the NPS and NFS for the EIS process, after PATH delayed that process.  Ali contrasts PATH's lack of detail with the TrAILCo Prexy abandonment filing, where 10 pages of cost detail was included.  Ali asks the Commission to suspend PATH's rates and replace the tariff sheets at a later date.

Keryn Newman of Shepherdstown, WV, filed a motion to intervene and protest.  (exhibits to filing can be found here.)   Keryn states that the PATH project will cost consumers $242,559,680.48, nearly a quarter billion dollars and deserves the Commission's scrutiny.  She also raises the issue of PATH's recently filed 2013 Projected Transmission Revenue Requirement, which she calls "completely invented" because PATH has recently transferred all CWIP totals to a regulatory asset account.  She asks the Commission to suspend PATH's rates until this matter is settled.  Keryn contends that PATH had fault in the abandonment, bungled state permitting and made no showing of the prudence of their expenses.  She also contends that "a reasonable utility manager" would not have purchased property before receipt of a CPCN, and provides several examples of other utilities that do not purchase land until CPCN completes.  Among the examples are PATH parent AEP's transmission line construction time table.  Keryn provides a list of the properties PATH purchased or optioned and presents specific examples backing up her contention that, "PATH had ulterior motives for purchasing or optioning certain properties at inflated prices that had nothing to do with simply acquiring necessary ROW," including PATH's land purchases in the River's Edge subdivision and an inflated option price in Jefferson County, WV.  Keryn contends that PATH has serious accounting deficiencies, protests PATH's proposed ROE, and compares PATH's abandonment to other recent cases, showing that PATH's $121M expenditure was incongruent with other cases.

Old Dominion Electric Cooperative filed a motion to intervene and protest.  ODEC protests PATH's proposed ROE.

In addition, American Municipal Power and the North Carolina Electric Membership Corporation filed motions to intervene.  These are non-profit municipal electric cooperatives.

The PJM Industrial Customer Coalition filed a motion to intervene.  This "coalition" includes large, industrial power customers who will pay a portion of the rate set in this proceeding.

The following investor-owned utilities filed motions to intervene:  PSE&G, Dominion, Exelon, Rockland Electric Co. and LSP Transmission Holdings.

And, of course, the PJM cartel, the ultimate perpetrator of this whole stinking mess, filed a motion to intervene.

I don't envy the Commission here.  The thirty parties raised a lot of issues to be considered.  What is obvious here is that there's no way FERC is going to approve PATH's filing before January, which is the absurd contention Becky Bruner was making on PATH's 2013 PTRR "Open meeting" phone conference last week.  I wonder if she's still insisting to her PATH masters that collecting this $121M is a "sure thing?"

It must have been fate when Ali and Keryn met at a PATH opposition meeting several years ago.  Or perhaps it was an intended consequence of PATH's own routing choice for its power line project.  Whatever the reason, new friendships were formed.  For some reason, the PATH project drew like-minded individuals together.  Sometimes work ethic, principles and thought processes of two people experiencing a chance encounter are so similar that partnerships of epic proportions are formed.

After several years working together long distance on a particular project, we finally had our opportunity to spend a day together, in person!

So, first we had a little fun.

Keryn to Ali while walking down a sidewalk in DC this morning:  "Did you ever picture this scenario happening?"

Ali:  "No."

Keryn:  "Me neither, but here we are!"

After years of telling people that the depreciation of PATH-Allegheny's Plant in Service was related to PATH's ROW office that they opened in Martinsburg before the project died, today the truth finally came out during PATH's 2013 PTRR Open Meeting.

After Maryland Office of People's Counsel's Gary Alexander verified with PATH that they never "put a shovel in the ground" PATH turned right around and told me that the depreciation was linked to amounts PATH spent to clear land at the old chicken farm they bought as a site for their mid-point Welton Springs substation.  I guess it technically wasn't "a shovel"... more like a backhoe or a bulldozer.

PATH never had a permit to do any construction (or destruction) of any kind in West Virginia, so what were they doing clearing land and recording the expense in their construction accounts that they now want to recover from 60 million PJM ratepayers?

Although all this will be dealt with later, I'm sure you CAKES folks can consider yourself really lucky that PATH never showed up and razed the farm they purchased for their "Kemptown" substation during the permitting process.

Silly PATH!  Never thought your project wasn't going to happen, did you?  Ut-oh!  That's probably going to cost you...