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...

A complaint was filed today in federal court alleging that Secretary of the Interior Ken Salazar and NPS Regional Director Dennis Reidenbach violated the National Environmental Policy Act, the NPS Organic Act and the Wild and Scenic Rivers Act when they issued a decision granting PSEG & PPL a permit to destroy national parks with their unneeded Susquehanna-Roseland power line two weeks ago.

Here's a link to the complaint.  Very interesting reading.  I think my favorite part was this:

"The EIS must be prepared so as to “serve practically as an important contribution to the decisionmaking process” and cannot be “used to rationalize or justify decisions already made.” 40 C.F.R. § 1502.5; see also id. §§ 1502.2(f), 1506.1. The inclusion of the Susquehanna-Roseland transmission line in the set of projects to be “fast-tracked” by the Rapid Response Team for Transmission placed undue pressure on rapid approval of the Project and influenced the Park Service to commit to a determination about the preferred alternatives before environmental review under NEPA had been properly concluded. Such prejudgment by the
agency is arbitrary, capricious, an abuse of discretion, and not in accordance with NEPA and its implementing regulations."

The groups also complain about the mysterious $56 million dollar "mitigation" plan that was never presented to the public.  There's some shady involvement by a greenwashing "conservation" group that involves buying additional property.

And guess what?  Y-O-U are going to pay every last penny of that $56M "mitigation" fund, plus 12.9% interest yearly on the remaining balance for the next 50 years or so. 

"Johnson said the rate of return is in fact 12.93 percent and said it is true PSE&G would earn a rate of return on the land purchase.
"The current rules say the cost of a project such as this will be shared by electric customers who will benefit," she said."

Perhaps it's time to start asking some questions about Susquehanna-Roseland's shifty financial schemes and collection of the amount they donated to the NPS from ratepayers, ya think?

Bravo to all the groups who are persevering in their fight to preserve national parks that belong to all of us while staring down political skulduggery, bribery, and two huge corporations' attempt to hurry up and get their project built before the truth gets out.  The truth is that the power line isn't even needed!

This article, Meet the 10 highest paid utility CEOs, was sent to me by a friend today in the form of a guessing game.  The question posed was, "I wonder if you can guess who's #1?"  No fair peeking!

Go ahead, guess in the comments.  Then read the article.

(And yes, I guessed correctly.)

How utterly revolting.

Remember all the hoo-hah over New Jersey's and Maryland's plans to provide incentives in order to get new generation built in their states?

As expected, PJM's incumbent generator PIGS cooked up a new way to stop new generation entries in New Jersey and Maryland, and the PJM cartel, of course, was right there in the thick of things, giggling behind hairy knuckles.

Worse yet, PJM's "independent" market monitor was scheming right along with them.  Shame on you, Market Monitor!

Douglas Nazarian, Chairman of the Maryland PSC, is calling foul on the PJM cartel's secret scheming to the detriment of electric consumers in the state.  In a recent letter to PJM, Nazarian roasts PJM's PIG.

"I write to express our Commission's profound disappointment and concern with the clandestine and exclusionary process that has led to the latest round of proposed changes to the Minimum Offer Price Rule (the "MOPR"). Although we have and will raise serious objections to the proposal itself, those are for another time. At this point, because the process that begat the
new proposal was fatally and unfairly flawed, PJM should bring the fast-track "educational" process to an immediate stop and hold an open and transparent stakeholder discussion before proceeding further.

We were not shocked to learn that certain stakeholders would like to revise the MOPR further. We were shocked, however, to learn after the fact that PJM and the Independent Market Monitor participated in, and that PJM facilitated, a secret and exclusionary negotiation to devise a new set of MOPR revisions. PJM's own slides state that the discussions were initiated by suppliers and public power interests, but that P JM and the IMM were invited, and that selected other stakeholders were included and provided an opportunity 'to represent their unique interests."  By PJM's own reckoning, four of its five sectors were included in the discussion - put another way, one of PJM's stakeholder sectors, the sector that includes Consumer Advocates, was actively excluded. And although we are not official stakeholders, State regulators -the parties most deeply interested in the terms of the MOPR and at whom these proposed changes are aimed - were excluded as well. So in spite of our well-known views on the MOPR, our
"unique" and public interests were, by design, never heard or considered.

Indeed, we and the Consumer Advocates and the few others not at the table learned of the discussions only when PJM Staff began rolling out (to great fanfare in the trade press) a fully formed proposal, using PJM's slide template, as part of a PJM-led "education process" that will fast-track this significant and targeted fait accompli from revelation to FERC filing in less than two months. 

It may well be that we would never have reached
agreement with others on changes to the MOPR, but that is beside the point: these negotiations were held behind closed doors, with PJM's blessing and assistance (if not outright leadership), specifically for the purpose of revising the MOPR to the detriment of our State's long-term reliability needs. And the proposed changes are now being represented to the world, and will shortly be characterized to the FERC, as a  PJM-endorsed proposal, despite the fact that the parties being targeted were affirmatively disinvited from the process.

PJM claims not to make policy. This time, however, PJM picked a policy winner at the beginning of the conversation, perhaps to try and preempt or moot the appeal to last year's changes that remains pending. This time, PJM excluded altogether the parties with the most at stake.

And this time, despite these shortcuts, PJM is visibly leading a forced, double-time march to the FERC on
behalf of a favored group of stakeholders, all so that the new rules can be in place for the May 2013 RPM auction."

Gosh, why does Nazarian sound so ticked off?  Doesn't he already know that PJM is a self-interested industry cartel?

"Our experience with PJM since 2007 had led us to expect better."

Ooops, maybe not.  Well, in that case, welcome to the real world that the consumers you serve have been living in for the past five years, Chairman Nazarian!

"Issues of courtesy aside, however, PJM's selective inclusion and exclusion of parties to these discussions has indelibly tainted the process and its results."

What?  PJM's processes are tainted?  Say not so!  Coincidentally, that's exactly what we've been trying to tell you all along!

It's about time someone sends a very frank note home to Mother FERC regarding the playground behavior of her little brat, PJM.  PJM is a selfish bully who steals from the other children.  PJM doesn't know how to play nice and has no morals.  It's time to take PJM out behind the woodshed and give it a little "tough love."

Consumers can't afford PJM any longer.

Since our first round of e-bay auctions for a limited quantity of Stop the PATH of Destruction t-shirts was so successful, we've decided to do one more round.

Until October 17, you can place your bid to snap up your very own souvenir piece of the grassroots opposition that kicked the poorly planned and unneeded PATH project to the curb.  Join the thousands of happy citizens and electric consumers in three states who proved that ordinary citizens can beat two huge, greedy, corporate goliaths at their own game!

Shirts are still available in sizes small - x-large - click on "see more items" to find other sizes.  All proceeds will go to local Jefferson County charitable organizations.

And don't worry, I promise I won't post the names of the winning bidders (although I may snicker quietly with my E-bay auctioneer).  If you're a government official, regulator, or even one of our power company fans who just has to have one of these shirts, your secret is safe with us.  Unlike PATH, I actually keep my promises  :-)

You just never know who you may bump into in Washington, D.C. that may be sporting one of our shirts ;-)

After a week of vacation, I've finally had time to read through PATH's PATH-etic sec. 205 filing to recover an additional $121M of investment in their abandoned project.

In their filing, PATH says:  "The project management structure provided the PATH Companies with a “forest and trees” assessment of daily activities and expenditures to ensure their reasonableness and prudence."

PATH's "forest" was continually in flames because their project was an unneeded economic-based project intended to increase the use of coal-fired electricity on the east coast that was masquerading as a reliability project.  The daily activities and expenditures were designed to continually shore up their rapidly deteriorating reliability case, denigrate feasible alternatives, and desperately attempt to build advocacy for the project by making it "too big to fail." 

It was never about reasonableness or prudence, it was about spending whatever was necessary to continue the charade.  And now PATH expects 60 million PJM ratepayers to pay for their planning errors and bungling of state approvals.

Worse yet, PATH seems to be in a big hurry to convince FERC to rubber stamp their PATH-etic proposal without modification, suspension or hearing.

PATH wants to recover $121M over 5 years.  They say they need 5 years to try to sell all that property they imprudently purchased at inflated prices so they can credit the proceeds to the amount they intend to recover.  PATH also claims there will be additional expenses to close down the project added over the 5 year recovery period.  What has PATH been doing with themselves during the 18 month "abeyance," at the beginning of which "all contractors and suppliers were told to cease activity on the Project and to prepare their final invoices?"

PATH also believes they should be allowed to collect a 10.9% annual return on equity for the unrecovered balance, in addition to carrying costs.  Although PATH so graciously offered to forgo the 150 bonus point ROE adder (1.5%) FERC granted them as an incentive, they want to continue to collect the 50 point adder (.5%) for their continued participation in PJM.  What benefit do ratepayers receive from the continued PJM membership of a soon-to-be-dead company that owns an already-dead project?  The 50 points for PJM participation was an incentive that PATH is no longer entitled to receive and PATH's continued membership in PJM is pointless.

And about those land purchases, PATH says: 

"As described in the testimony of Mr. Pokrajac, the PATH Companies propose to mitigate the overall Abandonment Costs included in the Filing by selling or transferring the parcels of fee land purchased for construction of the 765 kV transmission line, and the proposed Welton Spring and Kemptown Substations. As we explained earlier, due to the large scale of the PATH Project and PJM’s aggressive development schedule, the PATH Companies had to begin acquiring property that would be needed for the PATH Project in advance of CPCN authorizations. The PATH Companies attempted to negotiate the most reasonable price possible for all real estate purchases, but as noted previously, the location and size of property with respect to the needs of the Project were necessary considerations that impacted the purchase price. Approximately $30 million of total Abandonment Costs incurred by the PATH Companies are costs incurred to purchase twenty parcels of land as sites for construction of the PATH Project. More than half of these land purchase costs are for acreage acquired for construction of the proposed Welton Spring and Kemptown Substations.
The PATH Companies expect to transfer or sell all of the parcels of land acquired for the PATH Project to mitigate the Abandonment Cost, but completion of these transactions could not be accomplished prior to the filing. The property will be sold or transferred at fair market value, and Mr. Pokrajac explains how the sales or transfer price will be credited to mitigate the overall Abandonment Costs."

Quit laughing, little PATH opponents, PATH is spinning this yarn with a straight face.  :-)

PATH continues to hide behind PJM's skirts, blaming them for the poor planning and constantly delayed in service dates for the project.  It just never occurred to PATH that their project could be cancelled, although it was continually delayed due to decreased demand, increased demand response and new generation on the east coast, so PATH continued to blindly spend generously on their project.  Although the in service date never got any closer than 5 years, PATH continues to whine about how "aggressive" the construction schedule was.  But, that didn't stop PATH's continual requests to toll or withdraw the three state CPCN applications, did it?  Maybe PATH should have taken out their "aggression" getting their legal ducks in a row, instead of tossing away the ratepayers' money on property options and purchases, as well as public relations dreck that included front groups, lobbying and advertising.

Go ahead, read PATH's filing -- it's the perfect punchline to their joke of a project.

If you think PATH is all wet and want to intervene and protest PATH's plan to collect their investment in the abandoned project, you can join the ranks of entities who have already intervened, such as Exelon, PJM Industrial Customer Coalition, Dominion, PSE&G and the Maryland PSC, by filing your own petition and/or protest, which should follow this format, and be filed through FERC's e-filing system.  FERC has set a deadline for interventions, protests and comments on docket ER12-2708 of 5 p.m. on October 19.

Or, you can just sit back and watch the show, however only parties to this docket will have a seat at the table if FERC can be convinced to set this matter for hearing and possible settlement.

Pam Kasey at the State Journal investigates PJM's new ISAC in this informative article, which poses these questions:

If New Jersey wants wind power from the Midwest, should that mean a power line gets built across West Virginia to supply it?

And if it does, should West Virginians help pay for it? 

The West Virginia PSC, who only talks to the media through spokespeople, looks at ISAC as "a seat at the table."  

However, without integrated resource planning, which was rejected by the legislature last year at the urging of AEP & FE, West Virginia might as well stay home.  

Regulatory expert Scott Hempling says:

"...states that do Integrated Resource Planning will get the most out of the ISAC. It's clear enough that a state that doesn't have its own vision for the mix and type and timing of power supply … is putting itself in a down position," he said, while also asserting his familiarity with and respect for West Virginia's commission.

"States will have a much softer voice in the regional discussion if they don't have their own plans because they'll have nothing to assert — they're just reacting," he said. "It's better to write the first draft."

"Just reacting."  That astutely describes West Virginia's Public Service Commission, who continues to eschew the public interest in favor of corporate initiatives.

PATH made a filing at FERC today to collect their stranded investment in the PATH Project over a 5 year period.  This $121M is in addition to the $95M PATH will have collected from ratepayers through the end of 2012, and the $20M they propose to collect from ratepayers in 2013.  That's a total of $236M, for a project that was never built.  PATH even has the audacity to ask for a return on the abandoned project costs over the 60 month amortization period.

PATH says:

"The PATH Project was abandoned for reasons beyond the control of PATH LLC, the PATH Companies or their upstream owners, and the Commission previously determined that the PATH Companies may recover their prudently-incurred costs under such circumstances.
Accordingly, the PATH Companies seek authorization to recover abandoned plant costs over a sixty-month amortization period, including a return on the average unamortized balance under the transmission cost-of-service formula rates contained in Attachment H-19A of the PJM Tariff (“Formula Rate”), as revised herein, effective December 1, 2012. The abandonment plant costs for which the PATH Companies seek recovery are previously unrecovered costs incurred from January 1, 2008 through August 31, 2012, of approximately $121 million, subject to goingforward  accounting entries to reflect proceeds and costs associated with the orderly closing of transactions, including transfers or sales of land acquired by the PATH Companies for development of the PATH Project (“Abandonment Costs”)."

Read the whole 200 page filing here.