Here's a link to a video of the entire "media breakfast" with FERC Chairman Jon Wellinghoff at the National Press Club in Washington last week.  What the other articles didn't say was that Wellinghoff got asked about the PATH project.

To jump right to the PATH question without watching the entire 80 minute interview, click on the second link for "transmission" on the third line of "chapter links" below the video (there are three "chapters" entitled "transmission," you want the second one).

Watching him squirm, smirk, and squeeze his own head while discussing how expensive transmission projects  are oftentimes obsolete by the time they are under construction made me giggle.

Yes, we saved consumers a lot of financial misery by opposing this project and causing a delay that allowed the truth to manifest itself, didn't we, Mr. Wellinghoff?

Fun and fantastic PATH termination celebration party tonight at CAKES headquarters in Frederick.

Sorry, PATH, all you get is the bucket... We the People got the deep, dark, chocolate cheesecake!

As the PATH Project draws to an extended close with a federal battle over the ridiculous way PATH wasted our money during the past four years, it's time to rid our closets, basements and garages of all the PATH detritus that accumulated during the fight.  While Dick & Ginny "shared the wealth" as recognition for a job well done, they also received PATH's bucket as a "hostess gift" from StopPATH.  PATH's bucket showed up at numerous hearings and meetings.  It was a place to store electricity, even though the bucket analogy never made much sense to anyone but the engineers who used it.  It was also a place to store PATH's spendthrift expenses (because the word "account" is so hard for us hillbillies to understand!)  Perhaps PATH can now recycle their bucket to come up with new inapt analogies for FERC in their sec. 205 filing to recover investment in their abandoned project?  If so, they can pick up their bucket from a lovely neighborhood in Mt. Airy, Maryland that will now remain peacefully substation-free!

Many thanks to Dick and Ginny, our gracious hosts for the final PATH termination celebration party yesterday.  And there was much to celebrate!  Not only has PATH been terminated, but CAKES leadership put paid to the whole matter with a change to the county zoning ordinance to prohibit the use of the farm for a gigantic substation in the future.  Well done, CAKES, well done!

Some days, I like to have hope!

How refreshing is it to hear from a political appointee who actually makes sense?

After telling traditional utilities that they must change or die 6 months ago, FERC Chairman Jon Wellinghoff told assembled media yesterday that "the nations' electrical future may well belong to distributed generation such as rooftop solar rather than central power stations and generators far from demand, such as public lands solar and wind."

Wellinghoff also said he believes distributed generation is going to win the race.

Okay, so now let's get busy on reforming those transmission incentives, shall we, before we end up with $300B of unneeded long-distance transmission lines?  Outstanding!

Last week, PJM TERMINATED the PATH Project and removed it from the RTEP.  The PATH Project is O-V-E-R.  However, it seems to be business as usual down at PATH Gravy Train Station.

PATH finally got around to posting its 2013 Projected Transmission Revenue Requirement on PJM's website today (despite what they said in their Notice of Meeting yesterday).  Guess what?  PATH intends to continue to collect project costs from you just like nothing happened!

PATH will collect $19,978,284 from PJM electric consumers in 2013 unless someone stops them.  Yes, that's almost an additional TWENTY MILLION DOLLARS for a project that no longer exists.  Really, PATH?  Really?

PATH says:

"On August 24, 2012, the PJM Board of Managers ("PJM Board") decided to terminate the
Potomac-Appalachian Highline Transmission ("PATH") Project and remove it from the PJM Regional
Transmission Expansion Plan. In accordance with the Federal Energy Regulatory Commission's
("Commission") order authorizing the PATH Companies to recover prudently-incurred costs associated
with abandonment of the PATH Project for reasons beyond their control, the PATH Companies intend to
file, pursuant to Section 205 of the Federal Power Act, revisions to the PATH Formula Rate to allow for
recovery of prudently-incurred abandoned plant costs associated with the PATH Project. Following
Commission action on the Section 205 filing, the PATH Companies will revise the 2013 PTRR to reflect
changes authorized by the Commission."

Translation:  We're going to make a filing to ask FERC's permission to recover our stranded investment when we get around to it, but in the meantime, we're going to continue to milk you like nothing happened.  We'll settle up later (as in much).

PATH wants to float itself a $20M loan from ratepayers at .2735% interest because it has NO IDEA IN THE WORLD how to calculate a rate for 2013 right now.  I don't know about you, but I've got better places to invest my money in 2013.

PATH's impudence is stunning.  PATH's recovery of its stranded investment is far from the "sure thing" that's presented in the letter.  Here's what FERC actually ordered:  "recovery of 100 percent of prudently-incurred costs associated with abandonment of the Project, provided that the abandonment is a result of factors beyond the control of PATH, which must be demonstrated in a subsequent section 205 filing for recovery of abandoned plant."

When PATH makes its section 205 filing, in which PATH has the legal burden of proving prudence and reason for abandonment, other parties can (and will) intervene and present arguments against PATH's contentions.  There is no guarantee that PATH will be able to successfully carry its burden and recover anything.

In addition, PATH's incentives, such as a 12.4% ROE, CWIP in rate base, recovery of pre-construction costs, and hypothetical capital structure, were granted for the duration of the project on the condition that PATH was included in PJM's RTEP.  Incentives are NOT a reward for failure.  No project, no RTEP = no incentives! 

So, what's in PATH's 2013 PTRR that adds up to $20M?  A return (profit) of an additional $12,051,167 that it's not entitled to.  Administrative and General expenses of $1,964,529 that it's not entitled to.  "Miscellaneous Transmission Expense" of $237,785 that it's not entitled to.  There are also allowances for taxes and other expenses that add up to $20M.  But there is no PATH Project in 2013!  How can there be any expenses?  Because PATH still wants you to pick up a share of their parent company expenses that have nothing to do with the PATH Project.  Starting to see how you've been ripped off all along now?

PATH's 2013 PTRR is not not only outrageous, it's also shocking, disgraceful, scandalous, atrocious, appalling, monstrous, heinous, evil, wicked, abominable, terrible, horrendous, dreadful, foul, nauseating, sickening, vile, nasty, odious, loathsome, unspeakable, beastly, far-fetched, (highly) unlikely, doubtful, dubious, questionable, implausible, unconvincing, unbelievable, incredible, preposterous, extravagant, excessive, flamboyant, gaudy, ostentatious, shameless and  brazen.

PATH posted a copy of its "Notice of Open Meeting" on PJM's website this afternoon.  This not-so-open meeting is for review and questions about PATH's 2013 Projected Transmission Revenue Requirement.  PATH says it's PTRR was "posted on the PJM website on September 4, 2012," but it must be some kind of new-fangled scavenger hunt because it's not where it's supposed to be.  Or anywhere else.  Transparent.  Yup.

Anyhow, here's your hoop.  Jump!

"To participate in the meeting, you must RSVP to [email protected] on or before October 11, 2012. If you do not have an email account, you may RSVP by telephone to 202-973-4233. Your RSVP must state your name, address and telephone number, and the name of the person or entity you will represent during the meeting. Your RSVP must also state the basis upon which you believe you qualify as an Interested Party."

You might also want to include your blood type, birth certificate and a copy of your third grade report card, in order to increase your unlikely chances of winning the interested party lottery courtesy of Judge Becky.

Want to see how an Open Meeting notice is done by a company that has nothing to fear and nothing to hide?  See Duke Energy's recent notice.  Same requirement, different approach.

Why is PATH behaving this way? See FERC complaints EL12-79 and EL12-85, paying particular attention to the well-written comments of Patience Wait, which includes a brief summary of the back story.

Don't you just love the smell of paranoia in the morning?

You know what's wrong with making crap up?  One small lie requires more and more supporting lies until you simply can't keep track of all the lies you've told and you've ended up painting yourself into a corner from which you'll never escape with your dignity intact, and then you just end up behaving like a fool.  How amusing.

The federal government is in bed with PSEG and PPL, and it's going to cost you more money in your monthly electric bill.

The National Park Service issued a draft of their Environmental Impact Statement for the PSEG & PPL-owned Susquehanna Roseland transmission project on Friday.  The EIS recommends the power company preferred route through the parks, despite it being the most environmentally-damaging and expensive of the presented routes.

Dave Slaperud of citizens' opposition group Stop the Lines said, "Unfortunately, our system is rigged," in a recent article in the New Jersey Herald.

The "rigging" of the Environmental Impact Statement, which is required to be completed under the National Environmental Policy Act, has been public knowledge for nearly a year now.  Dirty deals between the power companies and Secretary of the Interior Ken Salazar were outed by the Public Employees for Environmental Responsibility last fall:

"PEER contends that Secretary Salazar, National Park Service Director Jon Jarvis and other Interior officials have met repeatedly with project proponents, PPL Electric Utilities of Allentown, Pennsylvania (PPL) and Public Service Electric and Gas Company of Newark, New Jersey (PSE&G), and have already approved a route for a new power line that will cut across the Delaware Water Gap National Recreation Area and the Appalachian National Scenic Trail.  The power line will be strung on 200 foot-tall towers that will permanently impair the scenic values of one of the most beautiful areas in the crowded Northeastern Corridor of the United States.

As part of the deal, the draft EIS will NOT consider at least two alternatives that would lessen impacts to the park’s scenery (#6 and #7) but will include at least one alternative (#2B) demanded by the companies that is untenable from a safety perspective.   The Secretary and the Director have unofficially committed to the companies that the NPS will select Alternative 2, the alternative preferred by the companies but which is the most damaging to the resources and scenery of the parks.  In return, the companies have reportedly agreed to pay $60 million for land acquisition and administration inside and near the NRA. 

"This is not ‘fast track,’ it is a short circuit in which political appointees are putting their thumbs on the scale to skew the review process,” Ruch added.   “It is one thing to select an alternative after the conclusion of the NEPA process, but is something else to decide on the alternative before public comment has even begun.”

The National Park Service's mission is:

To preserve unimpaired the natural and cultural resources and values of the national park system for the enjoyment, education, and inspiration of this and future generations.

But instead of stewarding irreplaceable resources owned by the citizens of the United States, the NPS has sold our resources to corporations, and they violated NEPA by guaranteeing the corporations their preferred outcome of the EIS before it was completed.

The entire NPS isn't rotten to the core, however.  Where do you think PEER got their information?  What is wrong with the NPS is that those who don't bow and scrape and sell their soul to dirty political appointees like Salazar have their lives made miserable and their careers ruined.  So, if you have ethics and a spine, a career with the NPS is not for you.

So, you're probably asking, "how does all this make my electric bill go up?"  Because in exchange for permission to lay waste to the Delaware Water Gap, PSEG & PPL promised $60M of "mitigation."  The "mitigation" will consist of purchase of inferior land adjacent to the current park borders in order to expand the park... and PSEG & PPL are using YOUR money to do it!  That's right, PSEG & PPL will be collecting the cost of their "mitigation" from all electric consumers in the PJM region, plus 12.9% interest annually, through their FERC-approved formula rates.  However, whether the cost of "mitigation" is a prudent expense is probably fairly debatable.

So, there ya go... you will pay the bribes two corporations made in order to destroy a park that belonged to you in the first place.

Disgusting.  Shame on all of you.

The regulated investor-owned utility business model has ingrained a wholly unwarranted sense of entitlement in companies such as PATH.  Regulation allows these companies to recover their expenses incurred to provide a public service, along with a guaranteed profit averaging around 10%.  Not too shabby -- what investments do you own that are guaranteed a 10% return?

Sound like a pretty sweet set up?  However, it's just not good enough for the investor-owned utilities, who are under enormous pressure to produce bigger and bigger shareholder profits every quarter.  Ten percent isn't shabby, but management's spending on items that cannot legally be passed to ratepayers in a regulated environment cuts deep into profit margins.  Therefore, the game is to find ways to cheat the system and create a way to meet profit targets without cutting expenses on the shareholder side of the balance sheet, such as lobbying, promotion, and political contributions, which the utility finds essential to a favorable regulatory environment.

Experiments with deregulation haven't worked out so well.  Remember Enron?  Deregulation and competition have been a miserable failure that usually ends up costing consumers more than a regulated environment.

Interstate high-voltage transmission lines are regulated by the Federal Energy Regulatory Commission, whose mission is to ensure that rates are just and reasonable and not unduly discriminatory.  FERC also ensures that transmission is open access, in an effort to keep costs low through competition.  What you end up with is another regulatory hybrid that may fail the consumers who are supposed to benefit.

Transmission owners are allowed to apply to FERC to be awarded "incentives" that encourage new investment in transmission.  They are not required to apply, and the bar is set pretty high for companies that aren't part of the good ol' boy utility scene.  PATH applied for and was awarded, among other incentives, a 14.3% return on equity (since reduced to 12.4%), and "recovery of 100 percent of prudently-incurred costs associated with abandonment of the Project, provided that the abandonment is a result of factors beyond the control of PATH, which must be demonstrated in a subsequent section 205 filing for recovery of abandoned plant."  The incentives were awarded under the condition that the PATH Project was included in PJM's Regional Transmission Expansion Plan (RTEP).  All risk for the PATH Project was shifted to consumers. 

PATH was also awarded use of a forward-looking formula rate to collect expense and profit from the captive PJM-region customer base through the setting of a yearly rate.  The formula rate allowed PATH to collect yearly expenses (such as taxes, certain types of advertising, certain contracted services, an allocation of corporate expenses, and other routine operation and maintenance expenses for the project), along with a yearly profit (ROE) on the amount of PATH's capital investment in the project.  Capital investments included land, engineering, routing and siting, regulatory expenses, legal fees and other expenditures they made that were necessary for the construction of PATH.

PATH behaved as if their formula rate was a bottomless money fountain from which they could draw to buy whatever they wanted.  How many of you thought it was outrageous that PATH was allowed to have all their costs at the PSC paid for by us (and even earn a profit on them!) while we were forced to spend our own money to defend our interests?  We paid for them to fight us, and then we paid for us to fight them, which gave PATH a sense of superiority and entitlement.  They felt entitled to spend our money on whatever they wanted to accomplish their goal of building the project.

How about being forced to pay for PATH's public relations campaign and millions of dollars of propaganda advertising?  How outrageous was that?  PATH's sense of entitlement, and greedy, perfidious public relations contractor Charles Ryan Associates, encouraged them to spend freely on an effort to sway public, political and regulatory opinion in PATH's favor.  The more of our money PATH spent on this effort, the more Charles Ryan Assco. earned.  However, in the case of these promotional expenses, it turns out that they should not have ever been billed to ratepayers, but absorbed by stockholders unless and until PATH made a sufficient showing at FERC that they provided benefit to ratepayers.  PATH failed to do its homework before going on its spending spree.  If PATH's stockholders (which only include parent companies FE & AEP) knew up front that they would be required to absorb these costs, would they have spent less?  Of course!

Now PATH finds itself in a precarious position with a $130M stranded investment of its stockholders money that may not have exactly been prudently incurred, and a dead project that has been removed from the RTEP, on its hands.  Never fear, the PATH project geniuses will just dump the whole stinking mess on its accounting and legal team for the daunting and impossible task of recovering the money and cleaning up the mess these arrogant blowhards created with their little spending spree.  Won't we have fun!

PATH windbag Todd Meyers had a lot to say about PATH's sense of entitlement in a recent article in the Spirit of Jefferson newspaper.

"Potomac Edison spokesman Todd Meyers said only prudently incurred costs will be recovered and would not acknowledge that Newman's figures were accurate.  "We will have to do a cost recovery filing to FERC" Meyers said.  "We will only know then the amount of cost to be recovered". 

Well, what do you know, it looks like Todd acknowledges that a portion of that current $130M rate base total might not be prudent and that there's going to be a need for a lot of legal and accounting skulduggery  before PATH makes its FERC filing.  Todd passes the hot potato to others, after upping the temperature a few degrees.

"Meyers said recovering costs is an allowable part of doing business because no company would take on a project that is as expensive as a large transmission line without it.  "There are many risks associated with that" he said, citing a possible regulatory denial of the project.  He said no one would attempt such projects without this assurance."

Todd's sense of entitlement deserves a medal for that little gem!  PATH wanted to build the project and collect a 14.3% ROE from here to eternity.  The "PJM ordered us to build it" line has worn threadbare long ago.  What's that you said?  "Regulatory denial?"  I like the sound of that!  As far as Todd's contention that "no one would attempt such projects without this assurance," I'd like to introduce Todd to the concept of merchant transmission lines.  Or perhaps Todd wasn't paying attention when an independent company without a sense of entitlement or bottomless fountain of ratepayer cash proposed the Liberty Line as an alternative to the PATH project.  Yes, it's true, other companies have proposed such projects without this "assurance," or the ability to shift all financial risk to consumers.
 
"Cost recovery will be spread across the entire PJM area, because they all would have benefited from PATH, had there been a need for it".

This is so crazy that it makes my head hurt.  There wasn't a need for it!  Todd finally admits there was no need for PATH!  Progress.  :-)