Back in 2005, Congress decided that not enough investment was being made in the transmission system, and this lack of investment was subsequently causing a decline in electric reliability.  They ordered FERC to concoct rules to provide for transmission investment incentives.  One of FERC's qualifications for incentives is based on the project's "challenges or risks," with the thought being that by making transmission investment less risky, it would become more attractive and result in increased investment.

What is the "risk" in building transmission?  The greatest risk is faced by new transmission projects that require new rights-of-way and new corridors through virgin territory, which will always be met with opposition from affected landowners and communities.  Replacement or upgrading of existing transmission faces much less risk and opposition, and should always be considered first before planning new builds.  However, industry continually fails to follow the path of least resistance because transmission incentives have made building and owning new assets a corporate profit-center in itself.  Investor owned utilities choose to take on riskier projects because they reap bigger financial rewards.  In addition, FERC has redirected all responsibility for financial risk from investors and transmission owners to consumers.

FERC defines risk this way:  "the challenges or risks faced by a project, e.g., siting, long lead times, regulatory and political risks, and financing challenges."  FERC attempts to financially reward investors and transmission owners for undertaking this risk, which has the effect of rewarding them for finding ways to overcome the risk.  Instead of removing risk, FERC attempts to financially compensate for it, and that increases consumers' ultimate cost of electricity.

The methods the industry has developed to overcome risk do not work and actually serve to increase the risk of successful opposition and the cost of the project.  Opposition fuels the siting, political, regulatory, long lead time (delay) and financial (cost allocation) risks.  The more opposition a project garners, the riskier and costlier it becomes.  A more costly project increases profit for investors and transmission owners.  They have no incentive to reduce risk.  As a result, we've reached a standoff where nothing of any substance is ever going to get built, even projects that are needed and economical.

The crux of this problem lies with transmission planning and siting "best practices" that rely on dishonesty, subversion of due process and dissemination of propaganda as a means to control "the public."  These self-defeating practices actually fuel more public anger, delay, political unpopularity and opposition entrenchment.  The solution is to change the transmission planning and siting processes undertaken by project owners, and to some extent by regulators, in order to prevent opposition and incite the support of the public as an equal partner in accomplishing a common goal.

The only way to accomplish this sea change is to throw everything the industry currently thinks they know about successful siting strategies out the window and start fresh with new perspectives.  The solutions have been right under the noses (and barking at the heels!) of transmission owners for quite a while, but they refuse to take the mental leap that would enable them to learn from experience.  Like a stubborn animal, transmission owners just keep butting their head into the same, old brick wall, and expecting different results.  It will never happen with the current "us vs. them" mindset that gives transmission owners a wholly unwarranted feeling of intellectual superiority over project opposition that allows them to incorrectly conclude that opposition can, or should, be dispersed through bullying, trickery or bribery tactics.  There is a complete lack of trust from square one when the root of a project lies in corporate or investor profit.

If you're a regular blog reader here, you might have seen an earlier post that featured the work of a couple of Brits who are nothing short of brilliant.  Patrick Devine-Wright and Matthew Cotton from the University of Exeter have continued their excellent research into the phenomenon of opposition to high-voltage electric transmission siting and, once again, they come to apt and stunning (to the industry, not to us opponents) conclusions.  What makes these guys so brilliant is that they spend time with the opposition and approach the problem honestly in search of a mutually acceptable solution.

Putting pylons into place: a UK case study of public beliefs about the impacts of electricity transmission-line-siting is the result of their work with a group of transmission line opponents.  I think it would be interesting to see their conclusions if they studied a successful opposition group, such as the tri-state PATH opposition, and the ways in which we manipulated, out-smarted and out-maneuvered PATH at every turn, but that's not particularly germane here, although there would undoubtedly be quite a lot of laughter and not a few pints of Raging Bitch ale consumed in the process...

The study comes to the conclusion that the industry and regulators are approaching the problem all wrong in the very beginning.  Transmission planning decisions are currently made at a level that is quite mysterious to the average citizen and subsequently presented to them as a front-loaded fait accompli where the community's only input is framed in an inaccurate "NIMBY" context that reduces their input to a choice between two evils that utilizes a "divide and conquer" methodology. The tone is dismissive and arrogant, whether intended or not. This approach breeds immediate mistrust of a self-interested "authority," and forces them into the hopeless position of attempting to justify and defend a previous decision, instead of a true community consultation process.  Trust, once lost, can never be regained. 

Once the industry has so kindly gathered affected individuals with common cause for these community exhibitions (referred to by PATH opponents as "dog & pony shows") opposition breeds and gathers steam.  The opposition groups satisfy the public's search for a trust-worthy, open and inclusive source of information and a plan for action that empowers and encourages the David vs. Goliath battle that will ensue.  The industry doesn't stand a chance here and have, in fact, already lost the battle at the first engagement.

By broadly painting any opposition with the selfish "NIMBY" brush, the industry is simply lying to themselves and ensuring their own defeat.  What the researchers found was that opposition is intellectually capable of, and indeed demands, a thorough discussion and debate of alternatives.  However, this discussion and debate has already taken place at a higher planning level where the interests of the public have been represented by disconnected and uninformed regulators and government-funded consumer advocates who are out of touch with the real world they supposedly represent.  The only mutually satisfactory conclusion at this point is an acceptable alternative (such as the Mt. Storm - Doubs rebuild in the case of the PATH Project).

Current industry "best practices" lack procedural fairness, effective consultation with affected individuals and consideration of acceptable alternatives.  Until that is remedied, transmission will continue to be "risky" and unduly costly and the stalemate will continue.

PJM spends a whole bunch of our money trying to manipulate their "markets" to be economic by expanding the transmission system to relieve economic "congestion."  Congestion simply means that "cheaper" power can't be transported to all points via the existing transmission system at certain peak load times.  That doesn't mean the lights are going to go out in those areas that can't import "cheaper" power, it simply means that they may have to crank up some more expensive generators closer to load. 

PJM has been whining for years about all the "congestion" between western PJM coal-fired generators and east coast load.  It was their basis for the failed $6B Project Mountaineer scheme.

See PJM's 2012 Market Efficiency Analysis Results presentation that is on the agenda for tomorrow's TEAC meeting.  As we've been telling you here and on The Power Line, PJM's "congestion" situation has changed dramatically since Project Mountaineer was proposed. 

Slide 3 tells us:

Significant drivers of congestion differences in 2011 and 2012 simulation results.

• Gas prices relative to coal much lower resulting in less coal units committed and less west to east transfers.
• Reactive upgrades on high voltage system led to significant increase in reactive transfer capability for future years.
• Decreased load forecast relative to previous years.
• Generation portfolio shifts to include more gas due to sustained lower gas prices, coal retirements and a net increase in natural gas generating capacity near load pockets.
• Emissions policies impact unit commitment/dispatch and shift to higher commitment of natural gas burning generation.

That's right... decreased load forecast on the east coast and new, cheaper gas generating capacity near east coast load pockets means less west to east (coal-fired) transfers, and that means Project Mountaineer is a big, fat, costly failure!  PATH might as well jump off that cliff they're perched on, and they can take MAPP with them (unless PJM re-purposes it as a east to west offshore wind transmission line).

As far as Susquehanna-Roseland goes, look at slides 4 & 5 where S-R and the Mt. Storm Doubs rebuild appear to alleviate "congestion."  While PJM pats themselves on the back for conquering the congestion monster, notice that some "congestion" simply moves to other areas.  Every change to the transmission system causes other changes.  They're never going to fix it all, just simply shift it among different consumers like a big electric bill fairy.

Now let's move on to slide 6 where we see "Constraints with at least $5 million Congestion Reduction and Upgrade(s) responsible for reduction."  Susquehanna-Roseland is credited with congestion reduction only twice in the table, and one of those instances is combined with reactive upgrades.  If we're generous here, we'll say S-R "saves" $32M per year in congestion costs for that line item.  The second reference to S-R credits it with saving $12M in "congestion" costs.  If we add those up, we've got $44M per year possible savings.  However, S-R is probably going to end up costing in the neighborhood of $200M per year when it's completed.  What the heck, PJM?  Thanks a lot for the "efficient" cleaning out of my wallet.

Abracadbra!  PJM's "efficient" markets have even more magic to perform for me!  That $44M in yearly "congestion" savings accrues only to the load pockets on the east coast (not me!), however S-R's $200M yearly cost is shared by all 61 million PJM consumers in the entire 13-state region (me included)!  Wow!  Sign me up!  It warms my heart to pay $156M to save other people $44M in "congestion" costs!  In fact, I'm now feeling so generous that I think I'll hop in the car, clean out my bank account, and then hand out money to all the winos hanging out on local street corners.  They'd probably spend my money more "efficiently" than PJM.

Oh, but wait, that's not all S-R will do for me.  It will also provide some illusory and hard to define "reliability."  $156M worth?  What kind of a rube do you think I am?

Won't someone pull the right lever and stop this out of control gravy train?  Please?

PJM has filed an answer to the complaint of Primary Power at FERC.  If you'll remember, Primary Power filed a complaint after PJM reassigned SVC projects Primary Power had spent 5 years and $5M developing to incumbent transmission owners Dominion and FirstEnergy.

PJM says they based their decision on three factors:

1.    The fact that the incumbents already owned land (their substations) on which to site the projects.

2.    The fact that the incumbents wouldn't need a CPCN because they would merely be "upgrading" existing transmission.

3.    Cost.

Wow!  That's it?  The crappy lawyering doesn't stop with the IOUs after all, but apparently also extends to RTOs as well.  1. & 2. are situations in which the incumbent will always prevail, effectively shutting the door on any independent projects and FERC's intent to encourage independent transmission ownership.  What a joke! 

But who said the projects won't need a CPCN or run into a siting buzzsaw in West Virginia if the incumbents construct them?  That's a lot of fallacious logic on PJM's part.  As I recall, somewhere in one of Primary Power's documents they said something about already having secured needed land, but I'm not going on a fishing expedition to find it.

And as far a 3. goes...  While Primary Power had a real cost estimate based on facts and figures, FirstEnergy and Dominion had back of the envelope guesses at cost.  PJM never did any independent cost evaluation to compare the alternatives.  Just like the PATH Project, the incumbent gets a free pass to underbid any competitors with estimates they pull out of thin air.  One of my favorite parts of PATH's fictitious cost estimate was demonstrated when the $1.8B project was reconfigured from twin 500kV lines from Bedington to Kemptown to a single 765kV line from a new  Welton Springs substation to Kemptown... and the $1.8B price tag remained exactly the same.  This proved that PATH's cost estimates were completely invented.

A plethora of parties have intervened in the Primary Power complaint at FERC.  Predictably, a bunch of PJM's favored incumbents protested the complaint and sided with PJM.  However, there was an equal number of independent transmission developers who intervened to support Primary Power's complaint.  If you want to browse through the filings, go here and enter Docket No. EL12-69.  Lots of good reading, but I'm not going to upload a whole bunch of them here.

The only party who can even claim some semblance of independence here is the Pennsylvania PUC, and guess who they sided with?  You'll have to read it to find out...

But what do I know about any of this... let's ask the PJM Magic 8 Ball if FERC is going to grab PJM by the scruff of its incumbent-lovin' neck and swat them with a rolled up newspaper...  take it away 8 Ball... "Outlook Good!"

What have our friends been up to lately in the Ohio capacity charge rumpus?  Last time we checked in, AEP had scored the first victory and had moved their campaign to the AEP Ohio Answers website where Pablo the AEP Answer Man showcases some of the ugliest ties ever and drones on painfully in video after video that nobody watches.

You know what they say, imitation is the sincerest form of flattery.

FirstEnergy has a new video where Diffident Donny "answers your questions" too.  Except, they're not your questions.  Donny's handlers just made up a bunch of questions that they wanted him to "answer."  FirstEnergy has provided no way for "you" to ask questions, so it appears that they have hired an invisible mime to "ask" Donny made-up questions via text message, or something.

It looks like they gave Donny some happy pills or a couple of stiff drinks to take the starch out of him this time and sat him down in a 1970s disco set to "answer your questions."  It almost works, until you watch his eyes.  Blinking and breaking eye contact reveal the nervousness they couldn't medicate away.

But the real curiosity here is:  Has FirstEnergy hired the Clown College to do their advertising?  Donny "answering your questions" bears a striking resemblance to Corky DeMarco "answering your questions" about the PATH Project two years ago.

Okay...  FirstEnergy is trying to keep up with AEP and making absolutely no sense.  Really nothing new in that!

Keep the comedy coming, fellas!

StopPATH WV, Inc., the Coalition for Reliable Power, Sugarloaf Conservancy, Inc. and Citizens Against Kemptown Electric Substation, Inc. (collectively "Consumer Organizations") filed joint Reply Comments on FERC's Promoting Transmission Investment Through Pricing Reform Notice of Inquiry on Friday.

You can download and read a copy of the organizations' comments here.

I got word from Sugarloaf Conservancy today that the public hearing/administrative meeting that they had originally been told would occur on June 20 at 10:00 has been temporarily cancelled.  The Maryland PSC says:

"As I explained in my e-mail below, a filing as listed on a 'draft' agenda does not indicate it will necessarily be addressed at that specific Administrative Meeting or through some other means.  In this case, your filing is being treated as a Formal Complaint and therefore removed from the draft agenda. Instead, on June 5, 2012, the Commission directed Potomac Edison to Satisfy or Answer the Complaint on or before July 6, 2012.  You personally were copied on that directive and should have received it in the mail.  You will be provided a copy of Potomac Edison's response.  After that response is received, the Commission will then determine its next course of action, if any."

If any?  Perhaps the MD PSC needs some additional information about how widespread this problem is.  If you've had too many estimated bills, see how to help spur the PSC into action below.

So if you were planning to attend the public hearing/meeting, hang onto that thought as we wait for Potomac Edison to manufacture some excuses for their questionable billing practices.

Meanwhile, keep those complaints coming if you have been experiencing Potomac Edison (or other FirstEnergy subsidiary's) Disappearing Meter Reader Scam where all your bills are "estimated" and charges are out-of-sync (along with all the other seemingly unrelated complaints about the utility that we have been receiving).  Contact Sugarloaf Conservancy here, or StopPATH WV here, or simply add them to the comments on this post.

We also encourage you to submit your concerns to the Maryland PSC.  You can send your comments via snail mail or try using the PSC's online form, but be sure to reference Mail Log#139432 in your comments.

As a follow-up to their recent comments on FERC's Transmission Incentives NOI, Edison Electric Institute pumps out some fear-mongering propaganda insisting that there is a great need to build new transmission.  EEI quotes a recent "report" from the American Society of Civil Engineers which slices and dices statistics based on a "business as usual" scenario in order to manufacture a future "investment gap" that will leave us all sitting in the dark in 2040.

"Business as usual," as defined by DOE's EIA, means that all variables will remain exactly the same as they are today.  This is completely unrealistic because change relentlessly marches on and ultimately cannot be denied.

Aside from that, the article incorrectly portrays transmission opposition this way:

"Power line planners are routinely delayed or blocked by communities that don't want the lines running through their towns because of aesthetic or environmental concerns," Otto J. Lynch, vice president of Power Line Systems, which develops and sells software for transmission lines, said.

There's that old "NIMBY" battle-axe again, one of the industry's favorite name-calling propaganda weapons against due process and landowner rights.  In reality, many transmission line projects, such as PATH, have been proven unneeded by opposition groups.  The ultimate abandonment of these unneeded projects saves consumers millions of dollars in the long run.

Sounds like some investor-owned utilities are wetting their pants over the thought of their transmission incentive profits going bye-bye.

The Pennsylvania Public Utilities Commission filed a complaint against FirstEnergy subsidiary West Penn Power last week related to their investigation of a 2009 incident in which a Pennsylvania woman was killed by a falling power line.

West Penn Power has repeatedly refused to provide internal investigation reports and information to the PUC for use in their own investigation.  Read PA PUC's complaint here.

The PUC is seeking to fine FirstEnergy $86,000, with additional fines of $1,000 per day accruing until FE coughs up the requested information.  They also ask that FE not be permitted to recover the fines from ratepayers.

FE is saying the same stupid stuff they always say... we're evaluating the complaint and will respond appropriately or some such nonsense.

The PUC complaint is an entirely separate matter from the lawsuit filed by the family of the woman killed by the falling power line.

Read the letter from the family's attorney to the PUC that details the improper training on splices Allegheny linemen received.  The letter states:  "Allegheny Power's witnesses continue to confirm the company's failure to follow the manufacturer's instructions and its own internal standards for splice installation, and there is obviously a grave concern for the safety of those living in Allegheny Power's service area because of its practices."

Allegheny Power, now FirstEnergy, just doesn't care how many of their power lines fail, fall and electrocute people. It's all about protecting themselves legally, who cares about public safety?  This is why corporations should never be considered "people."  People could never behave in such a vile fashion.

The Maryland Public Service Commission will hear the complaint of Sugarloaf Conservancy on June 20 at 10:00 a.m.  The item has been moved to the end of the agenda because the PSC suspects that they may have a full house on this matter, so expect to be there for a while.

The complaint details FirstEnergy subsidiary Potomac Edison's lack of performance reading residential electric meters as required by law.  The FirstEnergy Disappearing Meter Reader Scam has been going on since just after the Allegheny Energy/FirstEnergy merger last year.

You are welcome and encouraged to attend the hearing.  Directions to the PSC can be found here.  If you prefer not to deal with traffic and parking hassles in Baltimore, you can hitch a ride on Sugarloaf Conservancy's bus from Frederick County.  Cost for the bus is $20.  Contact Sugarloaf Conservancy to reserve your seat.

Potomac Edison is caught like a rat in a trap!  Cue the dissembling -- Potomac Edison is all of a sudden pretending that there is a great meter reader shortage and they're hiring.  Don't get too excited if you're looking for a job though... it only pays $12.31 an hour.  Who can support a family on that pittance?  No wonder they have a shortage of meter readers.  Perhaps they're desperate for help because they don't pay a living wage, ya think?  Staffing shortage is no excuse for violating Maryland law by not reading meters as required.

Todd, Todd, Todd... it's "unfortunate timing" that you're still completely full of crap!  The only thing that "comes out in the end" are the fabrications Todd continually spins.  I think Todd should get in his car and start reading meters instead of sitting uselessly around the office and making crap up.  He can start here, my meter hasn't been read in over 6 months.

According to PJM, its RPM capacity market is supposed to:

"...create long-term price signals to attract needed investments in reliability in the PJM region.

... stimulate investment both in maintaining existing generation and in encouraging the development of new sources of capacity – resources that include not just generating plants, but demand response and transmission facilities."

So, what is "capacity?"  Capacity is the amount of electricity a generator is capable of producing if it ran constantly.  However, generators don't run constantly, especially plants used only during peak demand.  But PJM must assure that enough capacity is available to meet that peak demand, therefore suppliers must purchase capacity, not just the electric power they may happen to use.  Capacity payments compensate generators for making capacity available, whether it ever actually produces a product that it gets paid for, or not.  A generator cannot afford to remain ready to dispatch if it never does, and never sells any product to produce an income. 

RPM auction prices are not "the cost of electricity," they just a small part of your total electric bill.  The larger part is the cost of the generation itself.  Different fuels (or no fuel in the case of renewables) and ways to produce electricity will produce different generation prices.  Coal is now more expensive than gas, therefore the cost of electricity produced from coal will be more expensive than electricity produced from gas, although both are receiving capacity payments to be available all the time.

PJM's markets are supposed to balance all this to ensure reliability -- an adequate supply of electricity at all times -- at the lowest possible cost.

However, it didn't quite work for New Jersey and Maryland, two states that pay some of the highest prices in the region because they are electricity importers.  Capacity prices were much higher than the rest of the region in those two states because they lacked adequate generation resources.  PJM's answer to that was to build billions of dollars of new transmission to import generation with cheaper capacity prices into those states.  New Jersey and Maryland waited years for PJM's capacity market to stimulate "development of new sources of capacity," but it never happened.  Therefore, New Jersey and Maryland decided to take matters into their own hands to stimulate "the development of new sources of capacity" in their own states.  Regulators in these states believe that local gas-fired generation will be a cheaper source of electricity for their consumers in the long run.  They wanted to be released from being held hostage by an ever-shrinking pool of dirty generators in western PJM and take control of their own electricity markets.

New Jersey implemented their LCAPP.

Maryland implemented their RFP process.

Both programs successfully stimulated proposals for new generation, which would mean that incumbent generators at the exporting end of all those new transmission lines would now have real competition.  The new generation proposals use currently low-priced gas for fuel.  The incumbents rely heavily on coal and some more expensive nukes, therefore their generation may no longer be economic to import to Maryland and New Jersey.  The incumbents have been screaming bloody murder and going to great lengths to try to halt Maryland and New Jersey's programs through the legal process.  PJM, being the cartel of incumbent generators that it is, sided with its most powerful members and joined in the state utility regulator beat down at FERC and in the courts.

In addition to the fuel cost disparity, PJM and the incumbent generators have another problem on their hands -- the cost of those new transmission lines needed to import their product to New Jersey and Maryland.  While the cost of a new generator will be paid for by those who use its electricity in New Jersey and Maryland, the cost of building new transmission lines is paid for by ALL electric consumers in PJM.  A consumer's share is dependent on their share of regional peak load, therefore consumers in areas far from these new transmission lines will end up paying a higher percentage of cost than those who are receiving the lower electricity price benefits that the transmission line supposedly provides. So, while clueless bloggers hyperventilate over the "subsidies" ratepayers will pay for New Jersey's new generation, they fail to consider the cost of the alternative to building new generation -- generation imports via new transmission lines that will be paid for by others who receive no benefit and end up costing consumers much more than "subsidized" new generation in the long run.

Maryland's project, and several of New Jersey's projects, cleared PJM's capacity auction last month, which was the hurdle they needed to overcome to get started.  The incumbent generators are completely beside themselves with worry that the captive market for their product is evaporating so quickly (never mind that decreased demand and fuel economics were already doing a nice job on their own).  Now the incumbent generators and their investors are on the war path to distort media understanding of a very complicated subject. More legal wrangling is absolutely guaranteed, along with some propaganda from the incumbent generators' front group, The Compete Coalition.

New Jersey regulators do a nice job of defending their LCAPP program in the clueless blog, however the blogger just doesn't understand the entire concept therefore, he doesn't understand them and remains a faithful lapdog for incumbent generators and their spinmeisters who want to throttle real competition in electric generation.