Blog Posts

PJM's State of the Market Report

3/15/2012

Just when you had puzzed and puzzed until your puzzler was sore trying to interpret PJM's 5-book RTEP set, concisely edited by Leo Tolstoy, PJM has issued another voluminous report. The 2011 State of the Market Report is like the world's biggest fortune cookie, with your hidden fortune cleverly translated into Ancient Sanskrit. I wish PJM would get more efficient and issue Magic 8 Balls instead. I mean, how easy it could be to give it a shake and say, "Oh, PJM Magic 8 Ball, will the PATH Project be coming back?" The PJM Magic 8 Ball would give you an immediate answer like, "Don't count on it!" Instead all we get are these encyclopedic mystery novels with "Reply hazy, try again!" stamped on the front cover.

Here's PJM's CliffsNotes version press release summarizing the report. This is about as concise as it gets:

"The report noted that gas prices fell and coal prices rose in 2011. Gas prices decreased on average by 10 percent and coal prices increased on average by 19 percent in 2011. PJM LMPs were lower. The load-weighted average LMP was five percent lower in 2011. PJM capacity prices were lower. PJM average capacity prices were 18 percent lower in 2011. Operating reserve charges increased by 1.0 percent in 2011. Congestion costs decreased in PJM by 29.9 percent in 2011."

Inside the big report, there's a section entitled, "Generation and Transmission Planning" (Volume 2, Sec. 11!) The report's mention of PATH seems to be missing one crucial fact -- that this project is supposedly "suspended." The report prattles on like PATH hasn't skipped a beat, but throws you a tiny little bone at the end saying that PJM is "considering new information." What is that supposed to mean, PJM Magic 8 Ball? "Outlook not so good." I hope Magic 8 Ball was speaking from PATH's perspective...

The Potomac - Appalachian Transmission Highline (PATH) project is required to resolve reliability criteria violations. The PATH project consists of a 765 kV transmission line extending approximately 275 miles from the Amos Substation, which is located in southwestern West Virginia, to the proposed Kemptown (765/500 kV) Substation, located in central Virginia. The project also includes a new Welton Spring (765/500 kV) Substation.
Currently, right-of-way issues are being discussed in West Virginia, Virginia and Maryland. The property for the Welton Spring and Kemptown substations has been acquired. The preliminary engineering design work, as well as the preliminary procurement activities, is in progress. Construction will be scheduled to begin following receipt of state commission approvals to construct. The required in-service date for the PATH line is June 1, 2015.
PJM is in the process of considering new information, including fuel cost estimates, emissions costs, future generation scenarios, load forecast updates and demand response projections.

Further down in the report, the MMU goes and gets all cranky about transmission projects dropping out of the RTEP messing up his little markets and makes this recommendation:

"The MMU recommends that PJM propose modifications to the transmission planning process that would limit significant changes in the status of major transmission projects after they have been approved, and thus limit the uncertainty imposed on markets by the use of evaluation criteria that are very sensitive to changes in forecasts of economic variables."

Way to send us all to the poor house, MMU!

This little transmission project went to market,
This little transmission project stayed in the RTEP,
This little transmission project is "in abeyance,"
And this little transmission project is not,
But this little transmission project cried, "Wah, Wah, Wah" all the way to abandonment.

Don't you just love the new "stakeholder friendly" PJM?

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The Ugliest Carpet Your Money Could Buy

3/15/2012

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Not much to dwell on here, because it would probably get ugly... but nowhere near as ugly as "Potomac Edison's" carpet. I think my eyes just rolled back in my head in self defense. I hope they didn't waste our money on this. Maybe it was free as part of some new "interior decorating gone bad" reality show. At least that's what I'll keep telling myself.

I note that although they brag that their new building is energy efficient, the crappy energy efficiency program they foisted off on the rest of us on January 1 was the bare minimum they could get away with under law. One half of one percent energy savings over 5 years is nothing to be proud of, especially when the majority of the customers who are paying for it don't qualify for any benefits.

Who knows... maybe next they'll update their canned phone butler who still thanks you for calling Allegheny Power, and let all those missing meter readers out of the basement, or wherever it is they've hidden them.

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Here come the NIETCs again...

3/14/2012

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The Department of Energy is seeking comments on their 2012 National Electric Transmission Congestion Study. Deadline for comments is March 30.

NIETCs are another one of the nifty tools the energy industry gifted themselves with in the 2005 EPAct that helped set the stage for their great transmission-building gold rush. The idea was for DOE to do a congestion study every three years and designate NIETCs. FERC was granted transmission siting authority in a designated NIETC, in the event that a state withheld approval for 1 year (as well as a few other situations). They thought they'd set up a system that usurped state siting authority. Combined with a delicious buffet of transmission incentives from which to choose, it created an IOU transmission feeding frenzy.

Unfortunately for them, their game plan was successfully challenged in the courts by environmental groups. In Piedmont Environmental Council v. FERC, the 4th Circuit ruled that denial of a permit by a state wasn't "withholding," and took away FERC's authority to site a line in the event that a permit was denied by a state. And in California Wilderness Coalition v. U.S. Dep’t of Energy, the 9th Circuit vacated the NIETCs that DOE had designated, further obliterating FERC's authority to override state siting decisions by doing away with the corridors upon which FERC's authority rested. Their little scheme has been rendered completely useless.

Never fear though, dear consumer. They're already busy with their next plan of attack. This time, DOE plans to solicit suggestions for NIETCs from utilities for narrow corridors that coincide with the utility's desire to build a certain transmission line. There's an interesting article about their conniving in the Public Utilities Fortnightly snooze-rag.

If there's one over-riding lesson we've all learned from our experiences over the past 3 1/2 years, it's that you've got to keep your eye on these greedy shysters. It's much easier (and a lot less stressful!) to attempt to prevent bad policy than it is to fix it after it happens.

Do you want to get in on the ground floor this time, instead of being rudely awakened by a transmission line dropped in your backyard by a power company routing etch-a-sketch after it's too late to comment? Don't be intimidated. Federal energy policy really isn't that scary and there's plenty of material on the site to use in crafting your own, or your group's, comments.

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Power Company Excess - The Corporate Jet

3/14/2012

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The Colorado Public Service Commission is a bit disturbed by electric utility Xcel's cost of corporate jets for which they are seeking reimbursement from ratepayers. And if you think they're disturbed, you can imagine how the consumers feel about it.

Xcel added $1.1M of their $5.7M cost of the aircraft to their recent request for a rate increase. Xcel says the expense is prudent to jet their execs around like mass transit for hoity-toity commuters. This isn't a rare occurrence. All the big investor owned utilities feel entitled to live like kings at your expense. You might even come across the words "corporate jet" in the PATH Formal Challenge (page 60).

These clueless plutocrats need a few lessons in humility and a day or so spent inhabiting the real world in which the rest of us live. News flash: The economy is in the dumpster and we can't afford your sense of entitlement any longer! Your train has run off the rails. All passengers must disembark!

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Targeted Pressure - Stop Power Company Lobbyists!

3/14/2012

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Word is that NPS personnel working on the Susquehanna-Roseland transmission project's EIS have been called to the Delaware Water Gap National Recreation Area this week for meetings. They may not come out of it with their integrity intact! Help them out by signing this petition. Do it right now!

Have you signed it yet? If you just said "no" then you're not allowed to finish reading this blog post. Go away.

NPS personnel have been under increasing pressure to permit profit-seeking utilities PSE&G and PPL to destroy the most scenic vistas of the park with one of PATH's sister Project Mountaineer unneeded transmission lines. In exchange for rolling over and selling your public resources to the highest corporate bidder, the Park Service will receive some inferior land on the fringes of the current park as "mitigation." Those on the inside report that Interior Secretary Ken Salazar has already cut a deal with power company lobbyists to approve the destruction, before the EIS is even finished! The NPS personnel working on the project have been put into the compromising position of just going through the motions when approval is already in the bag, bought and paid for. And guess who's paying? YOU ARE! Cost of the mitigation bribe will be rolled into the project's rate base that you'll be paying off for the next 50 years in your electric bill, along with 12.9% interest for the power companies every year.

Show your support for the honest NPS personnel who are facing a serious moral dilemma that risks their jobs by signing this petition today!

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WV Passes Electric Consumer Debt Bond Legislation

3/10/2012

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West Virginia's penny wise and pound foolish legislators have passed a bill that would enable the Public Service Commission to approve the issuance of bond debt which would allow Appalachian Power to recover its cost of coal over the past 4 years. The long-term debt will be repaid by electric consumers in their monthly bills over the next decade. Coal prices are expected to continue to increase in the future.

I'm not going to harp on why this is completely wrong anymore. I'll turn it over to an expert - James M. Van Nostrand, Director, Center for Energy and Sustainable Development and Associate Professor of Law, West Virginia University College of Law. Read his analysis of West Virginia's big mistake here. When our legislators and Public Service Commission won't listen to learned experts, but instead choose to buy into the pie-in-the-sky promises of corporate lobbyists, it's time to clean the state house, before we go bankrupt trying to stay warm in our own house.

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Consumer Revolt

3/8/2012

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Electric consumers are fed up with the gigantic for-profit energy conglomerates, and a day of reckoning is fast approaching. The status quo will change.

I came across this article recently. In it, the author claims that, "utility customers are mad as hell." He's right, but he also thinks that he can fix that for any willing corporate benefactors. In fact, he can't. While he does make one interesting observation down near the end of the article, he's about as clueless as his financiers.

Egan says, "Utilities have the tools and opportunities to respond effectively when they are targeted by guerrilla protests, but utilities face significant organizational challenges. Historically, they have been unable to move as quickly as protesters and are uncomfortable with the kind of direct confrontation espoused by activists."

This is a correct statement, and a weakness we discovered and exploited early on in the PATH battle. I disagree that they "have the tools to respond effectively" though. PATH was left with drool dripping off its collective chinny, chin, chin on numerous occasions. My personal favorite was watching them stare in disbelief from behind the lobby doors as we marched onto the sidewalk in front of their Frederick office 10 minutes before their "media event" that we weren't supposed to know about, and the press came running like Pavlov's dogs. Their ineffective response was to attempt to strong-arm the press away from us. Wrong! It set the tone for what was ultimately a complete and utter public relations failure in Frederick County, Maryland.

The PATH project ignited a fire in the hearts and minds of thousands of citizens in three states. Other unneeded transmission boondoggles have had the same effect in other states.

Constant electric rate increases that result in increased corporate profit have also awoken a sleeping giant. In Ohio, PUCO's recent tossing out of AEP's rate increase served only to empower the consumers. AEP and PUCO will never be able to stuff that genie back in the bottle. AEP is now a dead man walking in their home state.

West Virginia consumers are joining forces in record number in response to out-of-control rate increases and a lack of utility performance.

In Boulder last year, the citizens voted to kick energy giant Xcel to the curb and form their own municipal utility.

America is fed up with the corporate elite in general. We know who you really are, and what you're really doing. We're never going back to subservient ignorance of your money-making machinations to manipulate the masses.

The consumers are mad as hell. Changes are coming. The utilities can adapt or face extinction. We're not going to take it anymore.

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Incumbent Transmission Owners Usurp PJM's Authority

3/8/2012

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It looks like Primary Power has had another revelation about the shifty state of affairs at PJM. If you've been following the SVC issue, here's the latest.

Primary Power submitted a letter to PJM on February 29 to make a final plea to retain their prior selection to construct the projects. FirstEnergy wants to swoop in at the last minute and take over the project and they have been whining like a milksop champ.

In the letter, Primary Power makes a couple of astute observations:

"Continuing to allow a re-opening of the original recommendations made by the OI is tantamount to allowing the incumbent transmission owners to take over PJM’s role as the Transmission Planner in its NERC reliability regions, and PJM’s management of the stakeholder process."

and

"There are real problems with FirstEnergy’s claimed estimate that make it not credible, and not a valid basis for comparison to Primary Power’s well-founded estimate. First, Primary Power’s estimate is based on five years of development work on the Meadowbrook SVC and a design-basis cost estimate provided by the EPC contractor for the Primary Power SVC projects. In comparison, FirstEnergy has done no development work on a Meadowbrook SVC and its estimate is just an unvetted assumption.

Second, FirstEnergy’s track record on cost estimates for this very type of facility demonstrates that FirstEnergy grossly underestimates the cost of the facility in its initial estimate.

In the case of FirstEnergy’s Black Oak SVC facility, which was designated to FirstEnergy in the 2005 PJM RTEP, FirstEnergy’s initial estimate was $35 million. Within a year after FirstEnergy was designated to build the facility, the original cost estimate had ballooned from $35 million to $50 million. FirstEnergy underestimated the cost by almost 50 percent, and PJM selected the project based on that estimate.

If FirstEnergy has similarly underestimated the costs here, which is likely given that FirstEnergy has done no development or design work on the Meadowbrook SVC, then FirstEnergy’s $60 million initial estimate could easily escalate to $90 million, well in excess of the cost for Primary Power’s Meadowbrook SVC project. The lesson learned from FirstEnergy’s prior cost estimating and its off-the-cuff estimate for a project that it has not developed, is that care should be taken when comparing cost estimates."

So, FirstEnergy severely undervalues their "off the cuff," unvetted cost estimates in order to have them selected by PJM. And PJM continues to defer to the profit-driven bullying of its largest members. Anything new and striking in that for you PATH opponents? Nah, didn't think so. PJM is a dangerous cartel and its continued biased favoritism of projects awarded to certain incumbent TOs keeps cropping up again and again. Like water dripping on a stone...

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When Sensationalism and Evasiveness Collide...

3/6/2012

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...it causes news stories like this:

PATH power line could be back on track this summer

Don't blame the reporter, it looks like the title of the article that was not used by her editor was the more realistic, "Future of PATH power line could be decided this summer."

Does Herling actually say that PATH will be needed? No. In fact, most of what he says points to PATH not being needed. New generation is planned for the east coast, coal prices are up, gas prices are down, prices have levelized, the bottom has fallen out of the Ohio Valley power generation market, east coast states are pursuing renewables and PATH's parent companies clearly aren't interested in the project any longer. He drones on and on about PJM's new planning process, but none of what he says is news. In the practice of what Bill has termed "PATH Kremlinology," we've been keeping you informed of the little puzzle pieces we dig up and fit together. Stay tuned while we see this one through.

We first got wind of the supposed "summer" decision about PATH from the letter PATH sent to the NPS asking to have the EIS held in continued abeyance until 60 days after PJM's RPM auction in May. None of that has changed.

Herling isn't exactly known as a "transparent" source of information, however. When Dominion presented the rebuild of the Mt. Storm - Doubs 500kV line to PJM, our pal Herling tried like mad to sweep it under the rug or delay it unnecessarily. He lost that battle. MSD is proceeding with an in service date of 2015.

So, why would an impartial planner be in the pocket of the PATH companies? Here's a little "transparency" for you, taken from one of Herling's many expert testimonies for the PATH Project:

"Prior to that, I worked for the American Electric Power Service Corporation for eight years in bulk transmission planning."

Okay, so that explains Herling.

It probably also explains this glaring departure from reality that I noticed in the 2011 RTEP last night.

In Book 3 of the 2011 RTEP, PJM makes the following statement about PATH's "abeyance" as it was announced in early 2011:

"Additional sensitivity analysis performed on a 2017 study year case examined the impacts on the need for PATH abeyance from Warren County Generation, a Global Insights load forecast, RPS initiatives, at risk generation and State DR/EE goals."

What's missing? Dominion's MSD rebuild - the ultimate grim reaper for the PATH project.

Here's what PJM says about MSD:

"Baseline RTEP studies conducted in 2010 indicated that the Mt. Storm - Doubs line would continue to be a limiting system element even after major backbone additions like TrAIL and PATH were completed. Consequently, the PJM Board approved PJM’s recommendation to add the rebuild to the PJM RTEP as an operational performance upgrade."

But here's the testimony PATH presented to the VA-SCC on March 17, 2011 regarding PJM's additional analysis requested by the hearing examiner:

"When the upgrade is completed, the Mt. Storm-Doubs line, the first two lines on this slide, the carrying capacity of that line will be increased about 66 percent. And so, that will move out the thermal violations shown in the base case well into the decade of the 2020's."

Herling has always been in denial about MSD. He also rules his little fiefdom like the lunatic patriarch of a dysfunctional family.

"As we work through 2012 … I think will fill in the blanks for what other factors we will consider and how we will weigh them when we are making decisions," he said.

Transparent? Hardly. But, will the PATH project become "needed" again this summer? I suppose anything is possible when you're dealing with a cockamamie, clandestine cartel, but it's probably unlikely. This doesn't mean you should forget about PATH and staying involved in continued opposition, though. It's always possible that the zombie could rise from the grave until it is officially abandoned.

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Summary of FERC's Transmission Incentives NOI Comments

3/5/2012

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Nudge, nudge, FERC. Some people are getting impatient that you seem to have clammed up about transmission incentives after being deluged with comments from states, environmental and consumer groups, and angry citizens.

Spiegel & McDiarmid submitted a letter today on behalf of numerous organizations and states summarizing the general gist of the comments, in case FERC is having trouble sorting them out.

It makes perfect sense. But it doesn't make a bunch of unearned profit for transmission owners. Cue the whining... the IOUs should be responding in... 3, 2, 1...

It could have been better if they hadn't started out spelling two out of four Commissioners' names wrong. And, that word "incentive" is such a toughie! It isn't a verb. Even grammar experts can't agree on how to turn it into an action word. However, once you've picked one of the bastardized verb versions, please stick with it throughout the document. I'm glad this isn't an English 101 test.

But, hey, something amazing happened with this letter... WV's Consumer Advocate finally weighed in on the matter of FERC's transmission incentives! If he'd gotten involved sooner maybe they would have found out that there's already plenty of transparency between costs and reward in a formula rate. It's that line item called "Return." It's not that hard, Byron.

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Forward>>

PJM's State of the Market Report

The Ugliest Carpet Your Money Could Buy

Here come the NIETCs again...

Power Company Excess - The Corporate Jet

Targeted Pressure - Stop Power Company Lobbyists!

WV Passes Electric Consumer Debt Bond Legislation

Consumer Revolt

Incumbent Transmission Owners Usurp PJM's Authority

When Sensationalism and Evasiveness Collide...

Summary of FERC's Transmission Incentives NOI Comments

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