It was inevitable. FERC slapped down another one of Public Citizen's frivolous complaints on Thursday. What a complete waste of time and money. And I'm not talking about Public Citizen's time and money, I'm talking about YOUR money wasted both by FERC evaluating the complaint, and PJM having to spend time responding to it. YOU paid for that.
Public Citizen was complaining that PJM was making political contributions and lobbying on the ratepayer dime. Sounds awful, right? However, it was nothing but a trumped up cloud of innuendo completely disengaged from FERC accounting policy and precedent. Like much of Public Citizen's FERC work, it was just crap on a self-aggrandizing bun of politics, liberally smeared with ignorance sauce. But, FERC is hard, you say, impossible to figure out, and therefore Public Citizen's effort was honest. No, it's not. I'm not even a lawyer, and I managed to figure out FERC. Sure, it took a lot of effort and time, something Public Citizen doesn't seem to want to invest, preferring its drive-by and dump strategy of being a persistent pain in FERC's ass. Fabulous. Whatever. But it's costing ratepayers a bunch of money responding to this unfounded crap.
So, why was Public Citizen's complaint denied? It claimed that PJM had made payments to both the Republican Governors Association and the Democratic Governors Association. Said associations being political associations therefore made the payments campaign contributions, according to Public Citizen. PJM answered that the payments were for membership in the associations so that PJM could attend association functions and interact with state officials to educate same. It's pretty cut and dried and rooted in precedent that's at least 15-years old. This particular argument has been done and overdone in ISO New England, 117 FERC ¶ 61,070 (2006). Regional transmission organizations may recover their informational and educational costs, even when it enters the realm of politics. A court has found such expenditures reasonable given the “potential impingement of government action on all stakeholders” and the need for legislative access to information regarding RTO activity. RTOs enjoy this status due to their lack of a profit motive. RTOs are profit neutral. There's no way an RTO can put extra money in its pocket through political activity. In FERCenese, "...because an RTO lacks a profit motive, it is easier to see that the ISO/RTO is pursuing activities that benefit its ratepayers, when the RTO seeks recovery of costs associated with state policy monitoring." Agree with it or not, it's set in stone. A lightweight like Public Citizen has no chance in hell of overturning it.
Public Citizen also whined about money paid to lobbying companies. FERC found the expenditures were related to educational and informational activities and therefore recoverable.
Public Citizen was complaining that PJM was making political contributions and lobbying on the ratepayer dime. Sounds awful, right? However, it was nothing but a trumped up cloud of innuendo completely disengaged from FERC accounting policy and precedent. Like much of Public Citizen's FERC work, it was just crap on a self-aggrandizing bun of politics, liberally smeared with ignorance sauce. But, FERC is hard, you say, impossible to figure out, and therefore Public Citizen's effort was honest. No, it's not. I'm not even a lawyer, and I managed to figure out FERC. Sure, it took a lot of effort and time, something Public Citizen doesn't seem to want to invest, preferring its drive-by and dump strategy of being a persistent pain in FERC's ass. Fabulous. Whatever. But it's costing ratepayers a bunch of money responding to this unfounded crap.
So, why was Public Citizen's complaint denied? It claimed that PJM had made payments to both the Republican Governors Association and the Democratic Governors Association. Said associations being political associations therefore made the payments campaign contributions, according to Public Citizen. PJM answered that the payments were for membership in the associations so that PJM could attend association functions and interact with state officials to educate same. It's pretty cut and dried and rooted in precedent that's at least 15-years old. This particular argument has been done and overdone in ISO New England, 117 FERC ¶ 61,070 (2006). Regional transmission organizations may recover their informational and educational costs, even when it enters the realm of politics. A court has found such expenditures reasonable given the “potential impingement of government action on all stakeholders” and the need for legislative access to information regarding RTO activity. RTOs enjoy this status due to their lack of a profit motive. RTOs are profit neutral. There's no way an RTO can put extra money in its pocket through political activity. In FERCenese, "...because an RTO lacks a profit motive, it is easier to see that the ISO/RTO is pursuing activities that benefit its ratepayers, when the RTO seeks recovery of costs associated with state policy monitoring." Agree with it or not, it's set in stone. A lightweight like Public Citizen has no chance in hell of overturning it.
Public Citizen also whined about money paid to lobbying companies. FERC found the expenditures were related to educational and informational activities and therefore recoverable.
...the Commission permits RTOs to recover expenses related to RTO informational and educational efforts. Further, in affirming the Commission’s finding that ISO-NE’s external affairs expenses were recoverable, the court in Braintree explained, “it seems eminently reasonable to encourage legislature access to such an informational resource . . . [and] allowing recovery of [ISO-NE’s] costs in monitoring legislative activity, so that it may consider how such activity might affect its operations, appears quite reasonable.”
The only request Public Citizen made that could hold a tiny bit of merit was asking that PJM's political activities be publicly posted so that they may be monitored by stakeholders. Sunshine is a lovely thing! However, the Commission slapped that down too, saying that PJM's finance committee already combed through these expenses to make sure they were recoverable and that we should trust them. I'm not so sure about that, but it may have been more about Public Citizen's approach that caused FERC to shoot the messenger.
Another federal energy legal gaffe by Public Citizen comes to a close. Public Citizen published a whiny press release full of drama that no news outlets bothered to pick up, although a couple had run earlier articles touting Public Citizen's complaint. Blah, blah, blah... and then there's this:
Another federal energy legal gaffe by Public Citizen comes to a close. Public Citizen published a whiny press release full of drama that no news outlets bothered to pick up, although a couple had run earlier articles touting Public Citizen's complaint. Blah, blah, blah... and then there's this:
FERC-regulated industries should understand, however, that FERC’s decision does not mean that all bets are off. The commission appears to acknowledge that ratepayer funds may not be used for political contributions. Unfortunately, however, the commission bought the assertion that the pervasively political governors’ associations are engaged in nonpolitical educational activities and that PJM’s payments related solely to those nonpolitical purposes. Utilities shouldn’t be misled into thinking they have free rein to use ratepayer funds for partisan political purposes.
Oh, for goodness sake! No utilities think that. They know better (much better than Public Citizen, apparently). Public Citizen acts like their actions here set some sort of precedent prohibiting the recovery of political expenditures. That precedent has been in place for more than 50 years! It was most recently enforced in Opinion No. 554 issued in 2017.
Public Citizen fails to understand the distinction between RTOs and utilities that FERC made in its order denying its complaint. Although an RTO may technically fall under some definitions of "utility," they're not actually a utility. They don't own any utility infrastructure, they merely operate the infrastructure of real utilities. Real utilities have profit motives that can be satisfied through political activities. RTOs do not. All RTO money comes from ratepayers. They have no other source of funds. There's no place to put any profits.
Utilities are already prohibited from recovering the costs of their political activities and rejection of Public Citizen's frivolous complaint didn't change that one bit. It's been tried before by much better lawyers than Public Citizen, based on the same precedent, and it failed. Spectacularly failed. No utility is going to use that decision as precedent to say that they believed FERC gave them permission to collect political activity costs from ratepayers. Honestly, Public Citizen's hubris is stunning.
Why does this matter? Because Public Citizen has also been engaged in a continual whine that FERC establish an office of the public advocate and provide taxpayer funding to "public interest organizations" like Public Citizen. They want to be funded by someone else to do even more of this worthless, costly filing of frivolous complaints. I object. I spent my own time and money on a successful FERC complaint. Nobody gave me one thin dime for what I did, however PJM ratepayers received more than $20M in refunds. I never asked for money. I did what I did because it was the right thing to do. And I found that utilities (not RTOs) actually DO wrongly recover the costs of their RGA and DGA memberships and lobbying expenditures. PATH was ordered to refund those to ratepayers, however even though utilities should be on notice as a result of that decision, I'm pretty sure they still do it. They do it because nobody is minding the store. FERC does not normally audit utility rate informational filings, and other utilities and state agencies don't have the expertise or funding to do it. Utilities get away with it all the time because no one investigates and challenges them. If, perchance, they do get the hairy eyeball from FERC, a customer, or ratepayer advocate, the utility simply claims it was a mistake and makes a refund. This game works because the chance of anyone actually discovering the utility "mistake" is slim to none and definitely worth the risk to the utility, who fattens its own bottom line the majority of the time.
Perhaps Public Citizen should spend more time investigating the political expenditures of utilities, instead of taking the easy road of making off the cuff complaints on rate matters it doesn't understand in order to grandstand for the media? They could actually save ratepayers buckets of money and do something useful for a change. In no instance should the public, or ratepayers, financially reward Public Citizen for this counterproductive, wasteful behavior.
Public Citizen fails to understand the distinction between RTOs and utilities that FERC made in its order denying its complaint. Although an RTO may technically fall under some definitions of "utility," they're not actually a utility. They don't own any utility infrastructure, they merely operate the infrastructure of real utilities. Real utilities have profit motives that can be satisfied through political activities. RTOs do not. All RTO money comes from ratepayers. They have no other source of funds. There's no place to put any profits.
Utilities are already prohibited from recovering the costs of their political activities and rejection of Public Citizen's frivolous complaint didn't change that one bit. It's been tried before by much better lawyers than Public Citizen, based on the same precedent, and it failed. Spectacularly failed. No utility is going to use that decision as precedent to say that they believed FERC gave them permission to collect political activity costs from ratepayers. Honestly, Public Citizen's hubris is stunning.
Why does this matter? Because Public Citizen has also been engaged in a continual whine that FERC establish an office of the public advocate and provide taxpayer funding to "public interest organizations" like Public Citizen. They want to be funded by someone else to do even more of this worthless, costly filing of frivolous complaints. I object. I spent my own time and money on a successful FERC complaint. Nobody gave me one thin dime for what I did, however PJM ratepayers received more than $20M in refunds. I never asked for money. I did what I did because it was the right thing to do. And I found that utilities (not RTOs) actually DO wrongly recover the costs of their RGA and DGA memberships and lobbying expenditures. PATH was ordered to refund those to ratepayers, however even though utilities should be on notice as a result of that decision, I'm pretty sure they still do it. They do it because nobody is minding the store. FERC does not normally audit utility rate informational filings, and other utilities and state agencies don't have the expertise or funding to do it. Utilities get away with it all the time because no one investigates and challenges them. If, perchance, they do get the hairy eyeball from FERC, a customer, or ratepayer advocate, the utility simply claims it was a mistake and makes a refund. This game works because the chance of anyone actually discovering the utility "mistake" is slim to none and definitely worth the risk to the utility, who fattens its own bottom line the majority of the time.
Perhaps Public Citizen should spend more time investigating the political expenditures of utilities, instead of taking the easy road of making off the cuff complaints on rate matters it doesn't understand in order to grandstand for the media? They could actually save ratepayers buckets of money and do something useful for a change. In no instance should the public, or ratepayers, financially reward Public Citizen for this counterproductive, wasteful behavior.
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