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"Stuff the Angry Customer Genie Back in the Bottle" and Other Fun AEP Party Games

3/23/2012

8 Comments

 
That old adage, "what goes around comes around" never fails.  While we may have been mentally and financially tormented by AEP's PATH subsidiary for the past (nearly) 4 years, AEP is getting plenty of torment of their own in return lately.  And, it couldn't happen to a nicer bunch of *insert inappropriate word here*!  So, pull up a chair and let's get started.

We've been following AEP's pummeling at the hands of fed up customers in Ohio.  Earlier this week, AEP-Ohio had a serendipitous changing of the guard when the President (who got them into this mess) left for another job with a gas company.  "Curiouser and curiouser," cried Alice... 

Today, AEP-Ohio held what they called a public forum at the PUCO, although PUCO denied official responsibility for the process as being a part of any active case.  Over a hundred angry customers from all classes, such as small business, large business, residential, schools, non-profits, etc., showed up to return a little of their misery to AEP. 

The mayor of Hillsboro had this to say,
"AEP lit a prairie fire with its destructive actions and brought itself intractable and vocal critics, including myself and the people I represent." 

Customers also told AEP they're tired of the incomprehensible gibberish that goes on in rate cases and in the bills they receive
.  AEP pretended to take a lesson and incorporate the customers' concerns in their new rate filing expected next week.  Somehow, I don't believe that AEP hasn't started putting together their rate filing yet.  I would bet it's already done and the most the public's concerns will do is slightly modify things here and there.  If AEP really cared what the consumers think, they would have been paying attention all along, instead of ignoring consumer pain and crowing about their earnings every quarter.  These consumers aren't going away, and AEP is unlikely to truly change their behavior.  This story will continue...

Meanwhile, in Virginia, Attorney General Ken Cuccinelli, who desperately wants to be elected Governor next year has been holding town hall meetings to grandstand as "the people's lawyer" and pretend to explain electric rate increases to the voters.  He vigorously defended AEP's Appalachian Power subsidiary's recent rate increases and said they were caused by anything but the truth -- AEP's out-of-control coal addiction.  The only problem here is that ol' Kook doesn't know what the heck he's talking about.  He said previous rate increases in Virginia are the fault of the EPA (for regulations that haven't even been effected yet). 

He must have served some really potent Koolaid, as one Stepford wife said on her way out the door, “The EPA regulations are having a negative effect on the rates for people.” 

But where was Kooky Ken when Appalachian Power was granted recovery of 50% of their charitable contributions from ratepayers last year?  He forgot to mention that!  I guess "the people's lawyer" is looking for some of "the power company's campaign contributions."

Also this week, AEP officially notified PJM and SPP of anticipated plant closures.  It ended up being over 1,000 MW less than AEP has been bellyaching over since June, due to some creative math that suddenly made it more economical to install a scrubber on Big Sandy than to repower one of the units with natural gas (not that anyone believes them).  The Little Drummer Boy's canned quote shows how much denial of fact still predominates at AEP. 

"Our retiring units were required to run to meet peak demand last summer, and little new generation is scheduled to come on line prior to the retirement dates to replace this lost generating capacity." 

He continues to ignore the fact that previous "peak" is being vigorously hacked down to size by booming demand side management and energy efficiency.  Oh, cry me a river!

Closer to home in West Virginia, Appalachian Power is salivating at the thought of Century Aluminum reopening.  Century has been offered a $20M "tax break" to pay for electricity supplied by APCo.  And whose pocket do taxes come from?  Yours!  Be sure to thank your legislator for that one! 

Also, APCo has polished up its "economic development efforts" by re-hiring some guy they laid off years ago.  Good luck with that, I'm sure businesses just can't wait to relocate to West Virginia, where they will be paying off old coal debt for power that was consumed by other ratepayers in 2008.  What an incentive!

What will AEP do for an encore next week?
8 Comments
Jones Brother
3/23/2012 09:32:01 am

Didn't I also hear that coal companies that provide coal for power companies (John Amos) that provide power to Century would also get a $20 million tax break? Or am I confused?

Reply
Keryn
3/23/2012 09:34:15 am

Dunno... but probably! If you can find that in a news story, I'll add it.

Reply
Jones Brother
3/24/2012 12:38:34 am

Keryn,

This must have been what I heard in passing-not paying much attention.

http://www.wvmetronews.com/news.cfm?func=displayfullstory&storyid=51640

"As part of the Energy Intensive Industrial Consumers Revitalization Tax Credit, a tax credit of up to $20 million a year will be available for the next ten years to Century if certain conditions are met.

It is designed to be a partnership, drawing on coal severance tax money, between the coal companies, the utilities that use that coal to generate power and the companies that use that power in large amounts, like Century.

"From the taxpayer perspective, in this case, WHICH IS THE COAL COMPANY CLAIMING THE CREDIT, they would simultaneously send to the utility the amount that they would otherwise pay in taxes to the State Treasury and they would claim a credit on their tax return of a like amount plus a 3% charge for the administrative burden of that complex procedure," Heywood explained."

Doesn't it always go back to the coal companies? "PLUS A 3% AMINISTRATIVE """"BURDEN""""." ?????? $600,000 A YEAR will allow for a few more PR consultants, ads, parties and/or attorneys fees.

Reply
Keryn
3/24/2012 06:54:56 am

Thanks, J. Bros., my disgust of Charleston is now complete! I'm a little confused however. One paragraph says the coal company will pay the hijacked tax revenue to the utility and 2 other paragraphs say the coal company will pay Century. Something to look up, I'm sure the actual legislation is pretty interesting.

So... $20M per year (sometimes more if there's carryover) that would ordinarily go into state coffers will now be skimmed off into out-of-state corporate pockets. And who will have to make up that $20M difference in state tax revenue? Why, we will, of course!

"Administrative burden" uh, yeah, I'm sure they're going to pay a couple of staff accountants $600K for a couple extra days worth of work... not.

Thanks for adding to this outrage :-)

Reply
Keryn
3/25/2012 05:38:38 pm

Administrative burden or "inducement?"

"The three percent differential between a taxpayer’s tax credit and its required payment to the public utility is intended as an inducement to the taxpayer to participate in the tax credit and required payment mechanism provided in this article and may be retained by the taxpayer as compensation for the costs of participation."

What this legislation does is turn the power company into the state tax department -- the coal companies would pay up to 93% of the severance tax due to the power companies instead of to the state. The power companies get the revenue in exchange for offering the "energy intensive" facility a special rate.

Here's a link to this remarkable hijacking of coal severance taxes due to counties into the pockets of our wonderful, out-of-state electric utilities:

http://www.legis.state.wv.us/Bill_Status/bills_text.cfm?billdoc=hb101%20ENR.htm&yr=2012&sesstype=1X&i=101

Reply
bh link
3/26/2012 06:27:05 pm

I think the technical term is "transfer of wealth" from WV tax payers to Ohio power companies.

The real problem here is that WV electricity is no longer priced competitively. There are two reasons for this: (1) WV's own coal resources have been so depleted that mining coal in WV is no longer cost effective and (2) the fact that WV gets 97% of its power from coal has the state dependent on a high priced fuel for its power.

Around the US, power companies are switching rapidly to lower priced gas-fired power, and investment in efficiency/demand management is also bringing down the cost of electricity.

WV's dependence on coal for its power means that to attract power intensive industry back to the state, the power company/government complex must feed the corporations more and more tax payer funded subsidies.

The situation is so desperate that even with a company that already has a factory in the state, the Legislature has to give away huge subsidies just to get the plant to reopen.

Keep in mind that this is the same Legislature that killed SB162, which would have required real transparency and lowest cost in the planning of electrical system development in WV.

Reply
Taxed
4/1/2012 08:53:58 am

I'm going to deduct a 3% inducement from the amount I owe the state this year. It's compensation for my participation as a WV state tax payor last year. I look good in orange.

Reply
Surgery for eye link
6/28/2012 09:30:03 pm

I am extremely impressed thanks for sharing all information. It is a great post for the people to get the proper information.

Reply



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    About the Author

    Keryn Newman blogs here at StopPATH WV about energy issues, transmission policy, misguided regulation, our greedy energy companies and their corporate spin.
    In 2008, AEP & Allegheny Energy's PATH joint venture used their transmission line routing etch-a-sketch to draw a 765kV line across the street from her house. Oooops! And the rest is history.

    About
    StopPATH Blog

    StopPATH Blog began as a forum for information and opinion about the PATH transmission project.  The PATH project was abandoned in 2012, however, this blog was not.

    StopPATH Blog continues to bring you energy policy news and opinion from a consumer's point of view.  If it's sometimes snarky and oftentimes irreverent, just remember that the truth isn't pretty.  People come here because they want the truth, instead of the usual dreadful lies this industry continues to tell itself.  If you keep reading, I'll keep writing.


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