So, what triggered the TrAILCo audit? That's what a reporter from The Energy Daily is trying to figure out. Unfortunately only subscribers can access complete content, so if you're really curious, sign up for your "free trial" (no clue if this will actually let you see the article or not), or email me and I might be able to help you out. ;-)
He circles around TrAILCo's recent FERC filing (EL12-14) regarding a $130M capital dividend payout to its sole stockholder -- parent FirstEnergy, formerly Allegheny Energy. This is necessary to reduce TrAILCo's $179M 2011 Revenue Requirement by $7M to prevent "rate shock" for all of you. This "rate shock" is caused by the actual equity/debt structure when the project went into service. Instead of the hypothetical 50/50 split FERC had granted them as an incentive, the actual ended up at 63% equity. This payout is intended to reduce equity to 59% and lower the amount of return (or interest) ratepayers will have to pay TrAILCo for tying up their capital in "our" transmission line. The problem was exacerbated by some accounting that was done as a part of the Allegheny Energy/FirstEnergy merger. How come none of the authorities reviewing the merger saw that one coming and accounted for it in the crappy $2.5M of "synergy savings" we were oh so generously granted in West Virginia? Yeah, this merger continues to cost you... dearly.
Anyhow, after gushing on and on about this, the reporter concludes that FERC rubber stamped TrAILCo's request, so that isn't necessarily the reason for the audit. Yeah, we know. FERC granted their declaratory order on Dec. 29 and the audit was commenced on Jan. 3. FERC couldn't move that fast if the building was on fire. Their clocks don't run in the same time warp as the rest of ours.
Looks like the TrAILCo audit is going to continue to drive reporters crazy for a while yet because no one is talking and clues are hard to find. Yeah, we know :-)
He circles around TrAILCo's recent FERC filing (EL12-14) regarding a $130M capital dividend payout to its sole stockholder -- parent FirstEnergy, formerly Allegheny Energy. This is necessary to reduce TrAILCo's $179M 2011 Revenue Requirement by $7M to prevent "rate shock" for all of you. This "rate shock" is caused by the actual equity/debt structure when the project went into service. Instead of the hypothetical 50/50 split FERC had granted them as an incentive, the actual ended up at 63% equity. This payout is intended to reduce equity to 59% and lower the amount of return (or interest) ratepayers will have to pay TrAILCo for tying up their capital in "our" transmission line. The problem was exacerbated by some accounting that was done as a part of the Allegheny Energy/FirstEnergy merger. How come none of the authorities reviewing the merger saw that one coming and accounted for it in the crappy $2.5M of "synergy savings" we were oh so generously granted in West Virginia? Yeah, this merger continues to cost you... dearly.
Anyhow, after gushing on and on about this, the reporter concludes that FERC rubber stamped TrAILCo's request, so that isn't necessarily the reason for the audit. Yeah, we know. FERC granted their declaratory order on Dec. 29 and the audit was commenced on Jan. 3. FERC couldn't move that fast if the building was on fire. Their clocks don't run in the same time warp as the rest of ours.
Looks like the TrAILCo audit is going to continue to drive reporters crazy for a while yet because no one is talking and clues are hard to find. Yeah, we know :-)
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