Blog Archives

PATH - MIA in FirstEnergy's Financial Presentation

2/29/2012

Despite PJM's lingering uncertainty about the PATH Project, it's deader than dead at FirstEnergy. In today's Q4 2011 Earnings Call shindig in New York (which YOU get to pay for in your electric bill), there was no mention of PATH in any discussion of their transmission plans.

In fact, FE seems to have lost their taste for big joint venture projects like PATH entirely: "...one thing I don't see in our future is investing in large scale transmission projects outside of our utility footprint. We plan to stay close to home, make investments that have high certainty of completion and transparency as far as financial returns."

It's probably a good thing, considering:

"The skill sets acquired from Allegheny on transmission siting and construction will also be invaluable going forward as future projects are completed."

Well, based on Allegheny's "skill sets" utilized in trying to site the PATH Project, good luck with that, FE! It's just too bad about any future transmission projects you may undertake with those morons "applying best practices." They got thoroughly trounced by a tri-state coalition of ordinary citizens. They're just not the brightest bulbs in the string...

FirstEnergy doesn't even seem to understand why Allegheny was interested in the PATH Project in the first place:

"We aren't sure on the reasons for investing in Transmission either."

It was all about the money, boys!

If you want to download the slides, you can find them here.

1 Comment

AEP's Public Relations Charlie Foxtrot - The Empty Threat

2/29/2012

5 Comments

Just when I think power company corporate flacks can't get any stupider, they've managed to top themselves.

In this article in The Columbus Dispatch, AEP's Little Drummer Boy threatens to take his toys and stomp off Ohio's playground unless he gets his way. WAHHHHHHHHHHHHHHH, LDB, WAHHHHHHHHHHHHH!

This is just the latest comedic moment in a long-running freak show that's been playing out in Ohio over the past year. A Dispatch reporter got interested in electric rates when AEP filed a rate case in Ohio last year. The more he found out, the worse it began to smell. Ohio's Public Utilities Commission (PUCO) has been completely captured by the companies it regulates, and the appointed Commission is stacked with corporate lackeys. The Governor furthered the corruption by cutting the Ohio Consumer Counsel's budget in half last fall. The stage was set perfectly for what happened next.

When the rate case turned into a privately negotiated settlement that some parties, such as the Office of Consumer Counsel, refused to sign, The Dispatch reporter got even more curious and wrote a string of articles about the corruption at PUCO. The Dispatch also used FOIA to access internal PUCO documents and correspondence about the rate case and settlement. The Dispatch took what they'd won in the FOIA and consulted ratemaking experts. Turns out that during the settlement, an inequitable share of a new distribution rider was allocated to the small business, school, church rate class that resulted in bills doubling for these customers. Incidentally, this class of ratepayers were not represented in the settlement, however the large industrial customers who were represented came out of it with a corresponding decrease in the amount they would pay for the distribution rider. The Dispatch published the results of their investigation, warning small businesses and others in this class that their rates would go up 30 - 40% if the settlement was approved. They also published quotes from PUCO internal emails where staff had pointed this out early on in the process. In fact, one PUCO staff person pretty accurately predicted the ultimate outcome. Despite this, PUCO went ahead and approved the settlement.

When rates went into effect in January, and small businesses started getting their bills, a public relations storm erupted. PUCO was hit with over 1,000 complaints, small businesses were facing layoffs and closures. In response to the possibility of having the flaming bag placed on their doorstep, PUCO rescinded approval of AEP's settlement and rate increase last week. AEP's stock tanked 5%. PUCO pointed the finger at AEP for gouging customers without their knowledge.
Read The Columbus Dispatch's coverage of all this here.

Instead of falling gracefully on their sword, AEP pointed the finger back at PUCO and demanded that they reinstate the part of the settlement that allows them to limit the competition that's kicking their deregulated generation rear end in the state. AEP wants this immediately, or they're going to move their headquarters out of Ohio and cause massive job loss.

Hahahahahahahahahaaa! Hysterical! I guess some corporate PR genius was still sniffing the fumes of their successful snow job of WV's Senate Judiciary Committee last week, where the threat of job loss was used to get their own way. Really dumb move. LDB looks like a pouty pre-schooler and nobody really seems to care if he stomps off, in fact they are welcoming him to do so.

Buh-bye, AEP! Don't make threats you don't intend to carry out. Tony the Trickster and his merry band of wanna-be corporate pirates are batting their eyelashes at PUCO, wanting to be their next darling and take your place. Apparently, nobody's going to miss you much.

5 Comments

Legislative Scorecard

2/27/2012

2 Comments

SB162, Least Cost Planning, died in committee today. So ends my involvement with legislation this year. Now I can get back to the things I do best, like, oh I don't know... maybe researching and reporting on corporate campaign donations?

Many thanks to the many of you who made phone calls and wrote emails. Once again, our collective efforts produced the biggest response to a piece of legislation and made our corporate representatives at the Capitol distinctly uncomfortable. Unfortunately, it wasn't enough to drown out the "free speech" of the electric and coal corporation campaign cash. This will most likely continue until we hold "our" elected representatives accountable for their actions and make them earn our respect. As my poor mother was fond of saying many years ago, "I brought you into this world, and I can take you out!" The current status quo will only survive as long as you allow it. The power is in your hands.

So, the next time your electric rates go up (hey, that's this Thursday for you ApCo customers -- they're going to file for ANOTHER rate increase), you can send your personal thanks to the members of Senate Judiciary who tabled the least cost planning bill. It turns out that the problem was that the coal companies were scared that when their power company friends were forced to put real numbers on a public piece of paper, maybe coal wouldn't be the cheapest fuel to generate electricity going forward. Therefore, the corporations and their friends in the Senate decided it was better to kill the bill and hope that the consumers never find out that their electric bills keep going up in order to subsidize West Virginia's coal industry.

This is far from the end for least cost planning, however, it merely served as a launch pad. There's much more to come!

On the positive side, we scored a huge victory in the House by limiting Appalachian Power's Consumer Debt Bond Bill to only one bailout for the company.

Sometimes the victory is immediate and obvious. Sometimes it's a long term process, but a victory all the same.

Heroes

Del. Nancy Guthrie, who amended Appalachian Power's Consumer Debt Bond Bill to limit it to a one-time occurrence to bail APCo out of its current precarious situation.

Sen. Dan Foster, who sponsored the Least Cost Planning bill and continued to support it to the bitter end.

Zeros

Well now, that just wouldn't be "nice," would it? ;-) I don't really need to put a list of names here, do I?

2 Comments

Out-of-Control Electric Rate Increases Will Cause Job Loss in West Virginia

2/23/2012

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One of the advantages West Virginia has historically enjoyed when attracting and supporting businesses in the state has been low electric rates. However, that advantage has been severely challenged over the past four years with rates soaring nearly 50 percent. If we allow "business as usual" to continue and make no attempt to develop a logical plan to keep electric rates reasonably in check, that advantage will be lost forever.

When electric rates rise, businesses must find a way to cover the increased cost. That could mean cutting back on staff, resulting in increased job loss throughout the state. It could also mean that businesses will simply throw in the towel and close altogether. Or, perhaps they will simply relocate to another state where sensible planning provides electric rate certainty that businesses can rely on. The ultimate outcome of West Virginia's lack of planning to control skyrocketing electric rates will most likely be a combination of all the above.

The Power Line blog reports today that a "whispering campaign" has been started at the legislature by power company lobbyists who contend that SB162, requiring electric companies to submit least-cost plans to the Public Service Commission, will cause job loss in the state.

The power company's scare tactics are completely untrue, as The Power Line aptly points out. In fact, the opposite is true. Failure to institute least-cost planning will lead to wide-spread job loss across all industry and business sectors in the state.

Power company lobbyists say least-cost planning "would result in coal miners losing jobs and the power companies’ coal fired plants closing down." The coal industry may be in trouble, but it has nothing to do with least-cost planning in West Virginia. The price of coal has gone up due to an increase in exports to other countries who will pay dearly for it. In contrast, there has been a corresponding decrease in gas prices due to excess production. The gas vs. coal electricity generation war has begun. West Virginia's electric consumers have absolutely no fault in this and cannot solve it by paying more for electricity. It's an economic problem we can't afford to straighten out. Electric consumers don't have a dog in this fight.

Adding to the dilemma is decreased electric demand related to energy efficiency and demand response occurring in east coast states. West Virginia exports 80% of the electricity generated in the state to east coast markets. When the east coast isn't buying it, and is in fact building new gas-fired generation to meet their own needs, it causes electric rate increases here in West Virginia because power company sales to the east coast are part of what has kept our rates low in the past. This fact is also beyond the control of West Virginia electric consumers.

As well, there's an incredible amount of waste going on at West Virginia's electric utilities that has nothing to do with fuel costs. For instance, did you know that AEP's former CEO was allowed free use of the corporate jet for personal travel as part of his employment contract? There's certainly plenty of belt-tightening that can be done at the corporate level before placing their economic woes at the doorstep of West Virginia's electric consumers.

The power company lobbyists are lying to your elected representatives. The legislators who continue to stall SB162 are choosing to throw their constituents under the bus, and are embarking on a very slippery slope which will endanger the prosperity of West Virginia business and industry.

Look no further than Ohio for a recent example of what can happen when huge electric rate increases, cooked up through a corrupted Public Utilities Commission process, hurt business.

West Virginia can, and must, do better by instituting least-cost planning.

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Frederick County Circuit Court Substation Decision

2/23/2012

1 Comment

As promised yesterday, here is Judge Dwyer's Order affirming the Frederick County Board of Zoning Appeals denial of PATH's application for the gigantic terminus substation.

Judge Dwyer found that the BZA committed no legal errors in their denial. He did not, as PATH had hoped he would, attempt to second-guess the BZA or make any decision on whether the Special Exception should have been permitted by the Board.

"The Board utilized the substantial evidence presented to it, along with the arguments of those involved, as well as the Board's own personal knowledge stemming from a site visit to the proposed location to reach its conclusion. The substantial evidence before the Board rendered the issue fairly debatable, being sufficient enough to allow reasonable persons to reach different conclusions on the issue. Therefore, the Board's conclusion that the use of the subject property as proposed is not consistent with the purpose and intent of the Comprehensive Plan is not to be disturbed."

Some may have thought the BZA was being too tough on citizens during the marathon hearings, however the Board's actions were fair and kept strictly within the law, and that dogged adherence to the letter of the law is the basis for Judge Dwyer's decision.

"The Board's decision, denying Petitioner's special exception application, is supported by legally sufficient evidence. The Board properly considered all of the statutory factors required by the Code. There was sufficient evidence presented to make the grant or denial of the special exception fairly debatable. Therefore, the Court will not disturb the Board's ruling absent a showing of fraud. No showing of fraud has been alleged and therefore the Board's ruling, which is supported by legally sufficient evidence, should be affirmed."

Apparently size did matter to Judge Dwyer, too:

"Put simply the proposed substation is huge; it is larger than the size of the Pentagon building and measures approximately the length of 32 football fields, with towers that are higher than the Statue of Liberty."

This makes the fourth resounding defeat for PATH in Frederick County, Maryland. PATH made a really stupid decision to attempt to site the terminus in a county with zoning laws. The company needs to come to grips with their stupidity and discontinue this farce of continuing, lengthy and expensive appeals for a project that is no longer needed. It costs PATH nothing to continue to legally harass and attempt to financially break the PATH opposition groups in Frederick County. All of PATH's legal costs are recoverable through their FERC Formula Rate as capital expenditures earning 12.4% return yearly. However, PATH knows that its project is heading like greased lightning toward a contentious federal abandonment battle where they must prove that their expenditures were prudent. There is no prudence in continuing this pointless battle. Any other prudently-run business would fold their hand at this point.

We all owe a big "thank you" to the leadership of CAKES and Sugarloaf Conservancy, who not only did a superb job presenting their case before the BZA, but also had to contend with ensuring that their legal professionals were fully funded throughout this long, drawn out battle. You guys deserve a medal!

Victory... how sweet it is!

1 Comment

A Picture is Worth 1,000 Words

2/23/2012

4 Comments

Frederick County Circuit Court Affirms Decision of Board of Appeals

2/22/2012

7 Comments

This just in, with details to follow:

The Frederick County (MD) Circuit Court has affirmed the decision of the county Board of Appeals, which means that they agree with the findings of the county's zoning board -- the "Kemptown" substation does not belong in the middle of 1350 homes.

Congratulations to Sugarloaf Conservancy, CAKES and their attorneys! Very well done! Thanks for all your hard work!

So, what will PATH do now? Will they waste more of our money taking this to the next level? While PATH panics and postures, how about a toast to the power of citizen action?

7 Comments

PJM Still Thinks PATH Could be Needed

2/21/2012

2 Comments

PJM is still refusing to give up on the PATH Project boondoggle. With the 2011 RTEP just a week away, PJM continues to recommend that PATH and fellow Project Mountaineer boondoggle, MAPP, remain in the la-la land of "abeyance" until the May 2012 RPM auction. Project Mountaineer boondoggle Susquehanna-Roseland is supposedly still "needed," according to these slides.

There is no longer any "reliability" or economic justification for these projects! They simply hang around like a stale house guest and continue to cost electric consumers in thirteen states higher electric bills that they can ill afford.

The last RPM auction in May 2011 showed that prices between eastern and western PJM have nearly levelized:

"In PJM's MAAC area the price of capacity will be $136.50 MW-day, a decrease of about $100 from last year. (The MAAC price applies to the transmission zones of Baltimore Gas and Electric Company, Metropolitan Edison Company, Pennsylvania Electric Company, and PPL Electric Utilities, Atlantic City Electric, Delmarva Power, Jersey Central Power and Light Company, PECO, Public Service Electric and Gas Company, and Rockland Electric Company.) The non-MAAC region, will pay the RTO price of $125.99, an increase of about $100. This region includes western Pennsylvania, western Maryland, Ohio, Indiana, Michigan, Kentucky and Virginia.

"The convergence of prices between the eastern and western regions of the market is primarily driven by the significant reduction in forecasted load growth through 2014/2015," Ott said."

Any justification for Project Mountaineer has long since evaporated. "Congestion" has eased, coal-fired electricity has become more expensive, and gas-fired generation in the East Coast load pockets has become cheaper than coal-by-wire. In addition, new gas-fired generation is being proposed near load. Any supposed "reliability" or "congestion" crisis has eased.

As far as Susquehanna-Roseland, PJM really needs to take a fresh look at that project. Their current plan is complete overkill. The existing line may be near the end of its useful life, however a simple rebuild may be the answer, instead of a brand new double-circuited 500kV line.

It's always "one more auction" with these guys, and there is always another auction down the road for the project owners to pin their hopes on. Project Mountaineer was an embarrassing blunder on the part of PJM. Let's put it to rest, move on, and quit wasting the scarce resources of PJM electric consumers on useless boondoggles!

2 Comments

AEP CEO Says EPA Caused Rate Increases in WV

2/18/2012

2 Comments

I think someone handed the Little Drummer Boy the wrong script a couple weeks ago when he sat down with a reporter from the State Journal.

LDB says, "APCO – this territory – has borne the brunt of pretty sizable (rate) increases, and it's mainly due to environmental retrofitting of coal units. Still, the rates are lower than they are in other parts of the country, but that doesn't matter to the people paying the bills. The fact is that we've gotten ahead at APCO, so it should moderate future increases."

He also says that 35% rate increases are "needless."

But last week, AEP's spokes-flack said the rate increases were caused by coal that has already been burned:

"We have already bought the coal, we have already made the power and customers have already used that power," Matheney said. "We're facing this large amount of money that has already been spent."

I'd like to introduce you to

You two should get together some time and get to know each other.

Or, maybe the rate increases are caused by excessive AEP executive salaries

"The first step is for AEP's executive types to take some nice, big pay cuts and share in some of this pain the rest of us are feeling every month when we get their bill. Let that happen first, then we'll talk about selling some bonds."

Or maybe the rate increases are caused by zombies?

2 Comments

Charlie Patton and Billy Mays - Separated at Birth?

2/16/2012

1 Comment

Appalachian Power's glad-handing lobbyist was very busy today handing out advertisements for the company's "Consumer Rate Relief Bonds" to legislators. Why, thanks, we needed some comic relief!

I think Charlie Patton has missed his calling. He's got a great future on television, pitching Ginsus and Potty Patches* to witless insomniacs at 3 a.m. now that Billy Mays has left the sound stage.

Charlie says, "...we're looking at everything we can to keep costs under control." Well, everything except Integrated Resource Planning and diversifying generation. Charlie's version of "everything" includes taking out a mortgage in your name to pay for the cost of the electricity he's supplying you with today. Charlie also says that, "Securitization is an innovative tool we can use to help mitigate or ELIMINATE increases for the recovery of previously incurred fuel and purchased power costs." Eliminate? Does that mean that Charlie doesn't want his $350M of under recovered fuel costs back? That's awful nice of good ol' Charlie, don't you think? Charlie wants to sweep your current debt under the rug so that your kids can pay for it 10 years from now when it has a bunch of interest charges tacked on to it. Why, electricity can be yours today, little Appalachian Power customer, and you can pay for it in 120 easy monthly installments of only one cent each!!

Personally, I'd rather just give Charlie 120 pennies scavenged from underneath my car seats and under my couch cushions today. How about you?

Something just doesn't add up here... I think it might be those nifty charts on his advertisement. Charlie thinks that if he can "securitize" your rate increase, it will magically disappear! It won't though. That 30 - 40% rate increase will still be hanging over your head, along with all the other future rate increases that you will continue to incur every time you flip that light switch. Eventually, Charlie's house of cards is going to collapse, and then you're going to be stuck with a gigantic balloon payment to make just to keep your lights on. Or perhaps the state or federal government will have to bail Appalachian Power's ratepayers out of the financial mess Charlie has made with his magical disappearing rate increase trick.

Charlie doesn't really care what happens to you. He just wants to avoid any bad PR that may stick to him, his company, the Public Service Commission or your legislators because once again, Appalachian Power's imprudent planning decisions have made electricity cost more than you can afford to pay. Hiding another big rate increase will not make it go away.

*If you don't have the time or inclination to walk your dog on real grass to do its business, you probably shouldn't have a dog.

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<<Previous

PATH - MIA in FirstEnergy's Financial Presentation

AEP's Public Relations Charlie Foxtrot - The Empty Threat

Legislative Scorecard

Out-of-Control Electric Rate Increases Will Cause Job Loss in West Virginia

Frederick County Circuit Court Substation Decision

A Picture is Worth 1,000 Words

Frederick County Circuit Court Affirms Decision of Board of Appeals

PJM Still Thinks PATH Could be Needed

AEP CEO Says EPA Caused Rate Increases in WV

Charlie Patton and Billy Mays - Separated at Birth?

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