Federal energy agencies are a puzzle to most people. FERC and DOE? What's the difference? Is there a difference? What do these agencies do, and how can you participate in their processes?
It's helpful to start at the beginning, with the creation of these agencies. The Department of Energy Organization Act of 1977 reorganized a hodge podge of federal energy departments to separate energy policy from energy regulation to prevent too much coziness and to create a national energy program.
The U.S. Department of Energy was established as a cabinet-level department to deal with energy policy. Within the DOE hierarchy, Congress also created an independent energy regulatory Commission known as the Federal Energy Regulatory Commission, or FERC. The DOE organizational chart looks like this.
FERC was given jurisdiction over narrow and specific energy issues. FERC is NOT a national appeals court for state energy decisions you don't like. FERC does NOT have jurisdiction over the actions of DOE, or any other agency over which it is not specifically granted jurisdiction by Congress. Sometimes the DOE can delegate specific authority to independent agencies like FERC, in order to work cooperatively with them to develop rules or policy over which DOE has jurisdiction.
Here's a simple list of what FERC does and what FERC does not. If you think you have an issue that FERC should do something about, please check the list before wasting time and resources filing frivolous complaints or petitions with FERC. If you don't understand this list, or need more information, please ask someone who does know or do some research before running to DC with your pop gun loaded with blanks. Not only do you look silly, but you waste incredible amounts of time and resources and damage your reputation. Federal energy regulation and policy is not a game of flinging poop on the wall to see which pieces stick. Get educated, get your game plan organized, and target your requests with efficiency for best results.
FERC has its own set of rules that apply to matters under FERC's jurisdiction. If your issue isn't within FERC's jurisdiction, FERC's rules don't apply.
Unless operating under the rules of a different agency that has some jurisdiction in one of its actions, the DOE operates under 5 U.S. Code Chapter 5, Subchapter II - ADMINISTRATIVE PROCEDURE.
If you want something, you have to legally support what you're asking for. Remember, only monkeys throw poop.
Did you think I've been on vacation for the past couple of weeks? Hardly. But I've been having so much fun it sort of felt like a vacation.
Today was the filing deadline for initial briefs in the consolidated FERC proceeding dealing with the formal challenges to PATH's 2009, 2010 and 2011 rates and the recovery of PATH's capital investment in the cancelled PATH project.
The briefs summarize the evidence and positions of the parties.
You can download them here:
Newman-Haverty Initial Brief
(deals with formal challenge only)
FERC Trial Staff Initial Brief
(deals with formal challenge and abandonment)
Joint Consumer Advocates Brief
(deals with abandonment only)
(deals with formal challenge and abandonment)
Happy reading! They're much shorter than War and Peace. I think.
Why do they call them briefs? Is this some sort of sick joke?
Yesterday, The Coalition of Eastside Neighborhoods for Sensible Energy
and Citizens for a Sane Eastside Energy
, et al, filed a complaint
at FERC against Washington State utilities Puget Sound Energy, Seattle City Light, Bonneville Power Administration and ColumbiaGrid. The complaint alleges that the utilities violated the Federal Power Act, FERC Orders No. 1000, 890 and 2000, and contractual obligations that the respondents made with the Commission that incorporate the referenced Orders, as well as the terms of their respective Open Access Transmission Tariffs.
Whew! That's a mouthful, huh? In plain English, it looks like the complainants are accusing Puget Sound Energy of trying to permit and build a transmission project that was not developed in a plan by an independent grid operator (or a reasonable facsimile, since the Northwest doesn't have a traditional RTO/ISO).
ColumbiaGrid is supposed to be taking the place of a RTO for all the named respondent utilities, and according to the complaint, the utilities promised FERC that ColumbiaGrid would serve in a role to make the area Order 1000-compliant.
The complaint alleges that Puget Sound Energy developed its "Energize Eastside" project without proper load flow studies, no study of alternatives, no RFP to evaluate alternate proposals, and that ColumbiaGrid is an entity controlled by its member utilities, including Puget Sound Energy, and does not meet independence requirements for RTOs.
The complaint also alleges that the project is not the "local load flow" project it claims to be (to escape FERC jurisdiction) but also includes a new 1500MW transmission path to Canada that fulfills a decades-old agreement about shared hydro resources. The addition of the Canadian firm capacity also elevates the project to one that should be regionally allocated, and not charged 100% to local load in the Eastside neighborhoods, as Puget Sound Energy is attempting to do.
Sounds complicated, but the affidavit of J. Richard Lauckhart is a great read to get an easy handle on the problem here. These guys really did their homework on FERC process and policies, and provided evidence in the form of expert testimony. Well done!
Looking forward to seeing where this leads...
A friend sent me a copy of this recent FERC OE audit of Kinder Morgan, Inc.
He found it unusual because there was no dollar amount of refund in it anywhere. What was the point?
FERC has never met a utility merger it didn't like. In exchange for some divestiture and a promise not to charge ratepayers for merger costs, FERC approves every merger I've ever read about.
The divestiture is what it is. It happens, and then it's over. However, merger costs happen over a period of several years, and may not appear in rates until after the fact. How does FERC know that the utility has kept its promise and not passed on merger costs to ratepayers?
It audits them. It's happening a lot more frequently lately, as the Commission has realized that nobody minds their merger cost promise. "Mistakes" happen. If an audit doesn't happen, then the utility keeps the money. If an audit does happen, then the utility says, "Oooops! My bad!" and refunds the amount FERC recommends. No penalties happen.
So, it was really no surprise that FERC's OE commenced an audit of Kinder Morgan a couple years after the merger happened. FERC audits routinely turn up merger costs "accidentally" included in rates.
But what's interesting in Kinder Morgan's case is that although FERC found four different violations of its accounting rules, the corrective action was prospective.
FERC found that Kinder Morgan had incorrectly recorded some maintenance expenses and
incorrectly expensed some abandoned projects. That ended up pretty much being a wash. No big deal. Nobody but a bean counter cares.
But then FERC discovered that Kinder Morgan had not correctly recorded its merger labor costs in special merger accounts.
KMI stated that it made a corporate decision not to track merger-related labor costs not due to the lack of process or system, but rather due to the fact that management did not consider the labor-related costs to be incremental costs. Also, KMI asserted that no existing employee costs were shifted to merger activities, since all pipelines continued to receive the same level of service before the
merger and all merger activities were completed as well as employees' regular tasks. KMI stated that more than 300 employees made meaningful contributions to merger activities and received a bonus for their efforts.
Audit staff noted that KMI had the requisite processes, accounting practices, and systems to track the cost of labor for merger activities. However, audit staff found written communication specifically instructing employees not to record any labor costs as a cost related to the merger. By not tracking merger-related labor expenses for more than 300 employees, the KMI jurisdictional entities were unable to accurately record the allocation of labor costs to various USofA accounts based on the time engaged in various classes of work during the period of merger activity.
Audit staff also noted that activities for pursuing, considering, and consummating a corporate merger are nonoperating, so their costs should be recorded in Account 426.5, which includes miscellaneous items that are nonoperating in nature. For accounting purposes, the Commission has consistently stated that costs involving mergers of public utilities are nonoperating and are to be recorded in Account 426.5. By not tracking the cost of employees involved in merger activity, the KMI jurisdictional entities could not distinguish the cost of labor related to the merger from labor costs for pipeline operations. As a result, the KMI jurisdictional entities failed to record such costs consistent with their nature, and the entities were unable to properly allocate labor costs to utility and nonutility operations as required by General Instruction No. 10. This resulted in the KMI jurisdictional entities recording internal labor costs in operating expense accounts that should have been recorded in Account 426.5.
While audit staff believes that the KMI jurisdictional entities should have recorded merger-related labor costs in a nonoperating expense account, KMI stated that the accounting misclassification did not affect customers' rates. Audit staff also did not find that this misclassification affected rates for jurisdictional customers.
So, apparently now it's okay for a merging utility to fail to record its merger labor separately, causing a massive transparency fail that not even FERC can figure out? What was the point of this audit? Was FERC trying to make KMI admit to certain dollar amount of merger labor cost and failed? This is clear as mud, but it looks like KMI's deliberate failure to separate its merger labor costs made it impossible for FERC to determine how much labor cost there was, and where it ended up. I'm not buying that the merger duties didn't cause any additional labor on the part of the employees. FERC came away empty-handed. What a waste of time and money!
But wait.. FERC also discovered "several" accounting misclassifications in their dig for merger costs. Some of the misclassifications were a wash, rate-wise, but FERC still felt the reclass was necessary to bring KMI into compliance. Some of them, however, were not. FERC found donations, civil penalties, and environmental legal reserve in accounts that are recovered from ratepayers. These transactions should always be recorded in accounts that are not recovered from ratepayers. So, did FERC dig deeper to at least correct this violation and come away with something for ratepayers?
Nope. They recommended that KMI "[e]stablish and implement procedures to ensure proper coding and accounting of expenses under Commission regulations."
So, there was a big stare down about merger labor where FERC blinked first, but when FERC actually found some real money here, it didn't bother to correct it. It gave KMI a pass, as long as it pretended to do better next time.
I hope future audits do better for ratepayers than this one. FERC's OE isn't helping ratepayers, it's apparently too busy making headlines with banks and traders.
He's done it again. Former FERC Commissioner Jon Wellinghoff recently spilled some more "confidential" FERC secrets.
This report by the DOE IG says that Mr. Wellinghoff showed an excerpt from a video of a FERC Office of Enforcement (OE) interrogation... err...deposition of an "unnamed" electricity market trader to the audience at an industry conference in March.
The video was supposed to illustrate how not to behave in front of regulators. The IG says the video "
was meant to demonstrate that the witness portrayed in the clip was being evasive and uncooperative, arguing over such things as the meaning of the words 'from' and 'to' in the context of email communications."
Except this video wasn't publicly available, until Mr. Wellinghoff shared it.
Mr. Wellinghoff disagrees.
So, what's to be done about this? Shall we shut the barn door now that the horse has gotten out and crapped in the garden?
Apparently. The IG's report recommends:
- Determine if the former Chairman violated the Confidentiality of Investigations requirement and ascertain what, if any, sanctions are available to address the former Chairman's actions.
- Determine if the Commission currently has the necessary authorities it needs to prevent the disclosure or misuse of sensitive or nonpublic information; and, the authorities to impose sanctions on those who engage in such action, whether employed at FERC currently or in a postemployment status. If statutory or regulatory changes are needed in this regard, take appropriate action to expedite such changes.
- Expedite the current effort to update and strengthen the Commission's postemployment guidance and exit processes, including ensuring that departing Commission members and other employees are aware of what constitutes "nonpublic information" and their ethical duty to protect such information after they depart.
Sanctions? Don't laws covering this already exist?
5 CFR § 2635.703
§2635.703 Use of nonpublic information.
(a) Prohibition. An employee shall not engage in a financial transaction using nonpublic information, nor allow the improper use of nonpublic information to further his own private interest or that of another, whether through advice or recommendation, or by knowing unauthorized disclosure.
(b) Definition of nonpublic information. For purposes of this section, nonpublic information is information that the employee gains by reason of Federal employment and that he knows or reasonably should know has not been made available to the general public. It includes information that he knows or reasonably should know:
(1) Is routinely exempt from disclosure under 5 U.S.C. 552 or otherwise protected from disclosure by statute, Executive order or regulation;
(2) Is designated as confidential by an agency; or
(3) Has not actually been disseminated to the general public and is not authorized to be made available to the public on request.
Example 5: An employee of the Army Corps of Engineers is actively involved in the activities of an organization whose goals relate to protection of the environment. The employee may not, other than as permitted by agency procedures, give the organization or a newspaper reporter nonpublic information about long-range plans to build a particular dam.
18 USC § 2071(b)
(a) Whoever willfully and unlawfully conceals, removes, mutilates, obliterates, or destroys, or attempts to do so, or, with intent to do so takes and carries away any record, proceeding, map, book, paper, document, or other thing, filed or deposited with any clerk or officer of any court of the United States, or in any public office, or with any judicial or public officer of the United States, shall be fined under this title or imprisoned not more than three years, or both.
(b) Whoever, having the custody of any such record, proceeding, map, book, document, paper, or other thing, willfully and unlawfully conceals, removes, mutilates, obliterates, falsifies, or destroys the same, shall be fined under this title or imprisoned not more than three years, or both; and shall forfeit his office and be disqualified from holding any office under the United States. As used in this subsection, the term “office” does not include the office held by any person as a retired officer of the Armed Forces of the United States.
18 USC § 641
Whoever embezzles, steals, purloins, or knowingly converts to his use or the use of another, or without authority, sells, conveys or disposes of any record, voucher, money, or thing of value of the United States or of any department or agency thereof, or any property made or being made under contract for the United States or any department or agency thereof; or
Whoever receives, conceals, or retains the same with intent to convert it to his use or gain, knowing it to have been embezzled, stolen, purloined or converted--
Shall be fined under this title or imprisoned not more than ten years, or both; but if the value of such property in the aggregate, combining amounts from all the counts for which the defendant is convicted in a single case, does not exceed the sum of $1,000, he shall be fined under this title or imprisoned not more than one year, or both.
The word “value” means face, par, or market value, or cost price, either wholesale or retail, whichever is greater.
Well, ut-oh. Wellinghoff just doesn't look like the prison type to me. I hope he knows how to rap. Survival, man!
But don't worry. Nothing like that ever happens to the important people. And I'm sure Mr. Wellinghoff won't be fined... oh... say... $30 million or anything.
It simply can't happen again because Mr. Wellinghoff has lost his secret cache of FERC videos in a computer crash.
According to the memorandum, Mr. Wellinghoff stated that his computer "crashed" and all of his documents were permanently lost. A Commission attorney who participated in the March 20 telephone call told us that Mr. Wellinghoff had indicated his computer crashed in February 2015 and that all of his documents were lost. However, we were told that Mr. Wellinghoff used a personal computing device to show the video clip during the March 9 presentation, despite having told Commission attorneys that all of his documents were lost due to the computer crash. Thus, despite Mr. Wellinghoff's assertions about the loss of materials in February 2015, the events of March 2015 suggest that additional documents may remain on other personal computing devices. We were unable to reconcile this inconsistency. Despite multiple attempts on our part, Mr. Wellinghoff declined to speak with us regarding this matter.
However, Wellinghoff did become "available" to speak with the press
What I want to know is did current Chairman and former OE Director Norman Bay give the video to Wellinghoff when the investigation that spawned it was active? Did this happen before Mr. Wellinghoff would have had to make a decision in the case (which never got that far because it settled)? Or was it shared afterwards, when Wellinghoff wouldn't have been influenced by it? How many hours of the video deposition do you suppose Wellinghoff watched to find that particularly entertaining scene? Or was the excerpt the only part he saw? Is that what passes for entertainment at FERC? Watching investigation targets squirm on video? I thought it was about protecting consumers?
Doesn't seem like Wellinghoff cares one bit. That hard-knock life stuff never happens to people like him.
I've been trying to keep my nose to the ol' grindstone and ignore the calliope music coming from PJM's "Annual Meeting"
in Atlantic City
. But it's really hard to ignore it when a clown scampers across your computer screen before you've even had your morning coffee.
I started my day today with the latest issue of RTO Insider. I figured it went well with coffee and would be a pleasant way to wake up before going back to work on something that matters. I love RTO Insider almost as much as chocolate donuts!
Bowring, Gates’ Consultant Spar over PJM Traders’ Obligations on Loopholes
ATLANTIC CITY, N.J. — To shake or not to shake the Money Tree?
That was the question Independent Market Monitor Joe Bowring posed during his Year in Review presentation at PJM’s Annual Meeting last week, setting off a lively debate with one of the consultants that Richard and Kevin Gates, enlisted in their high profile defense against market manipulation allegations.
“If the rules are imperfect, is it OK to do anything not explicitly prohibited?” Bowring asked.
He quickly provided his own answer. “It is not permissible,” he said, citing what he called the “duty” of market participants to inform RTO officials and federal regulators of such “money trees.”
Is this rule supposed to apply equally to every entity FERC regulates? Doesn't Bowring realize that utilities routinely exploit "unclear" rules in order to pocket a little extra scratch? If regulated utilities had a duty to report all their "misinterpretation" money trees to FERC, we're going to need a couple more hotlines. Of course, if the utilities are so busy self-reporting all their shakes (or kicks, flicks, and karate chops) of the "money tree," they might not have time to "accidentally" misinterpret any rules that result in a profit for their shareholders, would they? Or will they simply have to hire new monkeys to shake the tree, while the old monkeys watch and phone in a report to FERC's hotline?
Utilities large and small routinely interpret FERC rules in incorrect and bizarre ways in order to squeak some additional profit from them. Except FERC never fines its utility pets $30M when they get caught breaking the rules. It's all giggle, giggle, hush, hush, slap my wrist, I promise to be good if you overlook this little "misunderstanding." FERC needs to tighten that shit up and adopt Bowring's "Money Tree Methodology" for everyone!
I do so admire Bowring's enthusiasm. You go, sport! I hear there's going to be a vacant spot on the Commission soon! Maybe you should be Chairman?
What do you suppose caused Bowring's money tree epiphany? Do you suppose he participated in the "Spa Toccare"* leisure activity in order to relax and clear his mind before giving his report to the membership?
Whatever you do, don't click on the clown picture above.
No, don't do it!
Well, that would explain things then. Thanks a lot, Joe, for making me snort with laughter before the coffee was even ready to drink.
*Dedicated to undoing the effects of your day, Spa Toccare offers relaxing treatments guaranteed to exhilarate. Here, tensions melt, knots disappear, skin glistens and eyes sparkle. A new you emerges just in time to wave bye-bye to your worldly cares.
Brace yourselves, Americans, Congress is tinkering with energy policy again! No good can come of this. And some idiot has introduced a whole new Sec. 216 (16 U.S.C. 824p)
aka Section 1221
of the Energy Policy Act of 2005 that's even worse than its first iteration.
The original, Section 1221, designated the Secretary of Energy to conduct an electric transmission "congestion study" and designate "National Interest Electric Transmission Corridors" (NIETCs) every three years. Transmission proposed in these designated corridors
was subject to "backstop" permitting by the Federal Energy Regulatory Commission (FERC) in the event a state withheld approval of an application for a permit for more than one year, or lacked the authority to permit the project.
Section 1221 was promptly deconstructed in two federal courts. When FERC proposed that "withholding approval" included a denial, and that meant it could override a state's denial of an application, the 4th Circuit determined that "withheld approval"
excludes a state's denial of an application, preserving state authority. In addition, the 9th Circuit determined
that DOE did not properly "consult with states" before designating NIETCs, and therefore it vacated the corridors DOE had set in 2009.
Last year, DOE made a half-hearted attempt to produce the 2012 "congestion study," but was resoundingly smacked down by a whole bunch of comments, and hasn't done a thing since.
In practice, Section 1221 has been an abject failure
However, the new Section 216, carried to Congress by Sen. Martin Heinrich (D-NM), attempts to fix all that by giving FERC authority to overrule a state denial of a transmission permit and use federal eminent domain authority to take private property. It also tosses NIETCs out the window as a means to identify worthy transmission projects and replaces them with an RTO/ISO finding that the project is "needed."
Good news: The new Sec. 216 does not apply to Clean Line in its current form.
Bad news: The new Sec. 216 will encourage a whole bunch of new transmission projects of questionable necessity, and landowners along existing corridors and/or those owning "open farmland" are always the first targets identified on the ol' transmission routing Etch-A-Sketch.
So, let's look at what the new Sec. 216 says:
(B) FEDERAL AUTHORITY.—The Commission may authorize, in accordance with subsection (d), construction of a high-priority regional transmission project that the Commission finds to be required by the present or future public convenience and necessity and in accordance with this section if--
“(i) a State--
“(I) fails to approve construction and authorize routing of a high-priority regional transmission project not later than 1 year after the date the applicant submits a completed application for authorization to the State;
“(II) rejects or denies the application for a high-priority regional transmission project;
“(III) authorizes the high-priority regional transmission project subject to conditions that unreasonably interfere with the development of a high-priority regional transmission project contrary to the purposes of this section; or
“(IV) does not have authority to approve the siting of the high-priority regional transmission project; or
“(ii) the developer seeking a certificate for construction under subsection (d) does not qualify to apply for State authorization to construct a high-priority regional transmission project because the developer does not serve end-users in the State.
So, FERC can "authorize" a transmission project if a state denies an application or conditions approval in a way the transmission developer doesn't like. That's not "backstop" or secondary authority, it's usurping state authority in its entirety. A state must approve, or else. So, why even bother with the fan dance of state applications at all? That's just a big waste of time and money.
Tell ya what... if FERC ends up with authority to overrule state transmission permitting decisions, there's going to be a lot more "turn-offs" for Commissioner Norman Bay, because the protestors will have moved "from pipelines to Order 1000." *Insert laughter here*
Second problem - how these "special" high-priority regional transmission projects are determined:
(1) HIGH-PRIORITY REGIONAL TRANSMISSION PROJECT.—The term ‘high-priority regional transmission project’ means an overhead, submarine, or underground transmission facility, including conductors or cables, towers, manhole duct systems, reactors, capacitors, circuit breakers, static VAR compensators, static synchronous compensators, power converters, transformers, synchronous condensers, braking resistors, and any ancillary facilities and equipment necessary for the proper operation of the facility, that is selected in a regional transmission plan for the purposes of cost allocation under Order Number 1000 of the Commission (or any successor order), including an interregional project selected under that plan.
That's it -- mere selection of and inclusion in a regional transmission plan makes a project "high-priority." Ummm... does Heinrich know that RTOs include hundreds of projects in their regional plans each year? "High-priority" over what? Transmission projects that aren't in a regional plan? Those are few and far between because they're nearly impossible to build (ain't that right, Clean Line?) So, every
project is going to be a "high-priority" project in this brave, new world?
It's quite obvious that S.1017 intends to "fix" everything that went wrong with the original Sec. 216, including the flawed NIETCs and the ability of a state to deny an application for a transmission project that did not serve its citizens. But, let's ask ourselves, does it really need fixing? State approvals aren't the problem with new transmission, it's federal approvals and studies that muck up and delay transmission plans. In addition, Congress has resolutely refused to make electric transmission siting and permitting a federal responsibility, and will most likely continue to do so.
There seemed to be little love for controversial legislation like S.1017 at Thursday's Senate Energy and Natural Resources Committee hearing. But, you know how Congress is... they get up to all sorts of hijinks if you don't keep your eye on them, so this bears a bit of babysitting.
One more thing before I wrap this up... where did this legislation come from?
The original Sec. 216 got its purpose from:
(4) In determining whether to designate a national interest electric transmission corridor under paragraph (2), the Secretary may consider whether--
(A) the economic vitality and development of the corridor, or the end markets served by the corridor, may be constrained by lack of adequate or reasonably priced electricity;
(i) economic growth in the corridor, or the end markets served by the corridor, may be jeopardized by reliance on limited sources of energy; and
(ii) a diversification of supply is warranted;
(C) the energy independence of the United States would be served by the designation;
(D) the designation would be in the interest of national energy policy; and
(E) the designation would enhance national defense and homeland security.
Nothing in there about renewable energy, right?
Now take a look at the purpose of the new Sec. 216:
(a) Policy.—It is the policy of the United States that the national interstate transmission system should be guided by the goal of maximizing the net benefits of the electricity system, taking into consideration--
“(1) support for the development of new, cleaner power generation capacity, including renewable energy generation located distant from load centers;
“(2) opportunities for reduced emissions from regional power production;
“(3) transmission needs driven by public policy requirements established by State or Federal laws (including regulations);
“(4) cost savings resulting from--
“(A) reduced transmission congestion;
“(B) enhanced opportunities for intraregional and interregional electricity trades;
“(C) reduced line losses;
“(D) generation resource-sharing; and
“(E) enhanced fuel diversity;
“(5) reliability benefits, including satisfying reliability standards and guidelines for resource adequacy and system security;
“(6) diversification of risk relating to events affecting fuel supply or generating resources in a particular region;
“(7) the enhancement of competition in electricity markets and mitigation of market power;
“(8) the ability to collocate facilities on existing rights-of-way;
“(9) competing land use priorities, including land protected under Federal or State law;
“(10) the requirements of section 217(b)(4); and
“(11) the contribution of demand side management (including energy efficiency and demand response), energy storage, distributed generation resources, and smart grid investments.
Hi! You've reached StopPATHWV Blog. Your visit is important to me. I'm sorry I can't come to the website right now... et cetera.
I'm off again, this time until it's over (a week? two weeks?) I predict another 6 days. Too bad there's not some sort of football pool going on. I might actually make some money that way.
If you're in possession of a call-in phone number to listen in to the festivities live, enjoy it. Or just show up... it's a public hearing.
If not, transcripts have begun to be posted on the docket. Go here. Enter Docket No. ER09-1256 and list sub docket 002 in the correct fields. Read.
Meanwhile, remember to play fair and be nice, everyone! Sleep the sleep of the righteous. A guilty conscience can be like a lead weight attached to your ankle. Ain't nobody got time for that...
Drama, drama, drama. I'm pretty sure the media over-dramatized the outages in DC yesterday. Maybe not a bad thing to raise awareness, but they've missed the real message.
OMG - like this outage affected IMPORTANT people doing IMPORTANT things! Like Pepco is sooooooo bad!
This article covers the basics, and with a few additional details from WaPo's more dramatic version, here's the story:
A hot 230-kV transmission line (conductor) just randomly fell off its tower in Southern Maryland. No storm. No damage. It just broke for no apparent reason. Live, uninsulated transmission line on the ground started a grass fire. Lucky it didn't fall on any people, vehicles, etc. that happened to be in the right-of-way at that time. The fault caused a bunch of other lines and generators to trip offline in self-defense against resulting voltage swings. And the lights went out many miles away in Washington, D.C.
So, no big deal, faults happen. But the grid is supposed to be designed so that other lines instantly spring to life and take the load of the one out of service and the fault ends up being nothing more than a barely-noticed blip. But that didn't happen, it started to cascade to other lines and generators. Comparison was made to the 2003 northeast blackout, when a fault on a transmission line in Ohio cascaded into a regional blackout. The concept is quite the same, but the effect not as far-reaching. Do you suppose we'll need a multi-million dollar government task force to examine the incident?
What's the real problem here?
Lack of maintenance and upgrades to existing transmission lines. The industry is so busy chasing the big profits that come from building NEW transmission that they aren't investing their money in maintaining the assets already in service. Perhaps our federal regulatory agencies need to start encouraging maintenance and rebuilds of aging lines with financial incentives?
And then there's the problem of parasites like DC that have no generation of their own and depend on transmission lines from distant generators. The more transmission lines we build, and the more centralized the system that supplies electricity, the bigger this problem becomes.
Stop it. Stupid.
Distributed generation and less transmission lines = reliability.
Below is a press release from Powhatan Energy Fund. Why mess with perfection? Here goes:------------
West Chester, PA - Last week, PJM Interconnection stated that Powhatan Energy Fund's response to FERC’s order to show cause illustrates our “failure to appreciate the unique legal and regulatory framework governing organized wholesale electricity markets.” Yeah, perhaps we do not understand this “uniqueness” – we were under the impression that constitutional protections applied to all regulated markets in this country, including theirs. We’ve raised our voice against the bullying tactics that FERC has employed in this investigation as they have completely ignored these protections, including our rights to due process and fair notice. Powhatan is in the news and people feel compelled to respond to us because we’re not unique – a lot of people know there’s a fundamental problem here.
The industry struggles to understand the rules and the laws under which they can operate their businesses. PJM’s recent statements add to their confusion. PJM’s pronouncement that FERC’s regulatory mission “to protect consumers and other market participants” is held to a “higher standard” than the SEC’s mission to protect investors is simply wrong. We do not believe PJM could cite any authority to support this claim. The SEC’s mission to protect investors is every bit as stringent and important as FERC’s. FERC has even stated that its market manipulation rule is modeled after the SEC’s 10b-5 precedent.
We wish PJM would stop pretending that this investigation has anything to do with “just and reasonable prices” for power, as they put it. There is no allegation that we increased power prices. As a matter of fact, Alan’s trading had no negative effect on prices or on the power markets at all. If PJM wants to argue, we suggest they find a different straw man.
PJM made the rules, and Alan traded under those rules. Our activities were perfectly legal. And the thing is – PJM knows it. Even after August 2, 2010, when Alan stopped trading, PJM continued to wire funds to us for the very trades that are the subject of the investigation. If they really thought there was anything illegal about the trades, we wonder why they repeatedly sent us money.
We suspect that every single UTC trader made money in the summer of 2010. Instead of vilifying us in the press, PJM should thank us for identifying the goose that was laying these golden eggs. If PJM feels compelled to run any more simulations, Powhatan suggests they quantify how much money the big utilities would have “lost” the last five years had PJM continued to pay UTC traders to take transmission service out of the system. It will show the big utilities are better today, in part, because of Alan’s trading.
Throughout this five-year investigation, we’ve been very cooperative. Over the last year, we’ve been very open. The analysis of our experts, the interactions we’ve had with the FERC, and even our legal correspondence are available to the leadership team at PJM, who can see it all at www.ferclitigation.com
. We encourage a visit.