The insiders got together to talk about the outsiders last weekend.  I'm sure my invitation got lost in the mail, along with yours, dear reader.  Or maybe... gasp... we're outsiders?

At any rate, the insiders had a nice long discussion about energy markets and slipshod enforcement tactics.  I know Barney has been telling the kiddies that they're "special" for many years now, but he wasn't singing about energy markets.
Energy markets aren't special.

They're just another product of the PJM cartel's enabling  of its members profits.

Bowring said the process that RTOs use to create market rules is flawed because market players get to vote on those rules, and sometimes they block the passage of needed reforms because they are engaging in the behavior that a new rule would prohibit.
It's like attending goody-two-shoes-kindergarten if you want to participate in PJM's energy markets, and you're going to have to tattle on yourself if you make too much money:
Bowring said market participants also have a duty to inform market overseers of faulty rules and false arbitrage opportunities and to not engage in such behavior once they suspect it to be wrong. He said the "vast majority" of market players do just that, and that those who think "they're the smartest guys in the room" by figuring out how to exploit some rule loophole are usually not since others have also seen that opportunity but chose to do the right thing by not engaging in such behavior.
When is FERC going to "do the right thing" and get rid of its mysterious and dysfunctional energy markets?

They need to realize that they need outsiders to make their silly markets work.  If outsiders aren’t allowed to make money playing by the market rules without suffering the occasional random sacrifice from their ranks to serve as an example of a "bad egg" and a demonstration of FERC's power, then perhaps they should just outlaw their participation altogether.  Will the beatings continue until morale improves?

It’s like slopping a whole bunch of chum into the water and complaining when sharks show up instead of some pretty goldfish.
 
 
Thirty-seven dozen people showed up at the Fort Smith Convention Center in Fort Smith Arkansas last night to tell the U.S. Department of Energy what they think about the Plains & Eastern Clean Line.  It was a madhouse (in a most literal sense!)
Arkansan Julie Morton summed it all up quite nicely:
“If you keep trampling on the rights of ‘we the people’ you may have another American Revolution on your hands!"
Clean Line's spokesman continued to blow smoke up everyone's ass by telling them that they shouldn't be concerned about possible health effects.  I don't think anyone believed him, and judging from his body language, I'm not certain he even believed himself!

What is certain is that the people of Arkansas WILL NOT peaceably accept this transmission line.

It's time for DOE to fall on its sword and stop this travesty!
 
 
It's Fakey-Friday here at StopPATH Blog on this snowy Monday night.  Yes, I know I have the day wrong, but what does that matter when it's all fake anyhow?

My non-friends at Clean Line Energy Partners have their own FAQ Fridays on their facebook page, and they actually have them on Friday, hooray!  But there's a whole bunch of stuff about Clean Line's Facebook page that just seems... well, not quite right to me.

There are huge time gaps in Clean Line's timeline.  No posts between June and November of 2013?  No posts between January and October of 2014?  Were those the periods when Clean Line shut down its facebook pages because real people kept showing up and asking real questions that Clean Line didn't want to answer?  Go ahead, try to click on the post comments from 2013 or 2014 to find that many are hidden.

And here's a puzzler... somehow in the past couple of years, when Clean Line's facebook page was closed more than it was open, the company managed to pick up 3,773 "likes."  Well, isn't that nice?  Except Clean Line doesn't seem to have the engagement that would come from 3,773 people finding its posts in their daily feeds.  The only comments on any recent posts have come from a couple of Block Clean Line group leaders and a handful of other opponents who haven't yet managed to violate Clean Line's social media rules:
Thank you for visiting the Grain Belt Express Clean Line page!
We created this forum for you, so go ahead and take the stage
Our goal is to inform you about our transmission line and Clean Line Energy
Once you learn about the many benefits, you’ll see the synergy
So what are you waiting for? please start to engage!
 
Oh wait…
 
While we love to hear your comments, we want you to be sure
The rules and guidelines below are required, so please maintain your composure
This page will be archived, so please show your respect
We all need to maintain professional etiquette
Thank you again for visiting our page—we will be in touch daily, we can ensure!
Oh my... gurgle, gag... I think I just threw up in my mouth a little.  Puh-leeze, Maya Angelou you're not.  Lots of affected landowners have tried to "take the stage" over the past few months since Clean Line reopened its facebook page, but a hook has ceremoniously yanked each of them off stage, one by one, for daring to express their opinions, ask for more information, or question Clean Line's claims.  A very small handful of folks have managed to persevere though... we'll call them the teflon troupe.  Perhaps they were the least objectionable real people "friends" Clean Line could find?  Because the only other engagement evident on Clean Line's page is a few post "likes" from employees, employee relatives and friends.

Where are all of the 3,773 people who "like" Clean Line Energy?  How come they never stop by, call or write?  They must be awfully busy.

Because I'm sure Clean Line wouldn't do anything so uncouth as to buy "likes" from fake people who don't really "like" them.

No, no, no.  Clean Line takes private property rights very seriously and values one-on-one conversations with landowners to answer questions and address concerns... except when those one-on-one conversations actually occur via facebook.  If you're an affected landowner who has had your comment or question deleted and lost your ability to post any more comments on Clean Line's facebook page, please sign the comments below.  I promise you won't get deleted.  And maybe Clean Line can stop by and read them whenever it gets an urge to value one-on-one conversations with landowners.

After all, Clean Line claims their project is being developed with EXTENSIVE participation from landowners (well, except for any actual participation, but they do intend to, like, participate with you, but you're just so hard to talk to, or angry, or misinformed, or something...).

And it's not just you landowners and stakeholders.  Clean Line has even been working with Senator Boozman and Senator Cotton, apparently to craft some federal legislation that will return Arkansas' right to approve transmission lines to Arkansas.  Thanks, Clean Line, that was really, really nice of you to help the good Senators get that legislation in the works!

Clean Line is also working with the Arkansas state leadership, apparently to craft a letter to DOE Secretary Ernest Moniz condemning the Clean Line project.  Yay you, Clean Line!!!

So, when Clean Line says it's working with landowners I guess that means it will continue to kick itself in the rear end by holding its Facebook FAQ Fridays and pretending it has any friends that frequently ask it questions.  Or at least questions it cares to repeat publicly...
 
 
The embattled Clean Line Energy project that proposes to transport energy from rural America to the heavily populated Eastern Seaboard has had a series of major setbacks.

In Missouri, the PSC's own staff, which is made up of engineers, utility economists, and attorneys advised the Commissioners to deny the application. In their Conclusions of Law brief they stated, "Grain Belt Express has not shown electricity delivered over its high-voltage transmission line and converter stations will be lower cost than alternatives for meeting renewable portfolio standards and general demand for clean energy because it overlooks significant costs affecting the integration of wind energy in its production cost modeling and its modeling inputs are insufficient to predict electricity prices at specific locations." They also recommended  “The Commission finds that Grain Belt Express' HVDC transmission line project is not needed in Missouri."

On February 11th the commission took the unusual step of ordering Clean Line to submit a considerable amount of additional documentation after the final briefs were turned in. Among the many requirements: Grain Belt Express shall set forth the status of its efforts to obtain the assent of the county commissions required by Section 229.100, RSMo, in the eight counties crossed by the selected project route in Missouri and provide supporting documentation thereof, including any letters of assent from those eight county commissions.

Five of the eight impacted counties have rescinded support they had previously given Grain Belt. Given that the local sentiment against Grain Belt tends to be very high, and that nearly 2,000 people turned out at the eight public hearings opposed to the project, it seems unlikely that they would be able to secure the needed county assent.

Additionally, Clean Line is running into many roadblocks with its Plains and Eastern project in Oklahoma, Arkansas and Tennessee. Clean Line hopes to be the first company to utilize Section 1222 of the 2005 U.S. Energy Policy Act to obtain federal eminent domain after they were denied eminent domain authority by the state of Arkansas. This provision would authorize DoE to essentially act as a land agent for the private company and use the government's power of eminent domain to condemn the private property in its path.

Recently the Cherokee Nation and several county boards passed resolutions against Plains and Eastern Clean Line obtaining federal eminent domain authority. Earlier this week, the Arkansas House Joint Energy Committee unanimously passed a resolution to send a letter to the Department of Energy condemning Clean Line's use of Section 1222. Arkansas’ congressional delegation has also been seeking answers from the DOE in Washington, and were instrumental in extending the public comment deadline on the project’s federal environmental impact statement an additional 30 days.

Clean Line is also facing major problems for their Rock Island Project in Illinois and Iowa. The Illinois Commerce Commission voted unanimously to withhold eminent domain authority at this time. In Iowa, where Clean Line recently filed franchise applications, they have been met with fierce resistance and an organized opposition group who is taking their fight to the state capital building.

Jennifer Gatrel from Block Grain Belt Express Missouri states, "Overall the idea that a private company could seize privately-held agricultural land for its own private benefit is just wrong. Clean Line has brought together a vast group of very different individuals from around the country working united on the common goal of protecting landowner rights. This company has brought a major disruption to our community and much time and money has been lost. Clean Line’s proposals have also created an enormous, tightly-knit family formed in reaction to the crisis. We will not lose this fight!!"
 
 
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.
 
 
Powhatan Energy Fund (aka the infamous Gates brothers) filed their Response in Opposition to Order to Show Cause and Notice of Proposed Penalty on Monday.  Unlike FERC's accusations, this one doesn't require a secret FERCenese* decoder ring to understand, and actually has plain-English section headings that every DC energy lawyer probably wishes he could write, such as:
C. The Report Contains So Many Obviously Wrong Accusations That Some
Additional Comments On the Most Blatant Inaccuracies Are Warranted
1. Dr. Chen’s “Home Run” Trading Strategy Is Not A “Post Hoc Invention” Because, Among Other Things, 35 Is Less Than 50
2. The Staff’s Analysis Of The “Indicia of Manipulation” Misses The Mark Entirely
3. Dr. Chen’s Trades Were Not “Wash-like” Or “Wash-type” – Whatever The Heck That Means
4. The Staff’s Stubborn Reliance On The Unpublished, Non- Precedential Amanat Case Is Just Lame
5. Uttering the Phrase “Enron” Or “Death Star” Does Not Magically Transform The Staff’s Investigation
6. Who Cares What Bob Steele Thinks?
7. The Staff Has Not Identified Any Actionable “Harm”
Although weighing in at 49 pages, Powhatan's response  is a quick and easy read, heavy on the common sense, and light on the bafflement that DC lawyers like to rely on to confuse the decision-makers.  It's a modern-day, regulatory version of The Emperor's New Clothes down there, where the object seems to be to simply confuse the issues with lots of big words and complicated concepts until the decision-maker (who most likely doesn't have the technical background to appreciate all the little nuances) is left drooling in his chair, more confused than he was before he entered the room.  I believe they hope that the decision-maker, like the long-ago emperor, will simply be afraid to admit that he doesn't get it, for fear of looking stupid in front of his lawyer courtesans.  When that happens, the emperor may nod his head and agree with the sagest of experts before him.

And in that spirit, OE's self-designated little conscience has entered the room by filing a public protest on the debacle.
  Former compliance counsel and current Super Dad Eric Morris shares:
I would hope the four Commissioners voting on this docket would reflect on the unjustness of treating certain entities that have regular business before the Commission very deferentially and then outsiders who receive zero funding from ratepayers such as the subjects of this investigation very harshly. 
He also has some other interesting observations, such as:
If [Kevin Gates] had become rich and bought a utility or five, I would imagine you would treat that future version of Kevin Gates much more nicely.
But what would Kevin Gates want with a utility (or five)?  He'd have to abandon his morals in order to run them.

Even Eric can't seem to find the harm that FERC's OE claims was done by Powhatan:
And speaking of protecting the incumbents, all the “harm” is supposedly being done to them.  I’d love to see OE prove that that money would have lowered ratepayers’ bills; if so, PJM should be broken-up for ever allowing this.  I would guess it is much closer to the old story of private gains (to PJM Members) and public risk (ratepayers paying for this investigation), though.   Who knows, maybe the PJM cartel is smarter than the Wall Street banksters like Goldman and I am just not giving them enough credit?
I doubt it.
*FERCenese |ferk in knees| noun:  The incomprehensible, acronym-laden gibberish spoken at FERC that is hard for common folks to understand.  Origin:  Electric ratepayer Scott Thorsen, standing in a field in Illinois.
 
 
If Clean Line's "Code of Conduct for Land Agents" was any more than window dressing, landowner reports of harassment by Clean Line land agents wouldn't keep happening.  It's nothing but a piece of paper Clean Line uses as a fig leaf to cover its transgressions.

Who enforces the "Code?"  Clean Line says it does.  How is this enforcement undertaken?  Nobody knows.  Despite continual public statements that Clean Line doesn't condone the kind of behavior that has been reported by landowners over and over again, there's never any obvious "enforcement," and the company's agents simply continue harassing landowners.
In a recent letter to the editor, Ms. Mary Adair Horsechief stated that “a representative of Plains & Eastern Clean Line recently dropped by” her home and he told her she “had no recourse but to let them take our land for their use.” Clean Line takes these assertions seriously and we do not condone or endorse statements like the one Ms. Horsechief claims was made on our behalf. Clean Line is committed to treating every landowner with consideration and respect. We require our representatives to follow a Code of Conduct that can be downloaded from our website. We strive to maintain long-lasting relationships with landowners by working in a respectful and collaborative manner. If you have information on interactions you have had with a Clean Line representative that goes against this code, we would like to know. Please contact us at 1-877-573-2851 or info@plainsandeasterncleanline.com and someone will respond to you in a timely fashion.
Read Mary Horsechief's entire Letter to the Editor here.

This isn't the first report of heavy-handed Clean Line land agent tactics, and I doubt it will be the last.  There's something wrong with the company doing Clean Line's land acquisitions.  They're not abiding by the Code of Conduct.  What's the punishment?  Judging from the continuation of this behavior... there is no punishment.

If you had contracted a company to do a job, given them a set of rules, and then the company systematically violated those rules and caused your company bad will in the community that could ultimately derail your entire project, would you fire them?  I would.

Instead, Clean Line keeps making excuses for this kind of behavior and pretending it's doing something about it.  Oh, poppycock, Mario!  Actions speak louder than words!

However, the "Land Agent Code of Conduct" is an old transmission owner trick that has been recycled again and again.  In fact, Clean Line's "code" was plagiarized nearly word for word from previous "Codes of Conduct" used by Allegheny Energy for its TrAIL and PATH projects.  In its original form on the TrAIL project, the "Code" was enforceable by the court.  The very idea that the company responsible for these transgressions would police itself is ludicrous!

In addition, Mario goes on and on disseminating his "facts" about how his project won't have health effects and will provide "opportunities" for landowners.  He's preaching to the choir.  No matter how many times Clean Line repeats this mantra, nobody believes it.  A company selling the benefits of its own project is ALWAYS suspected of dishonesty and bias from its public.  There is no amount of "information" from the company that's going to turn public opinion.  It's just not going to happen.

Here's what's actually happening... a fantastically researched and fairly presented story about Clean Line from NPR, Big Wind Blowing Through North ArkansasGive it a listen.

The jig is up, Clean Line!
 
 
The West Virginia PSC has approved the settlement reached by the parties to FirstEnergy's request to increase rates, and your rates will go up 8% overall on February 25.  Yeah, rate increases suck, but I think the bigger question here is... Did you get a better deal in the settlement than you would have if this case had gone through the full evidentiary hearing and been decided by the Commissioners?

I'm thinking... yes.  And here's why:

Actual base rate increase requested:  $95.7M (9.3%).
Actual base rate increase granted:  $15M (1.45%).

Vegetation Management Surcharge requested:  $48.4M
Vegetation Management Surcharge granted:  $47.5M  HOWEVER, something good happened here that is not reflected in the number.  For the first time, FirstEnergy will have to account for every dollar spent on vegetation management and file semi-annual reports that true up its actual expenditures to actual rates collected.  The vegetation management expenses must be reviewed for prudence.  In the past, the company was simply handed a certain amount annually for "vegetation management."  The company never had to account for how (or if!) the amount was actually spent on vegetation management.  What happened is that the company wasn't doing adequate vegetation management, resulting in more severe and frequent outages, but was using the money to bulk up its balance sheet and share dividends.  Now all the money collected for vegetation management must be spent actually maintaining vegetation.  This is a very good thing!

Depreciation rate change increase requested:  $17M
Depreciation rate change granted:  None.

Requested increase in monthly customer charge:  $1 (up to $6 from the existing $5)
Monthly customer charge granted:  $5 (no change).


Deferred expense for 2012 storm restoration:  $45.8M.  The companies wanted to collect this with an annual return calculated on the balance.  Instead, they will collect this over 5 years ($9M/yr.) WITHOUT any return (interest) being paid
.

The company wanted to collect $60M in expense it incurred in closing its Albright, Willow Island and Rivesville generating plants.  Instead, it will collect zero.  However, the companies are permitted to defer this expense (hold it on their balance sheet) for the time being, and may request recovery of it at a later date.  At that later date, you bet the recovery request will include years of "interest" accrued during the deferral.   This bears watching!

The companies had requested a surcharge to pay for the cost of upgrading their generators to comply with EPA regulations.  They withdrew their request in the settlement, however, the settlement simply kicks that can down the road, allowing the companies to create a regulatory asset (deferral) for those costs and to collect them during its next base rate case.  In the meantime, the accumulating costs will earn 8.19% return (interest), which will be payable at the next rate increase.

But, it looks like the apportionment of rates between customer classes was adjusted to lower rates of the industrial users, while residential rates were increased.
  Remember, industrial users were a party to this settlement.

Do you think you might have gotten a better deal from the PSC Commissioners?  I doubt it.  They're used to giving FirstEnergy everything it wants.  The Commissioners aren't really fighting for you, but the staff of the PSC, and our Consumer Advocate WERE fighting for you here and I think they engineered the best deal possible.  There was never any chance that the PSC would simply deny the rate increase in its entirety.  It was all about "how much."  And you kept the pressure on by filing comments and speaking at the public hearings.  Get educated, stay engaged!

 
 
"Gotta read" post on UWUA Local 304's blog today.  Utility’s “Cozy” Relationship With Regulators Questioned tells the story of Pacific Gas & Electric (PG&E), whose lack of maintenance was responsible for a massive gas line explosion in 2010 that leveled a neighborhood and killed or injured many.

But, wait, there's more!
The story may have stopped there, except for a consumer advocacy group’s efforts for utility reform. Their allegations kept the San Bruno disaster front and center by claiming PG&E knowingly pumped up their balance sheets and pocketed funds that should have went to the maintenance and upkeep of the aging natural gas system and that it was a relationship with the California Public Utilities Commission, that the group described as “cozy”, that let PG&E to get away with it.

Both the regulator in question and a PG&E Vice President have lost their positions, but recently released e-mails between the two seemed to confirm the allegations, and the fact that both have since lost their jobs also is a strong indicator that the charges were well founded (click here for a great story on this subject).

Discussed in the e-mails are, among other things, talk of vacations, chats with invitations to private meetings at remote and luxurious locales, and a general feeling of collusion between close friends rather than a more professional and business-like exchange between the regulator and the regulated. There are even some chat about PG&E meeting then Governor Jerry Brown and strategies to diffuse the events of San Bruno.

However, the most disturbing aspect revealed in the e-mails is the how the utility targeted the The Utility Reform Network (TURN), which was the advocacy group highlighting and investigating the events of San Bruno.
UWUA links to this story originally published in the San Francisco Chronicle.

Apparently the executive director of the California PUC and an "external affairs" schmoozer vice president were having a ton of fun making nasty jokes about the president of The Utility Reform Network (TURN), whose only crime was trying to protect customers and "reform" these dirty bastards.

The emails also detail the cozy relationship between PG&E and its regulators, as well as PG&E and elected officials.  It was suggested by the president of the CPUC that PG&E should whine to Governor Jerry Brown about how the explosion disaster was hurting poor, poor pitiful PG&E stock prices, so he could "fix" things.
In January 2011, Peevey sent an e-mail to Cherry urging him to share with a Brown aide, former PG&E executive Nancy McFadden, a financial analyst’s views that the San Bruno case was hurting PG&E’s stock. The report credited Peevey for his “even-handed” approach in controlling the situation.

‘‘As I suggested before, this info should go to the governor’s office, probably best to Nancy McF,” Peevey wrote to Cherry. “Jerry has to be made aware that actions have consequences and the economy is best off with a stable utility sector.”
No, you're not reading a John Grisham novel.  This stuff actually happened.  In fact, I'm pretty certain this is not an isolated incident.  This stuff happens all the time at just about any investor owned utility you can name.

UWUA finishes up their report with some very good advice:
The real news here is that when people stand together, no matter what derisive things business executives may say against them or how small they may view their fellow citizens, America is still America and people can still make a difference.

The story above is also a reminder that as Americans we have a responsibility to hold the people that serve the public interests in any capacity accountable, and by doing so, we can discourage such insular and covert “cozy” relationships from developing.
 
 
Wow, what a shocker, right?  What happens when a cartel has to make new rules whereby its members have to compete for projects? 

Complete and utter failure.

On Thursday, PSE&G filed a complaint against PJM at FERC.  The complaint is just a new wrinkle in PJM's failure to carry out a competitive transmission planning process ordered by FERC and set out in PJM's own rules.  PJM didn't seem to have any problem coming up with a competitive process in order to comply with Order No. 1000, but it completely failed at carrying out its own rules in its first attempt at a competitive transmission project window.

The complaint alleges that PJM altered all projects submitted in the Artificial Island competitive window, substituting its own project creations for the ones actually submitted, and then allowed a select set of project sponsors to continually alter their projects throughout the evaluation process.  PJM still has not selected a "winner," although the process has been dragging on for nearly two years.  PJM simply cannot resist using its heavy hand to unfairly influence selection of transmission projects that need to be built.

Funny that when PJM has to operate competitively, it cannot.  Everything falls apart.

Is it really about keeping the system reliable and cost effective, or is it about ensuring profits for its most favored members?  Where do consumers fit in?


So, why don't we just do away with PJM transmission planning altogether?  It's a miserable failure.