So, here's the sound track playing in Skelly's head when he gets his sexy on with transmission towers
Poor, sick bastard. Does anyone know why transmission pushes Michael Skelly's debauchery button this way? Moreover, why would he brag about his sick, sick turn on in public this way?
So, here's the sound track playing in Skelly's head when he gets his sexy on with transmission towers
And here's what the rest of us hear
Dude, get some therapy. You're sick!
...errr, customer. This morning, Clean Line Energy Partners had an imaginary customer.
Utility Energy has agreed to purchase 500MW of power from Plains & Eastern via an intermediate converter station in Arkansas. It is not immediately clear where the balance of the line’s capacity will be sold.
So reported "Recharge News," which bills itself as "the multi-platform news service for senior professionals in solar, wind and related sectors. It balances in-depth coverage of wind and solar with relevant news from the wider global renewables industry."
Balance? Recharge News thought this article was "balanced?" It only tells one side of the story... Skelly's side. Apparently the reporter did absolutely no fact checking.
"Utility Energy" doesn't exist. There's no company named "Utility Energy," therefore it has not agreed to purchase 500 MW of power from Plains & Eastern. Or maybe the reporter MEANT to report that "Utility Entergy has agreed to purchase...". But that would also be untrue. Neither Entergy nor Clean Line's imaginary friend, Utility Energy, have agreed to purchase so much as a glow stick from Plains & Eastern.
Coulda, woulda, shoulda.
It's pretty doubtful that Clean Line will "begin construction on Plains & Eastern next year." It's pretty hard to construct a transmission line on land you don't own. What Recharge News fails to report is that landowners are refusing all Clean Line's advances.
Get yourself one of these nifty signs from Golden Bridge, LLC!
Are you directly or indirectly affected by Clean Line Energy Partners' "Plains and Eastern" HVDC transmission line project? Don't want to talk to them? Members of Golden Bridge don't have to.
The LLC will educate members and other interested parties on our issues regarding the Plains & Eastern project, condemnation (eminent domain), and landowners' rights, especially as they affect property values and agricultural/recreational operations.
The LLC will take those steps necessary to help protect property owner interests, including but not limited to addressing environmental, economic and health impacts, and helping to protect and improve landowners' property rights, including the mitigation of potential liabilities.
To evaluate ALL options available to address the potential impacts from the Project, including, but not limited to:
- Legal action in defense of landowner rights
- Negotiation of the right-of-way easement terms that benefit landowners now and in the future
We are still accepting memberships. To find out more information:
Contact Us Directly: GoldenBridgeAR@gmail.com or (479) 214-0799
Please share this post to help us inform our friends and neighbors along the route.
And guess what? Clean Line does NOT have eminent domain authority, nor authority to enter private property along the route. No "studies." No "surveys." No land agent visits or calls. Landowners can simply tell Clean Line and its contractors to go away. And they are. They certainly are. It's not looking like Clean Line is going to have any land rights for its project by next year. Because the only way Clean Line can get land rights from resistant owners is to ask the U.S. Department of Energy to use its authority to condemn and take their land. And the U.S. DOE agreement stipulates that Clean Line must have firm, contracted customers, not just imaginary friends, before DOE will even consider getting involved. And even if they do, DOE must start all over again attempting to negotiate with the landowner. Think all this can be accomplished by next year? Not. It's going to take YEARS and YEARS, if it ever happens at all.
And there Skelly stands, waving his hands around and making up imaginary customers, like "Utility Energy." He doesn't have any real customers. And he won't have any real customers, because all the good imaginary customers will only "...commit once they see the project meeting critical milestones towards the start of construction." But Clean Line won't be meeting any milestones until it has land rights. And it can't get land rights until it has customers. Chicken, egg. Rock:Clean Line:Hard Place.
Skelly needs to quit making crap up. And the trade press needs to stop reporting made up crap.
Imaginary friends are only cute when you're five.
James V. Fakult needs to work on his communication skills.
I get lots of notices about new transmission proposals, but this one was so poorly done, it made me laugh out loud. According to this article, liespotting is an art. Watch out for number 6 when reading the quotes from Fakult.
Liars overemphasize their truthfulness. “To tell you the truth…” “Honestly…” “I swear to you…” Oh, if only it were so! When people use these bolstering statements to emphasize their honesty, there’s a good chance they are hiding something. Learning to baseline someone’s normal behavior is important in situations such as this: You want to listen for normal or harmless use of such phrases. There’s no need to add them if you really are telling the truth, so be on guard.
Now listen to Fakult:
"The growth has been in some fits and starts, but we're at a point now where this is an essential project to continue to provide, really, the type of service, the level of service, that our customers expect from us," Fakult told the Asbury Park Press. "It reinforces the system in that area. It allows us to, again, provide better, more reliable, resilient service."
Really, James? Really? What was the purpose of sticking that word into your statement, except to bolster your statement that the people really need your project. And you repeated yourself there at the end, hoping it would give more credibility to your proposition. Clearly, he doesn't even believe it himself. Maybe if he repeats it a couple dozen more times it will become true?
"The time is now," Fakult said. "It just needs to be done now."
Perhaps Fakult is attempting to tread carefully, since a substantially similar project was attempted many years ago but failed due to public opposition.
Nearly 16 years ago, the utility scrapped plans for a 6.5-mile transmission line, to be run on 60-foot high steel poles, along the railroad tracks from Matawan to Middletown, after intense community opposition. Residents and some town officials, fearing a reduction in property values and worried about health risks, fought the project for a decade.
I don't think the people have forgotten. Looks like opposition will be swift and fierce. So, what's changed this time?
This time, the utility proposes to run the wires atop slender single poles that average 140 feet tall rather than bulky towers used in the past, spokesman Ron Morano said.
Who says the public likes monopoles any better than they like lattice towers? Did AEP tell you that?
AEP isn't the public. Truly aesthetic transmission is underground. You should have started there, James. Since everyone (214,000 ratepayers, according to the article) is going to benefit from the project, everyone should pay the increased cost of undergrounding it so it doesn't become a hazard or a burden to adjacent landowners. You're always going to have opposition when you propose that a few should sacrifice themselves for the many. Beneficiary pays.
The use of the NJ Transit corridor, which is already designated for public use and has existing electric infrastructure, as well as the slimmer monopoles, will help to minimize the disruption on the community, Fakult said.
Transmission lines are NOT like Lay's potato chips. Just because someone lives near invasive infrastructure does NOT mean they want or deserve more of it. Look at it this way -- those folks living in close proximity to existing infrastructure have already paid their dues to society. Isn't it someone else's turn?
Morano, the JCP&L spokesman, said the utility follows all safety and heath guidelines and will have an electromagnetic fields expert available at open house sessions. "We are successfully building transmission lines in other (areas) without any issues," she said.
EMF health-related issues are entirely perceptual. Your "experts" and selected 30 year old studies don't convince anyone. How about putting your money where your expert's mouth is, FirstEnergy? How about offering the landowner a written guarantee to cover the health care costs of any individual who can prove their illness was related to living in close proximity to your transmission line? Your wallet clearly doesn't believe your "science."
So, next FirstEnergy plays its trump card to claim that PJM has determined the project to be necessary.
PJM Interconnection, the organization that oversees the electric grid in 13 states and Washington D.C., has identified the Monmouth County Reliability Project as a necessary project to reduce the length and frequency of outages in Monmouth County, the utility said.
PJM? The organization that "answers to no one?" But your press release said YOU were proposing it, FirstEnergy. Which is it? Who first "identified" this project as a necessity? Was it PJM, or was it FirstEnergy, looking to "energize" its profits by building transmission it believes necessary to meet future demand:
As noted in the fact sheet, Energizing the Future is a transmission initiative through 2017 that involves upgrading and strengthening the grid to meet the future demands of customers and communities. Key factors driving that investment include enhancing system reliability by replacing existing equipment with advanced technologies; meeting projected load growth; and reinforcing the system in light of power plant deactivations, the fact sheet added.
Fakult thinks he can do things differently this time:
The company plans to hold three open house events in neighborhoods near the proposed project to share information with the public and gather feedback. The company also is setting up a website at www.monmouthreliability.com.
You're going to hold three events guaranteed to thoroughly piss off the communities and give the opposition an opportunity to meet and greet and build mass, FirstEnergy? You've really learned nothing at all over the years, have you?
Your talk about "need" really isn't convincing. Did the utility "need" this transmission project the first time it was proposed, 16 years ago? Obviously not, since it never happened and the lights still come on in those communities when people flip the switch. Adding words like "really" this time isn't going to help you.
Once again, FirstEnergy puts its cart before its horse by presenting a community with a transmission project as a fait accompli. Presuming the project is "needed" and it's only a matter of how to build it and where to put it will never be accepted at face value by a community. First, you have to convince them that a need for something exists, and then you consult with the community to determine an acceptable solution.
That's true "community consultation." Really.
Last Thursday, FERC took the historic step of closing its monthly "open meeting" to the public. It did so in the interest of safety, both for its staff and any members of the public who might attend one of its meetings simply to observe. It didn't do it because it agrees there's some "bias" afoot, and closing its open meeting isn't a form of progress for transparency. So, what was accomplished? The public had one of its rights removed because of the over the top actions of a few.
Stop it! Just stop it! This isn't the way to increase public transparency or make FERC stop approving pipelines. It only succeeds to make FERC and the rest of society more inclined to dismiss public participation in FERC processes as ignorant and pointless bullying.
The refusal of a handful of gas pipeline protestors to engage in constructive advocacy, and instead simply make pests of themselves, doesn't accomplish anything. Interrupting the monthly meetings (and every other activity underway in the general vicinity) does not make FERC less likely to approve pipelines. Sure, maybe it feels good to the ones doing it for a few minutes. Everyone should join a non-violent protest at least once in life, the crowd-speak high is exhilarating, but that feeling is never shared by the folks on the receiving end. If you want change, create it! It can't be created by a couple hours of non-committal "fun." It takes years of actual education, work, and commitment to a goal to effect constructive change. It can't be accomplished quicker by ignorant mass action. What may have started out as a good idea to urge the public to become involved in the process as a way to effect change has gone too far.
Last week, FERC's fan club went too far with their "week of action." In addition to the usual protests outside the building, these folks cranked it up on a personal level to "camp out" outside the homes of the FERC Commissioners. And they announced that they would send people into the open meeting to interrupt it. And what was the result? A webcast open meeting. Instead of expanding transparency, it actually had the opposite effect.
If you think FERC's rules are designed to give advantage to pipeline companies, change the rules. There's a civilized process in place to do just that. Trying to bully FERC to operate outside the existing rules can only fail.
According to the rules, pipeline opponents may intervene in the established process in order to make their case for disapproval. And thousands of ordinary folks have been encouraged to do so, and have intervened. But it seems to stop there, when it shouldn't. Simply intervening, without actually participating in the legal process, doesn't accomplish anything. No matter how many people passively intervene, the pipeline company will actively participate -- and that may be the only voice FERC hears.
A week? Is that all the commitment these folks have to effecting change? Change is a long-term commitment, not a night on the sidewalk harassing a regulator who is following existing rules. Don't let your message get lost on the messenger.
Rural America has had enough urban arrogance. But that doesn't stop these small-world buffoons from pontificating arrogant theories that disparage rural America. Perhaps we need to start arranging some rural summer camp experiences for urban energy planners with really crazy ideas about what happens beyond the city limits? Get out there, urban dwellers, get out to the countryside, and find out how Mayberry lives!
In a recent article in The Atlantic about building a "nationwide" electric grid to be used as a quasi-storage device for renewable energy, David Byrne, manager of integrated planning for Tallahassee, Florida's, city electric system opined that Mayberry isn't "really living."
“The energy resources that we would like to have seem to be located in places where people really don’t live,” Byrne pointed out.
Well, isn't that parochial, David? What makes you think that your little workaday city world epitomizes "living," and that Mayberry's daily struggle to eke out a living from the land they husband (for your ultimate benefit, I might add) isn't "really living." I think if you expanded your horizons a bit, you'd find that Mayberrians are the ones who are really "living," as nature intended.
Why not explore and develop "energy resources that you would like to have" in your own urban neighborhoods or region? Is that because you're just a NIMBY at heart? You want all the benefits of "energy resources," without any of the sacrifice that come along with them. You want someone else to sacrifice their lifestyle to provide for your own? Keep searching for that "miracle." It's as close as your own backyard, Tallahassee!
Well, hey there! Renewable energy wonks have the same "saying" as transmission opponents. It's about time we all got on the same page!
At a FERC Techincal Conference regarding interconnection procedures last week, Dean Gosselin, NextEra Energy’s vice president of business management, said:
“We have a saying in our world of development, which is ‘time kills all projects.’ The longer it takes, the more unlikely it is the project will be valid and go to fruition,” he said.
Right. Projects that struggle for years to gain approval, financing, and customers aren't good projects that deserve to come to fruition.
So what in the world is Clean Line doing still trying to shove its projects through? This company has been "developing" its projects since 2009. That's 7 long years, and they're still no closer to fruition. Even the Federal government won't undertake massive eminent domain condemnations for a project that has no customers, and for which no voluntary easements have been signed.
Time kills all projects, even yours, Clean Line. You're like that slimy green stuff in the back of the vegetable drawer of project ideas -- so past its prime that it lacks physical substance and smells horrendous. Clean Line is way past its expiration date.
To justify thousands of miles of new transmission "for renewables," NIMBYs often claim it is "for the greater good." The NIMBYs who champion the use of eminent domain for renewable energy only support it because it is "Not In My Backyard." They have all sorts of specious arguments to support their position, such as:
None of these arguments is effective to convince landowners to sacrifice themselves and grant easements for the "greater good" of others in far off places.
Our country was electrified through the use of eminent domain. It was the only way to provide electric service to all who wanted it. Now everyone has electricity, and those who want new service choose whether to pay the cost of extending electric lines to serve their property, or building their own generation onsite. That is a simple economic argument -- would the cost of extending centralized generation to the property be more or less than building and maintaining distributed generation to serve the property. In many parts of the world, distributed generation is the option that makes sense.
But utility eminent domain is no longer about providing individuals with reliable basic service. It's now oftentimes used to provide lower cost electric service, or to provide a different "renewable" kind of generation required by public policies. This is where utility eminent domain starts sliding down the slippery slope of "public use." Can "the public" necessity for more economic or environmentally responsible electricity trump the right of the individual to own and enjoy property? Where does the responsibility of "the public" to be responsible for their own footprint enter into the equation?
If the current electric supply for "the public" in one location is more expensive than electric supply for "the public" in another location, does that give utilities the right to take private property in order to levelize electric prices between localities? In such a scheme, consumers enjoying cheaper electricity must sacrifice by paying more for their electricity in order that other consumers in a different region can enjoy cheaper prices. And landowners in between these two regions must sacrifice their personal property to grant easements for new transmission lines to effect this economic benefit for one group of consumers.
The same argument can be made about transmission lines "for renewables" (as if transmission lines could segregate "clean" from "dirty" energy - it's all the same when it's transmitted). Consumers who live in regions where renewables are cheap and plentiful enjoy lower electric prices. When those renewables are exported to other regions where renewables have failed to properly and economically develop (notice I did not say regions where there are no renewables, because such places simply don't exist), it raises prices for consumers who previously enjoyed low prices because supply exceeded demand. And it requires them to make a sacrifice so that consumers in other regions can enjoy the low-priced renewables they failed to develop themselves.
We get here because of electricity markets. Electric markets are run by organizations who also control electric transmission. Electric transmission is the only tool these organizations have to control their artificial electric markets by moving electricity around their own region, or to other regions. Electric transmission organizations cannot order new generation to be built as a way to control their markets, lower prices, or support environmental "public policies." Eminent domain cannot be used to force new generation, but it can be used to force new transmission. This mismatch between the power of a "market" to force transmission, but not generation, makes no sense.
If a particular region needs renewable generation, or lower cost electricity, an unfettered market would force it to be built. Instead, the current electric "market" forces transmission before market forces can be allowed to do their work to encourage new generation. This isn't a true "market," it's top down force that causes unnecessary sacrifice on the part of individuals who will receive no benefit in order to provide for the needs of others. If regions that have failed to develop their own renewable resources must pay more to develop them now, then that's the cost of environmentally-friendly consumption. If regions with more expensive power need cheaper prices, then they should build cheaper generators, or change policies that suppress generation and drive up its cost. Example: The east coast cities have traditionally relied on coal-fired generators in the Ohio Valley to supply them with cheap electricity because their own environmental restrictions or costs imposed on coal-fired generators prevented them from generating economic coal-fired electricity in their own neighborhood. The Ohio Valley destroyed its people and environment in order to ship cheap electricity east to serve the cities. Now the cities don't want any more coal-fired power, but they have been trained to be helpless leeches, incapable of providing for their own electric needs. Many of these NIMBYs continue to think that other regions enjoy sacrificing themselves for city needs. They somehow think other regions enjoy some economic benefit from serving them. One only need look at West Virginia as an example that any economic benefit from the sacrifice didn't flow to the people -- it went into the pockets of the out-of-state companies who exploited the state's natural resources for the last 100 years.
Climate change has happened gradually over hundreds of years of our industrial expansion. It cannot be changed overnight. The big rush to switch to renewables won't happen quickly. And it certainly shouldn't be used as a basis to require sacrifice of personal property rights to allow new renewable energy projects. Renewables will develop where they are welcomed by people who want to pay to use them. Arguing that development of more expensive local renewables isn't worthwhile effectively rejects climate change arguments entirely.
And, again, we have another mismatch between generation and transmission when it comes to renewables. The siting of renewable energy generators is an entirely voluntary process -- no eminent domain can be used to obtain land for wind farms, for instance. In that case, renewable generation developers have to operate in a voluntary real estate market to acquire land for their projects. These landowners are compensated at a rate that entices their voluntary participation, oftentimes receiving royalties and other long-term financial compensation for the use of their land. But voluntarily-sited renewable generators may require new transmission lines to tap into existing transmission systems, and request the use of eminent domain to get there. On the one hand, landowners hosting generators are well-compensated because their participation is voluntary, but on the other hand, landowners hosting the transmission lines that make generation profits happen are involuntarily forced to take one-time "market value" payments and sacrifice their property. Everyone participating in the production of getting renewable generation to market is not compensated equally.
And here's another incongruity... when eminent domain is used to acquire land for transmission lines planned by regional organizations and cost allocated to all ratepayers in a region, the ratepayers realize the benefit of the cheaper land acquisition accomplished by eminent domain through "cost of service" transmission rates. However, new "merchant" transmission projects proposed are not supported by cost of service rates, but by market rates. A merchant project is financed wholly by its investors, not ratepayers. It depends on market prices for transmission service in order to set its rates through a voluntary negotiation process. The users of its line negotiate a price for service. The merchant transmission owner can collect whatever rate it can negotiate in this voluntary market. In that case, any lower land acquisition values created by eminent domain flow directly to the investors. Eminent domain does not affect the market for transmission service -- that market remains unaffected whether land acquisition for transmission rights of way is voluntary or coerced through eminent domain. The merchant transmission ratepayers do not realize any financial benefit from the use of eminent domain for land acquisition. A merchant transmission project is a market-based endeavor -- it's success depends entirely on market forces. Therefore, why isn't a merchant transmission project's land acquisition also subject to the same market forces? A market-based merchant project should be required to negotiate land acquisition prices with voluntary landowners in the same free market in which it negotiates prices for its transmission with voluntary users.
Those who casually spout off that new transmission is "for the greater good" and therefore deserving of landowner sacrifice through the acquisition of rights of way through eminent domain aren't aren't dealing with a full deck. It's all so much self-interested hogwash. Who determines when transmission is "for the greater good?" Not the folks who stand to benefit from it. The "greater good" includes everyone. Equally.
Hurray, hurray, it's election day!
Maybe now the phone will stop ringing incessantly with recorded voices urging me to vote for the candidate with the most corporate money in their treasure chest. And maybe now my mailbox won't be stuffed with repetitive political cards urging me to vote for the candidate with the most corporate money in their treasure chest. Because, you know, corporate money rules the political world.
But there will be other things for certain people to vote on, even after election day. Corporate shareholders still get to vote on proposals at upcoming company annual meetings. In addition to company-sponsored proposals such as executive compensation or lowering the threshold for approval of "certain" proposals, shareholders can vote on their own proposals about how the company they own is run.
FirstEnergy shareholders will be voting on May 17. Of course, the company recommends that its shareholders vote for all the company's proposals, and AGAINST all the proposals of its shareholders. This pretty much never changes from year to year. The only thing that changes is the proposals that shareholders make which are consistently voted down at annual meetings.
This year, shareholders have proposed that FirstEnergy prepare and issue a report disclosing the company's lobbying expenditures, particularly direct and indirect lobbying and grassroots lobbying communications. Direct and indirect lobbying includes payments to tax-exempt organizations that write and endorse model legislation. "Grassroots" lobbying communications include company advertising advising the general public how they should think about certain legislation, and how they should participate in their own governance.
The Nathan Cummings Foundation believes FirstEnergy's lobbying efforts constitute a risky and ineffective strategy. It's not how much of the shareholders' money FirstEnergy pumps into its lobbying efforts (well, assuming FirstEnergy doesn't have any accounting "accidents" and charge the lobbying costs to ratepayers instead of shareholders) it's that they suspect FirstEnergy's lobbying efforts are hurting shareholders interest in the health of the company. Now, why would FirstEnergy engage in lobbying that hurts its financial position?
FirstEnergy's management believes "that it has a responsibility to participate in the legislative, regulatory and political process. Sharing its views and educating officeholders, regulators, community and business leaders, and the public on key issues helps your Company promote effective government and the interests of key stakeholder groups including our shareholders, employees and the communities we serve. By engaging with elected officials, regulators, community and business leaders, and other decision makers, your Company strives to conduct its business as transparently as possible to serve customers effectively and help build public trust."
Participate? It's not just about "sharing its views," it's about using money and political power to prevent voters from "sharing their views." It's about hiding behind trade associations and totally made up groups, such as Utility Air Regulatory Group (UARG), in order to influence government processes. It's about using its public voice to disseminate political propaganda to its customers.
But, never fear, these shareholder proposals are always voted down. Shareholders never truly revolt and vote with their money by dumping the corporate stock of a company who continues to ignore their wishes. Nobody is brave enough to have real convictions when it comes to their wallet.
Greed rules all in a voting process, whether at the voting booth or an annual shareholder meeting.
On Thursday, Maryland Public Service Commission Administrative Law Judge Dennis H. Sober fined Potomac Edison $25,000 for its 2011-2012 failure to read electric meters according to its tariff.
It's been a long time since Potomac Edison's outrageous billing failure caused its customers to receive astronomical bills resulting from the company's neglect of its duty to read meters in a timely fashion. The West Virginia PSC investigation and subsequent hearing into the same problem resulted in a requirement that the company switch to monthly meter readings back in 2014.
The judge's Proposed Order in Maryland also requires Potomac Edison to increase its meter reading frequency to monthly in that state.
The judge found:
that PE’s initial acknowledgment of the substandard meter reading history was an appropriate and an accurate reply to the Commission's correspondence. Its later reversal on the issue of accepting some responsibility for the substandard performance is troubling and counterproductive for the proper resolution of these issues.
It is not a legitimate excuse to blame the weather (which PE can’t control) or the staffing issues it faced (which it can control), as neither of these factors is unique to PE as an electrical utility, nor are they unusual or unknown factors.
The Maryland PSC staff recommended a penalty of $300,000, based on PE's cost of missed meter readings. Why should the company collect from ratepayers for services it never performed? While this makes perfect sense to me (and probably to you as well), the judge found that "the basis for the formulation of the financial penalty Staff would impose is not valid and has no basis upon which to rely." Therefore, the judge pulled a number out of nowhere to impose a much lower, arbitrary penalty of $25,000. Even a $300,000 penalty is nothing more than a minor annoyance to a company with annual revenue in the neighborhood of $15B. A penalty of $25,000 is an insult to ratepayers who were harmed by Potomac Edison's failure to abide by its tariff. But, hey, it's more than the WV PSC fined the company for the same practices, which was a big fat goose egg. Instead, the WV PSC ordered monthly meter reading at an additional cost to ratepayers of more than $7M annually. It remains to be seen if Potomac Edison will file a new base rate case in Maryland in order to collect the additional costs it faces for increasing its meter reading to a monthly basis. Potomac Edison currently enjoys an 11.9% return on equity in Maryland, a rate much higher than that allowed in neighboring states. A new base rate filing will most likely result in a new, much lower ROE. In fact, PE would probably lose money in such a deal as the lower ROE would cost them more than they could make collecting a higher cost for monthly meter reading. But, never fear, Marylanders, FirstEnegy will probably do something like apply for a supplemental rate rider to cover the cost of additional meter reading without having to file a base rate case. This ain't over until FirstEnergy takes even more money out of your pocket...
And speaking of... the judge's Proposed Order isn't final until June 7, and only then if no party files an appeal. Do you think Potomac Edison will appeal the Proposed Order, since all its costs to do so come out of ratepayer pockets?
Justice sure is funny in a regulated environment, isn't it?
Well, that was completely unsurprising. FERC said the Power Purchase Agreements requiring captive Ohio distribution company customers to purchase generation from AEP and FE merchant generators don't pass the sniff test.
Even though the Public Utilities Commission of Ohio (PUCO) approved the deals, FERC rules about affiliate transactions cannot be bypassed (or politically influenced).
FERC rescinded previously granted waivers to allow AEP & FE to engage in affiliate transactions without review. The waivers were granted when the companies spun off their regulated generators into merchant companies because the generation companies no longer had captive customers. In that case, any deals between regulated distribution affiliates and unregulated generation affiliates would have been subject to market forces. If the deals were too expensive, then customers could bypass the charges and switch to another, cheaper, generator. But AEP & FE made the mistake of placing the cost burden of these PPAs on captive distribution customers, and not free choice generation customers. Because then the customers would choose a cheaper generator.
Contrary to some of the articles I've read, the FERC decision does not reverse the PUCO's decision to allow the cost of the PPAs to become the responsibility of captive distribution customers. It simply rescinds its prior waiver of review of the PPA itself. The companies are now free to submit the PPAs to FERC for review. If FERC approves them, then everything can proceed as planned. However, it is unlikely that FERC will approve the PPAs because they allow AEP & FE to charge their captive customers to subsidize their shareholders profits.
So, what's a greedy and poorly managed utility to do? FE initially wanted to pretend that its PPA will be found just and reasonable by FERC. How much money and political influence would THAT require? Remember, the cost of civic and political activities is the financial responsibility of shareholders, not ratepayers. The cost of buying FERC is likely to obviate any temporary profits that may come from an 8-year PPA. They're not a cheap date like state utility commissions. However the company has apparently crunched the numbers and come to its senses. FE is now attempting to bypass FERC review by doing away with the PPA, while still collecting the charge it would levy on Ohio consumers. AEP is being a little more realistic, if not downright arrogant. AEP's CEO soothed investor agitation by claiming it will make the Ohio legislature re-regulate generation so that it may collect the cost of service, plus a return, for its Ohio generators. This would effectively end retail generation choice in Ohio. Is legislation that will cost Ohio electric ratepayers more money really that easy for AEP that it simply needs to want it and wave its magic wand? Time will tell.
Meanwhile, FirstEnergy wants to make its regulated Mon Power and Potomac Edison affiliates in West Virginia purchase another non-competitive generator from its competitive generation affiliate. It's just like re-regulating generation in Ohio, but the legislative work is already done. And FirstEnergy has already successfully pulled off a similar affiliate transaction a couple years ago when its competitive generation affiliate "sold" the Harrison Power Station to regulated Mon Power and Potomac Edison. West Virginia electric consumers have already bailed out one of FirstEnergy's uncompetitive generators, what's one more? This time, FE wants to "sell" its Pleasants Power Station to Mon Power and Potomac Edison. But Mon Power already owned an 8% share of Pleasants, which it "sold" to FE Generation as part of the Harrison deal. Now FE Generation wants to sell the same power station back to Mon Power. Pleasants is like the FE hot potato, bought and sold among affiliates as necessary to generate cash. The only fly in the ointment this time is that FE put a price on Pleasants when it "sold" it last time. I'm sure the cost to Mon Power can't be more than what FE Generation paid them for the plant a couple years ago. It's not like the price of antique coal generation stations has shot up in the past few years. But, never fear, I'm sure FE can pay the right people to convince the WV PSC that the plant is as valuable as the amount of cash FE needs to raise from its sale.
And don't forget... all this stashing of competitive generators into regulated companies is only temporary. If power prices recover and these generators once again become competitive, AEP & FE will find a way to "sell" these plants back to their competitive generation companies. It's all about shareholder return and making as much money as possible.... and ratepayers are the source of investor owned utility profits. The idea that regulation protects consumers in the absence of competition is nothing more than a fig leaf. Utilities that operate in both a competitive and regulated environment will continue to shift assets around to generate the most profit for their shareholders.
About the Author
Keryn Newman blogs here at StopPATH WV about energy issues, transmission policy, misguided regulation, our greedy energy companies and their corporate spin.
In 2008, AEP & Allegheny Energy's PATH joint venture used their transmission line routing etch-a-sketch to draw a 765kV line across the street from her house. Oooops! And the rest is history.