...the Commission concludes that, as courts have recognized, retail customers may file complaints and protest transmission rates and wholesale sales rates before the Commission. Moreover, allowing retail customers to challenge such rates does not violate principles of federalism or interfere with states’ rights.
The settlement judge in a formal challenge proceeding involving a subsidiary of investor owned utility AEP had submitted what are known as "Certified Questions" to the Commission on Oct. 13. A certified question is intended to seek the Commission's consideration and disposition of "any question arising in the proceeding, including any question of law, policy, or procedure
." The Commission had 30 days to answer the questions posed, otherwise they would revert to the judge who posed them for decision. The questions posed were:
(1) Shouldn’t section 306 of the Federal Power Act (FPA) be interpreted
in pari materia with section 201 of the FPA? FPA section 201 gives the Commission jurisdiction over wholesale interstate rates and interstate transmission; therefore, retail ratepayers would not have the right to file complaints against wholesale rates.
(2) Wouldn’t an expansive interpretation of section 306 of the FPA (allowing retail ratepayers or end users to file complaints against interstate wholesale rates) violate the delicate balance of federalism; in other words, by giving complaint authority to retail rate customers, is the Commission interfering with states’ rights by asserting jurisdiction over retail rates?
The judge had recommended that the Commission:
answer the questions as follows:
(1) “retail ratepayers are not permitted to bring an FPA section 205 complaint against wholesale sellers of electricity[;]” and (2) a different interpretation (i.e., allowing such retail ratepayer complaints) “would interfere with state jurisdiction over retail rates.”
The Commission didn't see it that way, and yesterday they issued an Order that explained to the judge:
Complaints may be filed under sections 206 and/or 306 of the FPA, 16 U.S.C. §§ 824e, 825e (2012). While section 205(e) of the FPA refers to “complaints,” 16 U.S.C. § 824d(e) (2012), the Commission commonly refers to these filings as protests. See 18 C.F.R. § 385.211 (2015).
The plain language of the FPA and the Commission’s implementing regulations allow broad participation in proceedings before the Commission. Specifically,
section 306 of the FPA explicitly authorizes “[a]ny person” to file a complaint with
the Commission. The Commission’s regulations are to a similar effect. For example, Rule 206(a) of the Commission’s Rules of Practice and Procedures provides that “[a]ny person may file a complaint seeking Commission action against any other person alleged to be in contravention or violation of any statute, rule, order, or other law administered by the Commission or for any other alleged wrong over which the Commission may have jurisdiction.
Ms. Peine, an intervenor in this proceeding, is contesting the SWEPCO/AEP transmission formula rate inputs, and thus rates for transmission of electric energy in interstate commerce, which is within the Commission’s exclusive jurisdiction under Part II of the FPA. These transmission inputs, i.e., costs, flow through to Ms. Peine’s retail electric bill. Stated another way, Ms. Peine is an “end-use customer that will pay . . . some portion of that [transmission] rate when flowed through [her] retail bill.” Thus, by challenging the transmission formula rate inputs, Ms. Peine has alleged injury in fact that can only be addressed by the Commission. Under these facts, Ms. Peine is permitted to file a protest or a complaint and to participate in this proceeding by intervening.
This outcome is consistent with federalism. Section 201 of the FPA recognizes the authority of the states over retail sales and facilities used in “local distribution.” Ms. Peine’s formal challenges, however, go to the transmission formula rate inputs identified in the SWEPCO/AEP 2013 and 2014 Annual Updates. Ms. Peine’s claims, therefore, go to the transmission of electric energy in interstate commerce and not to local distribution
Moreover, this issue is not a matter of first impression, as both the courts and the Commission have concluded previously that protecting consumers is one of the Commission’s primary responsibilities.
...the relevant definition of “interested parties” under the SWEPCO/AEP Protocols is not the version that was filed in 2007, but rather the version that was in effect when Ms. Peine filed her formal challenges under the Protocols, and that version did not include the examples that the Settlement Judge construed as limiting the definition of interested parties to exclude Ms. Peine. Moreover, we disagree with the Settlement Judge’s interpretation of the parenthetical phrase in the earlier version of the SWEPCO/AEP Protocols. The parenthetical phrase “(e.g., Transmission customers and affected state and federal regulatory authorities)” provided examples of categories of interested parties, and should not be read as exhaustive. This parenthetical language would not preclude an end-use customer, like Ms. Peine, who will pay a portion of the transmission rate in her retail bill, from challenging the inputs to the SWEPCO/AEP transmission formula rate.
Lastly, as to the administrative efficiency concerns raised by the Settlement Judge and AEP, we note that the Commission’s Rules of Practice and Procedure provide appropriate measures to streamline Commission proceedings.
So, the judge made a complete mess of a whole bunch of law in her rush to deny standing to a ratepayer. She also doesn't know the difference between "e.g." and "i.e."
And AEP and the Judge need to kwitcherbitchin about how terribly hard and unfair it is to utilities to have their rates examined by those who pay them. Did they expect that the Commission was going to do away with annual reviews of formula rate inputs altogether? There's no way to limit participation. It's all in or nothing. And the Commission just can't legally go with shutting down rate transparency.
Perhaps there's also a lesson here for AEP, who did a whole bunch of whining
about how burdensome and costly customer reviews of wholesale transmission could be as an excuse to escape rate review altogether. AEP has been down this road before as one of the parent companies involved in the PATH
decision the Commission cited over and over in yesterday's Order. Shame on you, AEP! If someone suggested that you could steal from your grandmother and get away with it, would you do it? Even though you know full well stealing from Granny is wrong? I thought AEP was supposed to "do the right thing?"
Here's a little advice from your own CEO to apply the next time you see an opportunity to do something that you know is wrong in order to take unfair advantage over someone who appears to be weaker than you:
I urge you to make the concepts described in this book a regular point of reference for the manner in which you carry out your work and the treatment of others.
In addition to airing her jurisdictional and standing concerns, the judge said permitting retail ratepayers to file such complaints "is at odds with promoting efficiency" because FERC could be faced with handling "potentially millions of individual complainants."
The groups, however, insisted that Cintron's position is "contrary to the plain language of the FPA," which states that "any person" has standing to file a complaint with FERC, as well as long-standing commission precedent holding that retail ratepayers have standing to challenge wholesale rates.
Citing a proceeding involving the abandoned Potomac Appalachian Transmission Highline project in which FERC found that "[a] complaint regarding a transmission rate can … be filed by any person, including an end-use customer that will pay some portion of that rate when flowed through its retail bill," the groups called Cintron's attempts to distinguish that situation from AEP's "unavailing." The judge relied on differences in the two companies' formula rate protocols to make her case, but the groups argued that "standing is a statutory right under the FPA, and whatever is said in the AEP protocol cannot overturn the statute."
As for Cintron's concerns about the regulatory burden that would be placed on FERC if retail ratepayers are allowed to challenge wholesale rates, the groups insisted that "administrative convenience is not a basis to eviscerate a statutory right." They said that "[i]n any event, this is a chimera — in the nearly 20 years since the commission issued Order 888, there has been a stream but not a deluge of … rate challenges."
Finally, among other things, the groups said the "novel viewpoint" expressed by Cintron "would reopen the … regulatory gap between federal and state jurisdiction that the FPA was designed to close."
"For consumers impacted by commission-jurisdictional transmission rates, there is no other effective remedy," the groups said.
And there's more new filings on the Docket
My challenge partner, Ali Haverty, reminded me this morning of a Facebook meme
we shared months ago. It's a photo of two owls on a branch, and says, "Sometimes I just want someone to hug me and say, 'I know it's hard. You're going to be okay. Here is chocolate and 6 million dollars.'"
And that's what we got. Of course, the 6 million dollars belongs to the 61 million ratepayers in the PJM region. Our personal share is probably about a nickel.
On Monday, FERC ALJ Philip Baten issued his ruling on the PATH case that was heard back in the spring.
Ali and I were seeking the refund of just over $6M in expenses for the purposes of influencing the decisions of public officials that PATH incurred and recovered from PJM ratepayers in 2009, 2010 and 2011. Judge Baten ruled that all of the expenditures were not recoverable in PATH's rates and must be refunded.
This is my favorite part:
As a general proposition, the cases that are discussed above suggest that when utilities are seeking selection or CPCN approvals from governmental entities, the utilities should rely on the established governmental approval processes to persuade the officials and not indulge in collateral efforts such as public education, outreach, and advertising activities. If a utility should rely on these collateral activities while pursuing selection or CPCN processes, then it will risk the chance that these costs may not be recovered from ratepayers. If the selection or CPCN application has merit, the governmental selection process provides a sufficient vehicle for the utilities to present their engineering, marketing and economic studies and thereby hope to merit the vote of approval from these officials. In this regard the PATH Companies spent over $8 million on attorney fees to prosecute the CPCNs before the respective governmental bodies, which begs the need for these collateral expenses.
The judge's decision must now go before the Commission, who may affirm or deny, in whole or in part. That decision is several months down the road, at least, and requires another round of briefs.
Meanwhile... more chocolate. And champagne. And music. Let there be music!
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?
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...
SWEPCO received a notification letter from SPP stating that updated electric load forecasts showing lower future electric demand in North Arkansas than prior forecasts for the area critical to the Facilities, and the recent cancellation of several large, long-term transmission service reservations, establish that the Facilities are no longer needed to meet the reliability needs in the region.
The withdrawn transmission project was a 60-mile, 345kV monster proposed to plow through the Ozarks as part of a plan developed in 2007. 2007? That's 8 years ago! Isn't it funny that SPP continued to find a need for this project, until the Arkansas Public Service Commission made clear that it wasn't likely to approve it.
Suddenly, SPP had an epiphany on load forecasts and transmission service reservations. How convenient. Except, that's exactly the same thing that happened with AEP's PATH transmission line
when Virginia state regulators became suspicious and ordered further studies by regional grid planner PJM Interconnection. This is how a regional planning organization and a transmission owner fall on their collective sword.
How are electric consumers supposed to believe a thing these transmission cartels say anymore? It's quite clear that transmission planning organizations are conditioned to simply rubber stamp the transmission building whims of their members. If nobody resists, then the project gets built.
However, the folks of NW Arkansas resisted... and formed Save the Ozarks. Under the competent leadership of Pat Costner, retired Greenpeace scientist, Save the Ozarks demonstrated that it takes a big, loud, committed, very public opposition, along with competent legal representation to defeat a transmission line. Lawyers, legal processes and polite demurral to power company public relations campaigns alone do not win transmission permitting battles. It's about making the transmission project political poison and telling the public the truth. Pat knew exactly what to do and she did it with style and dignity!
So, Congratulations, Save the Ozarks! Enjoy your victory for a few days before you start wondering about who is going to pay for SWEPCO and SPP's big "oops."
And for my "friends" at AEP... here's mud in your eye!
"Never doubt that a small group of thoughtful, committed citizens can change the world; indeed, it's the only thing that ever has." - Margaret Mead
It's been a long time since I last got a google news alert for "Potomac-Appalachian Transmission Highline." So long, in fact, I'd forgotten I even had those search terms set to notify. But, just in time for Halloween, the PATH zombie reared its ugly head and I got a notice last week that some right-wing think tank had published a paper where those terms were mentioned, America’s Electricity Grid: Outdated or Underrated?
And what did the author have to say about PATH, more than three years after its death? How has history treated this stunningly costly failure of "independent" planning?
Despite identification of areas in which transmission capacity is limited, a “not in my backyard” (or anyone else’s, in some cases) attitude toward new transmission line siting has resulted in cancellation or delay of some new transmission lines.
For example, in 2011, PJM cancelled the proposed Potomac Appalachian Transmission Highline (PATH) project, a 275-mile transmission line that would have run through West Virginia, Virginia, and Maryland to deliver electricity into Northern Virginia. Although the line was designed to improve reliability in eastern PJM, changing forecasts of electricity demand growth and intense opposition to siting the line led to the project’s cancellation.
It's the opposition that will be remembered, not individual analyses and the fine line that supposedly determined this white elephant was needed.
Hey, remember this? PATH's talking heads insisted that opposition had nothing to do with PATH's cancellation.
But, history says it did.
While the article's conclusions are pretty screwed up, it does a nice job explaining the bulk power system and federal regulation thereof. It's a good "backgrounder" for folks new to the transmission world. Think about how much more reliable our system would be though, if we brought back the "islands" of the past and operated them as smaller parts of the bigger system (aka "microgrids").
Beginning in the late 1920s, electric utilities began to integrate their operations to improve reliability and reduce costs. Previously, utilities had operated as “islands,” meeting the demand for electricity solely from their own generating plants. To ensure reliable service, this meant building extra generating capacity to keep in reserve, in case unexpected problems caused their plants to shut down. By integrating their operations, utilities could provide more reliable service without building as much backup generating capacity. In essence, if a generating plant at Utility A suffered a forced outage, one of Utility B’s generators would be available to ensure the lights stayed on. The concept is similar to diversifying a financial portfolio. Instead of investing everything into just one company’s stock, buying multiple stocks, bonds, and other investments reduces the risk of a sudden financial loss.
Microgrids that can be islanded from the larger system at times when the larger system fails (remember Superstorm Sandy?) can continue to provide power for necessary services. And if microgrid "A" suffers a forced outage, it can borrow from microgrid "B", or "C," or "D," or any other nearby microgrid. Relying on just a handful of generators and long-distance transmission lines creates parasitic load pockets with no native generation. Those folks have nowhere to turn in case of emergency.
Building more transmission lines isn't the answer. The answer is a more democratic electric grid system that benefits consumers and local communities, not gigantic, investor-owned utility holding companies.
On August 19, the U.S. Department of Energy issued its long overdue "National Electric Transmission Congestion Study" for public comment. You're the public! Serendipity!
I'm not sure what DOE is trying to hide, but I didn't get any notice about this study, although I participated in one of the webinars, and usually get 15 copies of these kinds of notices forwarded to me from lots of different folks when they get them. Nope. *crickets*
Maybe it's because I've been engrossed in the project from hell and not paying attention to much else?
Virtual paper cuts be damned, I happened across it the other day while putting together some links for a transmission opposition group. Serendipity, again!
It looks like the DOE really didn't pay much attention to the comments it received before writing this study. They still seem to think that we need more transmission to make sure that every electron produced can be used anywhere else, no matter how far from the generation source.
The DOE is supposed to do a triennial congestion study. That means every three years. But after it got the stuffing kicked out of it in the 9th Circuit over its 2009 designation of National Interest Electric Transmission Corridors (NIETCs) without properly consulting the states, and without performing a proper environmental review of said corridors, we can understand why DOE is only just now getting around to the triennial study it was supposed to complete in 2012. It's taken them this long to venture timidly out of their cave. I'll guess that this "study" is only a tentative foray back into the game, since it states that another study will be completed in 2015, to keep to the original triennial schedule. It's September, 2014 now, right? DOE moves at a glacial pace... Seriously? What's the point of this year's study?
Anyhow... please do read the 175 page study, paying particular interest to your particular geographic area, or transmission project of concern.
And I'd like to mention a few special things that DOE said in this report that you should be thinking about while crafting your comments.
The first is a particular pet peeve of mine. Perhaps in my next life I'll finally find time to do the full accounting of the TRUE cost of building new transmission that I've been constructing in my head over the last few years while listening to how transmission proposals affect hundreds of opponents across the country. Maybe we can start making a dent in it by addressing it here. DOE says:
Construction of major new transmission facilities, in particular, raises unique issues because transmission facilities have long lives – typically 40 years or more. Evaluating the merits of a proposed new facility is challenging, because common practices take into account only those expected costs and benefits from a project that can be quantified with a high degree of perceived certainty. This has two effects:
First, it leads to a focus on the subset of cost and benefits that can be readily quantified. Not taking into account the costs and benefits that are hard to quantify has the effect of setting their value to zero in a comparison of costs and benefits.
Second, it leads to projections of costs and benefits that are generally on extrapolations drawn from recent experiences. Projections based only on recent experiences will not value the costs and benefits a transmission project will have under very different assumptions or scenarios regarding the future because they ignore or discount the likelihood of these possibilities. Such a narrow view of the range of costs and benefits that could occur provides a false sense of precision.
Transmission developers are all about tossing made up, speculative, or fantasy "benefits" onto the table in order to make their projects appear to pass a cost-benefit analysis. But no one has ever quantified the REAL cost of transmission. I'm not talking about a project's total capital spend, or its annual revenue requirement. I'm talking about the very real costs to landowners who are unlucky enough to be picked to sacrifice their homes, businesses, retirement, health, peace of mind and countless other intangible COSTS for the benefit of the electricity-slurping public in some far off city. Market value payments for the involuntary sale of transmission right of way only attempt to compensate for the value of the land, not all the other costs to the landowner's way of life that can't be... in DOE-speak... "readily quantified."
Also, the DOE still seems to think that offshore wind is experimental.
As will be discussed later in this chapter, many states adopted Renewable Portfolio Standards with requirements or goals to use more renewable‐sourced electricity.
Because much of the best utility‐scale renewable resource potential is relatively remote from the load centers, the states then had to authorize new transmission construction to enable the desired renewable‐based electricity to reach the grid.
Maybe you can give DOE a link to its own map
showing the best utility-scale renewable potential located just a few miles offshore, conveniently near load centers? Quit tinkering, Einstein, and get 'er done!
And how about this?
Many points of transmission congestion today result from the need to deliver electricity from
changing sources of generation. For example, generation sources are changing because of
state‐mandated RPSs. The best renewable resources (i.e., those with the highest potential capacity factors) tend to be located far from load and sometimes in areas with less transmission than desired for effective resource development. Existing transmission constraints may deter development of these resources. While this is not a challenge in all parts of the Eastern Interconnect, it is a principal cause of evolving congestion concerns in the Midwest.
Maybe you could let the DOE know about the economic benefits that come with LOCALLY-produced renewable energy? Jobs, tax revenue and economic development happen where renewables develop. States that buy, rather than create their own, renewables are only exporting their energy dollars to other states or regions and hurting their own communities.
Oh, and let's make this next part a fun scavenger hunt... can you find all the little hidden mentions of the Clean Line projects in this report?
So, what's the point here? The DOE is going to use this draft and the comments it receives to create the final report. From that report it may designate National Interest Electric Transmission Corridors (NIETCs). NIETCs are very bad news, and a stupid idea left over from the 2005 energy policy act (don't ya wish your congress-person would get off their tookus and fix that mess?)
Designation of an area as a National Corridor is one of several preconditions required for
possible exercise by the Federal Energy Regulatory Commission (FERC) of “backstop” authority to approve the siting of transmission facilities in that area.
No. No. NOOOO!
So, what can you do? Read the report. Write a comment. Send it here. Do it now! Comments are only going to be accepted until October 20. If you don't participate, no one's going to care what you think later...
In a predictable move, the U.S. Court of Appeals for the 7th Circuit kicked the Illinois Commerce Commission v. FERC can back to Washington today.
This case has been dragging on for nearly 5 years. When it first started, ratepayers in PJM's Illinois territory were looking at sharing a huge chunk of the cost of PJM's multi-billion dollar Project Mountaineer collection of unneeded transmission projects. Although the bill has shrunk considerably with the cancellation of PATH and MAPP, the argument has only grown.
It centers on PJM's 2006 adoption of the "postage stamp" cost allocation methodology. This method assigned costs of new transmission 500kV or greater to all ratepayers in the region based on their share of regional electricity sales. The more power an area used, the greater its share. PJM did this to spread out (socialize) the cost of its Project Mountaineer venture over more customers so it could get that transmission built before the hoi polloi noticed, "before it became common dinner table talk."
However, it's important to realize that PJM no longer uses the 100% "postage stamp" cost allocation method and hasn't since last year. Today's 7th Circuit decision will have no effect on any proposed or future transmission projects in PJM, or any other RTO. Today's decision will only affect those projects that were built (or not!) before last year's new allocation method went into effect. PJM's new, FERC-approved cost allocation methodology relies on a 50-50 split of two different methods for transmission lines of at least double-circuited 345kV or greater. The first 50% is allocated according to the old postage stamp method, and the remaining 50% is allocated either to the cost causers or the beneficiaries, depending on the reason for the project. Costs for transmission projects based on "public policy" clean energy state laws will be allocated to the states that require them under PJM's "State Agreement Approach." If a state doesn't agree to shoulder the cost burden for a project designed to meet its renewable portfolio standard, then it will not be built.
Today's decision echoed the first remand from the 7th Circuit, that found that FERC had not done enough to show that utilities in "western PJM" received benefit from Project Mountaineer that was commensurate with their cost responsibility under the old "postage stamp" allocation method.
FERC dealt with the first remand by rolling its eyes and making up more crap about how "western PJM" benefited from Project Mountaineer. It pulled an even bigger diva act on rehearing. But FERC just can't out-diva Judge Posner of the 7th Circuit.
Posner hates coal, and transmission lines that carry it. But, he loves postage stamp rates for transmission lines that are supposed to be "for wind."
This Sybil act must also be confusing to FERC, but hopefully they can get it right this time... because third time's a charm, right?
Go ahead, read today's decision. It's quite chatty and reads like some guy's geeky blog post about electricity and cost-benefit analyses, until you get to the 9-page dissent by Judge Cudahy, who seems to be writing from the other side of the political spectrum. It's fairly entertaining. However, I suspect FERC is not as amused as you are.