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I've been trying to plow through FERC's Order No. 1000 that was released last Thursday, but with all the other things I've got going on right now, it's not going to happen anytime soon.  Therefore, here's what I've gleaned from it in the little time I had available.  All the news reports so far have been disappointing.  None of these reporters have actually read Order No. 1000, but are depending on the CliffsNotes version provided by FERC's press release and the statements of the Commissioners.  I'd be an idiot if I was satisfied that these stories provided all the details I needed to decide if Order No. 1000 was a good thing or a bad thing (or somewhere in between).

Bill has a pretty good general overview over on TPL.  This is his initial reaction to the order, and it echos mine as well.  While it appears that this order is going to work against the PATH project, it's encouraging AEP's "national grid" fantasy.  FERC believes we need a whole bunch of new transmission lines hundreds of miles long to pump western renewables to coastal population centers and to increase long distance energy trading (Enron?  Hello?).  As you all know, spending billions to transport power hundreds of miles, when local renewables that don't require new transmission lines are available, is inefficient and uneconomic.  Off-shore wind is located within 10 miles of population centers, and I read something recently that said existing transmission networks can handle the additional power generated by off-shore projects.  Instead of the east coast's power traveling from the west, it should come from the east.  Of course, that would spell disaster for our coal-burning buddies, wouldn't it?  Heh, heh, heh!!

FERC states that their new transmission planning and cost allocation order will "...benefit consumers by enhancing the grid’s ability to support wholesale power markets and ensuring transmission services are provided at just and reasonable rates."  However, think about it while applying a little logic.  FERC is promoting billions of dollars worth of new transmission infrastructure (plus incentive payoffs to the energy companies) that needs to be paid for.  It's going to be paid for by YOU.  The first place I went in Order No. 1000 was the Commission Determination on their new cost allocation process.  Here are the six new principles of cost allocation:

  1. Costs are to be allocated to those who benefit roughly commensurate with identifiable benefits received.  Some of these benefits are:  reliability & sharing reserves, production cost savings, congestion relief and meeting public policy goals.  Sounds great, doesn't it?  However here are a couple of things that bug me.  First, FERC prattles on about the "benefits of an interconnected transmission grid."  Scared yet?  Here's another:  In determining "benefits," power companies/RTOs can use "likely future scenarios."  To quote the Order, "Scenario analysis is a common feature of electric power system planning, and we believe that public utility transmission providers are in the best position to apply it in a way that achieves appropriate results in their respective transmission planning regions."  Now you're crouched in the corner doing some primal screaming, aren't you?  That's right, they can make up some fictional "scenario" whereby you might "benefit" from their project and assign you costs NOW.  That sounds fair, doesn't it?
  2. No involuntary allocation of costs to non-beneficiaries.  A beneficiary is one who causes costs, or benefits from the facility (transmission line).  No, this doesn't mean you can refuse to pay your electric bill, this is all going on between the power companies, the RTOs and FERC.  Nobody cares what you think, little ratepayer stakeholder.
  3. The benefit to cost ratio for selecting projects by an RTO cannot be higher than 1.25.  This means that your "benefits" must be at least .25 higher than the cost of the project that is selected.  However, this is no guarantee because this principle is merely intended to ensure that RTOs don't set too high a threshold for competing projects.  I just can't wait to see what kind of "PATH MATH" (lying with numbers) turns up in these benefit/cost ratios.
  4. Costs cannot be allocated to another region without voluntary agreement. (Again, not YOUR agreement, silly!)
  5. The method for determining benefits/beneficiaries must be transparent and provide adequate documentation that will allow stakeholders to determine how it was applied.  (Again, you're not a "stakeholder"!)
  6. Different cost allocation methods may be created for different types of facilities (projects):  Reliability, Congestion or Public Policy.
A "public policy" project is driven by individual state (or federal if that ever happens) Renewable Portfolio Standards.  So, say Maryland needs additional renewables to meet their RPS.  PJM will want to build a gigantic new transmission line from the midwest to bring wind power to Maryland, because we know transmission is the PJM-preferred solution to EVERY problem.  It wouldn't matter if Maryland is planning to construct their own in-state renewables or hook up to the Atlantic wind backbone, PJM would propose a transmission line.  Said transmission line would traverse several other states on its course and "benefit" people along the way.  That way, laws being enacted in the state of Maryland by Maryland legislators will also affect citizens of other states who had no say in their creation.  Landowners in these other states will also have their property taken by eminent domain to satisfy Maryland's laws.  Kind of sticks in your craw, doesn't it?  I expect to see this one in court in the near future.

Anyhow, that's only the tip of the iceberg.  I'm sure there's lots more goodies in Order No. 1000 I haven't gotten to yet.  I hear there's some "backstop" provision in the planning section that will cause an evaluation of alternatives in the event of a stalled project.  Sounds good... probably will end up being bad, but that's fodder for another day when I find the time to finish reading Order No. 1000.  My advice... get yourself off the grid ASAP!  That's where I'm heading and I hope you join me in my monthly giggle-fest when I don't get a whopping electric bill that pays for Mikey's "national grid."  If we make our off-the-grid club big enough, there won't be anyone left to pay for the national grid and all the power companies left holding the bag will go belly-up.  You don't have to finance this ludicrous expenditure.  Your own power generating system is within your grasp.

In other news:  Today the WV PSC Consumer Advocate Division filed a scathing rebuttal to the power companies' answers to the Staff's Petition to require a report of the condition of their transmission systems in our state.  Bill has the scoop here.  I'm trying to decide what my favorite part is.  Initially, I got a kick out of how he lambasted PJM for their bias, but maybe that's only because I was right at the point in the draft of StopPATH's Transmission Incentives NOI comments where I call PJM a cartel...  That Transco thing was pretty good too...  What's your favorite?

And speaking of Transmission Incentives comments to FERC, are you working on yours?  They are due a month from today, so get busy!!  If you need help, go here.  As you can see, FERC needs a little consumer education from the consumers and it appears that this NOI is actually a spin-off from Order No. 1000.  Get writing, folks!

And finally, go check out Bill's analysis of what's going on with PJM's strawman planning process.  Thanks, Bill!  One less thing for me to do!  As he points out in his post, The Sierra Club, Piedmont Environmental Council and EarthJustice are acting on our concerns at PJM.  So, if you're a PATH opponent who is wondering what to do with your money now that the project is stalled and we're no longer funneling all our spare cash to a lawyer and experts, why not show these organizations a little love of the green variety?  Bill's got his comments turned on now -- you can post a comment (unless, like me, you suddenly find yourself speechless).

And last, but not least, come check out what's going on at the Coalition for Reliable Power.  We're planning a series of public meetings next month intended to empower "Potomac Edison" customers to improve that farce of an energy efficiency program they proposed in WV.  Hope to see you all there!

And now I'm going to go crawl back in my hole and get back to work on all these rotten projects sitting on my desk.  Thanks, PATH, you're a real PAL!



 


Comments

bh link
07/26/2011 3:06am

In their comments to PJM on the planning process task force, the PJM NGOs made a very simple suggestion. PJM should start doing what NY ISO (remember that George Loehr is chairman of NY ISO's reliability council) as started to do. When NY ISO discovers a reliability problem on its system, it does not immediately start talking about building new transmission lines. It opens a request for proposals process and lets any company propose a solution. That solution might be for more generation capacity near load, it might be for new transmission lines, or it might be for a demand management project that would reduce the congestion on the system.

Until now, PJM has been in complete control of its "upgrade" process. There is no objective or transparent process for picking winners. As PATH has shown, PJM will even cheat at its own flawed game to promote its own choices.

The alternative is simple: an open process that encourages creativity and innovative, economical solutions. And this alternative has already been proposed in the PJM planning task force.

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Keryn
07/26/2011 5:21am

Why am I picturing Steve Herling and the PATH guys dancing around a campfire like Rumplestiltskin, having a major tantrum and screaming "NO NO NO NO NO!!!"

How many times have we heard, "We can't order generation (or demand management, or any non-transmission alternative)"?

How far will PJM management go to protect their "stakeholders'" financial interests?

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bh
07/26/2011 1:08pm

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bh link
07/26/2011 1:14pm

Tony Sade also made an interesting reply to FE's claim that PJM only ordered rebuilds for "reliability" reasons. Sade replied that PJM specifically ordered rebuilding Mt. Storm-Doubs because it was "aging infrastructure" and didn't just rely on reliability issues in order to spread the cost of that rebuild across all of PJM rate payers.

This is an important point. PJM's rules do not require cost recovery only for "reliability" projects. "Reliability" is the vaguely defined code word that FERC has been trying to use to push projects down our throats, but PJM is not bound by FERC's terms when it prioritizes its own projects.

This issue is also important for the WV PSC, because, as Sade points out, unless a rebuild is placed on PJM's planning agenda, the costs of the project will have to be borne only by WV rate payers. This is not the end of the world, but it is less of a burden us if the cost of a project can be spread throughout PJM.

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Keryn
07/27/2011 4:11am

We're having this same conversation in more than one place... I'm feeling like Sybil. But I think I'm going to go look some stuff up on this one...

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Keryn
07/27/2011 4:45am

Okay, here's what I've been referring to both here and over on C4RP's blog. http://www.stoppathwv.com/1/post/2010/12/dominions-mount-storm-doubs-rebuild-project.html
In socializing the cost of MSD, PJM/Dominion classified it as "expansion of existing facilities with capacity additions required to maintain reliability or qualify as market efficiency projects". In the linked letter from Exelon, an important point is made about companies allowing their lines to deteriorate in order to socialize the cost of rebuilding rather than spend on maintenance over time. We know how they brag to their shareholders about minimizing O&M, and ignoring maintenance issues until failure is imminent flies in the face of "reliability."
If the rebuild isn't classified as "expansion of facilities," license plate rates would apply and the cost would be borne by all AP zone ratepayers (considerably larger than just WV and only including the part of WV served by FE). I wonder if the AP zone was enlarged by the merger so we can all enjoy those much ballyhooed "merger economies of scale"?
At any rate, looking to socialize rebuilds that don't do anything particularly advanced is a double-edged sword. We may benefit from this one, but there will be others taking place all over the region that we won't want to pay for. What goes around, comes around.

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bh link
07/27/2011 5:23am

Thanks for bringing up the Exelon comment. While Tony Sade's cost recovery reasoning has some holes, the situation with maintenance, deterioration and rate impacts are all strong arguments supporting a stronger initiative from state PSCs in determining the condition of transmission lines. Sade is right when he says that the WV PSC should be the front line of regulators pushing for rebuild projects. State PSCs have the legal jurisdiction and authority to order studies of the condition of infrastructure and provide direction to RTOs like PJM as to how to handle cost recovery and project priorities.

The problem is with getting PSCs to take that initiative. As I have pointed out elsewhere, WV law clearly gives the WV PSC this authority.

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JustMe
07/27/2011 8:48pm

Exelon has managed to be an intervenor in MD several times over. Will the real Exelon please stand up? All you need to do, Exelon, is take a leap into the future and embrace the potential of off-the-grid capability. Its a goldmine. I know you are out there and I know you are watching. Where is your creative entrepeneurial spirit? You have not kept your public nose clean for nothing. C'mon already. Now is the time. Don't wait for the chaos of the next election or you will be branded as being as pathetic as all the rest. We are all preparing to say g'night to the regional authority system. Are you with us, or against us?

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