NERC's arrogant stupidity in contesting FERC's audit just doesn't make sense. Maybe if NERC had no experience with audits, it could just be ignorance, however NERC performs audits of others. They should know better.
Now here's the other piece that's starting to make a pattern. The WSJ, Fox News and some political blogs are categorizing the NERC audit as Obama's revenge against NERC for making some comment about coal-fired generation retirements causing reliability issues. This "reason" for auditing NERC doesn't even make sense!
And if we combine this empty rhetoric with NERC's proposal for FERC to open "a paper hearing process that would allow all interested parties to express their views on all 42 recommendations contained in the Final Audit Report and allow the Commission to resolve them on a comprehensive basis," what do we get? Is NERC intending to turn FERC into a political circus? I'm really starting to wonder...
After all, if NERC did not intend for the hoi polloi to comment on their audit, perhaps they would have seen the open invitation contained in their proposal after a concerned ratepayer submitted comment on the docket. However, NERC re-confirmed their support for their proposal today.
NERC's letter was a rather quick and snarky reply to FERC staff's filing today that proved NERC's previous accusation that FERC refused to discuss the audit findings was baseless. Over and over again. Auditors are firm believers in documentary evidence, it is their bread and butter, after all.
If you are gullible enough to believe that FERC's audit of NERC was political revenge, be assured it's not. FERC is legally required to perform audits of entities under their jurisdiction, it's part of their job to ensure just and reasonable rates. Just about everything FERC does comes back to this same basic premise. FERC is protecting YOUR interests here (and even the interests of the unenlightened who believe the politically motivated lies).
"Audit staff has approached its review of NERC’s budget and the associated costs from a ratepayer’s perspective
o Since the ERO is funded by public funds and those who pay the assessments (i.e. its Ratepayers) - whose interests are represented by the Commission
o The expenses incurred by the ERO must be paid by its Ratepayers alone – therefore having controls in place to prevent unwarranted expenses is in the interest of the ratepayers
o We have also recognize the fact that NERC, when acting as the ERO is under the authority of the Commission, but it is free to engage in other non-statutory activities that do not impinge upon its ability to perform its obligations to FERC."
FERC had no prior knowledge of what it would find during the audit, making claims of "revenge" mere ignorant rubbish. All FERC staff's concerns are valid, for instance:
"Second, audit staff noted that NERC incurred various expenses to entertain Trustees outside the official BOT meetings
Audit staff is concerned for three reasons:
1. These costs were incurred outside (after or before) the actual Board meetings and activities during the day
2. This presents a potential conflict of interest concern in which NERC employees are providing entertainment to the Trustees that are responsible for determining
3. NERC’s accounted for the costs as routine business expenses, which inflates NERC’s actual cost of business at the ERO
As a result, the expenses incurred outside the official BOT meetings may have been improperly funded by ratepayers under section 215."
"Audit staff noted that NERC incurred costs for entertaining its employees, including annual holiday party expenses and employee reward meal expenses
While audit staff believes NERC should have the discretion to incur these types of expenses, audit staff is concerned that:
o The majority of these costs were accounted for as normal operating costs and not as employee entertainment or employee reward expenses
o These costs were not transparently presented in the budgets or trueups as such
o These costs were not governed by formal guidance for determining if entertainment expenses were reasonable and reimbursable
From a rate-case perspective, such expenses would not be allowed as normal operating expenses
Audit staff believes that if NERC management wishes to incur employee entertainment costs or costs to reward employees, such costs must be declared, budgeted, and approved as such through the budget process."
FERC has merely switched NERC's speeding ratepayer gravy train onto a siding so it can be slowed down before it runs completely off the rails. If you pay an electric bill, you should be thanking FERC, not parroting conjectural, politically-motivated nonsense.
I hope FERC has the good sense to deny NERC's proposal to turn this matter into a political circus. As a ratepayer that funds NERC, I'm now thoroughly disgusted with their antics.
Next: Let's ALL Participate in FERC Audits!