Yesterday was the deadline for parties to intervene, comment or protest on PATH's proposal to collect its $121M investment in the PATH Project. This amount is in addition to the $95M PATH has already collected from consumers in 13 states and the District of Columbia since 2008. In order to collect on the abandonment incentive they were granted by FERC in 2008, PATH has to prove that the abandonment was beyond their control and that all costs they propose to collect were prudently incurred. The burden is PATH's. Of course, other parties can intervene and protest PATH's contentions.
And then the flood gates opened. Thirty parties have intervened and some have filed comments and protests. Nine state PSCs and/or consumer advocates intervened. Many filed comments or protests.
The consumer advocates of six states (PA, VA, DE, WV, NJ & MD) filed a joint motion and protest. In their protest, the Joint Consumer Advocates question the prudence of PATH's expenditures, especially in the last few years in light of the fact that PATH misfiled applications, withdrew and tolled their cases numerous times, and PJM's continuing analysis of the project pointed to serious questions about the need for the project. The JCA question PATH's $30M expenditure on land in light of the fact that they had no permits to build. They point out that PATH's proposed 5-year recovery period for the $121M will end up costing consumers an additional $25,782,017 of carrying costs & return. The JCA dispute PATH's proposed ROE, both the base ROE of 10.4% and the .5% PJM membership adder. They do some math to show that the amount PATH spent on its project is more than 1,000% higher than similar transmission projects that have applied for abandonment. They also point out that the Commission has set all these other cases for hearing and therefore must set PATH's for hearing as well.
The Illinois Commerce Commission filed a motion to intervene and comments. The ICC takes issue with PATH's assertion that costs were prudently incurred. The ICC wants the Commission to assert some control over PATH's sale or transfer of assets to maximize the sale proceeds, such as requiring PATH to sell them via public auction or requiring PATH to file FMV determination documents before a sale. The ICC argues that PATH did not make a proper showing that its proposed ROE is just and reasonable. They also bring up all the same old cost allocation arguments that aren't particularly germane to this proceeding, but still valid arguments. Then they went a bit crazy talking about having the prudence of PATH's costs challenged yearly through the Formula Rate Protocols. Obviously they don't understand the process or the fact that the bulk of the costs aren't going to change year to year and that perhaps they should have been involved in the process all along. Just because PATH filed for abandonment does not mean ICC cannot monitor and challenge the prudence of costs in successive formula rate filings. The process is still going to be there, and has been there all along. But ICC isn't the only state that doesn't seem to understand FERC formula rates, and sadly none of the states seem inclined to learn the process. As long as the states that supposedly protect consumers continue to fail to educate themselves and get involved in this process, transmission owners will continue to rip off consumers. States complain that they do not have in-house expertise or funds to hire any so therefore they don't get involved. It ain't rocket science, and if the JCA can get together to file a joint petition in this matter, what's stopping them from joining together to fund joint participation in formula rate filings on a yearly basis?
The Maryland Public Service Commission filed a protest and comments. The PSC questions the prudence of PATH's expenses and other requests and asks that the Commission set the matter for hearing. They also take the opportunity to continue their opposition to FERC's transmission incentives policy as "overly generous and incompatible with the risks faced by project developers," and suggest that FERC consider the quarter billion dollar waste of consumer money the PATH project represents as they continue their deliberations about the incentives Notice of Inquiry currently in progress.
The Virginia State Corporation Commission filed a motion to intervene and protest. The SCC protests PATH's proposed 10.9% ROE and, like the ICC, contends that PATH did not make a showing to support it. They further argue that that the risks and need to raise capital upon which PATH's original ROE was based have died with the project. Then the SCC urges the Commission to compel an audit of PATH to ensure the prudence of the $121M to make sure PATH wasn't "throwing good money after bad." That's what the Formula Rate Protocols are for - the VA-SCC should have been participating all along. Now because the SCC hasn't been doing its due diligence, they want FERC staff to do it for them. Perhaps the SCC should raise this issue with FERC enforcement staff because the Commission said in P. 27 of a recent order that only OE decides who to audit when. The SCC also asks that FERC staff monitor PATH's sale and transfer of assets.
The Indiana Utility Regulatory Commission filed a motion to intervene and protest. The URC states that PATH has not supported the prudence of their expenses nor explained why it kept moving toward completion of its project despite in-service delays. They point out that PATH witnesses used the word "aggressive" six times in their testimony to describe the project schedule, but failed to provide a copy of the schedule. URC believes PATH put the cart before the horse when they purchased land before receiving a CPCN in any state.
In addition, to the above, the Ohio Consumer's Counsel, the Pennsylvania Public Utilities Commission and the West Virginia Public Service Commission filed motions to intervene without comment or protest.
Four consumers from West Virginia and eight from Maryland also filed motions to intervene, some with protests.
Ken Sanders, Dave Fenstermacher, Catherine Combs, Ginny MacColl, Ricky Young, Lisa Jarosinski, Brent Simmons and Mary Ann Aellen from the Frederick area filed petitions to intervene.
Bill Howley of Chloe, WV filed a motion to intervene and protest. Bill questions whether PATH's abandonment was beyond PATH's control and points out that PATH failed to disclose PJM trends and analysis that undermined their state CPCN cases. Bill questions whether any of PATH's costs after 2009 were prudent due to PATH's failure to support their cases at the PSCs. He questions PATH's purchase of the Kemptown substation property before fully exploring Frederick County's zoning requirements.
Patience Wait of Shepherdstown, WV filed a motion to intervene and protest. Patience contends that PATH has not carried its burden in its filing. Patience says "...there is evidence to indicate that PATH incurred excessive costs in order to manipulate state-level regulatory processes, to try to create a sense of “inevitability” to the project and avoid rejection of their application – which would indicate, to a “reasonable person,” that PATH recognized its justification for the project was fatally flawed." She documents her contentions with examples from each state, including PATH's February 25, 2011 purchase of property in Hardy County, WV (just 3 days before the suspension) and PATH's premature clearing of land at their Welton Springs Substation before PATH had a permit, a violation of WV law.
Alison Haverty of Chloe, WV, filed a motion to intervene and protest. Ali contrasts PATH's continued project spending to PSEG's curtailment of spending on another project they subsequently abandoned. Ali states, "PSEG didn't wait for PJM to do their thinking for them." Ali also contends that PATH did not seek a refund for amounts paid prospectively to the NPS and NFS for the EIS process, after PATH delayed that process. Ali contrasts PATH's lack of detail with the TrAILCo Prexy abandonment filing, where 10 pages of cost detail was included. Ali asks the Commission to suspend PATH's rates and replace the tariff sheets at a later date.
Keryn Newman of Shepherdstown, WV, filed a motion to intervene and protest. (exhibits to filing can be found here.) Keryn states that the PATH project will cost consumers $242,559,680.48, nearly a quarter billion dollars and deserves the Commission's scrutiny. She also raises the issue of PATH's recently filed 2013 Projected Transmission Revenue Requirement, which she calls "completely invented" because PATH has recently transferred all CWIP totals to a regulatory asset account. She asks the Commission to suspend PATH's rates until this matter is settled. Keryn contends that PATH had fault in the abandonment, bungled state permitting and made no showing of the prudence of their expenses. She also contends that "a reasonable utility manager" would not have purchased property before receipt of a CPCN, and provides several examples of other utilities that do not purchase land until CPCN completes. Among the examples are PATH parent AEP's transmission line construction time table. Keryn provides a list of the properties PATH purchased or optioned and presents specific examples backing up her contention that, "PATH had ulterior motives for purchasing or optioning certain properties at inflated prices that had nothing to do with simply acquiring necessary ROW," including PATH's land purchases in the River's Edge subdivision and an inflated option price in Jefferson County, WV. Keryn contends that PATH has serious accounting deficiencies, protests PATH's proposed ROE, and compares PATH's abandonment to other recent cases, showing that PATH's $121M expenditure was incongruent with other cases.
Old Dominion Electric Cooperative filed a motion to intervene and protest. ODEC protests PATH's proposed ROE.
In addition, American Municipal Power and the North Carolina Electric Membership Corporation filed motions to intervene. These are non-profit municipal electric cooperatives.
The PJM Industrial Customer Coalition filed a motion to intervene. This "coalition" includes large, industrial power customers who will pay a portion of the rate set in this proceeding.
The following investor-owned utilities filed motions to intervene: PSE&G, Dominion, Exelon, Rockland Electric Co. and LSP Transmission Holdings.
And, of course, the PJM cartel, the ultimate perpetrator of this whole stinking mess, filed a motion to intervene.
I don't envy the Commission here. The thirty parties raised a lot of issues to be considered. What is obvious here is that there's no way FERC is going to approve PATH's filing before January, which is the absurd contention Becky Bruner was making on PATH's 2013 PTRR "Open meeting" phone conference last week. I wonder if she's still insisting to her PATH masters that collecting this $121M is a "sure thing?"
And then the flood gates opened. Thirty parties have intervened and some have filed comments and protests. Nine state PSCs and/or consumer advocates intervened. Many filed comments or protests.
The consumer advocates of six states (PA, VA, DE, WV, NJ & MD) filed a joint motion and protest. In their protest, the Joint Consumer Advocates question the prudence of PATH's expenditures, especially in the last few years in light of the fact that PATH misfiled applications, withdrew and tolled their cases numerous times, and PJM's continuing analysis of the project pointed to serious questions about the need for the project. The JCA question PATH's $30M expenditure on land in light of the fact that they had no permits to build. They point out that PATH's proposed 5-year recovery period for the $121M will end up costing consumers an additional $25,782,017 of carrying costs & return. The JCA dispute PATH's proposed ROE, both the base ROE of 10.4% and the .5% PJM membership adder. They do some math to show that the amount PATH spent on its project is more than 1,000% higher than similar transmission projects that have applied for abandonment. They also point out that the Commission has set all these other cases for hearing and therefore must set PATH's for hearing as well.
The Illinois Commerce Commission filed a motion to intervene and comments. The ICC takes issue with PATH's assertion that costs were prudently incurred. The ICC wants the Commission to assert some control over PATH's sale or transfer of assets to maximize the sale proceeds, such as requiring PATH to sell them via public auction or requiring PATH to file FMV determination documents before a sale. The ICC argues that PATH did not make a proper showing that its proposed ROE is just and reasonable. They also bring up all the same old cost allocation arguments that aren't particularly germane to this proceeding, but still valid arguments. Then they went a bit crazy talking about having the prudence of PATH's costs challenged yearly through the Formula Rate Protocols. Obviously they don't understand the process or the fact that the bulk of the costs aren't going to change year to year and that perhaps they should have been involved in the process all along. Just because PATH filed for abandonment does not mean ICC cannot monitor and challenge the prudence of costs in successive formula rate filings. The process is still going to be there, and has been there all along. But ICC isn't the only state that doesn't seem to understand FERC formula rates, and sadly none of the states seem inclined to learn the process. As long as the states that supposedly protect consumers continue to fail to educate themselves and get involved in this process, transmission owners will continue to rip off consumers. States complain that they do not have in-house expertise or funds to hire any so therefore they don't get involved. It ain't rocket science, and if the JCA can get together to file a joint petition in this matter, what's stopping them from joining together to fund joint participation in formula rate filings on a yearly basis?
The Maryland Public Service Commission filed a protest and comments. The PSC questions the prudence of PATH's expenses and other requests and asks that the Commission set the matter for hearing. They also take the opportunity to continue their opposition to FERC's transmission incentives policy as "overly generous and incompatible with the risks faced by project developers," and suggest that FERC consider the quarter billion dollar waste of consumer money the PATH project represents as they continue their deliberations about the incentives Notice of Inquiry currently in progress.
The Virginia State Corporation Commission filed a motion to intervene and protest. The SCC protests PATH's proposed 10.9% ROE and, like the ICC, contends that PATH did not make a showing to support it. They further argue that that the risks and need to raise capital upon which PATH's original ROE was based have died with the project. Then the SCC urges the Commission to compel an audit of PATH to ensure the prudence of the $121M to make sure PATH wasn't "throwing good money after bad." That's what the Formula Rate Protocols are for - the VA-SCC should have been participating all along. Now because the SCC hasn't been doing its due diligence, they want FERC staff to do it for them. Perhaps the SCC should raise this issue with FERC enforcement staff because the Commission said in P. 27 of a recent order that only OE decides who to audit when. The SCC also asks that FERC staff monitor PATH's sale and transfer of assets.
The Indiana Utility Regulatory Commission filed a motion to intervene and protest. The URC states that PATH has not supported the prudence of their expenses nor explained why it kept moving toward completion of its project despite in-service delays. They point out that PATH witnesses used the word "aggressive" six times in their testimony to describe the project schedule, but failed to provide a copy of the schedule. URC believes PATH put the cart before the horse when they purchased land before receiving a CPCN in any state.
In addition, to the above, the Ohio Consumer's Counsel, the Pennsylvania Public Utilities Commission and the West Virginia Public Service Commission filed motions to intervene without comment or protest.
Four consumers from West Virginia and eight from Maryland also filed motions to intervene, some with protests.
Ken Sanders, Dave Fenstermacher, Catherine Combs, Ginny MacColl, Ricky Young, Lisa Jarosinski, Brent Simmons and Mary Ann Aellen from the Frederick area filed petitions to intervene.
Bill Howley of Chloe, WV filed a motion to intervene and protest. Bill questions whether PATH's abandonment was beyond PATH's control and points out that PATH failed to disclose PJM trends and analysis that undermined their state CPCN cases. Bill questions whether any of PATH's costs after 2009 were prudent due to PATH's failure to support their cases at the PSCs. He questions PATH's purchase of the Kemptown substation property before fully exploring Frederick County's zoning requirements.
Patience Wait of Shepherdstown, WV filed a motion to intervene and protest. Patience contends that PATH has not carried its burden in its filing. Patience says "...there is evidence to indicate that PATH incurred excessive costs in order to manipulate state-level regulatory processes, to try to create a sense of “inevitability” to the project and avoid rejection of their application – which would indicate, to a “reasonable person,” that PATH recognized its justification for the project was fatally flawed." She documents her contentions with examples from each state, including PATH's February 25, 2011 purchase of property in Hardy County, WV (just 3 days before the suspension) and PATH's premature clearing of land at their Welton Springs Substation before PATH had a permit, a violation of WV law.
Alison Haverty of Chloe, WV, filed a motion to intervene and protest. Ali contrasts PATH's continued project spending to PSEG's curtailment of spending on another project they subsequently abandoned. Ali states, "PSEG didn't wait for PJM to do their thinking for them." Ali also contends that PATH did not seek a refund for amounts paid prospectively to the NPS and NFS for the EIS process, after PATH delayed that process. Ali contrasts PATH's lack of detail with the TrAILCo Prexy abandonment filing, where 10 pages of cost detail was included. Ali asks the Commission to suspend PATH's rates and replace the tariff sheets at a later date.
Keryn Newman of Shepherdstown, WV, filed a motion to intervene and protest. (exhibits to filing can be found here.) Keryn states that the PATH project will cost consumers $242,559,680.48, nearly a quarter billion dollars and deserves the Commission's scrutiny. She also raises the issue of PATH's recently filed 2013 Projected Transmission Revenue Requirement, which she calls "completely invented" because PATH has recently transferred all CWIP totals to a regulatory asset account. She asks the Commission to suspend PATH's rates until this matter is settled. Keryn contends that PATH had fault in the abandonment, bungled state permitting and made no showing of the prudence of their expenses. She also contends that "a reasonable utility manager" would not have purchased property before receipt of a CPCN, and provides several examples of other utilities that do not purchase land until CPCN completes. Among the examples are PATH parent AEP's transmission line construction time table. Keryn provides a list of the properties PATH purchased or optioned and presents specific examples backing up her contention that, "PATH had ulterior motives for purchasing or optioning certain properties at inflated prices that had nothing to do with simply acquiring necessary ROW," including PATH's land purchases in the River's Edge subdivision and an inflated option price in Jefferson County, WV. Keryn contends that PATH has serious accounting deficiencies, protests PATH's proposed ROE, and compares PATH's abandonment to other recent cases, showing that PATH's $121M expenditure was incongruent with other cases.
Old Dominion Electric Cooperative filed a motion to intervene and protest. ODEC protests PATH's proposed ROE.
In addition, American Municipal Power and the North Carolina Electric Membership Corporation filed motions to intervene. These are non-profit municipal electric cooperatives.
The PJM Industrial Customer Coalition filed a motion to intervene. This "coalition" includes large, industrial power customers who will pay a portion of the rate set in this proceeding.
The following investor-owned utilities filed motions to intervene: PSE&G, Dominion, Exelon, Rockland Electric Co. and LSP Transmission Holdings.
And, of course, the PJM cartel, the ultimate perpetrator of this whole stinking mess, filed a motion to intervene.
I don't envy the Commission here. The thirty parties raised a lot of issues to be considered. What is obvious here is that there's no way FERC is going to approve PATH's filing before January, which is the absurd contention Becky Bruner was making on PATH's 2013 PTRR "Open meeting" phone conference last week. I wonder if she's still insisting to her PATH masters that collecting this $121M is a "sure thing?"
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