Zacks Investment Research sent a love note to our favorite transmission-dependent electric utilities on Valentine's Day.
In a commentary about the utilities sector, Zacks advised transmission lovers that they're about to become obsolete:
The emergence of Microgrids for power generation could threaten the dominance of the age-old power distribution system in the U.S. Microgrids have evolved from simple power backup systems to small smart grids. The swift and cost effective installation of Micro grids could help distribute electricity among the masses. These rooftop solar systems meet the energy needs of the customers. In addition, the customers are allowed to sell excess power back to the utilities.
A report from American Society of Civil Engineers estimated that utilities need to spend $763 billion by 2040 to properly modernize and harden the existing grids against natural disasters. We believe that rather than going for a very costly maintenance, it will be economical to develop these Microgrids, which could lend support to the existing system.
That's right, instead of building more transmission it will be more economical to develop more secure microgrids.
A microgrid is defined as:
A microgrid is a localized grouping of electricity generation, energy storage, and loads that normally operates connected to a traditional centralized grid (macrogrid). This single point of common coupling with the macrogrid can be disconnected. The microgrid can then function autonomously. Generation and loads in a microgrid are usually interconnected at low voltage. From the point of view of the grid operator, a connected microgrid can be controlled as if it were one entity.
Microgrid generation resources can include fuel cells, wind, solar, or other energy sources. The multiple dispersed generation sources and ability to isolate the microgrid from a larger network would provide highly reliable electric power. Produced heat from generation sources such as microturbines could be used for local process heating or space heating, allowing flexible trade off between the needs for heat and electric power.
Wow! What a great idea, right?
Just one more warning shot across the investor owned electric utility bow. Transmission is a dead end. Save yourself, utility friends! After all, if my favorite utilities die, who am I going to pick on in my spare time?
Honestly, I couldn't make this stuff up if I tried!
Thousands of small, independent farm businesses and other residents of the Midwest are being asked to suck it up and make a financial sacrifice to accept the burden of new high voltage transmission lines through their land proposed by Clean Line Energy Partners.
There is no proven need for Clean Line's projects. They are a speculative venture that assumes "states farther east" will pay outrageous prices for wind energy exported from Kansas, Iowa, and Oklahoma. These projects aren't needed to keep the lights on. They are intended to supplant current generators in "states farther east" and replace them with generation imported from thousands of miles away. This is not economic, nor reliable.
Clean Line Energy Partners is financed by a couple of billionaires, who expect that they will make a huge return on their investment by selling capacity on new transmission lines at a huge profit.
Clean Line has identified one of its investors as Michael Zilkha of Houston, whose inherited fortune was made in the oil industry.
Who is Michael Zilkha? I'm sure he's a perfectly nice man who just happens to live in a 20,515 sq. foot stone manse that features 17 rooms. Built in 1999, the residence features a pool with pool house and lavish grounds including gardens and courtyards.... but no transmission towers. Nasty energy infrastructure is Not In Michael's Back Yard.
Our perfectly nice Mr. Zilkha also supports the arts, making Houston's society pages by "saving lives through words" by supporting poetry at the Houston Writer's Ball.
(go ahead, click through and check out all the photos of our glittery social heroes saving the world with ostentatious panache). Well, that's very helpful for all the Midwesterners who are being asked to make financial sacrifices to enable his transmission line investment to pan out. Maybe he'll write you a poem about eminent domain?
I think I'd rather hang out at a barn dance. At least the people are real.
Remember when FirstEnergy told the WV PSC in its February 3 brief
on the General Investigation that its customers in Pennsylvania haven't had issues with estimated bills?
The two major storms were the largest impact cause of the disruption to obtaining scheduled meter reads. That conclusion is supported by the experience of sister company, West Penn Power, which experienced all the same integration issues (system integration, renumbering, meter reading restructuring) as the Companies experienced, but did not experience the same level of damage and widespread outages from these two super storms. Consequently, West Penn has not had the level of customer complaint and billing issues that the Companies and their customers experienced.
UWUA brings this complaint in its capacity as the representative of meter readers and other Penelec employees who are being directed by Penelec to continually and willfully violate the Commission's meter reading regulations and the provisions of Penelec's own tariff.
UWUA states on information and belief that Penelec routinely estimates bills for thousands of residential customers three, four, or even five consecutive months when there are no exigent circumstances and no problems with utility personnel gaining access to the customer's meter.
UWUA states on information and belief that Penelec fails to read meters as required because it has failed to fill vacant meter-reading positions and has otherwise failed to properly staff its meter reading function. That is, Penelec has made a business decision to save the expense of hiring additional meter readers and instead issue numerous consecutive estimated bills to residential customers in violation of the Commission's regulations.
Oh, so it's not about salt-laden snow after all? Maybe it's about the company deliberately failing to read meters as a cost-cutting measure?
Shame on you, FirstEnergy!
The Wisconsin Public Service Commission chose to not respond to a request to reopen the CapX2020 Hampton La Crosse high-voltage power line docket. By allowing time to run out on the Jan. 9 request filed by Save Our Unique Lands of Wisconsin (SOUL) and Citizens Energy Task Force (CETF), the request is considered denied effective today, February 10.
“We may disagree with the PSC over who needs the power lines and why, but there should be no question that the process to plan and approve energy infrastructure should be transparent, comprehensive, and accountable to the citizens and ratepayers it is meant to serve,” said Debra Severson, who participated in the filings on behalf of the groups. Severson continued, “By choosing to ignore rather than address valid concerns, the PSC raises questions over whose interests they serve.”
New information cited by the groups in the request included minimal or declining growth in electrical demand, increased potential to further reduce demand, changes in La Crosse area electrical resources, and a Wisconsin court ruling regarding land-owner compensation.
More than three thousand individuals and ninety municipalities have asked for comprehensive analysis of alternatives to regional transmission. The lack of this analysis remains a point of contention for both CapX2020 and the Badger Coulee – the next section of new transmission lines that utilities hope will follow.
CapX2020 transmission would stretch form the Dakotas into Wisconsin near La Crosse. The Wisconsin segment was approved in May 2012. The proposed Badger Coulee line would plug into CapX2020 in the La Crosse area and travel non-stop to Madison, where energy from the Dakotas could be transferred further south and east.
The ability to transfer large amounts of electricity from the Dakotas both to and beyond Wisconsin was a driving force in approving CapX2020, and would require constructing the Badger Coulee line. Because of this, the groups feel the PSC should have considered the $514-$548 million Badger Coulee cost, and to not do so is misleading to the public and over-values the purported project benefits.
The Badger Coulee application has been submitted, but not yet considered complete by the PSC. SOUL is providing education so citizens can document their concerns during the Badger Coulee “scoping” meetings. These meetings will be sponsored by the PSC during preparation of the Environmental Impact Statement for Badger Coulee. Additionally, SOUL has applied for legal participant status in hearings on the Badger Coulee application.
Attorney Carol Overland, who filed the request on behalf of SOUL and CETF, said the groups are evaluating other activities to undertake to address CapX2020 concerns, before construction of the line begins in Wisconsin.
Sharon, an organic farmer from north central Kansas, recently had the opportunity to pause and ponder one of nature's wonders
on her way to work. Here are her words:
"Oh beautiful for spacious skies... " What a perfect Kodak moment! As I drove into town to my off the farm job, I was so lucky to witness yet another of Mother Nature's magic moments. I am so grateful that I was born and raised and returned back to our old family farm located in North Central Kansas. Most of you already know from geography class, that puts me on the western edge of that grand land many of us call Mayberry. Watching Mother Nature produce some of the most breathtaking artwork is one of the many perks of living out here, in the "boonies". I am so very blessed.
It's just too bad the next time many of us will see this spectacular and rare sight, the pasture fence will most likely be upstaged by 150'-200' tall, steel lattice poles with high voltage transmission lines carrying 3x the power of Hoover Dam from one end of our great state to the other and into our just as great, neighboring states. And they will stand there for--"FOREVER"!
We are assured they will be carrying all this clean? green energy which will be carried “out," not in or throughout our state. But we needn't worry, the company tells us. All is well, even though a project of this magnitude has never been built before and this company has never built a high voltage transmission line of any size.
The company and their expert witnesses assure us that we are in good hands, all is safe, there are no dangers, for "forever" and ever. Our children's grandchildren will just be fine, don't worry. They may never get to see or even know what an eagle is, nor the family farm. But what's a few sacrifices, for the greater good?
While I have spent many hours reading, re-reading, researching, searching for truth, there's still one problem I can't quite figure out in all of this. Exactly what is the "greater good" or maybe I should ask, for whom is this greater good? I'm certain Eminent Domain will let me know soon enough. Let's hope by then, it's not too late!
Moody's researchers have been busy contemplating investor owned utilities' most recent scheme to "de-risk" their holding companies by shifting investments to the regulated side of the business. After gathering all sorts of information available, Moody's has weighed the risks and decided that this utility investment scheme is a safe harbor for the time being, and utilities engaging in it should receive higher credit ratings.
I think Moody's got it wrong because they discounted the mettle and determination of regulators, elected officials, not-for-profit entities, and the people they represent, to continue to toss banana peels into the utility feeding frenzy that threatens to bleed them dry. We're quite creative and getting smarter every day. :-)
Although the actual report is for subscribers only, an article in Platts tell us that Moody's has concluded that utility holding company transmission subsidiaries have a stranglehold on regional transmission operators.
"FERC transmission regulation provides forward-looking formula rates, true-up mechanisms and premium authorized returns on equity. Transmission owners face limited revenue risk, owing to strong counterparty relationships with the operating utilities and the regional transmission organization," Moody's said.
The report also "highlight[ed] the key role that US Federal Energy Regulatory Commission policies are playing in driving transmission investment"
and attributed "a premium return and good cost recovery"
for transmission as "thanks in part to FERC's regulatory policies, calling the commission's oversight "a material credit positive."
Moody's chose to bat aside the current parade of ROE complaints at FERC. Perhaps Moody's thinks that ridiculous petitions like WIRES' request to stop the complaints actually has merit? Moody's needs to take a gander at the RM13-18
docket and face reality. The money buffet isn't going to last forever.
And Moody's totally checked out on the one thing that utilities, FERC and transmission operators have no control over:
The exploding resistance to new transmission in the form of landowners, ratepayers and local elected officials.
FERC's "premium return" means nothing when transmission can't be built due to overwhelming opposition that equates to political poison, or when ratepayers accept their responsibility to examine and challenge transmission rates they must pay.
But, that's okay, Moody's. We're patient, and we're used to being on the cutting edge of new trends, instead of running behind trying to shore up failing business models.
And do you know why that is? It's because FirstEnergy is a union buster.
While Potomac Edison spokesflack Toad Meyers makes intelligent excuses for the lengthy outages such as: "Trees will likely continue to fall until the ice gets off," the real reason is that there are nearly 150 skilled linemen, substation electricians and other union employees who have been locked out by FirstEnergy in an attempt to force them to accept a new contract.
News reports say the workers want to help, offering to work while negotiations continue, but the company has rejected their offer.
How much faster could service be restored if they had 150 extra workers on the job?
So, if your power is still off, it's because FirstEnergy doesn't value its workers any more than it values your comfort and safety.
Lynn Pugh opened her AEP bill this month to see just how much the cold January had set her back, but she found something in her bill that she normally doesn’t see.
“I’ve never seen the consumer rate relief charge,” said AEP customer Lynn Pugh.
Starting in December of 2013, AEP began adding the consumer rate relief charge to customer bills. According to the company, the new charge is a way to help them account for the spike in the price of coal in 2008-2009.
“It’s actually a reflection of a settlement we had with the PSC to recover the cost of coal,” said AEP spokesman Phillip Moye.
Normally AEP pays around $50 per ton for coal, but in ’08 and ’09 they were paying over $100 per ton because of a coal shortage.
The Public Service Commission signed off on the charge and has allowed AEP to keep it on your bill for the next 15 years. Pugh was shocked to learn that the charge would be on her bill for the next 15 years.
Moye said the AEP opted to go with the additional charge rather than increasing the rate on the price of power.
“The impact on the rate would have been tremendous,” Moye said. “30 to 40 percent increase, and that obviously is more than what customers can bare.” [bear!! although maybe customers will tear off their clothes and run naked through the legislature in protest?]
Pugh said she understands why she is paying the additional charge, but doesn’t think it should be on there for the next 15 years.
“I can’t imagine that they paid that much extra for coal that every AEP customer is going to have to pay this.”
The charge is based on how much your bill costs. Pugh’s charge was almost 11 dollars.
Ms. Pugh is only beginning to understand that now, in addition to all the old coal debt, she's also paying for other deferred regulatory assets, plus interest and fees.
We tried to stop this craziness in 2012, but customers like Ms. Pugh weren't paying any attention and took no interest in helping themselves. If Ms. Pugh had known then what she knows now, might she have picked up the phone and called her elected representative, or dashed off an email to the PSC? Probably.
Now APCo customers have the next 15 years to lament their lack of consumer education. When will West Virginia fund an effective consumer advocacy program that includes public education? Or does our legislature prefer us to remain barefoot, pregnant and chained to the coal-fired power station?
We have a lot of work to do, West Virginia!
Tony Alexander - President and Chief Executive Officer
Kit, I think it's important to recognize we haven't had rate cases for quite some time now. And we've been a part of - in recognition of what's been happening in from a customer standpoint in terms of the depressed economic conditions we've tried our best to hold off. As we move more towards regulation in terms of - we also anticipate having more rate applications. For example, some time this year, going into '15 or '16, the Pennsylvania and West Virginia decisions will be made. The New Jersey decision will be made. Those will all set baselines and new baselines for going forward.
So as we transition more towards a rate case model in terms of improving service to customers and getting them reset at new baselines, there will be a lot of things changing. For example, over the last several years and in part because of the major emphasis on reliability that we've had and because of our desire not to have interim rate cases, we have shifted a lot of our capital, particularly our vegetation management to a lot of our expense to capital, I should say, particularly our vegetation management. We are now about closed in many areas. We're not done yet, but we are about closed in many areas. That doesn't get rid of veg management, but it does move it from capital to expense. And that will happen naturally as we're moving towards these rate case applications in the various jurisdictions that we will have.
Kit Konolige - BGC
Just a final question to follow on that. Can you address at all what we should expect the growth rate to be in earnings in the distribution segment? Obviously you've addressed that in transmission.
Tony Alexander - President and Chief Executive Officer
That's going to depend primarily on our effectiveness as we move through the rate case process. And I think at this point, it's a little early to begin to try to address that.
Right, FirstEnergy's "effectiveness." Who can resist a build up like that? The news reports I've been reading about New Jersey's rate case haven't painted FirstEnergy as very "effective." So, I went to the source documents
(because they're ever so much more interesting than news reports, if you like that geeky rate stuff).
The New Jersey case presents a well-marked road map for Tony the Trickster's anticipated upcoming rate cases in West Virginia and Pennsylvania. The New Jersey Rate Counsel has expertly revealed the places where FirstEnergy cheats in a rate case. Forewarned is forearmed, I always say!
FirstEnergy didn't file a rate case in New Jersey willingly. The company had to be dragged to it, kicking and screaming. And, it looks like FirstEnergy is getting its clock cleaned. The company requested a $31M increase. Instead, New Jersey's Rate Counsel is asking for a more than $200M decrease in rates.
This matter began when Rate Counsel filed a Motion in September, 2011 alleging
that Jersey Central Power & Light (“JCP&L” or “the Company”) was over-earning and
asking the Board of Public Utilities (“Board” or “BPU”) to require the Company to file a
base rate case to protect ratepayers from continued excessive rates. The record that has
been developed since then shows clearly that Rate Counsel’s concerns were well-founded.
While the Company has sought an increase in rates, the record demonstrates that the
Company has been over-earning and that ratepayers are entitled to a rate reduction of
over $200 million. The record also supports a reduction in the Company’s overall rate of
Rate Counsel recognizes that a rate reduction of this magnitude is extraordinary.
Yet the evidence is clear and Your Honor and the Board must fulfill the statutory
obligation to establish rates that are just and reasonable based on the evidence in the
record. Unfortunately for JCP&L’s ratepayers, however, the story does not end there.
While this matter was pending, the State suffered several severe storms that led to
extensive and long outages throughout New Jersey. JCP&L’s territory was hit
particularly hard and customers suffered through outages of extraordinary scope and
duration. In many ways, the pendency of the rate case was fortuitous, as it led to an
opportunity to examine the Company’s reliability spending and practices as well as its
What that examination has shown is of great concern. While JCP&L was granted
additional funds in the second phase of its last base rate case in 2005 to address ongoing
reliability concerns, it substantially decreased spending on reliability once the initial work mandated by the BPU was completed. Between 2008-2010 the Company’s reliability spending was reduced and its tree-trimming budget was cut back significantly. During this same period, JCP&L was sending a whopping 170% of its earnings to its sole shareholder and parent corporation, FirstEnergy.
While the money paid by New Jersey’s ratepayers was being sent off to Ohio,
insufficient funds were being invested in JCP&L’s infrastructure in New Jersey. While some of that spending has now been increased as a result of the storms, ratepayers need the protection of their regulators to ensure not only that the Company’s rates are just and reasonable, but that ratepayers’ investment in this Company is spent for their benefit.
Ratepayers are entitled to better reliability and for this reason Rate Counsel seeks relief in
this case that would require more rigorous reliability reporting and standards as well as
consequences if the Company fails to provide that reporting or meet those standards.
The record also demonstrates that while JCP&L steered its extensive earnings to its parent, the credit rating of FirstEnergy has negatively impacted the credit worthiness of JCP&L. It is fundamentally unfair for the ratepayers to pay more than enough to maintain the stability of the utility and then potentially pay more because of the negative impact of JCP&L’s parent on the utility’s cost to borrow money. For this reason Rate Counsel is also asking the Board to order the Company to conduct a study to determine ring-fencing measures to protect JCP&L’s credit worthiness and thus protect New Jersey ratepayers.
As is evident by the way it started, this is not a standard rate case. It is an opportunity for the Board to reinforce its mandate to ensure safe, adequate and proper service for New Jersey’s ratepayers at just and reasonable rates. It is an opportunity to rein in JCP&L’s persistent reliability problems, to ensure appropriate and continued investment in New Jersey’s infrastructure, and the financial health of a local utility.
Get that? While the local subsidiary had increased rates to pay for reliability improvements, it was sending the money to its parent, FirstEnergy, and not spending it on reliability. As well, FirstEnergy's financial problems caused higher rates for New Jersey customers. All this is sounding strikingly familiar, isn't it, West Virginia?
And there's more... oh, so much more!
- In the wake of an earlier rate increase for reliability repairs, "...after making initial repairs, it is unclear whether the Company continued to use all
the funds collected for continued reliability investment. Instead, it appears that excess
funds went to shareholder dividends."
- The company has increased the number of "major event days" that are not required to be included in reliability statistics. For example, in 2004 there were 4 "major events." In 2011, there were 62. Rate Counsel recommends "...the Board should better define “major events” so that the definition cannot be modified to skew the Company’s performance results."
- The company deferred, or performed less than adequate, vegetation management work prior to the two hurricanes. "The evidence in the record shows... JCP&L deferred needed vegetation management and reallocated revenues to other projects."
While JCP&L enjoys cost savings by deferring projects, a substantial amount of revenue are being collected from ratepayers that has not been invested in JCP&L’s infrastructure. At that same time JCP&L was giving its parent FirstEnergy a generous dividend. Over 70 percent of JCP&L’s profits during 2009 to 2011 were paid out in dividends to its parent FirstEnergy instead of reinvesting its profits in its New Jersey electric distribution utility. The Company claims that “necessary” right of way vegetation management was deferred due to an off right of way vegetation management program called the Corridor Widening Initiative. However, in light of the millions of dollars sent to Ohio in dividends, it appears that the Company collected sufficient ratepayer funds to maintain its vegetation management spending and still complete the Corridor Widening Initiative.
- Rate Counsel recommends that the company conduct at ring fencing study. "'Ring fencing' refers to corporate structural protections and business practices that can help separate the utility subsidiary from its riskier parent and corporate affiliates. These measures, if properly designed, could help the utility avoid becoming involved in a
bankruptcy in the event of a parent (or affiliate) bankruptcy and/or reduce the likelihood that the utility subsidiary would be downgraded by credit rating agencies due to the parent being downgraded. Properly designed ring fencing measures can help to protect the financial health of the utility, avoid unwarranted credit downgradings, and provide reassurance to utility bond investors."
- "Aside from the less tangible adverse effects related to its lower debt rating, FirstEnergy over time drained cash from JCP&L. The record shows that JCP&L has paid much of its earnings over recent years to its parent FirstEnergy in the form of dividends and a $500 million “return of capital.”
- The company requested an 11% return on equity. Rate Counsel recommends 9.25%. The company's ROE expert's testimony was rife with error and inventive conclusions.
- The company included $1.8B in goodwill acquisition premium in its proposed capital structure.
First, a merger acquisition premium should not be considered to be part of the cost of providing utility delivery service, since this is a cost that shareholders should be required to bear. The Company did not cite a single instance of another utility commission or electric utility rate case where inclusion of goodwill in capital structure was sanctioned. Goodwill does not represent actual utility assets or investor-supplied funds, which Mr. Kahal found adversely affects the quality of JCP&L’s balance sheet and the Company’s credit agency ratings. Mr. Kahal concluded that this goodwill is “an accounting adjustment to the Company’s balance sheet that occurred in conjunction with the GPU/FirstEnergy merger approximately a decade ago.”
- The company played a lot of games with items included in its proposed rate base. The Rate Counsel's laundry list of no-no's include: storm costs not yet found prudent, inclusion of non-distribution items, excess cost of removal reserve, materials and supplies, cash working capital (lead/lag study), customer refunds, operating reserves, depreciation, including a bunch of stuff from the test year after the debt has expired, number of customers, inclusion of Allegheny Energy/FirstEnergy merger costs and employee bonuses related thereto, inflated forestry expenses, inflated general plant maintenance costs, executive incentive compensation tied to financial performance that benefits shareholders (“Payment of any short-term incentive [STIP] award is contingent upon the Company [FirstEnergy] achieving the Earnings Per Share threshold level, after accounting for the cost of the payout."), Supplemental Executive Retirement Program costs (extra perks for the bigwigs!), and Pension & OPEB expenses.
- The company has been charging customers for income taxes it doesn't pay. Because FirstEnergy files a combined return that includes all its subsidiaries, it can leverage the different companies' tax burdens to pay NO income tax.
The Company’s manipulation of its cash working capital requirement for federal
income taxes is especially bothersome when one considers the fact that JCP&L is a
member of the FirstEnergy consolidated tax group and, therefore, is making these
quarterly tax payments, not to the IRS, but to its parent corporation, FirstEnergy. And, in
fact, in 2011, parent corporation FirstEnergy paid no income taxes to the IRS.
JCP&L is therefore not only charging ratepayers for income taxes that were never
paid to the IRS, it also seeks to charge ratepayers for a phantom cash working capital
requirement on those phantom taxes. This is unfair and should not be allowed. Properly
measuring the expense lead days associated with the payment of federal income taxes
reduces JCP&L’s claimed CWC requirement by approximately $10.5 million.
- Payment of executive "incentives" to increase shareholder dividends don't provide benefit to ratepayers.
FirstEnergy’s incentive compensation programs are heavily weighted toward the achievement of certain financial objectives, with no payout being made unless certain financial goals are met. Incentive plans that are based largely on earnings criteria are not sufficiently related to the provision of safe and reliable utility service to justify passing this cost onto ratepayers. If incentive compensation programs are tied to increased corporate and shareholder earnings, then the corporate shareholders, not ratepayers, should pay for them. To do otherwise violates all sense of fairness to the ratepayers of the regulated entity. Accordingly, Rate Counsel recommends that JCP&L’s proposed incentive compensation expenses of $8.4 million be disallowed for rate making purposes in this case.
- Inclusion of certain "miscellaneous" O&M expenses, such as goodwill advertising; memberships in private clubs; employee rewards, outings, parties and gifts; and company memberships in a number of civic organizations such as chambers of commerce, mayor associations, area associations, Jersey Shore partnership association and economic development association. Oh, so it's not just me? This is nonsense, FirstEnergy! The free ride is over!
As these miscellaneous expenses are not related to the provision of safe, adequate
and reliable service, they are not appropriate for inclusion in rates set for utility service.
Certainly the Company has not demonstrated how funding of retiree clubs and parties will have a positive impact on the provision of electric service. Moreover, it is long standing Board policy in this state that institution and goodwill advertising shall be paid by shareholders, not ratepayers.
The Company has failed to demonstrate that these various expenses provide any “measurable benefit to its ratepayers” and therefore “the mandate of Title 48 for just and
reasonable rates precludes the captive ratepayer from subsidizing those costs.”
Accordingly, Your Honor and the Board should reject the Company’s proposal to include
the above listed $79,258 in miscellaneous expenses in claimed operating expenses.
It should also be acknowledged that the West Virginia PSC ordered FirstEnergy to file a base rate case by April 2014 as a condition of its approval of the Harrison power station "sale" to its WV jurisdictional utilities. This isn't a voluntary rate case FirstEnergy is filing simply to increase revenues. And if parties to the upcoming West Virginia case pay attention and prepare properly, it's going to be an absolute bloodbath. I can't wait! :-)
Big article in the Wall Street Journal yesterday, Assault on California Power Station Raises Alarm on Potential for Terrorism, that reports on a coordinated attack at a California substation that sounds like a scene from an action film.
According to the article, the information came from former FERC Commissioner Jon Wellinghoff, who has taken up lurking around substations in his dotage. Apparently Wellinghoff was horrified at the substation attack last April and the subsequent realization that our grid is astonishingly vulnerable and there's not much FERC can do about it.
I know what FERC can do about it... Stop promoting centralized generation and an increasing network of high voltage transmission lines to trade electricity like a commodity from coast to coast!
If you think substations are vulnerable, spend a few minutes pondering the thousands of miles of high voltage transmission lines strung everywhere. True, an attack on one remote tower may not have much effect and could be easily fixed, but what about a coordinated attack on hundreds of towers that supply our cities at the same time?
Our military isn't dumb enough to rely on a power supply this vulnerable, so why should we? As far back as 2007, the U.S. military was studying electric grid vulnerability and concluded that "distributed generation" (yes, they used quotes, like Dr. Evil with his "laser") was our best defense.
And so it is - our military is practicing distributed generation.
So, when is Congress going to put a stop to the transmission feeding frenzy and start protecting the rest of us?