Dear Chairman Sievers, Commissioner Wright and Commissioner Feist Albrecht,
I am writing in regard to docket 13-GBEE-803-MIS concerning the Grain Belt Express Clean Line proposal that affects my family's property, located Township 03, Range 12, Section 6. I oppose the proposed route that is under consideration.
I am a lifelong Kansan, as are my parents, as were my grandparents, as were their parents. My great-great grandfather, Johann Martin Stallbaumer settled in Nemaha County in 1854. Most of my family still lives there. I
currently live in Topeka and work as Art Director for Mother Earth News magazine. In this position over the past decade, I've heard stories, read letters and empathasized with readers who have lost use of their land to projects like the Grain Belt Express. Now, my family and the property that has been in our family through five generations is being threatened.
I ask that you will listen to your conscience as you read this letter, it is your best tool to decide between right and wrong.
I first learned of the proposed project following the public meeting held in Seneca on the late date of August 12th, 2013. Because the easement would not actually touch my parents' property, they did not receive any literature regarding this line until two weeks before the meeting, and it was vague. They were shocked to learn at the meeting
that the 200-foot-tall towers and 600 kV line would be only 986 feet (according to Clean Line representative Ally Smith) from their property and within 1/4 mile of where my grandparents' home stood.
When I think of the sacrifices my ancestors and parents have made to obtain and keep this property through hard work, honesty and fairness, it discourages me that a commission of three people would grant eminent domain to a group of private investors in return for no benefit to us whatsoever. It leads me to believe that the ethical, moral things Kansas once stood for are being threatened by private interest, influence and simply, money.
This land is home to us in the strongest sense of the word. In fact, I have often told people this: of all the things that could be possibly owned in this world, our land is the only thing I want to make sure stays in our family until
I die. It has been my personal dream and that of my brother to someday build at the location of the original home because of it's beautiful overlook of bottom grounds.
The proposed Clean Line transmission line would cut right through those bottom grounds, threatening our dreams. The opportunity to build there is priceless, but would become worthless if you allow this line as it is proposed. Yet, Clean Line Energy Partners refuses to acknowledge any loss whatsoever for us, property value included. Who among you would build a home in the shadows of such a structure, or even recreate near it? The poor aesthetics of the line, alone, would discourage and ultimately prohibit it. Furthermore, it's my understanding that
no line of this size has ever been constructed in Kansas or tested anywhere. Although Clean Line Energy Partners contends there are no safety hazards, I submit there is no evidence that there aren't. Who among you would risk your health, the health of your children and the existence of future generations of your family? Reports link these lines to childhood leukemia. Farmers and ranchers have observed a negative effect on livestock: infertility, inability to gain weight and death. Electric utilities have paid out millions in damages due to electric lines of lesser voltage. History and independent studies shows there are health issues caused by these overhead lines, whether Clean Line Energy
Partners admits them or not.
Would you touch one of these lines with your bare hands? Because they will be hung 200 feet high, they may be relatively safe, but they ultimately are not safe, and they are vulnerable. Consider the weather we have in Kansas, what happens the first time a tower falls? Pretending this won't happen is showing a lack of common sense and carelessness. The natural disasters that have occurred in this state and nation in the past decade alone exhibit that.
I understand the value of wind energy to Kansas, but I submit that the value of this wind energy should go to Kansans and not be at my family's expense, the expense of our neighbors, our community, our county, or Northeast Kansas. Northeast Kansas is one of the most productive agricultural areas in the state. Nemaha County, as evidenced by one of the lowest unemployment rates in the state, is an active, productive, growing and responsible community. This doesn't make us any more important than anyone else, but it speaks to our heritage and pride. You have put all
of this in jeopardy.
Although I disagree that this project happen anywhere is a necessity- you have made your own rationalizations to support that- if it must be somewhere and somehow, I plead with you to do it somewhere else and/or somehow
else. The manner in which this is being handled is disturbing. The short notice that was given to those of us along the proposed route is a perfect example. The need to use eminent domain is as welL It is being propagandized as solely clean wind energy, but sources say that other "dirty" energy will be transmitted too. Despite the fact that Ally
Smith denied hiding comments from those who oppose the project, Clean Line Energy censors those comments in their literature and on their social media, as later admitted by Mark Lawlor, Director of Development for Clean Line, during a phone conversation. In addition, Ally Smith promised that, after contacting the KCC, I would receive a
personal response to my concerns, only to find out from a representative in the KCC office that is not the case. These things alone exhibit the company's dishonesty that one can only assume spans across many other subjects.
My suggestions follow, if you consider them and act accordingly you would be showing good faith and a deserved level of concern to people like me who value a quality of life, heritage and opportunity over money:
1) Keep the energy created by Kansas in Kansas for Kansans. Local and regional projects are touted by our governor, approving the current method of export via exposed line and its route exposes hypocrisy. The transmission lines would not need be of the scale within this proposal and so would be easier buried and less destructive. It would also spur local economies: cheap energy would attract businesses, people and generate tax revenue.
2) If you must export wind-generated power, place these transmission lines in already existing, State of Kansas owned, rights-of-way. This would eliminate the need to disrupt private, clean land. Eminent domain may be legal, but it definitely doesn't make it moral, ethical, or right. As is fact, they don't make any more land. Land is not a renewable
resource, wind energy is, and you would be sacrificing something that can't be replaced for something that can.
3) Take advantage of already existing easements in other parts of the state, or find landowners who support your agenda and want it on their land. Clean Line reports how many landowners are for the project, so let those landowners have it.
4) Choose a route through more sparsely inhabited areas of Kansas. In Nemaha County, the average farm is still small. Landowners still live on their property. The politicians of Kansas tout small farms as our backbone, this is your chance to prove it. Other areas of Kansas are more sparsely populated, landowners there have thousands of
acres of land, many of whom live nowhere near it.
5) Bury the cable. It would be safer because it isn't exposed. The aesthetic value, and land values of much of our great state, will be spared. Because it may be more difficult up-front, it would generate more jobs for a longer period of time, and be better for Kansas long-term. This is your goal, correct?
If Clean Line Energy Partners contend that they are unable to bury this line, find another contractor who can. It is done in other parts of the world, it would be shortsighted to allow it to be done any other way in Kansas.
May I remind you that it is your duty as public officials to keep the best interest of Kansans your priority, you represent us, not the interests of private investors who may have never set foot in Kansas. The proposed ten year tax abatement offered to Clean Line Energy Panners is mind-boggling, most of the jobs created by this, many of them not even held by Kansans, will be long gone in a fraction of that time frame. Judging by the docket information I find on your Web site as of Aug. 20, the public comments and petitions record overwhelming opposition to this
project, especially in Nemaha and Marshall counties. I hope that you have listened to your conscience while reading this letter and the letters from others who have everything to lose and nothing to gain. We are aware that once a single line like this is approved, a corridor of similar lines could follow, swallowing up our land, homes, heritage,
dreams and our future altogether.
I will be putting a copy of this letter in a lock box for future generations of my family to read. They will know where I stood on this matter and will see your names as the addressee. I pray that you have the strength to put yourself in our position, follow your conscience, and do the right thing for us, the present and future citizens of Northeast Kansas: Rule against the proposed route and manner of transmission.
Respectfully, sincerely and pleadingly,
Meet Matthew. He filed to intervene in the Grain Belt Express Siting case at the Kansas Corporation Commission this week. This is why he fights:
Clean Line Energy Partners has been trying to quietly get its four HVDC transmission line projects criss-crossing the midwest approved without the notice of the landowners who will be asked to make the ultimate sacrifice in the name of "clean" energy.
Trying to get approvals before the landowners noticed or organized to fight back was a very short-sighted and mistaken practice. When the landowners eventually find out (and they will), they're twice as angry and determined to fight.
Clean Line's arrogant team of urban simpletons simply cannot grasp a living connection to the land and a farmer's sense of place identity.
This is the continuation of Amy's story. We previously featured Amy's story documenting how she was dragged out of one of Clean Line's Grain Belt Express meetings for daring to pass out information about the health effects of living in close proximity to high-voltage electric transmission lines. This time, we're going to hear why Amy was willing to stand up to Clean Line's propaganda, no matter the personal costs to herself.
Amy is just getting started on her opposition, and here's why:
My husband, Robin, and I bought land (8 acres) with a barn in Polo, MO a few years ago with the idea we would build a small home that would be energy efficient, and retire there one day. We did all the studies about solar power, small personal windmills, earth contact homes, wood stoves for heating, etc... When my husband lost his job in 2010, due to outsourcing to Singapore, we sold our suburban home in the Kansas City metropolitan area. Our house sold in a miraculous 33 days. We didn't have anywhere to live, so we took Robin's severance money and the equity from our home sale and in late April of 2011 we moved into our barn with our youngest son who was 12 at the time. Our future dream of an energy efficient home became a necessity.
So far, I've managed to resist being drawn onto the Binz bandwagon. While I received several emails from people jumping up and down with excitement about the nomination of their "friend" Ron Binz back in June, I was unimpressed and cautious.
Ron Binz for Chairman of the WV PSC? Why, sure! I think that would be lovely! Ron Binz for Chairman of FERC? I don't think so.
There's no surer way to know you've come to a proper conclusion than to make one based on first hand experience, and there's just too much to ignore in this WSJ opinion piece that resonates with my experiences over the past several years.
Sure, Binz's "Practicing Risk-Aware Electricity Regulation" is revolutionary and I would love to grab WV PSC Chairman Albert by the scruff of his neck and force him to read it, but how is it applicable or helpful at FERC? FERC isn't supposed to be making decisions about what types of generators are built.
This report is primarily addressed to state regulatory utility commissioners, who will preside over some of the most important investments in the history of the U.S. electric power sector during perhaps its most challenging and tumultuous period. This report seeks to provide regulators with a thorough discussion of risk, and to suggest an approach—“risk-aware regulation”—whereby regulators can explicitly and proactively seek to identify, understand and minimize the risks associated with electric utility resource investment. It is hoped that this approach will result in the efficient deployment of capital, the continued financial health of utilities, and the confidence and satisfaction of the customers on whose behalf utilities invest.
Those cheering Binz are doing so because they believe he will champion their goals to promote and enable utility scale renewables as the fastest way to a carbon-free future, social and consumer costs be damned. The WSJ reports:
Speaking of which, after Mr. Binz left the Colorado post in 2011, he maintained a paid relationship as a consultant with an outfit called the Energy Foundation.
So, the NRDC believes they can buy a seat for their "friend" Binz, paid for by what I call The Environmental One Percent. A FERC controlled by environmental interests is no more preferable to consumers than one controlled by fossil fuel interests. Who's representing the interests of consumers? Oh, that's right, there is no consumer advocate at FERC, it's all controlled by corporate lobbyists.
I'm really not seeing the connection this writer makes between what Binz did in Colorado, the Ceres report, and how that makes him the best pick for FERC Chairman. But then again, she also starts out proclaiming her misconception of what Binz can do for us:
FERC oversees the nation’s electricity and natural gas networks, and the grid is badly in need of upgrades—up to $2 trillion worth by 2030. Binz has the track record to ensure that money is well spent.
I've lost count of how many times I've said this recently: FERC is not some "national" public service commission with jurisdiction over state regulators. The two regulators operate in separate, parallel universes. Only states have jurisdiction over the permitting and siting of high voltage transmission lines. FERC has no authority to meddle in state jurisdiction, but that hasn't stopped them from trying.
The WSJ says:
He's mused about the rule of law as a nuisance when regulators want to exercise a "legislative role"...
Putting Binz in place at FERC would be like dropping an alcoholic into a brewery, don't you think? FERC has a history of overstepping its bounds and attempting to take on a legislative or other inappropriate role. Just two years ago we were sitting here in disbelief as Wellinghoff and Chu dithered over FERC taking on the role of designating National Interest Electric Transmission Corridors.
FERC attempts to revive NIETCs to trump state authority on new transmission projects
There's just too much temptation for someone predisposed to legislate from a regulatory position.
The WSJ also has an opinion on the former FERC Commissioners who tried to defend Binz, most of whom now work for other energy interests that have a financial stake in a Binz chairmanship:
Our reporting on all of this was too much for a dozen former FERC commissioners, both Democrats and Republicans. In a letter we published—a version is being circulated in the Senate—they assert that Mr. Binz fits FERC's "long nonpartisan tradition" and "will be a fair and impartial judge."
The industry/regulatory/industry revolving door isn't new. In fact, I've written about this and the legislative/regulatory mischief it causes several times:
Former FERC Commissioners' Opinions - A $2.98 Value!
FERC's Transmission Siting Federalism Coup
This does not serve consumers. It serves the corporate interests that make money building transmission or other FERC-jurisdictional business ventures.
So, let's put all this together:
The one thing the former FERC members are right about is that the agency's chairman really is supposed to be "a fair and impartial judge," not a political soldier. Perhaps that helps explain why Mr. Binz and his letter-writing and check-cashing partisans are so defensive.
Let's cut the crap, get rid of the propaganda and politics, and find someone who's looking out for consumers.
Not Ron Binz.
...Karma came a'knocking yesterday.
The Plain Dealer reports that FirstEnergy failed a Nuclear Regulatory Commission "force on force" exercise at its Beaver Valley nuke.
Security forces at FirstEnergy's Beaver Valley power plant apparently failed part of a routine "force-on-force" exercise in April. Beaver Valley contains two reactors.
FirstEnergy says that its failure was a result of the way the NRC inspectors conducted the exercise.
In other news, a group of local residents filed a lawsuit alleging that FirstEnergy's Hatfield's Ferry coal-fired generator was damaging their health and their property. Hatfield's Ferry is one of two plants that FirstEnergy has slated for closure in October. Political hijinks have ensued, attempting to keep the plants open. PJM has determined that the plants are necessary for reliability, but FirstEnergy is pretending to proceed with closure, hoping it might get a better deal if it continues this silly game of chicken.
And, closer to home, a Potomac Edison publicity stunt went wrong yesterday when spokesflack Crapaud Meyers got cornered about how the WV PSC General Investigation was going.
Unfortunately, the wanna be journalists at WHAG's summer training camp turned it into a one-sided infomercial, but that didn't dampen Crapaud's enthusiasm for twitching his way through making crap up. Crapaud now says Potomac Edison is working on solving the problem, when just a few months ago, the company told the PSC that there was no problem to be solved.
Watch the video to enjoy Crapaud's newly-evident twitch. What it is that FirstEnergy does to its employees that makes them twitch like that when they lie?
WV PSC Puts the Brakes on FirstEnergy's "Corporate Enthusiam" -- Orders Hearing on Harrison Settlement
The WV PSC just issued an Order requiring all the parties who signed that ridiculous settlement agreement to have to defend it during oral argument before the Commissioners.
This is HUGE!
The Commission appreciates the continuing efforts made by the Stipulating Parties, even after the close of the record in this matter, to offer compromises and counter proposals in a concerted undertaking to develop the Joint Stipulation that is now before us. We also understand the desire of the Stipulating Parties to move this matter to resolution with utmost speed. The Commission shares that desire; however, we will chalk up the suggested decision date of “no later than August 30, 2013,” to “corporate enthusiasm.’’ The issues to be decided in this proceeding are too numerous, too significant from a rate making and cost of service perspective, and too important to current and future ratepayers, Mon Power and PE, and the economy of the State to suggest that they be treated in anything other than a detailed and thoughtful manner by the Commission.
Hooray for the WV PSC for putting the brakes on this crazy train! And Hooray and THANKS to the WVCAG for being the only party to point the finger and loudly proclaim, "The Emperor is naked!"
Well, you know what they say, necessity is the mother of invention, and one creative individual has come up with a new (if illegal) way to pay his outrageous Potomac Edison electric bill.
According to this article in the Herald-Mail:
Charles Ashby Atkins, 78, of South Raleigh Street was arraigned Friday night by Magistrate Robert L. Lowe II on single misdemeanor counts of fraudulent schemes, obstructing, pedestrian on the interstate and failure to obey a traffic-control device, the court records said.
So, how many copycat crimes will this cause? And would it be a crime if you stood on a street corner with a bucket and a sign "Help Me Pay My Inaccurate and Outrageous Potomac Edison Electric Bill!"? Probably not. And it would probably be even more lucrative. You can't mention the words "Potomac Edison" out in public around here without having bystanders chime into the conversation. While out having coffee with a friend yesterday morning, those words were said and next thing you know we're in conversation with a gentleman who was simply standing nearby fixing his coffee. Who hasn't gotten an outrageous bill or knows someone who has? Would you feel sorry for someone stuck with an outrageous, inaccurate bill who was having their service shut off? Would you toss in a few bucks?
Thanks, Potomac Edison! Dishonest panhandlers! Just one more service you provide!
FirstEnergy has been defending its rate-increasing Harrison plant settlement by telling the media, "...the agreement includes a commitment to "bring more jobs" to West Virginia, and provides financial contributions for economic development, weatherization programs, low-income utility payment assistance and an education program to promote energy efficiency initiatives in the state's public schools."
And not one reporter was smart enough to ask Toad Meyers who would be paying for all these wonderful benefits?
1. 50 more jobs - The cost of those jobs, just like the cost of all the other FirstEnergy employees, is recovered from consumers through electric rates.
2. Financial contributions for economic development - As we've found in other cases, these rate credits for industrial users (like Century Aluminum) are merely deferred for later collection in a future rate case... where consumers will pick up the $2.3M cost.
3. Weatherization programs - The settlement stipulates that this contribution is in addition to the $250,000
amount currently included in rates as a result of the Joint Stipulation in Case No. 09-1352-E-42T. "Included in rates" means that consumers are paying for it.
4. Low-income utility payment assistance - The settlement stipulates that this amount will be funded by customers.
5. An education program to promote energy efficiency initiatives in the state's public schools - No mention of how this is going to be paid for.
6. Additional energy efficiency programs - Paid for though consumer rate increases, just like the current programs.
So, what did FirstEnergy "give" West Virginia consumers in exchange for accepting the financial liability of a 40 year old coal plant? The bill for its concessions! Ridiculous! The best FirstEnergy can do is to point to additional cost for consumers as a "benefit" of this transaction.
And if you think that's stupid, FirstEnergy did it one better! Toad Meyers was his usual brilliant self... when asked about WVCAG's Objection to the settlement, Toad told the press:
"Just like any settlement agreement, there's a lot of negotiating, a lot of back and forth, give and take," said Todd Meyers, a FirstEnergy spokesman. "We all came to an agreement that people were comfortable enough with to sign and forward along to the PSC for recommendation."
Well, obviously if WVCAG refused to sign on to the settlement and has now filed an Objection to it, then ALL parties didn't come to an agreement. Or maybe WVCAG was ostracized from participating in the settlement? Or maybe WVCAG is just not "people?"
Qu'est-ce que c'est, Crapaud, qu'est-ce que c'est?
Don't you just love it when the mouth-breathers at FirstEnergy explain themselves into a corner?
On August 15, FirstEnergy filed its first monthly statistical report. The Commission had previously ordered FirstEnergy to submit monthly data for at least a year so they could keep an eye on these shysters.
In its first report, "FirstEnergy stated that its data 'excludes annual meter reading accounts up through 11 months'.”
Now the Commission has ordered FirstEnergy to explain just what an "annual meter reading account" is, and provide statistical data on these accounts as well.
Shhh... if you know why the Commission did this, keep it to yourself. I want to see if FirstEnergy's brain trust can figure this out on their own...
Too bad stupidity isn't painful. Ha ha ha!
Risk. The word has many meanings in the utility industry, but it all boils down to undertaking risk in order to provide a dividend for shareholders. Sometimes the riskiest exploits produce the biggest return. An investor owned utility's loyalty to the shareholders who continue to fund management's lavish lifestyle overrules any loyalty to the customers being provided a necessary service at a reasonable price.
The competition for investor dollars fuels a ratcheting up of risk in order to provide bigger and bigger returns.
Where does it all end?
From a regulatory perspective, risk means not being permitted to undertake certain actions that will increase income of the regulated company. The purpose of regulation is to police the actions of private entities operating in a monopoly construct to ensure that customers are provided fair service at a reasonable cost. Regulators are the final decision-makers on utility proposals, and also serve as creator and enforcer of the rules regulated utilities must follow. Regulators are supposed to be protecting consumers, while also allowing the utility to make a reasonable profit in order to continue to operate the system.
Everything an investor owned utility does in a regulated environment is viewed through the lens of financial risk.
Should the company file a rate case? What's the risk that the return will be lowered? What's the risk that some costs may be disallowed?
Should the company sell assets to itself? What's the risk that the price will be adjusted downward? What's the risk that the transaction will not be approved?
Should the company break the rules? What's the risk that the company will be caught? If caught, what's the risk that the company will have to pay out more than it made while breaking the rules?
Regulatory risk really isn't risky at all.
Investor owned utilities make huge investments in buying the favor of their regulators. It's just one great, big utility club, where the regulators and the regulated interact daily, convincing each other that their actions benefit consumers. Consumers are not allowed to join. Regulators and regulated will find themselves together again and again, therefore they develop a cozy working relationship.
But it's an unbalanced relationship. While the regulator may think they're all sitting at the same table, they're not. The investor owned utility has nothing to lose. And the regulator's gun is loaded with blanks. An investor owned utility has access to a bottomless pool of consumer funding to appeal any regulatory decision it doesn't like, endlessly. Regulators have access to a very limited supply of money for such things, therefore, a utility can simply outspend them until the desired result is achieved. In many instances, it's not even worth trying enforce the rules for the regulator, and they may cave in before it even gets to this point.
This is a settlement. Ideally, in settlement, each party gives up something in order to create a balanced outcome. However, an investor owned utility will never enter a settlement with an equal number of eggs in its trading basket. Its rate case or asset transfer is thickly padded with things to give away that the utility doesn't really care about. The regulator's basket has less eggs at the beginning, therefore, each egg that's given away by a regulator means someone goes hungry. The regulator comes out with one egg, and the utility comes out with a dozen. This isn't a fair or balanced outcome.
And it's even more skewed when a utility gets caught breaking the rules. Rules are meant to be followed, not partially followed, or mostly followed, but completely followed. There should be simply no eggs in the regulator's basket to give away. It's impossible to break half a rule. When a utility breaks the rules for profit and gets caught, it's egg basket is full. A utility can give away some of the profits it made breaking the rule, while the regulator can only give away the rule and violate the trust of consumers, who expect that regulators enforce rules.
When a regulator begins negotiating a settlement in a rule breaking case, they are giving away the ability to break the rules without consequence.
How do you think the investor owned utility views this?
1. Chances are we won't get caught and we'll get to keep all the profits we made breaking the rule!
2. Even if we do get caught, we'll only have to give back part of the profits we made breaking the rule!
3. For every illegal action regulators catch, there are hundreds more where we'll never get caught!
4. Following the rule - zero profit. Breaking the rule - priceless!
Breaking the rules is very profitable for investor owned utilities, therefore they will keep doing so until the cost of punishment is higher than the retained profit of breaking the rules. Breaking the rules is low to no risk.
Filing a rate case, or proposing a ridiculous, overpriced sale of assets to itself, is also low risk these days. Lazy, captured regulators and ineffectual consumer advocates, who are more interested in maintaining relationships with utilities and their lawyers than with the consumers they are supposed to represent, are failing you.
Those who stand for nothing, will fall for anything.
Enough is enough.
West Virginia Citizens Action Group, the only party to refuse to sign FirstEnergy's Harrison settlement, filed an Objection to the settlement with the PSC this afternoon. The Objection asks that the Commission "...disapprove the proposed settlement and that the Companies’ petition be denied in its entirety."
WVCAG is the only party that didn't cave in and go along with that sugarcoated flashing blue light special settlement the others were pressured into signing.
What? Pressured? That's what I think. Some people accuse me of having too much imagination, but if you pick up a crayon and start connecting the dots, a perplexing picture begins to form.
The public has been increasingly dissatisfied with the actions of the WV PSC over the past several years. It's not just some obscure agency nobody has ever heard of anymore. High profile rate cases, the PATH project, and now the intra-company coal plant sale cases have promoted the WV PSC to common dinner table talk. As well, public anger over the FirstEnergy/Potomac Edison billing investigation has raised the ire of legislators. The WV PSC, with one expired Commissioner and another re-appointed but not yet confirmed by the Senate, does not want any nasty utility public relations poo stuck to its shoe. Any decision it would have made on FirstEnergy's Harrison transfer (other than a denial) would have produced more citizen and legislative scorn, possibly turning into the straw that broke the camel's back. So, the Commission slunk out of the emergency exit by not having to make a real decision. Because the case was "settled," blame for what went wrong can be foisted off on the settling parties.
The Consumer Advocate will be retiring at the end of next month. A new one will be appointed by the Chairman of the PSC (let's not even worry about what a very stupid idea this is right now!) Any consumer advocate division employees who may be hopeful of moving up to the top spot and filling the vacancy would be beholden to pleasing the Chairman right now. Perhaps one way to cement the Chairman's approval would be a willingness to divert public anger from the Chairman (who doesn't need anymore public disapproval before his re-appointment is confirmed).
Once the PSC staff and Consumer Advocate rolled over for FirstEnergy, the rest of the parties just went on a feeding frenzy to pick up what stray crumbs they could (with the exception of WVCAG, who exhibited good, old fashioned ethics).
Maybe I just think too much... or maybe I just know too much. Anyhow, that's my theory of why this happened.
But... here's something else to think about!
How did a proposal that FirstEnergy said would raise your electric rates 6% settle for a 1.5% decrease in your rates?
The settlement changed the amount of the $1.1B purchase price consumers will pay by requiring Mon Power to book a $300M+ impairment for a portion of the purchase price. The cost ratepayers will have to pay is $795M. An impairment is an amount that comes out of shareholder dividends, instead of out of your pocket.
In addition, the $25M credit for the included sale of Pleasants will be amortized over the first 16 months of new rates, which causes an artificial and temporary rate reduction that will expire at the end of 2014. Without this Magic Math, there would be no "decrease."
This resulted in a yearly surcharge (rate increase) of $113.4M.
However, this rate increase was offset by a $129.5M yearly credit that FirstEnergy will include in their projected rates through the end of 2014. This $129.5M is based on projections, not reality. At the end of 2014, this projection will be trued up with actual expenditures and the resulting shortfall will turn into a rate increase. From the look of FirstEnergy's unrealistic projections (cooked for the transaction proposal to show what FirstEnergy wanted them to show), it's going to be a BIG rate increase of a magnitude never before experienced.
The difference between $129.5M and 113.4M is only $16M. While $16M sounds like a lot of money, it's a very small margin for error at a company whose annual coal costs are estimated at well over $500M and whose annual revenue from off-system sales of Harrison's excess electricity are nearly $300M. If FirstEnergy's calculations are off just $16M, then your rate decrease completely disappears. If they're off by more than $16M, the rate increase starts.
In addition, as the proud new owner of a creaking, old coal plant, you're now fully responsible for the expected $244M cost of retrofits to comply with EPA rules. FirstEnergy opted to close other coal plants rather than spend their own money to retrofit, but in this case, they're spending YOUR money. This $244M cost will also translate to more rate increases.
So, enjoy your temporary "rate decrease," because the rate increase you're going to receive on January 1, 2015 is going to be a shocker. But, Chairman Albert hopes his re-appointment will be safely in the bag by that time and that you all will have forgotten all about this crappy deal he handed you.
About the Author
Keryn Newman blogs here at StopPATH WV about energy issues, transmission policy, misguided regulation, our greedy energy companies and their corporate spin.
In 2008, AEP & Allegheny Energy's PATH joint venture used their transmission line routing etch-a-sketch to draw a 765kV line across the street from her house. Oooops! And the rest is history.