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Transource Continues To Waste My Money As Hearings Continue

1/11/2020

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There.  I fixed the headline for this article published recently.

There's absolutely no good answer to why Transource feels the need to award a construction contract for a project that hasn't been approved in either state in which it is proposed to be constructed.  No good reason at all.

Maybe it's a PR stunt?  Perhaps Transource wants to tell the PA PUC in its upcoming status report that it has awarded the contract for the project to a "Pennsylvania company" and created jobs in the state?  Otherwise, it makes no sense at all, since Transource cannot put any shovels in the ground until it has its certificates.  But what may be happening is stockpiling of materials and final engineering work for a transmission project that will never be built.  Transource continues to spend buckets of ratepayer cash on their dead project.  Every dime Transource spends will have to be repaid by electric ratepayers assigned cost responsibility for the project by PJM, plus annual return more than 10% until the sunk costs are paid off.  We're talking tens of millions of dollars repaid over perhaps a 5-year period when the project is abandoned.  Actions like this are why everyone's electric bills are so expensive.  We've only recently finished paying off the quarter billion dollar sunk costs of the failed PATH transmission project that was never built.  Gotta keep those dollars coming in for abandoned projects!

So, who got awarded the contract for a project that will never be built?  Harlan Electric, which is supposed to be based in Harrisburg.  But it's also based in Massachusetts and Michigan, and builds projects all over the place.  If you think all the folks working on the project for the company are based in Harrisburg, you may not be correct.  How many workers would be imported to construct the project?  If all workers were local to Harrisburg, there would be no need for hotels with group rates, right?  The workers could simply go home every night.  Instead, Transource wants to hear from local hospitality folks who want to bid on supplying restaurants, catering, venue rental, and hotels with group rates.  Sure sounds like support for a traveling minstrel show of transmission workers.

But it seems there is one company local to Pennsylvania (although not in the project area) that has been awarded a subcontract, according to the Waynesboro Record Herald.

Harlan Electric representatives are securing subcontractors and will be working with local contractors such as Newville Construction of Newville.
So, Harlan is just a general contractor who will be subbing the actual work out to other contractors?  My, my, that sure sounds cost efficient!  Everybody gets a piece of the ratepayer cash pie!

And where have we heard the name Newville Construction before?

I think it first came up in this video, where a farmer appealed to other farmers in the project area, telling them that the transmission project won't be a burden and that the construction company would leave their property in better condition than they found it.  The farmer, Jim Shuster, didn't mention that he is also the President and Founder of Newville Construction.  Of course, that's not relevant, right?  It must have just been a happy accident that a company he owns, in addition to his farms, ended up with a construction contract, right?  Of course, Jim wasn't paid "a plugged nickel" for his work in the video.  That's what he said in this article.
"Jim spoke from his perspective as the owner of Eleven Oaks Farm on his experiences with utilities and agriculture. Transource has not yet made a selection of the construction companies that will build (the line), nor has it promised work to Newville Construction." 
Shuster said that is the case. He said he was approached by the International Brotherhood of Electrical Workers to appear in the video and testify about his experience with power lines and agriculture. He doesn't understand the opposition to the power line. "I wasn't paid a plugged nickel for that," he said. "I was not promised a dime's worth of work for doing it." 
The impact on the land is minimal, he said, and his company operates under the directive to leave the land in better condition than they found it, something that has earned the company awards and praise from conservation groups. 
Transmission and Agriculture video.mp4
"We're not some Ma and Pa operation with a backhoe," he said. "We're a $30 million-a-year business." 
He is angry with some of those who oppose the power line because, he said, they suggested that his farm is a hoax. About the opposition, he said, "It's one of the most hypocritical things I've ever seen." Unless those opposed to the transmission line have their own power plant, he said, the electricity they use flows through a power line on some other farmer's property. 

"I frankly don't understand what their problem is with it," he said. 

Well, serendipity!  What a fortuitous event!  What are the chances?  Wish I could take those chances to Vegas!  Jim wasn't promised a thing in exchange for making that video.  He only did it as a favor to the union.  And by a rare stroke of good luck, he ended up with a contract to work on the proposed transmission line! 

I wonder if Jimmy Hoffa knows anything about this?  Maybe I can contact him via seance?  The union is surely involved somehow.
“Anytime jobs are created, it’s a win,” said Bernie Kephart, business manager for IBEW Local 126. “Our workers earn family-sustaining wages building the infrastructure that supports our daily lives. We’re proud to build infrastructure that saves customers money and reinforces the grid against power outages in Maryland and Pennsylvania.”
“We support clean, safe and affordable power,” said William C. Tipton Jr., business manager/financial secretary for Maryland IBEW Local 70. “Any conversation around energy comes to a quick halt if we do not have the transmission infrastructure to transfer that power to all who need it.”
Wait a tick... it has not been determined that the IEC will save customers money or reinforce the grid against power outages in Maryland and Pennsylvania.  It also has not been determined that the IEC would provide clean, safe and affordable power.  The only ones who can make this determination are the Pennsylvania PUC and the Maryland PSC.  Neither one of these agencies have made their determination yet.  There's still a long slog ahead, and there's still opposition from state agencies who protect customers, as well as opposition from landowners in the project area.  The jury is still out.

Jobs aren't everything.  Creating jobs just for the sake of having jobs is a waste of money.  My money, your money, electric customer money.
Local companies contracted by Transource also completed much of IEC’s geotechnical survey work, which concluded last year.
Right... and much of that money was wasted when the original eastern route was completely scrapped in favor of building the connection on existing right-of-way.  It's not like using existing infrastructure was an idea that came out of the blue after the work was completed.  Opponents had identified existing resources and asked to use them from the very beginning, before one penny was wasted on geotechnical work.

Waste, waste, waste.

But, hey, now that Transource has awarded all its construction contracts, perhaps we can get a better feel for how much this project is actually going to cost?  With all these contractors, subcontractors, and hotel venues, maybe it would cost more than has been estimated?  There's no cost cap on this project.  The more AEP (Transource) spends, the more it makes!  Perhaps that's why they're still moving full-speed ahead on a project that has stalled in the regulatory process?  Maybe they just want to pad their investment so they can recover it from us with interest?

Stop wasting my money, Transource!
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Central Maine Power Dons Clown Suit For Failing Public Relations Effort

12/4/2019

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CMP's New England Clean Energy Connect transmission project is doomed.  And it's getting pretty expensive.  Good thing there's a clown!

Foster's reports that CMP and its foreign-owned parent company, Avangrid, thought it would be smooth sailing for NECEC.  It's been anything but smooth sailing.

Maine doesn't want this project!  The people of Maine don't want a new transmission line through one of their last remaining unspoiled wild areas in order to serve Massachusetts with green-washed "new" power sources.  And they're not giving up.

Grassroots groups have been hard at work collecting petition signatures to put the issue on the ballot in 2020.  CMP is feeling so threatened (and sure that the grassroots groups will succeed) that it recently kicked off a political action committee with $500,000 from Avangrid.  This anemic PAC is intended to sway the vote in favor of the project.  Send in the clowns!

It's not off to an auspicious start.

There's a hysterically bad Facebook group.  It started off with something like 20 followers, but has now magically bumped its followers up to just over 500.  I'm not buying it.  There are places you can purchase fake Facebook followers.  Cha-ching!  How much did that dip into the Avangrid fund?  How come I think CMP bought itself some followers?  Just take a look at their Facebook page!  There are hundreds of comments opposing the transmission project on every post.  I haven't seen any comments supporting the project.  People are laughing at this pathetic Facebook foray.

And then this turned up today:
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CMP has hired a casting director to audition some people that merely "look" like real people from Maine to star in upcoming advertisements for the project.  It even wants some cute kids; to pull on your heartstrings and cry about how grassroots opposition to NECEC is stealing their dreams and their childhood.  (No mention of how being exploited in a TV commercial contributes to this problem).

Seriously?  Now that everyone can see that CMP is casting ACTORS for its advertisements, nobody will believe them.  The "Plain Folks" propaganda device only works when the audience doesn't know they're actors!

You know how it is when you see some fading celebrity hawking Ginzu knives and age-spot cream on Infomercials at 3 A.M.?  Yeah, that.  That's about how believable these expensive ads are going to be for the public.

Somebody is trying really hard to employ the seven common propaganda devices to this PAC's campaign.  Cha-ching!$!  CMP is dumping a lot of money into an effort that doesn't stand a chance.  And it looks like their PR company is bumbling badly.

How much profit must be in it for Avangrid if it's willing to dump this kind of money into propping up its doomed project?  This project has to be crazy over budget at this point.  Where's the money coming from?  I do hope someone is paying attention to CMP's rate filings to make sure they don't have any happy, little, accounting accidents.

Meanwhile, grassroots activists are making fantastic headway in their petition drive.  It's awfully nice of CMP to provide them with these expensive comedy breaks... because laughter is always what makes life worth living.  Carry on, folks!
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AEP Snows City of Dublin About Transmission Project

12/4/2019

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Where there's new transmission, there's always opposition.  The crafty utility manipulates the community to fight about where to put the transmission line, not whether to build it in the first place.  Yay, you, AEP!

It was reported that residents of the Ballantrae community in Dublin, Ohio, stormed a city council meeting recently.  The City wants to re-route or bury the project, but seems to have blindly accepted its necessity.
PJM Interconnection -- a regional transmission organization that coordinates the movement of electricity in 13 states including Ohio -- mandated AEP build a new line in Dublin’s West Innovation District based on energy forecasts and projections, said Dublin Public Affairs Officer Lindsay Weisenauer.

Joe Demaree, a project outreach specialist for AEP, said Dublin residents and businesses -- and future residents and business -- would require more electricity. The summer of 2022 is when projected electrical capacity necessary to support businesses and residents would outpace existing infrastructure, he said.

The proposed transmission line, Demaree said, would fix that problem and avoid putting AEP’s power grid in jeopardy.

Mandated?  Isn't that a pretty strong word for a project AEP requested that was never approved by PJM?

This project was one on a long list AEP presented to PJM under its M-3 process.  Under the M-3 process, the Transmission Owners are responsible for planning a series of meetings with stakeholders specific to system needs, solutions and projects to be included in the local plan. PJM's role is to facilitate those meetings. The PJM Board of Managers do not approve Supplemental Projects.

Got it?  Not approved.  Simply accepted.  Acceptance does not equal mandate.

And why does AEP believe this project is needed?  Here's AEP's actual description of need for this project presented to PJM:

AEP has received requests for increased demand in the Dublin, Ohio area. Analysis shows Bethel - Sawmill 138 kV will be a constraint. Consequent inspection identified clearance violations along the Bethel - Sawmill 138 kV line. AEP has de-rated the thermal capacity of the line to mitigate potential safety issues. Brookside-Sawmill -> N-1-1=127%, N-1=117% Bethel-Brookside -> N-1-1=102%, N-1=92% (N-1-1: Bethel - Roberts 138 kV + Davidson - Roberts 138 kV) AEP believes that the loading issues exist today due to the recent 30% de-rate of the line. Newly connected customer loads are scheduled to ramp up, significantly contributing to area thermal concerns.

The Dublin-Sawmill 138kV circuit will experience loading of 116% under N-1-1 conditions involving the loss of Bethel-Davidson 138kV & Davidson-Roberts 138kV circuits. With load growth in the area, we anticipate this line to overload starting in 2022. AEP-Ohio has requested a third 138kV source to Dublin station to maintain acceptable reliability levels for the load at risk. Dublin Station serves 75 MVA of peak demand with minimal load transfer capability. Dublin station serves some critical loads. Newly connected customer loads are scheduled to ramp, significantly contributing to area thermal concerns.

Newly connected customer loads.  Requests for increased demand.  Some new customer or customers that use an inordinate amount of power are expected in Dublin.  New manufacturing that will provide new jobs?  Or new data center that will provide few jobs?  I dunno, but it's a big customer or customers.  This is what is driving this request from AEP... their anticipation of increased load.  Will it actually happen?  Maybe the City of Dublin can shed some light on this.

Because it was expecting this new, big customer, AEP decided to inspect its existing line.  And, wouldn't you know it, there are some previously neglected clearance issues!  As in, the existing line sags too much during high load and hot weather.  Ut-oh!  AEP took it upon itself to save the day by de-rating the line 30%.  This means that the maximum loading of the line was reduced by 30%.  And, wouldn't you know it, de-rating the line caused overloads!  Now there's not enough capacity available to serve anticipated load!  And, wouldn't you know it, utilities like AEP make money building things and collecting generous returns on their investments over their useful life.  Serendipity!  Dublin needs new transmission!

PJM has nothing to do with AEP's request.  AEP concocted this solution.  PJM didn't say "boo" one way or the other.  Hardly a mandate.

Now the City of Dublin is in a quandry... should it spend city funds to make AEP bury the transmission line, or route it somewhere else?  Are the drawbacks of this new line too much for Ballantrae, or other residents of Dublin to bear?  Where should they put the transmission line?

Does Dublin really need this transmission line?  Are there other solutions?  These are the questions Dublin should really be asking.  PJM simply won't care if AEP doesn't carry out its current plan.  The lights aren't going to go off.  There are always alternatives.

Looks like AEP has a community opposition wildfire igniting.  Just because the City swallowed AEP's fish story about mandates hook, line and sinker doesn't mean the people who would have to live with the new transmission line will.

It's never about where to put it, it's about whether to put it.  Before spending millions of dollars of taxpayer funds, the City of Dublin has a little more investigating to do.
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Transmission Tax Credits Are Dumb

11/23/2019

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A bunch of schemers who profit from building transmission have announced their "Statement of Principles" for overbuilding transmission.  Big deal.  The "principles" are just so much glittering generalities, such as:
  • Policy makers in the United States and its several states and municipalities and in Canada and its several Provinces, Territories, and municipalities are urged to review and improve the regulation of the infrastructure that comprises the electrical grid, to (1) streamline processes governing economic and environmental reviews of projects where possible, (2) promote economic and energy efficiency, (3) deliver important environmental benefits, and (4) ensure equitable sharing of the cost of needed infrastructure, as appropriate;
  • As applicable, the Federal Energy Regulatory Commission, the U.S. Department of Energy, and state economic regulators should assess the need to improve upon and revise regulatory processes and corresponding regulations and policies governing the planning and cost allocation of high voltage electric transmission, balancing the public's interest in expedition, cost savings, care of the environment, and an equitable sharing of burdens;
  • U.S. States and Canadian Provinces and Territories that adopt renewable electric generation (fuel) requirements for their domestic utilities and other generators should, at the same time, recognize and take into account the extent to which such policies necessitate the development of additional transmission lines and/or the deployment of advanced technologies;
  • Canadian and U.S. industry leaders and public policy makers must ensure that investment in grid infrastructure in both countries responds effectively to threats from extreme weather and cyber intrusion.
"We want new laws that gut regulation and make it easier for us to do whatever we want."  Why use 1,000 words when 18 will do?  Really, there's nothing in the "principles" that a good lobbyist couldn't cure.

These "principles" were supposedly cooked up at the first "International Summit on the Electric Transmission Grid."  Apparently, it was a frothy good time! 

"This will be a frothy presentation of new planning approaches driven by new technological developments."

WTF?  Frothy?  Who wrote this garbage?  An intern who moonlights at Starbucks?

All the usual suspects were there...  trade groups, unions, and environmental organizations.  These guys will support anything that makes them money or checks a box on a grant deliverable.  Doesn't make it necessary or needed.  Oh, c'mon, quit pretending that your money making goals benefit anyone other than yourselves.

Sounds like this "summit" was a bit of a joke and the only guys there that weren't biased towards more transmission as a money maker or grant deliverable made fun of the other speakers.
“The turf wars and feuds between RTOs are legendary; MISO and SPP, these people, for reasons that are often lost to the mists of time, they don’t really like each other that much, and they don’t work well together,” Skelly said. “So the notion that FERC’s going to pass something that says, ‘Hey, you guys, coordinate and work together’ … come on. It has not happened, and it’s not going to happen.”

In a later panel, MISO President and COO Clair Moeller disputed that, saying, “I’d submit we don’t actually have a planning problem. We have an objective problem. The reason we don’t get the answers that everybody agrees with is that people’s objectives are different.
“Lanny and I had a fistfight in the bathroom because RTOs don’t get along well,” he joked, referring to Lanny Nickell, SPP senior vice president of engineering, who was in the audience. “Well, that’s simply not true. The simple fact is the objectives are different.
Making crap up... and being called out on it.  Way to go, Mikey!  RTOs are set up to serve their own regions.  They're not set up to provide benefits for other regions.  Just because Skelly failed to find any economic need for his interregional transmission projects doesn't mean there's a problem with the RTOs.  There's just a problem with Skelly.  He keeps trying to pin his own failure on everyone else.

Skelly also had this terrible idea:
Skelly also described the confusion that state regulators have to endure when being pitched multiple interstate lines. “We need policy mechanisms so that the RTO shows up and FERC shows up. Somebody needs to show up from some sanctioned body to say, ‘Yes, this makes sense.’”
But FERC commissioners “hate telling state regulators what to do,” Gensler said. “That is a fate worse than death for most FERC commissioners.”
FERC Commissioners hate telling states what to do because they have no authority or jurisdiction to do so.  It doesn't matter what FERC or the RTO thinks about a transmission project.  The state doesn't care.  Its regulators are following state laws and policy.  In fact, the heavy handed interference of FERC and RTOs in state regulatory proceedings can have the same compelling effect as your mother suggesting you wear a hat and boots to school when you're a teenager.  It inspires secret rebellion for rebellion's sake alone.

Lots of "formerly" important people were there, such as former DOE Secretary Ernest Moniz, who got all excited reminiscing about the Paris climate change thing and an "absolutely beautiful" attempted rape of Arkansas.
“For the United States, the integration with Canada, and the opportunities for getting additional carbon-free electricity is absolutely essential” to reaching the targets under the 2015 Paris Agreement on climate change, said Ernest Moniz, former secretary of energy under President Barack Obama. “We have to get the infrastructure to support it.”

He talked about “an absolutely beautiful case” under Section 1222 of the Energy Policy Act of 2005, Clean Line Energy Partners’ Plains & Eastern Clean Line. “It was a beautiful example to implement, and the only problem was called ‘Arkansas.’”

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Maybe it's the hair?  Why didn't Arkansas just submit to Clean Line's advances?  Why did Arkansas think it had any rights to say "no?"  Next thing you know, Arkansas is going to start smoking cigarettes and thinking it should have the right to vote!

But maybe this was all about something else...
As a potential solution, Skelly pointed to Sen. Martin Heinrich’s (D-N.M.) announcement that he would introduce bills to create an investment tax credit for “regionally significant” transmission projects and to direct FERC “to improve its interregional transmission planning process.” Heinrich, however, has been introducing similar legislation since 2015 to no success.
Oh, right, Martin Heinrich, legislative utility pet.  This guy has more electric utility and energy company and environmental group political donors than any fossil fuel company I know.  He could make a Koch brother blush!

But, as RTO Insider tells us, Heinrich's legislation is rarely successful.  Thank goodness for that!  Especially because Heinrich's new "idea" that came out of this ridiculous transmission-lovin' circus is completely unworkable.
“Where this is right now, I have floated this with people across the industry who have done this type of work, and they have said it would make a real difference,” Heinrich told E&E News in a brief hallway interview.
Right.  All the folks at his Transmission Summit never look their gift horse in the mouth.

So, what makes this idea so bad?
Heinrich said the general framework of his bill would enable an investment tax credit for transmission development that meets a “regionally significant” threshold.
Such an incentive, he argued, would represent a more cost-effective way to help promote transmission development than other measures, although the New Mexico Democrat admitted he’s still working out the exact bar for how much the credit would be worth and what projects would qualify.
The need for additional transmission lines to help move power from rural outskirts to more heavily populated corridors has increasingly come to the forefront of energy planning and the push to add more renewable energy onto the grid.
“It could potentially be a game changer,” Heinrich said. “We are going to have to build a lot more transmission to have a completely green grid. You have to be able to move those electrons from where they are generated to where they are used.”

How are we going to define "regionally significant," and who is going to make that determination?  Let's face it, your real purpose is to build transmission for renewable energy.  But the electric transmission grid is "open access" to all kinds of energy, and it is completely impossible to separate "clean" electrons from "dirty" ones.  An electron is an electron.  Any tax credits for transmission will also support "dirty" energy.

As well, lack of investment isn't the problem.  A number of investors wasted over $200M (that's two hundred million dollars!) on Clean Line Energy Partners and never recouped a dime.

Heinrich envisions this working similar to the federal production tax credit for wind energy, where energy produced generates tax credits.  Except we're doing away with the PTC.  It expires at the end of this year.  Why would we need a new tax credit for transmission?

Especially when FERC already administers a generous transmission incentives program that awards all sorts of financial benefits to transmission owners.  At least those incentives are paid for by the users of the transmission in question.  One of the first principles for cost allocation is determination of benefits.  The cost of transmission shall be paid for by those who benefit from it.  Under Heinrich's brilliant idea, all the tax payers in the U.S. would pay for transmission that only benefits a handful of users.

Houston, we have a problem.  This idea is one of the dumbest! 
That infrastructure has hit hurdles, both political and regulatory, that have added years and millions of dollars to development, resulting in the abandonment of more than one high-profile transmission project.
An example is the proposed Plains and Eastern Clean Line project, a $2.5 billion, 705-mile transmission line from Oklahoma to Tennessee to deliver up to 4,000 megawatts of wind electricity. It stalled last year after running into individual state permitting problems.

And what do federal tax credits do to solve state siting and permitting problems?  Actually, nothing.  Less than nothing, because a state is likely to reject a project that is made more costly through added incentives.

Dumb, dumb, and dumber!

What is the solution?  Building renewables closer to load as distributed generation.  No transmission needed.  Ratepayers will save a bundle while the energy supply gets cleaner.  But then again, it wasn't called the Frothy International Distributed Generation Summit.  And none of those people donated to Heinrich's political campaigns.

No matter how badly these people want to overbuild transmission, they will never be successful.  We simply don't need it.  There are much better ideas!
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Public Citizen Slapped Down by FERC After Filing Another Frivolous Complaint

10/20/2019

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It was inevitable.  FERC slapped down another one of Public Citizen's frivolous complaints on Thursday.  What a complete waste of time and money.  And I'm not talking about Public Citizen's time and money, I'm talking about YOUR money wasted both by FERC evaluating the complaint, and PJM having to spend time responding to it.  YOU paid for that.

Public Citizen was complaining that PJM was making political contributions and lobbying on the ratepayer dime.  Sounds awful, right?  However, it was nothing but a trumped up cloud of innuendo completely disengaged from FERC accounting policy and precedent.  Like much of Public Citizen's FERC work, it was just crap on a self-aggrandizing bun of politics, liberally smeared with ignorance sauce.  But, FERC is hard, you say,  impossible to figure out, and therefore Public Citizen's effort was honest.  No, it's not.  I'm not even a lawyer, and I managed to figure out FERC.  Sure, it took a lot of effort and time, something Public Citizen doesn't seem to want to invest, preferring its drive-by and dump strategy of being a persistent pain in FERC's ass.  Fabulous.  Whatever.  But it's costing ratepayers a bunch of money responding to this unfounded crap.

So, why was Public Citizen's complaint denied?  It claimed that PJM had made payments to both the Republican Governors Association and the Democratic Governors Association.  Said associations being political associations therefore made the payments campaign contributions, according to Public Citizen.  PJM answered that the payments were for membership in the associations so that PJM could attend association functions and interact with state officials to educate same.  It's pretty cut and dried and rooted in precedent that's at least 15-years old.  This particular argument has been done and overdone in ISO New England, 117 FERC ¶ 61,070 (2006).  Regional transmission organizations may recover their informational and educational costs, even when it enters the realm of politics.  A court has found such expenditures reasonable given the “potential impingement of government action on all stakeholders” and the need for legislative access to information regarding RTO activity.  RTOs enjoy this status due to their lack of a profit motive.  RTOs are profit neutral.  There's no way an RTO can put extra money in its pocket through political activity.  In FERCenese, "...because an RTO lacks a profit motive, it is easier to see that the ISO/RTO is pursuing activities that benefit its ratepayers, when the RTO seeks recovery of costs associated with state policy monitoring." Agree with it or not, it's set in stone.  A lightweight like Public Citizen has no chance in hell of overturning it.

Public Citizen also whined about money paid to lobbying companies.  FERC found the expenditures were related to educational and informational activities and therefore recoverable.

...the Commission permits RTOs to recover expenses related to RTO informational and educational efforts. Further, in affirming the Commission’s finding that ISO-NE’s external affairs expenses were recoverable, the court in Braintree explained, “it seems eminently reasonable to encourage legislature access to such an informational resource . . . [and] allowing recovery of [ISO-NE’s] costs in monitoring legislative activity, so that it may consider how such activity might affect its operations, appears quite reasonable.”
The only request Public Citizen made that could hold a tiny bit of merit was asking that PJM's political activities be publicly posted so that they may be monitored by stakeholders.  Sunshine is a lovely thing!  However, the Commission slapped that down too, saying that PJM's finance committee already combed through these expenses to make sure they were recoverable and that we should trust them.  I'm not so sure about that, but it may have been more about Public Citizen's approach that caused FERC to shoot the messenger.

Another federal energy legal gaffe by Public Citizen comes to a close.  Public Citizen published a whiny press release full of drama that no news outlets bothered to pick up, although a couple had run earlier articles touting Public Citizen's complaint.  Blah, blah, blah... and then there's this:
FERC-regulated industries should understand, however, that FERC’s decision does not mean that all bets are off. The commission appears to acknowledge that ratepayer funds may not be used for political contributions. Unfortunately, however, the commission bought the assertion that the pervasively political governors’ associations are engaged in nonpolitical educational activities and that PJM’s payments related solely to those nonpolitical purposes. Utilities shouldn’t be misled into thinking they have free rein to use ratepayer funds for partisan political purposes.
Oh, for goodness sake!  No utilities think that.  They know better (much better than Public Citizen, apparently).  Public Citizen acts like their actions here set some sort of precedent prohibiting the recovery of political expenditures.  That precedent has been in place for more than 50 years!  It was most recently enforced in Opinion No. 554 issued in 2017.

Public Citizen fails to understand the distinction between RTOs and utilities that FERC made in its order denying its complaint.  Although an RTO may technically fall under some definitions of "utility," they're not actually a utility.  They don't own any utility infrastructure, they merely operate the infrastructure of real utilities.  Real utilities have profit motives that can be satisfied through political activities.  RTOs do not.  All RTO money comes from ratepayers.  They have no other source of funds.  There's no place to put any profits.

Utilities are already prohibited from recovering the costs of their political activities and rejection of Public Citizen's frivolous complaint didn't change that one bit.  It's been tried before by much better lawyers than Public Citizen, based on the same precedent, and it failed.  Spectacularly failed.  No utility is going to use that decision as precedent to say that they believed FERC gave them permission to collect political activity costs from ratepayers.  Honestly, Public Citizen's hubris is stunning.

Why does this matter?  Because Public Citizen has also been engaged in a continual whine that FERC establish an office of the public advocate and provide taxpayer funding to "public interest organizations" like Public Citizen.  They want to be funded by someone else to do even more of this worthless, costly filing of frivolous complaints.  I object.  I spent my own time and money on a successful FERC complaint.  Nobody gave me one thin dime for what I did, however PJM ratepayers received more than $20M in refunds.  I never asked for money.  I did what I did because it was the right thing to do.   And I found that utilities (not RTOs) actually DO wrongly recover the costs of their RGA and DGA memberships and lobbying expenditures.  PATH was ordered to refund those to ratepayers, however even though utilities should be on notice as a result of that decision, I'm pretty sure they still do it.  They do it because nobody is minding the store.  FERC does not normally audit utility rate informational filings, and other utilities and state agencies don't have the expertise or funding to do it.  Utilities get away with it all the time because no one investigates and challenges them.  If, perchance, they do get the hairy eyeball from FERC, a customer, or ratepayer advocate, the utility simply claims it was a mistake and makes a refund.  This game works because the chance of anyone actually discovering the utility "mistake" is slim to none and definitely worth the risk to the utility, who fattens its own bottom line the majority of the time.

Perhaps Public Citizen should spend more time investigating the political expenditures of utilities, instead of taking the easy road of making off the cuff complaints on rate matters it doesn't understand in order to grandstand for the media?  They could actually save ratepayers buckets of money and do something useful for a change.  In no instance should the public, or ratepayers, financially reward Public Citizen for this counterproductive, wasteful behavior.
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Big Wind Scheme Shifts Costs To Ratepayers In Order To Keep Costs Low

10/17/2019

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I like chocolate.  It makes me happy.  When I'm happy, everyone else is happy.  Therefore, providing me with chocolate provides a benefit to others and so they shall pay for my chocolate.

What?  You think that sounds stupid?  Of course it's stupid!  But it saves me money on the cost of chocolate.  The same could be said for big wind's effort to shift the costs of connecting new wind generators onto captive ratepayers that don't need the "benefit" of the wind project, or expanded transmission to serve it.

It's subtle, but I picked it up a while ago, and the fun appears to be only beginning with the latest big wind scam.  North Dakota Public Service Commissioners were recently the targets of this scam at a meeting reported in the media.
The topic came up Wednesday in a discussion involving the Public Service Commission and wind industry representatives, who told regulators that the issue is causing companies to think twice about locating a project in the state.
What's the problem?
Wind companies are having a tough time obtaining approval from grid operators to build new projects. Proposed wind farms -- and other types of power generators -- must first undergo an engineering study to determine their impact on the grid and identify any necessary updates to power lines or other parts of the transmission system.
Sometimes, developers learn that their projects will prompt upgrades with a hefty price tag in the tens or hundreds of millions of dollars, said Beth Soholt, executive director of the Clean Grid Alliance. The cost currently falls entirely to the developers putting forward the projects, though the upgrades can provide benefits to others.

If you plug something new into an existing system, it's going to affect the system.  The operators of the electric system require necessary studies to determine the effect of plugging in the new generator.  The cost of plugging in the generator is the responsibility of the generator, just as if you built a new home in the middle of the woods and requested electric service.  You would pay the cost of running the service drop from the nearest pole because it's only serving you.  A generator must pay the costs of connecting, plus the costs of any changes that must be made to the system to accommodate the connection and the additional amount of electricity flowing through the system coming from the new generator.  This has been standard procedure for years because it makes sense.  Generators are merchants who sell the power they produce into regional markets.  The cost of producing the power is borne by the generator.  The generator keeps all of its profits.

But now big wind wants captive ratepayers to pay for the cost of upgrades to the grid caused by the addition of new wind generators.  This can amount of hundreds of millions of dollars for a single project.  If big wind can get someone else to pay these costs, then the generator spends less to connect and can therefore discount the price of the power it sells to customers.

Big wind is trying to convince regulators that upgrades to the grid made necessary only by the connection of new wind generators provide some kind of "benefit" to ratepayers.  Because grid upgrades have to be made to connect wind, they believe they can concoct some kind of "benefit" for all grid users.  Not hardly.  It is not a "benefit" if you don't need it, and the grid works just fine without the upgrades caused by connection of big wind generators.  To do this would completely upend the way interconnections to the existing grid are paid for and shift cost from the generator to the ratepayers.  If the scheme is changed so that wind generators don't have to pay the cost of upgrades they make necessary, shouldn't we also extend that to new gas generators, new nuclear generators... even... *gasp* new coal generators?  Of course, it would apply to all.  And it would raise your electric bill significantly.  But what does big wind care, as long as they get their piece of the pie?

But why?  Because big wind is freaking out over the end of the federal production tax credit, which gives them tax credits for all the electricity they generate.  Without that income stream in the future, the price of wind is going to increase... a lot.  Big wind is looking for its next subsidy -- avoiding the cost of upgrading transmission to serve it.  It wants to shift those costs on to everyone else.

Adding insult to injury, much of the new wind generation in the queue is planned for export, however the cost of upgrading the grid to enable the new connection would be charged to ratepayers in the generation region.  The ones using the "cheap" new power in other regions would avoid the costs they would have to pay if the upgrades were the responsibility of the generator and therefore included in the price of their electricity.

Big wind's subsidy gravy train needs to be derailed.  Perhaps they think they're fooling the general public with this hogwash, but are they really fooling regulators?  Probably not, but if none of the general public objects to this nonsense, it could be just a wink and a nod away.
1 Comment

Transource + RGGI + Pennsylvania

10/9/2019

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In case you missed it, Pennsylvania's Governor recently signed an Executive Order leading to the state joining RGGI.  What's RGGI?  The Regional Greenhouse Gas Initiative is a voluntary market-based "cap and trade" program intended to limit carbon emissions.  The initiative sets a regional "carbon budget" and member states auction off a set number of carbon allowances that correspond with the budget.  All carbon emissions must be offset with allowances purchased at state auctions.  The regional carbon budget is incrementally reduced each year, shrinking the amount of carbon released into the atmosphere.  The states auctioning off the carbon allowances use the proceeds for whatever they like, such as energy efficiency programs, low-income energy assistance, or subsidies for new "clean" generators.

Does it work?  Depends on who you ask.  Some say it has reduced carbon emissions and electric prices.  Others say it has had no effect on carbon emissions and has raised electricity prices in member states.  And all opinion on the matter is political.

One thing I found interesting is that RGGI fans claiming reduced emissions and prices are giving RGGI credit for factors it had nothing to do with, namely cheap natural gas and the huge shift from baseload coal to baseload gas electricity generation.  In order to properly evaluate RGGI, you must do it in a vacuum.  Our complicated regional electricity markets don't allow such a vacuum, therefore it is truly impossible to determine whether RGGI works or not.

Another interesting tidbit is that RGGI caused emissions "leakage" to non-participating states.  If it's too expensive to emit carbon generating electricity in a participating state, the same generation can happen cheaper in a neighboring, non-participating state.

One thing unavoidable is that requiring generators to purchase carbon allowances creates revenue for a state, and that revenue creates a whole new cost for generating electricity.  Who pays for that?  Electric consumers.  Whether RGGI works to lower prices to offset the new costs gets into a lot of complicated stuff that can be used to bolster claims of success or failure of RGGI.

Pennsylvania is the biggest exporter of electricity.  Generators in the state produce much more than Pennsylvanians use.  Enter Transource.

The Transource transmission project was dreamed up to export cheap energy from Pennsylvania.  Energy in Pennsylvania is cheap because there is a surplus.  Transource will export Pennsylvania electricity to Maryland, Virginia and Washington, DC.  Maryland and Virginia import a lot of electricity, instead of generating their own.
Picture
Transource will essentially take from the land of plenty and give to the land of scarcity.  Cheap power into expensive markets.  This lowers prices in Maryland and Virginia, while raising them in Pennsylvania.  This fact was proven during state utility commission hearings on Transource's application to build its project and is no longer debatable.  It's reverse Robin Hood, robbing from the poor to give to the rich.

So, how might RGGI affect Transource's already fragile cost-benefit ratio if it is implemented in Pennsylvania?  Will it lower the amount of electricity Pennsylvania exports?  Will reductions in the amount of electricity produced in Pennsylvania raise its electricity prices?  If the price of electricity in Pennsylvania rises, will Transource actually save money for electric customers in Maryland and Virginia?  What purpose will the transmission line serve if the electric price differential it's based on evaporates?  There's going to be lots of geeks at PJM Interconnection hunched over their abacuses trying desperately to continue the charade that the Transource project serves some purpose other than to provide parent company American Electric Power with a double digit return on its investment.

The answer is a wishy-washy "who knows?"  What is certain is that the Transource project is going to cost regional electric consumers hundreds of millions of dollars in increased electric bills.  Cost = certain.  Benefit = uncertain.

Just one more reason to halt this dated project.
1 Comment

Do-It-Yourself Power Plant Proves Expensive

10/8/2019

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So, there were these people who were disappointed that they weren't selected to host a utility solar farm.  They decided to build their own.

It becomes a cute little media story when you add in some sheep lawn mowers.  However, the story gets lost there.  It was too expensive for this DIY solar power plant to connect to the grid in order to sell its product.  Farming the sun for profit maybe isn't as easy as it looks.

There's nothing stopping these folks from erecting a solar array to serve their own property.  The problem comes from building more than they need and trying to sell it to others via the electric grid.  The freight is too expensive.  I'm not sure what message this story is trying to serve?  The rules for connecting to the grid are bad?

The rules for connecting a new generator to the grid require the generator to pay for the connection and any changes to the grid made necessary to serve their generator.  Who else should pay for it?
"We felt like this is stacked against the little guy because utilities are not willing to invest in infrastructure.”
Oh, utilities!  Utilities are supposed to pay to upgrade the grid so that a new entrant generator can sell its product?  Why?  Where do you suppose utilities get the money they "invest" in building the grid?  Ratepayers, consumers, people who pay an electric bill, that's who.  So what they're really saying here is that other people are supposed to pay for the infrastructure necessary to connect their DIY power plant?  Why?  Not all of those people will even be using the power.

The correct answer is that the customers of the DIY power plant (although I don't see mention of any customers in this article) should pay the cost of connecting in their contract to purchase the power.  But that's going to make the cost of the power too expensive!  And that's why this location is not suitable for a power plant and probably why it was not selected by a utility in the first place.

Utilities do their homework before siting new generators.  The cost to connect (in conjunction with the cost that customers are willing to pay) is a big part of that homework.  They don't just build generators willy-nilly and believe that the connection fairy will fly in with a sack of gold and make connecting free or cheap.

Of course, trying to create a fairy before siting generation in inappropriate places is in the renewable generator toolbag.  No wonder these folks thought there was a fairy.  A group of "clean energy advocates" want MISO to make changes to the way it plans grid upgrades.  One of the changes they want is a re-evaluation of interconnection upgrade cost allocation.  In other words, they want ratepayers to cover some of the costs of new generator interconnections.
But stakeholders for months have been criticizing those estimates as seriously underestimating the widespread adoption of renewables. Several have said the RTO’s predictions are resulting in inadequate new transmission projects and leaving renewable developers with prohibitively expensive interconnection upgrades as system patches.
.................
That existing process is blind to the fact that many others in MISO benefit from interconnection upgrades, she said.
“We all know transmission will bring a variety of benefits to a variety of beneficiaries,” McIntire said, calling for a “more holistic” cost-benefit analysis on interconnection upgrades.

All those "benefits" the ratepayers didn't know they needed!  Because they didn't really "need" them in the first place.  The new generators need them to make money.  If generation is at a level adequate to serve load (and it is), then we don't "need" any new generators!  Add in the fact that many of the new generators being built in MISO are intended as exports to other regions.  The "advocates" want MISO ratepayers to pick up the tab for unneeded new generators that won't even serve MISO customers.  What a fairy tale!

In reality, this will just end up creating higher transmission rates in MISO while lowering the cost of new generation so that it can survive once the federal tax credits disappear.  Do they think MISO is stupid?

The only difference between the DIY power plant's thinking and that of the "clean energy advocates" is that the advocates should know better.
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Miz Tootie Sugarbush Jerks A Knot In AEP's Tail

8/23/2019

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Miz Tootie is about to pitch a hissy fit with a tail on it, y'all.  Now Miz Tootie doesn't like to speak badly of anyone, but can we just say that American Electric Power's management seems to be as lost as last year's Easter Egg lately?

Miz Tootie is referring specifically to AEP subsidiary SWEPCO's recent power issue in East Texas.  Not only did everyone's Sunday get disturbed, but the resulting gas flaring by Eastman Chemical sent neighbors into a tizzy, believing that certain disaster was afoot.  The news coverage looked like this.  Flickering lights, explosions, fire, and power outages, y'all!  Made a body want to just stick their head between their legs and kiss themselves goodbye!  How much clean Oklahoma wind power are we going to have to pay to import to offset that little environmental disaster, Miz Tootie wants to know?

And then we find out that all this ruckus was caused by "vegetation."  Someone has been shirking their gardening duty!  Or maybe AEP is just so cheap they wouldn't give a nickel to see sweet Jesus on a bicycle, since we all know that AEP doesn't trim their own trees and have to hire out to get the job done.  Why wasn't the job done?

AEP says it rained a lot and things just grew much faster than planned this year.  Now Miz Tootie is having a dilemma trying to decide who's dumber... AEP for pretending their neglect of their gardening duties caused "vegetation" to grow much faster than normal, or the news reporter who shot reels of footage of communications distribution lines buried in trees and called it plants touching power lines.  Butter my butt and call me a biscuit! 

Miz Tootie recollects something that nice Mr. Nick said during that boring investors earnings call right before AEP's Wind Catcher debacle blew up in his face.  He said that in the event that state utility commissions did not authorize collecting the cost of Wind Catcher from captive ratepayers, he would make it up by cutting the company's operations and maintenance expenses.  In other words, certain things would not get done, or would be put on the slow train to ever getting done.  Miz Tootie wonders if the trimming along this problematic transmission line might have been just such an expense?  Perhaps those lovely people at the Public Utility Commission of Texas may be eager to find out,  After all,  it looks like AEP's second attempt at importing wind from Oklahoma at ratepayer expense isn't off to an auspicious start.  It sort of looks like the other parties have substantial questions about that deal, such as what would happen if expensive transmission congestion is caused by moving all that wind (dry as a popcorn fart, don't you know) from Oklahoma to Texas.  AEP reckons that a bunch of new congestion will inspire regional grid operator Southwest Power Pool to order up a bunch of new transmission built that can be paid for by all the ratepayers in the region.  Or maybe AEP can simply build a new generation tie line and charge the cost of that to all the ratepayers who desperately need this wind power to make their bills go down.  Now Miz Tootie may not be a squattin' in high cotton power company CEO like Mr. Nick, but she knows that dog don't hunt.  Seems like any "savings" from the power generation will be gobbled up by the cost to get it to customers.  That sticks in Miz Tootie's throat like hair in a biscuit.

But not as much as AEP cutting its maintenance expenses to pay for its selfish Wind Catcher dalliance, and then visiting the hoopla it caused on East Texas.  And to add insult to injury, AEP has suggested to federal energy regulators that it would be more enthusiastic about its gardening duties if it could earn a profit from getting them done.  Right now, AEP can only pick our wallets for the expense of what it pays to tree companies to do it for them, but it would like paying others to do their gardening for them much better if they could earn a nice profit on doing so.
For example, the Commission could permit applicants to request the recovery of specified O&M expenses as capital costs for ratemaking purposes in the area of forestry and vegetation management to encourage best-in-class practices. Effective vegetation management is vital to the reliability of the Bulk Power System, as evidenced by the 2003 Blackout.*
Extreme weather conditions, whether it be excessive rainfall, drought or heat, is making traditional vegetation management more challenging while simultaneously increasing its
importance. Vegetation management is an on-going and evolving challenge facing transmission owners as extreme weather conditions intensify, which only heightens importance of vigilance in preventing encroachment of vegetation to ensure the reliability of the grid.  The NERC Reliability Standards applicable to vegetation management do not apply to facilities that are
below 200 kilovolt. Vegetation management, therefore, should be considered as one of the most critical components to maintaining system reliability, and should be prioritized in a way that puts it on equal footing with transmission investment. Best-in-class vegetation management creates long-term system benefits by reducing outages. The Commission could provide a greater incentive to adopt and implement state-of-the-art vegetation management practices by allowing transmission-owning entities to book the costs
that currently would be categorized as O&M expense as a capital cost to be amortized over an appropriate period. Treating these costs as capital would allow transmission owners to earn a return on the unamortized balances and thereby create an incentive to these entities to focus funds in this reliability-critical function. This incentive rate treatment would support the Commission’s reliability goals and benefit customers by reducing outages over the long term. By permitting applicants to capitalize certain O&M expenditures, the Commission could incent best practices for grid security and reliability that benefits all customers.

*And the East Texas issue!
Incent?  Miz Tootie's dictionary may be a bit dated, but "incent" isn't a real word!  It's grotesque business babble used to cloak the ugliness of corporate greed.  It's also a grotesque example of AEP making excuses for its own "vegetation" laziness.  If AEP wants to own and operate electric transmission lines, it has to make a firm commitment to the occasional tree trimming and quit robbing Peter (vegetation management) to pay Paul (money wasted on Wind Catcher).  Piles of ratepayer money isn't going to schedule the necessary tree trimming on its own!

And now that Miz Tootie has gotten herself hotter than a jalapeno's cootchie, it's time to cool down.  If the air conditioner works...
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Invenergy Announces "Sponsorship" of Future Farmers of America

8/2/2019

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Are we going to start making the distinctive blue jackets more like those worn by NASCAR drivers, with corporate sponsor logos stitched on the back?  It sort of looks that way... at least for 125 of the jackets purchased each year. 
Invenergy’s investment will support three of the organization’s central programs:
  • The Blue Jacket Program, which Invenergy will donate 125 signature jackets annually.
  • Career and Leadership Development Events.
  • Building out the FFA national alumni network.
Investment.  Invenergy made an investment.  Not a philanthropic gift.  Not a beneficient donation.  An investment.  Why?
More than half of Invenergy’s U.S.-based renewable energy projects are located in the same zip code as an active FFA chapter.

“FFA is important to the communities where Invenergy projects operate..." said Mick Baird, SVP of Renewable Development at Invenergy.

So, Invenergy is "investing" in something important to the communities where it wants to site wind projects.  And maybe transmission lines, too?

This reeks of indoctrination to me.  How many parents opposed to big wind and big transmission are going to pull their kids out of FFA as a result?

So, how much?  How much does it cost to buy sponsorship of FFA?  I'm not sure.  That information isn't readily available in a google search.  But I sure got my eyes burned out on a quick 10-minute attempt to find that information.

Invenergy has received $571,483,050 in federal and state subsidies since FY 2000.  That's more than half a billion dollars.  Half a billion dollars of the people's tax payments doled out to a for-profit corporation.  Of course, the government has no money of its own.  All the government's money comes out of taxpayer pockets.

Even more disturbing is the evidence cited by Federal judges in a lawsuit decided in June.  The Court found that Invenergy was not entitled to collect the millions of dollars of Section 1603 grant funds from the U.S. Treasury that it was seeking.  Under the Section 1603 program, an energy developer can apply for a grant in lieu of tax credits.  Invenergy did so for two of its wind farms.  The grant is based on the actual cost of the project.  Invenergy added a $60M "developer fee" to its costs.  The Court disallowed this fee and ordered Invenergy to make refunds to the Treasury.

And what about that $60M "developer fee?"  The Court found that it was a sham transaction.
The Court of Federal Claims held that none of the developer fees were includible in the applicants’ qualified grant basis because the fees had not been substantiated to the satisfaction of the court. The court applied as its legal basis for this disallowance, the so-called “sham” transaction doctrine applied under the tax law.
And how was it a sham?
The development agreement was a three-page document, according to the Court of Federal Claims, wherein Bishop Hill agreed to pay IWNA a $60 million development fee. The government’s requested findings suggest that the development agreement disclosed that this amount was intended to compensate IWNA for development services that it had already performed for Bishop Hill. The development agreement was signed by two officers of Invenergy Wind and was terminable by construction lenders if the exercise of their remedies resulted in Bishop Hill being no longer controlled by IWNA. According to the government, another single member disregarded entity of Invenergy Wind, Invenergy Wind Development North America LLC (IWDNA), transferred $60 million to Bishop Hill’s construction account in July 5, 2012. On the same day, the $60 million amount was transferred to IWNA’s operating account. And, on the same day, the $60 million amount was transferred back to the same IWDNA account from which the amount originated. According to the government: “Thus, on July 5, 2012, $60 million travelled through three bank accounts and in each account, the debit and credit of $60 million cancelled each other out.”
In people speak, that means that Invenergy merely sent money around in a circle to create evidence that it paid its subsidiary $60M that could be included in project costs as an allowable "developer fee."  The money left and returned to the same parent company account in the same day.

So, is this where Invenergy gets the money it "invests" in NASCAR-type sponsorships of some of America's biggest youth leadership organizations?  I wonder what they're going to be teaching our kids?
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    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.

    About
    StopPATH Blog

    StopPATH Blog began as a forum for information and opinion about the PATH transmission project.  The PATH project was abandoned in 2012, however, this blog was not.

    StopPATH Blog continues to bring you energy policy news and opinion from a consumer's point of view.  If it's sometimes snarky and oftentimes irreverent, just remember that the truth isn't pretty.  People come here because they want the truth, instead of the usual dreadful lies this industry continues to tell itself.  If you keep reading, I'll keep writing.


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