Ah... now I see why PJM needed the weekend "to brief the project developers" before releasing their decision on the PATH and MAPP projects.

It was so a propaganda snow job using Gannett newspapers could be effected to blanket the media with stories about our "fragile" transmission system and how it needs rebuilding.  I wonder how much that cost?

I won't say PJM is behind this, but it certainly had a hand in it.  It looks like a bigger effort... perhaps EEI or our federal government at work?

The industry is crying about the demise of MAPP.

Or, alternatively, they're using a whole bunch of "expert" opinions to convince the sheeple that the transmission grid is vulnerable.

Of course, every last one of these articles is utter hogwash.  But, we'll deal with that later.

Whatever decision is coming out of PJM today, it looks like it's going to be a doozy!  Stay tuned.

If you ever need a handy, dandy road map of corporate scheming, look no further than quarterly earnings calls.  Tony the Trickster and his merry band of profiteering pirates tried to put a big smiley face on their poor performance for investors during FirstEnergy's Q2 2012 earnings call on Tuesday.

You can read the transcript of the call here.

Here's a couple of items to look for as you read:

1.    FirstEnergy's "derecho" storm costs will be at least $130M.  70% of that amount will be capital expense that they will recover within existing regulatory mechanisms.  The other 30% will be "deferred."  This simply means the company will create a debt that they will recover from ratepayers at a later date (with carrying costs!)  FE says they will file a request in West Virginia in the 3rd quarter to set up the deferral.  They already have the regulatory structure in place to do this in the other states.  FE says that WV took the worst damage hit, so I'll assume WV will also get the lion's share of the repair cost.

2.    FirstEnergy's finance guy is pretending that the company has no idea why residential demand is still dropping.  He thinks it's due to the economy and unemployment.  Mark Clark thinks people without jobs sit home in the dark and don't use electricity because they can't afford to pay the bill.  Can any of you tell me why residential demand may still be falling?  Any kindergarteners reading this blog that are smarter than overpaid electric company bigwigs?  Apparently a light bulb (it was most definitely a CFL) finally went on over the head of Donny the Gregarious, who pondered whether energy efficiency was having a "dampening effect" on residential consumption.  Ya think?


3.    Lower operating costs due to "merger synergies" (most overused corporate buzzword, ever) and lower storm repair costs (remember this was before the "derecho") were an earnings driver for the quarter.

4.      Picture this...  Tony the Trickster reassured the analysts by telling them that his staff presented him with a weekly win/lose customer switching report.  See?  Being a CEO who makes millions every year really is as simple as sitting around, smoking cigars, and looking at pictures!

5.    FirstEnergy mentioned that transmission drives their profit... over and over again, in many different ways.  Has FirstEnergy told you lately that transmission is where they're hanging their hat to meet next year's "guidance"?  Yes, it's true, FirstEnergy needs to "accelerate" that $1B in "transmission spend" and push it up to 2012 or 2013, instead of later years.  Here's why:  Transmission spending earns a bigger return, 12.7% for their TrAILCo affiliate's projects.  Once they've spent capital on transmission assets, it begins earning in the world's sweetest investment account with absolutely NO RISK involved!  The quicker they can "deposit" their "transmission spend" in their own little investment account, the sooner it can start earning big profits that will enable even bigger earnings.  There's just one little problem -- sometimes Tony can't "accelerate" his "transmission spend" fast enough and get his transmission projects ramrodded through with enough alacrity to satisfy his financial needs.  Whatever could it be that might get in Tony's way?

"The real issue I see in terms of being able to get many of those transmission facilities in place, will not necessarily be driven by the construction schedule, but will be more affected by our ability to acquire rights of way, abilities to get outside crews in to support it, and doing that and getting the permits necessary to complete that amount of work in the timeframe that we’ve laid out in front of us.

So, we have some work to do, there’s a lot involved in the process, we’re in the early stages now, we’re preparing environmental impact statements and all of the other parts, pieces and parts that will require regulatory approval, primarily from siting organizations, and as we move in that timeframe, we’ll be better able to predict when we will have the particular parts of those projects in place. Because this is not just one project, there are a number of things that are going to be done. Substations are going to be enhanced, additional ones are going to be built, new lines are going to be brought in to serve those."


Delay might not be Tony's friend, but it can be a transmission opponent's BFF!

Whoever said corporations are faceless?  Investor owned utilities have two faces:  one face for the consumers who fund them, and a different face for their investors, who reap the financial benefits provided by consumers.

Here's the face AEP wants you consumers to see -- Pablo the AEP Answer Man.  He's a regular guy, just like you, right?  Were you all feeling as "strained" as poor Pablo, bravely "starring" in another one of his ridiculous youtube videos, after a grueling 18-hour day attempting to cover AEP's derriere over their poor post-storm performance?

Late one night, recording a video update on the restoration effort, he recalled feeling the accumulated strain of days without much sleep.“I couldn’t get complete sentences out that made any sense,” he said.

AEP is getting a bit carried away with the plain folks propaganda.  We thought it would be funny to see the corporate bigwigs hurling dodge balls at each other in TV commercials when we suggested it.  The ugly tie collection and experiments with different outfits and backdrops were amusing for a few minutes, but folks are over it.  AEP just doesn't know when to quit, however.

The other face AEP presents to its investors can be seen in this transcript of AEP's 2Q 2012 earnings call held on July 20.  There's so much bragging about how they're sticking it to consumers in order to make huge profits, I'm just going to paraphrase the highlights.  Be sure to read the entire transcript yourself for even more filthy rich one percent goodness.

1.    Quarterly earnings were .75 per share.  Year to date earnings were $1.55 per share.  Earnings were $370M for the quarter, and $759M year-to-date.  It was a "pretty good" quarter for AEP.

2.      Ohio has been a problem for AEP due to customer switching, low demand and their issues with rate cases.

3.    "Investment" in their regulated (monopoly) subsidiaries and transmission will provide 4 - 6% growth in earnings.

4.    Poor, poor, AEP CEO Nick Akins has had two "storms" to deal with since he became CEO 8 months ago.  One "storm" was created by Mother Nature on June 29.  The other "storm" was a regulatory one created by consumers in Ohio.

5.     The June storm cost AEP $230 million.  They will defer much of the cost for future recovery from consumers.  As soon as the consumer anger begins to die back and you all take your eye off the ball, AEP's planning to stick it to you.  $70M will be recovered through future rate cases.  $130M will be deferred for future recovery from consumers.  AEP has $4M budgeted for storm costs this quarter, so that only leaves $26M of cost coming out of AEP's shareholders pockets for the quarter.  However, AEP's shareholders have been collecting profits from unspent budgeted O&M in other quarters, so they're still way, way ahead.

6.    AEP was glad the June storm came along in order to take focus off the hot water they were in at PUCO.  This is a direct quote from Akins:  "...in an odd and perhaps, morbid way, it gave the management team a brief reprieve from the challenges of the other storm that occurred -- the regulated storm we call Ohio."

7.    AEP is looking forward to the PUCO allowing the company to recover deferred capacity costs from consumers when their rate case is decided in August.  PUCO declared both AEP and FirstEnergy winners in the dodgeball game by allowing FirstEnergy to pay a lower cost while also allowing AEP to charge a higher cost.  How can this be so?  Because the consumers are going to pick up the difference between what AEP is allowed to charge and what FirstEnergy has to pay.  Consumers are the big losers in Ohio, once again.

8.    AEP also wants PUCO to approve their rate stability rider "to ensure AEP's financial integrity," their distribution investment rider and allow recovery of deferred fuel costs and other regulatory assets totaling $800M.  Of course, these are all additional costs that consumers will end up paying, and paying, and paying.

9.    AEP needs a fistful of your cash to complete their corporate separation and start their competitive generation company.  In order to do this, AEP is going to "sell" a bunch of their Ohio generation assets into West Virginia and Kentucky's regulated environments, where consumers in those states will end up paying for them so that AEP doesn't have that financial liability mucking up their competitive company profit margins.

10.    AEP's new transmission projects will "really provide the earnings growth for the future."  Transmission will provide the "critical mass" for future earnings growth and AEP has "plenty of projects" that can take the place of those that don't work out.  So, AEP will just keep proposing and building new transmission projects as a way to make money, not because the transmission is truly needed.  Consumers will pay for all this unneeded new transmission.

11.     AEP is looking forward to getting their new pulverized coal plant on line in Indiana so they can start collecting the cost of it from ratepayers.

12.    AEP is concentrating on cutting operations & maintenance spending in order to make up for customer switching in Ohio and other areas where their earnings are lagging.  AEP added .13 per share this quarter by reducing O&M.  How did their skimping on maintenance work out for you on June 29?

13.    AEP is looking forward to $400M in "securitization opportunities" in West Virginia.  That means that they are anxiously awaiting all that beautiful cash they will get by mortgaging all their old coal debt in the name of West Virginia consumers, who will end up paying for AEP's past coal-buying mistakes for the next ten years.

14.    The profit AEP is making at their regulated companies in other states is propping up their big losses in Ohio.  Consumers in other states are making up for any savings Ohio consumers receive.  O&M cuts and transmission are really the only things propping up AEP right now.

15.    Akins had an epiphany moment where he toyed with the idea that the sustained decline in residential sales could possibly be due to increased energy efficiency.  Ya think, Nick, old boy?  Nick gets the Captain Obvious Award!

So, while AEP cries "poor me" to the consumers with one face, their other face is laughing all the way to the bank.  AEP thinks you're never going to know what they do behind your back.  Oops.

Shh!  Be vewy, vewy quiet, the Coalition is hunting wabbits!

The trade press seems to be vewy, vewy disturbed by the Coalition for Reliable Power's filing at the WV PSC regarding FirstEnergy's "plan for reconductoring existing transmission lines" that was ordered by the Commission in the TrAILCo order.

Read the re-hash  that appeared in "EnergyBiz" (for leaders in the global power industry) of Pam Kasey's State Journal article.

When "leaders in the global power industry" decide to pursue an unneeded transmission project that costs you time and money, they're not "blasting" consumers and landowners.  But when a citizens' coalition dares to speak up about "a leader in the global power industry's" failure to comply with a legal order, all of a sudden the coalition is "blasting" them, and inexplicably, "WV line [is] under attack."  What line is that, EnergyBiz?

Notice how the industry's scribe goes out of his way to get comments from the PSC and First Energy, but ignores the Coalition, other than to report, in a dismissive fashion:
 
 "The CRP describes itself on its web page as a “grassroots citizens’ association” whose mission is "to create a vital public conversation about reliable electrical power and real alternatives to our dangerously centralized electrical grid.” The group lists six organizations and 43 individuals as its members."

Is your name on this list?  If not, email me, and your very own cartoon shotgun will soon be on it's way to you!

The PSC spokesperson had this vewy vapid comment to make:

“Had these come in while the case was active, then there would have been a set, 10-day response period,” the spokesperson said. “But, it being a closed case, there is no set response period.”

I'm not sure how the Coalition could have predicted that the Commission would order the report, and that FirstEnergy would fail to file a proper report, while the case was "active" in 2008, but maybe they need to borrow my Magic 8 Ball?

FirstEnergy said what they always say when they get clobbered by an unexpected kick in the gut:

"The TrAIL companies are in the process of reviewing CRP’s comments and will not have a response until their review is complete, a FirstEnergy spokesperson told TransmissionHub on July 18."  Translation:  "We will respond appropriately."

So, who else has gotten bombarded with "free" subscription offers from Transmission Hub lately?  Seems the industry-centric publication is getting pretty hard up for readers lately and has been harvesting email addresses from somewhere... like state PSC e-service lists.  Tsk, tsk, tsk!  What makes them think we want to read their drivel?

Battleship!  *BOOM*  Battleship!  *CRASH*  Battleship is national energy policy's great game of strategy.  It's loaded with action and suspense.  Play it anytime, anywhere.  B-4.  Hit.  J-10.  Hit.  Oh no, we sunk EEI's battleship!  Hahahahahahahaha!

If you loved playing Milton Bradley's game of Battleship as a tyke, you'll probably also enjoy the grown up edition that goes on while deciding national energy policy.

A week ago, Consumer Organizations filed joint reply comments on FERC's Promoting Transmission Investment Through Pricing Reform Notice of Inquiry.  In the joint comments, the Consumer Organizations expressed their dismay and provided a link to EEI's "Transmission Policy Task Force CEO Priorities & Outreach plan" that was publicly available and accessed on the internet through EEI's website.

It has been brought to my attention that just a short week later, the link that was provided in the Consumer Organizations' comments has been hidden behind a "members only" firewall on EEI's website.  I guess we weren't supposed to see it, much less publicize its contents and bring it to the attention of FERC and other parties on the docket and now they are attempting to hide the evidence.  Embarrassed, are we, EEI?  That's a real shame.... because the document is STILL publicly viewable for anyone who wants to enter "2012-04-26-TransmissionPolicyTaskForce-Ingram-CEO Priorities.pdf" into Google search and then use Google's "document quick view" utility.

And, of course, I didn't just fall off the back of the NIMBY truck last week, either.  You can also see EEI's formerly publicly available, but now private, plan here.  Of course I saved a copy.

Oh no!  Did we sink EEI's respectability battleship?  Or did they do it to themselves through the false assurances of sheer arrogance?

I'm laughing at you, EEI!   :-)

After FirstEnergy recently claimed that AEP "wants a billion dollar bailout" in their just plain ol' annoying amateur-hour commercials, AEP has upped the ante by claiming that FirstEnergy "wants a 7 billion dollar bailout."  What's next?  Will FirstEnergy claim that AEP wants a 14 billion dollar bailout and raise the bet in this silly game?

Who cares?  AEP gets bonus points for introducing the dreaded school lunch ladies to the fray (with a snapping glove for an extra shot of horror), and coming up with a better version of FirstEnergy's brain-dead message and using it to confuse people.  AEP = creative win!

Oh, but wait... FirstEnergy fires back with a placed editorial in their local paper whining about AEP's kickin' commercials.  Yes, we get it, AEP is now using your message against you, FE.  Wahhhh!!!  C'mon FE, you buncha wimps, we want to see some creative commercials.... get busy!

Update:  It appears FirstEnergy finally took a lesson!  See their newest commercial here.

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And now it's time for the entertainment section of this blog, currently featuring the corporate dogfight going on in Ohio between American Electric Power and FirstEnergy.  In our latest entertaining episode, we find the champion, AEP, grinning wickedly from their lemonade stand, while the challenger, FirstEnergy glares cluelessly from the opposite corner.

AEP has released a follow-up to their untruthful, but very entertaining, lemonade stand commercial.  The new commercial uses a game of dodge ball to paint FirstEnergy as a bunch of unfair bulllies beating up on poor, wimpy children.  AEP has also stepped up their game by petitioning to intervene in FirstEnergy's Ohio rate case, in order to become as much of a legal pest to FE as FE has been to AEP in all of AEP's recent rate cases. 

FirstEnergy attempted to make some improvements  to their sickly counter campaign.  They tried to come up with a memorable character/image that consumers could relate to that would give their campaign a boost.  In their two new TV commercials here and here, FirstEnergy bets the farm on a couple of annoying, cheezy, bad actors who are pretending (too hard) to be angry at AEP for "taking away their right to shop."  Apparently there really wasn't a winner to be found between Li'l CoalFella's molars, just a couple of chewed up landowners and ratepayers he has neglected to properly (and privately!) floss out since the PATH failure.  Perhaps some of the other FE flacks might find something in their own dental work that doesn't just annoy the living spit out of people.  It's worth a pick or two, because FE's current ad campaign is a big loser.

FirstEnergy should take a gander at the creativity and simplicity of AEP's messages and website.  It's simple, memorable, and although it isn't exactly humorous, it's creative enough to make people watch the ads, instead of just being annoyed by FE's whiny monologues, which make a person want to change the channel!

There's way too much junk on FE's website, and still no clear message.  AEP isn't taking away a "right to shop," they're just making it less profitable for FE when shopping occurs.  If FE wants to run an effective counter-campaign, they need to answer AEP's message, not create some other confused and angry message.

What FE needs in their campaign is a little humor, such as we previously suggested, by having the little lemonade waif cross the street and demand that Mr. First Energy suit pay up for selling on "her" corner.  To demonstrate the power of humor in effective messaging, and inspired by a chilled six-pack of Raging Bitch Ale, here are a few ideas Patience and I came up with:

1. Spark some retro satire!  Portray the AEP bigwigs as downtrodden, homeless panhandlers lined up on a busy city street (perhaps LittleDrummerBoy can play for spare change!) Suddenly, the little lemonade girl walks past them all, shedding a gigantic tear at how far they have fallen because of FirstEnergy's "unfair" practices, spoofing the iconic crying Indian.  Poor, poor AEP!  It's a crying shame!
   
2. FE needs to make their characters more sympathetic.  Instead of an annoying, nasal-sounding, "angry" woman in her fake-beautiful kitchen, how about some teddy bears, unicorns or funny clowns pointing out how AEP is ripping consumers off? Seniors and women love that stuff! Let's get happy here, FE!
3. How about portraying AEP as a masked cat burglar  going door-to-door, personally delivering AEP's monthly electric bill to unsuspecting consumers?  "This is a stick-up!" (hint:  get some talented actors, the ones you have now SUCK!)
4. Now, for AEP, here's an idea for your next commercial.  FE portrays themselves as the white knight whose only objective is to save consumers money.  How fast do you suppose FE would beat feet when there's not as much profit in re-selling your capacity?  FE pretends like they don't like to make money, but they're making a bundle at your expense, aren't they?
5. For both companies:  How about some face time with the CEO(s)?  After all, a little plain folks propaganda isn't too hard to pull off.  Have them show the public how they're "just like you," and  shed that "faceless corporation" identity you're carrying like a lead weight around your ankles.
6. FE: Why not show a little kid selling candy door to door, and this big, scary man comes up and lifts the kid upside down and shakes him 'til all his money comes out of his pocket?

And then, here are the commercials Ohio consumers should produce.  You know, ones that portray the REAL facts:

1. AEP's dodgeball commercial:  Start the commercial as is, however,  as the teams face off before the game starts, the sound mutes and action stops as the camera focuses on a quarter that falls out of someone's pocket and rolls slowly into the center of the gym floor, and lands, *Plink*. Sound and action suddenly resumes as both teams abandon the game and rush toward a new, greedy, vicious, individual battle to capture the wayward quarter and be the one to pocket it.
2. Another take on the dodgeball commercial: Start the commercial as is, but have an audience sitting on the bleachers. A referee blows the starting whistle for the game, and both the geeks and the jocks turn and pummel the audience (ratepayers, of course - keep up, people, keep up!).
3. The little girl at the lemonade stand gets into a real hair-pulling, scratching and biting fight with the big bad bully; but then they realize there's a crowd standing around watching and laughing their heads off. (And they all look like Keryn ...)
   

While watching these two claw and scratch is highly entertaining (and makes kissing and making up to partner on a reanimated PATH project much more unlikely), it isn't helping either company in their Ohio case.  Everyone still hates AEP and thinks they're greedy.  And nobody really cares to champion FirstEnergy's money-making "right to shop" schemes, either.  I'm gonna make a prediction here... PUCO is gonna split the baby and come up with a capacity price somewhere in the middle.  PUCO recently got caught with AEP's hand up their skirt and they're not going to end up with egg on their face again.  The public is ANGRY!  Unfortunately, neither one of these companies knows diddly-squat about harnessing that anger to champion their corporate profit-making cause.  First, they would have to make people relate to them and like them.... and that's never going to happen.  Corporations aren't people!!!  Perhaps the power companies should get busy forming more fake grassroots "coalitions" to testify for them at PUCO.  Oh wait, that doesn't work either!  Too bad, so sad.  Fight on, fellas, we're enjoying the show!

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