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Federal Energy Regulation Takes a Turn for the Worse

6/5/2025

For the past 4 years, consumers have had someone looking out for them at the Federal Energy Regulatory Commission. FERC Commissioner Mark Christie, most recently Chair of the Commission, never forgot who he was working for. He never forgot that regulation serves to protect the captive consumers of monopoly utilities.

The American Bar Association defines regulation like this:

For all these regulatory purposes, the legal lodestar is the regulatory statute. Most regulatory statutes tell regulators to act “in the public interest.” This command implies a statutory judgment—that absent regulation’s constraints and inducements, private behavior will diverge from the public interest; that whether the market structure is monopolistic or competitive, universal, reliable, safe utility service at reasonable rates won’t happen by itself. Effective regulation therefore aims to align private behavior with the public interest. Regulation defines standards for performance, then assigns consequences, positive and negative, for that performance. The common purpose of all regulation is performance.

It used to be that regulation was a specialized skill practiced by experienced regulators. But all that seems to have been chucked aside in the past 20 years as politics invades the regulatory realm. There should never be politics in regulation because politics are not necessarily in the public interest. However, when you let politicians nominate and/or appoint regulators, you may just end up with more powerful politicians. And sometimes, you end up with special interests in regulator seats, where they regulate in the interest of corporations or special interest ideology.

And then there was Commissioner Christie, who always did the right thing, because it was the right thing to do.

One of the more memorable things is his famous PATH rant at the December 2023 Commission meeting. Begin at minute 13:48 and watch for about 5 minutes until he's finished.

And then there was his recent dissent on Valley Link's request for financial incentives.

And then there was the time he wanted to open up an investigation of PJM's cost allocation for data center transmission lines.

Commissioner Christie has both surprised and delighted this long-time FERC watcher. I can truthfully say that he is the BEST Commissioner FERC has had in the almost two decades I've been doing this. I remember how much he terrified me the first time I encountered him in full poker face, sitting on a stage at an SCC public hearing for the PATH transmission project. But that was a different time and a different me.

So, why this dirge?

The White House on Monday said it was nominating Laura Swett, an energy attorney at Vinson & Elkins, to take the seat held by Federal Energy Regulatory Commission Chairman Mark Christie.

Christie’s term expires June 30, although he can remain in his seat through this Congressional session, which typically ends around the end of the year.

The move to replace Christie appears to have been a surprise. “I learned this evening from a media inquiry that Pres. Trump has appointed Laura Swett to replace me when my term expires,” he said on social media. “I congratulate Laura and wish her the best.”

Christie said he would remain at FERC for a few weeks after June 30 to help get key orders out.

Imagine that after a long career of service you find out you're fired when a reporter calls you for a quote? He deserved much better than this (finally something I can agree with former FERC gadfly Neil Chatterjee about).

I hope Commissioner Christie deals with this the same unique way he's carried out his term at FERC. Maybe instead of jumping right into private practice as some white shoe law firm's FERC whisperer, Christie might just retire. I mean really retire. Enjoy life. Do all those things on his bucket list.

If not, I'm sure he'll do good wherever he goes next.

So, what's next for FERC? Laura Swett, who currently works for one of those white shoe law firms after a brief stint being an advisor at FERC. That revolving door is spinning away.

It's kind of like being given a handful of poison berries instead of the M&M's you're used to eating.

Why did someone think it was a good idea to replace an experienced regulator who works in the public interest with a corporate attorney? Is there anyone left at the Commission who knows that they are working for consumers?

FERC's Mission: Assist consumers in obtaining reliable, safe, secure, and economically efficient energy services at a reasonable cost through appropriate regulatory and market means, and collaborative efforts.

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Checking NextEra's Math

5/22/2025

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NextEra Energy Transmission MidAtlantic, designated entity for the MidAtlantic Resiliency Link, or MARL, project recently announced its Actual Net Revenue Requirement and Annual True-up Meeting. The meeting will be held on June 12 at 3:30 p.m. and probably won't last more than an hour (depending on how many questions you ask). Interested parties can attend via Webex or telephone. NextEra requests that you répondez s'il vous plaît, but it's not required. See meeting notice linked above.

An interested party is defined in NextEra's Formula Rate Protocols (PJM OATT Attachment H-33-A). "For purposes of these protocols, the term Interested Party includes, but is not limited to, customers under the PJM Tariff, state utility regulatory commissions, consumer advocacy agencies, and state attorneys general." If you pay an electric bill in the PJM region, NextEra's transmission costs are flowing through into your bill and therefore you are an interested party by definition. This issue has been litigated before FERC many times and FERC has emphatically found every time that consumers are interested parties.

At the meeting, NextEra will be presenting its Formula Rate Update to true up its estimated 2024 revenue requirement with its actual expenditures. It will also be presenting its estimate of its revenue requirement for 2025.

What's a revenue requirement? It's the total amount NextEra gets to collect from ratepayers in the PJM region for each year. Once NextEra calculates its revenue requirement, PJM collects that amount from responsible load serving entities (LSE -- the company that actually sends you your bill). The LSE in turn collects the transmission rate from you in your bill. This is how the costs of new transmission get included in your monthly electric bill.

NextEra will NOT be discussing or entertaining any questions about its transmission projects. This meeting is ONLY about NextEra's transmission formula rates.

What's a formula rate? It's a series of mathematical calculations into which the utility plugs certain numbers. It calculates the utility's annual revenue requirement. Formula rates take the place of a stated rate, which is a set dollar amount that the utility would collect from its customers. Instead of a set number, the regulator sets a formula for calculating yearly rates so that there doesn't need to be a full blown rate case every year. The formula is the rate, not a fixed number. The revenue requirement can therefore fluctuate from year to year.

Now take a deep breath.

This is NextEra's formula rate, populated with numbers from 2024.

It's not as hard as it looks. Each calculation names where the numbers it plugs in come from. The numbers used come from NextEra's FERC Form No. 1.

The Form No. 1 is an accounting of NextEra Energy Transmission MidAtlantic's finances for 2024 that is organized into various accounts. If you've ever worked in accounting, or taken an accounting course, you know that an entity's finances are organized into certain accounts that describe each general class of expense. The list of descriptive accounts for an entity is called its Chart of Accounts. All utilities regulated by the Federal Energy Regulatory Commission use FERC's Chart of Accounts, called the Uniform System of Accounts (USofA). Each account listed on the Form No. 1 (and transferred to the formula rate) has a description and rules for its use. Not every account in the USofA gets transferred to the formula rate template. Only certain accounts are included in the formula rate. Other accounts are not included in the rate. For instance, FERC Account Number 426.4, Expenditures for certain civic, political and related activities, is not included in a formula rate. That's because those kinds of expenses are not recoverable from ratepayers under FERC's accounting rules. A utility that chooses to make those kind of expenditures pays for them out of its own funds. When a utility does not follow the descriptions and rules, this can happen.

Sometimes, utility accountants accidentally record expenses in an incorrect account. Not a problem if both accounts are either recoverable or non-recoverable. However if a non-recoverable expense is accidentally recorded in a recoverable account, it would get transferred to the formula rate and recovered from ratepayers in error. In that case, the utility must refund that expense to ratepayers.

NextEra will also be discussing its projections for 2025. These numbers are based on historic averages or company budgets. The estimated revenue requirement is what will be recovered from ratepayers in 2025. However, it is just an estimate. This estimate will be compared with actual 2025 expenses in 2026 (called a true-up) and any overage will be refunded, or any under collection will be wrapped into the next year's rate. This way, the utility only collects its actual expenditures from ratepayers.

As an interested party, you will be able to ask about specific numbers that are plugged into the formula rate, the accounts included in that line item, and how the actual expenses were classified for accounting purposes. If the utility cannot provide detailed answers during the meeting, there is a process for interested parties to submit information requests to seek more details about the expenses and/or calculations to make sure that the rate was calculated correctly. If you are not satisfied with the answer you receive to your question, feel free to ask them how to submit additional written information requests.

Yes, this is heady stuff, but it can be mastered by regular people. Having an accounting background helps.

You might wonder why this process exists. Doesn't FERC check NextEra's math when they file their annual revenue requirement? The answer is NO. No, they do not. FERC relies on the entities that pay these rates to examine and question them. Occasionally FERC may audit some of these utilities, but that's a random process that never looks at every one filed. Because the formula rate has been determined to be just and reasonable, FERC assumes that the utility that uses it follows all the rules when it fills out the rate template every year. Therefore, FERC doesn't need to even look at the filings. They leave that job to you. You might think that your LSE or your state regulator or other state office reviews these filings for accuracy. NO. No, they do not. Your electric company just pays the bill to PJM and passes these costs on to you. It doesn't care how much they are. Your state offices usually don't have the skills or resources to review formula rate filings. In a lot of cases, they don't understand them at all. That leaves it up to you...

So, if you want to plunge into NextEra Energy Transmission MidAtlantic's annual transmission revenue requirement to check their math, don't miss the meeting. It's your first step.

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FERC Checks the Box

5/18/2025

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Last week, the Federal Energy Regulatory Commission approved financial incentives for the Valley Link "portfolio" and set its formula rate, return on equity, and hypothetical capital structure for settlement and hearing. That's exactly what I expected they would do, so no surprise there.

It was also no surprise that FERC Chairman Mark Christie wrote a scathing dissent to the approval of incentives. Financial incentives for transmission projects are so far out of whack that they border on usurious. No, scratch that, they're way past the border. FERC's generous award of financial incentives for the Valley Link projects will cost consumers hundreds of millions of dollars in increased transmission rates over Valley Link's expected 40 year life. Well, if it actually gets built that is. Even if it never puts a shovel in the ground, ratepayers are still on the hook for hundreds of millions of dollars, thanks to the abandoned plant incentive. I just hope I'm around long enough to say... I told you so!

Chairman Christie's dissent is worth a read. He's grown increasingly critical of FERC's incentives policy and desperately wants to change it. But, he was outvoted 2-1 by two other Commissioners who are fairly recent additions to the Commission. The fourth Commissioner was MIA on this Order, like she is on many others. I'm not sure I understand why a sitting Commissioner doesn't participate in a lot of the Orders that are issued, but I'm sure there's a reason. If only she had participated, I'm sure consumers would have gotten a better deal.

Commissioner Christie compared Valley Link to its predecessor, PATH, and rightly so, since it's the exact same project, in the exact same place, owned by the exact same companies. Attention must be paid! However the other two Commissioners that were not around during PATH failed to pay attention, and therefore consumers are doomed to repeat the PATH experience that cost them $250M.

As Yogi Berra once said, “it’s like déjà vu all over again.” Once again, a transmission developer asks the Commission to put already hard-pressed consumers on the hook for a laundry list of “incentives.” And once again, the Commission approves almost all of the list. As I have said repeatedly over the past four years, it is long past time for this Commission to do its job of protecting consumers by cutting back on its unfair practice of handing out “FERC candy” without any serious consideration of the impact on consumers already struggling to pay monthly power bills. The statute simply does not mandate such lavish generosity to developer interests at the expense of consumers. As discussed in great detail below, this list of incentives is especially difficult to stomach for consumers in Virginia, Maryland, and West Virginia given the egregious history of the Potomac-Appalachian Transmission Highline (PATH) project, about which I have written many times.

No matter how much Chairman Christie tries to reform a regulatory agency gone amok, he just can't get any traction in today's politicized FERC. I'm fast running out of patience myself. Perhaps it's time for Congress to act, since FERC just can't manage to reform its 20 year old incentives policy to comport with the existing statute. Maybe FERC needs to be called in for a hearing so they can explain themselves to our elected representatives? Or perhaps we need to get rid of Sec. 219 of the Energy Policy Act in its entirety. Imagine if utilities could only earn cost plus return on new transmission projects, without any financial "candy" from the all-you-can-eat incentives buffet. I guarantee you that they would still eagerly line up to build new transmission. It's how they make money. Even without incentives, transmission rates are already incredibly generous. Are you earning 10.9% on your investments lately? Yeah, me neither. In fact, while I'm having this dream, how about if we simply eliminate investor owned utilities altogether and make all utilities public? No more fat cats, no more bonuses, no more investors, no more outrageous profits paid by Granny in her electric bill. Just a necessary service paid at cost by struggling consumers.

So, incentives granted. Water under the bridge. But, FERC also set the formula rate and its protocols, Valley Link's Return on Equity and its hypothetical capital structure for settlement and hearing. I will be participating in that so that's all I can say about it until it's over. See you on the other side.

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Valley Link Transmission Files for Incentives and Formula Rate at FERC

3/18/2025

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On Friday, Valley Link Transmission filed at the Federal Energy Regulatory Commission (FERC) for approval of a formula rate to collect their costs from ratepayers, along with a request to set a Return on Equity (ROE) and additional financial incentives. They're wasting no time trying to ram their transmission projects through and make a ton of money doing it.

Applying for CPCN/CCNs from the Maryland, Virginia, and West Virginia state commissions is a threshold step for Valley Link during the pre-construction phase, because obtaining CPCN/CCNs will improve Valley Link’s ability to secure the needed land rights to support the Project Portfolio. Because the PJM Board only recently approved the Valley Link Portfolio Project on February 26, 2025, Valley Link has not yet initiated the CPCN/CCN process. Valley Link faces significant time pressure to initiate the CPCN/CCN process within the next few months because CPCN/CCN proceedings in these states can be lengthy.

That's right, Valley Link wants to file its state permitting applications within the next few months, even though we've been waiting 18 months for FirstEnergy to take any interest whatsoever in building their section of the 500kV MARL project in Jefferson County. They're in an awful hurry on Valley Link and landowners and communities are going to be mowed down if they can't keep up.

"Valley Link is committed to collaborating with residents, local governments and other stakeholders in the project communities at every stage of the process."

Well, except this stage. Valley Link doesn't want you to "collaborate" on their request for FERC incentives or in their rate process. All the more reason to do it!

Your first task? Valley Link's 1500 page rate/incentive filing. Go ahead, take a look. I hope you understand FERCish. You don't? Fortunately, I do so here's a summary of the important points included in this filing. You are encouraged to intervene and/or file a comment on this proceeding. Deadline to do so is April 4.

Valley Link is a 765kV transmission project proposed to connect the John Amos coal-fired power station in Putnam County, WV to Loudoun County's "data center alley." It will cross 14 counties in West Virginia on its way, including Jefferson. It will require a new 200-foot wide right-of-way for its entire length. In Jefferson County it is proposed to expand the existing transmission line corridor through the southern part of the county and add a third transmission line to the existing configuration that is surrounded by hundreds of existing homes, schools, businesses, parks, historic resources and even our national parks!

Valley Link's filing asks FERC to grant financial incentives to the project and set up the rate it will use to collect its costs from captive electric customers across the PJM region.

First, let's examine the incentives Valley Link has requested. In order to qualify for incentives, the transmission line must be the product of a fair and open transmission planning process. Competition is an important and required part of this process so that consumer costs may be reduced through competitive cost concessions. Except there were no such concessions for Valley Link. They not only bid their projects in at full price, they also did not include any cost caps. Consumers will pay whatever it costs to build these projects, even though the initial "competitive" bid may have been much lower. The sky's the limit! The idea of competitive transmission is that it allows incumbents and non-incumbents to compete on a level playing field to construct the most cost-effective project. Incumbents hate it because they'd rather not compete at all, and instead be awarded all new transmission in their territory at whatever price they want to charge. For years after FERC's Order 1000 required competitive transmission windows, incumbents simply declined to participate in region-wide competitive planning, preferring instead to concentrate on smaller projects in their own territory. PJM's 2022 Window 3 competitive planning process actually allowed several non-incumbent companies to offer cost caps and financial concessions that actually saved ratepayers money, and those projects were selected, much to the chagrin of the incumbents. But they weren't about to be fooled again, so they created an incumbent cartel and agreed not to compete with each other so that none of them had to make any financial concessions. If they didn't compete with each other, they could create ostensibly "joint" projects that shut out all competitors and took control of PJM's Planning Process. And that's how we got Valley Link's $3B project portfolio, with no limit on how much these projects might eventually cost. Who does that? PJM ought to be ashamed of itself! Valley Link Transmission was not the result of a fair, open and competitive planning process.

Financial incentives for transmission must be rationally tailored to a project's risks and challenges. "Rational" has long ago left the incentives building... it's nothing but a free buffet where utilities gorge themselves on ratepayer cash. That's right, ratepayers fund all these financial "extras" that encourage transmission developers to build "much needed" projects. Except if you attended any of the PJM meetings, you know that these developers are beating each other down to get awarded these projects. And that's precisely because they want to gorge on the unnecessary incentives. Even if FERC stopped offering these incentives tomorrow, these companies would *still* be falling all over themselves to build new projects. Incentives are a give away that is not needed to encourage new transmission.

These are the individual incentives Valley Link has requested, with a brief explanation of each:

Recovery of 100% of prudently incurred costs in the event that all or part of the Project Portfolio must be abandoned for reasons outside the control of Valley Link (“Abandoned Plant Incentive”)

This means that Valley Link is guaranteed to be able to collect ALL its prudent project costs from ratepayers if the project is cancelled. Essentially, ratepayers are providing insurance for the project's success. If it fails, then the utilities can't lose. Only ratepayers can lose. In the case of the failed Potomac-Appalachian Transmission Highline (PATH) project, ratepayers ended up spending more than $250M on a cancelled project that never put a shovel to the ground. This is outrageous! Utilities must have some skin in the game and accept some of the risk that they are being rewarded for through incentives.

Inclusion of 100% of construction work in progress (“CWIP”) in rate base during the development and construction of the Project Portfolio (“CWIP Incentive”)

This means that Valley Link will be able to collect a return (interest) on the amount of money it has spent to construct the project while it is building the project. It begins collecting money from ratepayers as soon as FERC approves the incentive, although the project may not actually be built and serving ratepayers for many years. It makes ratepayers responsible for paying for projects that are not being used, and haven't even been finished yet. Ratepayers are being used as the utility's "bank" to pay the companies while they are building.

Recovery of pre-commercial costs through establishment of a regulatory asset that will include all expenses, including expenses incurred prior to the filing of this application, that are incurred prior to the time costs first flow through to Valley Link customers under the PJM Tariff, including authorization to accrue monthly carrying charges (“Pre-Commercial Incentive”)

This means that Valley Link can put all its costs from its first idea to make a "joint project" through the time its formula rate is approved into a regulatory asset and collect them from customers in the future. It's a way to retroactively open the money spigots so that ratepayers pay Valley Link's costs to compete at PJM as well as their costs to create their fake shell company, and ask for incentives and a formula rate. It makes sure that the utility never has to spend a dime of its own money on this project.

Inclusion of a 50 basis point return on equity (“ROE”) adder for Valley Link’s participation as a new member in a Regional Transmission Organization (“RTO”) (“RTO Participation Adder”).

This means that Valley Link's Return on Equity (ROE) will be raised one half of one percent because its "joint venture" will be a separate new member of PJM. Keep in mind that each one of these three joint venture companies (FirstEnergy, Dominion, and Transource) is an existing member of PJM and collecting their own RTO Participation Adder. But because they formed a new fake shell company, they can pretend to be "new" and collect again. This is also outrageous. It's not a new entity, and it would only encourage utilities to keep creating new shell companies in order to receive financial reward.

Valley Link says it needs incentives to reduce "risk" for its project. What risk is that? Valley Link speaks out of both sides of its mouth. First they say this: "Valley Link Transmission’s joint venture structure allows the Participants to combine their diverse experience and knowledge to successfully develop projects of significant size and scope, while sharing the risks of such projects. The geographic and financial scale of new competitive transmission projects sought by PJM in the RTEP process in recent years lends itself to this structure to adequately manage the risks associated with infrastructure projects of this scale." Somehow the joint non-competitive project was able to "manage risk" but yet on the other hand, the project is just so risky that it needs a bunch of financial incentives. "Valley Link will
face significant permitting, siting, construction, procurement, and financial risks that present challenges to developing and constructing the Project Portfolio." So, which is it? Is Valley Link risky or not? It can't be both!

Of course, Valley Link plans to lower its risk that you're going to go all torches and pitchforks on them by "collaborating" with you. Of course, that "collaborating" doesn't mean they will make any adjustments to their plan or anything like that... they just want to pretend they're considering your ideas while they laugh at you behind your back.

Valley Link is committed to collaborating with residents, local governments and other stakeholders in the project communities at every stage of the process. Community engagement is crucial for making informed decisions that reduce or prevent potential impacts while delivering for the public essential infrastructure necessary to address large-scale reliability needs that the PJM grid faces both in the short term and for years to come.

Valley Link also requests three identical new formula rates, one for each of its state-specific sub-companies (it's like Russian nesting dolls). A formula rate is a set of calculations that devise a yearly revenue requirement for each company. It includes O&M, A&G, taxes, and return (interest) on capital expenses that are paid for over the project's useful life (approximately 40 years) as these assets slowly depreciate because we pay for them. I've long since given up trying to explain formula rates to people who don't understand them, but let's just say it's extremely complicated. If you don't believe me, take a look at the proposed formula rates in the filing. I will sum it up by sharing that we pay for transmission much the same way we pay for a home using a 30 year mortgage. While the bank loans us the cash to purchase the home, we will pay much more than we ever borrowed over that 30 years because the interest is calculated monthly. We slowly pay the bank back, and they earn a huge profit over 30 years. It works the same way with transmission, except the utility is "the bank" and the transmission line is our house that we have to pay for over 40 years, with interest calculated every year on the remaining unpaid balance.

And speaking of interest... Valley Link has requested a base ROE of 10.9%. But they're not stopping there... they are also requesting .5% for their new membership in PJM (see above). Total Return on Equity for this project is proposed at 11.4%. That means Valley Link would earn 11.4% on the unpaid project balance every year for 40 years. Do you earn 11.4% on your investments? Probably not. Transmission ROEs are already incredibly generous.

The important thing to think about with the formula rate is transparency so that we can check the utility's math from time to time to make sure they are doing it correctly. Valley Link's formula rate is not transparent and leaves certain terms undefined. That's probably because of this. However, lack of transparency is not just and reasonable and FERC cannot approve a formula rate that is not just and reasonable.

And I think I'll stop there. If you have any additional questions after reading the filing, I'd be happy to help.

So, let's sum it up:

FERC should not grant transmission incentives to Valley Link because Valley Link was not part of a transparent and competitive transmission planning process.

FERC should not grant the costly transmission abandonment incentive to Valley Link because the project has not been found needed by any state where the public may actually participate in the decision making.

FERC should not grant the CWIP in Ratebase incentive because that starts the money flowing out of ratepayer pockets before any state has approved it.

FERC should not grant the RTO Participation incentive to Valley Link because it is a shell company managed by incumbent utilities that have already been granted this incentive. The "joint venture" is a charade.

FERC must ensure that Valley Link's formula rate is transparent and allows any person to participate in annual updates, seek information, and file challenges.

And keep this in mind when you file your comments at FERC. (File on Docket No. ER25-1633). FERC Chairman Mark Christie had this to say about the cancelled PATH project just over a year ago. (Begin at minute 13:48 and watch for about 5 minutes until he's finished). Attention must be paid! Valley Link is a second attempt to build the PATH project, but it also presents FERC with a second chance to correct all the things Christie said they got wrong with the original project.

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Invenergy Asks To Dismiss Illinois Landowner Suit

1/14/2025

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As you may be aware, a group of Illinois landowners appealed a recent decision by the Federal Energy Regulatory Commission to somehow "continue" Grain Belt's Negotiated Rate Authority at the same time it granted completely new authority. Of course, FERC can't do these completely opposite things at the same time. The basis for Invenergy's intervention in the case and request to dismiss the case is that the Illinois landowners have no standing to bring the case because they have no interest in the outcome.

20241213_motion_gbx_to_dismiss_petition.pdf
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The landowners responded to Grain Belt's weak motion, asking, "What's it to ya?" Only Paul Neilan could write a brief with that phrase in it! His response was engaging and spelled out exactly why the Illinois landowners had an interest to bring this case. When GBE applied for its Illinois permit, it told the ICC that it had negotiated rate authority from FERC. The ICC based their approval on that fact, along with others. If it turns out that GBE did NOT have negotiated rate authority at that time, then that is grounds to have the approval thrown out and GBE would have to reapply. Of course, GBE's bespoke legislation that allowed it to apply for a permit in the first place has expired. Therefore, GBE would have to get new legislation passed in Illinois that allowed them to apply again. Because what FERC did in the Order under review tried to say GBE had "continuing" negotiated rate authority when FERC also claimed to have reviewed GBE's request anew, what happens in the FERC case is pivotal to what happens in Illinois. Even a dense person could see that the Illinois landowners have standing. You can read a copy of the landowner's brilliant response here:

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GBE and FERC are caught between a rock and a hard place, claiming that FERC never needed to approve the sale of GBE from Clean Line to Invenergy under Sec. 203 of the Federal Power Act. If that's true, then why didn't Invenergy notify FERC when it bought the project?

Neilan writes extensively about GBE's attempt to belittle Illinois landowners by calling them "A group of citizens who roam the country in search of governmental wrongdoing." How disrespectful can you get?

GBX's Motion states that building an interstate transmission line across their properties does not constitute any “invasion of a legally protected interest.” (GBX Motion at 15). As GBX sees things, Petitioners’ objections to GBX’s likely condemnation actions, its subjection of Petitioners to forced sales of their lands, and its construction of its transmission line across their farms and properties are "purely academic concerns." (GBX Motion at 19).

GBX wants this Court to ignore the Illinois landowners' objections to GBX's entry on their lands because Petitioners’ objections are nothing more than "...general...moral, ideological or policy objection[s] to a particular [FERC] action" (GBX Motion at 15).

GBX’s contempt for the property rights of Petitioners would be bad enough if it stopped there. But having hit rock bottom, GBX begins to dig. After omitting any mention of its need for eminent domain power and belittling Petitioners’ interest in avoiding forced sales of their properties, GBX tells this Court that Petitioners are a group of “…citizens who … roam the country in search of governmental wrongdoing." (GBX Motion at 3).

But it was GBX, not Petitioners, who lobbied the Illinois General Assembly for custom-tailored legislative changes to provide a glide path for its transmission line project. (Petitioners’ Initial Brief, at 21).

It was GBX, not Petitioners, who inserted in its custom-tailored legislation a route through the nine Illinois counties in which Petitioners’ farms and properties are located. (Petitioners’ Initial Brief at 22).

And it was GBX, not Petitioners, who sent minatory letters to Petitioners stating that, if they didn’t sell their property to GBX voluntarily, GBX would file an eminent domain lawsuit against them to take their property anyway. See Exhibit B to this Response.

So GBX is partly correct: there is one party to this appeal who has been roaming across the country looking to pick legal fights with strangers. But it’s not Petitioners.

FERC’s unlawful order makes possible GBX’s exercise of the power of eminent domain against Petitioners. GBX’s plan to take Petitioners’ lands involuntarily and to build its high voltage transmission line across their properties presents precisely the kind of particularized injury that affects Petitioners in a concrete and personal way required for standing. TransUnion LLC v. Ramirez, 594 U.S. 413, 424 (2021).

Someone is respecting landowners and their rights, and it's not GBE or FERC. Let's hope the DC Circuit Court of Appeals can set things right again!

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Who Pays for Data Center Extension Cords?

11/13/2024

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Virginia is trying to shove the barn door closed after the horses escaped by holding a technical conference regarding its proliferation of data centers and who pays to provide their electric service. Questions to be addressed include:

Whether certain transmission costs should be directly assigned to a new large-use customer class?

In other words, should Virginia create another rate class for electric service to "large users" (aka data centers) and assign them the cost of all the new transmission lines they make necessary?

Well, bravo, Virginia! However, Virginia only has jurisdiction to assign the costs that are assigned to Virginia load serving utilities, like Dominion. The cost allocation of these big lines is a federal responsibility under the jurisdiction of the Federal Energy Regulatory Commission (FERC). FERC approves the assignment of costs made by regional grid operator PJM Interconnection. PJM's current approved cost allocation methodology assigns the costs of lines 500kV and above to the entire PJM region. The PJM region includes all or parts of 13 other states: West Virginia, Maryland, Delaware, Pennsylvania, New Jersey, Kentucky, Ohio, Illinois, North Carolina, the District of Columbia, Indiana, Michigan and Tennessee. When PJM orders a new line 500kV or above, it allocates the costs among all 13 states based on the percent of the entire system that state has used over the past year. Every state in the region uses the PJM system, and every one of those states gets a portion of the cost. Each state then assigns the costs to its electric consumers using state rate classes. Virginia is thinking about taking its portion and charging it directly to the data centers that take service in Virginia.

But what about all the costs for data center transmission lines that are assigned to other states? The other states cannot charge them to Virginia's data centers, they can only charge them to the customers who take service in their own state. We're all still stuck with the cost of transmission extension cords that serve Virginia's data centers.

How can this change? It can only change at the federal level where PJM's transmission cost allocation formula is approved. That's FERC's jurisdiction. When consumers and consumer advocates asked FERC to make PJM change its cost allocation formula to make the state with the data centers needing new transmission responsible for their entire cost, they were rejected 2-1. Only when the entire cost of the transmission gets allocated to the state where the data centers take service can it be properly allocated to the actual users of these new extension cords through the very process Virginia is currently proposing. Virginia's proposal only passes Virginia's share of the transmission line costs to Virginia's data centers. The data centers that need the new transmission are not taking service in those other states and therefore the other states have no choice but to allocate the costs of new transmission service for Virginia's data centers to their own consumers.

Perhaps Virginia should first be asking FERC to change PJM's cost allocation formula so that Virginia is responsible for the entire cost of their transmission needs. Instead, Virginia is happy to be a parasite and let other state electric consumers pay the cost of serving their data centers.

When consumers and consumer advocates questioned PJM's cost allocations for its Window 3 projects last year, the majority of the Commissioners were of the opinion that since PJM's cost allocations are already set and the cost allocations for Window 3 followed that cost allocation scheme, the only thing the Commission could do was approve them. However, Commissioner Christie had a different opinion (although he legally had to concur). He thought that the Commission should take up the issue of who pays for state public policies that cause new transmission, such as building data centers, or closing fossil fuel power plants.

While this matter (and the November 2023 RTEP Order) both arise in PJM, the issue of the proper regional cost allocation for public policy-driven transmission projects is not confined to PJM, but is applicable across all of the nation’s multi-state RTOs. Since RTOs are regulated by this Commission, I believe that the time has come for this Commission to take the lead in its convening role to initiate a proceeding, such as a Notice of Inquiry, a series of technical conferences, or by initiating an FPA section 206 proceeding outside this docket, posing such important questions, among others, as: What is the proper definition of a public policy transmission project? Does the definition of public policy transmission project need to be changed for purposes of regional cost allocation? How should public policy transmission projects be cost-allocated in a multi-state RTO? In my view the states themselves need to be at the forefront of deciding these questions, as it is their own state policies that are largely making these questions unavoidable, as these two recent PJM RTEP cases graphically illustrate.

So while Virginia is acting parochially to solve problems for its own ratepayers, it is avoiding asking FERC to weigh in on this issue and solve the transmission extension cord rate burden on other states. What's it going to take to solve this issue at FERC? The other states need to speak up to ask FERC to solve it.

Meanwhile, Virginia will be taking comments after it holds its technical conference on December 16. You don't need to live in Virginia to submit a comment asking them to raise the issue at FERC so that ALL its data center extension cord costs are allocated to Virginia, who can then re-allocate them to the data centers. Nothing is ever going to change unless the other states speak up.

Click here for more information about Virginia's technical conference, Case No. PUR-2024-00144.

1 Comment

The Politics In Your Electric Bill

9/10/2024

2 Comments

No, it's not the "lobbying, campaign money, and bribes" purported to be in your electric bill in this stunningly incorrect article, it's the supposed "advocates" (as the article calls them) who are meddling in your electric rates for political reasons. This whole article is a political stunt targeting fossil fuels and the electric industry after those same "advocates" didn't get their way trying to change FERC's accounting rules three years ago. These crafty shysters are just using you as a battering ram to try to get their way through new overly prescriptive laws written by people who don't understand utility accounting in the least. And it pisses me off.

First, let's take a look at those self-proclaimed "advocates" who shopped this article to the USA Today reporter. The "advocates" do not have a mission or responsibility to advocate for electric consumers. Their mission is simple.

By disseminating our information to media, allies, and decision makers, we seek to disrupt fossil fuel-funded misinformation, separate polluters from policymakers, and accelerate the transition to a clean economy.

It's all about climate change and employing sensationalism and made up bullshit to make people angry at certain targeted corporations. It's not about saving you money on your electric bill, or stopping corruption. These advocates don't actually DO anything to help ratepayers, except spew ignorance. They have very little knowledge of electric rates and have never ever brought or prosecuted an electric rate case. They are not consumer advocates, or even watchdogs. They don't "watch" anything on behalf of consumers, they exploit tidbits they dig up by turning them into something they are not.

The charges in the electric bill you pay are determined by two different places: your state utility board and the Federal Energy Regulatory Commission. Your state determines the rate you pay for generation and distribution, and FERC determines how much you pay for transmission. Both systems already prohibit the recovery of money paid for lobbying, campaign money, and bribes. What these climate change fanatics are doing is exploiting certain utility accounting failures to pretend they happen routinely. No, they do not. All the examples are one off instances of regulatory failure that were not uncovered by these self-proclaimed "advocates," but by REAL consumer advocates and even by actual consumers themselves.

Utility accounting is complicated, but I managed to master it over a number of years when I actively investigated a utility's recovery of advocacy and advertising costs to influence public officials to approve a transmission project. I investigated, I challenged, I went through hearings, and I ended up before the DC Circuit Court of Appeals. Over that time period, I learned all there is to know about FERC's ratemaking process.

Utilities record their expenses according to a chart of accounts. A chart of accounts separates and organizes a utility's expenditures by type or purpose. Each category of cost is defined in the chart of accounts. A chart of accounts describes the different categories of expenses. Here's FERC's Chart of Accounts. States use a very similar system based on FERC's chart for consistency. Rates are set based on these cost categories from the Chart of Accounts.

At the state level, distribution utilities (the ones who send you your monthly bill) use what are known as stated rates. A stated rate is a dollar figure set by the state commission after examining a utility's typical expenses for a test year. Once the rate is set, the dollar figure doesn't change until a new rate case is filed many years down the road. The utility gets the same set amount of money every year and how it spends it is the utility's business. Certain categories of costs such as lobbying, campaign contributions, and bribes are excluded from the rate. The Chart of Accounts instructs that these expenses be placed into accounts that are not recoverable in rates. However nobody is checking because it's a moot point... the amount collected cannot change.

Transmission rates that are set at FERC end up billed to your distribution utilities to be passed on to you in your bill. The distribution utility and the state commission cannot change these rates but must pass them through to your bill without adjustment.

At FERC, transmission utilities use what are known as Formula Rates. A formula rate is a set of tables that the utility fills out each year with account totals according to its Chart of Accounts. The formula is the rate, not a set dollar amount. All accounts, such as the one for lobbying and political contributions (bribes aren't legal and don't have an account), is either included or excluded from the formula rate. The formula rate excludes these types of accounts from recovery. Once FERC sets a formula rate, the utility is responsible for filling out the formula every year and calculating a monetary amount that it can recover as a rate. The utility must do this in accordance with the Chart of Accounts and the formula. The utility can then recover that amount without further supervision because the formula and Chart of Accounts limits recovery. FERC does not review or approve the yearly filings. They go into affect automatically.

However, there is transparency where anyone who pays these rates (and their legal advocates from the various states) can examine the charges that flow through the formula into rates. If an error is detected, the ratepayer can challenge the rate and FERC may order corrections.

The real problem here (and in any rate process) is the process of assigning account numbers to expenses. Since some accounts are recoverable and some are not, assigning an expense to an incorrect account can make it recoverable in error. Utilities have A LOT of these errors.
The way to keep these inappropriate expenses out of consumer electric bills is to actually examine and challenge rates, however the "advocates" can't be bothered to do that. It's a lot of work.

Back in 2021, these "advocates" and some other clean energy and progressive political groups asked FERC to change the way its formula rates handle industry trade association dues. They claimed FERC should make these unrecoverable and require the utility to get special permission to recover them during an approval process that doesn't exist for formula rates. FERC opened a rulemaking proceeding (Docket No. RM22-5) to consider making changes. These "advocates" and friends wanted FERC to require disclosure of all trade group expenditures and other political contributions so that it could easily use this information in anti-utility public relations campaigns. They didn't want to have to waste time using the investigative process to find out information they could use against utilities, they wanted it handed to them on a silver platter. They filed all sorts of cute suggestions that demonstrated their complete ignorance of FERC's ratemaking process. FERC is supposed to destroy a system that works in order to play politics with special interest groups? I filed initial and reply comments with a couple of other ratepayers who had successfully challenged transmission rates. You can read them here

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and here

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Our comments schooled these political dummies and advocated for minimal process changes and more training for utility accountants. And then FERC just abandoned the whole thing without taking any action. What started as political meddling in order to scrape up information that could be used to attack utilities in advertising and social media campaigns was foiled by people who had actually successfully used FERC's process to challenge rates and score refunds for consumers. Honestly, if we can figure it out and use it, then any "advocate" could do the same. It doesn't need to be further dumbed down for you.

But the political schemers weren't done yet. They took their manufactured complaints to state legislatures and told elected officials that they needed to change the ratemaking process to prevent the inclusion of lobbying, bribes, and campaign contributions in rates. Because legislators know even less about utility ratemaking than the advocates, they were easily led by the nose. You'd think the legislators would ask the state utility commissions and real ratepayer advocates if these changes were a good idea, but apparently not in at least three states where political special interests rule the legislature.

And they even got one Congress critter to file their legislation on the federal level. It's an eye-watering display of micro-management of utility ratemaking that really doesn't change anything because none of it is workable. The legislation attempts to change FERC's Chart of Accounts, which is a regulation written and approved by the Commission. Legislators pass laws that do something or other... and regulators write regulations that define the process by which the agency will carry out the law passed by Congress. Congress rarely gets into the weeds with this kind of detail because it is not an expert on ratemaking. It wisely leaves the details to the experts. However, that's not what happened here. The "advocates" and their liberal political friends wrote the regulations they way they wanted them to be (usurping FERC's authority to write its own regulations) and then sent them to their Congressional pet for passage. This is a stunningly bad idea. Fortunately, it appears that the federal legislation has been DOA for more than a year.

Wake up, folks! These political schemers have no business destroying the system that sets the electric rates you pay. They don't know how the system works!
Don't believe everything you read in the main stream media these days. It is often the brain farts of idiots.

2 Comments

How PJM and FERC Caused Huge Spikes in Regional Power Bills and New Transmission

8/9/2024

2 Comments

PJM's recent capacity auction resulted in huge price spikes in the cost of supplying power to electric customers in the PJM region for the 2025-2026 year. It was directly caused by the actions of PJM and FERC. These entities aren't protecting ratepayers, they are harming them! Let me explain...

PJM holds annual capacity auctions to secure the provision of electricity three years in advance. A capacity auction is not actual electricity, it is a promise from a generator to supply a certain amount of energy at a future point in time. This is how PJM ensures that it will have enough electricity supply available three years from the auction. PJM is paying these generators to be available to produce energy when needed during the auction year. PJM starts by announcing a certain amount of electricity is needed for the auction year. Generators submit bids of how much it will cost to be standing by to produce that electricity during the auction year. PJM stacks the bids by price, and each bid is represented by an amount of electricity and a price. PJM then looks at its bid stack and finds the place where the capacity need is met. Whatever the price of that bid is the clearing price for all the capacity bids lower in the stack. Those bids that go over the capacity price are not accepted. At the end of the auction, PJM has a stable of committed generators sure to provide the power when needed 3 years from the auction date.

PJM does not order generation. Generation is a market construct, where generators build when the capacity prices are profitable. If the clearing price at auction is high, it would entice the development of new generation. If the clearing price is low, many generators may not have enough revenue to continue to operate at a profit. This is how PJM manages generation to make sure there is always enough, but not too much. The auction serves as an important warning bell... when clearing prices are high, it means more generation needs to be built. The auction sends a signal to generators to build more when the prices are high. More generators lowers prices because there is more competition in the supply. But what happens when the prices are high at the auction and no new generators get built? That's exactly what just happened... there is a dearth of needed generation in PJM so prices shot through the roof to record highs.

The problem here began with PJM making a proposal to change the parameters of its auction. In order to do so, it needed FERC's permission. A battle broke out at FERC, with many other parties objecting to the auction changes. FERC moves at a snail's pace and can take years to make a decision on a request. The more parties to a case, the longer it takes to resolve it.

Because of the battle going on at FERC, the auctions got put on hold. As Power magazine says,

BRA auctions are usually held three years in advance of the delivery year. While the 2025/2026 auction was originally scheduled to be held in May 2022, it was suspended while the Federal Energy Regulatory Commission (FERC) considered the approval of new capacity market rules. The recent July 2024 auction stems from a compressed schedule that aims to return to the three-year forward basis. According to PJM, the next BRA—for the 2026/2027 delivery year—is scheduled for December 2024.

FERC suspended PJM's capacity auctions while it resolved the issue. That's like turning off the warning system. PJM's annual capacity auction couldn't send the market signal to build new generation because it wasn't being held.

During this time, an extreme change in the power needs of the PJM region was underway. Many baseload fossil fuel generators closed, either the result of the last auction's low capacity prices, or because they were "dirty" and no longer socially acceptable. The new generation that entered the market could not keep up with the amount of generation that was closing. As a result, we had less generation available. Also during this time, the building of new data centers and increasing power demands for AI shot through the roof. No new generation to supply power for these data centers was proposed or built because PJM's auction warning bell was not sounding due to the auctions being suspended.

PJM used the only tool it had available to meet regional need... transmission. PJM conducted a competitive transmission window to connect the remaining generators with the new data center load. Unfortunately, the majority of the available generators are located in WV and PA, and the data center load is in Northern Virginia. PJM asked for new transmission to connect the two, and it ended up with a whole bunch of new projects, including MARL and MPRP. PJM says they are "needed" to supply power to the data centers because no new generation has been built anywhere near the data centers.

Now that FERC has finally resolved the issue and PJM has its new market parameters, PJM recently began holding auctions again. The first new auction for the 2025-2026 year was held just 10 months before the auction year begins, instead of 3 years in advance. There's no way new generators can be built in 10 months, even if the prices are generous enough to support them economically. That's why the auction is always held 3 years in advance, in order to give time for new generation to be built to reduce auction prices.

Instead, we're looking at a transmission bandaid to keep the existing generation flowing to the places that need it. And PJM has opened another transmission planning window to add another 4,500MW of generation imports to Northern Virginia because there is no generation currently proposed to fill that need.

Eventually, if PJM's market signal works as intended, new generation will be built near the load. However, certain states like Virginia and Maryland have passed laws that prevent the building of new fossil fuel generation. That leaves only the nuclear option to supply the outrageous amount of power needed by the data centers. Can you imagine how long it would take to build a new nuclear plant in Northern Virginia? It would be completed on the 12th of Never. Meanwhile, transmission is the only viable option.

PJM's market system didn't work to get generation built in time to meet new need because PJM and FERC had turned it off and were asleep at the switch. Now we have a disaster of epic proportions on our hands.

What's going to happen first? The construction of hotly opposed transmission projects, or the building of new generation? And where will that generation be built? Continuing to build in PA and WV only perpetuates the transmission problem. We need new generation at load. It's probably cheaper than billions of dollars of new transmission, but it takes a willingness to sacrifice for its own benefit on the part of the data center loving states.

New generation is coming to market... and how much of it will obviate the need for new transmission? That's an unknown at this point, but it's going to happen. PJM's transmission project needs will change and fall apart. Let's hold the line, folks! This battle is far from over!

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FirstEnergy Files For Incentives For MARL, Delays Project

7/3/2024

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The MidAtlantic Resiliency Link, or MARL, transmission project has been assigned by PJM Interconnection to two different transmission builders. NextEra is assigned to build the majority of it, but FirstEnergy ended up with the portion that runs through Frederick County, VA and Jefferson County, WV.

Long ago, even before PJM ordered MARL, NextEra filed an application for transmission incentives with the Federal Energy Regulatory Commission. FERC approved them back in January. Nobody bothered to get involved and comment or protest.

Everyone's been treading water, waiting to get more information, but neither NextEra or FirstEnergy has held public meetings to share information with impacted communities. Seems like nobody is in a hurry at all.

Remember that when PJM ordered MARL, it said the project was needed to be operating by June 1, 2027 or else there would be darkness.

Back in May, FirstEnergy finally got around to requesting transmission incentives for its portion of the MARL. It asked FERC to grant it the abandoned plant incentive. Grant of the abandoned plant incentive begins the tally of project costs that can be recovered if the project is abandoned (cancelled) before being built. Anything FirstEnergy spends before receiving this incentive is only eligible to be recovered at 50%. That would mean that FirstEnergy could only collect half of the money it spends on MARL in the case of abandonment. The other half would come out of FirstEnergy's pocket. Fitting, don't you think, since FirstEnergy insisted on being assigned this portion that rebuilds and expands lines FirstEnergy already owns? However, that's not what FirstEnergy asked FERC for... it asked FERC to allow it to recover 100% of whatever it has spent (plus interest) if the project is abandoned.

FERC Commissioner Mark Christie is at war against certain transmission incentives. FERC opened a rulemaking to examine and revise its incentives more than 4 years ago, but has punted it to the side without action, allowing the overly generous incentives to continue.

I'm taking this opportunity to object to FirstEnergy's request for the abandoned plant incentive. Do they really need it, since they were so eager to have this project that they engineered some secret deal behind the scenes at PJM?

NextEra's cost cap for MARL (as crappy as it is) did not transfer to FirstEnergy when it took over this section of the project. FirstEnergy can and will spend however much it wants... currently estimated at $341M for a very short "rebuild" segment. How much will they actually spend, and how soon will they spend it? How much spending is planned *before* state approvals, which if denied can cause abandonment? FERC should place a limit on running up the spending before project approval.

These are the comments I submitted to FERC.

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And here's the worst part! As part of their filing, FirstEnergy included a copy of its acceptance letter of PJM's designation of a portion of the MARL. In their acceptance, FirstEnergy has changed the in-service dates for its portion of the MARL. The Virginia portions (both in Frederick and Loudoun counties) are supposed to be in-service by June 1, 2028, delayed a year from the date PJM said they were needed. The in-service date for the West Virginia portion in Jefferson County is delayed until June 1, 2030. That's right... 2030! MARL is not planned to be completed and transmitting energy until 2030! That's six years from now! Are Virginia's data centers going to hang around waiting to build and be connected to the electric grid for another 6 years?

NO! They won't wait. They will go somewhere else where they can build a data center and get electric service before 2030. The bottom may be about to fall out of Virginia's data center craze.

Here's what FirstEnergy's acceptance letter looks like:

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Once the in-service date for PJM's transmission projects starts slipping, it often keeps slipping... right off into oblivion. It can be delayed if expected load doesn't show up (but goes elsewhere). It can be delayed if the utilities run into permitting problems, such as taking a state denial in a NIETC to FERC for permitting. It can be delayed if the utilities have difficulty procuring project components; there is a huge supply chain issue for transmission components right now. It can be delayed if there are issues with land acquisition. It can (and will) be delayed even further. And, as I said in my comments...

MARL’s in-service date is already slipping. Why is that relevant? Because the electric grid abhors a vacuum. When a planned transmission (or generation) project fails to come online when needed, other projects will take its place. That’s exactly what happened with the PATH project, and what is likely to happen with the MARL project, including the Potomac Edison portion that is the subject of this filing.

Giving these transmission companies the greenlight to spend as much of our money as they want before they finally abandon MARL many years in the future is not just and reasonable.

This transmission project may never happen, but PJM and the utilities involved feel they should pursue it anyhow. Is that because there are no other options? Or is it because there’s no harm done to them if it fails. All the burden of failure falls on ratepayers, and this encourages the utilities to take more of a chance than they would it they had some skin in the game. Utilities shoulder no risk, while collecting all the rewards.

Consumers have zero control over the project’s risk factors, but they are the ones left holding the bag when it fails. As consumers, we simply cannot afford to continue to financially cover the failures of grid planners and transmission developers simply because we are the one entity without a voice in incentive awards.

FirstEnergy has asked FERC to approve its incentive request before July 15. Once consumers have thus insured the reimbursement of FirstEnergy's project spending, then maybe FirstEnergy can actually start working on MARL.

But what happens if FERC doesn't grant this incentive? Will FirstEnergy still want to build its part of the MARL? Or will it have to go back to PJM for revision?

Stay tuned...

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Illinois Coalition Files Appeal of GBE's Negotiated Rates at the DC Circuit Court of Appeals

6/29/2024

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A coalition of Illinois landowners and Farm Bureau made good this week on their threat to appeal a recent FERC decision approving "continued" negotiated rate authority for the Grain Belt Express.

A couple months ago, FERC made an incomprehensible decision to rubber stamp GBE's request for "continued" negotiated rate authority, and then ignored the Illinois group's request for rehearing simply because it ran out of time. In my opinion, FERC will find itself between a rock and a hard place trying to explain how its decision was logical to the court. There's still time for FERC to change its mind and bolster its contradictory order, but that window is closing fast.

Perhaps FERC didn't think that the Illinois group would actually file an appeal. Basing the legal durability of its decisions on whether or not FERC thinks the appellant has enough money and skills to file an appeal (and therefore making bad decisions that affect parties without means) doesn't always work out so swell. Sometimes those parties win the stare down contest and FERC ends up trying to defend the defenseless before some judges. I might actually feel sorry for the FERC attorney who gets handed this dud, if it didn't cost so much time and money for the appeal to be filed.

Here's what the Illinois group filed.

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In October 2023, GBX filed with FERC its Application for Amendment to Existing Negotiated Rate Authority (the “2023 GBX FERC Application”), for which FERC opened its Docket ER24-59. Absent from the 2023 GBX FERC Application is any mention of its failure to obtain FERC’s prior approval under FPA Section 203 for the 2020 upstream ownership transfer of GBX to Invenergy. GBX instead continually characterizes certain noncontroversial changes to its transmission project as amendments to its existing negotiated rate authority. Because FERC never approved the upstream ownership transfer of GBX to Invenergy under FPA Section 203, after the January 2020 closing of that transaction GBX had no negotiated rate authority to amend.

While FERC claims in its Order that it is reviewing GBX’s negotiated rate authority de novo based on its current ownership structure (Order, ¶71), it plays right along with GBX, dismisses as irrelevant GBX’s failure to obtain prior FPA Section 203 approval for the 2020 upstream ownership transfer, and expressly recognizes GBX’s continuing negotiated rate authority (Order, pg. 27). FERC thus backdates GBX’s negotiated rate authority to January 2020.

FERC’s recognition of GBX’s negotiated rate authority as continuing from any time prior to February 29, 2024 not only gives the lie to its claim that it has conducted a de novo review of that authority, it is a patently unlawful retroactive approval of an upstream ownership transfer that closed more than four years before FERC issued the Order.

What happens next? The Court will assign a procedural schedule that allows for initial and reply briefs, and may set the case for oral argument before the Court.

Stay tuned!

Bravo to the Illinois group for questioning what FERC wrote in its Order and filing an appeal!

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<<Previous

Federal Energy Regulation Takes a Turn for the Worse

Checking NextEra's Math

FERC Checks the Box

Valley Link Transmission Files for Incentives and Formula Rate at FERC

Invenergy Asks To Dismiss Illinois Landowner Suit

Who Pays for Data Center Extension Cords?

The Politics In Your Electric Bill

How PJM and FERC Caused Huge Spikes in Regional Power Bills and New Transmission

FirstEnergy Files For Incentives For MARL, Delays Project

Illinois Coalition Files Appeal of GBE's Negotiated Rates at the DC Circuit Court of Appeals

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