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Sugarloaf Conservancy is still pursuing the FERC Town Hall Meeting in Urbana to answer your questions about the PATH project which was promised to them by Rep. Bartlett.
Rep. Bartlett has submitted Sugarloaf's questions to FERC and is working to set up the meeting. Stay tuned!
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PATH has responded to the flood of letters asking FERC to take action on their "suspension."
PATH still isn't telling FERC the whole story, only that PJM determined that the need for the PATH project has "moved several years into the future." But, what PATH presented at the VA-SCC hearing showed that the need actually moved so far "into the future" that PATH fell off the far side of PJM's 15-year planning horizon. PATH tells FERC that PJM says PATH is currently not needed, so they are conducting "more analysis" -- more open-ended, uncertain nonsense. PATH wants FERC to know that their March 7 letter was FYI only, and FERC should not take any action. That's what the kid always says when they get caught with their hand in the cookie jar, isn't it? However, PATH is concerned because your letters are "inaccurate" and "reflect a misunderstanding" of: Commission orders, PJM's RTEP, the PATH project, and the Formula Rate. In other words, you don't know nothin'! For any comments that can be remotely related to the Formal Challenge, PATH hides behind their Answer. And PATH says that FERC has no business interfering in the PJM planning process or "second guessing" PJM's decisions. PATH's a little late here... it's already happened. And PATH also contradicts themselves (or PJM) here. Despite the fact that their letter states that PJM has placed PATH in abeyance for the 2011 RTEP, they further claim PJM will report the results of its "more rigorous analysis" of PATH as part of its 2011 RTEP. So, which is it? PATH says the Kemptown substation is going to happen, despite Frederick County's local government jurisdiction. According to PATH, Frederick County's actions are "not final and are not binding." PATH thinks the MD-PSC can preempt the County's authority. PATH thinks that FERC has no business revisiting their incentives and formula rate cost recovery system. They base this on the Commission's 2008 decision, but fail to consider more recent events, such as PATH no longer being part of PJM's RTEP. Being an approved RTEP project was a requirement for the incentives PATH received in 2008. PATH whines because not all persons who commented fully understand all the legal and financial/accounting intricacies of their formula rate and some of you used the word "cancel." The word should have been "abandon", and PATH thinks all comments should be tossed aside for that reason. Here's the deal... if the project is abandoned (what you would call canceled), then PATH would have to file with FERC to collect its stranded capital costs. All costs would have to be prudent and the abandonment cannot be through any fault of the PATH companies. This would be a separate filing from anything going on right now and up to FERC to decide, however, just like a PSC case, parties can intervene and present a case regarding why the expenditures are not prudent or why abandonment was PATH's fault. What is at issue right now is that PATH is refusing to abandon their unneeded project, and pretending that they can merely "suspend" it indefinitely. PATH thinks FERC should proceed with on-going ROE proceedings, even though their project died, and your concerns about the 14.3% ROE are "without merit." PATH says they need to continue to spend money on their dead project. These expenditures are doubly necessary apparently: "...incurring reasonable and necessary expenditures necessary to maintain..." PATH's continued expenditures include things like writing their letter to FERC, so you all are at fault for causing them to spend more money! The rest of the money is going to be spent on those mysterious "non-development activities" (like front groups?) And besides, PJM ordered them to continue to spend your money on their failed project. The concerns about the vacated NIETC designations have no relevance to rate recovery, according to PATH. As I recall, they were mentioned relevant to incentives, not rate recovery, a distinction PATH failed to grasp. PATH also wants you to know they are not "receiving financial assistance," since they are recovering their own money invested in the ratebase. However, they are also receiving financial assistance with their project expenses directly from ratepayers for their non-capital costs, and also a hefty return on the capital costs in the ratebase every year. I guess since they don't like the term "financial assistance," perhaps they would prefer the term "corporate welfare?" I dunno... Now, here's the part you're going to love most of all! All those stories you told FERC about misconduct on the part of PATH are FALSE. PATH told the Commission you are all a bunch of liars. Be sure to have a tissue handy when you read PATH's rendition of how wonderful they have been to all of you. It's positively heart-breaking how unappreciated they have been by you. PATH even goes so far as to vouch for PJM's credibility in their letter. PATH claims that their project will not harm your health or your property values and your concerns are unfounded. Aside from that, it's none of FERC's business. So, what should you do now? You can let PATH have the last word, or you can answer them with another letter to FERC. You all probably know the drill by now, but here's a link to the instructions. If you haven't sent a letter to FERC yet, but would like to, just follow the instructions. The tone and content of PATH's letter aren't anything new... it's the third time I've seen the same basic arrogance & denial from PATH before FERC. PATH must think FERC is really dumb. It's April. FirstEnergy got fooled!
Remember the TrAILCo request to FERC for recovery of costs of the abandoned Prexy facilities portion of their project? Today was the deadline to intervene in that case. Let's check to see how our team line-up panned out. We already know that Exelon and the Maryland PSC have intervened. Since then, the opposing team has added American Municipal Power, PSEG, Mid American Energy Holdings and, just before the deadline, Dominion. Couple of humorous musings on the "team", in honor of this day... American Municipal Power was one of the intervenors in PATH's FERC incentive filing back in 2008. They objected rather vigorously to just about everything PATH was asking for, and they did some great work on PATH's Formula Rate Protocols that eventually made our work on the Challenge easier. I'm thinking they really don't like the former Allegheny Energy very much. Dominion is FirstEnergy's "partner" on TrAIL. However, it is a vastly different kind of partnership than AEP & Allegheny entered into on PATH. The project construction and finances were never mixed, and the TrAILCo shell company belonged solely to Allegheny. The Dominion guys called it a "meet-up" project. Dominion constructed their portion, and Allegheny constructed their portion, separately. Dominion doesn't hold any stake in this cost recovery. And I got the distinct impression from the Dominion guys after talking with them on several occasions that Allegheny wasn't one of their favorite friends. Also, Exelon filed this comment on the docket today. Gosh, it's a real breath of fresh air to see a power company attorney who isn't a dunce -- Exelon's counsel makes a great point! The problem is that PJM has removed the existing cost allocation for the Prexy facilities from their most recent update. Exelon wants to know who is supposed to be paying for the recovered costs, if granted. Postage stamp rates only apply to facilities 500kV or above. Only a portion of the proposed Prexy facilities was a 500kV line; it also included other 138kV lines and substations. TrAILCo can't be thinking that they can foist all of this off onto all the PJM ratepayers, can they? Exelon also brings up the 7th Circuit remand to FERC. Until the Commission makes a decision on that, Exelon wants the decision on TrAILCo delayed. Makes perfect sense to me, since the 7th circuit decision called into question PJM's postage stamp cost allocation that will apply to the portion of Prexy that was at 500kV. FirstEnergy really should have checked the Allegheny Energy horse's teeth before buying... by "PowerMAD"
I've been following the letters sent to FERC arguing against PATH being allowed to “suspend” the project so it can continue to collect that 14.3% Return on Equity and keep some maintenance level of activity going. So far, 31 individuals and one organization have submitted comments, every single one of them objecting to PATH's attempt to create a new project category - “No Plan to Build But You Already Promised Us the Money” (NP2BYPU$, for short). You know what's missing? Where are all the “citizens” (Affiliated Construction Trades Foundation, intervenor in favor of PATH) who supported PATH, and all the “experts” (Dan Ervin) who wrote pro-PATH op-eds, and the U.S. Chamber of Commerce “leaders” (Bill Kovacs, SVP for Environment, Technology and Regulatory Affairs, USCofC) who just argued that PATH is a critical project? They're MIA. In fact, if you look at the FERC docket for PATH, you might notice that even PJM hasn't filed anything to support PATH's argument that it gets to keep collecting our money. Do you think that might be because it's one thing to pay “experts” to spout the corporate line to the public, but quite another to lie to the federal agency that regulates your industry? Editor's Note: The above is a submission written by one of our regular readers who goes by the screen name "PowerMAD". We do accept submissions -- send yours here. Our friends at Sierra Club have weighed in on the "suspension" scam PATH is trying to pull at FERC. See letter to FERC from Elena Saxonhouse of Sierra Club and Abigail Dillen of Earth Justice, which was filed today.
Sierra Club and Earth Justice are responsible for bringing out the truth in the PATH case before the Virginia State Corporation Commission way back in 2009, and that was the beginning of the end for PATH. We owe a huge debt of gratitude to these organizations and their incredibly sharp, hard-working attorneys for providing legal expertise, and for providing expert witnesses to fight the PATH proposal. They have also worked incredibly well with the ordinary citizens and grassroots groups involved in a coordinated opposition. And, on a personal level, they're some of the nicest folks I've ever met! The cavalry has arrived :-) Have you sent your letter to FERC yet? It's not too late! FERC has decided that PJM needs a babysitter. Apparently there's no parental control and the children are running wild!
Quote from FERC's notice dated yesterday: "The Federal Energy Regulatory Commission (Commission) hereby gives notice that members of the Commission and Commission staff may attend upcoming PJM Interconnection, L.L.C., (PJM) meetings, as well as other subcommittee or task force meetings that are not currently scheduled, but that are typically scheduled on short notice or meetings that are scheduled on short notice based on items arising from the agenda as posted on the PJM Web site." Looks like the shenanigans have to be relegated to top secret, closed door meetings from now on. I hope the FERC representatives have watched plenty of Dr. Phil so they're not too freaked out by PJM's screwed-up family dynamics. Maybe now is a good time for little Stevie Herling to polish up the ol' resume. Perhaps there's a new official job for him at AEP or FirstEnergy to be had. C'mon, PJM, if a bunch of ordinary citizens can clearly see your bias and phoney "need" projections for PATH, FERC isn't going to be fooled either. ...and rubs off on new daddy FirstEnergy! I bet FirstEnergy didn't know about all the "extras" they would be getting in the meger deal.
We've been watching FirstEnergy's FERC Section 205 filing to recover stranded costs due to abandonment of the Prexy portion of TrAIL for the past week. Yesterday, both Exelon and the Maryland PSC petitioned to intervene on behalf of their ratepayers. FirstEnergy/Allegheny must prove that the abandonment was outside their control and all recovered expenses must be prudently incurred. Ut-oh, looks like Exelon and the MD-PSC have other ideas! Here's a link to the filing. It's a huge, mega-file and takes a while to load, so don't get impatient. It's worth the wait. Apparently Allegheny didn't treat the landowners and opposition any better during the TrAIL case than they have treated us during the PATH case. The Pennsylvania PUC turned down their application for this portion of the line. Anyhow, TrAILCo is asking for around $13M in project management & permitting costs, ROW property purchase costs, ROW options & damage release costs, construction engineering, pre-construction and legal costs for the Prexy facilities. If approved, this regulatory asset will be amortized over 49 years, to be paid by all PJM region electric customers. Fortunately, it appears that they had to try to mitigate the costs by using some of the capitalized assets in other parts of TrAIL, and selling the property purchased for ROW purposes. The Pennsylvania authorities forced them to give back all the ROW they had wrestled from landowners along the length of the line. However, us ratepayers get to pick up TrAILCo's cost for what appears to have been a big-time swindle of Pennsylvania landowners. TrAILCo attempted to utilize unused ROW purchased for a project years and years ago that was never built. PATH landowners should take notice... if you have signed a ROW agreement with PATH, don't be surprised if 50 years down the road some power company shows up on your property and tells you they have a ROW for a huge, new project. Just in case you're interested in having a little fun poking TrAILCo with a stick, here's the info. about intervening in the FERC case. You have until April 1. Why not file just before the deadline and give FirstEnergy a little April fool's thrill? Docket Numbers: ER11-3064-000 Applicants: PJM Interconnection, L.L.C. Description: PJM Interconnection, L.L.C. submits tariff filing per 35.13(a)(2)(iii: Trans-Allegheny Interstate Line Co’s revisions to Attach H-18A of the PJM Tariff to be effective 6/1/2011. Filed Date: 03/11/2011 Accession Number: 20110311-5131 Comment Date: 5:00 pm Eastern Time on Friday, April 01, 2011 Our friends at Sugarloaf Conservancy met with Rep. Roscoe Bartlett on Friday to request a town hall meeting in Urbana with Federal Energy Regulatory Commission representatives to answer our questions about the PATH project.
While PATH went on record at the Virginia SCC hearing last week presenting evidence that PJM has determined that the need for the PATH project has slipped out past their 15 year planning horizon, they have also informed FERC that they intend to continue to utilize their Formula Rate to collect "costs necessary to maintain the project in its current state" for an indefinite period of time. I would like to think that this is not the outcome FERC intended when they granted PATH's incentives in 2008 and that FERC will be responsive to both PATH's arrogant "Status Update" of March 7, and the concerns of ratepayers forced to fund this unending gravy train for a project that PJM no longer supports. See Sugarloaf's press release. More information to come... On Monday, PATH jabbed a thumb in FERC's eye, as Bill so poetically phrased it on TPL when they filed this "Status Update".
So, what is PATH trying to pull now? They are telling FERC that they are "suspending" their project indefinitely while PJM "conducts more analysis of the PATH project" and "evaluates its planning methods." In other words, PJM is going to alter their processes to create a need for PATH, which has disappeared under their current planning process, and then they'll be back. Maybe. Meanwhile, PATH will be undertaking "activities necessary to maintain the project in its current state" during the suspension and guess who gets to pay for these "activities" during the suspension? You do, little ratepayer! Since these "activities" are undefined, lets see what PATH considers "necessary" to maintain the project. Their PATH Education Awareness Team (PEAT)? Nope, I guess that's not "necessary". Their ratepayer-funded front group, West Virginians for Reliable Power or Energy or whatever we're calling ourselves this week? Yes, PATH considers this "necessary". Looks like they intend to continue to waste your money on imprudent expenditures like front groups for an indefinite period of time. How are they going to do that, you ask? Through their Formula Rate, "which will continue to apply during the suspension," just like nothing has happened. So, PATH intends to continue to charge ratepayers for all project expenses and that huge 14.3% return every year while their failed project sits on a shelf at PJM indefinitely. How long is this suspension supposed to last? That's really not clear, but "FirstEnergy spokesman Doug Colafella said it looks like completion of the project has been delayed until at least 2020, based on PJM's latest forecasts." So, PATH wants to continue to toss your money down the PATH rathole for at least another 9 years before they abandon this loser project? How much is our outlook on energy going to change in the next nine years? We certainly won't need the PATH project! It's time to give up on PATH now! When PATH was granted their incentives at FERC way back in 2008, one of the incentives they were granted was,"recovery of 100 percent of prudently-incurred costs associated with abandonment of the Project, provided that the abandonment is a result of factors beyond the control of PATH, which must be demonstrated in a subsequent section 205 filing for recovery of abandoned plant." FERC granted this incentive for a reason that has now become reality -- the PATH project has failed. However, PJM and PATH were very careful with their word choice in the press release last Monday to avoid that "A" word. PATH's "thumb in FERC's eye" continues, "Importantly, the PJM Board has not directed the sponsoring transmission owners to cancel or abandon the PATH project..." One of the reasons PATH got such a big basket of incentives from FERC was that the route and end users were in what the Dept. of Energy had designated to be the Mid-Atlantic National Interest Electric Transmission Corridor (NIETC). On February 1, 2011 the Ninth Circuit Court of Appeals vacated (cancelled) that designation. An open question is - What should the status of the incentives PATH received be now, in the face of this designation cancellation? Does PATH have the right to continue using incentives which were granted due to a now illegal designation? PATH's "suspension" is an option they are creating. Either they have a project and they proceed, or they don't have a project and they abandon it. Instead, they are making up a third option and hoping FERC will go along with it. FERC has an important decision to make. Would you like to let FERC know what you, the ones financing this project, think they should do? We're going to make it easy for you to do! 1. Download this template. Fill in your name, address, the date, your comments, and your name at the bottom. If you would like it filed electronically, you don't need to sign it, but can use "/s/ Your Name" in the signature block. 2. You can drop it in the U.S. Mail, or we will file it electronically for you. 3. If you would like us to file it electronically, there are two more steps to complete. First, you must register your email address with FERC. It's simple and quick -- go here Second, send your letter as an attachment (either pdf or word file) here (click on the word "here" and it will launch your email program) and it will be filed electronically with FERC for you. Let's review: 1. PATH wants to continue to spend an undefined and unlimited amount of funds recovered from ratepayers and collect their 14.3% return for an indefinite period of time. 2. PJM has said their project is not needed. FirstEnergy says their project may be needed in 2020 or later. 3. PATH should be properly abandoned at FERC now. To "suspend" the project and continue to charge ratepayers to maintain it in its current state is unjust and unreasonable. 4. The conditions under which PATH received their incentives from FERC have changed significantly. 5. Allowing PATH to proceed this way sets a dangerous precedent whereby utilities will apply for projects they never intend to complete and hold in "suspension" indefinitely in order to collect a generous return from ratepayers. 6. Tell FERC about your own personal experiences with the PATH project -- whether it's your dealings with land agents, lies you were told, outrageous behavior on the part of PATH, their arrogance when dealing with local government and citizens, the fact that their "Kemptown" substation has been rejected by Frederick County, or whatever you would like to relate from your own experience. Make your letter personal and unique! To see a couple of example letters, click here and here. Please do not copy these letters word for word! This may be your only opportunity to have a say in PATH's final status. Please add your voice! To see comments already docketed at FERC regarding PATH's "suspension", click here. |
About the Author Keryn Newman blogs here at StopPATH WV about energy issues, transmission policy, misguided regulation, our greedy energy companies and their corporate spin.
In 2008, AEP & Allegheny Energy's PATH joint venture used their transmission line routing etch-a-sketch to draw a 765kV line across the street from her house. Oooops! And the rest is history. About
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