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Todd Burns:  Liar?  Or Just Stupid?

8/10/2017

5 Comments

 
It's one or the other.  Let's contemplate this...

When I asked Todd Burns what his company's return on equity was, he appeared confused.  He didn't know what a return on equity was.  It was only after I explained what it was that he finally remembered that Transource's return on equity for this project is "10 to 11 percent" something like that.  FACT:  Transource has applied to the Federal Energy Regulatory Commission for a 10.9% ROE.  The matter is currently in settlement discussions, with an administrative hearing possible if a settlement is not reached.

I met a handful of the Transource guys and gals the other night.  Most attempted to be personable and avoid direct lies while trying to answer my increasingly hard questions.  And then I worked my way up to Todd Burns.

He also had trouble admitting that Transource has received an incentive from the Federal Energy Regulatory Commission that allows the company to file to recover all its sunk costs from ratepayers in the event that PJM decides to abandon this project. 

So, do the lawyers and bean counters at "Transource" (really utility giant AEP, because Transource has no employees of its own) not share basic information, such as return on equity and who pays if the project is abandoned, with Todd Burns?  Todd needs to hustle home to Columbus with great alacrity and find out about all this stuff!  Otherwise, he looks rather stupid to a public who does know about it.  Or maybe he looks like a liar who was pretending to be uninformed so he could avoid the question?  As if that could happen.

Todd Burns also seemed to be confused about a lot of other facts during an interview with the Waynesboro Herald Record.  Despite that, the reporter managed to write a great, balanced article.  The Herald Record has the best coverage of this issue that I've seen (other media take note!)  What was it that Burns said?
Burns said some of the negative feedback is based on misinformation about the project. “There’s a lot of confusion and a lot of things being said that aren’t accurate,” Burns said.
I blame you, Todd.  I think most of the "misinformation" is coming from you.  Please, allow me to demonstrate...
“Burying lines causes problems,” Burns said. “If a line fails and it’s underground, it can’t be located and fixed immediately. That’s what happened recently on the Outer Banks.
“The environmental disturbance is greater to trench and bury a line than to run it overhead. And it’s ten-times more costly to do it underground.”

It is NOT "ten times more costly" to underground lines.  In fact, it's only twice as costly, roughly.  AEP has been claiming undergrounding is "ten times more costly" for years, along with a whole bunch of other excuses for taking the cheaper and easier option of aerial lines.  And the technology does exist to determine where a fault is on an underground line.  And you probably can mark an underground line to prevent all by the biggest idiots from pile driving onto it.  I'm not buying the environmental disturbance thing, either.  I've seen what transmission companies do to rights of way when building overhead lines.  So, let's update these excuses, because they sort of sound like a lie to me.

As well, who cares how much it costs to underground lines?  If the landowners require undergrounding, then that is the cost of fixing this "bottleneck."  Are you saying that unless you can build this cheaply that all the savings for the DC-Baltimore elite will evaporate?  A more expensive project doesn't clear a cost-benefit analysis?  Then, obviously, this project isn't worth doing.  It is not incumbent upon Pennsylvania and Maryland landowners to sacrifice by allowing the cheapest project you can build in order to move cheaper power to the city.  If you want them to sacrifice for the cities, then the landowners need to have input into how the final project looks on their property.  And by having input, I mean actually making the determination -- I don't mean having an opportunity to toss comments down a black hole at Transource where they are completely ignored.  The only way a landowner can have effective input is when eminent domain is not an option.  Anything else is coercion, not negotiation.  Which brings us to...
“I’ve heard people are concerned about land use and whether they will be able to use their properties,” Burns said. “People will still be able to work under the power lines, although obviously there would be a limit on building underneath them. The land is still useable.”
Burns said property owners would be compensated for the easements through their land. “We’re going to be acquiring easements from the landowners and compensate them for it. They will retain the rights to certain activities,” Burns said.
He said property-owners shouldn’t be worried about the threat of eminent domain. “Our approach is we negotiate fair market value for anything that has to be acquired,” he explained. “We use eminent domain less than three percent of the time.”

If you want to see how landowners can still work under high voltage transmission lines, carefully watch the AEP videos on this page.  Nuisance shocks, EMF, and big brother monitoring your activities on your own land?  What's not to like?  But wait, there's more... like aerial spraying of the right of way with chemicals to keep growth down,  or power line workers coming on your property for maintenance or repairs and leaving gates open, driving large equipment through your fields, and disturbing the soil.  The truth is that you will have picked up a parasitic tenant on your land... in perpetuity.

"Compensation" for property taken may be less than you'd expect.  After all it is a value created by an out of state company, that will never even lay eyes on your place, from market studies of similar land sales of property in your county.  It is Transource's idea of the value of your property, not yours.  As well, you may only be paid for the property in the right of way, when the right of way itself devalues the rest of the parcel.  Payments for damages will be argued over in court for years... at your expense, if you don't accept what the company wants to give you.

I'm pretty sure Transource land agents will use the threat of eminent domain 100% of the time in order to coerce the landowner to sign on the dotted line.  That isn't negotiation, that's coercion.
Burns said he is confident the Independence Energy Connection will save customers money not just in the greater metropolitan areas south of here, but locally. “The driver is to give customers in this area access to lower costs,” he said. He said it is too early to estimate what the cost savings might be, or whether local, independent energy companies will pass the savings on to customers. “They may have other initiatives that will affect your bill,” Burns said.
Perhaps Burns needs to talk to his underlings, who have readily admitted that the lion's share of the savings is for customers in the DC/Baltimore area.  And PJM agrees with that.  That's why 80.52% of the cost of this project will be paid for by DC, Baltimore and Northern Virginia Customers.
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Those who receive the benefits (in this instance cheaper power) pay the costs.  That's how PJM works.  Any savings for the project area (benefits) are not commensurate with the cost to the community and the individual landowners.  Their costs are much greater than any benefit they may receive.

And I hate to let Burns know, but one of his underlings actually confirmed that market efficiency projects perform a leveling of costs across the region.  If power is cheaper in the cities, the cost of it must rise somewhere else.  All that cheap power "bottlenecked" in PA and MD and unable to reach the cities?  Those are the prices that are going to go up once the "bottleneck" is removed.

And then Burns admits he has no hard evidence of how (or even if) this project will lower local electric bills.  Then he supposes that local electric companies may keep any savings that develop for themselves.  Of course... always thinking ahead, that Todd, to explain now why bills will never go down after this project is built.

Todd is not telling the truth about project benefit.  But he may not be the only one with a penchant for prevarication.  Transource spokeswoman Abby Foster made up a whole bunch of satisfied and happy landowners out of thin air.
Despite the many negative comments exchanged from person to person around the packed community center, Transource officials said there was also positive feedback.
“We found in this area, people understand the greater need for infrastructure,” said Abby Foster, community affairs representative for Transource Energy. “Everyone here benefits from something being on someone’s property.”
Foster said the positive comments she heard came from residents who see the financial benefits of easements on their properties as well as the benefits of costs savings on energy bills.
She said some residents don’t like the exact location of the proposed line across their properties but are willing to have it shifted to a different location on their properties.
“There’s a lot that has shifted because of public input,” Foster said.
Why are there no quotes from these people?  Why didn't the reporter talk to any of them?  Is that because they don't exist?  These must be the mysterious folks who have requested monopoles, because those people are just as elusive.  What it seems more like is that Transource is making up a mythical landowner who is pleased because Transource is altering its plans to suit Mr. Mythical.  A company that presented its public image as "take it or leave it" would be seen as unfavorable by the public.  One that pretends it is bending to the will of the people may curry more favor.  But when there are no happy people in reality, it's all an illusion.  Nobody wants this transmission line on their property.

And as far as that “everyone here benefits from something being on someone’s property” line, puh-leeze.  I heard that from one of the Transource people at the open house.  It was the tagline of the night.  And it sucks.  It doesn't work on the public, just so you know, Transource.  Other companies have tried it before you.  It is met with anger and confusion.  It has no relevance for affected landowners.  Just because we use eminent domain and rights of way to take property for public use does not mean that everyone should gladly sacrifice for the selfish needs of others.  And that's what this is... rural sacrifice for urban benefit.  This project isn't needed to keep the lights on.  It's only "need," according to PJM, is to make power cheaper in the cities to the south.  Those cities like to keep their pretty skylines lit up all night long.  There's no reason at all to keep an office tower lit inside all night.  Maybe if the cities quit wasting so much electricity, they wouldn't need to call older, more expensive plants to generate during peak load a few days out of the year.  And then we wouldn't "need" gigantic transmission towers in Pennsylvania.

Let's wrap up with this...
“We’ll look at a route that strikes the best balance,” Burns said, mentioning recreational activities, historic value and land use concerns. “You rarely come up with one that’s gonna satisfy all those things. Ultimately, it will be at the state level to decide where it goes.”
It is up to the state to decide WHETHER it goes, not just where.  Opposition to this project is huge and gathering mass every minute.  Loud, forthright opposition kills transmission projects.  Todd Burns is going to need to get himself educated quickly!  Or else quit lying.  He's not very good at it.
5 Comments

Abandoned PATH Properties, Get Your Abandoned PATH Properties Here!

8/8/2017

1 Comment

 
PATH is holding a fire sale this month on all those abandoned properties it purchased nearly 10 years ago.  Need a gigantic farm property that's not zoned for an electric substation? 
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How about a nice vacation cabin in West Virginia that's been sitting vacant and rotting for years? 
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Or perhaps you're in the market for a big lot in a very exclusive Loudoun County, Virginia, subdivision and you don't mind having high voltage transmission lines running through the middle of your property?
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Then don't miss these PATH absolute auctions on August 22 and August 23!

Finally, 5 years after the PATH 765-kV transmission line project was officially abandoned by PJM Interconnection and the PATH companies, the property PATH bought with your money is being auctioned off.  PATH has been marketing some of these properties for years, with no takers.  What kind of a property is marketed for 5 years with no offers?  What's wrong with these properties?  Buyer beware!

While actively seeking to build the project between 2008 and 2011, PATH purchased outright around $30M worth of real estate to be used as future substations and right of way for its transmission project.  Each property has some story attached that serves as an excuse for purchasing it way above its market value at that point in time.  Need an ending point for your project?  Purchase a farm zoned agricultural and then set about battling the county about re-zoning it.  Need to have a conservation easement lifted?  Purchase a bunch of property near the easement and then hire lobbyists to influence the governmental entity that holds the easement to release it.  See an opportunity property where the owners are struggling financially?  Purchase it now and worry about how you may use it later.  After all, it's not YOUR money, it's coming out of electric ratepayer wallets, and you're earning a big fat return on every dollar you spend.

How much return?  Well, initially, 14.3%, later 12.9%, later still 10.9%, even later 10.4%, and finally, 8.11%.  As long as you own those properties, you may collect the corresponding return on your investment from ratepayers. 

But when you sell the properties, you must credit the sale price to your unpaid balance upon which the return is calculated.  For example, if the balance of your investment is $100, and you sell a property that is included in that balance for $5, then your new balance is $95.  An 10% return on $100 is $10.  A 10% return on $95 is $9.50.  So, by holding onto your properties as long as possible, you will collect the maximum amount of return.  So it really wouldn't help your profit margin to sell these unneeded properties quickly.  You must hold on to them until the rest of the ratepayer debt is paid and a regulator orders you to dispose of them, then auction them off at fire sale prices and make the ratepayers pay all the auction and commission expenses off the top of the credit they will realize from the sale of property.  And then you can hope the ratepayers don't find out about it.

Whoopsie!!!

So, for all those PATH opponents who have been living in suspended animation for the past 5 years wondering if PATH was going to dream up another project to use those properties for a transmission line, you're released from your continuing torture.  The PATH companies are finally going away and won't be using the properties for a future transmission project.  Now you only have to worry about what a new owner may do with the properties.  And how much you ultimately paid, of course.  Creative accounting, and feigned uncertainty combined with a failure to effectively market vacant property, will squeeze the last possible penny out of your wallet.

PATH... the gift that keeps on taking.

How do these guys sleep at night?
1 Comment

Grain Belt Express's Worst Nightmare

8/8/2017

2 Comments

 
Legal transcripts contain an index.  The transcript of last week's Missouri Public Service Commission Oral Argument in the Grain Belt Express case includes the word "nightmare."
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There was a bit of debate regarding exactly what constitutes Grain Belt Express's worst nightmare.  PSC Chairman Hall thought issuing a non-appealable favorable finding (but not a permit) for GBE to use as leverage for assent of county commissions would create GBE's "worst nightmare" of hanging in limbo forever.  However, GBE's attorney was quick to correct him.  He said dismissal of the application was GBE's "worst nightmare," because dismissal means the project is dead.  Chairman Hall started to disagree, then changed his mind.  I still think a dead project is better than a limbo project, at least it has finality and stops costing the investors money that maybe they don't want to invest anymore.

Chairman Hall thought GBE's idea that a "favorable finding" by the PSC would convince the counties to give assent to the project "naive."

CHAIRMAN HALL: Yes, I have a few. I want to start with your alternative argument that
the Commission go through the Tartan analysis, determine that Grain Belt has met each of those factors, but then withhold issuing the certificate. Would that be an appealable decision?
MR. ZOBRIST:  I think it would be because if you construe Neighbors United to say that you cannot issue a CCN, you're making these other findings and you're simply withholding it at that point. To be honest, I really haven't thought through that. It may be -- it depends on what your language is. I think if you say that this part is final, you view it as appealable, that that might be something for us to take a look at because it may not be an appealable order until either --
CHAIRMAN HALL: I think that would be your worst-case scenario. Then you're sitting in limbo here and you can't take the order up. MR. ZOBRIST: Well, I'm being the optimist, Chairman. I'm assuming we get favorable  factual findings on the public convenience and necessity. We'd use those to go to the county commissions and say the Public Service Commission has weighed in and says the public is not going to be harmed and you should issue your county assents and then we'll be back.  Now, if you -- if you deny it, if you dismiss it, then I think --
CHAIRMAN HALL: Well, that's --

MR. ZOBRIST: Pardon me. Go ahead.
CHAIRMAN HALL: That, to be perfectly blunt, seems a little naive to me that this commission's decision on public interest is going to sway the county commissions, and so --
MR. ZOBRIST: Like I said --

CHAIRMAN HALL: I think the reality is that that would be almost your worst nightmare because then the case just sits in limbo here and you can't take it up on appeal.
MR. ZOBRIST: Well, let me put it
this way. The nightmare is if you just dismiss it out of hand because then the project's dead. The
problem -- 
CHAIRMAN HALL: I would say that's better than this because at least then -- oh, okay.   I'm sorry. I'm with you now. Keep going.

The transcript also contains derivatives of the word "baffle."  As in
I mean, I completely understand Mr. Zobrist's argument. I'm baffled by yours.
So said Chairman Hall regarding MJMEUC's argument that the ATXI decision supports the issuance of a conditional permit for GBE.

I'm thinking that the hearing did not go well for GBE.  Chairman Hall did not seem to be buying the arguments that the ATXI decision wasn't relevant to the GBE case.  In order to declare the ATXI decision inapposite, GBE would have had to distinguish itself from ATXI, and it completely failed to do so.  Instead it put forth arguments that were "naive" and "baffling" that urged the Commission to defy the courts and issue a CCN with language that tells the court their ATXI decision was wrong.  If the Missouri Supreme Court declined to do so, it's not the place of the PSC to attempt to re-interpret the law.  The law is clear, and the courts have spoken.  Done.

And speaking of specious arguments, the attorney for the Sierra Club and other parties really stepped in it.  He told the Commission,
We've also raised the possibility of a county veto being in violation of federal law, and this is based solely on my general knowledge, but it seems that local interference with interstate commerce and electricity would violate the Commerce Clause of the Constitution. The Federal Power Act gives FERC authority over interstate transmission lines. The state still has authority to regulate the siting of interstate transmission lines, but they're otherwise preempted.
This guy's "general knowledge" is flat out wrong.  The Federal Power Act only gives FERC authority over interstate transmission RATES.  It does not give them permitting or siting authority.  FERC cannot approve transmission projects.  The states have complete jurisdiction over the siting and permitting of interstate transmission lines and are not "preempted" from acting.  With this kind of stellar legal analysis, can we believe anything this guy says?  The Sierra Club needs to mind its own business and stop trying to interfere in state transmission permitting cases.  They only succeed in making themselves irrelevant.

So now it's up to the Missouri PSC to decide what to do with this case.  The ATXI decision does preclude the issuance of a CCN for GBE.  Any attempt to go around it, as suggested by GBE and its sycophants, will most likely be struck down by the courts.  GBE's attorney has to recognize this.  He seemed nearly hysterical in his anger and frustration when it appeared that he failed to convince the Commissioners to go along with his "path forward."  Remember, the nightmare isn't keeping this case in limbo, but in dismissing it.  While logical thinking says that limbo is the worst thing that could happen, for some reason GBE is looking forward to it.  It's almost as if GBE is already hanging in limbo, unable to unlock enough cash to continue operations unless it receives some sort of "favorable" opinion from the MO PSC.  It doesn't seem to matter if the favorable opinion hangs the project in legal limbo, or results in a future court vacating the favorable opinion.  It's all about having that piece of paper right now. 

The Missouri Public Service Commission holds the key to the Clean Line money vault.  Without it, the project is dead... and likely the other Clean Line projects as well.  In the wilds of Mayberry, an animal so injured it cannot recover is put out of its misery.  It's a kindness to end its suffering.  GBE is suffering.  It cannot be saved.  It's time...
2 Comments

A Good Day at the Illinois Supreme Court

5/18/2017

5 Comments

 
Landowner opponents of the Rock Island Clean Line transmission project hoped that the Supreme Court oral argument yesterday would be the last they will see of Clean Line Energy Partners.  They could be right.

Clean Line arrived overly confident, conflating the Court's desire to hear the case with a desire to reverse the decision of the Third District Appellate Court.
Hans Detweiler, vice president of Clean Line Energy Partners, Rock Island's Houston-based owner, said he's "encouraged" that Illinois' high court will review the case and hopes it "will recognize that privately funded infrastructure projects" like Rock Island "serve a public purpose."
But softball questions and encouraging smiles were not to be had from the Supreme Court Justices yesterday.  The Justices asked a plethora of questions regarding how RICL could legally be for "public use."

In response they got a whole bunch of complicated explanations on physics, Open Access Transmission Tariffs, and the idea that FERC's rules on a non-discriminatory auction process satisfied Illinois law regarding a utility's non-discriminatory service to the public.  It's quite unfortunate for RICL that they decided the ICC's attorney should go first with his argument that the ICC is entitled to deference in how it interpreted Illinois law.  The Justices didn't seem too interested in that, instead asking Matthew Harvey questions about how RICL could legally be a public utility.  Poor Mr. Harvey... his answers did not satisfy RICL's bevy of attorneys in the first few rows and drew skeptical faces and negative headshakes from them.  I was afraid that if Owen McBride's eyebrows knitted themselves any closer together whether he'd go cross-eyed.  Despite this superior attitude from RICL, I can't say RICL's attorney fared any better before the judges than Mr. Harvey.  RICL's attorney met the justices' questions with complicated circular answers and lots of smoke and mirrors that failed to shed any light on the issue.

When asked by a Justice if RICL's desire to be a public utility was for the sole purpose of acquiring eminent domain authority, RICL's counsel chose to deny it and blame the ICC for telling them they had to be a public utility.  Really, now?  I'm thinking that a straight up admission of how hard it is to build transmission without eminent domain authority would have served them much better than a ridiculous story nobody believed.

The appellees lead off with a strong argument defining "public use" that managed to answer all the Justices' questions that had remained basically unanswered after the appellants had their say.  Matthew Price, representing Com Ed, was positively brilliant compared to the bombastic, uninspired arguments of the ICC and RICL.  He explained public use so simply that it could be understood by anyone.  Public use is a utility's obligation to serve all who want service.  A public utility doesn't get to choose which customers it will serve in order to maximize its profit.  RICL will pick and choose its customers in a way that maximizes its profits.  A public utility must serve everyone, not just allow them to bid for service, or use service available when no one else is using it.

Mr. Price made it clear as a bell.  And the Justices pretty much stopped asking the questions about public use, so I guess their questions were answered by Mr. Price.  It's pretty clear to me that the merchant transmission business model doesn't comport with Illinois law.  Price said something about a FERC-land determination of non-discrimination does not satisfy a determination in the Land of Lincoln.  Right... because FERC is only looking at whether the auction process is fair.  It does not concern itself with whether the merchant transmission company is discriminating against members of the public by only providing service to select customers.  Just because FERC approves it does not mean it comports with Illinois law.

Mr. Price brought up the issue of RICL's refusal to expand capacity on its line if it gets more requests for service than it can provide.  RICL claims it has to stick with the original plan because that's the project in its application.  Maybe it could build another line if it had multiple requests, but why bother with that if it can increase its profits by limiting available capacity? 

Price brought up the idea that RICL could pro-rate its available capacity at the auction, with each bidder receiving a share, instead of trying to maximize its profits by selling only to the highest bidders.  And then the most humorous thing happened... in rebuttal, RICL's counsel decided it could pro-rate its capacity to auction bidders.  I've never heard anything about this from RICL before, and I'm pretty sure it wasn't in their FERC application for negotiated rate authority.  Nor was it in the Order of the ICC granting the CPCN.  So now the Court is supposed to believe RICL has fundamentally altered its auction process on a whim?  Way to admit you're wrong, RICL!

The ILA presented a short, cogent argument about how eminent domain is basically procedural once a CPCN is issued.  And got snotty looks and smirks from the RICL attorneys for their trouble, along with an arrogant rebuttal that attempted to minimize and disparage landowner concerns.  RICL showed the Court that it doesn't give any consideration whatsoever to the landowners it wants to get into perpetual easement partnerships with.

So, now we wait for the Court to issue its opinion.  Some people say that you can tell which way a court is leaning by the questions its judges ask during oral arguments.  Hans Detweiler better not count his chickens before they hatch.  He's no constitutional scholar.  Commerce Clause.  Heh.
5 Comments

Billionaires' Club Looks Out For Its Own Interests First

5/11/2017

0 Comments

 
Who's looking out for your interests, little electricity consumer?  Is there some government agency taking an interest in ensuring that the rates you pay and the services you receive are fair?  Or are privately-funded, self-anointed "consumer interest" groups the ones working in your best interests?  And what's the difference, anyhow?

Public Citizen claims to be a public interest consumer organization.  Public Citizen's energy program has engaged over the years in a series of protests and interventions that spend more time whining about its lack of public funding that hinders its participation than actually saving real dollars for energy consumers.  Public Citizen's most recent whine was highlighted in an article in RTO Insider this week.  Public Interest Groups Cry Foul over Technical Conference, RTO Transparency links to a letter sent to RTO/ISOs and FERC complaining about being denied an opportunity to speak at a Technical Conference.  Public Citizen also launches into its tired arguments that it should be paid to participate in energy regulatory proceedings and should receive  voting rights at RTO/ISOs.

State Consumer Advocates already participate in RTO/ISO processes, and also represent consumer interests before FERC.  State advocates are government employees with the sole mission of protecting consumer interests.  They don't accept outside funding, and in fact currently operate on shoestring state budgets.  These hardworking, underfunded advocates truly have the best interests of consumers in mind.  How do I know this?  Because I shared a counsel table with them during a 15-day FERC proceeding.  I saw and heard a lot.  Consumers saved nearly $20M in that case.

Public Citizen, on the other hand, is a private organization funded with grant money.  Public Citizen's interests are the interests of their funders.  When I looked at who funds Public Citizen, I found a list of individuals and foundations who donated buckets of money to the organization.  While Public Citizen claims to represent thousands of consumer members (who remain nameless) and "low-income" citizen interests, regular folks aren't the ones donating obscene sums of money to Public Citizen.  Under the category of "Foundations" there's plenty of private interest money to be had, such as the Energy Foundation.  The Energy Foundation seems to have an interest in environmentalism.  And, wouldn't you know it, Public Citizen's "Climate and Energy" program seems dedicated to clean energy (not necessarily saving consumers money on their energy bills).   The Energy Foundation seems to be a conduit for billionaire environmentalists to hide while funneling money to private organizations eager to do their bidding.  The Energy Foundation seems to have its fingerprints on a lot of "clean energy" initiatives, such as America's Power Plan (APP).  APP was concocted several years ago to blow some smoke over the issue of using eminent domain to site energy facilities on private property.  The Energy Foundation's assembled "experts" (including Farmer Jimmy Glotfelty of Clean Line Energy Partners) tried really hard to purport to know what landowners wanted in exchange for hosting energy infrastructure on private property.  Except no landowners participated in their project.  As a result, APP got things horribly wrong, such as this gem:
I want to site a new transmission line, but I am struggling to find the best way to work with private landowners who will be affected. Any suggestions?

Look to successful examples from around the country—like Montana Dakota Utilities and Clean Line Energy Partners. And consider new options to bring landowners to the table in a positive way—like Special Purpose Development Corporations or annual payments.

The first principle is to engage landowners early and often. Many utilities have found that holding landowner meetings earlier and more often than required can dramatically improve project efficiency. Innovative ideas include compensating private landowners via Special Purpose Development Corporations (which offer equity in the project’s success) or annual payments (which give landowners a stake in the life of the project). For example, Clean Line Energy Partners is now offering annual payments to landowners who will host a new DC transmission line intended to deliver 3.5 GW of power from Iowa to Chicago.

Of course, eminent domain often becomes an option once a transmission developer demonstrates that a new project is needed and the siting authority confirms that the project will serve the public interest. But cross-state transmission lines and third-party (non-utility) developers cannot always count on eminent domain. Regardless of whether eminent domain is an option, it should always be considered a last resort as there are many options to bring private land-owners to the table in a more positive way that can minimize friction in siting new lines. For example, Montana Dakota Utilities has not had to use eminent domain since 1983, mainly because the utilities consider themselves a part of the community, and have formed positive, trusting relationships with landowners.

For a more detailed treatment of these issues and further options for compensating private landowners, see pages 18-21 of Siting: Finding a Home for Renewable Energy and Transmission.
Successful examples from around the country?  Clean Line Energy Partners?  Hahahahahaa!  Clean Line Energy Partners has had no success, and landowner opposition groups continue to fight them every step of the way.  If you really want to site a transmission line, Clean Line could only be a realistic example of what not to do.

Well, now, how did I get so off track?  "Clean energy" is  like peeling an onion... there are so many layers when you drill down into where they get their funding.  The Koch brothers would be proud.

So, let's get back on track here.  Dueling consumer advocates.  The state Consumer Advocates we already have are doing a good job.  "Public Interest Organization" consumer advocates are an unnecessary addition to the fray, and may not have the interests of actual consumers in mind.  This was demonstrated quite clearly in a recent FERC proceeding that pitted Public Citizen against the West Virginia Consumer Advocate.  The subject was a PJM Interconnection rate case.  Public Citizen intervened and whined about PJM's costs and said that consumer advocates aren't allowed to participate at PJM.  West Virginia Consumer Advocate Jackie Roberts intervened and filed a comment disagreeing with Public Citizen's contentions about Consumer Advocate participation in PJM's budget.  In fact, consumer advocates do participate in PJM's budget process, as well as being voting stakeholders in all PJM's processes.  Not to be outdone, Public Citizen filed an answer, claiming that state consumer advocates don't represent Public Citizen members, and therefore there was also room at the consumer advocate table for PIOs like Public Citizen.  I don't think anyone is stopping Public Citizen from participating in any regulatory or RTO process, just like any other PIO, such as Sierra Club, or NRDC.  What Public Citizen likes to whine about is the fact that there is no public funding for its participation.

Talk about trying to board the gravy train...  since when are any PIOs publicly funded by ratepayers through the federal regulatory process?  And if they were, how many PIOs would belly up to the bar?  The bottom line is that PIOs do their own thing according to the wishes of the people and foundations that fund them.  That is not "public" interest.  That's a private interest masquerading as a public servant.  Nobody is minding the store to ensure that PIOs truly serve public interests.  Therefore, they don't deserve public funding, or special concessions to allow them to have the same rights and privileges as state consumer advocates.

Federal regulators should think twice about opening Pandora's box with a pile of public funding offered to anyone who wants to call themselves a "public interest organization."  The queue to score some public funding to advance private interests would probably wrap around the National Mall several times.

Maybe Public Citizen should concentrate on actually delivering some documented savings to electric consumers before whining that it needs public funding to protect consumer interests.  The proof is in the pudding.
0 Comments

Eighteen million six hundred thirty three thousand one hundred twenty four ratepayer bucks

3/21/2017

2 Comments

 
Eighteen million six hundred thirty three thousand one hundred twenty four ratepayer bucks in the till...

Eighteen million six hundred thirty three thousand one hundred twenty four ratepayer bucks...

Take one out, refund to ratepayers, eighteen million six hundred thirty three thousand one hundred twenty three ratepayer bucks in the till.

Eighteen million six hundred thirty three thousand one hundred twenty three ratepayer bucks in the till...

Eighteen million six hundred thirty three thousand one hundred twenty three ratepayer bucks...

Take one out, refund to the ratepayers, eighteen million six hundred thirty three thousand one hundred twenty two ratepayer bucks in the till.

PATH made its compliance filing yesterday, as ordered by the Federal Energy Regulatory Commission on January 19th.  FERC ordered the company to recalculate the rates it has collected from electric ratepayers since 2008 to correct errors it made and refund amounts collected in error.

Here's the money quote.  Literally.
For Rate Year 2008 through Rate Year 2015, PATH has calculated that refunds, with interest, will amount to $18,633,124.
The refund includes errors PATH made in the recording of public relations expenditures, advertising, lobbying, and other expenditures for the purposes of influencing public officials, such as recruiting support for the project at public hearings and signatures on petitions supporting the project.  It also includes errors on the effective date of recovery of abandoned plant, and errors in calculating depreciation of assets.  The refund includes interest on amounts collected in error, and adjustments to the company's return on equity due to the adjustment of capital account amounts.

Do you think PATH managed to correct its errors without making further errors in its corrections?

Eighteen million six hundred thirty three thousand one hundred twenty two ratepayer bucks in the till...

Eighteen million six hundred thirty three thousand one hundred twenty two ratepayer bucks...

Take one out, refund to ratepayers, eighteen million six hundred thirty three thousand one hundred twenty one ratepayer bucks in the till.
Eighteen million six hundred thirty three thousand one hundred twenty one ratepayer bucks in the till...

Eighteen million six hundred thirty three thousand one hundred twenty one ratepayer bucks...

Take one out, refund to ratepayers, eighteen million six hundred thirty three thousand one hundred twenty  ratepayer bucks in the till.

Eighteen million six hundred thirty three thousand one hundred twenty ratepayer bucks in the till...

Eighteen million six hundred thirty three thousand one hundred twenty ratepayer bucks...

Take one out, refund to ratepayers, eighteen million six hundred thirty three thousand one hundred nineteen ratepayer bucks in the till.

Eighteen million six hundred thirty three thousand one hundred nineteen ratepayer bucks in the till...

Eighteen million six hundred thirty three thousand one hundred nineteen ratepayer bucks...

Take one out, refund to ratepayers, eighteen million six hundred thirty three thousand one hundred eighteen ratepayer bucks in the till.

2 Comments

FERC Orders $7M Refund of PATH Advertising, Lobbying and Front Group Costs

1/20/2017

5 Comments

 
On January 21, 2011, Ali Haverty and I filed a "Formal Challenge to Potomac-Appalachian Transmission Highline, LLC 2010 Formula Rate Annual Update." This was after several months of rather frustrating information requests to an active and threatening PATH transmission project.  We had no expertise or legal help, we simply did the best we could with available processes.

Now, nearly 6 years later, the Federal Energy Regulatory Commission has confirmed our contentions that PATH should not have collected from ratepayers the costs of its reliable power coalitions (West Virginians for Reliable Power, Marylanders for Reliable Power and Virginians for Reliable Energy), its PATH Education Awareness Team (or "PEAT"), its memberships in civic and social groups, its lobbying for release of a conservation easement in Loudoun County, Virginia, its hiring of a well-connected lobbyist in West Virginia, its cost of public opinion polling and focus groups in West Virginia, Virginia and Maryland, and the cost of all of PATH's television, radio and print advertising promoting its project in all three states.  The Commission has ordered PATH to refund these costs (plus unearned return and interest) to millions of ratepayers in PJM's 13-state region.
It truly was no bed of roses.  We combed through hundreds of thousands of documents, learned FERC's accounting rules, learned how to write and file all sorts of legal pleadings, made dozens of trips to FERC's offices in DC, and suffered through some middle of the nighters in order to meet deadlines.  We've spent the past 6 years jumping one hurdle after another to get to this point.

And we're still friends.  Never once did we consider giving up or splitting our team.  No matter how heavy the burden, we kept our eyes on the prize.

Opinion No. 554
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The Commission also ordered accounting transactions to remove an additional $1.1M of public relations & advertising expenses PATH booked to its asset account in 2008, before Ali and I began to challenge PATH's annual rate filings.  This $1.1M of cost has been sitting neatly in an account where it earned 14.3% (and then 10.4%) return on equity for the PATH companies every year since.  Not only will PATH have to deduct those costs from its ultimate recovery, it has also been ordered to make a compliance filing to essentially correct and replace each of its annual accounting filings for the past 8 years.  This approach allows crediting of that undue return to ratepayers.  So, while the total disallowance to PATH is more than $7.1M, the total ratepayer credit effected will be much more.

We appreciate the Commission's order, and our overall experience at FERC.  In an era where the agency has been kicked around by protestors and the media, we can honestly say that we were treated well by FERC staff, judges, and commissioners.  We never felt dismissed or marginalized.  We felt that our concerns were heard.

We wouldn't change a thing.
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5 Comments

Pavlov's Energy Markets

12/6/2016

0 Comments

 
What's the difference between a generator over-forecasting its output in order to collect DAMAP payments from MISO when their day-ahead schedule is higher than their actual real-time output, and an electricity market trader making trades designed to collect MLSA transmission credit payments from PJM?

It sure looks like it's based on pre-conceived notions of the "goodness" of the recipient of the regional transmission organization payments.

A recent article in RTO Insider details a report to MISO's market subcommittee by Market Monitor David Patton, which revealed "
some wind generators appear to be deliberately over-forecasting their output to inflate their revenues."
Two-thirds of MISO’s $7.5 million in DAMAP payments to wind resources in 2015 and 2016 was because of over-forecasting and only $2.5 million was spent on curtailment, Patton said. “Most of our wind DAMAP payments are unjustified,” he said.
DAMAP payments are described like this:
The purpose of DAMAP is to provide an incentive for Market Participants to be flexible in their offers in the real-time market.

The DAMAP compensates suppliers when (i) the real-time dispatch of a resource is reduced below the day-ahead schedule's level, and (ii) the market participant would have been financially better off in real-time had it operated at its day-ahead schedule.

Read the whole article for an explanation of how DAMAP can and is being manipulated by wind generators to receive higher compensation payments. 

This is complicated stuff!  Regional energy markets are extremely complicated, to the point that they are nearly incomprehensible to the regular folks who fund millions of dollars in "market compensation" payments every year in their electric bills.  But don't feel too bad, it appears that energy markets are also complicated for the experts who create and police them to try to prevent manipulation by traders and other participants.  Every regional electric market would be well-served by a couple of whip-smart analysts whose only job is to continually test the market by attempting to find ways to manipulate it for profit.  Obviously the creators and monitors of these markets are completely blind to the opportunities they create that allow participants to unwittingly "push the money button" and be rewarded by compensation payments.  To expect Pavlov's dogs to immediately report the unexpected reward they received, instead of continuing to push the button and feast at will, is unnatural.  If the creators and monitors of energy markets expect an unnatural response, they need to provide a compensatory reward for it.  In lieu of having staff dedicated to and capable of rooting out flaws, market monitors should look at providing the stimulus necessary to find volunteers within the market participants.

So, how did the MISO Market Monitor propose to solve this problem, once discovered?  He proposed changes to the market, instead of punishing the wind energy dogs who had been pushing the money button that brought it to his attention.  He chose to stop ringing the bell.

But how did the PJM Market Monitor propose to solve a similar "money button" problem that developed in his own market?  He worked with FERC to punish the traders who pushed the button and brought it to his attention.  He beat the dog.  In fact, FERC has proposed fining the traders somewhere in the neighborhood of $35M.

Why the disparate treatment?  Is it because the general public looks disparagingly upon "Wall Street" (and therefore traders big and small) as the root of all evil?  Is it because wind energy is looked upon by the same public as a "clean" and "good" struggling industry?  I've got news for you, general public.  Big wind is a hugely profitable industry whose greed knows no bounds!  What may have started out as a cottage industry predicated upon selfless environmental gains has morphed into a gigantic subsidy- and compensation-gobbling monster that fills the pockets of foreign investors with your gold.  Years of environmental propaganda has conditioned you to behave just like Pavlov's dogs when you hear the words "clean energy."  You may believe anything with a "green" label must be "good" and therefore more valuable, without examining any actual benefits to you.

Energy markets will only work if they are consistent.  Allowing one group of participants to escape the punishment heaped upon another group isn't consistent.  What kind of bell are they trying to ring?

Oh, and big wind is ripping you off... big time!
0 Comments

FERC Ordered to Pay Legal Fees in FOIA Dispute

10/7/2016

3 Comments

 
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Lawyers and their document games!  Lawyers often resemble broody hens when documents are requested, and they have any number of tricks to play when finally placed in the broody cage by a judge.

This week, U.S. District Judge John Bates ordered FERC to pay over $60K in legal fees to STS Energy Partners to reimburse them for their cost of suing the Commission to force the release of documents requested through FOIA.  Although the lawsuit eventually inspired FERC to cough up the requested documents, Judge Bates found that FERC's document games should have been solved without STS Energy having to resort to filing a lawsuit and incurring legal fees.
FERC did show some recalcitrance and at least “appeared” to “withhold” the segregable portions of requested documents “merely to avoid embarrassment or frustrate the requester,” or simply to avoid the time-consuming work of separating information that could be properly withheld from information that could not.
 According to the decision, the story goes like this:

STS Energy submitted two FOIA requests to FERC "seeking to 'shin[e] light on FERC’s recent and punitive efforts against small power market traders for engaging in legal and ubiquitous activity in the PJM Interconnection (“PJM”) wholesale electricity market'."  FERC withheld some responsive documents.  STS filed suit to seek release of the withheld documents, and eventually FERC settled with STS to release the information.  However, attorneys for STS had to spend over $60K in legal fees to get to that point.

FOIA laws provide for the recovery of legal fees when the complainant prevails in a FOIA suit.  The court examined whether STS was eligible to recover legal fees.   The standard for the court is: 
The D.C. Circuit has instructed this court “to consider at least four criteria in determining whether a substantially prevailing FOIA litigant is entitled to attorney’s fees: (1) the public benefit derived from the case; (2) the commercial benefit to the plaintiff; (3) the nature of the plaintiff’s interest in the records; and (4) the reasonableness of the agency’s withholding.”
On the first factor, FERC claimed that there was minimal public value in releasing the documents, that they represented "provincial concerns not shared by the public at large."  However, the court found that media and Congressional interest in the information, even if drummed up by the litigants themselves, demonstrated significant public interest in the action.

On the second and third factors, FERC claimed that STS Energy, while not technically the subject of records requested, was “deeply intertwined with the entities that FERC is investigating,” including Powhatan Energy Fund, LLC.  FERC reasoned that because STS Energy was "intertwined" with the Powhatan, the subject of one of its market manipulation investigations, the firm had a private interest in the disclosure of the records.  FERC believed that the requests by STS were part of Powhatan's litigation strategy and that the company "used FOIA requests to circumvent the fact it has not been entitled to obtain discovery from FERC in the pending litigation."  That's right, Powhatan was not entitled to any discovery while FERC was conducting its investigation.  The first opportunity for discovery may have come after the investigation was completed, if the company had elected to try the matter before a FERC administrative law judge.  Instead, Powhatan elected to try its case in court.  Once at court, FERC claimed that the court was restricted to simply reviewing FERC's decision, and that Powhatan was not entitled to discovery or adjudication of the facts leading to FERC's assessment of penalty for market manipulation.  That matter is still pending.  However, back to the case at hand, where the court found that the two firms were "intertwined" and that there was a "private interest" in requesting the records. 

On the final factor, the court found that FERC didn't have sufficient reason for withholding the documents.  FERC defended its conduct in withholding as "good faith" because it eventually released the records without a court order.  However, FERC did not release the records before legal fees were incurred.

This left the court with weighing four factors, two for, and two against.  The court ultimately determined that the fourth factor carried the greatest weight.  It was FERC's game playing trying to avoid release that caught them in the end.

Lawyers that go all broody over documents rarely win.  And now it's going to cost FERC $60,168.19.
3 Comments

How Many Clean Line Supporters Are Actually Dead?

9/18/2016

0 Comments

 
The Consumer Energy Alliance recently got caught sending fake letters of support for a pipeline project to the Federal Energy Regulatory Commission.  One of the letter writers has been dead since 1998.

Hmm... Consumer Energy Alliance.... where have we heard that name before?  I know!  The Consumer Energy Alliance was behind the "EDJ Alliance" that was used in a lame attempt to drum up support for Clean Line's Plains and Eastern project in Oklahoma, Arkansas and Tennessee last year.  Since then, it has been suspiciously quiet... almost like it is dead itself.  And the Consumer Energy Alliance also pretended to speak in favor of Clean Line's Rock Island project at an Illinois Commerce Commission public hearing in 2013.  Clean Line is a "member" of the Consumer Energy Alliance, although it (along with all the other "members") aren't "consumers" at all.  The CEA represents "consumers" in name only, while it really represents the interests of its paying industry members.  That's what's called a "front group."
A front group is an organization that purports to represent one agenda while in reality it serves some other party or interest whose sponsorship is hidden or rarely mentioned.
In the recent pipeline case, attorneys for opposition groups have asked the U.S. Postal Service to investigate the CEA for mail fraud, since it stupidly mailed its fake support letters to the Federal Energy Regulatory Commission to be placed on the pipeline docket.  The attorneys have also asked FERC to
...immediately convene an independent audit of all public comment statements submitted to docket of Case No. CP16-22 since the opening of the comment period for the Draft Environmental Impact Statement; that the Commission strike Intervenors’ Exhibits A through O from the docket and grant leave to any intervenors to this proceeding to submit
further pleadings relating to striking other public comment statements from the docket; finally, that the Commission make a referral to its Division of Investigations, the U.S. Department of Energy Office of Inspector-General, the U.S. Environmental Protection Agency Office of Inspector-General, and the U.S. Postal Inspection Service.
The opposition groups claim "someone appears to have undertaken widespread criminal fraud to influence the outcome of this federal pipeline certificate proceeding." And have produced evidence that at least 15 of the letters submitted to FERC by the CEA were done so without the knowledge or permission of the purported authors.

The CEA answered the opposition complaint, requesting "... that the Commission decline to address Neighbors’ protest (the “Protest”) as its contentions are false and have no merit."  CEA goes on to claim that it has records to prove that the authors of the letters gave permission to CEA to create and mail the letters to FERC.  The authors claim otherwise in numerous affidavits.  In one instance, the author has been dead since 1998.  In another, a relative of an author claims she could not give permission because she has dementia.  Another author  interviewed by Newsnet5 said, "I’ve never said none of those words. I don’t have a typewriter, I don’t have a computer to make a letter as such.”

Here's how CEA explained this "misunderstanding."

As an energy consumer advocacy organization, CEA has developed a process of gathering grassroots support for affordable, reliable energy projects. As part of that widely accepted business process, CEA conducts automated telephone surveys with selected individuals. When an automated call is placed, and consistent with accepted industry practice, the call is directed to the individual listed in phone company records. The individual who participates in the survey is asked a series of questions from a scripted questionnaire to which he or she is requested to answer by pressing on the phone’s keyboard “1” for “yes” and “2” for “no”. But, it is the nature of automated surveys that the questions are not asked by a live person and there is no process to identify and confirm who answers the phone and responds to the question.

The survey used here began with an introductory statement telling the respondent that the Commission is considering whether or not to grant a permit to build the NEXUS pipeline and explaining the benefits of the pipeline, including creation of jobs in the region and reduction of energy costs for manufacturers and consumers. The survey continued with the express question on whether or not the respondent would give his or her permission to relay to the Commission his support for the pipeline. If the respondent replied with “no”, the survey would ask another question reiterating the importance of the Project and again ask the respondent if he or she would support the pipeline and authorize CEA to pass that view on to the Commission. On behalf of those respondents who indicated their support for the project and authorized CEA to forward that viewpoint to the Commission, CEA then generated the letter for the 347 individuals that were filed.

Moreover, it is implicit in the nature of any automated phone survey that from time to time there will be instances where the person who answers the phone and responds to the survey is not the person listed in the telephone company’s records as the householder. This would explain the inadvertent error that can occur when a supporting letter is generated in the name of the person listed as householder, but someone else actually answers the phone. So, even though the householder – in whose name the support letter was generated – may not be competent or even in agreement, the person who answered did respond affirmatively and authorize support for the Project. Similarly, in some instances the respondent may not fully understand the presented question, unintentionally answer it in the wrong way and later change his or her mind. Or, in some cases, the respondent may forget that the survey even took place, let alone that he or she gave the authorization for his comments to be filed with the Commission. CEA regrets any such misunderstanding or miscommunication that may have occurred.
So, CEA robocalls people and asks them to push a number on their phone and that constitutes permission to create and mail a letter in their name to the federal government?  One news account says that CEA robocalled 25,000 households, and from that it found only 347 people supposedly gullible enough to push the right button to give permission?  And even then, many deny ever getting the phone call in the first place.

I guess we can assume that the other 24,653 people contacted by the CEA did NOT support the pipeline, although CEA didn't bother generating a letter from those consumers expressing their opposition to the project.

CEA doesn't represent consumers.  CEA represents its paying industry members.  One of those members is Clean Line Energy Partners.

So, if you're a live person in relatively good health, you'd better get your comments opposing the various Clean Line projects filed with regulators now.  Otherwise, the CEA may submit comments supporting Clean Line to regulators using your name. 

What a bunch of dirty, cheating tricksters!
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    About the Author

    Keryn Newman blogs here at StopPATH WV about energy issues, transmission policy, misguided regulation, our greedy energy companies and their corporate spin.
    In 2008, AEP & Allegheny Energy's PATH joint venture used their transmission line routing etch-a-sketch to draw a 765kV line across the street from her house. Oooops! And the rest is history.

    About
    StopPATH Blog

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

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


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