Each Commission-approved independent system operator or regional transmission organization shall establish a tariff that provides a just and reasonable rate for the (A) purchase of electric energy from an eligible reliability and resiliency resource and (B) recovery of costs and a return on equity for such resource dispatched during grid operations. The just and reasonable rate shall include pricing to ensure that each eligible resource is fully compensated for the benefits and services it provides to grid operations, including reliability, resiliency, and on-site fuel assurance, and that each eligible resource recovers its fully allocated costs and a fair return on equity.

For years the citizens of Maryland have been waiting to find out whether the Public Service Commission really cares about justice and protecting the public. We have our answer. The answer is NO!

The Maryland Public Service Commission (PSC) in their recent Order has taken a position in support of Potomac Edison (PE) on the major issue, against ratepayers’ interests. The Commissioners’ decision is in conflict with both their own Judge’s determination and the West Virginia Public Service Commissioners on the same issue.

The most important decision on this matter was whether or not to require PE to read meters monthly. The PSC Commissioners, as usual, supported the utility company when they overturned the Order issued by the Judge who heard the case.

This should have been expected because in every meeting and mediation, PE’s attorney would declare that PE will not do monthly reads! Apparently lawyers and attorneys trump justice every time! We now know our PSC stands for money in politicians’ and big businesses’ pockets without concern for the problems and concerns of the people or justice at all.

As a brief history, in May 2012, as President of Sugarloaf Conservancy (Doug) filed a formal complaint with the PSC asking them to “establish a formal case to investigate this matter” in response to members’ complaints about PE meter reading practices.  These practices included the failure of the company to read meters bimonthly as required, using inaccurate estimations, which caused substantial over and under billings. Both situations have negative ramifications causing harm to those who can least afford to pay overcharges or large catch-up bills.

A case was finally opened in April 2013. After years of delay the Judge in May 2016 ruled against PE. In part of his Order he stated, “I find that PE's meter reading tariff must be modified to require an actual reading on a monthly schedule...” (as is the case with all other electric utilities in Maryland).  PE appealed the Judge’s Order. A year passed without any decision by the Commissioners. On May 16th, in a letter sent to the PSC, we insisted they fulfill their obligation. Finally on June 19th, the PSC issued an Order.

The Order upholds most of the findings of the Judge’s ruling, including that PE must submit a monthly report for 24 months; pay a minor penalty of $25,000; offer a payment plan to those customers who receive a substantially low estimate bill, followed by a substantial catch up bill the following month; modify their bill to clearly show when an estimate occurs and the reason for not reading the meter.  The reversal of the Judge’s Order to require PE to read meters monthly is in stark contrast to a similar case in West Virginia. West Virginia took less than a month to open a case after the issue was raised whereas the Maryland PSC waited a year after we asked for an investigation; Maryland dragged out the case for four years before the Commissioners issued a final Order; West Virginia issued a comprehensive ruling against PE including the requirement that they read meters on a monthly basis after only a year.  Maryland PSC Order required PE address only 4 areas of concern whereas in West Virginia their PSC hit PE on twelve major requirements.

There is great concern that this slap on the wrist will embolden PE to resume their past business practices, which have caused severe harm to so many.  Unfortunately the losers will be the senior citizens on a fixed income and the poor who can least afford to either pay for electricity they have not consumed or be hit with a sizable catch-up bill.  The Commissioners, through this Order, confirmed their past history of supporting utility companies at the expense of ratepayers in Maryland. This pattern should be disturbing to everyone and unfortunately will not likely change.

 Among the sea of red t-shirts, jackets, hats and signs were small, blue stickers, each handwritten with a different number. It was a description, in feet, of how far their home was situated from a proposed JCP&L power line poles. For some, it was a couple thousand feet. For others, it a few hundred feet. And there were those whose number was expressed in two digits.

Buildings, building extensions and additions (homes, businesses, garages, barns), swimming pools, above ground fuel tanks, tall signs or billboards, tall trees, obstructions and mounding of soil in the right of way are encroachments that are prohibited.

[a] minimum of a 60 ft. wide corridor will be cleared (30 ft. from either side of conductor or approximately 45 ft. from centerline of the poles on the rail side and 15 ft. from centerline of the poles on the opposite side/vacant side of pole).

JCP&L will clear the NJT and JCP&L ROW to the specified width in accordance with the FirstEnergy Initial Clearing of Transmission Lines Specification and the FirstEnergy Detailed Property and Provision List. Trees located outside the ROW which are deemed Priority Trees shall be removed. Priority Trees are defined as trees located adjacent to transmission corridors that are dead, dying, diseased, structurally defective, leaning or significantly encroaching, where the transmission facilities are at risk of arcing or failing should the tree or portions of the tree (1) fall into or near the transmission facilities; or (2) grow into or towards the transmission facilities. JCP&L will obtain the necessary rights from applicable property owners before removing trees and vegetation both on and off the ROW.

“This meeting tonight was to hear what the public had to say,” said JCP&L spokesman Ron Morano. “We elected to not have any supporters speak at this event.”

JCP&L spokesman Ron Morano said the utility is following procedures. "All costs associated with the project will be reviewed as part of that process," Morano said.

"I fear all we have done is to awaken a sleeping giant and fill him with a terrible resolve."  --  Isoroku Yamamoto

JCP&L has been consistent on the project’s need, which stems from a decision made by PJM Interconnection, a regional grid operator that oversees 13 states and the District of Columbia – New Jersey being one of those 13. PJM has stated that a 2011 review found that Monmouth County’s electrical system violates reliability criteria.

PJM Interconnection is a regional transmission organization (RTO) that coordinates the movement of wholesale electricity in all or parts of Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and the District of Columbia.

Acting as a neutral, independent party, PJM operates a competitive wholesale electricity market and manages the high-voltage electricity grid to ensure reliability for more than 65 million people.

PJM’s long-term regional planning process provides a broad, interstate perspective that identifies the most effective and cost-efficient improvements to the grid to ensure reliability and economic benefits on a system wide basis.

An independent Board oversees PJM’s activities. Effective governance and a collaborative stakeholder process help PJM achieve its vision: “To be the electric industry leader – today and tomorrow – in reliable operations, efficient wholesale markets, and infrastructure development.”

The North American Electric Reliability Corporation (NERC) is a not-for-profit international regulatory authority whose mission is to assure the reliability and security of the bulk power system in North America. NERC develops and enforces Reliability Standards; annually assesses seasonal and long‐term reliability; monitors the bulk power system through system awareness; and educates, trains, and certifies industry personnel. NERC’s area of responsibility spans the continental United States, Canada, and the northern portion of Baja California, Mexico. NERC is the electric reliability organization for North America, subject to oversight by the Federal Energy Regulatory Commission and governmental authorities in Canada. NERC’s jurisdiction includes users, owners, and operators of the bulk power system, which serves more than 334 million people.

In the 2011 RTEP, PJM identified reliability criteria violations of NERC Category P7 (previously NERC Category C) contingencies for the outage of the Atlantic-Red Bank (S1033) 230 kV line and the No. 2, 230-34.5 kV transformer with the loss of the Atlantic-Red Bank (T2020) 230 kV line and the No. 8, 230- 34.5 kV transformer due to failure of a common structure containing both circuits. JCP&L confirmed this contingency may result in more than 700 MW of load loss, well above the 300 MW loss of load criterion limit, which violates the JCP&L Planning Criteria as well as PJM planning criteria. The JCP&L-proposed Project was confirmed by PJM that it adequately addresses the reliability criteria violation.

PJM has not changed their required date for the project, but has listed the projected in-service date as June 1, 2019 in the RTEP Transmission Construction Status database... Note the PJM Required Date is the date the violation is initially identified to occur.

1.7 Obligation to Build.
(a) Subject to the requirements of applicable law, government regulations and approvals, including, without limitation, requirements to obtain any necessary state or local siting, construction and operating permits, to the availability of required financing, to the ability to acquire necessary right-of-way, and to the right to recover, pursuant to appropriate financial arrangements and tariffs or contracts, all reasonably incurred costs, plus a reasonable return on investment, Transmission Owners or Designated Entities designated as the appropriate entities to construct, own and/or finance enhancements or expansions specified in the Regional Transmission Expansion Plan shall construct, own and/or finance such facilities or enter into appropriate contracts to fulfill such obligations.

1.5.8 (j) Acceptance of Designation. Within 30 days of receiving notification of its designation as a Designated Entity, the existing Transmission Owner or Nonincumbent Developer shall notify the Office of the Interconnection of its acceptance of such designation and submit to the Office of the Interconnection a development schedule, which shall include, but not be limited to, milestones necessary to develop and construct the project to achieve the required in-service date, including milestone dates for obtaining all necessary authorizations and approvals, including but not limited to, state approvals.
 
1.5.8 (k) Failure of Designated Entity to Meet Milestones. In the event the Designated Entity fails to comply with one or more of the requirements of Section 1.5.8(j); or fails to meet a milestone in the development schedule set forth in the Designated Entity Agreement that causes a delay of the project’s in-service date, the Office of the Interconnection shall re-evaluate the need for the Short-term Project or Long-lead Project, and based on that re-evaluation may: (i) retain the Short-term Project or Long-lead Project in the Regional Transmission Expansion Plan; (ii) remove the Short-term Project or Long-lead Project from the Regional Transmission Expansion Plan; or (iii) include an alternative solution in the Regional Transmission Expansion Plan.

"There's blood in the water," Jones said in an October interview.

He added, "We've reduced benefits, we've reduced 401(k) matches, we froze wages. We've done a lot of things to try and offset lost revenue, but couldn't offset it entirely … We're evaluating everything we do as a company to try and find a way to close that gap. Because (what's been done so far) is not enough to get us into the position with the credit rating agencies that we need to be in."

Pleasants, currently owned by a Mon Power sister company, Allegheny Energy Supply, is an aging, coal-fired plant that hasn’t been generating the returns investors want in Ohio’s deregulated energy marketplace. FirstEnergy CEO Charles E. Jones, on at least two occasions in 2016, told analysts the company wanted to shift plants like Pleasants that weren’t making investors enough money in Ohio into West Virginia’s regulated market, saying, “I think later this year, they’ll start (looking) at it seriously, and it’s up to (the West Virginia Public Service Commission) to decide, would Pleasants be the appropriate solution.”

If the Companies determine in any annual PJM Base Residual Auction (“BRA”) that their combined capacity obligations for the delivery year covered by the BRA (“Delivery Year”) exceed the Companies’ owned or contracted-for capacity resources for the Delivery Year by 100 MW or more (“Capacity Shortfall”), then not later than the end of the calendar year following the BRA, the Companies will develop an RFP for capacity resources to address the Capacity Shortfall and submit the RFP to the Commission and the Parties for their review and comment. The RFP will allow proposals from both supply-side and demand-side resources.

Mon Power’s Long Term Load Forecast indicates a capacity shortfall starting in 2016, with the shortfall exceeding 700 MW by 2020 and extending to over 850 MW by 2027.

We will continue to seek opportunities both within the competitive realm and the states to further de-risk the business and convert megawatts from competitive markets to a regulated or regulated-like construct.

We also plan to work with the West Virginia Public Service Commission when they are ready to address the generation shortfall included in Mon Power's integrated resource plan.

So we previously filed the IRP. It showed a need for generation going out a couple of years from now. But that case right now is concluded. So there is nothing that would, unless we were to file something, initiate something, that would come out of that case. So we would be looking as we go forward and continue to monitor the forecast for that company to see how we might want to present something consistent with the IRP in terms of bringing additional generation to Mon Power.

Michael Lapides - Goldman Sachs & Co.

Got it. So there's no formal like RFP process that's about to kick off or that will be undertaken in 2016 or 2017?

Leila L. Vespoli - Executive Vice President, Markets & Chief Legal Officer

Correct. There's no time line associated with that. We would initiate it when we believe it to be the appropriate time.

The decisive regulator makes decisions (1) required by the public interest, (2) when the public interest requires it, (3) regardless of discomfort felt, (4) using a logical method and an active approach.

At this time, however, we do not see any short-term solutions to the current challenging market situation. Longer-term, we do not believe competitive generation is a good fit for FirstEnergy and are focused regulated operations. And we cannot put investors and our company at risk as we wait for the country and PJM to address the issues with the current construct.