Category:

Where's Waldo?

5/24/2014

Would you trust this guy ?

Me neither.

Where's Waldo? He seems to have dropped out of the public eye, lately replaced by this other guy who smirks when he tells the people of Missouri that there are no health effects, no property devaluation, no impediments to farming.

Clean Line has a public relations problem. They're running out of project managers and executives.

Waldo (aka Mark Lawlor) has been thoroughly trounced in the Missouri media by the forthright and personable Block GBE spokeswoman, Jennifer Gatrel. People like Jenny. They trust her. Can't say the same for the Clean Line representatives.

Because Grain Belt Express is in so much trouble in Missouri, Waldo has been replaced by Clean Line president Michael Skelly. Oh, brother! That's like putting out a fire with a bucket of gasoline! Where Waldo was awkward, uncaring and shifty, Skelly is arrogant, arrogant and arrogant. This man simply doesn't care what you think. He gets an attitude when questioned, and provides flippant answers. Was "the President of Clean Line answering questions in Missouri" supposed to help or hurt the project?

Send this guy back to Skellyville, and bring on the next personality. Or maybe Clean Line could try some more costumes to cheer everyone up?

Whither goest thou, Waldo?

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FirstEnergy Files To Raise Potomac Edison and Mon Power Electric Rates

4/30/2014

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As part of last year's PSC settlement allowing FirstEnergy to "sell" the Harrison Power Station from its competitive generation subsidiary to its regulated West Virginia utilities, the company was required to file a new base rate case with the PSC this month.

A company's base rate covers the utility's fixed costs and earns a return. FirstEnergy's current West Virginia return (profit) is 10.5%. Base rate cases are filed infrequently, usually at the initiative of the utility if it thinks it can increase earnings by doing so, or it may be ordered by a regulator as part of another deal.

FirstEnergy has asked for a $96M rate increase. I haven't read the filing at the PSC yet, but I received several copies of this company-generated rubbish in my email today. The company doesn't mention its requested return percentage, so I will assume it's the same, or even higher.

In addition to the more than a billion dollar cost of "buying" Harrison, the rate increase also includes:

...recovery of costs associated with storm repairs from the 2012 Derecho and Hurricane Sandy, along with operating costs at power stations, including new environmental control equipment. In addition, the rate request includes hiring 50 new company employees to help enhance service reliability.

So, how much is this going to cost you?

Currently, the monthly bill for a typical residential customer using 1,000 kilowatt-hours is about $92.62. If the proposed rate increase, including the cost of the new tree trimming program, is granted, the monthly bill would be about $106.79.

But, wait! FirstEnergy wants you to know about all the value you're going to be getting!

Mon Power and Potomac Edison have not filed for an increase in base rates for nearly five years. The companies’ last major rate changes were a decrease in fuel-related rates of 5 percent on Jan. 1, 2013, and a rate reduction of 1.5 percent in October 2013 due to the Harrison acquisition.
Even with the full proposed increase and tree trimming surcharge, Mon Power and Potomac Edison residential rates would be 10 percent lower than the national average residential rates.

But, that's of little actual value when the company doesn't bother to read your electric meter for months on end and then sends you a gigantic bill for your accumulated usage once a year. Don't worry though...

To help customers manage their bills, Mon Power and Potomac Edison offer an average payment plan, special payment plans, and access to energy assistance programs.

Just hop on the ol' FirstEnergy debt treadmill and run for your life!

Oh, and let's not forget... that extra $96M out of your pockets will now guarantee you better service!

“The filing will help ensure continued safe and reliable electric generation for our customers,” said Holly Kauffman, president of FirstEnergy’s West Virginia Operations. “On the utility side of our operations, the new employees will include linemen, engineers, supervisors and other personnel to help make the service we provide our customers even better and meet anticipated business growth in our state.”

Twit.

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Landowner Says Clean Line is Armed Robbery

4/29/2014

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Here we go again with the Clean Line news articles full of misinformation. This time, the lies are about the company's Plains & Eastern Clean Line project in Oklahoma, Arkansas and Tennessee.

Hiding amid the lies and half-truths is one nugget of news, however. Clean Line is now purporting that it will build a $100M HVDC converter station in Arkansas in an attempt to provide some "benefit" for the state. In 2011, the Arkansas PSC denied Clean Line's application to become a public utility in the state so that it could use eminent domain to take land for its project against the owners' will. The APSC based its denial on the lack of benefits to the state from the transmission line, that Clean Line proposed would begin and end in other states like a highway with no on or off ramps for local use.

Claims that the company will build a converter station for local use seem to be sprouting like weeds. But, what guarantee does any state have that Clean Line would actually build one? If it receives a permit, Clean Line could once again change its plans, taking the local converter station off the table, laughing all the way to the bank.

The midpoint converter stations are very expensive and only plan to make available a miniscule portion of the project's capacity. For the 3500 MW Grain Belt Express, the converter station is being touted as making "up to" 500 MW available. For the Plains & Eastern project, this article says the converter station will make available "up to" 250 MW of the project's 3500 MW capacity. The rest of the capacity is slated to be made available to eastern states where electricity commands a higher price. And that's how Clean Line intends to make its money -- selling electricity in richer markets that have certain minimal renewable energy purchase requirements. These "public policy" renewable portfolio standards require load serving entities in eastern states to generate or purchase a certain percentage of renewable energy, no matter the cost. This is the market Clean Line is desperately trying to reach.

So, let's think about that. Clean Line is pretending it will "make available" miniscule amounts of its capacity in pass-through states in exchange for the ability to take private property from the state's citizens. "Make available" means exactly that -- make available for purchase by load serving entities in states like Arkansas or Missouri. However, if local LSEs can purchase lower cost power, they must do so. Clean Line is priced for the east coast, not Missouri or Arkansas. While the wind power generated in the Midwest may be "cheap" by east coast standards, building a "Clean" Line to transport it more than doubles the delivered price of the electricity. Chances are no local load serving entities will contract to purchase ANY of this power, obviating the need for any mid-point converter stations after permits are granted. Don't be fooled!

Don't be fooled by the article's misinformation either. Here's where the reporter (or the president of Clean Line) got the information wrong:

The project, called the Plains & Eastern Clean Line, won’t break ground until 2016, but the company behind it — Clean Line Energy Partners — announced this month that it would build a $100 million convertor station along the line’s route, somewhere in central Arkansas.

But as initially planned, the project would have had little effect on Arkansans beyond creating some jobs through the construction period. The line traveled from Oklahoma east through Arkansas, but Clean Line’s electricity wouldn’t have stopped in Arkansas along the way.

This was the basis of the Arkansas Public Service Commission’s 2011 denial of Clean Line’s attempt to be recognized as a utility in the state. Becoming a utility would have meant the company could have used eminent domain in creating the route for its new lines.

However, that changed when Skelly announced the convertor station at this month’s Little Rock Sustainability Summit at the Clinton Presidential Library.

This project won't "break ground" until it is fully permitted, and obtaining permits is still highly speculative. Just because Clean Line has tried to create a smokescreen of "benefit" for Arkansas does not automatically buy them a permit.

A spokesman for the company said the station “was a significant change in the scope of the project” that was “not initially intended” for it, noting that it was expressly requested by the PSC and by landowners.

WTF, Clean Line? No landowner ever requested a converter station in Arkansas. The few landowners who knew about your project rejected it in totality.

Clean Line is a private transmission company in Houston. It develops projects that connect renewable generation points between states.

The Plains & Eastern project is one of five Clean Line transmission projects underway in the country, and the only one that passes through Arkansas.

The new line would mean many new customers for the company.

Clean Line only exists on paper. This start-up has never built anything and probably never will. It has no customers... at all. The company has signed an agreement to allow its biggest investor, European transmission giant National Grid, to purchase the entire collection of projects in the pre-construction phase. If Clean Line can spin enough lies to get a handful of permits, it absconds with a bundle of cash and a new company takes over ownership of any projects. Research on Clean Line's principals reveals a history of exactly this kind of behavior. Many of Clean Line's management, who have personally invested in the company, have a history of building wind energy companies and then flipping them for huge profit. They probably should have stayed in their own area of expertise because they're in way over their heads playing transmission company.

It has been in the works for the past half-decade and will build two lines intended to connect the Midwest’s wind resources to surrounding areas with less potential to generate wind, such as Missouri and southern Indiana. About 7,000 megawatts of power in Oklahoma would become available to surrounding states.

Actually, that 7,000 MW plan for two lines got scrapped several years ago as overly ambitious. Or, did it?

“Because this is an interstate project, it has to go through the federal permitting process,” Skelly said. “We’re in the middle of that [process]. What it basically does is look at a series of routes, and we take all that information which our different stakeholders use to come up with a route.”

There is no requirement for federal permitting just because a project is "interstate." Transmission permitting is state jurisdictional. A project must receive a permit from every state through which it passes. Except when a state denies a permit... then a transmission owner can attempt to preempt local authority to take advantage of a couple of arcane loopholes in the 2005 Energy Policy Act. It is only then that federal permitting becomes necessary. And still, the federal authority Clean Line is attempting to acquire only gives it the power of eminent domain. It does not anoint Clean Line with state utility status to build a project. We'll just assume that the U.S. Department of Energy is going to take on the role of transmission builder for this project and then re-sell it back to Clean Line after it's constructed, right?

A lot of the job, he said, is getting the word out about the job to county officials, state agencies and environmental groups to determine the route of the line.

“Because this is an interstate project, it has to go through the federal permitting process,” Skelly said. “We’re in the middle of that [process]. What it basically does is look at a series of routes, and we take all that information which our different stakeholders use to come up with a route.”

Currently, the U.S. Department of Energy is working with states and local agencies to gather input on the line’s proposed route.

The permitting process overall, Skelly said, is expected to conclude in spring 2015.

“We hope to break ground in a year after that — at some point in 2016,” he said. “This is like any large infrastructure project. It takes a long time to work through the issues and come up with a proper design and take into account the stakeholders’ interests. These things take a long time. As things go, we’re moving at a reasonable pace.”

So, when is Clean Line planning to consult the landowners about the route of its line? Because landowners, in Clean Line's world, aren't stakeholders. They're just the folks who have to sacrifice their properties for Clean Line's profit.

No matter. The landowners aren't waiting to be invited. As my friend Joel says in the article's comments:

"Clean" Line is intent upon getting eminent domain authority. That's why their plan has changed to include the central Arkansas converter station. The company wants to force Arkansas landowners and homeowners to allow huge transmission towers on their property. This is a private venture, backed by a few out-of-state billionaires. They refuse to acknowledge that these towers will lower the property value of the landowners and homeowners. Anyone with an ounce of common sense would know that property values will plummet where a 200' steel lattice tower is constructed. So the out-of-state billionaires make huge profits while Arkansas landowners and homeowners lose real estate equity. It can't happen without state or federal eminent domain authority. I think of it like armed robbery, but in this case the robbers don't have to hold the guns. They will have state or federal law enforcement holding the gun to the heads of Arkansas landowners and homeowners.

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FirstEnergy Takes Credit for Dominion Transmission Project

4/11/2014

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After two years of Dominion refusing to do any publicity on its Mt. Storm - Doubs transmission line rebuild, rival FirstEnergy has swooped in to take all the credit for the project.

Cue the irony.

While Dominion has been doing a great job with directly affected landowners, the company has completely failed to disseminate any information about its project to the greater community. As if folks don't notice the access roads, the helicopters, the construction traffic, the road closures, the implosive splicing... I've gotten mighty tired of having to reassure people that this is not the PATH project, that this is a permitted activity, and that the world is not exploding. But I do it, not for Dominion, but for the people who are the victims of Dominion's "secret" rebuild project.

Mt. Storm - Doubs (MSD) is a smarter, better solution than building the PATH project ever was. So, let's get 'er done, fellas, so that I can stop having this distraction sitting on the edge of a rather full plate.

The MSD transmission line begins in Mt. Storm, West Virginia and ends at the Doubs substation in Frederick County, Maryland. The 96 miles of the line located in West Virginia and Virginia are owned by Dominion. The last 3 miles of the line in Maryland are owned by FirstEnergy. Each company is responsible for permitting and constructing its own segment of this project. Dominion has been working on its portion of the project for more than 4 years. FirstEnergy only recently got off it's corporate ass to do its part on the last three miles.

Well, yay, FirstEnergy! You da man! Fourteen transmission towers and 3 miles of line? Awesome! Put Toad Meyers in a hardhat and push the "on" button. That should ameliorate your billing and meter reading fiasco, right?

Wrong.

Back in 2010, while the PATH was still madly attempting to get it's 300 mile, 765kV transmission line sited and permitted on new right of way, Dominion dropped a bombshell on transmission planner PJM Interconnection. Dominion proposed several alternatives to the PATH project (which was never actually "needed"). One of the alternatives involved rebuilding MSD because of deteriorating towers. A rebuilt and modernized MSD would increase the thermal capacity of the existing line 66% and make the addition of PATH's capacity unnecessary. Both PJM and PATH partners FirstEnergy and AEP tried to deny the proposal and insist that PATH was still necessary. That was the beginning of the end for PATH. The Virginia SCC got mighty suspicious and ordered PJM to re-run some data on the necessity for PATH if MSD was rebuilt. Low and behold, the data showed that there really wasn't a need for PATH after all and PJM suspended (and later cancelled) the PATH project. PATH withdrew all its project applications and went into hiding, after wasting a quarter billion dollars of consumer funding on the project.

Ahhh... good times! :-)

Now FirstEnergy says "look at me!" and give me credit for modernizing the electric grid.

Kind of makes you wish that someone would drop a load of insulators on Toad's hard hat, doesn't it?

Oh, what would I do if I didn't have this little outlet...

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FirstEnergy Fantasy

4/9/2014

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FirstEnergy's frequent financial fiascos aren't Tony's fault!

Poor management pointed the finger at everyone else yesterday during some silly Chamber of Gladhanders event.

The quotes in the news article were bad enough, but check out the full text of the fairy tale here.

If Tony actually believes any of this stuff, he needs to exit stage left:

"All of us have been challenged by the economy over the last few years."

Well, except for you and your 1% pals, right? After all, how much of a struggle is it to survive on $23M a year? Almost as hard as it is to survive locked out of your job for months because your employer is a union buster, I'm sure.

"For example, in FirstEnergy’s six-state service area, our 2013 utility sales were below 2007 levels – and, during that period, wholesale energy prices dropped by more than 40 percent. While this isn’t the first time we’ve faced tough economic conditions, this is the longest period of economic stagnation I’ve seen in my 40 years in the industry. We will ultimately work through this… and as the economy grows, so will the use of electricity."

It's called energy efficiency, Tony. It's permanent.

"But quite frankly, the challenges we now face from government interference in the electric business are far more intrusive and disruptive, and I believe far more significant to our industry’s future, and to your future. That’s because whether it impacts our traditional regulated business or our competitive operations, government policy is now aimed at stifling the growth and use of electricity – and picking winners and losers in the competitive marketplace."

Oh, puh-leeze. FirstEnergy was singing a different tune when the West Virginia government puppets at the PSC "interfered" in FirstEnergy's scheme to sell a dirty, old coal plant to itself and charge West Virginia ratepayers over a billion dollars for it. Not only was having FirstEnergy's dirty trash dumped on ratepayers intrusive and disruptive to the amount we pay for electricity, it's effect is going to last well into the future. The mistakes of FirstEnergy's competitive operations got dumped into its regulated business, and that stifles economic growth and use of electricity in West Virginia. Worst of all, the PSC allowed FirstEnergy to pick winners and losers in the competitive marketplace. Yeah. FirstEnergy wins, we lose.

"Or, would you think it is fair to face competition from a supplier who can be indifferent to price… since all of its costs, including a return on investment, are guaranteed?"

What? Every stinking penny of FirstEnergy's $121M dollar investment in its unneeded PATH project was earning a 14.3% return on investment, and recovery of its sunk costs are guaranteed in the event of abandonment. FirstEnergy spent generously because it was indifferent to the ultimate quarter billion dollar abandoned price to ratepayers.

In addition, FirstEnergy is well on its way to plunking its "transmission spend" into a whole bunch of dubious projects, just to earn a big return on the investment. That's not "fair." Right.

"The industry has invested more than $840 billion… employs more than 500,000 workers… and pays billions of dollars in taxes."

But FirstEnergy earns a return on its investment, treats its workers like garbage, and doesn't pay any taxes!

"Thomas Sowell, a noted economist and commentator at Stanford, summarized a broader trend, now playing out in our nation’s energy policy, when he said, quote: “Much of the social history of the western world, over the past three decades, has been a history of replacing what worked with what sounded good.”

In the electric utility industry, energy efficiency, renewable power, distributed generation, micro grids, roof-top solar and demand reduction are examples of what “sounds good” – and while they may all play some role in meeting the energy needs of customers, they are not substitutes for what has worked to sustain a reliable, affordable and environmentally responsible electric system. And, the mandates and subsidies needed to force their use have far-reaching consequences for our customers and our economy."

Energy efficiency, renewable power, distributed generation, micro grids, roof-top solar and demand reduction sounds like a workable, and inevitable, future to me. Tony can either get in the backseat or get left behind. His choice.

Thomas Sowell quote? Really?

"Consider the fact that you can no longer buy a 100-watt incandescent light bulb in the United States, but you can purchase a 500-horsepower vehicle."

Oh, the horrors! Wanna bet that Tony is an incandescent bulb hoarder? He probably sits in his underground bunker with huge stack of them, crying quietly.

"Or that electric customers are being forced to pay additional costs for subsidized, unneeded generation."

Is he talking about Harrison?

"Or that these policies and others – designed to achieve a social agenda that has little, if anything, to do with maintaining electric service – are shifting the fixed costs of the system to customers who can least afford it… and are undermining our nation’s competitive position."

"So why are we engaged in this effort to experiment with the electric system by taking away customer choice… increasing prices… and jeopardizing reliability?"

Why are you doing that to West Virginia, Tony, WHY?

"Quite frankly, I believe state and federal policymakers are manipulating the supply and demand, and distorting markets for electricity, to further advance the “war on coal.”

Well, quite frankly, I believe FirstEnergy is manipulating the supply and demand and distorting the markets for electricity, to further advance corporate profits.

"Some generating units were off-line as natural gas was used to meet higher priorities – and the entire market was affected by a substantial increase in the price of natural gas. To put this price increase in perspective, it was the equivalent of paying about $85 per gallon of gasoline!"

And one of FirstEnergy's nuke plants was also off-line, right? And then prices went up, and FirstEnergy charged more than 2 million customers a "polar vortex fee" that's now under investigation by more than one state regulatory commission.

"As President Ronald Reagan stated in a letter to Congress on July 17, 1981, “Our national energy plan should not be a rigid set of production and conservation goals dictated by government… When the free market is permitted to work the way it should, millions of individual choices and judgments will produce the proper balance of supply and demand our economy needs."

Because the only thing more trite than a Ronald Reagan quote is comparing your issue to the Holocaust, right?

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New England's Transmission Feeding Frenzy

4/8/2014

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Remember that ambiguous "energy agreement" that New England states signed back in December? Its meaning is now beginning to take shape, not as a true energy plan, but as a ratepayer-funded transmission developer feeding frenzy.

Instead of "making investments in local renewable generation, combined heat and power, and renewable and competitively-priced heating for buildings that will support local markets and result in additional cost savings, new jobs and economic opportunities, and
environmental gains," it looks like some of the states are depending on this "agreement" to satisfy their energy appetites at the expense of the other states.

Here's how the states plan to implement their agreement:

In the next few months, the governors are expected to issue requests for proposals for 1,200 to 3,600 megawatts of transmission capacity that could carry wind and hydroelectric power from the northern reaches and Canada.

Massachusetts is plowing ahead with legislation ordering utilities to solicit bids for up to 2400 MW of "clean" energy.

Instead of fostering the development of renewable energy within their own borders, or tapping the incredible resource right off their own shores, the energy hog southern New England states plan to import renewables from another country and run transmission lines through the northern New England states to deliver it.

What's in it for the northern states? Part of the bill!

Massachusetts and Connecticut are driving the push to bring clean hydropower from Canada to help the states meet their clean-energy goals. But the other four states — Vermont, New Hampshire, Rhode Island and Maine — agreed through the New England States Committee on Electricity, made up of state utility officials from the six states. They have agreed to share the costs because they would benefit from the overall reduction in energy costs, although the details of how that would be done remain to be worked out.

Northern state landowners will also be required to sacrifice privately owned land or be subject to eminent domain condemnation and takings. They will also have to live with these 200-foot tall extension cords zig-zagging through their communities and unspoiled vistas.

Because Massachusetts and Connecticut don't want any of that nastiness mucking up their views.

This "agreement" was never about true diversification of generation. It's about increasing centralized generation and reliance on imported energy. And it's about corporate schemes to make money by smoothing the way to build more long distance transmission.

"Many of the proposals have been talked about in utility circles for some time..."

Of course they have, but the transmission developers needed cover to spring their plans on a wary public, and a way to broadly socialize the costs so that the burden on any one customer would be overlooked as minor.

The transmission developers and their pet Governors are even rewriting history, putting the egg before the chicken by pretending that the past winter's delivery issues were the impetus for the "agreement" that was signed before the problems occurred.

Adding to the charlie foxtrot are Big Green, who sanctimoniously oppose this new transmission plan, worrying that it "could crash the regional power market and kill off other needed energy-generating resources." Funny... these are the same green hypocrites who are cheering Clean Line Energy's plan to cover the Midwest with wind turbines and HVDC transmission lines. No worries about that crashing the regional power market and killing off other needed energy-generating resources. Right.

So, a whole stable of eager transmission developers are chomping at the bit to have their project selected as the winner of the ratepayer-guaranteed profits. Several proposals have been made. In addition to stupid overhead projects like the parasitic Northern Pass, Anbaric has proposed a project that it says will be buried, both on land and offshore.

A 300-mile power cable would be buried on land in Maine and then run across the Atlantic Ocean floor to greater Boston under a proposal to tap Canada’s plentiful hydropower to meet the needs of power-hungry southern New England.

Maybe Anbaric thinks that battling the opposition that is sure to develop against an overhead project isn't worth the time, money and headaches, preferring to spend a little more to bury its project for fast approval, while the competition languishes for years on the regulatory battlefield. Anbaric could teach some other "clean" energy developers a lesson. But then again, Anbaric is counting on ratepayers to finance its project, including the extra cost to bury the cable.

Other "clean" energy companies operating under a merchant model are caught in a desperate cost control game in order to keep their projects cost competitive. Merchant transmission projects depend on energy markets for their existence. If a merchant transmission owner can cover its own expenses to ship energy long distance and make a profit, then it is economic to build. However, if a merchant transmission company's cost of service increases because it has to spend more to bury cable to make landowners happy, then it is no longer economic and will not be built. Sounds fair, right? But, what if the merchant developer wanted the power of eminent domain to take land cheaply for an overhead route, instead of having to please landowners during a fair, open market right of way negotiation process that could include the requirement to spend more money burying the line? That would be the best of both worlds for the transmission developer -- depending on the artificial influence of eminent domain to keep its project costs in check to ensure market competitiveness. This is perhaps the single biggest flaw in Clean Line Energy's plan. Merchant projects should NEVER be granted a utility's eminent domain authority because they are not needed for reliability or economic purposes and depend completely on the economics of the market for existence, therefore they should also be forced to compete in unfettered real estate markets to bring their projects to reality. If it costs too much to obtain right of way in a free market, then the project is not economic.

But, I digress.

New England has a lot of work to do to craft a real, sustainable energy plan that does not depend on inflicting social and environmental injustice on people in other states or other countries.

the states will hold public meetings to present the region's plan in preparation for bidding process. The meetings will include stakeholders, including environmental groups and developers.

It is unclear whether these "meetings" will include citizens, landowners and ratepayers, the most important "stakeholders" of all.

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Another Bullshit Argument

3/26/2014

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That's what former Secretary of Energy Steven Chu had to say about claims that distributed solar was making the grid unstable.

“That’s another bullshit argument,” said Chu, a Nobel Prize winning physicist who served as energy secretary from 2009 to April, 2013. Solar installations don’t threaten grid stability until they approach 20 percent of the customer base, Chu said.

Finally released from officialdom, Chu is no longer telling utilities what they want to hear, but what they need to hear. Feels, good, doesn't it, Dr. Chu?

Chu has some sage advice for utilities: To ward off the inevitable "death spiral," they need to get into the rooftop solar business.

Chu said his advice has been met by utilities one of three ways:

“Tell us what to do.”
“Deer in the headlights.”
“We’re going to fight this.”

What was your utility's response?

Isn't it refreshing that former high ranking energy officials are loosening up and telling the truth now that they can? Former FERC Chairman Jon Wellinghoff is also under fire for giving away energy industry "secrets" about the vulnerability of our centralized electric generation and transmission system.

This isn't just some random crackpot who overdosed on the Metamucil, but two guys who had their finger on the pulse of our electric system for years. It's rather telling that the industry and governmental officials are screaming foul when two of their own finally break rank and spill. The regulated and the regulator are way too cozy in this country. Denying the advice of those who know the system best, when they are finally free to give it, is a head in the sand approach to disaster.

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FirstEnergy Solutions Sticks It To Customers With "Polar Vortex" Surcharge

3/25/2014

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Customers in the deregulated states of Illinois and Ohio are up in arms about FirstEnergy's plan to stick it to them with a $5 - $15 one-time charge to pay for what it says are "unexpected costs incurred during the polar vortex."

"FirstEnergy Solutions is preparing to bill about 2 million of its 2.7 million retail customers a surcharge for expenses the company will soon have to pay for reserve power it needed when temperatures plummeted below zero." 2,000,000 x $15 = $30M

That's $30M being transferred from consumers pockets into the pockets of FirstEnergy. A company spokeswoman opined, “We consider that pretty nominal.”

I wonder if she also considers CEO Tony Alexander's annual $23M compensation "nominal." If the big guy took a pay cut, it would almost cover the cost of the "polar vortex," wouldn't it?

Crain's described the reason for the charge like this:

"The company confirmed that it will impose a one-time charge of between $5 and $15 on customer bills in June to recover a portion of its power-purchasing costs made through PJM Interconnection LLC's regional grid, which serves 61 million people in all or part of 13 states from northern Illinois to the Mid-Atlantic, as well as Washington. In January, PJM — which acts as a market referee for power generators — lifted caps on the price natural gas-fired power plant operators could charge as the cost of gas soared due to record demand, and electricity consumption likewise spiked."

The Plain Dealer described the reason for the charge like this:

"When the arctic blast hit the region in early January, demand for electricity spiked - and simultaneously dozens of power plants failed because of the weather, mechanical problems or because of fuel problems.

About 20 percent of the PJM region's power plant capacity went down, he said, threatening the stability of grid. And because the cold was widespread and lasted many days, PJM grid operators found that they could not import power from other areas.

Wholesale power prices then skyrocketed. PJM reduced voltages by 5 percent, asked for voluntary conservation and even briefly considered rolling brownouts to avoid a grid collapse and blackout.

But PJM also ordered more expensive power plants to begin generating, just to keep the system stable, he said."

But here's another reason:

FERC compounded the problem by lifting a $1000 price cap and allowing these greedy corporate entities to further game PJM's malfunctioning markets. FERC has allowed generators to charge whatever they want, and is in denial about any "harm" that may result:

"FERC said PJM's proposal met the commission's criteria for approving waivers, as doing so would remedy a 'concrete problem,' would not harm third parties and would be limited in scope."

It's really not sounding very "limited in scope," is it?

In addition, FirstEnergy ended up purchasing so much expensive power because many of its generation plants were out of service. Where does FirstEnergy's fault in that end and the consumer's responsibility for the charges begin?

Not all electric companies are passing these "polar vortex" charges on to their customers, however. But, FirstEnergy is shuckin' and jivin' like a champ on a "special website" the company has set up to serve you some koolaid, as well as in the media:

"Francis of FirstEnergy Solutions declined to say how much her company has been billed by PJM, except to describe the amount as unprecedented. She said the company is passing on only a portion of the charge to customers."

FirstEnergy also said the company has no idea how much it will have to pay.

"Ms. Francis declined to say how much in unanticipated vortex-related costs FirstEnergy Solutions must pay, saying that figure was confidential. FirstEnergy will know next month precisely how much the surcharge will be, she said."

Yes, it seems that the real cost to FirstEnergy is going to remain a deep, dark secret, not even revealed to the company's investors.

That's because:

"We thought it was necessary to pass through these costs to customers where contracts allow,” FirstEnergy spokeswoman Diane Francis said."

Necessary? FirstEnergy thought using the fine print in its contracts to stick it to customers in deregulated states was so very funny during its last earnings call.

Steve Fleishman - Wolfe
Yeah. Hi, good afternoon.

Tony Alexander - President & CEO
Hi, Steve.

Steve Fleishman - Wolfe
Hi, Tony. I guess this question might be for Leila. I think you mention the PJM ancillary cost that some of those get pass through the customers?

Leila Vespoli - EVP, Markets, and Chief Legal Officer
Yes.

Steve Fleishman - Wolfe
Is that just in certain states or how does that work? How do we know which areas get pass through or not?

Leila Vespoli - EVP, Markets, and Chief Legal Officer
It is pursuant to contract in a specific language within the contract so it is not a state by state kind of thing, Steve.

Steve Fleishman - Wolfe
Okay. So it is certain types of your customer classes?

Leila Vespoli - EVP, Markets, and Chief Legal Officer
In?

Steve Fleishman - Wolfe
In a retail business?

Leila Vespoli - EVP, Markets, and Chief Legal Officer
It is not even the same throughout particular classes.

Steve Fleishman - Wolfe
Okay.

Leila Vespoli - EVP, Markets, and Chief Legal Officer
It is as that contract language was developed for that particular customer or grouping of customer. So there is no way I can even give it to you by segment.

Steve Fleishman - Wolfe
Okay. So some of the cause when you get this data come up will be cause that you absorb but some of those would be available to essentially pass through your contracts to the customers?

Leila Vespoli - EVP, Markets, and Chief Legal Officer
Correct.

Steve Fleishman - Wolfe
And in the future, do most of your contracts have that clause, so new ones do or not older ones or vice versa?

Leila Vespoli - EVP, Markets, and Chief Legal Officer
I think it would be safe to say that we are going to be adding that language where we can in the future.

Steve Fleishman - Wolfe
Got it. Okay. Thank you. Just want to clarify that.

Leila Vespoli - EVP, Markets, and Chief Legal Officer
Okay.

So, if you don't want to get stuck with these kind of charges in your deregulated electric bill again, do like the City of Rockford and look for a new supplier ASAP.

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Missouri Landowners Alliance Files FERC Protest and Missouri PSC Complaint Against Grain Belt Express

3/20/2014

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The Missouri Landowners Alliance has retained excellent counsel to defend its interests against the intrusion of Texas-based Grain Belt Express.

After a long career with a big utility, attorney Paul Agathen brings a wealth of experience to the Alliance's legal team. Paul has gone on the offensive with a Protest of the Grain Belt Express Application for Negotiated Rate Authority at the Federal Energy Regulatory Commission and a Formal Complaint before the Missouri Public Service Commission alleging that Grain Belt Express has violated and continues to violate the Commission's rules regarding ex parte communications.

First, let's take a look at the FERC Protest. As a merchant (self-funded) transmission project, Grain Belt Express must concoct its own rate scheme to recover its cost of building and operating its proposed transmission line from customers. GBE's rate scheme is under the jurisdiction of the FERC and must adhere to FERC's rules, including its non-discriminatory open access transmission rules. GBE's rate scheme proposes that the company be allowed to negotiate rates with willing transmission customers in a open and non-discriminatory bidding process. FERC's job is to review and approve GBE's proposed negotiation process BEFORE it occurs.

And, according to the protest, that's just the problem. Although GBE hasn't "officially" initiated its "open season" for potential customers, GBE has already started soliciting interest from its preferred customers via a "Request for Information" directed solely toward wind project developers in Kansas. Directing its solicitation to only wind developers discriminates against other forms of electric generation, such as solar or gas, that could potentially bid for capacity on GBE's transmission line. This discrimination violates FERC's open access transmission rules.

GBE has been doing an elaborate fan dance with FERC, promising to provide access to all forms of generation, while touting its project as a "wind only" transmission line and soliciting interest from wind developers.

The Alliance's Protest asks that the Commission determine that GBE's proposed solicitation of customers is unduly discriminatory and dismiss GBE's application for negotiated rates.

Without negotiated rate authority from FERC, GBE will have no way to collect its cost of service. No money, no GBE.

Moving on to the Missouri PSC Complaint, the Alliance alleges that GBE has been violating the Commission's ex parte rules. Ex parte means "one side only" and refers to communication between the decisional authority and only one of two (or more) parties in a case. It's like one person getting to have a private conversation with the judge in order to sway his opinion against the other person.

But that's not exactly the way the Alliance alleges GBE has violated this rule. The ex parte rules state:

It is improper for any person interested in a case before the commission to attempt to sway the judgment of the commission by undertaking, directly or indirectly, outside the hearing process to bring pressure or influence to bear upon the commission, its employees, or the presiding officer assigned to the proceedings.

The Complaint alleges that GBE violated this rule through its extensive public relations campaign intended to influence public opinion through statements on its websites, the gathering of boiler plate letters of support for its project, public statements and media interviews, and meetings with local government officials.

The Alliance is not objecting to GBE providing legitimate information to the public:

The Alliance is not objecting here to everything on the two Grain Belt websites.
It recognizes, for example, that it is perfectly acceptable for Grain Belt to provide nonargumentative factual descriptions of the Line and its supporting towers; to include maps of the alternative routes of the Line; to provide information for potential suppliers of
component parts for the line; and to address any other matter which is not likely to be a
contested issue at the forthcoming Commission hearings.

The Alliance is objecting to GBE's elaborate public relations campaign:

As is apparent from all of the above, Grain Belt has engaged and continues to engage in an elaborate PR campaign designed to sway public opinion on matters which it will litigate in the forthcoming Commission proceedings. Their campaign is extensive, it is expensive, and it is professionally managed in all of its various aspects. They have even incorporated Facebook and Twitter into their PR arsenal, and added links in their website to a number of video presentations.

For example, it its Application to the FERC for approvals regarding the proposed Line, Grain Belt refers to their video "that describes the need for the Project and how Grain Belt Express will bring significant economic benefit to states through much-needed transmission expansion for new wind energy projects .... " (Exh. 23, p. 8).

This description of the Grain Belt PR efforts is not intended in the pejorative sense at all. The Grain Belt publicity campaign is undoubtedly effective, and will no doubt accomplishing two of its principal goals: to sway public opinion on the Line in Grain Belt's favor, and to thereby convince members of the public to sign on to the computer-generated letters of support which Grain Belt will file with the Commission.

The letters may have no effect at all with the Commission. However, the ultimate impact of Grain Belt's efforts should not be the deciding question here. If Grain Belt has violated the Commission's ex parte rules, their conduct should not be excused by some sort of "no harm, no foul" escape clause.

We may never know how many people in Missouri were exposed to and influenced by Grain Belt's one-sided presentation on issues which they themselves will raise later at the Commission. Nor could the Alliance ever hope to present its own position to all of the people reached by Grain Belt. Grain Belt has been waging an extensive PR campaign for about four years, and will likely win that battle.

Just how Grain Belt has gone about doing so is illustrated in materials presented at a recent conference in Houston, where participants spent two days learning various techniques for "selling" a transmission project to the public.
A copy of the initial brochure for that conference is attached here as Exhibit 18.
As noted on the first page, the conference was held this past January, and was to be hosted by Grain Belt's parent company- Clean Line. As noted at page 3 of that brochure, the keynote speaker at the conference was to be the Executive Vice-President of Clean Line.

According to the brochure, this is a sample of what those involved with building and siting transmission lines were to learn in Houston:

• How best to utilize social media to "engage the public", including who you can expect to reach, and how to go about doing it. (Exh. 18, p. 4) Not surprisingly, an expert in social media from Clean Line was to be one of the two speakers on this subject.
• How to deal with people disparagingly referred to as "NIMBYs" and "BANANAs". Ironically, the audience at that session was also told that a driving force behind the emergence of community-based opposition groups has been the push to build more infrastructure to support more renewable energy. (Exh. 18, p. 4).
• In "Marketing to Mayberry" the attendees would learn, among other things, how to talk down to people in small town, rural America, by communicating with them "in a conversational tone rather than corporate tone ... " Presumably, these techniques were designed with the citizens of rural northern Missouri in mind.
• "How to frame and 'sell' infrastructure projects ... ", and how to use "effective
strategies and tactics, and share in critique of on-camera training ... "
• How to deal with the media, including: "Getting into a reporter's head"; "How to answer questions you don't want to be asked"; and how to "position" your message to the media. (Exh. 18, p. 6)
• Finally, the Executive Vice President from Clean Line was to explain "how to ensure that our stakeholders feel they are informed and part of the process". (emphasis added). Apparently, it is not important to Clean Line that stakeholders actually be informed, or actually be involved in the process, so long as they are somehow made to feel that they are.

The Complaint asks the Commission to find that GBE violated the ex parte rules, order it to revise its websites to conform to the rules, "that the letters of support included by Grain Belt with its Application for
Commission approval of the Line constitute the fruit of a poisonous website, and be therefore stricken from the record in that case," and other just and reasonable relief.

Everyone needs to read this Complaint. The uneven playing field on which transmission owners and the public who oppose them do battle has been clearly defined as unfair. This is the new normal of transmission opposition, so transmission developers may as well get used to it and turn over a new leaf to play fair.

2 Comments

ITC "Survey" Says You Love Transmission

3/18/2014

1 Comment

There's been lots of discussion in the news over the past year about the "disruptive challenges" increased deployment of distributed generation resources, such as onsite solar, pose to traditional utility business models. Even the Edison Electric Institute publicized a report urging utilities to devise a way to continue to collect monthly payments from you, even when you disconnect from the grid.

ITC Holdings Corp. builds, owns and operates transmission. Unlike other utilities that also own generation or distribution (your "local" electric company), transmission is all ITC does.

More distributed generation means less transmission. ITC must have found that pretty terrifying, because the company recently "...conducted research, including an online survey of national audits and in-depth interviews with business leaders on grid and transmission development, to measure whether businesses and the general public understand the complex and significant economic benefits that stem from a fully functioning electric transmission grid."

And wouldn't you know it, "[t]he research found that 99 percent of Americans polled think the grid is important to the United States, the national economy and their local economy. Ninety-one percent of Americans agree that investing in transmission will help local, regional, and national businesses grow and succeed. Further, 89 percent of Americans included in the ITC Holdings research believe that investing in the electric grid will benefit consumers by increasing competition and lowering electricity prices."

Oh, poppycock, ITC! It's all in how you ask the questions, right? A "hired gun," or advocacy survey is carefully constructed to lead the participants to the desired responses through carefully worded questions, false choices, or limiting possible answers.

Let's take a look at ITC's "survey:"

The survey included an upfront, conclusive statement before any questions were asked of the 800 sample "Americans":

After reading the following short description about the electricity transmission grid, nearly all Americans (99%) think that the grid is important to the United States, the national economy and their local economy.

"As you may know, an important part of our nation’s infrastructure is the electricity transmission grid. The grid is made up of transmission towers and power lines that deliver electricity from power generating sources to the distribution network and the millions of businesses and consumers across the country. It’s often useful to view the transmission grid as the “backbone” to the country’s electricity infrastructure. The pieces that make up the transmission grid are very old and outdated. More than 70% of the nation’s transmission lines are at least 25 years old."

Questions consisted of asking participants if they agreed or disagreed with the following statements:

Investing in the electricity transmission grid will ensure reliable access to power, especially during severe storms, for consumers and businesses.
Investing in the electricity transmission grid will help America’s economy by promoting job creation and economic growth.
Investing in the electricity transmission grid will help regional local, regional and national businesses grow and succeed.
Investing in the electricity transmission grid will increase competition by facilitating
access to more efficient forms of energy and thereby reducing costs.
Investing in the electricity transmission grid is important to national security.
Everyone benefits from investments in the electricity transmission grid.
Investing in the electricity transmission grid will accelerate access to all types of power.

Participants were asked "Why do you think the United States should invest in the electricity transmission grid? Select all that apply." Why is it assumed that all participants think the U.S. should invest in the grid? And why isn't one of those choices "To make my electric rates go up while providing corporate welfare for transmission companies?" Instead choices were limited (and surprisingly sappy):

To lower electricity prices, helping to save consumers like me money
To reduce the number of power outages, especially during severe storms, making electricity more reliable
To make a difference for future generations, including my children and grandchildren
To give businesses more reliable power and make our economy stronger
To minimize the impact of cyber security risks

Here's what ITC concluded from the above question:

• The majority of Americans (61%) prefer investing in the electricity transmission grid rather than building power-generating facilities to increase energy efficiency.

The majority of Americans would rather give their money to ITC every month than invest it in their own power producing equipment or energy efficiency improvements that lower their bills overall? That is a plainly ridiculous conclusion. What was in the koolaid they handed out?

For some reason, a majority of ITC's "Americans" think that the government invests in the grid from some magic pool of money that doesn't cost the "Americans" anything:

Despite agreement around the benefits of investing in the grid, Americans are divided over who is primarily responsible for actually investing in it.
• More than half (56%) say either federal (Congress) or local/state government is responsible for investing in the grid, while a quarter say electric utility companies are. Small percentages think that President Obama, consumers, or private investors are responsible.

Only a small percentage of these "Americans" know the truth -- that consumers pay for grid expansion in their monthly electric bills. Oh, if only we really did have a magic grid expansion investment fairy, then there would have been no need for this "survey!"

Now you know how ITC reached its desired conclusion that "Americans" want ITC to build even more transmission to increase corporate dependence and profits! Then ITC turned this into a white paper for use in trying to convince the federal government to create laws mandating more transmission. We don't need more transmission! We need more generation near point of use and less unreliable and expensive transmission!

Since ITC's "survey" was scientifically carried out online, let's undertake our own online survey to see if we can arrive at the same results as ITC's pollster.

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Where's Waldo?

FirstEnergy Files To Raise Potomac Edison and Mon Power Electric Rates

Landowner Says Clean Line is Armed Robbery

FirstEnergy Takes Credit for Dominion Transmission Project

FirstEnergy Fantasy

New England's Transmission Feeding Frenzy

Another Bullshit Argument

FirstEnergy Solutions Sticks It To Customers With "Polar Vortex" Surcharge

Missouri Landowners Alliance Files FERC Protest and Missouri PSC Complaint Against Grain Belt Express

ITC "Survey" Says You Love Transmission

Americans Online Transmission Survey

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