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Will Midwest States Become the Next West Virginia?

1/23/2014

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The West Virginia water crisis has generated a whole bunch of national media attention on West Virginia's status as the east coast's dumping ground.

This isn't a new story, it's actually a very old story.  The long and short of it is that the people and environment of West Virginia have been prostituted to out-of-state business interests by their own elected officials.  The people of West Virginia have long sacrificed for the needs of others, and all they have to show for it is crushing poverty and a fouled environment.  All the money ends up in the pockets of its out-of-state overlords.  I told this story to the people of Illinois during a public hearing on the Rock Island Clean Line project last fall.

Now, Salon tells West Virginia's story to the rest of the country.

Is there a lesson to be learned here?  How easily could wind-rich Midwest states be substituted for West Virginia in this article?
The people of West Virginia had made clear demands: put land and people first.  The companies did neither, but continued on their profit-driven rampage destroying huge swaths of the West Virginia mountains – one of the world’s most beautiful landscapes – with mountaintop removal for cheaper access to coal, exposing residents to toxic air pollution in order to provide the rest of the nation with cheap energy.  The decisions made in the early 1970s are what got us here today, with hundreds of thousands of people spending days unsure when they would be able to drink their water again, with many remaining unsure as pipe flushing and other cleanup procedures have been ineffective.
Think huge industrial wind farms and miles and miles of high voltage transmission lines are harmless?

Wind farms could endanger small aircraft
Wind turbines throw ice
Wind farms can drive you crazy
Wind farms have a multitude of adverse effects

New high voltage transmission lines also have adverse effects and will take thousands of acres of the nation's most productive farm land out of production.


The people of Illinois, Iowa, Kansas and Missouri have made clear demands:  put the land and people first.  Clean Line Energy Partners have done neither, but continue on their profit-driven rampage intent on destroying huge swaths of America's farmland -- one of the world's most productive food producers -- with acres of wind farms and miles of transmission lines for cheaper access to renewable electricity, exposing residents to economic and health risks in order to provide the rest of the nation with cheap energy.  The decisions made today will be the history of tomorrow.

And if we don't learn from history, we are bound to repeat it.

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FirstEnergy Slashes Dividend - Sigh, Scribble, UT-OH!

1/22/2014

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Sometimes it's worth getting to work early to enjoy a little schadenfreude!  FirstEnergy put on a special show for investment analysts this morning in the wake of the company's announcement yesterday that it would FINALLY be cutting its dividend to reflect the mess our pal Tony the Trickster has made of the company.

Investors have long used the services of voice analysts to pick up clues that indicate CEO lying.  In response, companies have done a better job preparing their CEOs to mask verbal tells.  And then there was today's FirstEnergy call...  no fancy voice analyst needed!  It was obvious to anyone tuning in that Tony was very put upon to be there and have to answer questions.  Very pointed questions.

The call began with much heavy sighing and attitude, and if that wasn't enough, once the questions from analysts began, the sound of someone scribbling furiously on a piece of paper to feed answers to company officials kept getting louder... and louder... and louder.  Right.... that's the sound of a healthy company poised for enormous growth....

So, what's Tony's next great plan?  Betting on guaranteed earnings from FirstEnergy's regulated business.  If you've been listening in on the earnings calls of Ohio's utility Tweedledum and Tweedledee over the past few years, you may note that Tony the Trickster was so focused on "beating" rival AEP in the Ohio retail market, that he didn't see what was sneaking up behind him.  AEP was forced to retreat from its competitive business a lot sooner, because FirstEnergy was so willing to take quantity over quality in order to sign up the most customers in Ohio.  Fortunately for AEP, concentrating on its regulated business a lot sooner than FirstEnergy saved it from a lot of sighing and scribbling.

Oh, that competition thing... it can make smart men do really stupid things.  Tony the Trickster got all offended when asked if the company would need to continue to inject cash in its loser competitive business segment, or if that part of the business would begin supporting itself.  Truth hurts, doesn't it?

FirstEnergy finds itself squarely behind the curve now, so the next great plan is to start pumping money (i.e. "investing") into its regulated transmission business.  What can go wrong with this plan?  Lots. 

FirstEnergy also plans to file base rate cases in West Virginia and Pennsylvania this year, despite the fact that its JCP&L rate case in New Jersey hasn't actually "derisked" the company.  Tony forgot to tell analysts that it must file a West Virginia rate case as a result of its dumping of the Harrison power station into West Virginia's regulated system, not that it wants to file a rate case to increase earnings.

Tony says that "reality" caused the company to most effectively "reposition" itself because now is the time to make a move to eliminate uncertainty, speculation and rumors by refocusing the company.

You believe him, don't you?
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Residential Power Use Expected to Fall Again in 2014:  Utilities Continue Pollyanna Plans

1/4/2014

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Remember Jonathan Fahey?  He wrote an article in 2011 headlined Shocker: Power demand from US homes is falling that pioneered the idea that even though we're using more electric "gadgets" than ever, power use is dropping.  Well, now he's back with a similar article, Home electricity use in US falling to 2001 levels.
The trend Fahey first reported in 2011 continues, more than 2 years later.

Have utilities gotten any smarter since then?  Partially.  It took them forever to admit that dropping demand wasn't tied to the economy and that a rebound of electric use wasn't just over the horizon.  However, some utilities have simply moved on to other unsound business plans that continue to bank on the same old ideas that are no longer sustainable. 

Now utilities have moved on to transmission investments as their savior.  This is pretty puzzling, considering that long-distance transmission champion AEP concluded a year ago that enormous projects built across multiple states were an impossible dream.
Mr. Akins said he wants to avoid the bruising battles that delayed or doomed big projects in the past, like the 275-mile Potomac-Appalachian Transmission Highline project from West Virginia to Maryland. AEP and partner FirstEnergy Corp. dropped development plans for the complex project in 2011.

"Sometimes, we were just dreaming" that the companies could get enormous power lines built across multiple states, Mr. Akins said. He said AEP now is focusing on shorter projects blessed by federal regulators that eliminate grid bottlenecks. "It's where you want to put your money," he said.
The transmission investment gravy train has also left the station.  The sheer number of new transmission projects proposed combined with today's ease of online information sharing and social media tools has led to an explosion of knowledgeable, interconnected transmission opposition groups who are combining resources across the country to delay or stop unneeded projects altogether.

Instead of embracing innovation and new technology to make the existing grid smarter, some utilities are intent on merely building more of the same old dumb grid, or actively attempting to stifle innovation by forcing us all into an historic "consumer" position where we must funnel money to incumbent utilities in order to survive.  Ultimately, this plan will also fail, because technology marches relentlessly on. 

How we produce and use electricity is also changing.  Not only is producing our own electricity locally better for our economy, it's also much more reliable.  Hurricane Sandy was one of the biggest wake-up calls we've had recently, and the inevitable Monday morning quarterbacking of that disaster reveals that increasing long distance, aerial transmission from remote generation is simply dangerous.
  Making our grid more reliable isn't about building more transmission.  It's about change:
This includes traditional tactics, such as upgrading power poles and trimming trees near power lines. But it also encompasses newer approaches, such as microgrids and energy storage, which allow operators to quickly reconfigure the system when portions of the grid go down. Implicit to such plans is the need to ensure uninterrupted power to critical sites such as oil and gas refineries, water-treatment plants, and telecommunication networks, as well as gasoline stations, hospitals, and pharmacies.

Some of the nation’s leaders seem receptive to such approaches.
Elected officials, progressive regulators, energy producers, energy consumers, and innovative companies embracing new technology are also increasingly joining forces to move our energy economy forward and away from the dated centralized generation and transmission business plan of the past.  Companies who continue to deny the inevitable will ultimately be the ones left behind in irrelevance.
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Is AEP Leading on Ideas or Dragging Around A Huge Anvil?

12/30/2013

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The Columbus Dispatch and a couple of investment analysts gushed all over AEP CEO Nick Akins for "leading on ideas" yesterday.

What's Nick's idea?  Getting out of the generation business and betting AEP's future on long-distance transmission.

Bad idea.
...a transformation of the company’s structure and a shifting notion of what AEP needs to do to remain relevant in a changing energy landscape.

In doing so, the company is de-emphasizing what was once a crown jewel, the fleet of Ohio power plants, and putting a greater focus on developing an interstate network of power lines.

“The less we have to spend on centralized generation, the better off we are,” he said in a recent interview.

When he says “centralized generation,” he means big power plants. AEP will be closing more plants than it is building.

The company is shifting resources so it can expand its transmission system, made up of the high-voltage power lines that carry electricity across state lines and between metro areas.
Maybe ol' Nick missed the EEI report earlier this year, Disruptive Challenges: Financial Implications and Strategic Responses to a Changing Retail Electric Business.  The report cautioned electric utilities to avoid "that Kodak moment" for investors by embracing new technology and addressing competitive threats.

While getting out of the competitive centralized generation business "addresses" the threat that AEP may lose some of it's golden eggs in an unpredictable market, AEP is not embracing new technology or making itself relevant in a changing energy landscape.  It's simply putting even more of its golden eggs into a business plan that it will help to make obsolete. 

As competitive centralized generation closes, it is being replaced by independently owned distributed generation.  Distributed generation doesn't need new transmission.  Nick won't be collecting any eggs if he kills all the chickens.

A better idea to embrace new technology and establish future relevance was adopted by competitive generation company NRG earlier this year.
...NRG is installing solar panels on rooftops of homes and businesses and in the future will offer natural gas-fired generators to customers to kick in when the sun goes down, Chief Executive Officer David Crane said in an interview.
AEP loves regulated businesses.  It's a guaranteed revenue stream for a bulky, staid, not-particularly-innovative company.
AEP, which was reluctant to split its Ohio operations, has responded by focusing on the delivery business.
Meanwhile, the Ohio power plants are a shrinking asset. Because of environmental rules and the age of some of the plants, the company has announced a series of shutdowns that will occur over the next few years.

Also, AEP is in the process of transferring two plants away from Ohio regulation. The plants, both of which are in West Virginia near the Ohio line, will be regulated in nearby states that allow a utility to sell electricity directly to consumers.

Once the moves are complete, AEP will have 8,668 megawatts of power-plant capacity in the new Ohio power-plant subsidiary, which will be down from 11,652 megawatts today.

Akins says the company is responding to an economic climate in which there is little reason to build power plants in Ohio. The state’s electricity demand has been flat, and the regulatory structure provides no clear way to pay for plant construction.
So, dumping competitive, centralized generation is a smart idea, but increasing investment in long distance transmission to support a shrinking pool of centralized generators is not sustainable.

While AEP is banking on federally regulated interstate transmission to nearly double earnings from transmission activities from 2013 to 2014, AEP seems to have forgotten what happened with its PATH project.  Big, interstate transmission projects with long lead times lead to big failure.  That's because "need" for these projects is constantly shifting, and if opposition can delay them long enough, they become obsolete.  Opposition is growing by leaps and bounds.  AEP ain't seen nothing yet!

It's a risky proposition and I don't think it's a particularly good idea.
Akins says he’s having fun and is eager to see the work of the past two years come to fruition.

“We are now at a point where we can start defining our success,” he said. “Before, we had a huge anvil we were dragging around, whether it be environmental expense or whether it be other things we were dealing with that were reactionary. We’re finally at a point where we can map out the strategy of this company going forward. It is exhilarating.”
We'll be "having fun" too, supporting companies embracing the new technology of distributed generation, and dragging the progress of AEP's transmission projects down like a huge anvil.  Although AEP can ignore growing public discontent, it ultimately cannot be denied.
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Potomac Edison/Mon Power Billing & Meter Reading Investigation Evidentiary Hearing

12/29/2013

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The WV PSC's evidentiary hearing in the General Investigation of Potomac Edison and Mon Power Meter Reading, Billing and Customer Service Practices was held in Charleston December 17 -18.  If you didn't have an opportunity to watch the hearing live, never fear, we drove 12 hours, spent 2 nights in a hotel, talked to people we don't particularly like, fended off icy stares, and stayed awake for the entire thing in order to generate 13 pages of notes just so you can find out what happened.  The media took no notice of the event, even though FirstEnergy media personality Toad Meyers was there to act as their personal hearing interpreter.  Maybe they're waiting for him to share his notes...

If you've never watched one of these hearings, let's set the stage.  It's a quasi-judicial, court-like proceeding, sans robes and much of the formality.  This was an opportunity for the Commissioners to consider evidence and examine witnesses.  Witnesses sponsored by the parties to the case filed written testimony and rebuttals in advance.  At the hearing, the witnesses took the stand to have their testimony officially recognized and to give opposing parties a chance to cross examine them.  The Commissioners also took the opportunity to ask the witnesses questions.  The parties to this case are FirstEnergy's Potomac Edison and Mon Power utilities, the Staff of the PSC, and the Consumer Advocate Division of the PSC.  Between them, they produced 6 witnesses, 4 from the company, and one each from the Staff and the CAD.

FirstEnergy's first witness was John Hilderbrand, Director of Operations Support for Mon Power, who was grilled by the attorneys for CAD and Staff, and the Commissioners, for more than three hours.  From my notes:
  1. Exigent circumstances prevented the company from making bi-monthly reads as directed in its tariff.  The dreaded "exigent circumstances," or "EC" were defined as:  weather, access issues, unplanned absences and equipment failures.  Weather = ice, snow, rain, flooding that impedes access to meters. Access issues include a broad range of items such as new gates being erected, no keys being provided, meters on the interior of the home, animals, such as dogs.  Unplanned absences = sickness or illness, or 3 personal convenience days that can be used w/24 hour notice.
  2. Because the company has limited resources, they don't attempt to read in the month following a missed read, when an estimate is scheduled.
  3. Company now has 7 substitutes, or "rovers" to cover for unplanned absences.  This process began several months ago,  However, the company did not have substitute meter readers before that.  But, there may still be missed reads due to "EC" because there are only 7 rovers.
  4. The company was not adequately staffed to read meters for some period of time due to merger organization and that contributed to the problem.
  5. As a result of the merger, meter readers are devoted to meter reading only.  (Despite the fact that FirstEnergy was recently recruiting for meter readers that would also perform collection activities and disconnects and reconnects.)
  6. When meter readers transferred to other positions after the merger, FirstEnergy had to shift resources to read meters and catch up on missed reads.  FirstEnergy shifted resources 8/15/11 and again 4/2/2012.
  7. It takes 6 months to train a meter reader (but the company wants YOU to read your own meter with no training whatsoever!)
  8. Company has not researched how the storms affected other power companies, but AEP didn't have the same problems because their meter reading is automated and is a different process.
  9. The proposal to read meters every month for one year would increase the cost to WV ratepayers $5M.  But who said WV ratepayers would be paying for that?  Nobody.
  10. Renumbering is a "short term inconvenience to customers" but will make the process better in the long run.  Why not a short term inconvenience to the company?  It's good utility practice to see that reading is as efficient as possible.
  11. The company added renumbering to the existing staffing, merger transition and storm problems.  But it results in cost savings (for the company!)
  12. Readers hired since mid 2012 must use their own vehicles.  Decision was made as part of merger integration aligning practices across FE and the company always evaluates ways to deliver product cost effectively. 
  13. Meter readers using their own vehicle are paid IRS mileage rates and must carry certain insurance, although the FirstEnergy witness doesn't know how much.  "Most" personal vehicles used by meter readers are all-wheel drive, however that is not a requirement.  The supervisor inspects the vehicle monthly to ensure the vehicle can complete the route.  If a personal vehicle breaks down the company may facilitate getting it back on the road with a tow or a jump, but does not normally provide a back-up vehicle.  If a meter reader has continued vehicle issues, that affects the ability to get the job done.  Meter readers are not compensated if they don't get the job done.
  14. When asked about missed readings due to the Derecho, Hilderbrand's logic came up short.  Staff attorney John Auville walked him through a typical storm-altered read schedule:  The Derecho caused a missed read in the first half of July.  The August read was a scheduled estimate.  The meter should have been read in September, but was not.  Hilderbrand said the company was still not recovered from the Derecho and able to read meters in September.  Hilderbrand started talking about the dreaded EC again.
  15. On renumbering:  When you reorganize routes and shift between even and odd cycle reads, that results in some customers being estimated when due an actual read, or some customers receive back-to-back reads (is there anyone this happened to?  I'm still waiting for someone, anyone, to tell me they got back-to-back reads due to renumbering).  It was a poor decision to renumber the Eastern Panhandle in the winter.  Why didn’t FirstEnergy think of that beforehand?  The FirstEnergy staff had never renumbered before, so they didn’t understand it.
  16. FirstEnergy has selected 10,000 residential accounts for monthly reads between Nov. 2013 and Jan. 2014.  FirstEnergy has approximately 445,000 customers in WV.  At most, this provides one, maybe two additional reads for these customers.
  17. FirstEnergy has 16,920 "annual read" customers in WV.  An annual read customer is one whose meter is read only once per year.  Reasons for an account being designated "annual read" include:  Safety, access, customer request and seasonal.  The company is reviewing these accounts to make sure designation is correct, but has no plans to notify the customers of the review, the results, or notify them of their right to appeal the determination.  Maybe that would be a good idea.
  18. When a meter reading is considerably higher than expected based on prior reads, the reader's hand-held computer unit emits an audible tone that causes the reader to do an immediate re-check.  However, it's up to the reader and supervisor to set the parameters of error allowed.
  19. It would take up to a year to get staff in place to read every meter every month.
  20. If a reader has access issues, one of several form letters is sent to the customer to remedy the access issue.  If the customer fails to respond, the company may be more aggressive in turning off service.
  21. The company has a 3-day read window for each account during a scheduled read month.  If an unplanned absence occurs on the last day of the read window, it cannot be made up.  Note that the company can read your meter at any time within that 3-day window.
  22. Commissioner McKinney vigorously questioned this witness about meter readers driving their personal vehicles and identifying themselves and asked the company to look hard at providing some sort of "work around" in the case of a missed read.  Then he started in about renumbering, observing that the company could have chosen to read all meters during renumbering, but they didn’t choose to do that.  That’s a resource issue from Commissioner McKinney's perspective.  It was something the company made an intentional decision to do.
  23. Commissioner Albert wanted to know what was going on with the Maryland PSC billing investigation, but couldn't get a straight answer from the witness.
Second witness was Kaye Julian, Director of Customer Management.
  1. The system has calculated expected consumption and if it falls outside expectations, then it goes to billing personnel for review.  This is supposed to catch a large true up.  They could send a re-read order or a billing rep. would catch an obvious error.  But, if the reader has verified the reading (see #18 above), then they release it for billing.  Customer is not notified of the reason for such a high bill, but the company is considering doing that, along with giving the customer payment plan options.
  2. If a customer's history contains "bad data" (defined as inaccurate estimates) then it’s possible that the estimated reading is going to be inaccurate.  If there are more than 4 estimates, then "we do have issues."  The company has a levelizing routine for 4 estimates and are confident it’s correct.  But if there are more than 5 estimates in a row, it does not work.  Those customers go through an estimation routine that uses prior month usage to calculate current month estimate.  If the prior month was estimated, this would make the current estimate based on "bad data."
  3. The company's estimation routine did not perform as they intended it to.
  4. In April 2012, a computer system change (result of the company's merger) was made that changed the estimation routine.  Although Allegheny's estimation routine worked well, FirstEnergy "enhanced" it because it was not possible to retain the old and support the business environment we’re in.  In order to share resources it’s best to all be on the same platform – it’s about managing costs and best practice.
  5. Agrees that adding additional months to the levelizing routine may only add more "bad data" and that an average is only as good as the data used to create it.  If data is off, then estimate will be wrong.
  6. EPRI study of company estimation routine expected January 6.  EPRI has been meeting with FirstEnergy "team" and needs more time.  Weekly/daily meetings on review that began in July.  EPRI is trying to simulate estimation routine with good data and creating other scenarios with additional estimates.  EPRI will tell them how to improve. Too early to say if the company will do whatever EPRI recommends because the company doesn’t know how much it may cost.  Could reject EPRI's recommendation if it’s too expensive for the company.
  7. Regarding the 10,000 "special" customers who will receive monthly readings between Nov. & Jan. -- The system picked them based on the following criteria:  5 consecutive estimates in 2012 and more than 25% variance after an actual read.  Only accounts with 5 consecutive estimates because the company believes its levelizing routine for 4 or less estimates is accurate.  The purpose of actual reads is to replace "bad data" and high true-ups with actual reads because they could not be levelized.  The company will reassess these accounts at the end of January.  
  8. Doesn't think actual reads for a year would be necessary based on how the system works and based on read rates.  Not all customers were impacted like that. Not all accounts need special handling, just "anomalies" (10,000 accounts).
  9. Believes there's a difference between a high bill inquiry and a complaint.  Maybe the customer called simply because they didn't understand something about their high bill.
  10. FirstEnergy applied its own estimation routines used for monthly read accounts to Allegheny's bi-monthly read system, but doesn't believe that exacerbated the estimation problems.
  11. Chairman Albert asked what are "we" going to do with this thing?  Lots of customer issues, lack of confidence in the company’s processes.  To what extent is somebody going to suggest to us what needs to be done?  Julian responded that the company has discovered that their bills are confusing for customers.  Will enhance customer messaging on bill to let them know why there is a huge variance in the bill.  "Little idiosyncrasies"  came out.  Chairman Albert asked again about the Maryland PSC case and still got no answer.
FirstEnergy counsel helps out by asking witness on redirect if there is a similar billing problem in FirstEnergy's West Penn Power territory.  Julian says there is not because WPP didn't suffer the consequences of Hurricane Sandy.

Next witness was Gary Grant, FirstEnergy's Director of Customer Contact Centers:

  1. Companies have voluntarily implemented modified guidelines for payment plan procedures for high bills with no financial qualification.  Gives the customer a repayment period similar to the estimation period that caused the high bill.  Customer Service Reps. offer payment plans as an "opportunity" for customers, but only when they call and ask because each customer is "unique".  Hand-out refers to customers as "business partners."
  2. West Penn Power doesn't have high bill payment plans "at this scale" (not that they don't have the same high bill problems - see paragraph above).
  3. Disagrees that customers got rude treatment from customer service reps. Wait times at call center have decreased, and the company's robust quality assurance process ensures CSRs are not rude.  But did customers in fact express concern during the public hearings?  Yes, they said that.
  4. The company does not inform new customers about the company's bi-monthly reading practices, and if they did it would be an additional cost.
  5. Commissioner Palmer questioned this witness about hold times once initial contact is made.  These hold times are not counted in the company's ASA statistics.  The company tracks handle time for individual reps. as well as overall call center, and any hold time would count in the handle time metric.  They don't keep track of how long customers are on hold once answered.  The supervisor can see how long customer is on hold.  When asked if there will be any changes to the process, the witness said just payment plan and high bill refreshers for the CSRs.
  6. Chairman Albert asked what the harm was in informing the customer about bi-monthly reading when they apply for new service over the phone.  The witness said it would add seconds to the call.  Chairman Albert speculated that it would add about 3 seconds.
Next witness was Kevin Wise, Director of Rates and Regulatory Somethingorother:
  1. Witness claimed he had not seen the lawsuit filed by Potomac Edison customer John Kilroy in Jefferson County the day before.
  2. Said the company would never accept the $5 customer refund for a missed reading, even if exceptions were made for exigent circumstances.  Was asked how many times the company would be paying this fine.  Said there will always be meters that aren't read and would be estimated.
  3. Commissioner Palmer asked if the company had future renumbering projects planned.  Witness has no idea what the company's future plans may be.
Next witness, Suzanne Akers, Utility Analyst with the Consumer Advocate Division, was cross examined by FirstEnergy's counsel.
  1. Acknowledged that if the company were to read meters monthly for a year, it would take time to increase staff.  Could not answer if the cost of the extra readings would be recoverable in rates.  
  2. Was asked what she would do with those extra meter readers after the year.  Said perhaps they may still be needed.  Was asked if she would lay off those meter readers, because that might affect FirstEnergy's ability to hire workers.  (Hey, I didn't write this comedy, I'm just reporting here.)  Akers noted that many current meter readers are contract employees.
Final witness was Michael Fletcher, Deputy Director of Consumer Operations Section at the PSC:
  1. Part of his concern about changing to FirstEnergy's new estimation routine is that under Allegheny’s estimation process, the company did an analysis on the specific customer and had 5 estimating routines to fit different scenarios.  Allegheny used to look at what routine is appropriate and current system does not.
  2. Concerned that sequence of estimates are adjusted for weather, until there are too many estimates and then the routine changes to levelized midstream.
  3. FirstEnergy's counsel asked if the linear routine uses prior year historic data, and witness said it varied, either prior year or prior month, but neither estimate may be accurate.
  4. Witness said that the weather-adjusted estimates were put in place in a settlement in the 1990s and if the company wants to change them they should file a new tariff.
  5. The customer supplied meter reading should be used as supplied if within the company's 3-day read window.  (Note #21 under Hilderbrand.)  However, the company has been adjusting the customer-supplied reading to their scheduled read date within the window and then marking it as an estimate on the customer's bill.  The tariff supports Fletcher's interpretation.  Fletcher said that when the customer calls in a reading and the bill shows a different number coded as an estimate, that increases customer anger and complaints.
  6. FirstEnergy counsel asked Fletcher about several missed read situations and whether they would count as missed reads where the $5 refund applied.  Fletcher agreed that some would be exceptions.  Fletcher said the company needs to have enough back up meter readers to cover absences.  Sick or vacation excuses for not reading meters are not acceptable.  He understands the company can’t plan for every eventuality, but needs additional rovers to take up the slack for planned absences. If it’s the same problem that has brought us here because of poor planning, then the refund would apply.  The company says they have increased meter readers and fixed all the other problems, and if they have, it wouldn’t apply to anyone.
  7. The $5 customer charge includes the cost of reading, billing, maintenance, and parties may agree to include charges in there that are not direct customer costs. However, it's primarily related to those items in the Uniform System of Accounts that can be tied to the customer, even if the customer had zero usage.  The company’s cost to serve that customer, according to Wise’s testimony says the cost of meter reading is $1.19 (or $1.56 later in the testimony).  Meter reading has a $3.7M yearly cost.  There are other costs recovered in addition to meter reading.  Fletcher is not trying to compensate customer for company’s cost – he was picking easy number to reference ($5).
  8. FirstEnergy's counsel contends that the $5 refund is performance rate making (where there are penalties and rewards), but Fletcher's proposal has no reward.  Fletcher said the reward is not incurring the penalty. 
  9. Fletcher said if a customer got 5 consecutive estimates, it sends incorrect signals to the customer about energy use and is not fair to the customer.
  10. Chairman Albert questioned witness about exigent circumstances (EC) and whether or not EC can be verified how do we avoid more EC circumstances and whether discount should apply.  Aren’t we setting up a system with a penalty that would result in a bunch of contested cases?
If you found this summary interesting, or laughable, check back for links to the hearing transcripts, when they are available.

And now we wait for the Commission to issue an Order to fix this mess.  At some point, FirstEnergy has to right its wrongs and make amends to its customers.  Otherwise, this saga will simply continue in another venue.
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A Very Supercilious FirstEnergy Christmas

12/24/2013

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As a FirstEnergy customer, I'm thrilled to know that my Board of Directors won't be bombarded with cheap foreign junk or moldy fruitcakes this holiday season.  Oh no, only the best for the folks who approve the compensation packages of the management that continues to send me inaccurate bills every other month!

The State Journal tells us:
When FirstEnergy selects gifts for its Board members at Christmas, they have one very firm requirement: They must be handmade in America.

"Not only are we supporting American artists, but we are also giving a unique, not mass-produced, American made gift to each of our board members. I urge all American businesses to look towards supporting American artists," says Tony Alexander, President & CEO.


Ho, Ho, Flippin' Ho.  I hope this doesn't end up in my bill.  But, it probably will.
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EUCI Kicks Clean Line Shysters Out of Industry Conference

12/11/2013

5 Comments

 
Never doubt that a small group of thoughtful,  committed citizens can change the world. Indeed, it is the only thing that ever has. --
Margaret Mead
US social anthropologist (1901 - 1978)
It appears that EUCI has knuckled under from citizen pressure and kicked Clean Line's executives off the speakers line up for its 8th Annual Public Participation for Transmission Siting Conference scheduled for January 23-24, 2014 in Houston.  Clean Line is also no longer sponsoring the conference.

The original agenda put together by Clean Line included offensive sessions entitled "Going BANANAS with NIMBYs - Best Practices in Dealing with Community Based Opposition Groups" and "Marketing to Mayberry: Communicating with Rural America."

The new agenda has been "cleansed" of Clean Line influence and the offensive sessions have been renamed "Best Practices in dealing with community based opposition groups" and "Communicating with rural America," dispensing with the offensive and cutsey-poo insults of transmission opposition groups.

But, does this make EUCI's continuing education conference any more useful?  Probably not.  It still more closely resembles a transmission industry echo chamber, where industry blowhards make crap up and feed it to the attendees as a successful example to follow.  The truth is that "the public" continues to laugh at these idiots' attempts to "participate" with us to successfully site their projects.  It's not about "participating" with the public at all... it's about sharing ideas for ways to lie and cheat the public in order to win project approval.

The only way to successfully "participate" with the public is to actually dirty your hands consorting with them, and EUCI isn't about to let THAT happen.  Offhand, I can't think of a more useless conference for the industry.  For the opposition, however, it's a fun opportunity, as protestors at a Missouri EUCI conference found out a couple months ago.  See you there!
5 Comments

Potomac Edison/Mon Power Investigation Testimony Overlooks the Obvious

12/8/2013

0 Comments

 
The PSC staff, the Consumer Advocate and FirstEnergy all filed testimony in the General Investigation of the company's billing and meter reading practices on Friday.  While a satisfactory solution could possibly be cobbled together from the staff and consumer advocate testimony, they both overlooked the obvious.

The change in meter reader duties and the resulting employee exodus was a direct result of Allegheny Energy's merger with FirstEnergy.  The computer system change was a direct result of the merger.  The "renumbering" of meter reading routes was a direct result of the merger.  None of these causes of (excuses for?) FirstEnergy's billing and meter reading failure would have happened but for the merger.

FirstEnergy told the WV PSC that "...the Merger would not have any adverse impact on Allegheny, the West Virginia customers of Mon Power and Potomac Edison, other public utilities in West Virginia, or the public in general, Rather, Joint Petitioners projected that the Merger would result in a stronger combined company and would benefit the public generally, the WV Subs, and Allegheny’s West Virginia customers."

This is reality:  FirstEnergy's merger integration has caused great harm to hundreds of thousands of its West Virginia customers in the form of inaccurate bills.  These bills resulted in financial hardships and service shutoffs.  End of story.  It is now FirstEnergy's financial responsibility to right its wrongs and make amends to its customers.

From the FirstEnergy merger settlement (not that any of these stipulations have been enforced by the PSC):

During the Merger integration process, FirstEnergy and Allegheny will review existing procedures and policies to determine “best practices” and how to implement them, ensuring that customer benefits appropriately outweigh the associated costs and considering any related effects on customer service and customer satisfaction levels.
FirstEnergy failed to "consider" the effects of its failure to read electric meters on customer satisfaction.  Customers are so thoroughly disgusted with this company and its regulators that a mere slap on the wrist and promise to do better just aren't going to cut it.

The WV PSC staff fails to grasp the real causes and magnitude of the problem.  The Consumer Advocate does better, but both of these regulators have only seen the tip of the iceberg.  The failure to read electric meters has been going on since the fall of 2011, shortly after the merger.  The high "catch up bill" complaints actually began in the spring of 2012, months before any "storms."  "Storms" is just an excuse.

The staff also seems to fail to grasp that no matter which estimation routine is used, FirstEnergy's estimations will be inaccurate because they are based on inaccurate prior estimates.  A weather-adjusted estimate based on garbage is still going to be garbage, no matter how much FirstEnergy or EPRI tweak it.  No amount of mathematical tweaking can overcome a lack of accurate base data.

Although the staff seems content to wait and see if the inaccurate estimates trigger another billing charlie foxtrot this winter, I'm not.  I'm going to start handing out staff's phone number because I've heard and seen enough.  The inaccurate bills continue.  Perhaps the WV PSC would rather let the legislators solve this problem through their own investigation and enactment of new legislation?

As well, none of the regulators seem to notice or care how FirstEnergy is fudging their monthly statistical reports. 


And isn't it interesting that FirstEnergy keeps slipping down the slope toward reading every meter every month?  Just last month, the company admitted that it had selected "several thousand" accounts for monthly reading.  In its testimony filed Friday, the number of monthly read accounts has ballooned to 10,000. 
Give up, FirstEnergy:  Every meter, every month, one year.

So, what can we do to cobble together something good out of the recommendations in the testimony?
  1.  The Consumer Advocate recommends  "...that the Companies increase their number of meter readers in order to perform actual reads every month for at least a year to obtain 12 months worth of actual reliable data for every customer. Once there is reliable customer usage data, it can be determined whether there are systemic problems with the new FE software estimation procedures that should be addressed."  However, it should be stipulated that the company bears the financial responsibility for the monthly read expenses and that they shall not be recovered from customers nor included in any cost of service study for a future rate case.
  2. The Staff recommends "If a customer’s scheduled actual meter read is instead estimated for any reason other than demonstrable inclement weather or Federal or State Emergency Declaration, the customer shall receive a refund of the applicable customer charge for each month estimated usage occurs between utility performed actual meter readings.    Applicable customer charge means the tariff customer charge for the customer’s class of service. For example, a residential customer receiving three (3) consecutive estimated meter readings would receive a $15 credit on his next actual bill."  However this should be applied retroactively from the date of FirstEnergy's merger and refunded to customers to act as a punitive measure to mollify public anger.



That's it!  Can we stop screwing around here and just get this over with?  I'm pretty sure that FirstEnergy and its regulators have wasted way more time and money on this investigation than the company would have incurred to simply fix the problem months ago by reading meters every month.  It's simply obvious.
0 Comments

Happy Holidays!  Now Use More Electricity!

11/27/2013

1 Comment

 
Well, there they go again… the geniuses at FirstEnergy have devised another not so ingenious way to encourage you to pull their money-losing corporate keister out of the fire.

If you live in FirstEnergy's JCP&L or MetEd service territories, the company invites you to engage in some holiday excess that will put some excess cash in its own pocket.  The company's "Merry & Bright" Christmas lights contest invites you to create an electrical charlie foxtrot on your home and front yard that would put Clark Griswold to shame and then "like" the company Facebook page to enter a photo of your creation.

You could win a $250 gift card!  I don't think the company accepts gift cards to pay your $250 Christmas lights extravaganza electric bill though.

Ho, Ho, Ho, Big Daddy Tony needs a new Rolex for Christmas!


1 Comment

Rock Island Clean Line Outsmarted in Iowa

11/21/2013

2 Comments

 
Lots of news coverage this week about public notice meetings in Iowa for the Rock Island Clean Line (RICL).  The Preservation of Rural Iowa Alliance has done a fantastic job getting information to landowners so they are prepared for the power company meetings.

One story I came across featured some whiny comments from RICL's attorneys, complaining that the Alliance was making RICL's progress difficult.
"It is clear that the Alliance will seek to make this process unnecessarily burdensome and overly complicated before the board can even make its initial determination on whether the franchise should be granted," the company's lawyers conclude.
Let's take a look at who is making the process "unnecessarily burdensome and overly complicated," shall we?

Each state has a different process for transmission line permitting.  In Iowa, a hearing must be held if objections are filed, or when a petition involves the taking of property by eminent domain.  The Alliance has helped lots of landowners file objections, therefore a hearing is guaranteed.  Also, Iowa law requires informational meetings for landowners before they can be approached by RICL's land agents.  But, because RICL will stretch across nearly 400 miles of Iowa, eminent domain will most likely be needed to secure easements.  When a company files an application for its project, it must also state whether eminent domain will be sought.  If so, the applicant must provide an "Exhibit E" with specific information on each property it expects to take by eminent domain, to include specific ownership, legal description, a map of the property showing buildings, electric lines, and other features, as well as the names of any tenants on the property.

Clean Line can't be bothered to spend this much time and money on each property it wants to acquire, so they have asked the IUB to bifurcate (separate) the franchise process into two separate proceedings.  First, Clean Line wants the IUB to determine if its project is needed and serves a public purpose.  That way Clean Line can try to keep affected landowners out of that part of the process.  Only after that determination has been made would Clean Line bother to spend the money to provide "Exhibit E" information for eminent domain takings.  Clean Line also states that an affirmative determination granting it the requested franchise would "put Clean Line in a better position" to spend the money.  What they really mean is that it would put them into a better position to threaten landowners and tell them it's a done deal, hoping that would result in less eminent domain takings and less "Exhibit E" material.

Let's take a minute here to talk about Clean Line's "RSVP" for the initial public hearings.  I'm not sure why the IUB let them get away with this, but landowner notice of the project and meetings included a superfluous "RSVP" for the meeting, and a "request for information."  What kind of information does RICL want?  "Exhibit E" info. it would have a hard time gathering on its own, the names of any tenants.  This is the same info. it is whining about having to supply in order to apply for eminent domain.

Much to Clean Line's chagrin, however, the Alliance has some very smart attorneys who have filed a motion to resist the motion to bifurcate.  First of all, they argue that a motion to bifurcate is premature until the actual application for the franchise is filed because it deprives any potential intervenors of due process to object to the bifurcation.  They also note that Clean Line unsuccessfully lobbied for legislation to bifurcate the franchise process in 2011.  What Clean Line was unsuccessful at legislatively, they are now trying to acquire through the IUB.  They also point out how Clean Line intends to use any potential approval of the franchise before eminent domain proceedings to coerce landowners to voluntarily sign easement agreements.

Now, here's where it gets funny.  Clean Line starts to squeal and whine.  First, they want to limit the Alliance's participation in the case.  I'm sure our friends in Kansas, who were denied due process by having their own participation limited by the KCC, will identify with this tactic:
Clean Line does not object to the Alliance's limited intervention at this stage; however, Clean Line reserves the right to request specific limitations be placed on such participation depending upon the participation of other parties who may have the same interest as the Alliance. Such limitations may include but shall not be limited to prohibiting the Alliance from preparing direct testimony, submitting exhibits or other evidence, or conducting cross examination of witnesses. If the Alliance seeks to "advance the mutual arguments of all its members" as stated in its Petition to Intervene, limiting its participation to briefing legal arguments will satisfy the Alliance's goal.
And then Clean Line starts whining about how it got outsmarted by quoting information it harvested from the Alliance's website:
...the motive of the Alliance is clear: to make sure Clean Line does not build this  transmission line. A recent statement
from the Alliance Board President Carolyn Sheridan to the Alliance members concisely details the strategy:
"From the Board President
Think about it: Imagine you're [Rock Island Clean Line ("RICL")] and you have to file all
this information about a parcel of land in a distant location: How much time would it take
you to learn the names and addresses of all persons with an ownership interest in the land?
How much work would it be for you to prepare a map showing the location of all electric
lines and supports within the proposed easement; and the location of and distance to any building w/in 1OOft. of the proposed line? A lot of work. Multiply that by hundreds; and
you have an idea of how important it is to the success of RICL's project that it obtains.
The more parcels upon which RICL has to do all this work, the less likely this project is to
succeed. Every parcel upon which it has to do all this work is one more shovel of dirt on
the grave of this RICL line. Join the opponents of the line. DO NOT sign an easemnts
[sic] with RICL.
Carolyn Sheridan
Board President"

Without bifurcation, it is clear that the Alliance will seek to make this process unnecessarily burdensome and overly complicated before the Board can even make its initial  determination on whether the Franchise should be granted.
Umm... so?  The Alliance is just using existing laws that were put in place to protect Iowa landowners from out-of-state speculators like Clean Line.  If the process is "overly complicated" Clean Line ought to be taking its whining to the Iowa legislature, who made this law.

Clean Line also gives away another one of its strategies:   to financially break the Alliance by requiring them to participate in two separate legal processes, hoping they'll run out money and determination somewhere along the way.

I really don't think Clean Line's strategy is working.  It's only encouraging landowners to dig in even deeper and resist a voluntary easement.  If Clean Line is going to be met with a brick wall in either case, why bother with two different hearings?  That doesn't serve administrative efficiency.

And this about sums up Clean Line's little pity party:
The Alliance seeks to force Clean Line to waste time and resources, and consequently also the time and resources of the IUB, with the hope that Clean Line eventually gives
up on the project.
Well, if Clean Line wants to waste the time and resources of the people of Iowa, Illinois, Kansas, Missouri and Indiana, as well as regulatory boards in all these states, adjudicating and opposing its unneeded, speculative projects, I'd say Dr. Karma is making a long overdue house call to Clean Line headquarters!
Give up, Clean Line.  You've been completely outsmarted by the people of Iowa!

See the following newslinks about Clean Line's public meetings in Iowa this week:

Clean Line's Beth Conley tells a BIG LIE in this story:

Landowners Skeptical of Wind Energy Transmission Line

"...other states to the east that have little wind power potential but a strong demand for clean, reliable energy."  First of all, we have a better wind power resource 12 miles off the Atlantic coast, and furthermore, we are not "demanding" this project.

Clean Line Opponents Speak Out

Crowds Grow at Clean Line Public Meetings

Proposed Power Line Leaves Farmers Concerned
The faces and snarky comments from the anchor and reporter in this story are worth watching!


Details on Transmission Line Aired Out

Proposed Power Line Project Sparks Controversy in Northeast Iowa

Property owners sound off on Clean Line plan

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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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