The perturbed parade of stakeholders who believe PJM and the Market Monitor were engaged in secret scheming to revise the MOPR to their detriment continues to grow.

There's a whole new crop of angry letters on PJM's website that generally urge PJM to toss out the current proposal and start again from scratch, this time including ALL stakeholders.

OPSI Resolution (Organization of PJM States)

Joint letter from MD-PSC and MD-OPC

U.S. Rep. Van Hollen letter (now you've gone and ticked off Congress with your secret scheming, PJM, tsk, tsk!)

PA-PUC letter opining that secret scheming isn't such a big deal (if you're from a state that has a bunch of expensive coal-fired generation that now has no market).

Ut-oh, PJM, Ut-oh!  Next thing you know, they're going to be labeling you a cartel.  Go figure.

One of PJM Interconnection's purposes is to provide reliable power at the lowest possible price.  As part of its attempt to accomplish this goal, PJM plans for transmission "enhancement" and administers an artificial market construct that is supposed to foster competitiveness that will ensure market prices for electricity are "the lowest possible."

Although PJM can order new transmission to artificially adjust electricity markets, they cannot order new generation to shape the market.  This unbalanced "market" is what set up the investor owned incumbent utility transmission feeding frenzy we've had to put up with over the past few years.  Instead of ordering new economic generation near load, PJM orders expensive new transmission lines that source from existing generation farther from load.  PJM believes that "the market" (that is the REAL economic market, not PJM's artificially constructed and controlled market) will stimulate new generation without interference.  However, PJM will not rely on "the market" to drive transmission expansion.  If they did, would the lights go out while we wait for "the market" to catch up?  PJM thinks so.

Because PJM cannot order new generation, the states of New Jersey and Maryland took matters into their own hands and ordered new generation in their own states.  This upset PJM, the Market Monitor, and the incumbent generators, who have been scheming to actually prevent new generation.  So much for allowing "the market" to encourage new generation.

PJM "ordered" four new high capacity long distance transmission lines between 2006 and 2008 in order to increase the use of coal-fired resources.  These lines were supposed to bring lower cost electricity to the east coast, instead of waiting for "the market" to encourage new east coast generation.

The lines were economic projects, designed to decrease the "congestion" on existing lines that prevented the import of additional coal fired generation to the east coast during peak load.  However, PJM also floated these projects as reliability projects, insisting that eastern load would continue to attempt to draw cheap coal fired power from the west over congested lines until the lines simply overheated and failed, pitching the entire region into the dark.  That would never have happened because the east coast had plenty of their own generation, albeit more expensive (at the time) gas fired generation, that would increase prices when relied on to support peak load.

In order to decrease prices on the east coast through the building of these new lines, the cost of the lines is shared by all consumers in the entire PJM region.  The east coast only paid a fraction of the cost of the lines that lowered their prices.  And, in fact, the lowering of prices on the east coast by building new transmission actually increased prices in the western region by providing new markets for previously constrained generation.  Eliminating "congestion" serves to levelize prices between different markets.

But, something amazing happened between 2006 and 2012.  Demand for electricity on the east coast tanked due to increased energy efficiency and demand side management.  By shaving peak load, the east coast made great strides to solving the "problem" of not having access to cheaper, western coal fired generation.  Something else happened during that time as well.  Shale gas flooded the market, opening up a cheap, plentiful, new supply of natural gas that lowered the cost of previously expensive gas fired generation on the east coast and motivated new gas fired generation builds near east coast load.

The combination of decreased load and more economic east coast generation completely obviated PJM's "need" for the four new transmission lines.  Unfortunately, TrAIL had already been built at enormous cost and personal sacrifice by the people of West Virginia.  However, two other projects, PATH and MAPP, have finally been abandoned by PJM and won't be built.  But, the PJM consumers will still pay for these abandoned projects they never wanted and no longer need.  PJM's transmission planning has failed on a massively expensive scale.

But I've only accounted for three of the four projects thus far.  The last one is PSEG & PPL's struggling Susquehanna Roseland project in Pennsylvania and New Jersey.  Although there is no economic or reliability need for this project anymore either, the project owners and PJM continue to insist on constructing it at enormous cost to consumers, landowners and the citizens who own the Delaware Water Gap National Recreation Area.

PSEG & PPL read the economic writing on the wall over the past few years and stepped up their efforts to ramrod their project into reality by making it "too big to fail" even though the economic justification for it had evaporated.  The companies still claim that S-R "will save consumers $200M per year in congestion costs," therefore it is urgently needed and justifies enormous cost that will raise electric prices, take land from property owners, force those living in close proximity to risk their health being bathed in the line's continuous EMF soup, and destroy a priceless and irreplaceable national park.

In order to do so, PSEG & PPL bribed towns and landowners with "mitigation" payments and began a lobbying program that reached all the way to the White House with the goal of obtaining the approval of the National Park Service.  The cost of all this, of course, will be borne by all consumers in PJM.

Last week, I watched FERC Commissioner Moeller extoll the virtues of new transmission while disparaging the efforts to hinder Susquehanna Roseland, a project that "would save consumers $200M a year in congestion costs," according to Commissioner Moeller.

So, where did that congestion figure come from?  PJM and the project owners floated it at the time the project was approved, many years ago.  Does that figure still bear any resemblance to reality?  No. The "congestion" driving S-R has evaporated.  The building of S-R will actually cost consumers more than any subset of consumers will ever save on their electric bills.  Whether or not there is a "reliability" need for this project I really can't say, but if there is one, a simple rebuild of the existing line may suffice to fill that void.  S-R as planned is overkill.

Every quarter PJM's Market Monitor publishes a "State of the Market" report.  The one for the third quarter of 2012 was released the other day.  The report has a section about "congestion."  If S-R was still going to save consumers "$200M per year" that information would show up in the report.  It does not.

The SOM report says, "The AP South interface was the largest contributor to congestion costs in the first nine months of 2012. With $50.9 million in total congestion costs, it accounted for 12.0 percent of the total PJM congestion costs in the first nine months of 2012.
The top five constraints in terms of congestion costs together contributed $112.5 million, or 26.5 percent, of the total PJM congestion costs in the first nine months of 2012. The top five constraints were the AP South interface, Graceton – Raphael Road transmission line, Woodstock flowgate, Belvidere – Woodstock line and Clover transformer."

None of these congestion contributors is located anywhere near the Susquehanna Roseland project area.  And the biggest contributor to congestion costs is $50.9M per year, not $200M.

The SOM report also provides a nifty map on page 221 that shows congestion points.  There's no congestion showing up in the geographic area where S-R is being constructed.

Need and justification for Susquehanna-Roseland have completely evaporated.  If the project is abandoned now, or reconfigured to more closely align with any actual need, the cost to consumers will be dramatically lowered.  Stop constructing this project now.  Just stop.  Consumers can't afford PJM's artificial markets and planning failures any longer.  Stop it.

PATH never could resist having the last word in any argument, even if doing so burned PATH like a moth circling too close to an enticing flame.

PATH didn't disappoint today and filed a second "response" to the answer of one of the other parties to PATH's answer to protests of its abandonment filing at FERC.

Old Dominion Electric Cooperative filed an answer to PATH's answer last week pointing out that PATH was only remaining a "member" of PJM in order to collect an extra half a percentage point of interest over the amortization period.  Since PATH does not plan to own any transmission that would receive benefit from a PJM membership, the extra interest to be derived from this "membership" is just another way to gouge consumers without any corresponding benefit.  ODEC also pointed to PATH's ridiculous contention that its parent companies' memberships in PJM entitled PATH to receive this benefit.

What is it that PATH fails to understand here?  Sec. 219 of the Energy Policy Act directs FERC to "provide for incentives to each transmission utility or electric utility that joins a Transmission Organization."  Now that PATH's project is abandoned and PATH has no plans to own any other transmission, ever, PATH is no longer a "transmission utility or electric utility."  Therefore, PATH is no longer eligible to retain this incentive.  Does someone need to draw PATH a picture?  Any further answers or responses should include artwork, preferably in crayon.

In their "response" today, PATH rambles on accusing ODEC of conflating and confusing PATH's answer.  Fail!  Considering that I read the same thing in PATH's answer that ODEC did, chances are that the Commission will also read it that way, despite PATH's suicidal attempt today to rehabilitate its own bleary legal work.  And speaking of bleary legal work... who is the "Virginia Service Corporation Commission" that PATH mentioned in their "response" today?  Any parties here by that name?  Didn't think so.  Thanks for the laugh, PATH!  Watch out for that fire, it's hot!

Ooops!  PJM's Terry Boston let the wind industry's scheming out of the bag yesterday at some "event" on fostering transmission investment and clean energy resources in the Southeast.

"The Bipartisan Policy Center is working with power industry representatives and plans to send recommendations early next year to President Barack Obama on transmission and electricity policy, the head of PJM Interconnection said Wednesday."

Say what?

According to this article in Platts, Boston said, "FERC's current rule on cost allocation of new transmission lines is to assign costs to those who benefit from the lines, but for interstate projects to move renewable resources through several states, some states may feel left out and that is a big challenge for the industry to address."

Left out?  Is that how the industry that stands to profit from long-distance transmission lines "for midwest wind" is going to color those states being used as a pass-through for these lines?  You're darn right we're going to feel "left out" when other states' renewable portfolio standards require us to give up our land for new rights-of-way and pay for construction of a transmission line that only benefits citizens of another state.  It's not going to happen, even if the lobbyists do whisper sweet nothings in Obama's ear while writing campaign contribution checks.  Bi-partisan, my eye!

Let's take a look at the people involved here.  While they may be politically bi-partisan, there's an even scarier partisanship going on here than anything the Democrats or Republicans could dream up.  It's all about the money, boys!  It's big business vs. the consumers they plan to rob blind.

John Jimison, a former US House of Representatives staffer and current managing director of Americans for a Clean Energy Grid:  Americans for a Clean Energy Grid is nothing but a front group for industry that stands to rake in the cash by turning the midwest into "the Saudi Arabia of wind" and shipping it to both coasts via $300B of new high-voltage transmission lines that we don't need, can't afford, and that will only serve to render the grid more fragile and vulnerable.  This front group is a transmission owner's dream$come$true because they've reined in the big environmental organizations to act as their lackeys to promote transmission development for "clean energy."  The environmental fantasy these patsys see fails to recognize that once this "green" grid is built (with consumer funds, remember that) it's going to transport fossil fueled energy because the grid is open access and "wind" won't be able to compete on a price basis.  Only through government subsidies and state mandates will costly "wind" power be viable.  This front group has been busy holding real old fashioned kool aid socials around the country.  In fact, we may have infiltrated one earlier this year ;-)  Just remember, there ain't no such thing as a free lunch, check out the "sponsors" of these propaganda fests.

Former Congressman Rich Boucher:  Now employed as the "head" of energy lobbying firm Sidley Austin's "government strategies group."  Lobbyist.  Not "bi-partisan" but protecting the interests of his well-heeled energy company clients.

Former Federal Energy Regulatory Commission Chairman Curt Hebert:  Currently the Chief Executive Officer of Lexicon Strategy Group, LLC.  Lexicon Strategy Group " specializes in risk assessment and developing appropriate business strategies to mitigate the impact of adverse legislative and regulatory policies. Our legal team provides regulatory expertise to electric and gas clients for issues including exploration/production, generation, transmission, distribution and securities."  How do they do that?  "Coalition Building, Third Party Advocacy, Constituent Recruitment, Governmental Management (Federal and State), Federal and State Energy Policy Development,
Advocacy Campaigns."  You know, all the best front group propaganda techniques.

And, of course, the partisanship to the energy companies that own him of our dear friend Terry Boston from the PJM Cartel is already legendary.

Well, guess what, lobbyist friends?  The consumers who make up the 99% aren't on board with your money making schemes, and the states who currently control transmission siting approvals aren't on board with your attempts to usurp their authority, and guess what?  There's more of us than there are of you.  See you at the White House!

Although FERC rules prohibit an answer to a protest, PATH has 121 million reasons to ignore the rule and waste everyone's time simply rehashing and reiterating its original section 205 filing to collect its stranded $121M investment in its failed PATH project.  Exceptions can be made by the Commission if the answer provides new information that informs the Commission's decision.  Did PATH bother to provide any new information in its answer?  Perhaps they should have highlighted any actual "new" information to make it more easily detected among all the flimsy excuses and incorrect information.

PATH tells the Commission that although it has the ability to suspend proposed changes to existing rates, that PATH's changes to the Formula Rate (which is PATH's rate) aren't changes to its rate after all.  PATH also urges the Commission to hurry up and approve the changes to its Formula Rate without hearing because PATH has submitted a fraudulent 2013 Projected Transmission Revenue Requirement that they need to revise before January 1, 2013.

PATH believes the Commission should summarily reject protests that the company had control over the abandonment of its project, otherwise, PJM's authority will be undermined!  Would that be a bad thing, really?  PJM's imprudent actions brought about by its Project Mountaineer initiative to build new transmission to increase the use of coal-fired resources, and intended to provide significant profit to its favored incumbents, has just cost millions of consumers in its region a quarter billion dollars for the failed PATH project alone, not to mention the additional amount wasted on the also-cancelled MAPP project.  How much more will PJM's erroneous and failed initiatives be permitted to steal from struggling electric consumers if this costly failure is swept under the rug and not examined?

PATH believes that it is entitled to receive an extra half of a percent interest on its abandoned plant during the amortization period.  The extra interest is a reward for membership in PJM.  PATH states that it intends to remain a member until the consumers finish paying for its project, although it does not intend to own any transmission during that time.  PATH is simply maintaining its membership to receive the extra interest.  Is this really prudent?  PATH whines that the Commission should not discriminate against it for the business structure it voluntarily constructed.  "Revisiting the 50 basis point ROE adder would deny AEP and FirstEnergy an opportunity to apply the ROE-based incentive adder to their abandoned plant investment in the PATH Project merely because of the business structure they chose as a vehicle for fulfilling the construction obligations assigned to them by PJM."  Bingo!  Ya know what, PATH?  Life ain't fair.  You set up that business structure voluntarily because it benefited you and now you're stuck with it.  Quit your sniveling and take your lumps.  Your parent company memberships in PJM do not make PATH eligible to receive this incentive either.  That was really PATH-etic!

PATH has 121 million excuses for why its spending wasn't imprudent.  After asking the Commission to set the issue of prudence for a hearing wherein the prudence of its expenses can be debated, PATH wastes page after page trying to justify its spending on things like property and option purchases.  So, PATH, do you want a hearing or do you want the Commission to rule here?  It's hard to tell.  PATH falsely accuses protestors of not providing any "basis or support" for prudence challenges and proceeds to neglect to provide any "support or basis" for its own contentions that the spending was prudent, except for the ridiculous assertion that AEP and FE routinely buy property before a permit is received.  PATH holds its parent companies up as the industry standard in the face of evidence showing that one of these same parents doesn't buy land prior to the issuance of a permit.  So, was AEP lying to the Department of Energy earlier this year or are they lying to FERC now?  Inquiring minds want to know.

PATH attempts to color all its property purchases the same.  The reality is that PATH was split into two different companies, PATH-West Virginia (owned 50-50 by AEP and FE) and PATH-Allegheny (owned 100% by FE).  PATH-WV made minimal land purchases for substation sites and was slower to option property.  However PATH-Allegheny purchased lots of property that had nothing to do with substations and was quick to option property long before the permit process had even begun rolling.  This is a distinction that most likely has roots in the two different corporate philosophies behind the PATH project.  Now AEP gets to help FE hold its little doggie bag of imprudence, however.  Didn't your mommy ever tell you that you will be known by the company you keep, AEP?

PATH goes out of its way to admit that its property purchases in River's Edge were for the purposes of forcing the release of a conservation easement.  PATH goes into a long diatribe attempting to justify its imprudent property purchases as cost saving measures.  Yes, that's right, if PATH had not attempted to nullify a conservation easement in which Loudoun County had invested taxpayer funding, it would have cost more to re-route the line around it (using the most destructive route possible in an attempt to make releasing the conservation easement and allowing PATH's preferred route look preferable).  This same theme continues in flimsy justifications for other purchases.  PATH claims if it had not bought certain properties, it would have had to route its line around them in order to avoid homes or other obstacles.  Is this what PATH told landowners?  That if they didn't prefer to voluntarily sell their property that PATH would simply route their line around the property?  No, of course not.  PATH told landowners that if they didn't sell voluntarily that the company would take the property by eminent domain or simply "run the line right over the top of your house."  So, now PATH wants to test its word against that of thousands of landowners?  Isn't this going to be fun?

PATH also points out to the Commission that other abandoned projects that requested much, much smaller recoveries were not RTO-ordered projects.  So, I guess PATH's point must be that when there is some risk to the transmission owner that spending is prudently curtailed.  However, in PATH's case it was a giant, bleeding spend-a-thon because PATH believed that ratepayers were on the hook for all of it.  Now when the specter of shareholders being responsible for some or all of PATH's spending spree rears its ugly head, all of a sudden the amount of spending becomes a big deal.  Don't you just love karma?

So, now it's up to the FERC Commissioners to wade through the facts presented and make a decision that ensures that PATH's rates are just and reasonable.

The Chairman of the Maryland PSC isn't accepting PJM's flimsy excuses for conducting secret meetings to revise the MOPR.  Nazarian's latest letter to PJM says:

"We also are struggling to understand how the process now under way can constitute an appropriate stakeholder process for tariff revisions as significant as these. Stakeholders Manual 34, which authorizes "User Groups" to debate a specific market design problem (see Paragraph 5.5 at p. 14), still requires published notice to all members that the process is to take place, requires that other interested stakeholders be permitted to participate, and requires PJM to post agendas and  summaries of meetings on the PJM webpage. None of  this happened during the secret negotiations. Moreover, the "ad hoc stakeholder group" discussions took place over a period of at least three months - as we  understand it, discussions began in June and continued well into September- during which the invited parties had the opportunity to get detailed input from PJM and the IMM and to analyze different options in depth. The rest of us get less than half that time to understand and analyze and react to a complicated set of revisions that were reduced to proposed tariff pages only last Friday. Put another way, the parties to the exclusive negotiations ran out most of the clock and have left the rest of us to scramble against a deadline driven only by PJM's and the proponents' self-interested desire to have these changes in place for the May 2013 Base Residual Auction."

New Jersey's Director of Rate Counsel, Stefanie Brand, also throws a few logs on the PIG roasting fire.  Her letter gets extra points for snarky use of quotation marks.

"As we understand it, the proposed MOPR changes arose from dissatisfaction on the part of certain suppliers that the previous changes to MOPR, which are currently on appeal in the United States Court of Appeals for the Third Circuit, were insufficient to thwart what they viewed as "outcomes that are inconsistent with a  competitive market." These suppliers then engaged other select PJM members in confidential discussions regarding changes to the MOPR to address their concerns. At some point, PJM itself and the Independent Market Monitor (IMM) were brought into this process and, in joining it, agreed not to inform any other interested PJM members of the discussion or invite them to participate without the agreement of the other group members. Eventually, and apparently with the group's agreement, PJM reached out to a select group of "load" interests to participate. Their participation, too, was  specifically conditioned on agreeing to maintain the secrecy of these discussions. Not surprisingly, the proposal that resulted from this closed-door process addressed the specific concerns of the PJM members who participated in the discussions, at the expense of the interests of the PJM members who were intentionally excluded. Indeed, the discussions were aimed at  developing "solutions" designed specifically to  exacerbate, not resolve, the matters of concern to the excluded PJM members."

and

"...certain members were invited into the process by PJM itself. PJM should not be choosing which members are allowed at the table, particularly when the invitation comes with a requirement that the process be kept secret from other interested members."

and

"That PJM views the interests of 27 large users as more worthy of consideration than the millions of customers represented by the consumer advocates underscores the perception that PJM favors the interests of certain members over others."

and

"While packaged as a series of exemptions and criteria, the intent is obvious: to thwart the actions of those States to address capacity shortages and implement policy judgments about resource choices."

and

"PJM has no business involving itself in efforts by the
incumbent suppliers to control the "competitive" market in which they participate."

And finishes up threatening to "...pursue all remedies to prevent PJM and the proposal's proponents from  usurping the States' role under the FPA."

Update:  The Maryland Office of People's Counsel has also written to PJM.  In their letter the MPC requests that PJM throw the "secret" proposal out the window and start fresh with all stakeholders.  MPC also says:

"MPC is in the process of evaluating the proposal and forming positions on it.  However, it appears that the proposal is founded on the notion that certain actions that  result in new capacity are "legitimate" and some are not. PJM should focus its attention on administering the electricity markets for the resources that participate in those markets and not on deciding which actions are legitimate and which are not.  Furthermore, from the perspective of customers who rely on electricity to meet their daily household and business needs, there is nothing illegitimate about a State directing utilities in its jurisdiction to take action that results in new generation that the State believes is in the long-term best interest of that State. While such an action may affect markets, the creation of rules to prevent such action is not administering the market but attempting to assure certain outcomes. PJM's role should not be to assure price levels or targets."

Well, PJM is certainly scoring some important collaboration points with the states, isn't it?  Just more of the same old lobbying and influence being exerted at the PJM cartel by their profit-hungry power company "members."  This time it's especially egregious because the supposedly "independent" market monitor also jumped aboard the S.S. PIG.  The market monitor probably isn't playing favorites among PJM's unruly children.  However, the market monitor refuses to admit that its market is a complete and utter failure that ends up costing millions of electric consumers extra money every month.

PJM's "market" is supposed to bring you low cost electricity.  Generation and transmission is supposed to be driven by "market" need.  Because the market is not properly stimulating new generation entries, states such as New Jersey and Maryland are paying some of the highest electricity prices in the country.  Instead of waiting for the market to prompt new generation in those states, PJM is instead jumping the gun to provide "low cost" electricity to those areas by importing its incumbent PIG's existing generation via new high voltage transmission lines such as TrAIL, PATH, Susquehanna-Roseland and MAPP.  The "market" never had a chance to work.

New generation in New Jersey and Maryland will be paid for by the consumers in those states.  Transmission lines are paid for by all PJM consumers, including those in states far from New Jersey and Maryland.  This costs you money, if you don't live in New Jersey or Maryland.  However, the big Ohio Valley generators are currently sitting on a glut of generation they can't sell as demand continues to tank.  Companies like AEP and FirstEnergy are in big financial trouble if they can't find new markets for their dirty, coal-fired generation.  FirstEnergy recently scaled back one of its plants because there was no market for it.  Last week, FirstEnergy laid off a whole bunch of employees.  Tough times, FirstEnergy?  Awww... that's too bad :-)

New Jersey and Maryland got tired of waiting for PJM's market to work, so they came up with their own laws to encourage the building of new generation in their own states.  This upset the incumbent generation PIGs, who feared losing a profitable, captive market for their dirty product.  So, the PIGs changed the MOPR (Minimum
Offer Price Rule) to prevent new generation from being built.  The states fought vigorously, but lost when FERC agreed with PJM.  However, even under the new rules, New Jersey's and Maryland's new plants cleared PJM's RPM auction this year.  In response, the greedy little PIGS got together to hold secret meetings to craft even more changes to the MOPR, hoping to stop new generation for good.  Now they've been caught and called out for their scheming.

PJM's "market" doesn't work because its incumbent PIGS won't allow it to work.  Consumers deserve better.

Terry, Terry, quite contrary
How does your RTO grow?
With secret plans
made by incumbent clans;
And transmission towers all in a row.

PJM's Terry Boston has replied to the Maryland PSC's pig roasting missive.

In Terry's world, it's okay to exclude a certain group of stakeholders when conspiring against them, as long as PJM doesn't initiate the conspiracy and simply participates in it.

Oh yes, that's quite "transparent."  That makes it all better, doesn't it?

Yesterday was the deadline for parties to intervene, comment or protest on PATH's proposal to collect its $121M investment in the PATH Project.  This amount is in addition to the $95M PATH has already collected from consumers in 13 states and the District of Columbia since 2008.  In order to collect on the abandonment incentive they were granted by FERC in 2008, PATH has to prove that the abandonment was beyond their control and that all costs they propose to collect were prudently incurred.  The burden is PATH's.  Of course, other parties can intervene and protest PATH's contentions.

And then the flood gates opened.  Thirty parties have intervened and some have filed comments and protests.  Nine state PSCs and/or consumer advocates intervened.  Many filed comments or protests.

The consumer advocates of six states (PA, VA, DE, WV, NJ & MD) filed a joint motion and protest.  In their protest, the Joint Consumer Advocates question the prudence of PATH's expenditures, especially in the last few years in light of the fact that PATH misfiled applications, withdrew and tolled their cases numerous times, and PJM's continuing analysis of the project pointed to serious questions about the need for the project.  The JCA question PATH's $30M expenditure on land in light of the fact that they had no permits to build.  They point out that PATH's proposed 5-year recovery period for the $121M will end up costing consumers an additional $25,782,017 of carrying costs & return.  The JCA dispute PATH's proposed ROE, both the base ROE of 10.4% and the .5% PJM membership adder.  They do some math to show that the amount PATH spent on its project is more than 1,000% higher than similar transmission projects that have applied for abandonment.  They also point out that the Commission has set all these other cases for hearing and therefore must set PATH's for hearing as well.

The Illinois Commerce Commission filed a motion to intervene and comments.  The ICC takes issue with PATH's assertion that costs were prudently incurred.  The ICC wants the Commission to assert some control over PATH's sale or transfer of assets to maximize the sale proceeds, such as requiring PATH to sell them via public auction or requiring PATH to file FMV determination documents before a sale.  The ICC argues that PATH did not make a proper showing that its proposed ROE is just and reasonable.  They also bring up all the same old cost allocation arguments that aren't particularly germane to this proceeding, but still valid arguments.  Then they went a bit crazy talking about having the prudence of PATH's costs challenged yearly through the Formula Rate Protocols.  Obviously they don't understand the process or the fact that the bulk of the costs aren't going to change year to year and that perhaps they should have been involved in the process all along.  Just because PATH filed for abandonment does not mean ICC cannot monitor and challenge the prudence of costs in successive formula rate filings.  The process is still going to be there, and has been there all along.  But ICC isn't the only state that doesn't seem to understand FERC formula rates, and sadly none of the states seem inclined to learn the process.  As long as the states that supposedly protect consumers continue to fail to educate themselves and get involved in this process, transmission owners will continue to rip off consumers.  States complain that they do not have in-house expertise or funds to hire any so therefore they don't get involved.  It ain't rocket science, and if the JCA can get together to file a joint petition in this matter, what's stopping them from joining together to fund joint participation in formula rate filings on a yearly basis?

The Maryland Public Service Commission filed a protest and comments.  The PSC questions the prudence of PATH's expenses and other requests and asks that the Commission set the matter for hearing.  They also take the opportunity to continue their opposition to FERC's transmission incentives policy as "overly generous and incompatible with the risks faced by project developers," and suggest that FERC consider the quarter billion dollar waste of consumer money the PATH project represents as they continue their deliberations about the incentives Notice of Inquiry currently in progress.

The Virginia State Corporation Commission filed a motion to intervene and protest.  The SCC protests PATH's proposed 10.9% ROE and, like the ICC, contends that PATH did not make a showing to support it.  They further argue that that the risks and need to raise capital upon which PATH's original ROE was based have died with the project.  Then the SCC urges the Commission to compel an audit of PATH to ensure the prudence of the $121M to make sure PATH wasn't "throwing good money after bad."  That's what the Formula Rate Protocols are for - the VA-SCC should have been participating all along.  Now because the SCC hasn't been doing its due diligence, they want FERC staff to do it for them.  Perhaps the SCC should raise this issue with FERC enforcement staff because the Commission said in P. 27 of a recent order that only OE decides who to audit when.  The SCC also asks that FERC staff monitor PATH's sale and transfer of assets.

The Indiana Utility Regulatory Commission filed a motion to intervene and protest.  The URC states that PATH has not supported the prudence of their expenses nor explained why it kept moving toward completion of its project despite in-service delays.  They point out that PATH witnesses used the word "aggressive" six times in their testimony to describe the project schedule, but failed to provide a copy of the schedule.  URC believes PATH put the cart before the horse when they purchased land before receiving a CPCN in any state.

In addition, to the above, the Ohio Consumer's Counsel, the Pennsylvania Public Utilities Commission and the West Virginia Public Service Commission filed motions to intervene without comment or protest.

Four consumers from West Virginia and eight from Maryland also filed motions to intervene, some with protests.

Ken Sanders, Dave Fenstermacher, Catherine Combs, Ginny MacColl, Ricky Young, Lisa Jarosinski, Brent Simmons and Mary Ann Aellen from the Frederick area filed petitions to intervene.

Bill Howley of Chloe, WV filed a motion to intervene and protest.  Bill questions whether PATH's abandonment was beyond PATH's control and points out that PATH failed to disclose PJM trends and analysis that undermined their state CPCN cases.  Bill questions whether any of PATH's costs after 2009 were prudent due to PATH's failure to support their cases at the PSCs.  He questions PATH's purchase of the Kemptown substation property before fully exploring Frederick County's zoning requirements.

Patience Wait of Shepherdstown, WV filed a motion to intervene and protest.  Patience contends that PATH has not carried its burden in its filing.  Patience says "...there is evidence to indicate that PATH incurred excessive costs in order to manipulate state-level  regulatory processes, to try to create a sense of “inevitability” to the project and avoid rejection of their application – which would indicate, to a “reasonable person,” that PATH recognized its justification for the project was fatally flawed."  She documents her contentions with examples from each state, including PATH's February 25, 2011 purchase of property in Hardy County, WV (just 3 days before the suspension) and PATH's premature clearing of land at their Welton Springs Substation before PATH had a permit, a violation of WV law.

Alison Haverty of Chloe, WV, filed a motion to intervene and protest.  Ali contrasts PATH's continued project spending to PSEG's curtailment of spending on another project they subsequently abandoned.  Ali states, "PSEG didn't wait for PJM to do their thinking for them."  Ali also contends that PATH did not seek a refund for amounts paid prospectively to the NPS and NFS for the EIS process, after PATH delayed that process.  Ali contrasts PATH's lack of detail with the TrAILCo Prexy abandonment filing, where 10 pages of cost detail was included.  Ali asks the Commission to suspend PATH's rates and replace the tariff sheets at a later date.

Keryn Newman of Shepherdstown, WV, filed a motion to intervene and protest.  (exhibits to filing can be found here.)   Keryn states that the PATH project will cost consumers $242,559,680.48, nearly a quarter billion dollars and deserves the Commission's scrutiny.  She also raises the issue of PATH's recently filed 2013 Projected Transmission Revenue Requirement, which she calls "completely invented" because PATH has recently transferred all CWIP totals to a regulatory asset account.  She asks the Commission to suspend PATH's rates until this matter is settled.  Keryn contends that PATH had fault in the abandonment, bungled state permitting and made no showing of the prudence of their expenses.  She also contends that "a reasonable utility manager" would not have purchased property before receipt of a CPCN, and provides several examples of other utilities that do not purchase land until CPCN completes.  Among the examples are PATH parent AEP's transmission line construction time table.  Keryn provides a list of the properties PATH purchased or optioned and presents specific examples backing up her contention that, "PATH had ulterior motives for purchasing or optioning certain properties at inflated prices that had nothing to do with simply acquiring necessary ROW," including PATH's land purchases in the River's Edge subdivision and an inflated option price in Jefferson County, WV.  Keryn contends that PATH has serious accounting deficiencies, protests PATH's proposed ROE, and compares PATH's abandonment to other recent cases, showing that PATH's $121M expenditure was incongruent with other cases.

Old Dominion Electric Cooperative filed a motion to intervene and protest.  ODEC protests PATH's proposed ROE.

In addition, American Municipal Power and the North Carolina Electric Membership Corporation filed motions to intervene.  These are non-profit municipal electric cooperatives.

The PJM Industrial Customer Coalition filed a motion to intervene.  This "coalition" includes large, industrial power customers who will pay a portion of the rate set in this proceeding.

The following investor-owned utilities filed motions to intervene:  PSE&G, Dominion, Exelon, Rockland Electric Co. and LSP Transmission Holdings.

And, of course, the PJM cartel, the ultimate perpetrator of this whole stinking mess, filed a motion to intervene.

I don't envy the Commission here.  The thirty parties raised a lot of issues to be considered.  What is obvious here is that there's no way FERC is going to approve PATH's filing before January, which is the absurd contention Becky Bruner was making on PATH's 2013 PTRR "Open meeting" phone conference last week.  I wonder if she's still insisting to her PATH masters that collecting this $121M is a "sure thing?"

Remember all the hoo-hah over New Jersey's and Maryland's plans to provide incentives in order to get new generation built in their states?

As expected, PJM's incumbent generator PIGS cooked up a new way to stop new generation entries in New Jersey and Maryland, and the PJM cartel, of course, was right there in the thick of things, giggling behind hairy knuckles.

Worse yet, PJM's "independent" market monitor was scheming right along with them.  Shame on you, Market Monitor!

Douglas Nazarian, Chairman of the Maryland PSC, is calling foul on the PJM cartel's secret scheming to the detriment of electric consumers in the state.  In a recent letter to PJM, Nazarian roasts PJM's PIG.

"I write to express our Commission's profound disappointment and concern with the clandestine and exclusionary process that has led to the latest round of proposed changes to the Minimum Offer Price Rule (the "MOPR"). Although we have and will raise serious objections to the proposal itself, those are for another time. At this point, because the process that begat the
new proposal was fatally and unfairly flawed, PJM should bring the fast-track "educational" process to an immediate stop and hold an open and transparent stakeholder discussion before proceeding further.

We were not shocked to learn that certain stakeholders would like to revise the MOPR further. We were shocked, however, to learn after the fact that PJM and the Independent Market Monitor participated in, and that PJM facilitated, a secret and exclusionary negotiation to devise a new set of MOPR revisions. PJM's own slides state that the discussions were initiated by suppliers and public power interests, but that P JM and the IMM were invited, and that selected other stakeholders were included and provided an opportunity 'to represent their unique interests."  By PJM's own reckoning, four of its five sectors were included in the discussion - put another way, one of PJM's stakeholder sectors, the sector that includes Consumer Advocates, was actively excluded. And although we are not official stakeholders, State regulators -the parties most deeply interested in the terms of the MOPR and at whom these proposed changes are aimed - were excluded as well. So in spite of our well-known views on the MOPR, our
"unique" and public interests were, by design, never heard or considered.

Indeed, we and the Consumer Advocates and the few others not at the table learned of the discussions only when PJM Staff began rolling out (to great fanfare in the trade press) a fully formed proposal, using PJM's slide template, as part of a PJM-led "education process" that will fast-track this significant and targeted fait accompli from revelation to FERC filing in less than two months. 

It may well be that we would never have reached
agreement with others on changes to the MOPR, but that is beside the point: these negotiations were held behind closed doors, with PJM's blessing and assistance (if not outright leadership), specifically for the purpose of revising the MOPR to the detriment of our State's long-term reliability needs. And the proposed changes are now being represented to the world, and will shortly be characterized to the FERC, as a  PJM-endorsed proposal, despite the fact that the parties being targeted were affirmatively disinvited from the process.

PJM claims not to make policy. This time, however, PJM picked a policy winner at the beginning of the conversation, perhaps to try and preempt or moot the appeal to last year's changes that remains pending. This time, PJM excluded altogether the parties with the most at stake.

And this time, despite these shortcuts, PJM is visibly leading a forced, double-time march to the FERC on
behalf of a favored group of stakeholders, all so that the new rules can be in place for the May 2013 RPM auction."

Gosh, why does Nazarian sound so ticked off?  Doesn't he already know that PJM is a self-interested industry cartel?

"Our experience with PJM since 2007 had led us to expect better."

Ooops, maybe not.  Well, in that case, welcome to the real world that the consumers you serve have been living in for the past five years, Chairman Nazarian!

"Issues of courtesy aside, however, PJM's selective inclusion and exclusion of parties to these discussions has indelibly tainted the process and its results."

What?  PJM's processes are tainted?  Say not so!  Coincidentally, that's exactly what we've been trying to tell you all along!

It's about time someone sends a very frank note home to Mother FERC regarding the playground behavior of her little brat, PJM.  PJM is a selfish bully who steals from the other children.  PJM doesn't know how to play nice and has no morals.  It's time to take PJM out behind the woodshed and give it a little "tough love."

Consumers can't afford PJM any longer.

Is the utility industry finally starting to admit that weak demand isn't strictly a product of the economy that will bounce back very soon?

The utilities have been telling their investors that demand is about to skyrocket at any second, although just recently a few of them have been pondering whether slow load growth may be the permanent effect of increased energy efficiency.

We've been telling them that for years, but apparently it took an equities research firm to drag the truth out of them. 

"Macquarie Equities Research said in a client note several days ago that energy efficiency measures really do seem to be having an impact on electricity demand, and the effect is likely to continue. It’s not just theoretical or wishful, the analysts said. “Unfortunately for investors,” the firm said, “utilities expect this demand destruction to continue or even accelerate.”

PJM used "the economy" as an excuse for cancelling the PATH and MAPP projects, but yet they refuse to consider decreased demand in their rush to construct the gold-plated Susquehanna Roseland transmission project.  As well, a hideous, uncoordinated snarl of new wind farms and transmission lines are proposed for the Midwest.  Is there really a market for all this new centralized generation and long distance transmission, or will hundreds of billions of dollars of new infrastructure end up rusting quietly in fields as more and more consumers decrease their usage through energy efficiency and drop off the grid altogether by deploying of their own small scale renewable generators?

The utilities who continue to deny permanent change to consumer demand and stick blindly with their 100-year old business plans of centralized generation and transmission will go belly up.  Those who welcome and embrace change and seek to develop a foothold in a distributed generation, consumers-as-producers future, will thrive.