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For Sale:  Environmental Liability

1/7/2015

2 Comments

 
The Columbus Dispatch reports today that AEP has hired Goldman-Sachs to explore the potential sale of its unregulated coal-fired merchant generation fleet.

Coal-fired power plants are no longer profitable.  AEP and FirstEnergy have been unloading these liabilities on the backs of ratepayers in regulated states, and even have cases pending to unload them in unregulated states. 

The power plants are no longer profitable because the price of power has fallen below the cost to operate them, and these plants need a bunch of expensive retrofits to comply with new EPA regulations.  AEP and FirstEnergy are in a bind because they placed all their eggs in the same basket by hanging onto coal plants way past the time when smart utilities unloaded them at fire-sale prices.  Corporate greed strikes again!

The WV PSC just recently approved an AEP subsidiary's purchase of all but 140MW of one of the company's merchant plants, making Wheeling Power and Appalachian Power customers responsible for operating it and absorbing any losses.


In 2013, the WV PSC approved FirstEnergy's plan to dispose of its Harrison Power Station the same way, by making customers of Mon Power and Potomac Edison responsible for it.

The WV PSC never met a coal-fired power plant or rate increase that it didn't like.

Encouraged by the WV PSC, the Ohio companies next decided to try to unload more of their coal-fired assets on ratepayers in Ohio.  Except... Ohio is a deregulated generation state.  Demonstrating extreme creativity, the tedious twins came up with ingenious plans to shift responsibility for the plants to ratepayers anyhow.  FirstEnergy came up with its "Powering Our Profits" plan.  I don't know if AEP came up with a cutsie-poo name like FirstEnergy, but it also put forth a proposal to transfer responsibility for its
plants to Ohio ratepayers.

Gotta wonder how those cases are going to turn out at the PUCO, considering:


AEP has proposals pending with Ohio regulators that would provide a profit guarantee for five plants, four of which are part of the unregulated fleet. The company has said the plans would allow it to continue operating the plants, as opposed to a potential sale or shutdown.
But now it looks like AEP is getting ready to sell them instead.  Smart move.  Finally.

FirstEnergy is still too dumb to buy a clue.
2 Comments

The Forked Tongue of FirstEnergy

1/2/2015

2 Comments

 
I noticed something funny the other day.  It seems that FirstEnergy is having trouble telling the same story about its transmission building endeavors to different audiences.

Just like new transmission lines proposed to criss-cross the midwest to allow "wind" to interconnect with the existing transmission system are nothing more than gigantic generator lead lines, FirstEnergy's "Energizing the Future" campaign to build new substations and transmission in West Virginia are nothing more than gigantic service lines to new Marcellus shale processing plants.

Generator lead lines (the transmission necessary to connect a generator to the existing transmission system) are paid for by the generator.  It's part of their cost of selling power, just like the rest of their plant.

So, why are service lines for new customers the responsibility of all customers?  If I wanted to open a plastics factory in my backyard and asked Potomac Edison for service, I bet they'd charge me plenty...  like the entire cost of the service line connected to whatever voltage I required for my plant, or the cost to upgrade existing lines to serve my plant.

The State Journal reports that FirstEnergy is building new transmission and substations in West Virginia to support the Marcellus shale industry.
Projects include the new Waldo Run transmission substation and a short 138-kilovolt transmission line in Doddridge County near Sherwood. The $52 million project is expected to support industrial users and enhance electric service to more than 6,000 customers in Doddridge, Harrison and Ritchie counties. The substation will accommodate additional load growth at a new natural gas processing facility, which consumes large amounts of electricity separating natural gas into dry and liquid components.

FirstEnergy is also working on a 138-kilovolt transmission line that will support the natural gas industry, as well as enhance service reliability for nearly 13,000 customers in the Clarksburg and Salem areas. The 18-mile, $55 million Oak Mound-Waldo Run transmission project is expected to be placed into service by December 2015.

The company is also evaluating additional transmission upgrades as new service requests from shale gas developers continue throughout the Mon Power territory. FirstEnergy is currently evaluating new transmission facilities in Wetzel County to support a midstream gas processing plant that continues to expand.
Would the existing 19,000 customers need their electric service "enhanced" if not for the addition of the Marcellus facilities?  Probably not.

So, what is FirstEnergy telling the landowners affected by their new, Marcellus-supporting projects?
Project Need
FirstEnergy has identified the reliability risk of low voltage conditions on the transmission system under certain conditions. The proposed project addresses the reliability issues. Its assessment is based on existing conditions and the need for system reliability to safely meet the electrical needs of the region now and into the future.
Nothing about shale gas development or new Marcellus facilities there.  Just mysterious "low voltage conditions on the transmission system under certain conditions."  Wanna bet those "certain conditions" are the construction of Marcellus facilities?

It seems that FirstEnergy has two stories here.  The one for its investors is all about building things to support Marcellus.  The one for ratepayers is about building things to support existing customers.  Obviously, one of these stories isn't exactly honest.

Why isn't the Marcellus industry paying the cost of new electric facilities to support its business? 

Why are West Virginia electric consumers, who have been subject to more and more rate increases recently, being asked to pay the cost of harvesting Marcellus gas?  Isn't the gas industry in West Virginia profitable enough without subsidies provided by ratepayers?

And if that isn't bad enough, FirstEnergy's transmission scheme is all about pumping more and more "transmission spend" into its transmission subsidiaries, like TrAILCO, that earn a sweet 12.7% return on equity courtesy of federal transmission rates.  In addition, these lower voltage transmission lines are beyond the jurisdiction of state regulators.  As noted on FirstEnergy's "fact sheet:"
Regulatory Approval
TrAILCo will submit a letter to the staff of the Public Service Commission of West Virginia advising them of the project.
Just a letter.  No debate.  FirstEnergy is a utility with eminent domain authority in West Virginia so they're just going to write a letter to the PSC, and come take your property.  They don't even need to notify you until they show up with the bulldozer.  Who needs due process?
Easements
In most locations, a new 150-foot wide right-of-way will be needed for the proposed transmission line. In a few locations, the new right-of-way will be 200 feet wide.
Who wins here?  The Marcellus industry.  FirstEnergy. And your elected officials owned by both industries.

Who loses?  Ratepayers.  Again.
2 Comments

FirstEnergy Puts Tony the Trickster Out to Pasture

12/16/2014

0 Comments

 
He shall now be forevermore known as Tony the Dotard. Yeah, I know, it just doesn't have that same ring to it, but I'm sure he can still get up to lots of corporate hijinks and mock floggings down at the senior center soon.

FirstEnergy announced today that effective January 1st, they're kicking Tony upstairs to some newly-created figurehead position known as the "executive chairman."  Apparently the quotes are included in the official name of Tony's new position.  I like how he stopped to pose with a big grin next to a portrait of one of his belching power plants on the way out.  Classy!

So, who's next?  FirstEnergy's soon to be president and CEO is Chatty Chuck Jones, the famous deal-maker who is completely out of touch with the real world the rest of us inhabit.  Someday, someone's going to spit in his mashed potatoes.

FirstEnergy says that Chatty Chuck worked his way up from substation engineer, but they don't share how many co-workers he had to step on to get there.  Chatty Chuck has managed FirstEnergy's distribution companies since 2010.  That means he was directly responsible for that meter reading disaster over the past several years at the former Allegheny distribution companies -- Mon Power, Potomac Edison and West Penn Power.  But wait... Chatty Chuck brings even more to the table!
  He's also former president of FirstEnergy Solutions, the company's failed competitive generation subsidiary.

Chatty Chuck is also the insufferable jerk who made that stupid $102M deal to plaster FirstEnergy's name all over Cleveland Browns Stadium a couple years ago.  In the wake of all the bad publicity that generated, Chatty Chuck tried to clear it up with an amusing little story about how he intimidated the staff of the restaurant where the deal went down.  Aren't FirstEnergy's communications shysters going to have fun?

As amusing as all this is, Chatty Chuck shares that nothing will change.  He's going to run the company exactly like Tony the Dotard did.  And, just in case he starts acting like a wise guy:

Alexander, serving in the newly created position as executive chairman of the company, said he will be in an advisory role. "But Chuck is running the company," he said.
...with a wink.

Demonstrating that FirstEnergy's death spiral will continue, perhaps even speed up, Jones revealed that he doesn't understand finance.
"Having a stronger technical understanding of the finances would be a plus, but I don't see it as a necessity," he added.
...he has henchmen for that.
0 Comments

What Society Can Learn From Dr. Luther Gerlach

12/2/2014

3 Comments

 
A while back, I shared a little bit about Dr. Luther Gerlach and his work studying public response to electric transmission projects and how it produces debate about and shapes our energy future.  I included a link where you could download his short film, Grassroots Energy.

Now I'd like to share more about this amazing man, how he works, and how he created Grassroots Energy. 
Luther and Ursula Gerlach doing research in early 1970s on a protest of long haul truckers against high cost of their diesel fuel.  They made a 16mm film of the truckers' strike.
Dr. Gerlach explains how and why Grassroots Energy was made:
In the late 1990s, I made 12 videos for a distance learning version of my course Ecological Anthropology at the University of Minnesota, Twin Cities. I made these with the assistance of my wife, Ursula, my colleague Paul Eide in University Media Resources, and research assistant Tis Stringer.  To make these videos, we used 16 mm movie film, 35 mm slide/still film, and audio tape that Ursula and I had taken over years of anthropological field research in the USA, Kenya, Germany, and other places.  Our practice has been to complement written note taking with film and audio recording during this field research.  We draw upon our film and tape library to present lectures in class and also to make films and videos for use in class and in distance learning.  In recent years, we have digitized film and analog tape to make programs that can be presented via computer. 

It is thus that we made the Ecological Anthropology program Grassroots Energy.  I introduce and then conclude the movie with still photos and voice over narration. The movie itself is 27 minutes long, originally a 16 mm film.  We filmed during our field research.  We began research and recording in August 1974, shortly after farmers and townsfolk in West Central Minnesota learned that Cooperative and United Power had applied to state authorities for permits to build a +/-400kVDC line from a mine mouth plant in North Dakota across their land to a AC converter facility in a Minneapolis suburb.  We continued research and recording through the construction and energizing of the line and early response in 1980.  The film focuses on the period 1976-1978, when resistance to the line was most intense and widespread. 

Filming in the field and making slide shows and movies in the era before digital imaging presented problems not experienced by the users of digital cameras.  Instead of being able to take countless pictures and see the results immediately, one had to ration film and wait until processing to determine if one “got it or not.”  One had to keep film – and batteries - cool in the summer and warm in the winter.  And it was obvious to all that one was taking pictures or recording audio.  In any event, we observed the cardinal and ethical rule of anthropology: to get informed consent of those photographed.  

Before we released the film about the CU transmission line issue and resistance to it, we showed it to those involved in the resistance. 

A citizen’s organization in Wisconsin concerned with electricity production, distribution and use asked me if it could show the Grassroots Energy movie for a fundraiser.  After some deliberation, I agreed.  I then also agreed that a blog concerned with electricity transmission issues could provide access to this movie.  Further, I have included clips from the movie as well as other information about the CU case in a presentation to a workshop on transmission held in part by Edison Electric Institute.

I am now working to make available more of my published and unpublished material, print and audiovisual, on transmission and other energy issues.

Luther P. Gerlach, PhD
Professor emeritus of Anthropology, University of Minnesota

Biosketch

My studies of public response to electricity transmission lines is part of my broader study of the interplay of social movements and established orders in the management of technological and ecological risk and resource use locally, regionally and globally.  Thus, I examine how the interplay between advocates and opponents of transmission grid expansion produces debate about the energy future and shapes this future.

I have studied social movements, ecological adaptation, and related cultural change in the USA, Germany, and along the Kenya coast.  Following undergraduate and graduate study at the University of Minnesota, I served as a US Army officer in the Far East and a US government researcher in Germany. I then attended the University of London, particularly its School of Oriental and African Studies and also its London School of Economics, receiving certificates in African Law(Islamic Law Option) and Swahili, and a PhD in Cultural Anthropology (1960), following field research in Kenya.  In addition to my professorship in Anthropology at the University of Minnesota, I have been visiting professor at the Environmental Quality Lab of the California Institute of Technology, the Aspen Institute of Humanistic Studies, Oak Ridge National Laboratory, Science Center, Berlin, Germany.
If you haven't watched the film yet, you can download it here.

Luther's research, writings and film come closest that I have ever seen to capturing the feelings and purpose of people and groups who oppose transmission lines.  He has an understanding and appreciation for both sides of the energy debate, and studying his work should propel us along toward solutions. 

Instead, it appears that we are poised to make the same mistakes about centralized renewables that we made with centralized fossil fuel generation decades ago.  Why must the few sacrifice for the many when there are better solutions available?  Only when we understand social movements and energy equality can we learn from history and stop making the same mistakes over and over.

Dr. Gerlach has a huge body of work, some of which I've had the pleasure to read and ponder, and I hope he continues to make more of his published and unpublished works available.  There's so much to be learned!

Some of Dr. Gerlach's publications pertinent to social movements and energy for further reading:


Gerlach, Luther P, 2014. Public Reaction to Electricity Transmission Lines, Reference Module in Earth Systems and Environmental Sciences, Elsevier, 2014. 21-Mar-14 doi: 10.1016/B978-0-12-409548-9.09111-9.

Gerlach, L. P. (1999). The structure of social movements: Environmental activism and its opponents.  In Waves of Protest: Social Movements since the Sixties.  (J. Freeman and V. Johnson, Eds.), pp. 85–97. Rowan & Littlefield, NY

Gerlach, Luther P., and David Bengston. 1994. “If Ecosystem Management Is the Solution, What Is the Problem?” Journal of Forestry 92, no. 8 (August): 18–21.

Gerlach, L. & Palmer, G. (1981). Adaptation through evolving interdependence, pp 323-381 in Nystrom P.C, & Starbuck W.  Handbook of organizational design, vol 1. Adapting 0rganizations to their environments. New York, Oxford Press

 Gerlach, Luther P. (1979). Energy Wars and Social Change, in Predicting Sociocultural Change, Susan Abbot and John van Willigen, eds. Southern Anthropological Society Proceedings #13. Athens: University of Georgia Press 

Gerlach, L.P. 1978  Gerlach, Luther P. (1978). “The Great Energy Standoff.” Natural History 87 (January).

Gerlach, Luther P., and Virginia H. Hine. 1973. Lifeway Leap: The Dynamics of Change in America. Minneapolis: University of Minnesota Press.

Gerlach, Luther P., and Virginia H. Hine. 1970. People, Power, Change: Movements of Social Transformation. Indianapolis: Bobbs-Merrill.

 Gerlach LP and Eide P (1978) Grassroots Energy, 16-mm 27- minute, sound, color film. University of Minnesota Media Resources. Distributed by Penn State University Film.

We all owe Dr. Gerlach and his wife many thanks for their capable documentation and thoughtful commentary on our energy wars.  Now, let's do it better this time around as we move toward a cleaner, more democratic energy future!
3 Comments

Testimony Filed in PATH's Abandonment/Formal Challenges Case at FERC

11/24/2014

1 Comment

 
Friday marked the first time the public has been able to take a look at what's shaken out of PATH's consolidated FERC case (ER09-1256-002 & ER12-2708-003).

Docket No. ER09-1256 deals with the three Formal Challenges to PATH's formula rate filings for rate years 2009, 2010 and 2011 that were made by West Virginia ratepayers Keryn Newman and Alison Haverty.  The Challenges alleged that PATH recovered millions of dollars that it was not entitled to.

Docket No. ER12-2708 deals with PATH's recovery of $121M of stranded capital investment in the PATH project.  In 2008, FERC granted PATH the right to recover all prudently-incurred expenses for the project in the event it was abandoned for reasons beyond PATH's control.

These two very different PATH cases were consolidated by FERC in 2012, forever joined at the hip for settlement and hearing purposes.

Earlier this year, the settlement phase ended and a procedural schedule for hearing was set.  Under the procedural schedule, PATH filed its Initial Direct Testimony in May of this year, supplemented in July.  Intervenors filed their Direct and Answering Testimony on Friday.  The public, trial-type evidentiary hearing is scheduled to begin on March 24, 2015 in Washington, D.C.

Here's what was filed Friday:

Direct and Answering Testimony of Keryn Newman and Alison Haverty, along with testimony from their witness Doug Kaplan.  Files are labeled, and the narratives are files number 2 of 20, 16 of 20, and 17 or 20.  The other files are supporting exhibits as mentioned in the testimony.  This testimony deals exclusively with the Formal Challenges in Docket No. ER09-1256.

Testimony and Exhibits of FERC Trial Staff.  Witnesses Miller and Deters deal with the Formal Challenges, while witness Keyton testifies on PATH's return on equity percentage that is part of the abandonment docket.

State Agencies and Joint Consumer Advocates filed testimony.  The testimony of witness Lanzalotta is with regards to the amount PATH should recover in the abandonment docket, while witness Woolridge deals with PATH's return on equity in the same docket.  The third JCA witness questions the prudence of PATH's legal expenses.
1 Comment

Settlement Proposal Filed in FirstEnergy WV Rate Case

11/3/2014

1 Comment

 
A settlement proposal was made public today by parties to the West Virginia Mon Power/Potomac Edison base rate case.

The settlement must be approved by the WV PSC before it becomes final.  The PSC has scheduled a hearing on the settlement for Nov. 7 at 9:30.  You can watch the webcast here.

The settlement was crafted during negotiations between the company, the staff of the PSC, the Consumer Advocate Division, WalMart and the WV Energy Users Group (a group of energy hog industrials).  The PSC Commissioners (what few we have left) did not have a hand in crafting this settlement.  They will have a hand (or a rubber stamp) in approving it.

So, what happened?  They agreed to a rate increase effective Feb. 25, 2015.  The press release yammers on about how much this will cost the "average" customer (23 cents per day, $6.90 per month, $84.40 per year).  Mr. & Mrs. Average Customer use exactly 1,000 kwh of electricity every month.  Your usage isn't so neat, so therefore your increase will vary. 

But, it's not the rate increase the company asked for.  It's less.  The original proposal was going to increase Mr. & Mrs. Average Customer's bill something like $15/month, so consider the proposed settlement to be slightly less than half the amount requested.

The company had asked for a total of $151M annual increase.  The settlement amount is $62.5M annually.  This amount includes a $15M (1.45%) increase in base rates and a new $47.5M surcharge for vegetation management. 

The vegetation management surcharge bears further examination considering the company asked for a $48.4M surcharge for increased vegetation management.  The company has been receiving a separate amount for vegetation management that has been included in the base rate for years ($28M).  What this settlement does is remove that amount from the rate base and combine it with an additional amount for increased vegetation management to create the new vegetation management surcharge.  This new surcharge is subject to filings in the first, third and fifth year in which the company must true up actual expenditures to the amount collected.  Gone are the days of FirstEnergy collecting millions for "vegetation management" that it never performs (and contributes to more severe and prolonged storm outages).  Now you'll actually get the vegetation management you pay for!

Back to the base rate increase:  Included is $46M of 2012 storm costs, amortized over a 5-year period, without earning a return (about $9M/year).  Once the 5 years is up, this is gone forever (unless we have another storm disaster in the meantime). 

The stipulation regarding the $60M FirstEnergy wanted to collect for closed power plants Albright, Rivesville and Willow Island sounds like Yoda wrote it.
For the unrecovered the companies may account, undepreciated investment.  
Balances in the 2012 deactivated power plants (albright, rivesville, and willow.  
Island) in any manner the companies deem appropriate, with gaap in accordance.  
And regulatory accounting.  Not, the parties agree that such accounting does.  
To recover these costs or amortization expenses in future rate establish a right.  
Proceedings, and this joint stipulation shall prevent the parties from nothing in.  
To recovery of these taking whatever position they deem appropriate in relation.  
Amounts in future proceedings.  Herh herh herh.
I'm not sure what it means.  Probably nobody else knows either.  Except maybe Yoda.

The companies must increase the amount they contribute to the Dollar Energy Fund that assists low income folks with their outrageous FirstEnergy electric bills.  FirstEnergy's increase is $150,000/year.  In addition, the company must continue to "contribute" an additional $250,000/year that they recover from ratepayers.  So, essentially, YOU are paying this extra and FirstEnergy is getting the credit for the "donation."  Isn't that special?  Betcha' didn't know that FirstEnergy provided charitable giving coordination services like that!  Of course, how much of any of this is "giving," when all the money ends up right back in FirstEnergy's pocket?

This one is kinda confusing.  Even Yoda can't help. 
The proposed increase to the customer charge for residential and small commercial
customers shall remain at $5.00 per month.
The increase shall remain at $5.00 per month?  We're already paying $5.00 per month.  Does this mean that we're now going to pay $10.00 per month, or does this mean that there will be no increase in this fee?  Clarity needed.

The company is allowed to establish a regulatory asset for its expected EPA compliance plans at Harrison and Ft. Martin.  This amount will be deferred (sit on the balance sheet uncollected and earning interest) until a future rate case
.

The company will earn a 9.9% ROE, down from the requested 11%.  When combined with the return on debt of 5.15%, and adjusted by the company's capital/debt ratio, the total return will be 7.36%
.

The company will receive an additional $1,074,174
per year to read every meter every month going forward.  This is down from FirstEnergy's requested $7.5M yearly cost to read meters monthly. Now the trick is going to be making sure the company actually DOES the required readings!  No skimping now, we'll be watching!

So, what do you think?  Did your advocate cut you a good deal in this rate case?  You can submit comments to the PSC here.


1 Comment

The More Things Change, The More They Stay The Same

11/2/2014

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It has been my pleasure to work with Dr. Luther Gerlach a couple of times over the past few years as he continues his studies of transmission line opposition groups.  Dr. Gerlach is professor emeritus of anthropology at the University of Minnesota, and has been studying transmission opposition since the 1970s. 

In 2013, Luther updated his encyclopedia article, Public Reaction to Transmission Lines  (EEI has made the article publicly available for download here).  After it was published in 2014, the Edison Electric Institute invited him to present at their recent Utility Siting Workshop.  I again participated in discussions with Luther over several months as he put together his presentation for the workshop, Transmission Lines: Characteristics and Effects of Opposition.

Discussion with Luther has a way of making you think!  During the most recent discussions, Luther shared with me a film he narrated in the 1990s from footage he had acquired during the CU power line fight in Minnesota in the 1970s.  This battle was the subject of Paul Wellstone's book, Powerline: The First Battle of America's Energy War, which is sort of a transmission opposition primer.  A lot of us have read it to analyze what went wrong with their fight so we can improve on our own.  If you haven't read it yet, go get a copy!

I downloaded Luther's film, Grassroots Energy, and settled in to watched it by myself. 

Then I invited a fellow transmission opponent over to watch it with me a second time so we could discuss the similarities to our own fight.

Then, with Luther's permission, I shared it with a few other transmission opposition leaders across the country.

Now, I can share it here... Download and watch this film!  For even more fun, watch it with your transmission opposition buddies and plan a discussion afterwards.

Although it's been 40 years since the CU battle, I was struck by how much we're still reacting to new transmission proposals with the same emotions and actions that formed these opposition groups many years ago.  We still share information with others, and we still try to find better solutions. 

Now I'm going to go watch it again... while waiting for better solutions!
0 Comments

And the History Book Says...

11/2/2014

9 Comments

 
It's been a long time since I last got a google news alert for "Potomac-Appalachian Transmission Highline."  So long, in fact, I'd forgotten I even had those search terms set to notify.  But, just in time for Halloween, the PATH zombie reared its ugly head and I got a notice last week that some right-wing think tank had published a paper where those terms were mentioned, America’s Electricity Grid: Outdated or Underrated?
And what did the author have to say about PATH, more than three years after its death?  How has history treated this stunningly costly failure of "independent" planning?
Despite identification of areas in which transmission capacity is limited, a “not in my backyard” (or anyone else’s, in some cases) attitude toward new transmission line siting has resulted in cancellation or delay of some new transmission lines.

For example, in 2011, PJM cancelled the proposed Potomac Appalachian Transmission Highline (PATH) project, a 275-mile transmission line that would have run through West Virginia, Virginia, and Maryland to deliver electricity into Northern Virginia. Although the line was designed to improve reliability in eastern PJM, changing forecasts of electricity demand growth and intense opposition to siting the line led to the project’s cancellation.
It's the opposition that will be remembered, not individual analyses and the fine line that supposedly determined this white elephant was needed.

Hey, remember this?  PATH's talking heads insisted that opposition had nothing to do with PATH's cancellation.

But, history says it did.

While the article's conclusions are pretty screwed up, it does a nice job explaining the bulk power system and federal regulation thereof.  It's a good "backgrounder" for folks new to the transmission world.  Think about how much more reliable our system would be though, if we brought back the "islands" of the past and operated them as smaller parts of the bigger system (aka "microgrids").
Beginning in the late 1920s, electric utilities began to integrate their operations to improve reliability and reduce costs. Previously, utilities had operated as “islands,” meeting the demand for electricity solely from their own generating plants. To ensure reliable service, this meant building extra generating capacity to keep in reserve, in case unexpected problems caused their plants to shut down.[2] By integrating their operations, utilities could provide more reliable service without building as much backup generating capacity. In essence, if a generating plant at Utility A suffered a forced outage, one of Utility B’s generators would be available to ensure the lights stayed on. The concept is similar to diversifying a financial portfolio. Instead of investing everything into just one company’s stock, buying multiple stocks, bonds, and other investments reduces the risk of a sudden financial loss.
Microgrids that can be islanded from the larger system at times when the larger system fails (remember Superstorm Sandy?) can continue to provide power for necessary services.  And if microgrid "A" suffers a forced outage, it can borrow from microgrid "B", or "C," or "D," or any other nearby microgrid.  Relying on just a handful of generators and long-distance transmission lines creates parasitic load pockets with no native generation.  Those folks have nowhere to turn in case of emergency.

Building more transmission lines isn't the answer.  The answer is a more democratic electric grid system that benefits consumers and local communities, not gigantic, investor-owned utility holding companies.
9 Comments

Settlement in Progress in Potomac Edison/Mon Power Rate Case

10/27/2014

7 Comments

 
If you were looking forward to watching the PSC evidentiary hearing via the Commission's webcast like I mentioned on the radio last week, change of plans.

There won't be an evidentiary hearing. 

As I also mentioned, there will be a rate increase.  It's only a matter of how much.  The Staff of the Public Service Commission, your Consumer Advocate, Wal-Mart and the Energy Users Group have reached a settlement with FirstEnergy "in principle."  The exact amount of our rate increase is still under wraps.

If FirstEnergy is settling, it probably means us ratepayers are gong to take it in the... wallet.
7 Comments

Bad Estimate Fever Is Spreading

10/27/2014

5 Comments

 
An Indiana utility is apologizing to its customers after failing to read electric meters for months, then issuing gigantic "catch up" bills when finally performing an actual meter read.

Remind you of anyone?

Vectren's excuse is that its meter reading contractor simply quit reading meters at the end of its contract period when it knew it would not be receiving a new contract.  The company says that the 400 customers affected can pay their gigantic bills in smaller increments, without interest.

The company has "put a formal communications plan in place."  This means they're spinning and trying to downplay the true magnitude of the problem.

The Courier Press says the problem is much bigger than Vectren has admitted.
The Courier & Press began investigating this issue after receiving a call from a local business owner on Friday concerned that her bill had tripled without warning.

Vectren initially said that more bills than usual were estimated over the summer because the company switched meter reading contractors, and it was changing the readers’ routes.

“Without getting into specifics, there are challenges that happen with any contractor transitions,” Hedde said Tuesday morning. She added that the anonymous caller’s high bill was likely atypical.

“I don’t want to give the impression that that is normal,” Hedde said. “She is experiencing something hopefully that is an anomaly.”

But response to a Courier & Press’ Facebook post showed the issue was widespread. Hundreds of people replied to the post with stories of bills that were several times what they expected.
The Courier & Press characterizes the problem as affecting "thousands" of customers.

The Indiana Regulatory Commission doesn't seem to see this as a problem.
But mistake or no, customers whose bills were underestimated must pay up, said the Indiana Utility Regulatory Commission.

“They are responsible for it,” said Natalie Derrickson, a spokeswoman for the Indiana Utility Regulatory Commission. “At this point, if a customer feels like their bill was estimated and they have larger bills than they were expecting, their first step should be to contact Vectren. If the customer feels like the issue is not resolved, they should contact us.”
This utility failure probably couldn't come at a worse time of year for struggling families.  No Christmas this year, kiddies, Mommy & Daddy have to pay the electric bill instead!

Seems to me that if the problem was caused by a contractor that did not live up to its legal obligations, then Vectren and/or the affected customers have a clear course of action.  Unless... maybe Vectren isn't being honest about this and is scapegoating a contractor they no longer do business with?

You'd think the Indiana Regulatory Commission would at least want to get to the bottom of this.

At any rate, the Courier & Press wants to know what the people think -- Should utilities be permitted to estimate customers’ bills for periods longer than one month?

As we found out here in West Virginia when thousands of customers were abused in exactly the same fashion by FirstEnergy, meters should be read every month.
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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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