Now this bogus “mitigation” is coming to NJ in the form of a deal engineered by US Dept. of Energy Secretary Chu at the direction of President Obama.  Last fall, we saw here the fast tracking of a number of high voltage transmission projects by the Obama Administration, over the objections of National Park Service professionals.  The Susquehanna-Roseland line, a Project Mountaineer sister project to PATH and TrAIL, was one of those fast tracked projects.

The S-R line was moving through the normal Environmental Impact Statement process, but things weren’t moving fast enough for Sec. Chu and his power company friends.  We, as well as the NPS employees, knew that a backroom deal was coming, and now we know what it is.

In November 2011, despite pressure coming from the White House, the National Park Service recommended that the S-R line not be built through the Delaware Water Gap National Recreation Area as the best way to protect the park from the many negative impacts of the route preferred by power company PSEG, owner of the NJ section of the S-R line.

After the first of the year, PSEG revealed by the “mitigation” deal.  The power company first offered to spend $60 million buying new land to add to the DWGNRA.  When that made the bribe a little to obvious, PSEG reduced the deal to $30 million.  The S-R line would remain on its current route through the middle of the NRA, but some extra land would be tacked on to the edge of the existing park.  How this is supposed to “mitigate” (PSEG’s word) the impacts of the transmission line, or to conform with the NPS “no build” recommendation is a mystery to me.

Most galling of all, we rate payers in PJM Interconnection will actually be paying the $30 million “mitigation” bribe through the FERC/PJM cost recovery process.  Because this bribe will be considered a cost of construction of the S-R line, FERC also lets PSEG collect “incentive” return on equity of more than 12% (that’s about $4 million) every year from now on.

NPS was shamed by this bribe offer into re-opening is still accepting public comment in their EIS process, so you and I can tell them what we think of this outrageous deal.  The deadline for comments is January 31.  You can comment directly on the NPS Web site at this link.

Keryn has more information on the StopPATH Web site here and here.

I spent the day at the WV Legislature today and spoke with a very prominent legislative leader.  He told me that he recently met with FirstEnergy officials, and he asked them pointblank if they had any plans to proceed with PATH.

The answer?  PATH is not even on FirstEnergy’s radar screen anymore.

This is complete hearsay, but it is pretty reliable.  Yet FERC continues to allow FirstEnergy and AEP to collect our money for their zombie project.  There needs to be an open and transparent end to PATH as soon as possible.

There is no “abeyance” when a project is dead.  Citizens should not have to rely on rumor and secondhand information to find out the truth.

This year’s load forecast repeats the pattern we have become used to with each passing year:

• Each year’s actual load number fall below the previous years’ predictions
• Each year the previous year’s projections for the next 15 year period are revised downward
• PJM continues to base its load projections on unrealistic economic forecasts resulting in inaccurate load projections for the future.

Each year, PJM identifies key projections in important years of its planning process compared with the previous year’s projection.  Here is the table from last year’s load projection:

Compared to the 2010 Load Report, the new PJM RTO summer peak forecast shows
the following changes for three years of interest:
o The next delivery year – 2011 -2,585 MW (-1.9%)
o The next RPM auction year – 2014 -2,797 MW (-1.9%)
3,090 MW (1.9%) – with ATSI, DEOK
o The next RTEP study year – 2016 -3,925 MW (-2.5%)
1,796 MW (1.1%) – with ATSI, DEOK

Here is that exact same table from this year’s executive summary:

Compared to the 2011 Load Report, the new PJM RTO summer peak forecast shows
the following changes for three years of interest:
o The next delivery year – 2012 -4,821 MW (-3.0%)
o The next RPM auction year – 2015 -3,338 MW (-2.0%)
o The next RTEP study year – 2017 -2,000 MW (-1.2%)

At every key year of PJM’s RTEP process, this year’s projections are lower than the previous year’s projections.  In the 2010 Load Report, PJM had added two new power companies to the cartel, so they broke out the loads for those companies separately.  Those companies have now been integrated fully into the 2012 load report.

As you can see, the difference between 2011 and 2012 projections is actually higher than the difference between the 2010 and 2011 projections.  The load projections appear to actually get worse and worse as time goes on.

As in last year’s load report PJM stated that their rosy economic projections have been wrong:

The combination of the new economic driver and a downward revision to the economic outlook for the PJM area has resulted in lower peak and energy forecasts in this year’s report, compared to the same year in last year’s report.

In my post on the 2010 load forecast report, I provided one of the graphs for PJM’s projection of summer peak in a power company service area for a company identified by the initials DPL which stands for Delmarva Power & Light, a subsidiary of Pepco Holdings, on the Delmarva Peninsula.  Here is the DPL graph from the 2012 report:

You will note that there is an uptick in 2011, but normalized summer peak was still below the 2007 level.  Also note that the actual normalized summer peak was significantly below what PJM predicted it would be just last year.  If PJM’s one year prediction was off by that much, how far off will their 15 year projection be?

And the DPL load zone is actually one of the better looking graphs.  Many load zones did not show an increase in 2011 normalized summer peak.

The 2011 summer peak also gives you a good picture of what “normalized” means.  Statisticians “normalize” data to remove impacts of extreme variations in factors influencing the numbers they are studying so that they can compare numbers from one year to the next on a more or less uniform scale.  In this case, PJM normalizes for variations in weather, particularly temperature.  You can see that the black line, the actual summer peak, was much higher than the normalized red line in 2011.  That was because we had a very hot July this summer compared with normal July temperatures.  In 2010, summer must have been about average in temperature, because normalized and actual peaks were about the same.  In 2009, the summer was cooler than normal and normalized peak was actually higher than the actual peak.  In these graphs, the red normalized lines are what you should compare with the green normalized projections.

You can also see the new 2012 map of PJM in the report.  On that map, below, you can see that with the addition of FirstEnergy and Duke Energy, the PJM cartel now controls all of Ohio.

To document her descriptions, Keryn posted a link to a Morgan Stanley investor slide show that give us a very good picture of the arms of the AEP Transco octopus.  This includes a joint venture with Warren Buffet’s MidAmerican Energy Company.  The slide show is a little out of date, because it still describes AEP’s PATH partner as Allegheny Energy, instead of FirstEnergy, but the other information is still operative.

Note that the MidAmerican joint ventures overtly involve wind power connections.

Our friends in the Frederick area should also note the squiggly dotted line that represents a mysterious future project that connects AEP’s 765 kv transmission network in the Ohio Valley to the also future “Kemptown substation” that has been blocked by local zoning ordinances.  This AEP pipe dream probably will not happen, because Allegheny Energy has now been bought by FirstEnergy, a major competitor in PJM that now controls most of the transmission system in PA.

I used the term “octopus” in my title for a very good reason.  Back in the early 20th century, muckraker Frank Norris wrote a great book called The Octopus about the grain trusts and the railroads that controlled the US market for wheat and corn.  The octopus in the title was his metaphor for the tentacles of this middle man/transportation system that set prices and exploited both producers and end consumers of US grains.  Transportation has always been the high profit/low risk choke point in US markets, mainly because distances are so great in North America.

Why does AEP want to go into the transmission business?

Here’s why:

1. AEP is stuck with huge long term bets on coal-fired generation.  It is now costing the company millions of dollars in payoffs to politicians and right wing think tanks to keep these power plants in business.  These obsolete power plants are killing thousands of Americans every year, and it is very expensive fighting off attempts to shut them down.
2. AEP has made some new investments in wind generation in Texas (see transmission plans in Texas and Kansas), but new land based wind generation is constantly undercut by heavily subsidized coal plants and a Congress that is hostile to renewable energy.
3. Selling electricity to consumers is a nice steady gig, but all consumer electric rates, even in “deregulated” states is subject to rate setting by state PSCs.

But with interstate transmission -

• Power lines are not subject to pollution restrictions, now or in the future.  And maintenance costs are relatively low.
• Now that Cheney and FERC have “put in place” a federalized process for stripping states of their power to regulate transmission, you only have to buy off one set of regulators and politicians in Washington, the famous “one stop shopping” that corporations are always trying to set up.
• And you have those wonderful federalized guaranteed returns on equity.  Look at the slide show chart.
• The operation of your transmission lines is mostly controlled by regional transmission organizations like PJM and MISO, which are cartels controlled by power companies with only incidental participation by state regulators.

This is an entirely new development in AEP/FE’s push for PATH.  In the past, all of AEP/FE’s claims in support of PATH have revolved around PJM Interconnection’s flawed Regional Transmission Expansion Plan, which PJM creates every year.  The power companies’ problem in 2010 was that PJM announced that they were dumping the PATH project in their 2011 RTEP, the final version of which will be published in February 2012, next month.

Remember when the Soviet Union still existed and Kremlinologists would try to figure out what was going on there by who stood where on the parade platform on May Day?  Or how the media try to figure out what is going on in the Vatican by the smoke signals the cardinals put out there?  Well, those of us who report on PATH developments have to rely on the skimpy smoke signals that come out of state PSCs, federal agencies and the power companies to figure out what is going on behind those closed doors.  “Professional” media outlets are too busy covering important stories about the Kardashian family to bother with minor issues like who is raising your electric rates or trying to steal your land.

So we have this odd reference to the May 2012 capacity auction results as being some kind of PJM decision point on PATH.  We have never seen a reference like this from either PJM or AEP/FE.  We know that the purpose of PJM’s capacity auctions is to allow the large generators in the RTO to prevent new power plants from being built on the East Coast, so they can maintain their monopoly position in PJM’s electricity markets.  The MD PSC has been filing complaints at FERC for years, and the NJ BPU has just published a detailed report on how this market manipulation works in the PJM cartel.

Back in 2006, AEP and its PATH lil’ buddy Allegheny Energy (now swallowed by power giant FirstEnergy), cited the low capacity auction prices in Western PJM (where AEP and Allegheny have huge obsolete coal-fired power plants) and high capacity prices in Eastern PJM (where PJM and AEP/Allegheny had been suppressing new generating plants using the very same capacity auctions) as a sign of “congestion” and the need for the PATH and TrAIL power lines.

Why have we not heard this argument recently?  Because despite the 2006 propaganda claims, the capacity price gap between eastern and western PJM has been falling, not rising, in recent years.  That is not because PJM has stopped suppressing new power plants on the East Coast.  In fact, PJM has sued NJ to prevent the state from providing incentives for the construction of three new gas fired power plants to reduce electric rates for NJ citizens.  No, I’ll let PJM tell you.  Here is PJM’s press release following the May 2011 capacity auction:

Renewable resources, including demand response and energy efficiency, made up nearly 68 percent of the new capacity available and about 10 percent of the resources clearing PJM Interconnection’s recently completed capacity auction.

PJM today announced the results of its Reliability Pricing Model (RPM) capacity auction for resources to meet customers’ electric power demand in the June 1, 2014 to May 31, 2015 delivery year.  RPM commits resources three years in advance to be made available to preserve reliability.

“The increase in demand resources follows the introduction of two new demand resource products in addition to the existing product — one available throughout the year and another available for an extended summer period,” said Andrew Ott, PJM senior vice president-Markets. “There was more than a 50 percent increase in the amount of demand resources that cleared this year over last year.

And:

The resources clearing price for all resources except for limited demand response in PJM will be $125.99 per megawatt-day (MW-day). In the northern New Jersey area, which is transmission-constrained, the price will be $225 per MW-day, a decrease of about $20, over last year.

In PJM’s MAAC area the price of capacity will be $136.50 MW-day, a decrease of about $100 from last year.  (The MAAC price applies to the transmission zones of Baltimore Gas and Electric Company, Metropolitan Edison Company, Pennsylvania Electric Company, and PPL Electric Utilities, Atlantic City Electric, Delmarva Power, Jersey Central Power and Light Company, PECO, Public Service Electric and Gas Company, and Rockland Electric Company.) The non-MAAC region, will pay the RTO price of $125.99, an increase of about $100. This region includes western Pennsylvania, western Maryland, Ohio, Indiana, Michigan, Kentucky and Virginia.

“The convergence of prices between the eastern and western regions of the market is primarily driven by the significant reduction in forecasted load growth through 2014/2015,” Ott said.

So, what can we deduce from the smoke signals coming out of AEP/FirstEnergy high dollar law firm that you and I are paying for in the EIS delay?  Why are they suddenly claiming that the May 2012 PJM capacity auction is a big deal for PATH?

Here are my best Kremlinology speculations:

1. PJM engineers like Steve Herling have told AEP/FirstEnergy that the 2012 RTEP, which PJM has already started compiling although it won’t be published until February 2013, will repeat the 2011 RTEP’s decision that PATH isn’t needed.
2. PJM and AEP/FE are looking for some excuse to drop the PATH boondoggle, but they just can’t bring themselves to tell us honestly “we give up,” so they want some number that they can use as cover for their surrender.
3. Or PJM and AEP/FE will try to claim some little increase in the difference between eastern and western PJM capacity prices will show some miraculous new reason that PATH is “needed.”

Unfortunately, we have to wait for more smoke signals.  Our electricity regulators and the corporations they supposedly regulate don’t have much interest in allowing us peons to see what is really going on.

We reported a couple of weeks ago that the National Park Service December 31, 2011 deadline for the federal PATH EIS process had passed without any activity by either AEP/FE or the Park Service.  Well, the NPS has now posted a letter from AEP/FE dated December 16, 2011 on its Web site.

It appears that the power companies are now asking for an indefinite delay in the EIS process.  They say that PJM might consider the final plight of PATH in May 2012, but they really don’t know when a final decision will be made.  But AEP/FE are requesting a delay of the EIS process again until 60 days after PJM makes its decision.

What?  So you don’t know when PJM will make its decision but you want a delay until 60 days after that date, whenever that may be?  Really?  Translation:  We want a delay until 60 days after whenever.

Here’s the statement directly from the AEP/FE letter:

In light of this most recent PJM report, and in particular, the further analysis that PJM intends to undertake in 2012, the PATH Project remains in suspension as previously directed by the P JM Board at least through the period required for PJM Staff to report the results of the additional analysis described above, and for the PJM Board to take further action. Accordingly, the PATH Companies respectfully request that the NPS continue to hold its review of the pending applications for right-of-way authorizations in abeyance. As indicated by the PJM Staff report, additional analysis will be undertaken after completion of the May 2012 forward capacity auction results. The time required by P JM Staff to perform such analysis thereafter is not yet known. [emphasis added]

In order to accommodate the PJM study process, while providing a measure of certainty [Since when does "whenever" create "certainty"?  That's a pretty small "measure."] for both the PATH Companies and the NPS, the PATH Companies respectfully request that the NPS continue to hold its application review in abeyance until 60-days after the PJM Board issues a further decision on the status of the PATH Project. Promptly after being advised of such further decision by the PJM Board, the PATH Companies will notify the NPS of that decision and, within such 60-day period, submit a further request to the NPS with regard to the pending applications.

So now AEP/FE are performing a kind of striptease with NPS, USFS and the public.  They throw out the date May 2012, but then they say, but we really don’t know when the decision will be made.  After they say  they have no idea when PJM will make a decision about PATH, they say they will let NPS know 60 days after that date, but that date doesn’t exist.  They hope by flashing some numbers and dates they can fool the feds into thinking there is something solid there.

Here is a link to the power company fan dance.  I must say, it is quite a remarkable performance.  I’ll ask it again — Do they really think we are stupid enough to fall for this?  AEP/FE’s fancy DC lawyers seem to think so.

We’ll see what NPS does with the 60 days after whenever request.

Thank you, Keryn, for digging out this information.

Keryn has a post about the answer, and a link to it, over at StopPATHWV.  I have not read the answer yet, but Keryn reports that AEP/FE provide no real rebuttal of claims that PATH’s “public education” costs were really public relations and lobbying designed to benefit only their companies’ shareholders.

Keryn plucked the following gem out from the answer, as the excuse AEP/FE claim for having to spend so much on their “public education”:

In the wake of highly orchestrated and vocal opposition to the Project, PATH had a responsibility as the Project’s developer to educate government officials, civic, community and business leaders, and the public at large, about the reliability benefits of improved transmission infrastructure in general, and the PATH Project in particular. [emphasis mine]

The word “orchestrated” implies that some nefarious behind-the-scenes manipulators were controlling the behavior of opponents of the project.  That would be news to the thousands of property owners and rate payers who stood up to fight the PATH project in three states over the last three years.

As for AEP/FE having a “responsibility” to “educate” anyone, I will put the information on The Power Line up against any propaganda coming out of Columbus, OH and Greensburg, PA, headquarters of PATH’s owners over the last three years.  I have been told countless times by “government officials, civic, community and business leaders, and the public at large” that information here on The Power Line is the most accurate and complete information about the PATH project and reliability issues that they could find anywhere.

“Highly orchestrated” we definitely aren’t.  I would not even characterize us as “opposition.”  We know what real electric system reliability is and we are all for that.  The only opposition to reliability we have seen is AEP/FE and PJM Interconnection clinging desperately to their obsolete PATH project.

I do have to admit that we are pretty vocal.

Consumer Advocate Division Director Byron Harris says electricity rates in the state have increased by 41.9 percent since 2008.

It is important to read the words in this chapter, but I also think the pictures provide a clearer understanding of the Cheney/AEP/Enron vision behind Chapter 7.

Here is one of several artsy, romanticized pictures of high voltage transmission lines you will find in Chapter 7.  This one appears to be through wild mountainous terrain, perhaps in the Cascades or the Sierra Nevada.  It is a chilling vision.

One more note — This kind of stacked right of way, with multiple transmission lines is exactly what has happened with the TrAIL line in eastern WV as TrAIL was put alongside existing transmission lines coming from Dominion’s Mt. Storm plant.  This is also what much of the PATH right of way would have looked like, as it was planned to share a right of way with TrAIL as well.  Plans for the Susquehanna-Roseland line also involve turning most of the right of way into this kind of multi-line mess, including the section through the Delaware Water Gap National Recreation Area.  This is the Cheney/Wellinghoff vision for your future.

First, why Wellinghoff/Cheney in my title?  All of the current attempt by FERC Chairman Jon Wellinghoff to socialize the construction of a national network of high voltage transmission lines is derived from the National Power Act, also called the Energy Policy Act, which was passed by the Republican controlled 2005 Congress.  This law was the culmination of all of the plans that VP Dick Cheney had “put in place” (in Mike Morris’ immortal phrase).

The 2005 Energy Policy Act (often shortened to EPAct to distinguish it from the coal/electrical industry’s arch enemy, EPA) created an entirely new system to take control of high voltage transmission lines (referred to in the Act by the innocuous word “siting”) away from state regulatory agencies and state legislatures and place it in the hands of the federal Department of Energy (DoE) and the Federal Energy Regulatory Commission (FERC).  This effort grew directly out of the secret energy task force convened by Cheney in 2001 which was chaired by disgraced Enron CEO Kenny Lay.

The 2005 Act couldn’t impose the new federal control directly, because state control of these kinds of decisions is firmly in place and is supported by all legal precedents in federal courts.  As FERC and DoE found out in the Federal 4th Circuit with the PEC case, and DoE found out in the Ninth Circuit case throwing out DoE’s “congestion studies” mandated by the 2005 EPAct, federal courts continue to stand behind state control of power line decisions.

Cheney and FERC propaganda surrounding their power grab included a lot of hot air about “safeguards” and “accountability” that would protect rate payers from being “overcharged” in an enterprise that was attempting to pass on an estimated $100 billion price tag for a brave new world of transmission lines to US rate payers.  This new “regulatory” regime would not longer take place in state capitals around the US.  It would all happen in Washington, DC, in complicated new procedures designed to shut out US citizens.

But these new cases, like the high voltage transmission “formula rate cases” (What does that mean?), are too much even for the so-called consumer advocates who are being paid to “protect” consumers.  Here is what the Maryland Office of People’s Counsel told FERC when AEP/FE tried (unsuccessfully) to shut Keryn and Ali out of the FERC process:

Second and finally, consumer advocate offices (“CAOs”) (including MPC) and other load entities have long voiced concerns about the substitution of the formula rate process for actual rate cases. Because regulated utility companies generally file rate cases only once every 3 to 5 years, CAOs can target their limited staffing resources and budgets when regulated companies present a rate case. With formula rate annual updates being filed every year by each utility, however, CAOs simply do not have the in-house technical expertise, and do not have sufficient funds for retaining outside technical expertise, to review these financially complex formula rate update documents in anywhere near the depth that can be accomplished in occasional rate cases. While industrial and commercial load often do have in-house expertise, as for-profit businesses they also are constrained from spending money and reassigning staff to reviews of rates whose impact on any single industrial or commercial customer is deemed insufficient to justify the cost. [emphasis mine]

The last phrase in this quote tells the whole story — the purpose of removing real rate cases and creating arcane procedures is to make the cost of fighting these rate increases much more than the individual impact of each rate increase.  In other words, FERC and the federal government are creating a dripping water torture system that literally gives power companies uncontrolled license to nickel-and-dime rate payers with hundreds of billions of dollars in new rate increases.

So not only have two West Virginia housewives, with their completely volunteer effort, shamed state financed “consumer advocates” all across PJM Interconnection, they have now shamed FERC into conducting its own audit of FirstEnergy’s TrAIL transmission project.

And yet FERC continues its crusade to impose its federal transmission line regime through its new Order 1000.  Until FERC cleans up the mess it has already made of its existing transmission line policies, there is no way it can claim that it can police even more complex and deceptive Order 1000 rules and procedures, which themselves remove the “regulatory” process even further from citizens.