“Some Will Rob You with a Six-Gun, and Some with a Fountain Pen”

A number of activists fighting PATH have spent the last six months educating themselves about the Federal Energy Regulatory Commission’s (FERC) cost recovery scheme for PATH.  These unpaid volunteers have done the work that “professional” “journalists” should be doing, digging into PATH filings to find the outrageous charges that AEP/Allegheny are piling onto West Virginia rate payers, as well as rate payers all over the PJM region.

First, some background.  Over two years ago, the FERC approved a scheme by which AEP/Allegheny can force all rate payers in PJM to pay for their PATH power line, plus a return on equity of 14.3% on the project.  Under the FERC scheme, AEP/Allegheny’s front companies can pass on to rate payers two main types of costs: the investment in the power line itself and normal expenses of the power line’s operation, called “operations and maintenance” or “O & M” in the lawyer/power company jargon.

FERC requires AEP/Allegheny to open their books to the public a few times a year so that people can take a look at the costs they are charging rate payers for PATH.  So guess who has been showing up at the fancy K Street office of Allegheny’s lawyers in Washington, DC?  You guessed it.  Intrepid activists from WV, MD and VA.

Not only have they been showing up, they have been filing requests for the actual invoices and receipts for the costs that AEP/Allegheny uses to back up its cost claims.

Ruh, roh.  Guess what?  There has been some cheating going on:

  • AEP/Allegheny submitted invoices from Congressional lobbyist Jana Sheffer for discussions with Senators and Congresspeople pushing the PATH project.  What’s wrong with that?  Well, Ms. Sheffer doesn’t work for any of the PATH front companies.  She is Allegheny Energy’s registered lobbyist.  AEP/Allegheny are also trying to pass off Allegheny’s lobbying costs as “educational” costs and “outside services” to hide them from inquisitive minds.  How much did Ms. Sheffer’s non-PATH bills total?  $11,000. Headed for your electric bill.
  • When confronted with their misleading accounting, AEP/Allegheny lawyers called them “mistakes” and claimed they would be “corrected.”  And these “mistakes” were just from the first two batches of records.  How many more will turn up with more investigation?
  • Oh, and about those PEAT guys, WV’s Clarence Martin and MD’s Russell Frisby, who AEP/Allegheny portrayed as “concerned community leaders”?  Charleston PR firm Charles Ryan Associates submitted invoices for thousands of dollars for their PEAT guys to debate volunteer activists at meetings and radio programs.  And you will pay for all of it.
  • At the October 6 rate recovery public meeting, AEP/Allegheny employees and attorneys admitted that none of the O&M expenses they are collecting from you and me are included in the $2.1 billion figure that power company PR people have been using as the cost of PATH.  These PATH O&M costs have been charged every year since 2008 and will continue for the life of the line, but they are never mentioned in public statements about the cost of the PATH line.  These O&M costs amount to millions of dollars per year, but power companies are hiding them from public discussions of the cost of the PATH line.  That’s like a bank loaning you money and telling you that you only have to pay back what you borrowed, without telling you that your payments also include interest.

So, as I said above, unpaid volunteers have been digging and finding all this dishonest accounting that would have gone unnoticed if alert citizens hadn’t found it.

No one from the WV Consumer Advocate Division attended the October 6 meeting.  Clueless blogger Jay Hancock from the Baltimore Sun wasn’t there, even though he wouldn’t have had to get up at 4:00 a.m. like a number of WV citizens did.  The government regulators have been playing footsie so long with the power companies that nobody cares.  The power companies invent rules and accounting practices to hide their dirty work and no one even asks a question.

We all owe a great big “thank you” to everyone who has been working hard to keep the power companies honest.  It wouldn’t have happened without self-educated and persistent citizen action.

Read an eyewitness account of the cost recovery meeting over at StopPATHWV. It’s a fun read, but in the end, sad.  And there is more to come.

The whole affair reminded me again of Woody Guthrie’s wise words “As through this life you travel, you’ll meet lots of funny men.  Some will rob you with a six-gun, and some with a fountain pen.”