A Case Study in Failure

I was going to write a final post on yesterday’s WV PSC order that focused on the failure of the PSC’s “quasi-judicial process” (as the PSC itself has described its procedures).  Then I realized that (1) this was too easy and (2) it misses the real point.

But first, here are a few comments that I do need to make about yesterday’s decision to continue the PATH case.  The PSC’s only argument supporting their decision to grant another delay is that this delay is the most “prudent and cost effective” alternative to dismissal of the case.  That statement is patently false and illogical on its face.

There were four alternatives before the Commission:

  • toll the case with no conditions or requirements (which only the power companies requested),
  • toll the case with specific conditions that the power companies had to present a complete assessment of all alternatives to PATH (which was supported as an alternative to dismissal by most intervenors, the CAD and the PSC’s own legal staff),
  • dismiss the application (for which there was clear legal support and which was advocated by all intervenors, the CAD and the PSC’s own legal staff) or
  • continue with the case schedule then in effect (advocated as an alternative to dismissal by one intervenor, me)

In its decision, the Commission chose the alternative requested only by AEP/Allegheny, for the reasons that the power companies claimed in their recent filing — that this was the most “prudent and cost effective” alternative.

Except that this wasn’t the most “prudent and cost effective” alternative.  Of the four listed above, this was the least “prudent and cost effective”.

The most prudent and cost effective choice would have been to dismiss the application, for which the Commission had ample support in WV law.  Dismissal of the PATH application would have forced the power companies to abandon the PATH boondoggle and proceed with really fixing problems in the PJM regional transmission grid in a much quicker and cost effective way, namely Dominion’s Alternative 1.

The second most prudent and cost effective choice would have been for the Commissioners to have proceeded with the existing case schedule to allow the case to proceed to it’s final hearing in March 2011.  There is plenty of evidence on record, both from PJM and from the various companies presenting alternatives to PATH.  In fact, AEP/Allegheny attorney Chris Callas advocated just this alternative in his initial response to the PSC legal staff’s motion to dismiss.  Callas stated that the PSC should not be dismissing an application before a final hearing was held, because that was the forum for all the parties to present their evidence.  This alternative would have been cost effective, because it provided a certain endpoint to the PATH farce (unless the Acting Governor intervenes to delay the case and  strong arm the PSC, the way Gov. Manchin did with the TrAIL case).  This would have been the next most prudent alternative because it would have brought all the currently available evidence together in front of the PSC for a decision by June.

If the PSC had ordered AEP/Allegheny to present the evidence they claimed they “intended” to provide about real alternatives to PATH, then tolling of the case would at least have been prudent, even if it was the least cost effective choice.  In Friday’s order, the Commissioners failed to order even this minimal level of prudence.

Let’s take a final look at the Commissioners’ claim that they are being “prudent.”  Throughout both the TrAIL case and the PATH case, AEP/Allegheny and the Commissioners themselves, in their TrAIL final order and response to the appeal of that order to the WV Supreme Court, have argued that the regional transmission system must be fixed now or else we will face electrical Armageddon.  I actually heard the director of the PSC legal staff argue to the WV Supreme Court that WV political leaders faced the prospect of presiding over catastrophic “blackouts and brownouts” if the TrAIL project were delayed for even another month.

If our transmission system is in such desperate straits, real prudence would dictate that the WV PSC dismiss the PATH application and proceed immediately to ordering AEP/Allegheny to begin on Dominion’s Alternative 1, which can be implemented much more quickly and cost effectively than PATH.  But the PSC chose instead to delay the PATH case another six months.  If the world is about to end, is another delay really “prudent”?

So instead of doing what they claimed they were doing, the PSC chose the least prudent and least cost effective alternative, the exact opposite.

The PSC presented their order in the form of a regular order by a court of law. PSC orders always include a section titled “Findings of Fact,” in which a judge recites the facts of the case, and a section called “Conclusions of Law,” where judges state the application of existing statutes or case law to these facts to justify their orders.  Despite the fact that the PSC’s legal staff included multiple references to WV statutes in its original motion to dismiss, and intervenors who later filed supporting motions added similar and further references to statutes and PSC precedents, the “Conclusions of Law” section of yesterday’s order did not contain a single reference to WV statute or prior case law.  The Commissioners’ order cited only the logically inconsistent statement that their chosen alternative was “prudent and cost effective.”

So — what is going on here?  It is too easy to point to the fact that a majority of the Commissioners were appointed by Gov. Manchin who invited the Department of Energy to force TrAIL and PATH on West Virginia.  It is too easy to point out that the most recently appointed Commissioner was once Gov. Manchin’s general counsel.  It is too easy to remark that the current Chairman of the Commission was chosen by Gov. Manchin from his job as a power company attorney for Allegheny Energy with the same law firm, Jackson Kelly, that is currently representing AEP/Allegheny on the PATH project before the WV PSC.

We need to look at the people who created the larger context in which the PATH case is played out at the WV PSC.  Those people designed a case study in how to NOT to design an effective decision-making process.

It seems to me that the PSC is a convenient excuse for real judges, legislators and the governor to avoid making difficult decisions that involve seizing money and private property from West Virginians and stopping corporate campaign donors from getting their favorite boondoggles.  Every single citizen who has tried to get a WV political leader to stop the PATH project hears exactly the same refrain, “We can’t do anything about that, it’s up to the PSC.”  This is the real reason for the PSC process for high voltage transmission lines.

Keep in mind also that while PATH is a multi-state project with significant federal legal and policy implications, AEP/Allegheny did not face a single federal assessment of the project before they brought it to the state PSCs.

So what are the claims that politicians actually make for having given this decision only to the WV PSC?  Apparently, the reasoning is that the decision will be made by legal and engineering “experts” with some participation by “intervenors.”  Just the word “intervenor” implies that the people at most risk of losing their land and hard-earned money are “intervening” in a process where they don’t really belong, and in which they don’t have nearly the power that AEP and Allegheny Energy have.

But what do we know about the quality of decisions made by experts?

Take a look at my post from April 2010 on the scientific analysis of the quality of decision making.  A number of scientific studies have concluded that experts generally make worse decisions than large numbers of people.  The conclusion from these studies is that decision-making processes should be designed to include large numbers of diverse perspectives in order to result in the best quality decisions.

In order to provide the facade that average people have some access to the WV PSC process, the Legislature provided that average citizens could intervene in PSC cases, with or without attorneys.  This was done not to improve decision-making, but to allow politicians to claim that citizens had access to the process, even though they are completely ignored by Commissioners in their final orders.  If you think intervenors, even organizations like the WV Energy Users Group and the Sierra Club, aren’t ignored by the PSC, compare the AEP/Allegheny recent filing here to the Commission’s order here.  You will see clearly that the Commissioners granted AEP/Allegheny everything they asked for, while completely ignoring the arguments made by intervenors and PSC staff.

The PSC Commissioners have complained about the large number of citizen intervenors in the PATH case in almost every order they have issued.  No other issue in this case has received such consistent attention from the Commissioners.  Rather than welcoming the many and diverse perspectives that scientists tell us lead to the best decisions, the PSC constantly complains about the burden of having so many intervenors in the case.  Is this the behavior of people seeking high quality results? Or is it the behavior of a selected priesthood protecting its own power?

So let’s look at the current PATH situation objectively.

Let’s look at what people are actually doing, instead of what they are saying.  Elected officials have pushed off their responsibility to protect our state from out-of-state corporate predation onto a priesthood of so-called experts insulated from the basic principles of good decision-making.  To avoid their responsibility, political leaders have created a decision-making process for huge high voltage transmission line projects that is guaranteed to produce the worst decisions available.

Yesterday’s WV PSC order is a perfect case study of this failure.  This should be all the evidence WV politicians need to step in and fix West Virginia’s broken decision-making process for multi-state, high voltage transmission lines.

The Acting Governor and Legislators need to step out from behind the fiction that they are powerless to act.  They all need to exert strong public and political pressure on the WV PSC to fix what needs fixed in our state’s transmission system. Gov. Manchin intervened in the TrAIL case in support of Allegheny Energy.  Our political leaders need to stand up and publicly oppose AEP/Allegheny’s dying PATH project to support our state and its citizens.

PATH is now standing in the way of  real progress.  The PSC only wants more delay.  The Acting Governor and Legislators need to step in and get the job done by directing the PSC to kill PATH and to proceed with implementing Dominion’s Alternative 1.  If the PSC won’t do it, WV citizens need to find someone who will.