Sorting Out the Shell Game

In some recent discussions about PATH, I have come across a lot of confusion about all of the corporate names in the PATH situation.

Large energy corporations have learned that public confusion is an important tool in covering up their activities and keeping massive debt off their balance sheets.  This strategy has created a shell game of multiple names and subsidiaries that keep regulators and the public from figuring out what is going on.

The PATH transmission line project is owned by a single company, PATH, LLC, which controls two companies that will actually operate the line, PATH West Virginia, LLC and PATH Allegheny, LLC.  These companies also own two other companies called  PATH West Virginia Land Acquisition Company and PATH Allegheny Land Acquisition Company.  As you can see from the description below, AEP and Allegheny Energy each own half interests in PATH West Virginia, LLC and Allegheny Energy owns all of PATH Allegheny, LLC.  Here is the explanation of the ownership of these companies from the PATH application to the WV PSC:

PATH LLC has been organized by AEP and Allegheny to own the membership interests in certain operating companies (including, in this instance, PATH-WV and PATH-Allegheny) that will finance, construct, own, operate and maintain transmission and transmission-related facilities in connection with certain transmission infrastructure projects approved by PJM under its RTEP process. PATH LLC has its principal offices at 800 Cabin Hill Drive, Greensburg, Pennsylvania 15601 and 1 Riverside Plaza, Columbus, Ohio 43215.

2. AEP and Allegheny formed PATH LLC as a series limited liability company organized under the laws of Delaware. PATH LLC is partitioned into three series: the West Virginia Series, the Ohio Series, and the AYE Series. AEP and Allegheny each owns 50 percent of the Ohio Series and West Virginia Series, and Allegheny owns 100 percent of the AYE Series. AEP and Allegheny jointly manage the Ohio Series and West Virginia Series, while Allegheny manages the AYE Series.

3. PATH LLC owns three operating companies: PATH-WV (controlled by the West Virginia Series), PATH-Ohio (controlled by the Ohio Series), and PATH-Allegheny (controlled by the AYE Series) PATH-WV has its principal offices at 800 Cabin Hill Drive, Greensburg, Pennsylvania 15601 and 1 Riverside Plaza, Columbus, Ohio 43215. PATH-Allegheny has its principal offices at 800 Cabin Hill Drive, Greensburg, Pennsylvania.

4. PATH-WV and PATH-Allegheny will, among other activities and in conjunction, to the extent required, with PATH-WV LAC and PATH-Allegheny LAC as described below, conduct the business of transmitting electric power and energy through portions of West Virginia as public utilities under Chapter 24 of the West Virginia Code. PATH-WV and PATH Allegheny may also finance, construct, own, operate, and maintain other transmission projects assigned by PJM to the AEP East Companies or Allegheny Power.5. PATH-WV LAC and PATH-Allegheny LAC are single-purpose entities, wholly owned by PATH-WV and PATH-Allegheny, respectively. PATH-WV LAC has its principal offices at 800 Cabin Hill Drive, Greensburg, Pennsylvania 15601 and 1 Riverside Plaza, Columbus, Ohio 43215. PATH-Allegheny LAC has its principal offices at 800 Cabin Hill Drive, Greensburg, Pennsylvania. The sole purpose of each of these companies is to acquire, hold, transfer, lease, license and/or otherwise transfer or provide legal interests in real property, to the extent that may be necessary under West Virginia law, on behalf of its immediate parent, for the reasons identified in this Application.

6. Allegheny Power is the trade name, singly and collectively, of three operating companies, Mon Power, Potomac Edison, and West Penn, each of which is a wholly-owned subsidiary of Allegheny. Of the three Allegheny Power companies, Mon Power and Potomac Edison provide electric service in West Virginia. Allegheny and the Allegheny Power companies have their principal offices at 800 Cabin Hill Drive, Greensburg, Pennsylvania 15601.

7. Of the seven AEP East Companies, APCo and WPCo provide electric service in West Virginia. AEP, APCo, and WPCo have their principal offices at 1 Riverside Plaza, Columbus, Ohio 43215.

Note that all the addresses for the PATH companies are either the headquarters of Allegheny Energy in PA or of AEP in OH.

In recent discussions of Alternative One, there have been a lot of references to subsidiaries of Dominion Virginia Power and Allegheny Energy.  This is another part of the shell game.

When deregulation hit the electric power industry in the 1980s and 1990s, changes in federal and state laws allowed separate holding companies to control utilities that operated in regulated states.  In the PATH situation, we have four of these holding companies.  AEP, or American Electric Power, is the holding company that controls Appalachian Power, which serves roughly the southern half of WV, and Wheeling Power, which serves much of the northern panhandle in WV.  Allegheny Energy is the holding company that controls three subsidiary utility companies whose names are used in the PSCs in PA, WV and MD.  Allegheny’s utility subsidiaries in these three states, as described above, are Monongahela Power in WV, Potomac Edison in MD and West Penn Power in PA.

The situation is further complicated (some would say obfuscated) because Monongahela Power does business in WV under the name “Allegheny Power.”  In WV PSC documents, you will only see references to Allegheny as “Monongahela Power,” although that name never appears in public statements.

Allegheny Energy, the parent holding company of Monongahela Power, Potomac Edison and West Penn, is in the process of being swallowed by another electrical conglomerate based in OH, FirstEnergy.

In East Virginia, Dominion Virginia Power is the holding company that controls the utility Virginia Electric Power Company.  In filings at the WV PSC and the East VA SCC, you will only see Dominion referred to as Virginia Electric Power.

On The Power Line, I have chosen to refer only to the parent holding companies to keep things simple.  I do not use the PATH, LLC companies because they are just shells controlled by the holding companies AEP and Allegheny Energy.  I have begun referring to Allegheny Energy as Allegheny FirstEnergy while the merger is in process.  When the merger is fully approved and complete, I will only refer to FirstEnergy as AEP’s PATH partner.