FERC Chairman Describes PATH Cost Recovery As “Contested”

A few weeks ago, Congressman Roscoe Bartlett, whose district includes Frederick County, MD, sent a letter to the Federal Energy Regulatory Commission asking a number of questions about the status of PATH’s cost recovery and 14.3% incentive return on equity.

In a letter dated April 28, FERC Chairman Jon Wellinghoff responded with this letter.  Wellinghoff offered only dodges and diversions.  He refused to answer the Congressman’s main questions, because the question of whether PATH can keep picking rate payers’ pockets is now a “contested proceeding” and not the “done deal” that PATH claimed in their earlier letter to FERC.

In his letter, Chairman Wellinghoff also reminds Congressman Bartlett that FERC has not yet made a ruling on the challenge by a number of PJM states to the outrageously high PATH incentive RoE.  This case is supposed to be limited only to the amount of the incentive rate, but now that PJM has dropped PATH from its planning, FERC could take the opportunity of PJM’s cancellation to end PATH’s incentive rate altogether.

Chairman Wellinghoff also sidesteps the fact that the US Ninth Circuit Court has voided the whole US Dept. of Energy congestion study that provides the justification for allowing cost recovery and incentive rates for new transmission lines.  Here is what the Chairman told Congressman Bartlett:

You also ask whether the recent decision of the U.S. Court of Appeals for the Ninth Circuit (Ninth Circuit) in Calif Wilderness Coalition v. U.S. DOE affects actions that the Commission has taken with respect to the PATII transmission line. You note that the Ninth Circuit’s decision vacated the designation of two National Interest Electric Transmission Corridors by the Department of Energy. The Ninth Circuit’s decision could affect the siting of a transmission line if its sponsors were to ask the Commission to exercise its backstop siting authority under section 216 of the Federal Power Act. The Commission, however, has received no such application with respect to the PATH transmission line. Furthermore, the Ninth Circuit’s decision does not directly affect the Commission’s decisions on ratemaking matters.

Mr. Wellinghoff’s final comment that “the Ninth Circuit’s decision does not directly affect the Commission’s decisions on ratemaking matters” misses the fact that FERC has repeatedly referred to the NIETC designation as justification for giving incentives to new transmission lines like PATH.

Although there is not a “direct” connection between NIETCs and incentives in the 2005 Federal Power Act, FERC has repeatedly made this connection in decisions, rules and public statements.  Back when FERC was cheerleading about Project Mountaineer, they proclaimed that DoE’s “congestion” was the reason for incentives.  Now that DoE’s congestion study has been eliminated, Chairman Wellinghoff falls back on legalisms to avoid responsibility.

When AEP/FE jabbed FERC in the eye in early March, the power companies claimed that they could continue taking our money as if PATH had never been killed by PJM.  Thanks to the large number of citizens who have filed protests at FERC, Chairman Wellinghoff has been forced to respond to our “contesting” of this arrogant power company claim.

You can still offer your comments.  Here’s how.  Let’s give PATH an even bigger “contest.”