FirstEnergy Busted on TrAIL Merger Costs

This one requires a little background.

Allegheny Energy built the TrAIL high voltage transmission line which was turned on this year in May.  FERC had imposed on PJM rate payers (that’s us) special guaranteed profit and cost recovery for the TrAIL line.  Every year, Allegheny Energy, which is now FirstEnergy, has to make public what costs associated with the TrAIL line they are imposing on us.

Those of you who read The Power Line regularly have been following Keryn’s and Ali’s Formal Challenges of PATH’s costs for 2009 and 2010.  This year, in July, PATH revealed the costs that AEP/FE were charging us for costs incurred in 2010.  Guess what popped up on PATH’s 2010 costs?  Some of the costs incurred by FirstEnergy for its merger with Allegheny Energy showed up on the 2010 PATH cost recovery list.

When the WV PSC and the MD PSC approved the merger of Allegheny Energy and FirstEnergy in 2010, both PSCs required that none of FirstEnergy’s costs for the merger could be passed on to WV or MD rate payers.  Yet there those costs were, being charged to WV and MD rate payers through the back door on the PATH power line’s accounts.  On the “public” conference call that FirstEnergy is required to hold to explain its costs, Keryn and Ali pointed out FirstEnergy’s illegal attempt to push merger costs off onto WV and MD rate payers using the PATH project cost recovery.

Please note that no one from the WV PSC, the WV CAD, the MD PSC or the MD OPC participated in this conference call to protect their rate payers from FERC/PJM/power company rate gouging.

So guess what just happened?  FirstEnergy “corrected” their “mistake” concerning their attempted cost recovery in the TrAIL case:

On December 19, 2011, Trans-Allegheny Interstate Line Company submitted to the Commission, for informational purposes, a revised reconciliation of the annual transmission revenue requirement for the 2010 Rate Year and a revised annual transmission revenue requirement for the 2011 Rate Year to reflect the removal of merger-related costs inadvertently included in the original version filed in May 2011.

Keryn has a great post on FirstEnergy’s attempt to pick our pockets — again.  Here’s her take on this “mistake”:

Ooops!  What’s a couple million between friends, anyhow?  Is anyone keeping track of all FirstEnergy’s accounting mistakes that cost you money?

Remember, Keryn and Ali are only watching the costs on the PATH line.  As Keryn says, no one is looking out for rate payers in the TrAIL process.  Once again, we have Keryn and Ali to thank for saving millions of people, millions of dollars.

But here is the real laugher.  FirstEnergy claims that:

As part of an internal review, TrAILCo personnel discovered that merger-related costs were inadvertently included in the original 2010 Reconciliation ATTR and 2011 Forecasted ATTR.

Yeah, right.  Why can’t they just tell the truth?  For once?

4 thoughts on “FirstEnergy Busted on TrAIL Merger Costs

  1. They can’t tell the truth because they’re still trying to deny we exist. And, if they told the truth, which is that allocation of merger costs to affiliates like PATH and TrAILCo was specifically set out in the Allegheny Energy Cost Allocation Manual, then it’s no longer “inadvertent.” It was no “mistake,” the manual used by the accounts booking expenses told them to allocate a portion of the merger costs to PATH and TrAILCo’s ratepayers. Once agreements were entered into prohibiting Allegheny/FE from collecting merger costs from customers in certain states, those employees responsible for such agreements should have notified the accounting department so that any merger costs already booked could be reclassed, and so that the Allocation Manual could be updated. But, Allegheny Energy’s legal department fell down on the job. Again. Or, maybe all this is done on purpose to enrich the corporation through illicit means and they just never thought they’d be caught. Ut-oh.
    At any rate, I thoroughly enjoyed that “Open Meeting” phone call. The only thing better would have been to see their faces when they realized they were caught. 🙂

  2. oops — I inadvertently made a mistake (really!)
    Should be “accountants booking expenses”, not “accounts booking expenses”
    But, luckily, this “mistake” doesn’t cost the ratepayers anything. 🙂

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s