Pulling Together Some Threads in the Wellinghoff/Cheney Mess

Let’s pull together some of the threads connected to Keryn’s and Ali’s adventure at FERC.  The web is complicated and the threads are many, but I think it will be very productive.

First, why Wellinghoff/Cheney in my title?  All of the current attempt by FERC Chairman Jon Wellinghoff to socialize the construction of a national network of high voltage transmission lines is derived from the National Power Act, also called the Energy Policy Act, which was passed by the Republican controlled 2005 Congress.  This law was the culmination of all of the plans that VP Dick Cheney had “put in place” (in Mike Morris’ immortal phrase).

The 2005 Energy Policy Act (often shortened to EPAct to distinguish it from the coal/electrical industry’s arch enemy, EPA) created an entirely new system to take control of high voltage transmission lines (referred to in the Act by the innocuous word “siting”) away from state regulatory agencies and state legislatures and place it in the hands of the federal Department of Energy (DoE) and the Federal Energy Regulatory Commission (FERC).  This effort grew directly out of the secret energy task force convened by Cheney in 2001 which was chaired by disgraced Enron CEO Kenny Lay.

The 2005 Act couldn’t impose the new federal control directly, because state control of these kinds of decisions is firmly in place and is supported by all legal precedents in federal courts.  As FERC and DoE found out in the Federal 4th Circuit with the PEC case, and DoE found out in the Ninth Circuit case throwing out DoE’s “congestion studies” mandated by the 2005 EPAct, federal courts continue to stand behind state control of power line decisions.

Cheney and FERC propaganda surrounding their power grab included a lot of hot air about “safeguards” and “accountability” that would protect rate payers from being “overcharged” in an enterprise that was attempting to pass on an estimated $100 billion price tag for a brave new world of transmission lines to US rate payers.  This new “regulatory” regime would not longer take place in state capitals around the US.  It would all happen in Washington, DC, in complicated new procedures designed to shut out US citizens.

But these new cases, like the high voltage transmission “formula rate cases” (What does that mean?), are too much even for the so-called consumer advocates who are being paid to “protect” consumers.  Here is what the Maryland Office of People’s Counsel told FERC when AEP/FE tried (unsuccessfully) to shut Keryn and Ali out of the FERC process:

Second and finally, consumer advocate offices (“CAOs”) (including MPC) and other load entities have long voiced concerns about the substitution of the formula rate process for actual rate cases. Because regulated utility companies generally file rate cases only once every 3 to 5 years, CAOs can target their limited staffing resources and budgets when regulated companies present a rate case. With formula rate annual updates being filed every year by each utility, however, CAOs simply do not have the in-house technical expertise, and do not have sufficient funds for retaining outside technical expertise, to review these financially complex formula rate update documents in anywhere near the depth that can be accomplished in occasional rate cases. While industrial and commercial load often do have in-house expertise, as for-profit businesses they also are constrained from spending money and reassigning staff to reviews of rates whose impact on any single industrial or commercial customer is deemed insufficient to justify the cost. [emphasis mine]

The last phrase in this quote tells the whole story — the purpose of removing real rate cases and creating arcane procedures is to make the cost of fighting these rate increases much more than the individual impact of each rate increase.  In other words, FERC and the federal government are creating a dripping water torture system that literally gives power companies uncontrolled license to nickel-and-dime rate payers with hundreds of billions of dollars in new rate increases.

So not only have two West Virginia housewives, with their completely volunteer effort, shamed state financed “consumer advocates” all across PJM Interconnection, they have now shamed FERC into conducting its own audit of FirstEnergy’s TrAIL transmission project.

And yet FERC continues its crusade to impose its federal transmission line regime through its new Order 1000.  Until FERC cleans up the mess it has already made of its existing transmission line policies, there is no way it can claim that it can police even more complex and deceptive Order 1000 rules and procedures, which themselves remove the “regulatory” process even further from citizens.

One thought on “Pulling Together Some Threads in the Wellinghoff/Cheney Mess

  1. I’d love to see an updated version of Fig. 7-3 in the Chapter 7 link. What do you want to bet that it has completely reversed itself – to show dropping demand and increasing transmission infrastructure projects?

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