AEP/FE Started PATH Construction in Violation of WV Law

Keryn posted a story on Tuesday about an interesting tidbit she learned on the conference call with AEP/FE concerning the costs for PATH that the companies are planning to put on PJM rate payers in 2013.  Here is Keryn’s account:

After years of telling people that the depreciation of PATH-Allegheny’s Plant in Service was related to PATH’s ROW office that they opened in Martinsburg before the project died, today the truth finally came out during PATH’s 2013 PTRR Open Meeting.

After Maryland Office of People’s Counsel’s Gary Alexander verified with PATH that they never “put a shovel in the ground” PATH turned right around and told me that the depreciation was linked to amounts PATH spent to clear land at the old chicken farm they bought as a site for their mid-point Welton Springs substation.  I guess it technically wasn’t “a shovel”… more like a backhoe or a bulldozer.

PATH never had a permit to do any construction (or destruction) of any kind in West Virginia, so what were they doing clearing land and recording the expense in their construction accounts that they now want to recover from 60 million PJM ratepayers?

Read that again carefully.  Yes, AEP/FE began construction of the PATH project by clearing land and doing initial grading for the Welton Spring substation, an integral part of the PATH project.

Here is Chapter 24 Section 2 paragraph 11A of the WV Code:

§24-2-11a. Requirement for certificate of public convenience and necessity before beginning construction of high voltage transmission line; contents of application; notice; hearing; criteria for granting or denying certificate; regulations.
(a) No public utility, person or corporation may begin construction [emphasis added] of a high voltage transmission line of two hundred thousand volts or over, which line is not an ordinary extension of an existing system in the usual course of business as defined by the Public Service Commission, unless and until it or he or she has obtained from the Public Service Commission a certificate of public convenience and necessity approving the construction and proposed location of the transmission line.

Well, there it is.  On Tuesday, AEP/FE’s attorneys admitted that the companies violated WV law by beginning construction of a high voltage transmission line without first securing a certificate of public convenience and necessity from the WV PSC.  It can’t get any clearer than that.

Let’s see if the WV PSC will open an investigation into this violation of WV law by these two Ohio based companies.

6 thoughts on “AEP/FE Started PATH Construction in Violation of WV Law

  1. According to our friend Randy, “PATH can do whatever it wants with property it owns.”

    I think there’s still one bottle of his special brew left in the fridge…

  2. Is a mid-point sub-station, the only apparent purpose of which is to serve the segments of a “transmission line” connected to it, reasonably considered part of a “transmission line”? I believe that it is. But I can see the PATH lawyers arguing it is not, and that a “transmission line” consists only of towers and conductor wires.

    • Well, as far as the PSC is concerned, the issue is moot, because the PATH case is over. The fact that the Welton Spring substation is in the middle of the PATH line makes a pretty good case that it is integral to the line. It is not at an intersection point with TrAIL, because they were going to build a short spur line over to the substation from TrAIL.

      This issue was also a bone of contention in MD concerning the so-called “Kemptown” substation. The MD PSC and the Frederick County Commission would have gone to the MD state supreme court over it. The county commission claimed that the substation was an industrial facility and was subject to county zoning ordinances. The MD PSC asserted sole authority over the substation, because it claimed the substation WAS an integral part of PATH. Because the PSC had sole authority to site transmission lines, the PSC, not the county commission, had final say over the substation. The Frederick County Commission made it very clear in their filings at the PSC that their zoning authority came from the MD constitution and thus pre-empted any powers given to the PSC by statute. This was going to be one nasty fight, but the PJM cancellation stopped everything. I think the MD PSC was wrong for lots of reasons, the best being that the “Kemptown” substation was built to handle multiple connections to HV transmission lines, not just PATH. It was clearly designed to be much more than a part of PATH.

  3. One argument we made from the beginning was that PATH was actually part of a much larger scheme to ship “coal-by-wire” to New Jersey – as shown in Project Mountaineer in 2005, and evidenced by the extra bays in the Kemptown substation design intended to accommodate new lines coming out and heading northeast. And PATH alluded to this in its original application at FERC.

    But the fragmented, state-by-state regulatory system makes it very difficult for citizens to see what’s going on. In this case, for instance, PATH was able to lie by telling the truth – AEP and Allegeny/First Energy could honestly say they had no plans for additional lines. That’s because the continuation to NJ would have been undertaken by other power companies, such as BG&E and PSE&G – the lines would be in their service territory.

    It wasn’t until fairly late in the game that this “hypothetical” line showed up in PJM’s RTEP, in the summer of 2010. We’d been watching for it, of course, but when it was listed we made sure that the Frederick County (Md.) Board of Zoning Appeals knew of it, to counteract some of PATH’s claims at that marathon hearing.

    • In my reply to Frank above, I should have pointed out that how a substation is designated, part of a transmission line or not, has much more to do with the political goals of a PSC in a particular situation than what is actually in state law. In the Kemptown substation case, the MD PSC wanted to assert its power, so it said the substation was part of the transmission project, when Kemptown was clearly designed, as you point out, as a junction for many transmission lines beyond PATH.

      The Welton Spring substation was a very different kind of substation. The important point with this one is that AEP/FE certainly consider it to be part of the PATH project, because they have included all the costs of the Welton Spring substation in their cost recovery cases at FERC. Their FERC filings clearly indicate that they believe that the substation is part of the transmission project. And WV law says you cannot begin construction of a project like PATH without of certificate of need. Period. End of story. We can’t argue about what the WV PSC would have done, because it doesn’t matter anymore. That case is closed.

      BTW, here is a link to my 2009 post about the fight between the MD PSC and the Frederick County Commission. The County Commission’s filing at the PSC is well worth the read.

  4. It really doesn’t matter what the WV-PSC thinks at this point. The fact is that the cost of clearing the substation property was included in PATH’s “construction work in progress” account at FERC, therefore PATH classified the clearing as a necessary part of constructing PATH. The only problem was… they didn’t have a permit to construct it in WV. But they jumped the gun and decided to go ahead and do the clearing BEFORE they had a permit. That wasn’t necessary, was it? Would land PATH owned still be in their hands after a CPCN was issued? Sure. Why not clear it then? Because PATH was one arrogant pitchforker who thought it wouldn’t matter if they got started before they had a permit… because in their mind a permit was such a sure thing.

    Yeah, ut-oh, PATH. Jumped the gun on a whole lot of things that probably wouldn’t have mattered except the project got cancelled. Ooops. Buy in haste, repent at leisure 😉

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