Final AEP/FE Rate Payer Shakedown Gets Off to a Bad Start for PATH at FERC

Back in September, AEP/FE filed a request for FERC to grant them $121 million of our money to cover their abandonment costs for the failed PATH transmission project.  The gist of their plea was “just give us our $121 million before anyone realizes its missing, you don’t need to hold a hearing on this.”  Well, it didn’t turn out that way.

Today, FERC issued its first procedural order setting the case for hearing, making it clear that AEP/FE will have to fight for every penny of the $121 million that they are trying to get from us.  There will be a hearing, and AEP/FE will have to prove that every one of the costs they want from us was “prudently incurred.” This should be fun.

And, despite the fact that a lot of big shot power companies and consumer advocates and PSCs intervened in this case, the big hero was our own Keryn Newman.  Keryn knows more about cost recovery at FERC than most lawyers.  In her petition to intervene, she protested every category of cost in a thorough and detailed analysis.  This meant that FERC had to include all of these contested costs in the upcoming hearing process.  Read the FERC order at the link above.  You will also see some other familiar West Virginians noted in the recitation of the history of the case so far.

Here are the key points of this FERC order:

  • PATH’s costs are contested and there are facts to be determined, so there will be a full blown case
  • PATH is not entitled to a jacked up return on equity for being in a regional transmission organization, because PATH’s line will never be built and will never be taken into PJM’s system, so there is no need to reward PATH for being part of PJM.
  • FERC has ruled that the abandonment of the PATH project was beyond PATH’s control, although some intervenors, including this blogger, were prepared to present evidence that PATH did have control, largely because there was clear collusion between PJM, AEP and Allegheny (later FirstEnergy) starting with the Coal Love Fest right up to the collapse of the state PSC cases.
  • FERC did not accept AEP/FE’s claim that Keryn’s and Ali’s Formal Challenge cases should be combined with the abandonment case.

Read the FERC order at this link.  It provides a good summary of the case and gives you an idea of the utilities, citizens and state agencies involved in the case.

4 thoughts on “Final AEP/FE Rate Payer Shakedown Gets Off to a Bad Start for PATH at FERC

  1. Ya know what I thought was huge? The mention of Project Mountaineer and the coal love fest right up there in the front in the order. Acknowledging you have a problem is the first step toward recovery… 🙂

    • Keryn,

      Thanks for pointing this out. I skipped over the history sections. But there it is, right there in paragraph 4 at the very beginning:

      4. The PATH Project concept was originally introduced by PJM in May 2005 at a Commission technical conference as Project Mountaineer- a major east-to-west transmission corridor.

      It is interesting that FERC starts here and not with PJM identifying a need for new high voltage transmission lines. No wonder FERC didn’t want to deal with the issue of whether or not the abandonment of PATH was within AEP/FE’s control. Even FERC’s lawyers seem to think PATH started with the Love Fest and not with reliability or congestion problems. But the lawyers who drafted this order got it wrong. Project Mountaineer was about a west to east transmission corridor, not the other way around.

      Here is the link to the Love Fest transcript. Take a look for yourself and see whether you think FERC wasn’t neck deep in the conspiracy to create PATH and TrAIL as business ventures to save AEP’s and Allegheny’s obsolete coal plants, or whether these two lines were real solutions to problems that PJM had already identified with their transmission system.

  2. I saw that last night when I read through, and was very pleased they included it. I remember all those meetings we had in JeffCo, Keryn, and how people didn’t believe at first that PATH was something that had been cooked up years before – and how all the PATH guys insisted there was no master plan to move electricity to New Jersey. Very nice to see FERC acknowledge that we were right!!

  3. That order if full of minor little errors. In addition to the east-west thing, there are several instances where the Commission confuses Ali and I. Apparently the two of us are now one and the same, the dreaded two-headed hydra known as Kerison or Aliryn. Their lists of intervenors/protestors is a little whack as well. But they are just minor so it’s kind of amusing. I’ll always find humor in minor annoyances. 🙂

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