(01/18/2012)
Did electric ratepayers in West Virginia and a dozen other states give a blank check to promote a giant electric project that has now been discontinued?

Federal officials have ordered a complete audit of all expenditures between 2006 and 2012 made by the Trans-Allegheny Interstate Line Company, a wholly owned subsidiary of FirstEnergy, on the company's recently constructed TrAIL line in northern and eastern West Virginia.

TrAIL is a 500 kilovolt transmission line from West Virginia to the east coast which was proposed originally as a sister project to the discontinued PATH line.

The TrAIL project was approved by the West Virginia PSC and the Virginia SCC in 2008 and became operational in May 2011.

The Division of Audits in the Office of Enforcement of the Federal Energy Regulatory Commission (FERC) is commencing an audit that will evaluate whether TrAILCo has "complied with the conditions and requirements upon which the commission approved its incentive rate treatments."

The audit follows a complaint filed by two West Virginia women, including Ali Haverty of Chloe, Calhoun County, that the companies improperly charged up to $6 million in promotional expenditures back to the ratepayers in West Virginia and 12 other states and the District of Columbia for the PATH line, which is owned by FirstEnergy in partnership with American Electric Power.

The PATH project has been dropped by three state regulators, including the West Virginia PSC, and the regional transmission manager PJM Interconnection.

While the new FERC audit of the TrAIL project is separate from the recent challenges to the PATH charges, both cases are directly related to FirstEnergy's and AEP's attempts to pass on illegal costs for their new power line projects to rate payers in violation of federal law and FERC regulations.

In their challenges filed at FERC in the PATH case, Haverty and Newman have urged FERC to conduct a similar audit of the charges that AEP and FirstEnergy are charging rate payers for the PATH line.

The issues identified by Haverty and Newman in the PATH case will likely be a significant part of FERC's findings in their audit of the TrAIL project.

"A review of 2010 project costs reveals a propaganda pattern, using funds inappropriately recovered from ratepayers, to influence state regulators, as well as a large number of simple accounting errors," said Haverty.

"We contend that the commission never intended to hand PATH a blank check signed by electric ratepayers in 13 states to use as they see fit to promote their for-profit endeavor," said Keryn Newman, a Shepherdstown resident, who has filed the complaint with Haverty.

Bill Howley of The Power Line blog has been covering PATH for the last three years.

"The fact that ratepayers in PJM Interconnection are being charged for a dead PATH project is bad enough. The PATH companies should not be allowed to get away with sloppy accounting and dishonest representation of their promotional costs as 'public education," Howley said.

See related story FERC COMPLAINT ALLEGES PATH TRANSMISSION PROJECT IMPROPERLY RECOVERED $2.5M - Calhoun Woman Leading Fight


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