(11/10/2012)
Ali Haverty of Chloe and Keryn Newman of Shepherdstown were the grass-roots advocates that have raised the issue with the Goliath PATH project (now defunct) for charging costs back to WV ratepayers.

By Pam Kasey, for the State Journal

Developers of the abandoned Potomac-Appalachian Transmission Highline want to more than double the amount they have charged to ratepayers, and the consumer advocates of six states, West Virginia included, have filed in protest.

"If you set out a big bowl of candy, people are going to reach their hands into it," said Byron Harris, director of the Consumer Advocate Division of the Public Service Commission of West Virginia. "That's what they're doing."

PATH, the $2.1 billion, 765-kilovolt line proposed in 2007 to stretch 275 miles from near Charleston northeast across Virginia and into Maryland, was to be developed in a partnership between American Electric Power and Allegheny Energy, since bought by FirstEnergy.

It was canceled in August by regional grid operator PJM Interconnection because, with the economic downturn and other changing conditions, it turned out the line was not needed.

But the Federal Energy Regulatory Commission created in 2008 an "abandonment incentive" for power line projects: Line developers whose projects are abandoned through no fault of their own can pass "prudently incurred" expenses on to ratepayers.

PATH already has passed $95 million in expenses to the more than 61 million ratepayers in PJM's territory of all or parts of 13 states and the District of Columbia.

Of that, $5.7 million is under legal challenge.

Now the PATH companies have filed with FERC to recover another $121.7 million: $67 million for siting and rights of way; $40 million for engineering and design; $8.7 million for filings in Maryland, Virginia and West Virginia; and $6 million for administrative functions.

Thirty parties have filed to intervene in that case, including, on Oct. 19, the "joint consumer advocates," or JCA, of the states of Delaware, Maryland, New Jersey, Pennsylvania, Virginia and West Virginia.

The JCA do not dispute that the abandonment of the line was outside the control of the PATH companies, their filing reads.

But they do question whether all of the expenses listed for recovery were prudently incurred.

PATH never received certificates of public convenience and necessity from the state commissions in the three states it was to be constructed in, they note. And its in-service date was pushed back repeatedly by PJM before it was finally canceled.

Given those facts, why did the PATH companies buy $30 million in property? the JCA ask in just one example of costs they question.

"I don't think that was a prudent move by the companies to go ahead and purchase property in advance of having approval to construct the power line," Harris said.

"And second," he said, "we should require them to sell the properties and then, if there's a net difference, we'll deal with that net difference. If you include it in their FERC rates now, then what incentive do they have to drive a bargain selling that property?"

The JCA filing notes that the PATH cost recovery request dwarfs other cost recovery filings for abandoned lines of similar scale and timeline, citing specific recovery proposals of $11 million and less.

The JCA are asking FERC to schedule an evidentiary hearing in which to openly review the real estate and other costs the PATH companies seek to recover from ratepayers.

In total, the $121.7 million would come to a fairly inconsequential $2 per ratepayer in PJM's territory.

"That's a conundrum we face all the time In our utility world," Harris said. "It is $2 per customer but, on the other hand, it is $121 million and that's a lot of money they shouldn't be allowed to recover costs that are imprudently incurred."

FERC may schedule an evidentiary hearing, may investigate on its own or may dismiss the complaint without investigation, Harris said.

See CALHOUN WOMAN'S COMPLAINT OVER MILLIONS CHARGED ELECTRIC RATEPAYERS REACHES FEDERAL COMMISSION - 'Huge Victory For Regular People,' Says Ali Haverty


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