Capon Valley Coalition

The following piece ran on page one of The Dominion Post on Sunday.

BY J. MILES LAYTON The Dominion Post

West Virginia has joined a lawsuit with another 14 states in challenging federal authority that may deprive states of the power to site power line projects.

There is a lawsuit pending before the U.S. 4th Circuit Court of Appeals to clarify what happens if a state denies approval of power line projects, according to court documents. Last year the Federal Energy Regulatory Commission issued a ruling that if a State Commission denied a transmission line project based upon the merits of the public case it was the same as withholding approval, therefore, the utility could then appeal to FERC under the Energy Policy Act to get approval of the line.

“If the state says ‘no’ based on the merits of the case, the utility is not entitled to a ‘do over’ at the federal level,” said Bob Lazaro, director of communication for the Piedmont Environmental Council, of Virginia, which filed its lawsuit in August.

Last month, the states filed a brief in support of the PEC’s position. The states are New York, Arizona, California, Connecticut, Delaware, Illinois, Iowa, Kentucky, New Hampshire, Ohio, Oregon, Pennsylvania, Rhode Island, West Virginia and Wyoming.

“We join a lot of amicus briefs filed by state attorney generals that seek to preserve states’ regulatory power in the face of business interests that want to develop uniform national standards, which have the effect of watering down state powers,” said Silas Taylor, senior deputy attorney general for West Virginia.

The state’s Public Service Commission will be monitoring the lawsuit, PSC officials said.

Allegheny Energy wants the West Virginia Public Service Commission to approve construction of a 500-kilovolt transmission line. The 240-mile project would start in Pennsylvania, pass through West Virginia and continue to northern Virginia.

Allegheny said the lawsuit has no effect on its application for the project under consideration by the PSC.

“The lawsuit doesn’t change the fact that we still intend to work with state regulators not only in West Virginia, but in Pennsylvania and Virginia,” said Allen Staggers, an Allegheny Energy spokesman.

In West Virginia, the line would run 114 miles through Monongalia, Preston, Tucker, Grant, Hardy and Hampshire counties. The Trans Allegheny Interstate Line Co. is managing the project. PJM is the regional power-grid operator.

In other news, the PSC will begin its evidentiary hearings Wednesday. Several groups and people filed opening statements Friday with the PSC.

Allegheny’s statement makes arguments in favor of the proposed project.

“All of our filings have led up to this point,” Staggers said. “The testimony that we intend to discuss will fully address the … Public Service Commission’s concerns and will also demonstrate the need for the line and that this line is the appropriate solution for the reliability problems that PJM has identified.”

The PSC staff’s opening statement recommends that the project not be approved by the commission.

“The company has failed to meet its state statutory requirements of evaluating the need for action, balanced with environmental impacts and economic benefits, at the expense, at least in part, of West Virginia ratepayers and landowners in accordance with the statutory provisions of the state code,” the statement said.

Though the PSC has yet to make a decision about the TrAIL project, the staff’s position sends a signal to the commission about why the line should not be approved, said John Balasko, vice president of the Halleck Community Association, which opposes the project.

“While I am not an attorney or claim to know how the PSC commissioners will interpret the applicable paragraphs of the state code, I do believe that we have the momentum going into the evidentiary hearings and that TrAILCo will have an uphill battle to overcome all the legal opposition that it will face,” he said. “Opening statements submitted to the commission on Friday were overwhelmingly against construction of the line.”

Staggers said, “It’s not uncommon for the staff and a utility to have differing opinions on issues.”

PSC Consumer Advocate Byron Harris filed a statement in support of the Grafton Alternate Route because “it minimizes the amount of greenfield right-of-way that must be acquired, and maximizes the reuse and paralleling of transmission line right-of-way.”

The alternative route would parallel Allegheny’s existing 500 kilovolt power lines from Fort Martin to Pruntytown and on to Mount Storm, a corridor that has been in use for about 40 years. The alternative route starts in Monongalia County, then crosses into Marion and Taylor counties.

Allegheny favors the current proposed route. Staggers said the preferred route is shorter, and affects fewer homes and properties.

The West Virginia Energy Users Group’s opening statement said the people who mainly benefit from the power line project are not from West Virginia. According to the group’s paperwork filed with the PSC “the WVEUG is an ad hoc association of energy-intensive industrial customers receiving electric service from Allegheny Power.”

The group includes Mylan Pharmaceuticals, DuPont, Mittal Steel, Novelis Corp., SKF Pulp Recycling US Inc., UCAR Carbon. Inc., U.S. Silica, Quad Graphics Inc., the Linde Group and Esroc Cement Co.

Staggers said West Virginia and other states in the region could see blackouts and brownouts as early as 2011 if the line is not built.

With the evidentiary stage of hearings on Allegheny Power’s TrAIL application set to start Wednesday (Jan. 9), the staff of the West Virginia Public Service Commission says the plan comes up short in five areas: Need, reliability, economic benefits, line routing and regulatory obligations.

The staff laid out their objections in an opening statement made public on Friday (Jan. 4).

Here are excerpts:

After reviewing the Company’s March 30, 2007 application and pre-filed direct testimony; the Company’s August 10,2007 supplemental materials and testimony; the prefiled
direct and rebuttal testimony of the Staffs own expert witnesses; as well as the Intervenors pre-filed direct and rebuttal testimony in response to the Company’s case in chief, the Staff recommends the filed certificate application by TrAILCo be denied. The Company has failed to meet its State statutory requirement of evaluating the need for action, balanced with environmental impacts and economic benefits, at the expense, at least in part, of West Virginia ratepayers and landowners in accordance with the statutory provisions of West Virginia Code f 24-2-1 la (d)( 1) and (2). The Staff finds that the application is deficient in these significant areas:

I. Need - 1) Lack of showing of the reasonableness of the PJMRTO load forecasts underlying the claimed need for TrAIL in 201 1. 2) Insufficient demonstration that TrAIL serves as a most economical or cost-effective means of resolving the outages that PJM reports are likely to occur in 201 1 in the absence of TrAIL. In particular including a failure (I) to evaluate the ability to reduce end-use power demands responsible for the overloads; (ii) to evaluate additions of new generation; and (iii) most significantly to evaluate upgrading existing transmission facilities.

II. Reliability - 1) Lack of showing of necessity of TrAIL for reliability purposes in West Virginia and PJMRTO in 201 1. 2) Insufficient analysis of benefits of upgrading existing facilities. 3) Insufficient analysis of impacts of major planned transmission facilities in West Virginia e.g., PATH. (This is the planned joint venture 765kV transmission line of Allegheny Energy, Inc. and American Electric Power, that is known as Potomac-Appalachian Transmission Highline, L.L.C., consisting of 290-miles of extra-high voltage line to be constructed primarily in West Virginia.)

III. Economic Benefits - 1) Failure to utilize the requirements of integrated resource planning in evaluating need for action. 2) Failure to demonstrate the reasonableness of the load forecasts on which the claimed need for TrAIL is based. 3) The magnitude of the economic benefits of TrAIL remain insufficiently documented by calculation and the corresponding results are not
reasonably supported. In particular the Staff witnesses take issue with the Company’ s calculation of the localized project expenditure amounts claimed to be made in the geographic area, the reasonableness of the ‘multipliers’ implicitly incorporated in the spillover analysis and the adverse property impacts calculated by TrAILCo.

IV. Line Routing - 1) TrAILCo’s filing does not demonstrate that the route referred to as ‘Preferred Route’ for which the Company is seeking approval presents an acceptable balance between reasonable power needs and reasonable environmental impacts for the affected population. In particular the Staff witness’ testimony will demonstrate that Route A has significantly less impacts. 2) TrAILCo has not committed to reasonable mitigation measures associated with line routing, including: purchase of properties within an adequate buffer zone (Staffs witness proposes 400 feet of centerline), a prohibition of aerial spraying in the maintenance of this line, adoption of ommission previously stated conditions in Appalachian Power Company case, Case No. 9003, Commission Order entered May 18, 1979.

V. Regulatory Compact Obligations - Under the TrAILCo proposal the regulatory compact obligations of a utility operating in the State of West Virginia have not been fulfilled, specifically: 1) TrAILCo has not committed to recognizing this Commission’s exclusive ratemaking authority over the recovery of transmission costs from retail customers in West Virginia. 2) TrAILCo has not committed to recognizing the Commission’s authority for jurisdictional allocation of transmission costs to West Virginia retail customers. 3) TrAILCo has not demonstrated the flow through benefits to West Virginia ratepayers in dollars for off system sales transactions.

From ABCMoney comes this Jan. 4 story about Allegheny Powers defense of TrAIL:

CHARLESTON, W.Va. (AP) - Responding to questions about the value and necessity of a proposed $1.3 billion power line that would cross several northern West Virginia counties, Allegheny Energy says it would stave off service disruptions and generate economic growth.

PJM Interconnection, the organization responsible for the transmission grid for a 13-state area, warns that without the 500-kilovolt, 240-mile transmission line between Washington County, Pa., and Loudoun County, Va., the stability of the grid and reliable flow of electricity within the region could not be guaranteed.

‘This could result in blackouts, voltage disruptions, and brownouts throughout the region, including West Virginia, as soon as 2011,’ the Greensburg, Pa.,-based regional energy supplier said in a news release issued Friday.

It also said the line would help to expand markets for West Virginia coal, add 700 temporary construction jobs and spur the potential for new generation projects, including clean-coal technologies.

The company was responding to issues raised by the West Virginia Public Service Commission and its consultants regarding the application by Allegheny subsidiary Trans-Allegheny Interstate Line Co. to build the line.

The PSC has scheduled a hearing Wednesday in Charleston concerning the request.

‘We are confident our testimony fully addresses the staff’s concerns and further supports the new line as the appropriate solution for looming reliability issues on the transmission network,’ David E. Flitman, president of Allegheny Power and TrAILCo, said in the news release. ‘We believe this new line is the right solution to keep the lights on for years to come.’

Company representatives plan to testify at Wednesday’s hearing to the need for the line, the selection of the proposed route and the economic benefits, among other issues.

Consultants hired by the state have urged the PSC to reject Allegheny’s proposal.

In documents filed with the PSC, they question whether the line would help West Virginia consumers and suggest the interstate line is not the most cost-effective option for easing potential power outages in the Eastern United States.

The Trans-Allegheny Interstate Line would pass through Monongalia, Preston, Tucker, Grant, Hardy and Hampshire counties and would be built by Allegheny and Dominion Energy of Richmond, Va.