Capon Valley Coalition

The West Virginia Public Service Commission is posting on its Web site transcripts of its evidentiary hearings into Allegheny Power’s plan to build the TrAIL power line through the Capon Valley.

This link will take you to the 283-page transcript for Day 1, Jan. 9.

Bri West of the Piedmont Environmental Council, one of the few people with the time, energy or know-how to read through every page of every Allegheny Power document filed in the TrAIL power line case, finds a gem in the TrAIL documentation.

[The Consumer Advocate Division of the WV Public Service Commission] cut a deal that will raise the rates of most of the people in West Virginia in order to benefit a small crowd of landowners. But in fact, those landowners don’t even really get “free electricity” because in exchange they will receive reduced compensation value for their properties (see details below).

The Consumer Advocate should be caring for all of the people in the state – Not trying to appease TrAILCo. …

17. Component of Fair Market Value. The Parties agree, and each Agreement will
specify, that TrAILCo’s obligation to pay the Transmission Credit and the aggregate amount of
such payment while the Facilities are emplaced on the Subject Property to which the
Transmission Credit relates, are a component of the agreed upon fair market value paid by
TrAILCo for the Legal Interest that TrAILCo is required to obtain in the Subject Property in
order to construct and operate such Facilities. The person or entity owning each parcel of
Subject Property shall have the option of rejecting TrAILCo’s offer of the Transmission Credit
as a component of fair market value and elect to receive the agreed upon fair market value paid
in cash upon acquisition of the Legal Interest in the Subject Property by TrAILCo. The Parties
further agree and recommend that TrAILCo’s payment of the Transmission Credit is and should
be considered as a component of TrAILCo’s operation and maintenance costs and recovered
through TrAILCo’s transmission revenue requirement as in effect from time to time in a tariff on file with the Federal Energy Regulatory Commission or its successor (“FERC”), and the CAD will support any TrAILCo effort to seek the recovery of its payment of the Transmission Credit
in TrAILCo ’ s transmission revenue requirement.

This email circulated through the Capon Valley community yesterday, and the author, Jim Kocton, agreed to let us print it. Well worth reading.

The Consumer Advocate Division (CAD) agreement with TrAILCo has the effect of providing momentum for TrAILCo’s case with very little down-side for TrAILCo. It seems inevitable that, even if a transmission line certificate were granted, that the restrictions on right-of-way clearing and herbicide use would be made conditions of the Certificate. Hence, all that was really gained was free electricity for landowners who agree to a right-of-way.

This provides an additional incentive for people to settle with TrAILCo.
But TrAILCo also gets the support of CAD who agreed to support TrAILCo’s claim (before FERC) that these costs were operating expenses for the line, and therefore subject to rate recovery.

This means that all other ratepayers will be gouged even more for this line.

Not only will we have to pay for the construction and operating costs, now we pay the electric bills for those landowners. What is worse, if these costs are considered eligible for rate recovery, then TrAILCo also gets their “incentivized rate of return” which means that we pay the landowners’ electric bills AND we also pay TrAILCO’s additional 14 % on top. TrAILCo stockholders get even richer with this deal and ratepayers get gouged even
more.

How is this “Consumer” advocacy?
Jim Kotcon

If you caught the previous entry about the AP story, you know that the Consumer Advocate Division of the West Virginia Public Service Commission has reached an agreement with Allegheny Power over TrAIL and will no longer oppose the TrAIL power line.

The 21-page agreement is available on the WV PSC Web site.

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.