Capon Valley Coalition

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.

The West Virginia Public Service Commission has scheduled a series of “evidentiary” hearings on Allegheny Power’s TrAIL power line in Charleston next month.

The hearings will take place in the Public Service Commission Building at 201 Brooks Street on Jan. 9-12 and Jan. 14-19. If more time is needed, they will continue Feb. 12-15.

These hearings are open to the public, but are not for taking public comment.

You can keep track of the Allegheny Power case (#07-0508-E-CN) via the PSC Web site, including this running log of all documents filed in the case. All documents must be made public.

Among the documents available are complete transcripts of the public hearing held Oct. 30 in Moorefield:

• Transcript No. 1 of the afternoon session runs 53 pages.
• Transcript No. 2 of the evening session runs 76 pages.

West Virginia Gov. Joe Manchin sent out the following article to constituents on Friday.

It’s a reasonable piece with reasoned arguments: In a nutshell, he says we need more electricity and we need coal plants to provide it but we also need to clean them up. Reasonable people can agree with that.

Where Manchin is totally off the map — and maybe that’s the problem, maybe he can’t read a map — is that he simply will not stand up and tell the East Coast states to build the coal-powered electric plants in their states, in their communities, in their neighborhoods. They need the electricity; they should put the plants right there!

We will be happy to sell them all the West Virginia coal they need to produce the power that they use.

We just don’t want our neighborhoods and mountains and valleys trashed up to provide profits for electric utilities headquartered in other states and selling coal — again — to other states.

It’s not that hard a concept, Joe. We assume you would not like one of your neighbors running a bunch of those bright orange electric cords through your living room, dining room and kitchen and out the back door to provide power to a neighbor on the other side of your house. Right? It’s that simple.

We don’t benefit. And right now, Allegheny Power wants us to pay higher electric rates to run the bright orange cable through our bedroom. Can you see why we are more than a little mad at your weasel words? Governors in other states get it. Why don’t you?

Go sell all the West Virginia coal you can, Governor. But keep power lines that do not benefit West Virginians out of our West Virginia communities.

Here’s the Manchin piece:

Dec. 7, 2007

Greening Coal for a Bright America
An Opinion Article by Gov. Joe Manchin, Joined by Kentucky Gov.-elect Steve Beshear

Contact: Lara Ramsburg, 304-558-2000

As the governor of the second-largest coal producing state in our nation, and as chair of the regional interstate compact Southern States Energy Board (SSEB), I would like to offer some insight into the importance of greening of coal for a bright future in America.

Today, we hear the terms energy security and climate change spoken almost in the same breath. Those two key issues are running up against a third, less-spoken concern that is surely as certain to require our attention in the near future. Simply put, we are faced with shortages of electrical generating capacity and we need to act to maintain economic prosperity and to grow the economy. One of the critical responses to this national situation is for those with a stake in the solutions — Congress, governors, legislators, regulators, the utility industry — to start a serious dialogue to develop solutions to ensure an ongoing, reasonably priced, green and reliable energy supply.

The North American Electric Reliability Corporation (NERC) projects electrical system reserve margins will continue to shrink, indicating projected increases in peak demands continue to exceed projected committed resources beyond the next few years. To meet these shortfalls, the country needs a portfolio of electrical generating options that include new, cleaner, green coal-fueled generators as well as gas-fired generation; renewable energy resources including wind, solar and biomass; and a strong emphasis on energy efficiency in buildings.

As we plan for a bright future fueled by our own indigenous resources, the mission of the SSEB comes to mind: “Through innovations in energy and environmental policies, programs and technologies, the Board enhances economic development and the quality of life in the South.”

As we consider how we provide an adequate energy supply that is environmentally acceptable, we must recognize the critical role of technology in this three-fold discussion. Because of its wide availability, versatility and reasonable cost, clean coal technologies will be of strategic importance in the future.

How can we utilize these plentiful indigenous coal resources in a green way to meet the future needs of our citizens? Coal currently is the fuel source for almost half of the electricity generated in the United States. Carl Bauer, director of the Department of Energy’s National Energy Technology Laboratory, testified at a recent congressional hearing that the United States has some 250 years of coal available given current technology, prices, and coal consumption. What actions are necessary to lead us toward a sustainable future, environmentally and economically, using these coal resources?

While coal is expected to remain a major fuel for electricity generation for the foreseeable future, recent decisions by state public service commissions and utilities show a clear movement away from the resource due, primarily, to CO2 emissions. Fifteen coal plants have been canceled in Florida and 10 in Texas the past two years.

Regulators require some utilities planning to build a coal plant to have a carbon plan projecting the lifetime emissions of the plant. The most promising opportunity to reduce CO2 emissions is carbon capture and sequestration (CCS), which traps CO2 and stores it underground, uses it for enhanced oil and coal bed methane recovery, or feeds CO2 to algae for biofuels production.

Potential storage solutions include depleted oil and gas reservoirs, saline-filled formations or unmineable coal seams. The U.S. Department of Energy (DOE) has formed seven regional partnerships that are testing technologies for large scale CCS.

There are signs that advanced, clean coal technologies are making an impact on the nation’s electrical capacity. Indiana utility regulators recently approved Duke Energy’s proposed 630-megawatt integrated gasification combined cycle coal-fired power plant, equipped with advanced pollution controls. Duke Energy Indiana President Jim Stanley suggested that finding ways to burn plentiful, low-cost Midwest coal cleanly is fundamental to meeting customers’ demand for power at “one of the cleanest, coal-fired power plants in the world when it’s completed.” Duke will complete an engineering and design study to potentially capture up to 18 percent of the plant’s CO2 emissions and will design the plant so that CCS equipment could be added in the future.

The DOE has a major research and development project under way, called FutureGen, which uses technology developments from a number of core R&D programs in providing near-zero atmospheric emissions from the clean power plant. This plant will be the cleanest fossil-fuel-fired power plant in the world. The project will use coal gasification technology integrated with combined cycle electricity generation and capture and sequestration of carbon dioxide.

DOE will announce its final site selection for the FutureGen project in December, following a November release of the final environmental impact statement for all four candidate sites (Mattoon and Tuscola, Illinois and Odessa and Jewett, Texas). A report by the Electric Power Research Institute earlier this year recognizes the potential for FutureGen to fundamentally change our nation’s electricity infrastructure. The report acknowledges the importance of testing and proving the concepts so the combined technology can be made commercially cost-effective. FutureGen has the potential to be a major solution in the quest for green coal technologies.

The real key to a successful future in the energy sector is sustainability. We need to keep learning how to optimize the use of our resources, become more energy efficient, and minimize waste. Sustainability is achieved when we incorporate a balance of environmental, economic and energy security goals to maintain a reliable and efficient power sector in our economy. We can implement demand reduction programs such as switching to compact fluorescent bulbs, installing high-efficiency heating and cooling systems, set back thermostats, insulation and storm doors. We can also provide incentives and promote renewable energy and energy efficiency, especially in our building designs. But we simply must invest in improving thermal efficiency at existing coal plants, begin construction of a new generation of clean, supercritical coal and integrated gasification combined cycle plants, and implement other advanced designs.

Not since the 1970s have we seen so much discussion about the role of energy and how it is produced and used. Concerns about global warming and greenhouse gases, rising fossil energy costs, nuclear waste, summer blackouts and instability in energy rich regions of the world have led to intense debate in the United States over our energy future.

Leadership and dialogue throughout the industry and at the national and state level is needed now more than ever. DOE Undersecretary of Energy Bud Albright recently described the “energy chaos” currently plaguing our country relative to the future role of coal. He said, “On one hand, the coal industry hears congressional leaders say they must reduce carbon dioxide emissions from coal-fired power plants, without specific plans. On the other hand, state regulators are turning down proposals for more efficient coal plants that produce less CO2 emissions.”

This is a conundrum that must change if electric utilities are to preserve their reserve margins and if we are to continue our economic prosperity. Technological solutions leading to the greening of the coal industry hold the key to that promise for a bright future for America.

This opinion article was jointly signed by Kentucky Gov.-elect Steve Beshear.