Governor Manchin has talked a lot about how his power line tax would have been paid mostly by other rate payers in PJM Interconnection. The WV PSC has assured WV rate payers that because the costs of PATH and TrAIL (plus their FERC approved profit rates) will be covered by all PJM rate payers, their costs to WV rate payers won’t amount to much.
These are only half truths. The FERC incentive rate plan, cooked up by the Cheney secret energy task force in 2001 and put into law by Congress in 2005, means that all FERC-approved projects in other states in PJM will also be paid for by WV rate payers. Unless state PSCs protest vigorously to this pass through of costs, and some are, these charges will appear on WV electric bills with almost no warning. Don’t expect the WV PSC or the Consumer Advocate to protest.
Here is a list of projects you will probably be paying for soon:
- October 31, 2008 – The Commission approved a series of rate incentives for Pepco Holdings Inc.’s proposed 230-mile Mid-Atlantic Power Pathway (MAPP) project, a major backbone transmission line from Virginia to New Jersey that would improve reliability in the PJM Interconnection region. Specifically, the Commission authorized for the project a 1.5 percent return on equity (ROE) adder to the company’s existing 11.3 percent ROE, which will result in an overall ROE of 12.8 percent. The Commission also authorized full recovery of construction work in progress and prudently incurred abandoned plant costs. The MAPP project is a 500 kilovolt, 230-mile transmission line from Virginia to Southern New Jersey.
- October 10, 2008 – The Commission granted Duquesne Light Company’s requests for a return on equity incentive adder of 150-basis points and recovery of 100 percent of its costs for construction work in progress for the Brady Project. The project is a PJM Regional Transmission Expansion Plan project which includes high-voltage transmission facilities in the Pittsburgh, Pennsylvania Area.
- August 29, 2008 – The Commission granted Virginia Electric Power Company’s (VEPCO) request for transmission incentives in the form of 125 and 150 basis point adders to its return on equity for 11 transmission projects in Virginia and parts of the PJM Interconnection (PJM). Between 2008 and 2012, VEPCO expects to triple its capital investment to $2.1 billion. Four of the 11 projects are part of the PJM’s Regional Transmission Expansion Plan.
- August 22, 2008 – The Commission granted Pepco Holdings, Inc., effective June 1, 2008, their request for a 150-basis point return on equity (ROE) adder for the projects because the projects were approved baseline projects by the PJM Regional Transmission Expansion Plan, which means that PJM made a determination that the projects are regional in nature and mitigate congestion or ensure PJM’s ability to continue to serve load reliably. Pepco Holdings, Inc. will upgrade existing substation equipment, add new substations, rebuild and reconduct existing lines, and add discrete transmission lines. Pepco Holdings, Inc. also sufficiently demonstrated that the projects are not routine and that, individually and combined, they address significant reliability issues.
- April 22, 2008 – The Commission granted certain transmission rate incentives for PPL Electric Utilities Corporation and Public Service Electric and Gas Company project, designated the Susquehanna-Roseland Line, which will span 130 miles across Pennsylvania to northern New Jersey. Specifically, the Commission approved a 1.25 percentage adder for the utility’s base return on equity, a reduction from the 1.50 percent that was requested; a one-half percent adder to each utility’s base return on equity for continued membership in PJM Interconnection; a 100 percent recovery of prudently incurred expenses for construction-work-in-progress to be included in rate base; abandonment incentives; and authority to transfer the incentives to as-yet unidentified affiliates.
We haven’t heard much from the Governor or the WV PSC about these projects and their effect on your electric rates. Maybe we should start asking them to tell the whole truth from now on.