Legalectric

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PATH, the Potomac Appalachian Transmission Highline, is in trouble… AGAIN…

The good news is that the West Virginia Public Service Commission staff is challenging need for the PATH line, which was already postponed by PJM.  And then there’s these pesky states questioning the need, like Maryland, which challenged the corporate organizational form, noting that it wasn’t a utility so “get outta here!”

Now it’s time for the West Virginia PSC staff to raise its eyebrows and deliver a solid Motion to Dismiss:

WVa PSC Staff’s Motion to Dismiss PATH Application

For the entire docket, go here:

West Virginia PSC Docket for PATH Transmission Line

And here’s the way it looks in the press:

$2B PATH project faces dismissal by W. Va. regulators

Posted: 6:39 pm Thu, December 16, 2010
By Associated Press

CHARLESTON, W.Va. — An application to build a $2 billion power line from West Virginia to Maryland should be dismissed because less expensive alternatives should be considered first, say staff reviewing the project for the West Virginia Public Service Commission.

Developers of the Potomac-Appalachian Transmission Highline, or PATH, say the 765-kilovolt line is needed to meet projected power demand along the East Coast by 2015.

But PSC staff said it was “ludicrous” to continue with the project while changes to the region’s existing power grid are being contemplated. Staff specifically mentioned Virginia-based Dominion’s recent notice to rebuild its 500-kilovolt line from Mt. Storm in West Virginia to the Doubs substation in Maryland. That upgrade and other improvements are estimated to cost $500 million to $600 million.

Another planned project is the Mid-Atlantic Power Pathway in Maryland. The line is to provide power to the Delmarva Peninsula.

Dominion says the Mt. Storm-Doubs line, which was built in 1966, must be rebuilt to maintain service. Developers gave the line’s current condition as a justification for the PATH project and the separate Trans-Allegheny Interstate Line.

“The rebuild will be a more stable line with 65 percent increased capacity,” PSC staff said it its Dec. 10 filing. The additional capacity “will push the need for the PATH line further out on the horizon,” perhaps to 2020, staff wrote.

PATH is a joint venture of Allegheny Energy Co. and American Electric Power Co. The proposed 275-mile line would run from AEP’s John Amos plant in West Virginia, across three counties in Northern Virginia, to a substation near Kemptown in Frederick County.

At least 250 groups, representing landowners, The Sierra Club, local county commissions and boards of education are opposed to PATH’s construction. Many of them have submitted letters supporting the latest staff filing.

The filing marks the second time PSC staff has recommended the application be dismissed. In October 2009, staff sought to dismiss the application because Maryland’s utility commission had dismissed an application in that state, saying it had been improperly filed.

Instead, the utilities agreed to extend the deadline for when the PSC must make a decision from May 16, 2011, to July 28, 2011.

PATH spokeswoman Jeri Matheny said Thursday the Dominion line “ties in very well” with the PATH project. Also, once PATH is built the Dominion line can be taken out of service for a rebuild, he said.

Matheny did not have an immediate comment on the staff’s recommendation to dismiss the application, saying a formal response would be filed with the PSC next week.

Earlier this month PJM Interconnection approved the Mt. Storm-Doubs line, but also reaffirmed its support of the PATH project. PJM manages the electrical grid in a 13-state region.

If the three-member PSC doesn’t dismiss the PATH application, staff is asking that it require developers to submit new testimony regarding the economic and environmental aspects of the project. Staff is also asking that AEP and Allegheny Energy again agree to extend the decision deadline.

The commission has not taken any action on the staff’s recommendation, PSC spokeswoman Susan Small said Thursday.

I got word a couple days ago that the MAPP transmission line, Mid-Atlantic Power Pathway (not Mid-Continent Area Power Pool) application has been filed in Maryland.

Here is the Maryland Public Service Commission page for this project.

The Sierra Club has been on the front lines fighting MAPP.  Here’s the SIERRA CLUB MAPP & PATH PAGE.

This is Travis Miller/Morningstar’s take on PEPCO and MAPP:

In our first meeting since the Conectiv sale to Calpine, management detailed its goal of 12% compound annual growth rate in total rate base at power delivery, with transmission rate base more than doubling and distribution rate base climbing $1.4 billion (37%) behind $5.2 billion of capital expenditures the next five years. Of that, its Mid-Atlantic Power Pathway project represents $1.2 billion. The project has been delayed but now appears set to go forward with an in-service date in 2015. Line capacity would be the equivalent of a large coal plant entering the region on an energy basis. Management estimated $150 million-$200 million of energy savings for Maryland customers as a result of the project, all of which is lost margin for area merchant generators.

Here’s PEPCO’s 3Q 2010 Financial Results.

Why isn’t this application reported anywhere?  Well, anywhere that google picks up?

Apparently Great River Energy and Xcel Energy are outlooking for money.  Gee, I wonder why?  I remember the snorts and hoots that broke out in the room way back during the CapX Certificate of Need hearing when they admitted to presenting their CapX 2020 financing dog & pony show to Lehman Brothers.

As for GRE, from Monday’s article in Finance & Commerce:

For example, GRE’s 2009 revenues fell $42.1 million to $787.8 million at the same time the utility was paying to develop a coal-fired plant in North Dakota and helping develop the CapX2020 system of transmission lines with 10 other state utilities.

Xcel just made an SEC filing that shows some creative efforts:

The primary purpose of the Plan is to provide our common and preferred shareholders as well as new investors with a convenient and economical method of purchasing our common stock.  Once enrolled in the Plan, you may reinvest cash dividends and, through optional cash payments, purchase additional shares of common stock from time to time or at regular intervals.  Although we expect the Plan to appeal to many shareholders, it is entirely optional.  A secondary purpose of the Plan is to enable us to raise additional capital by selling newly issued shares of our common stock under the Plan.

“Secondary purpose of the Plan…”  (click the quote for the full filing)  “Secondary purpose…”

Yup, uh-huh…   …WHAT… EVER!

Here’s the full article from Finance & Commerce about GRE’s capital raising efforts:

Great River Energy to sell $450M in mortgage bonds

Posted: 4:35 pm Mon, October 18, 2010

By Bob Geiger

Faced with declining power-usage revenues and rising utility-plant costs, Maple Grove-based Great River Energy (GRE) on Monday issued $450 million in taxable first mortgage bonds to meet costs and pay down debt.

The mortgage bonds are intended to fund capital spending for the utility’s power generation and transmission as well as paying off $325 million of GRE’s $2.4 billion outstanding debt, said Susan Brooks, GRE treasury director.

“It’s part of our long-range plan to meet member costs in the most cost-effective manner,” said Brooks, who expects bond pricing to be set today.

The mortgage bond sale is the second such transaction in 2010 by GRE, which in April announced it would sell $106 million in tax-exempt first mortgage bonds issued by McLean County, N.D.

It’s not unusual for utilities to sell mortgage bonds to help make ends meet at a low cost. Such financing makes sense because GRE is making additions to its system and paying for generation and transmission improvements in the wake of the recession.

For example, GRE’s 2009 revenues fell $42.1 million to $787.8 million at the same time the utility was paying to develop a coal-fired plant in North Dakota and helping develop the CapX2020 system of transmission lines with 10 other state utilities.

Fitch Ratings assigned an A- credit rating to the $450 million mortgage bond sale. Fitch noted that, “while GRE’s debt level remains a concern, (it) has been effective in managing the higher debt loads, even in what has been a difficult operating environment.”

Background information on GRE’s mortgage bond offering from Fitch stated that GRE is working to lessen its debt-load by paring its five-year capital spending plan by $350 million.

GRE serves more than 645,000 residential and small-commercial customers through 28 member cooperatives. The utility maintains 3,647 megawatts of generation capacity, of which 2,751 megawatts is owned by GRE.

Additional capacity is expected to come online in 2012 when Spiritwood Station, a coal-fired plant near Jamestown, N.D., begins operation.

The start-up of Spiritwood, which has a peaking capacity of 99 megawatts, was delayed until early 2012 earlier this year because plans for an ethanol plant to use steam from the nearby coal plant failed to materialize.

Therese LaCanne, GRE spokeswoman, said Spiritwood also will provide steam for a Cargill Malt plant in the industrial park.

Of GRE’s 2009 power generation, 78 percent was coal-fired, with the remaining 22 percent coming from 7 percent renewable energy, 1 percent natural gas and 14 percent other energy sources.

Combined with the planned firing up of Spiritwood and wind energy contracts, GRE projects it will have adequate capacity to meet its member needs beyond 2020.

The utility projects compounded average annual peak load growth of 1.4 percent from 2010 to 2020, according to Brooks.

Friday the National Park Service said NO to the Stillwater Bridge across the Wild & Scenic St. Croix River.

This is the same NPS, but a different region, that has the Susquehanna-Roseland transmission line crossing of the Wild & Scenic Delaware Water Gap under review.

This Stillwater Bridge mess has been a decades long struggle.

When I heard about this on Friday, I started looking for the primary documentation, and couldn’t even find a press release.  Then this a.m., a little birdie sent the press release…

NPS Stillwater Bridge Press Release 10-15-10

… but alas, he had no primary documentation either!  And so onward with the search, and still nothing, then, lo, another birdie dropped these into my inbox:

National Park Service – Transmittal Letter

National Park Service – Stillwater Bridge – Section 7a Review Final

Is there a trend?  We can only hope…

This week, PJM has “decided” that part of the humongous 500kV buildout isn’t necessary.  Well DUH, but…

PJM Press Release – PJM Board authorizes $18 billion in transmission upgrades

And so please explain why the headline isn’t “PJM Board cancels 500-kilovolt (kV) line connecting the Branchburg, Roseland and Hudson substations in northern New Jersey.”

From that PJM board meeting, there was a presentation that looks like a corporate-style WAKE UP call:

Tierney Presentation to the Board

Meanwhile, I’m trying to find the primary documentation, something with specifics about what was “approved” and what was “removed” and the basis for it… nada… nothing that I can find on the site.  Something else irritating is that when I’m looking up documents on the PJM site, I often just get a blank black page, particularly from the TEAC site.

One interesting presentation was about a Market Efficiency Analysis, in 2014 without Mid-Atlantic Power Pathway (MAPP), Potomac-Appalachian Transmission Highline (PATH), Branchburg-Roseland-Hudson and Susquehanna-Roseland, and from then on without the Branchburg, Roseland and Hudson line:

2010 Market Efficiency Analysis Results Updates – October 6, 2010

And when I try to get closer to the Northern NJ documentation… well, tell me if YOU can get anything:

Link to “Northern Option Conceptual Study”

“File is damaged and could not be repaired.”  So I called the number on the PJM press release to see… and was told they’ll call back.  Yes, we shall see…