Recently, the Federal Energy Regulatory Commission (FERC) issued a final order for the failed Potomac-Appalachian Transmission Highline company (PATH) to re-collect approximately $12 Million it had previously refunded to electric customers in the 13-state PJM Interconnection region. The refunds, made in 2019, had been ordered by FERC as a culmination of our successful 6-year battle with PATH at the Commission. But in today's politicized FERC, what one group of Commissioners does can later be undone by their successors with different political goals and opinions. Electric consumers have been tossed under the bus like pawns while the political battles in Washington, D.C. rage on. Our only hope for justice now lies at the Court, and we're going to get there.
This battle is about more than $12M. It's about whether a company assigned an electric transmission project ordered by one of FERC's numerous Regional Transmission Operators can charge to electric consumers its cost to influence the decisions of public officials to approve the siting and permitting of the transmission project. In 2017, FERC issued an opinion that its long-standing regulations prohibited the recovery of costs to influence the decisions of public officials to issue a permit to build new transmission. However, FERC recently flip-flopped and changed its mind by issuing a new opinion that allows a utility trying to build an RTO-ordered transmission project to charge in rates its cost of influencing decision-makers. If unchallenged, this new opinion will add billions of dollars in previously unrecoverable costs to our electric bills and allow the utility to spend whatever if feels necessary to influence state regulators to approve a new project. It also raises the question of legal deference to the actions of a federal administrative agency, like FERC. What really controls the agency actions? Is it the statutes and regulations as they are written? Or is it the fluctuating political opinions of appointed regulators? In the words of Supreme Court Justice Gorsuch, "... we are governed not by the shifting whims of politicians and bureaucrats, but by written laws whose meaning is fixed and ascertainable." (If you're into the legal stuff... Kisor v. Wilkie, 588 U.S. ___ (2019) (Gorsuch, J., concurring in judgement) (slip op., at 31). If you're curious enough to get into the nitty-gritty, read our Request for Rehearing on FERC Docket ER09-1256.
When FERC considers a Request for Rehearing, it performs a "risk assessment." Is there a risk that the losing party will appeal the case? Is there a risk that an appeal will be successful? Obviously that assessment went as awry as FERC's opinions. The belief that we can't or won't pursue justice, that we'll simply give up this quest, is like waving a red cape at a bull.
How did we get here? If you're still reading, settle in. We'll try to condense it as much as possible.
Back in 2008 we were just minding our own business, raising our families in our beloved West Virginia communities. And then PATH was announced as a 300-mile, extra high-voltage (765kV) electric transmission line passing through our neighborhoods on its way from coal-fired electric plants in south-central West Virginia to a new substation in suburban Maryland. PJM Interconnection ordered the project to be built as part of their "Project Mountaineer" initiative to transmit 5,000 MW of coal-fired electricity from the Ohio Valley to the east coast cities. We joined with thousands of other citizens in West Virginia, Virginia, and Maryland to organize grassroots opposition to the project.
An interstate electric transmission project must be approved by regulators in each state it passes though. Only states have authority to site and permit new transmission projects within their borders. FERC, on the other hand, has jurisdiction over interstate transmission rates. So, while we were battling the transmission project before state regulators, PATH was setting up its rate process at FERC.
As the battle raged on, Ali and Keryn met for the first time during a statewide strategy meeting. Somehow they got into a discussion about all the money PATH seemed to be spending around the state in order to convince people and regulators that their project was needed. We noticed that several astroturf advocacy groups had mysteriously sprung up, and that PATH was blanketing the airwaves with persuasive advertising. As the PATH cases began being called to public hearing in the individual states, we heard from a parade of business and union group advocates that began to show up at the hearings to make supportive comments. And we asked each other... who is paying for all this?
We satisfied our curiosity by participating in PATH's FERC rate filings, where any person who pays PATH's transmission rates may seek information about how the rates are developed. We found that the $6M cost of the advocacy and advertising had been recovered from electric consumers in all PJM states through PATH's FERC Formula Rate. We found the information we were seeking, but a funny thing happened on the way. We also discovered that FERC's accounting regulations seemed to prohibit the recovery of expenses and advertising for the purposes of influencing the decisions of public officials. FERC's rate process allowed for affected ratepayers to challenge the components of the rate. We took a huge leap of faith and filed a complaint. We had no idea what we were getting ourselves into. It's not like we could make a complaint and let FERC do the rest. No, we had to support our complaint through various settlement meetings, motions, further complaints, and eventually through an administrative hearing before a FERC Administrative Law Judge and several rounds of complicated briefing. We're not lawyers, but we put our energy to the task and we learned while doing. And we never gave up, no matter how daunting the next task in our journey. One step at a time.
Long before we ever got to hearing, PJM ended up canceling the PATH project in 2012. PJM got backed into a corner by the judge in the Virginia case and had to admit that PATH was no longer needed. For many, this ended their involvement with PATH. But for Ali and Keryn, the rate proceedings continued. We were not about to abandon our complaint at FERC. We vowed to see it through to the end.
In 2015, our case finally went to hearing, where we had the support of FERC's staff of experts and lawyers. We were so impressed with their integrity and knowledge, and we learned a lot. No, more than a lot... we learned A LOT! After the hearing concluded, the Administrative Law Judge issued a decision that fully supported our position and recommended that the Commissioners order PATH to refund the $6M in advocacy and advertising costs ratepayers had funded, plus interest. Eventually, the Commission unanimously issued Opinion No. 554 that upheld the judge's decision in its entirety and ordered the refunds. After a bunch of confused and incorrect refund reports from PATH, and a whole bunch of effort on the part of FERC staff, the Commission issued another compliance order correcting the refund amounts and ordering additional refunds recommended by staff. Victory at last!
But, wait. FERC has a nasty habit. An order of the Commission is not cleared for appeal in the court until rehearing has been requested and ruled upon. FERC's nasty habit has been to toll requests for rehearing indefinitely in order to prevent the losing party from proceeding to the court. And that's just what FERC did in this instance. It prevented PATH from appealing its order by tolling its rehearing indefinitely. PATH's 2017 request for rehearing sat on the back burner for three years while the refunds were completed. It should have been over and done. But then the administration changed, and sitting Commissioners began leaving FERC. New ones were appointed. When the political sea change was complete earlier this year, the new Commissioners dusted off the old request and used it to reverse their predecessors on all issues and order PATH to once again collect the costs of influencing public officials between 2008-11. Then it was our turn to request rehearing, and we did. Unsurprisingly, the Commission batted it aside and issued its final order on the matter. Our only avenue now leads to the Court.
We're going to get there. If we thought about the obstacle course in front of us by concentrating on the finish line, we might think it was going to be too hard to get there. But we've always focused solely on the next obstacle in line. We sail over the current obstacle before concentrating on the next. We know the finish line is out there!
We'd love to have you take this journey with us and hope you'll lend your support!
And, finally, huge thanks to "anonymous" who recently inspired us with some kind words and generous cash donation toward our appeal costs that showed up in the mail. Whoever you are, this one's for you! Thanks for believing in us!
If you have questions, or would just like to open a dialogue with us, please feel free to drop us a line!
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