Owners of the suspended Potomac-Appalachian Transmission Highline project are inappropriately charging ratepayers for promotional activities, say two of those ratepayers, and they want it stopped.
In complaints pending with the Federal Energy Regulatory Commission, Keryn Newman of Shepherdstown and Alison Haverty of Chloe detailed their allegations about PATH's 2009 and 2010 expenses.
"The biggest problem here is the promotional expenses that they are charging to the ratepayers. That's against the FERC rules," said Newman, a former accountant.
"The rules say promotional expenditures are not supposed to be taken from the ratepayers," she added. "They are presumed to be the responsibility of stockholders unless and until the company puts forth a showing that the expenses benefit ratepayers."
The Potomac-Appalachian Transmission Highline, or PATH, is a 275-mile long, 765-kilovolt transmission line that AEP and Allegheny Energy -- now FirstEnergy -- proposed to build from near Charleston northeast across 14 West Virginia counties and Virginia into Maryland.
Regional grid manager PJM Interconnection directed construction of the line in 2007 as its best transmission solution to projected line overloads.
But successive PJM analyses kept shifting the need for the line into the future with the recession and other developments.
The project was suspended in February 2011 and currently remains active at a minimal level until revived or canceled outright. During the suspension, the PATH owners are passing along to ratepayers in PJM's 13-state region costs that were incurred at the beginning of the project along with ongoing expenses.
How do ratepayers end up paying for transmission?
Transmission owners file annually with FERC, stating how much money they need for operations in the coming year.
Regional grid manager PJM Interconnection allocates those costs proportionately to utilities across its region.
In West Virginia, the Public Service Commission sets rates for electricity. But those charges for transmission pass through to the monthly bill, unreviewed by the commission.
The transmission owners' costs are presumed "prudently incurred" by FERC, according to Newman. But she and Haverty said their review of PATH's filings shows expenses for advertising, lobbying and grassroots "front group" operations directed at local and state decision makers.
They say, for example, that PATH lobbyists enlisted the Maryland Chamber of Commerce in influencing the Maryland Public Service Commission's consideration of PATH's application. The chamber received a $20,000 platinum sponsorship from PATH that was charged to ratepayers' electric bills.
Newman describes, in another example, PATH commercials that she said are much more like propaganda than like public education.
In total, the costs Newman and Haverty label as inappropriate total $3.3 million in 2009 and $2.5 million in 2010.
That comes out to around a dime for each of the customers in PJM's region, Newman said, and she and Haverty want it paid back.
The PATH companies' response to the challenges argues that the expenses challenged by Newman and Haverty are in fact appropriate and prudently incurred.
"The challenge's characterization of the expenses incurred by PATH as expenses incurred to lobby public opinion in favor of the PATH project is incorrect and fails to grasp the distinction between efforts to influence decision makers during the process of obtaining approval to construct a transmission project," the Jan. 12 response reads, "and broad-based activities and distribution of information intended to educate government officials, business and community leaders, and the public at large about the core responsibilities of the utility in constructing such infrastructure."
Newman and Haverty are waiting to find out whether FERC will take up their cases or dismiss them.
Documents may be found in the FERC eLibrary under docket numbers ER08-386 and ER12-269.
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