Monday, December 31, 2012

FERC's Fast-n-Furious Freak Show

I just started reading who FERC truly is and what goes on there.  Keryn Newman at StopPATHWV and her previous postings were a big big help.  She recently wrote another Blog about FERC’s Order No. 1000 and nailed it.  It’s refreshing to see someone isn’t afraid to call it like it is.   Take a minute and go there.  It is one of the best commentaries I have read in a while.  Besides FERC and Order No. 1000, Keryn has taught me not to take this industry too seriously.  She taught me to look at it in the context of a circus, comedy or the soap opera that it is and not so much as a battle.  (You too can learn to read FERC petitions like it is a script to some lame episode of the show DALLAS or maybe make comparisons to Madagascar 3’s AFRO-CRICUS!)  Yes, the industry has a distaste for recognizing the ratepayers, consumers, and land owners.  It is a bit offensive but this industry can be one big circus. 

The way the industry approaches Mother FERC is fascinating.  Trade organizations serve such a wide base from the traditional Exelon and Ameren to these Nick-the-New Guy wannabes in the transmission circus.  There are renewable, coal, natural gas, nuclear, and hydro energies.   OPSI, I forgot solar!  Can’t forget solar.   These trade organizations and their publications look to be so afraid to write anything negative or report what is actually going on because it will offend someone in this politically charged industry.  Take the Order No. 1000 as an example.  FERC is clearly playing favorites to the red-headed step child of the industry with it.  The only reason FERC finds Renewable Energy so attractive now is because renewables through Order No 1000 is a means for FERC to take control from the states.  I’m no expert on the industry, but it’s pretty darn obvious and absurd to watch.  Consequently you get a company that is very likely the next Enron being treated like it’s FERC’s golden child because the company is willing to be a tool for FERC and their turf ware with the states.

Most trade organizations don’t want to touch this sensitive issue like Order No. 1000 too much.  If they do, its soft and mild or very cryptic.  They don’t want to offend the renewable energy business and call it the way it is.  They sure don’t want to show the contrarian side of issues, but a favorable ruling by FERC hurts another in the industry.  It’s hard to find anything to even acknowledge the flaws in Order No. 1000 or that it will likely be tied up in courts for years.   Trade organizations and their publications are not going to bight the hand that feeds them either….or tick off Mother FERC.  Some of the stuff printed on the internet makes Order No 1000 out to be something written by the finger of God and handed down form Mt Sinai.  FERC is not the mystical being it’s being treated by some writers.

Then there are the conferences.  Is there another industry in America that loves their conferences more that the energy business?   Every two weeks there seems to be another conference somewhere in the United States.  (Self-Indulgence?)  It’s like one orgy fest after another for these guys with their love affair with the regulators.  I suspect they create shell trade organizations just for an excuse to hold another conference.  And what’s a conference without a FERC Commissioner in attendance?  It’s a featured draw to bring the industry and their money.  Perhaps this is another reason why groups are so afraid to offend Mother FERC or explain how a policy will adversely affect another part of the industry.  An orgy isn’t an orgy without someone from Mother FERC attending the junket.

Last November there was a conference in Nashville about renewable energy.  Clean Line Energy’s Jimmy Glotfelty  gave a presentation.  FERC Commissioner John Norris is also a featured guest.  The next day the FERC’r John Norris writes a statement on FERC's Policy Statement on Electric Transmission Rate Incentives with a very positive letter about renewables and the “need” for further transmission for the renewable energy industry.  Is this a coincidence or a product of a very “close” relationship between the industry and those who oversee them?  

Shortly after, we find a petition by Jimmy Glotfelty asking FERC to force PJM’s interpretations of Order No. 1000.  I’ve never seen an industry so cozy with the regulators that oversee them and so arrogantly blatant about their tight relationship.  There’s no need to come out of the closet.  They’ve long forgot what the closet used to be used for.  I can imagine the frustration for the traditional energy companies like Exelon, Ameren, or MidAmerican Energy.  It must be frustrating to try to do business with such a circus around you. 

What other industry would allow such self-interest regulation? 

What function does regulation serve if the regulators are from the industry? 

What value is there to the ratepayer if the energy companies, RTO’s, and FERC all seek what is best for their self-interests? 

Who works toward the interest of the ratepayers?   Looks to me the closest hero in this bazaar world is the state regulators, the Public Utility Boards and the Commerce Commissions.  Without the state regulators, I would be afraid where this industry is headed.

To borrow a Hunter Thompson quote, “Politics is a cruel and shallow money trench, a long hallway where thieves and pimps run free, and good men die like dogs.  There is also a negative side.”  So is the world of the energy industry.  I am learning this is truly a Freak Show to watch the energy company’s fight before the RTO’s.  The energy companies fight the RTO before Mother FERC.  The state’s fight with Mother FERC and the energy company is used for convenience by the regulators.   The interests of the ratepayer, public and consumer are ignored in this Freak Show.  We are just a pawn.  To borrow a quote from the Mel Brooks western, Blazing Saddles, “Mongo just a pawn in the game of life.”   In many ways, that is all the ratepayer is to this industry.

Mongo is no longer a pawn in the FERC Fast-n-Furious Freak Show.

It's time this FERC'd up industry gets cleaned up. 

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