Feds to review plan to pass on PATH spending

Two West Virginia ratepayers scored an initial victory against electric companies associated with an abandoned electric project they say are seeking to saddle customers with illegitimate expenses when a federal agency agreed to a hearing to examine the matter.

In 2011, Karyn Newman of Jefferson County and Alison Haverty of Calhoun County filed several challenges to the electric rates proposed to repay costs associated with development of the since-abandoned Potomac-Appalachian Transmission Highline, or PATH, project. The women alleged that PATH accounting procedures were insufficient, that PATH was charging ratepayers for lobbying efforts and fake grassroots groups, and that PATH had double-reported some expenses.

They should not have been charging these expenses to ratepayers,” Newman argues, pointing out that only “prudently incurred” expenses can be charged to ratepayers. Newman said many of the expenses PATH incurred were not prudent.

Officials from FirstEnergy, one of the PATH partners, declined to comment on pending litigation.

Newman and Haverty say they had to fight to be recognized as individuals with legitimate standing to challenge the rate calculations offered by PATH.

“They told me they wouldn’t respond to my discovery request because I wasn’t an ‘interested party,’” Newman said.

But, in an order granting a hearing on the matter, the Federal Energy Regulatory Commission, or FERC, ruled that both Newman and Haverty were interested parties with a legitimate right to challenge PATH’s proposed rates.

“The hurdle we had to jump was to raise serious doubts about their accounting,” Newman said. “We did raise serious doubts, and that is what is affirmed in the order. I hope they will finally treat us as an equal.”

Since Newman and Haverty have been formally recognized as interested parties, PATH will now be under increased legal obligation to comply with their requests for documents detailing accounting practices, expenditures and other internal documents. Newman said, after being initially accommodating, PATH had attempted to deny their requests as the review process dragged on. “Now they have to cooperate and give us the information we want,” Newman said.

Newman and Haverty, among other intervenors, will now be part of a FERC process called “settlement,” similar to mediation, that will attempt to resolve all the issues they have raised. If the settlement discussions are unsuccessful, Newman and Haverty will face off with PATH at a formal administrative law hearing, similar to a trial.

The hearing process is likely to raise further issues, Newman added, because PATH recently filed to formally abandon the proposed power line. Formally abandoning the process will allow PATH to try to recoup the $121 million in costs they incurred while attempting to pursue the project.

Combined with the $95 million PATH has collected for the project since 2008, Newman says, “we’re talking about a quarter of a billion dollars for a project that never got off the ground.”

Patience Wait of StopPATH said Newman and Haverty’s actions will pay a double dividend to ratepayers, lowering their rates while making it clear that they have a legitimate right to be heard when FERC examines rates.

“Individuals, citizens like you and me, can participate at a national agency when we have questions or want information on what a regulated power company wants to charge ratepayers for,” Wait said. “Citizens all over the country can look at this and say see we have a right to get involved.”

“These women gave us a chance of getting some of the money (spent pursuing PATH) back,” Wait said. “Now they will be able to go back and look at other expenses. I think that there is a big argument to be had over whether any of that money was prudently spent.”

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