PUBLIC SERVICE COMMISSION OF WEST VIRGINIA
CHARLESTON

_______________________________

CASE NO. 07-0508-E-CN
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TRANS-ALLEGHENY INTERSTATE LINE COMPANY

            Application of Trans-Allegheny Interstate Line
            Company for a certificate of public convenience		
            and necessity under W. Va. Code § 24-2-11a
            authorizing the construction and operation of the 			
            West Virginia segments of a 500 kV electric
            transmission line and related facilities in Monongalia,
            Preston, Tucker, Grant, Hardy, and Hampshire
            Counties, and for related relief

THE SIERRA CLUB, INC.’S INITIAL BRIEF IN OPPOSITION TO APRIL 15, 2008 JOINT SETTLEMENT, APPLICATION FOR SUBPOENAS TO JIM ELLARS AND
IDENTIFICATION OF WITNESSESS AT MAY 30, 2008 HEARING 

	Pursuant to the April 24, 2008 scheduling order of the Commission, the Sierra Club submits its Initial Brief on the April 15, 2008 proposed settlement submitted to the West Virginia Public Service Commission (“Commission”).  Additionally, the Sierra Club is identifying witnesses it proposes to call at the hearing on May 30, 2008, and applying for subpoenas ad testificandum and duces tecum.

A.	Identification of Witnesses To Be Called At May 27, 2008 Hearing

1.	Jim Ellars

B.	Grounds for Issuance of Subpoenas
Jim Ellars does not work for the Sierra Club, and the Sierra Club cannot unilaterally compel his attendance at this hearing.  However, Rule 14 of the Commission’s Rules of Practice and Procedure, entitled “Subpoenas for witnesses and documents” provides as follows:
14.1.  Upon application of any party, or on the Commission's own action, subpoenas requiring the attendance of witnesses at any designated place of hearing before the Commission, or a member thereof, or any employee of the Commission which it shall have designated to hold such hearings, for the purpose of taking the testimony of such witness, may be issued by the Executive Secretary or any member of the Commission or any employee of the Commission which it shall have designated to hold hearings as provided by law.  Such written application must be verified by affidavit and set forth reasons supporting the issuance of the subpoena for the attendance of the witness or witnesses.
14.2.  Upon written application of any party, or on the Commission's own action, subpoenas for the production of books, papers or documents may be issued by the Executive Secretary or any member of the Commission or any employee of the Commission which it shall have designated to hold hearings as provided by law.  Such application must be verified by affidavit and set forth and identify specifically the books, papers or documents sought to be produced and the reasons therefore.
§ 150-1-14 (emphasis added).
	The Sierra Club respectfully requests that the Commission issue, and serve upon Jim Ellars, a subpoena ad testificandum requiring Mr. Ellars, an employee of the Commission, to appear at the May 30, 2008 hearing in this matter, and a subpoena duces tecum directing that Mr. Ellars produce all documents in his possession pertaining to his assessment of the adverse impacts likely to be incurred from each of the various alternative routes studied.
	In order to afford all parties a reasonable opportunity to examine the evidence, the Sierra Club respectfully requests that the Commission make the subpoena duces tecum to Mr. Ellars returnable, at the Commission’s building, at 3PM on Wednesday, May 28, 2008, at which time Mr. Ellars can appear and authenticate all responsive documents, which may then be copied and distributed to counsel for use at the May 30, 2008 hearing.  Sierra Club’s counsel is prepared to provide a court reporter to record the authentication.
Mr. Ellars testified under oath at the January 9-19, 2008 evidentiary hearing that the best route for the proposed electric transmission line was through Maryland.  He has personally flown over all proposed routes, and is in the best position to testify objectively at this time of the impact of the new proposed route.	
Relying upon Mr. Ellars’ testimony that the least environmental impact would be incurred by routing the transmission line through Maryland, the PSC Staff argued in its February 29, 2008 brief to this Commission that:
“It is inconceivable the Commission should find the balancing favors the granting approval of the Preferred Route when the route selected by the Company is not the route with the lowest potential impacts in terms of overall impacts across all of the affected states and in terms of impacts to West Virginia.”
PSC Staff 2-29-08 Brief at pp. 32-33.
	The question which the Sierra Club will address to Mr. Ellars is whether, under the same analysis, as compared with the newly proposed Grafton Area Route, the Maryland route is still the route with the least environmental impact, particularly on the citizens of West Virginia.
	The Rule 14 verification of Counsel for the Sierra Club appears at the end of this pleading.

C.	FOIA Request and Responses
	On April 17, 2008, the Sierra Club issued an FOIA request to the PSC and CAD for copies of all documents pertaining to the Joint Stipulation.  The May 2, 2008 responses of PSC (1128 pages) and CAD (647 pages) are submitted with this Initial Brief, and parts of those responses are referenced herein.  The Sierra Club respectfully requests that the Commission admit to the record of this proceeding the entire response of the PSC and CAD.  Further, the Sierra Club notes, and believes that the PSC staff and CAD are to be commended for, their decision to waive all potentially applicable exemptions to the FOIA, in the interests of total transparency in the decision making process before the Commission.
	Additionally, because numerous documents released by CAD and the PSC refer to possible input from the office of the Governor, on May 12, 2008, the Sierra Club issued an FOIA request to the Governor of West Virginia (copy attached) for documents pertaining to the TrAILCo application, including but not limited to communications with the parties to this proceeding.  The response to the May 12 FOIA request will be filed with the Commission upon receipt.
	
D.	Initial Brief In Opposition

The Sierra Club opposes the entry of an order by the Commission granting TrAILCo a certificate of convenience and necessity based upon the proposed settlement contained in the Joint Stipulation filed on April 15, 2008. Nothing in the proposed settlement, signed by TrAILCo, the PSC Staff, the Consumer Advocate Division (CAD) of the PSC, and the West Virginia Energy Users Group (WVEUG), even purports to alter the “need” evidence, admitted into the record under oath, in the eleven days of hearings held between January 9, 2008 and January 19, 2008.  The evidence on the need for the proposed electric transmission line was clearly inadequate, for the reasons detailed in the briefing of numerous parties – in particular the extensive, cogent analysis of the PSC Staff.  

To be sure, the only reasons offered for approving TrAILCo’s application asserted to date have amounted to a bald assertion that TrAILCo has: (1) agreed to provide what it describes as a package of economic incentives to West Virginian’s generally, and (2) agreed to alter the route of the proposed line in a manner which inflicts environmental costs on persons not now known, and who themselves may not know of the alternate route, rather than on those persons who had adequate notice of the proposed route and an opportunity to be heard in a meaningful fashion.  

In this regard, the total value of all direct cash benefits provided to the state of West Virginia is approximately $41.7 million dollars.  This figure is derived from Allegheny Energy’s April 15, 2008 press release, a copy of which is attached as Exhibit A, and which values the benefits of non-recovery of transmission costs at $31 million dollars, cash grants to the W. Va. Government for conservation at $2.5 million dollars,  reductions in rates for the benefit of the state’s largest commercial and industrial users of electricity at $5.7 million dollars, and provides $2.5 million dollars in cash to the government for distribution to the lowest income earners of the state.

Because TrAILCo has negotiated a settled rate of return of 12.7% on its $1.3 billion dollar investment, the annual return on the $1.0 billion portion of that investment in West Virginia, will be $127 million dollars, guaranteed, year in and year out, in perpetuity.  

The one-time $41.7 million dollar cash benefit to West Virginia represents less than 33% of one year’s guaranteed profit.  Stated otherwise, West Virginia would get the guaranteed profit for the months of January through April of the first year of operation of TrAILCo; all profits thereafter, from May 1st of the first year of operations through the now unknown end of operations would go, in their entirety, to TrAILCo.  No wonder that the PSC internal staff memo discussing the settlement, copy attached, recited succinctly:  “Not enough money on the table.”  Indeed, nowhere near enough.  PSC-00471-472.

All of these incentives and alterations are clearly aimed at simply appeasing most of the current intervenor land owners and commercial customers at the expense of as yet unknown citizens of West Virginia..  In plain English, the proposed settlement is nothing more than a large scale, administrative law example of the simplest form of commercial fraud, i.e., “bait and switch.”   

The Commission ordered notices published throughout the state identified the initially proposed route, and persons affected by it had notice and an opportunity to appear and be heard.  Now, with no further opportunity for meaningful participation, unknown citizens are to learn that there will be a new route, different from the one previously proposed – and, by the way, it crosses your property.  

It is not enough to say that alternative routes were also proposed; the proposal which people were told was under consideration has changed, and the change should be the subject of notice and an opportunity to be heard, including opportunities by all affected persons to intervene and call their own expert and other witnesses.

Moreover, none of the proposed incentives or alterations pretend for a moment to address the overriding environmental (and economic) issue, i.e., the costs of the massive increase in CO2 emissions to from current and planned coal-fired electric generation plants, whose operation depends upon the increased infrastructure represented by TrAILCo’s proposed electric transmission line.

The environmental costs include the adverse impact on global warming generally by increased emissions of CO2, and the more localized impact from increased emissions of SO2 and NO2.  The economic costs include the incremental impact on West Virginia customers, both residential and commercial, that will flow from the failure to diversify the fuel source for electricity.  

The evidence in this proceeding is that West Virginia depends on coal for 95% to 97% of its electricity.  Upon passage of any significant carbon tax – which is totally foreseeable in the next 18 months – the current, relatively low cost of coal fired electricity, will instantly be increased, in all probability dramatically.  None of the current proposals for a carbon tax start at the $10 per barrel level and go north from there.  

Allegheny Energy will incur a $450 million dollar cost on day one of that carbon tax in light of its 45 million ton per year emission of CO2   That cost will be passed through, in one form or another, to West Virginia businesses and consumers -- or Allegheny Energy will file for bankruptcy.  There are no other alternatives -- unless the Commission now conditions approval of the line on an appropriate diversification of fuels for electric generation in West Virginia.

The only condition that would justify approval of the proposed electric transmission line is a condition that TrAILCo and/or its parent, Allegheny Energy, commit to the construction in-state of alternative energy (wind, solar, or other) in sufficient volume to offset the four 650 MW coal-fired plants referred to by TrAILCo witness, Tom Witt, as part of the economic benefits of approving TrAILCo’s proposed transmission line.

Additional coal-fired electric plants will increase West Virginia’s dependence on coal and forgo the opportunity that presently exists to diversify the fuel mix that serves West Virginia’s residential and commercial electric customers.  Failure to diversify fuel mixes now will permanently penalize already challenged West Virginia businesses.

	As the Sierra Club previously stated in its February 24, 2008 brief, following the close of the evidentiary hearing, TrAILCo failed to carry its burden of proving the need for the proposed $1.3 billion dollar electric transmission line.  That was also the position of the PSC Staff on February 24, 2008, in a thorough review of the evidence and a proposed order that would have denied the TrAILCo application.  None of the testimony on need, which the PSC Staff based its earlier recommendation to deny the line, has changed.  That need testimony remains, and is not even challenged by the proposed settlement incorporated into the April 15, 2008 Joint Stipulation.

	W. Va. Code § 24-2-11a provides in subsection (d) that  the commission may approve the application for construction of a new electric transmission line, if it determines that the proposed transmission line:

(1) Will economically, adequately and reliably contribute to meeting the present and anticipated requirements for electric power of the customers served by the applicant or is necessary and desirable for present and anticipated reliability of service for electric power for its service area or region; and

(2) Will result in an acceptable balance between reasonable power needs and reasonable environmental factors.

W. Va. Code § 24-2-11a (d)(emphasis added).

          Although the proposed settlement purports to provide certain palliatives to the obvious adverse environmental impacts, the criteria of § 24-2-11a (d) is plainly stated in the conjunctive, not the disjunctive.  Accordingly, merely altering, however minutely, the environmental impact of the proposed electric transmission line, in no way advances TrAILCo’s case for the necessity of the line.  In that regard, based on the evidence already admitted of record, no claim of need can be sustained.
		
In light of the foregoing, the Sierra Club respectfully submits that the Commission should determine that TrAILCo has failed to carry its burden of proof to establish any need for the proposed electric transmission line, and deny the application.  Moreover, the demonstrable environmental costs of the proposed line far outweigh any purported electric need, where the documented environmental costs can be avoided in their entirety by the investment of less than $60,000,000 ($50,000, 000 for a static var compensator to deal with reliability issues 10-12, and less than $10,000,000 in ground clearance work to deal with reliability issues 1 - 8) in the improvements identified in the January 9 to 19, 2008 evidentiary hearing. 

In short, the Commission does not need to authorize a $1.3 billion investment as a means of obtaining a paltry $41.7 million dollar benefit to the state.  The Commission can instead, by denying the application, effectively compel TrAILCo’s parent to make the $60,000,000 investment needed to fix the minor “reliability” issues identified in the January 2008 evidentiary hearing.  

Alternatively, this Commission could exercise its discretion under W. Va. Code § 24-2-11a (e) to condition issuance of the certificate to TrAILCo upon Allegheny’s enforceable commitment to cancel  the $4 billion dollars it contemplates on construction of four new, coal-fired electric generation plants, and instead commit those sums to the construction, in-state, and for the rate benefit of West Virginia citizens, of a similar amount of alternative energy construction with low or no carbon foot print, and a commensurately lower economic impact on the businesses and consumers of West Virginia.

						Respectfully submitted,
						THE SIERRA CLUB
						         By Counsel
__________________________
William V. DePaulo, Esq. #995
179 Summers Street, Suite 232
Charleston, WV 25301-2163
Tel: 304-342-5588
Fax: 304-342-5505
william.depaulo@gmail.com

VERIFICATION

Pursuant to Rule 14 of the Commission’s Rules of Practice and Procedure, William V. DePaulo, counsel for the Sierra Club, Inc., upon oath, states that the subpoena for Jim Ellars, requested in the foregoing pleading, is requested on the good faith belief that his testimony, and the documents he possesses pertaining to that testimony, are necessary for a full, adequate and just resolution of the issues before this Commission.

							________________________
							William V. DePaulo

Subscribed and sworn to before me this ___ day of May, 2008.

							________________________
							Notary Public

My commission expires: ______________________

CERTIFICATE OF SERVICE

I certify service of this Initial Brief by US mail May 16, 2008, to the following:

Caryn Watson Short, Esq.
John Auville, Esq.
Pub. Serv. Com’n of W. Va.
Post Office Box 812
Charleston, WV  25322	Billy Jack Gregg, Esq.
700 Union Building
723 Kanawha Boulevard, East
Charleston, WV  25301
 Consumer Advocate Division	Adam L. Benshoff, Esq.
McNees Wallace & Nurick 
Post Office Box 1166
Harrisburg, PA 17108-1166
WV Energy Users Group	
Susan J. Riggs, Esq.
Spilman Thomas & Battle, PLLC
P. O. Box 273
Charleston, WV  25321-0273
W Va Energy Users Group	Elizabeth H. Rose, Esq.
Rose Padden & Petty, L.C.
Post Office Box 1307
Fairmont, WV 26555-1307
Laurel Run Comm. W’shed 	Mary Guy Dyer, Esq.
Dyer Law Offices
Post Office Box 1332
Clarksburg, WV  26302-1332
Peter Kent Thrush et al.	
John Philip Melick, Esq.
P O Box 553
Charleston, WV  25322-0553
TrAILCo	Ladd and Angie Williams
Route 2, Box 214C
Tunnelton, WV  26444	Alan and Julie Sexstone
181 Paul Davis Road
Independence, WV  26374	
Susan C. Capelle, Samuel E. Dyke Route 1, Box 259
Independence, WV  26374	William Peterjohn, Susan Olcott
305 Paul Davis Road 
Independence, WV 26374		Mark and Julie Sullivan
Route 1, Box 282
Independence, WV  26374	
Letty Butcher
Post Office Box 732
Reedsville, WV  26547	Timothy Hairston, IBEW
Post Office Box 346
Dellslow, WV  26531	Robert Lynn
Rural Route #1 Box 18
Independence, WV 26374	
Bradley W. Stephens, Esq.
Mountainview Manor, Suite AB1
Morgantown, WV  26501
Halleck-Triune Community	Douglas Imbrogno, Member
Bhavana Society 
141 Hazelwood Place
Huntington, WV  25705	J. Andrew Jackson, Esq.
Dickstein Shapiro LLP
1825 Eye Street, NW
Washington, DC  20006-5403	
Larry and Rose Willoughby
PO Box 367
Amissville, VA 20106	Rosemarie Calvert
Rt. 1 Box 29B
Independence WV 26374	Thomas M. Hildebrand
392 Red Spruce Drive
Moorefield, WV  26836	
L. R. Dallas
676 West View Avenue
Morgantown, WV 26505
The Dallas Family	Casey D. Stickley, Secretary
Allegheny Club Inc.
126 South Gate Drive
Fairmont, WV 26554	Robert R. Rodecker, Esq.
P. O. Box 3713
Charleston, WV  25337-3713
CPV Warren, LLC	
John Wilfred Haywood
15100 Interlochen Drive, # 604
Silver Spring, MD  20906	Charles K. Arnett
1160 Sugar Grove Road
Morgantown, WV  26501	Steven Giessler 
3927 River Road
Morgantown, WV  26501	
Bradley C. & Lynette D. Swiger
Route 6, Box 345
Fairmont, WV  26554	Misty Garlow
Route 4, Box 603-A
Fairmont, WV  26554	Raman K. Jassal
519 Seneca Green Way
Great Falls, VA  22066	

____________________
William V. DePaulo