Mr. Chidester believes PJ+M is in bed with FirstEnergy. If they breed, the child would probably behave a lot like this one:
He's exactly right!
They're not fooling Len Chidester of Montrose, West Virginia. He's heard some nasty rumors about the shoddy way FirstEnergy treats its linemen, neglects maintenance of equipment, and fails to read electric meters. Apparently this is all being done under the mandate of some company named PJ+M.
Mr. Chidester believes PJ+M is in bed with FirstEnergy. If they breed, the child would probably behave a lot like this one:
Mr. Chidester concludes that FirstEnergy bought Mon Power and Potomac Edison. FirstEnergy is bleeding these companies for every nickel they can squeeze by their phoney meter reading process, doing minimal repairs, and who knows what other practices. And he advises that a very major investigation be launched into exactly what the power companies, FirstEnergy, Mon Power, Potomac Edison and the company PJ+M have been and are continuing to do.
He's exactly right!
Where do investor owned utilities get their silly project names? PJM gives transmission projects alpha-numeric names. Sometimes companies name their projects for the substations they connect (i.e. Susquehanna Roseland). But sometimes a company proposes a project so big, so expensive, and so outrageous that it needs its own cutsie-poo name, like some sort of fire-breathing, money-eating dragon (i.e. PATH, TrAIL, MAPP).
Behold, Project Compass!
PPL proposed this monster last week in conjunction with its 2nd quarter earnings call. Maybe it was just some elaborate distraction for investment analysts? A poorly executed joke?
At any rate, here's the motivation for this ambitious and bodacious "investment" in new transmission:
The strong year-to-date increase in ongoing earnings was driven in part by a combined $69 million from our domestic utilities, driven by returns on additional transmission investments in Pennsylvania...
Well, shoot, if you can make a little money "investing" in transmission, why not go big and make a LOT of money, right?
Also this morning, we announced a PPL Electric Utilities proposal to PJM, as part of the competitive solicitation process under FERC Order 1000. As currently proposed, the 500 kV transmission line would run about 725 miles from Western Pennsylvania into New York and New Jersey, and also south into Maryland. The project is in the preliminary planning stages. The new line would improve electric service reliability, enhance grid security and enable the development of new gas-fired power plants in the shale gas regions of Northern Pennsylvania. The proposal would create savings for millions of electric customers by delivering lower cost electricity into the region and reducing grid-congesting cost. According to preliminary estimates, the cost of the project, which is not yet included in our CapEx projections, would be between $4 billion and $6 billion. Because of the magnitude of this proposal, there is a good chance we may enter into partnerships to develop and build the project. The preliminary timeline envisions completion of the project by 2023 to 2025, assuming all necessary approvals are received and construction begins in 2017. Approvals are needed from various regulatory and regional planning entities. We'll keep you posted on any further developments.
But it doesn't sound like the analysts shared PPL's enthusiasm and confidence in Project Compass:
Daniel L. Eggers - Crédit Suisse AG, Research Division
Eat. Eat. Eat.
There's nothing "compelling" about this project. It's uninspired, unrealistic overbuild in its purest form. Why should ratepayers shell out billions to "fix" a bunch of minor problems?
Neel Mitra - Tudor, Pickering, Holt & Co. Securities, Inc., Research Division
Oh, right, we're supposed to spend billions to make it cheaper for new merchant generators to sell their electricity in a "competitive" market. If these new generators can't afford to compete in the market by paying their own way to existing transmission connections, then they're not profitable and competitive and shouldn't be built.
Reliability? Where's the driver for that? Or are we going to put the cart before the horse again and create the "opportunity" for transmission before creating the "reliability" issue it is intended to fix?
Substation security? How do existing substations get made safer by building new ones? Is it because we're going to increase the number of possible targets to water down interest in just a few crucial points?
Didn't factor in the economics... but I'm sure they can make something up!
Wow, pretty weak reasoning there, Greg!
Paul Patterson - Glenrock Associates LLC
See question above... they didn't factor in the economics, they're going to make that part up later!
Rajeev Lalwani - Morgan Stanley, Research Division
Because, ya know, when the only tool you have is a hammer, everything looks like a nail.
Obviously there is no need for a new transmission project of this magnitude, but PPL thinks they can "compel" PJM into agreeing to this massive boondoggle without any competition developing. This is exactly how PJM got into trouble on Project Mountaineer. When it's not about reliability or economics, it's greed, not need.
Angie Storozynski - Macquarie Research
No, no national parks. Their last escapade in a national park cost the ratepayers $60M in hush money to the Department of Interior.
ALL the stakeholders? Landowners and ratepayers, grab your stakes, we're heading out!
I think PPL needs to do a round of drug testing of its employees. Whoever came up with this idiotic idea must be on something.
PPL announced today that it had "submitted an application to PJM" to build a 725-mile 500kV line, estimated to cost $6B, through four mid-Atlantic states.
Never going to happen.
Residents of affected states are still reeling from PJM's last big transmission building idea, Project Mountaineer, that cost them billions, including nearly half a billion dollars for planned projects that were never built. Try it, PPL, and you will experience coordinated, strategic opposition like you've never seen before!
The Morning Call seems to be the first media outlet to... err... call PPL out on its outrageous money-making scheme. PPL interstate transmission project both costly and lucrative: Project would fill utility coffers while costing ratepayers billions of dollars.
Morning Call says:
The project also would be a significant source of revenue for PPL Corp., PPL Electric Utilities' Allentown-based parent. Under Federal Energy Regulatory Commission rules designed to encourage infrastructure investment, utilities may earn a profit of 11.68 percent on transmission projects.
But, Morning Call only sees the tip of this iceberg. PPL can apply to the Federal Energy Regulatory Commission for transmission rate incentives that would up its profits significantly. In addition to incentive ROE adders that can increase the 11.68 percent several percentage points, PPL can also ask for guaranteed cost recovery in event of abandonment, a return on construction work in progress that enables them to begin earning that juicy return immediately, even before the project is completed, and many other outrageous financial rewards.
In addition, Morning Call's math is wrong. The $700 million profit the reporter calculated is only that earned in THE FIRST YEAR of operation. Transmission project rates work sort of like a 40-year mortgage. The return is calculated and paid on the depreciating balance of the project cost every year! So, in the first year of operation, PPL would earn a return on $6B and collect a certain amount of depreciation on the project assets that would lower the balance owed by ratepayers. The second year, PPL would earn a return on the depreciated balance, and additional depreciation. And so on, over the 40 year (or more) life of the capital assets. PPL's possible profit from this ridiculous project is a nearly endless goldmine!
And, one last thing Morning Call gets wrong -- this project will be paid for, in part, by ratepayers in all 13 states in the PJM region because of its size. A 500kV project built in PJM is cost allocated at 50% to all ratepayers based on peak usage, with the other 50% being assigned to the cost causers/beneficiaries.
Moving right along into PPL's feeble assertions that its project will:
If approved, PPL predicts, the project will improve energy reliability and security and provide customer savings by eliminating transmission bottlenecks and encouraging development of lower-cost natural gas-fueled generation plants.
This doesn't even make sense. The coal-fired plants that will be closing are located in the Ohio valley, not on the east coast. Once those coal-burners are offline, it will free up significant transmission capacity for any new "mine mouth" Marcellus shale gas-fired plants built in the Ohio valley. Why would we need to build a new west to east transmission line when there's already plenty of them sitting idle due to coal-plant closings?
PPL says they will have a robust public input process to find out where to site the line. Seriously? That strategy doesn't work anymore. It's all about need for the line in the first place, not where to put it. Get with the brave new world of transmission opposition, PPL!
And speaking of siting the line... where is that new Maryland substation supposed to be on that featureless map? If you compare it to a real map of Maryland, it looks like it's in Howard or Carroll counties. But, what if there was land available in neighboring Frederick County for a proposed substation? Oh, deja vu!
This has got to be the most thoughtless transmission proposal I've ever seen.
Never going to happen.
After being pelted with correspondence from transmission developers, regulators, and environmental organizations promising vehement opposition, the PJM Board of Managers "delayed action" on PJM staff's recommendation of PSE&G's "7K" project to solve its Artificial Island problem.
But lest you think sanity has finally prevailed and the Board has rolled back the process to ensure it is carried out fairly and transparently going forward, don't be silly! The Board has merely kicked it back to staff in order for the other four "finalist" bidders to "supplement" their projects to try to undercut finalist LS Power's self-imposed cost cap on its project.
So, how hard can it be to simply make up a number lower than LS Power's $171M construction cost cap? It's not like anyone's going to hold them to it, right? PJM doesn't have any performance standards for transmission developers and is unlikely to bat an eye at "unforeseeable" cost overruns.
PJM's Herling also says that his TEAC will "review" specific issues with process and transparency that were raised in the letters. Who wants to guess how that will go? Herling rules the TEAC with an iron fist. He also babbles on about how "especially challenging" new process can be. I have to agree, it's especially challenging to continue on like nothing's changed when you're supposed to be following new rules and the unruly children challenge your authority.
Still no recognition about PJM's incorrect determination of the "constructability" of the PSE&G project. This despite an even more pointed letter from the Delaware Riverkeeper, promising "active and committed opposition" to the selected project.
But don't worry, PSE&G also made an appearance with a letter defending its project. Send in the clowns!
PSE&G says that they are the preferred choice of park rangers everywhere when it comes to having precious national park resources destroyed by transmission developers:
For example, the Susquehanna-Roseland project had environmental and other types of challenges, but PSE&G and its co-developer, PPL Electric Utilities Corporation, overcame the challenges to get the line sited and built. The
So, if you want to have your backyard destroyed, remember to call PSE&G for fast, prompt and friendly service!
And is this supposed to be a threat or a promise?
The same PSE&G team that brought Susquehanna-Roseland to a successful conclusion is committed to this project.
Oh, dear heavens, NO! The Susquehanna Roseland project was a permitting disaster that cost ratepayers $60M in hush money to the Department of the Interior in exchange for allowing the destruction of a park that belongs to these very same ratepayers. The $60M "mitigation" fronted by PSE&G will be re-paid to the company over the many decades that this project will be in service. The re-payment will come out of ratepayer pockets and will reward PSE&G with a 12.9% yearly return on its "investment" in the "mitigation" hush money.
With friends like that, ratepayers are sure to be smiling all the way to the poor house!
Stay tuned... sounds like the PJM fun is only beginning at Artificial Island!
PJM Interconnection has completely screwed up its first competitive transmission project proposal process. And now transmission developers and regulators are schooling PJM on what "constructability" really means (of course, for English language purists, "constructability" isn't even a real word, but some bastardized business buzz word).
While FERC's Order 1000 reforms were supposed to usher in a new wave of competition, pricing and cost allocation beneficial to consumers, nothing has changed except the window dressing. When push came to shove, PJM selected a project proposed by one of its favored incumbent transmission owners and kicked all the other proposals to the curb.
PJM staff has recommended that its Board of Managers approve its selection of PSE&G's "7K" project that will construct a new 500kV line parallel to an existing circuit. PJM staff has stated that the "constructability" of the PSE&G project, as evaluated by hired consultants, was the basis of its decision.
And then the letters from regulators, public interest groups, and competing transmission developers started rolling in...
Competing developer Atlantic Grid sums up the problems with PJM's over-managed RFP process quite nicely:
Lastly, this decision is risky as precedent for future RFPs that should encourage innovative, well-engineered proposals and rigorous competition. In a typical RFP, a problem in need of fixing is published and competitors are invited to submit proposed solutions. The customer (PJM in this case) evaluates the proposals, disqualifies the ones that don’t work, and makes a selection from the remaining qualified projects. But PJM’s RFP was more like a “call for ideas.” It appears that PJM took the proposals and then re-engineered a solution it liked best by mixing and matching pieces from different project proposals. The result is that PJM’s recommended 7K Project looks almost nothing like the original 7K proposal submitted by PSE&G. Unfortunately, if this RFP sets the pattern for the future, PJM will discourage participants from spending time, money and engineering resources to develop innovative, well-engineered RFP responses. And ratepayers will lose when the robust, competitive process PJM hoped for fails to develop.
Somebody needs to step in here and put PJM staff on a strict non-manipulation diet. I know it's really hard to step away from the buffet line when you've been gorging for years, but that kind of manipulation made the entire RFP worthless, and wasted the time of the independent developers who invested time and money in innovative proposals. Hey, who remembers Primary Power and FERC's hope that Order No. 1000 would put a stop to that kind of favoritism? I'm thinking it didn't work.
Atlantic Grid points out PJM's "constructability" error:
For PJM it is risky because significant permitting hurdles mean that the project
And what happens when PJM makes a "constructability" error? Sixty-some-odd-million consumers will end up paying for more failed projects, and reliability will suffer.
And that brings us to... the regulators.
The New Jersey Board of Public Utilities and the New Jersey Division of Rate Counsel sent a joint letter to the Board of Managers, pointing out that the "constructability" of PJM's selected project will receive national, even international, opposition from environmental groups because of its unnecessary crossing of "wetlands of international importance." New Jersey regulators point to the LS Power proposal as a lesser cost and more environmentally friendly alternative.
Competitive developer LS Power not only called PJM on its heavy-handed, manipulative "evaluation" of competing proposals, but it also threw a bomb into the center of the room. LS Power has offered to cap its project cost at $171M, much less than the PSE&G project's $297M estimate.
Well, that's a first. A transmission project with a firm cost cap that requires the developer to actually perform during construction. This is exactly the kind of "performance-based" behavior Congress expected out of transmission developers when handing them very profitable incentives in Sec. 219 of the Energy Policy Act. Unfortunately, FERC didn't see it that way and chose to open the incentive buffet with absolutely no performance standards or cost caps on qualifying projects. The more it costs, the more they make!
The Delaware Public Advocate's letter, on the other hand, supports PJM's choice of the 7K project. But, Delaware's support is not because 7K is a superior choice from a "constructability" angle, it's simply because Delaware will be allocated less total cost from the 500kV 7K project than from LS Power's cheaper 230kV solution due to PJM's new cost allocation methods. Well, if this isn't a walking advertisement for cost allocation issues causing short-sighted transmission choices...
Dominion's transmission company (because if you don't have your own independent transco in order to take advantage of extra FERC incentives, you're just not part of the "in" crowd these days) also takes issue with the way in which PJM evaluated projects and made its selection.
Exelon doesn't shill for its own losing project, but concentrates on the mess PJM made of its competitive process, and makes some suggestions for improvement.
Here's a suggestion Exelon didn't think of... why not remove any sponsor-identifying information from the proposals before evaluating their technical merits, costs, and "constructability"? Playing favorites among incumbents seems to be the most basic problem here. Maybe PJM can issue little blindfolds to their planning staff, because justice is blind and all, especially when she gets her eye poked out with the rod of favoritism.
And bringing up the rear of the letter flurry, New Jersey Sierra Club slaps PJM with a glove regarding the environmental issues with its selected project. This is pretty much a guarantee of a public opposition charlie foxtrot that PJM would do well to heed.
So, when is PJM's selection of new projects going to become a truly competitive, cost effective and forward-looking process that builds for the future? PJM has not improved its processes under Order No. 1000, and its ratepayers and consumers are going to be the ones to suffer poor "constructability" choices, short-sighted "minimum required for now" choices, and ineffective, but cheap solutions to reliability issues.
This is one giant FAIL.
Check out the collision of ideas in a recent edition of the Energy Law Journal. Oh, it's really not as boring as it sounds, but the authors sure do know how to belabor a point. You'd think they were being paid by the word...
First, take a look at DOES DISRUPTIVE COMPETITION MEAN A DEATH SPIRAL FOR ELECTRIC UTILITIES? by Elisabeth Graffy and Steven Kihm. It's one more take on the idea that how we produce and use energy is moving on, and utilities that don't get ahead of the curve by offering products that consumers want are going to end up like streetcars, land line phones, and beanie babies.
Traditional utility response to the proliferation of widely distributed rooftop solar has thus far been limited to attempts to lock in a future revenue stream to pay for what may become a stranded investment in centralized generation and transmission. Early efforts in this regard have been soundly rebuffed, not only by the owners of these small-scale generators, but regulators as well.
Strenuous efforts to mitigate rather than innovate seem likely to increase vulnerabilities by generating public and customer backlash, motivating market competitors, and instigating potential legal challenges.
The article compares and contrasts the responses of two companies facing innovation/technology challenges in their respective industries. It examines how the cable TV industry remade itself when facing competition from satellite TV companies -- it began offering new products that increased its value to consumers by bundling TV with phone and internet service.
In contrast, much is made of the fate of Market Street Railway, a regulated streetcar company whose response to competition from buses and automobiles was to increase rates to cover its costs while relying on regulation to maintain its monopoly.
This story has significant implications for electric utilities facing increasing and especially disruptive competition that may shift their risk position from the zone in which regulation is effective to one in which it is not. That Market Street responded to disruptive competition by simply requesting rate increases from its regulator reveals denial that their economic woes were due to fundamentally changed circumstances that required new organizational strategy, not just regulatory intervention. Market Street, while fully understanding the existence of threats to its viability, showed no real signs of innovation or adaptation in this regard, but rather continued a reliance on conventional cost-accounting-based utility ratemaking practices to the bitter end.
And that's exactly what utilities seem hell bent on doing in the other ELJ article, REGULATORY FEDERALISM AND DEVELOPMENT OF ELECTRIC TRANSMISSION: A BREWING STORM?
This article, by James Hoecker, advisor to WIRES, the "Voice of the Electric Transmission Industry!!!" wanders on for 29 pages of transmission building advocacy. Build, build, build! It doesn't seem to matter whether there will be any consumers left to pay for it all, as long as the federal government takes control of electric transmission permitting and siting today by "collaborating" with states in order to usurp their authority. It even goes so far as to push the CSG's interstate siting compact bad idea.
So, what will it be? Transmission or innovation?
Building more traditional transmission using eminent domain to acquire new rights of way will NOT work. The public has had enough! Transmission opposition has become increasingly sophisticated and its methods are becoming more effective at cancelling and delaying most new proposals. This pitched battle has both sides spinning its wheels, but delay is the opposition's friend. And the more the industry nibbles away at state authority, the closer it pushes state regulators toward permit denial.
Does this mean that we can stop building transmission altogether? No, but we can stop building transmission stupidly. Smart transmission uses existing rights of way to rebuild existing lines to increase their capacity. In some instances, the public actually welcomes a responsibly managed rebuild, especially when presented as an alternative to new transmission. In other instances, the public welcomes smartly designed new transmission projects, like Atlantic Grid's New Jersey Energy Link. This project is buried for its entire length, avoiding the expense and time delays of opposition to traditional overhead transmission projects. But perhaps its best selling feature is that it is designed to be useful long into the future -- moving conventionally generated power to markets that need it today, but also there to move offshore wind to load as it is developed. If only they get rid of that insulting "NIMBY" word...
But old habits die hard for the big energy conglomerates, who wish to continue operating their streetcar named De$ire. Instead of creating an exciting and profitable new market for themselves, Ohio's Tweedledum and Tweedledee have hung their hopes (and plopped their "transmission spend") on investing in more transmission.
You can lead a company to knowledge, but that doesn't necessarily make it any smarter.
Oooooh! Shiny object!
In the end, the electric utility as an institutional form has not exhausted its relevance. Claims that utilities are in a certain death spiral seem premature. However, those predictions seem disturbingly grounded in tacit assumptions that utilities are too hidebound by their past to be able to adapt in a timely or agile way to rapidly changing conditions. If so, utilities will find themselves to be brittle rather than resilient when confronting disruptive competition in a sector that is central to social, economic, security, and environmental necessities and, therefore, cannot remain static. All signs point to the reality that utilities must change. The open question is whether they will change by embracing and, indeed, leading value creation or be changed by others in the market who embrace it first and more firmly.
In a predictable move, the U.S. Court of Appeals for the 7th Circuit kicked the Illinois Commerce Commission v. FERC can back to Washington today.
This case has been dragging on for nearly 5 years. When it first started, ratepayers in PJM's Illinois territory were looking at sharing a huge chunk of the cost of PJM's multi-billion dollar Project Mountaineer collection of unneeded transmission projects. Although the bill has shrunk considerably with the cancellation of PATH and MAPP, the argument has only grown.
It centers on PJM's 2006 adoption of the "postage stamp" cost allocation methodology. This method assigned costs of new transmission 500kV or greater to all ratepayers in the region based on their share of regional electricity sales. The more power an area used, the greater its share. PJM did this to spread out (socialize) the cost of its Project Mountaineer venture over more customers so it could get that transmission built before the hoi polloi noticed, "before it became common dinner table talk."
However, it's important to realize that PJM no longer uses the 100% "postage stamp" cost allocation method and hasn't since last year. Today's 7th Circuit decision will have no effect on any proposed or future transmission projects in PJM, or any other RTO. Today's decision will only affect those projects that were built (or not!) before last year's new allocation method went into effect. PJM's new, FERC-approved cost allocation methodology relies on a 50-50 split of two different methods for transmission lines of at least double-circuited 345kV or greater. The first 50% is allocated according to the old postage stamp method, and the remaining 50% is allocated either to the cost causers or the beneficiaries, depending on the reason for the project. Costs for transmission projects based on "public policy" clean energy state laws will be allocated to the states that require them under PJM's "State Agreement Approach." If a state doesn't agree to shoulder the cost burden for a project designed to meet its renewable portfolio standard, then it will not be built.
Today's decision echoed the first remand from the 7th Circuit, that found that FERC had not done enough to show that utilities in "western PJM" received benefit from Project Mountaineer that was commensurate with their cost responsibility under the old "postage stamp" allocation method.
FERC dealt with the first remand by rolling its eyes and making up more crap about how "western PJM" benefited from Project Mountaineer. It pulled an even bigger diva act on rehearing. But FERC just can't out-diva Judge Posner of the 7th Circuit.
Posner hates coal, and transmission lines that carry it. But, he loves postage stamp rates for transmission lines that are supposed to be "for wind."
This Sybil act must also be confusing to FERC, but hopefully they can get it right this time... because third time's a charm, right?
Go ahead, read today's decision. It's quite chatty and reads like some guy's geeky blog post about electricity and cost-benefit analyses, until you get to the 9-page dissent by Judge Cudahy, who seems to be writing from the other side of the political spectrum. It's fairly entertaining. However, I suspect FERC is not as amused as you are.
Nearly 10 years ago, PJM's management made a very poor choice approving Project Mountaineer, a scheme to build more than $3B worth of new transmission in order to increase the transfer of 5,000MW of coal-fired generation to the east coast. Project Mountaineer caused PJM to approve four new high-voltage transmission projects and add them to its RTEP: TrAIL, Susquehanna Roseland, PATH and MAPP. Only two of these highly controversial projects were ever built, and at a very high cost. The other two were abandoned without ever turning a shovel of dirt.
PATH was re-routed within months of being introduced to the public, because PJM's approved plan for it called for "twin" 500kV circuits through densely populated, high-growth areas of West Virginia's eastern panhandle, northern Virginia, and Maryland's Washington, D.C. suburbs. It just wasn't physically and politically possible to construct the project. PJM's determination of the "constructability" of PATH was wrong. Even its second choice of a single 765kV line through the area failed.
And PJM hasn't gotten any smarter about constructability since. Its first major transmission project since the PATH/MAPP failure is also destined to "constructability" failure. PJM recently selected PSE&G's proposal for a new 500kV line to parallel an existing line in Salem County, New Jersey to solve its Artificial Island problem. PJM claimed its decision was based on the "constructability" of PSE&G's project.
So, what standard did PJM use? PJM hired a company that does work for the companies bidding on this project to do a "Constructability Study."
The study accounts for environmental permitting, historical commission review, federal environmental review, and a host of other "risks." It gave little moment to state utility commission review and permitting, and paid absolutely no attention to possible public opposition and its impact on permits necessary from local government.
I guess PJM and GAI Consultants have already forgotten what killed the PATH project they both had a hand in. GAI opines that paralleling existing transmission lines will dampen opposition because there's no need to involve "new" landowners. Right... because transmission lines are like potato chips... one is never enough!
The routing study and mapping shows urban and residential areas being crossed, and at one point the line runs practically right over top of a school. Although all projects needed to acquire new right of way adjacent to the current one, GAI and PJM reason that PSE&G has an advantage here because of some old agreement over ownership of transmission assets. I just don't see this agreement being helpful convincing landowners to agree to expand the current right of way. Maybe PJM has forgotten what happened when TrAILCo attempted to utilize old right of way in Pennsylvania? In that instance, trying to force old agreements on new landowners using unscrupulous land agents blew up in TrAILCo's face and most likely contributed to its eventual denial by the PA PUC. In the end, TrAILCo had to abandon that old right of way and give it back to the landowners.
The selected project also proposes an overhead river crossing in a very busy shipping lane, instead of the submarine crossing proposed by other projects.
This is a public opposition bonfire in the making!
So, what else could PJM have done here? What other projects were in the running? Projects choosing a route through Delaware were evaluated for "constructability" by a different company that actually considered public opposition, and none of that was very encouraging. All projects will garner public opposition, some more than others. DUH.
Damned if you do, damned if you don't.
But, wait a tick here. There's one project on PJM's bid list that doesn't seem to have been evaluated in either "constructability" report. I guess PJM batted it aside instantly, like a distasteful mint.
Atlantic Grid (yes, the ones who have been patiently trying to construct an offshore backbone transmission line to gather offshore wind generation and funnel it to shore at strategic locations) submitted something called the Garden State Reliability Project. It looks like this project was going to do something entirely different than the rest of the contenders.
The Artificial Island-related challenges to grid reliability and operational flexibility that PJM describes in its Problem Statement can be solved with the Garden State Reliability Project (GSRP), a proposed voltage source converter (VSC) high voltage direct current (HVDC) transmission system that connects Artificial Island to the Cardiff AC Substation near Atlantic City, New Jersey. GSRP has the capacity to controllably transmit 1,000 MW of power on its approximately 60-mile underground circuit. GSRP also incorporates static VAR compensator (SVC) facilities. The project is estimated to cost $1,012 million and to be in service by December 31, 2018.
Not only was this project going to fix PJM's little Artificial Island problem, it was also going to tie into Atlantic Grid's New Jersey Energy Link to provide a way to move nuclear power into the congested northern New Jersey load zone. It would also provide backup, baseload power to balance the eventual offshore wind generation's variability.
But, Atlantic Grid's GSRP was proposed to cost 4 times as much as PJM's favored project. However, GSRP provided many other benefits the other project didn't, such as black start capability for Artificial Island, and it was designed to meet future needs, instead of simply fixing today's little problem. Low cost may be the easy choice for today, but sometimes it's just not as efficient.
PJM's "low cost" choices presume that a select set of landowners must be forced to sacrifice their private property for the good of society. When is the rest of society going to make a sacrifice for its own good? Adequately compensating landowners and/or building higher cost projects that don't require as much sacrifice from host landowners should be a sacrifice society is willing to make for its own good! Want cleaner power? Want your lights to stay on? You need to pay for it, not some other landowners miles away who are not benefiting from the project.
And you know what was really innovative about Atlantic Grid's project? It was completely underground and routed along road rights of way! Minimal sacrifice for host landowners, minimal public opposition, minimal risk, minimal time to complete.
Another key GSRP project objective was to demonstrate timely constructability with a practical right of way (ROW) approach and low construction and environmental impact. GSRP is distinguished from high voltage AC line solutions to the grid reliability and operating issues at Artificial Island because GSRP has a more predictable in-service date. GSRP’s HVDC cable system would be buried underground in state and local road ROW, rather than being constructed as an overhead transmission line. Accordingly, building GSRP requires simple rights of access to existing road ROW granted by public entities. In comparison, AC overhead transmission solutions will require new or expanded ROW acquisition involving tree and brush clearing, high towers, aesthetic and environmental impacts, public opposition and litigation. All of these challenges associated with overhead lines cause less predictability and greater cost.
Instead, PJM seems to prefer continuing its old status quo of selecting projects proposed by its incumbents that are environmental, permitting and public opposition nightmares. And we all pay for PJM's mistakes.
I came across an interesting FERC filing the other day. It's about something called "unreserved use," which is kind of a geeky, complicated subject, but the real issue here seems to be FERC's deference to one of its regional transmission operator pets, and a contradiction about whether specific information should be public or privileged.
Now where else has FERC had issues with that lately?
Unreserved use is failing to reserve transmission before utilizing it, so planners cannot account for the usage until they see it in real time, some call it "leaning on the system." In most tariffs, a company gets a 200% penalty for the extra stuff it puts on the system. FERC has asked that RTOs annually account for those penalties. FERC also wants the RTO to distribute the penalty amounts to non-offending customers, so it's a two-pronged incentive to follow the rules.
In FERCenese, here's how it's supposed to work:
In Order No. 890, the Commission required each transmission provider to report its operational penalty assessments and distributions in an annual informational filing. The annual filing must contain the following information: (1) a summary of penalty revenue credits by transmission customer; (2) total penalty revenues collected from affiliates; (3) total penalty revenues collected from non-affiliates; (4) a description of the costs incurred as a result of the offending behavior; and (5) a summary of the portion of the unreserved penalty revenue retained by the transmission provider. Each transmission provider must report on its penalty assessments and distributions in an annual compliance report submitted on or before the deadline for submitting its FERC Form No. 1.
Sounds rather routine, right? Except that some RTOs make their compliance filing as a public filing, but MISO has decided that its compliance filing is privileged because:
MISO contends that this type of information could be used by other "MISO market participants to discern trading patterns, and even trading strategies, adopted by other MISO market participants.
Well, yee-haw, cowboys! SPP files this information publicly! Cue the crooked traders.... And PJM has NEVER even made a compliance filing. FERC has so many clear rules it doesn't try to enforce, yet sticks its nose into the murky but headline grabbing world of supposed market manipulation where it doesn't even know its own rules.
Just what IS it about MISO's unreserved use filing that can't stand public scrutiny, anyhow? Something doesn't add up here...
The Pollyanna Planners of PJM Interconnection are at it again. Today, PJM announced it had made a decision about the building of a new 18-mile 500kV transmission line in Salem County, New Jersey. As the first project awarded under FERC's new "competitive" transmission building system, PJM proved that old habits die hard by awarding the $250M project to incumbent transmission builder PSEG.
PJM kicked a plan by independent transmission builder LS Power to the curb. LS Power's plan was to build a 5.5-mile 230-kV line and a new transformer and switchyard by mid-2017 for $116 million to $148 million. But, PJM's delusions of grandeur made it decide in favor of a longer, bigger and more expensive plan proposed by one of its incumbents.
PJM says that siting and permitting prospects were one of several factors it considered when making the recommendation, although the selected project may have issues securing a permit for a river crossing and will cross the Supawna Meadows National Wildlife Refuge, the Alloway Creek Watershed Wetland Restoration Site and the Abbotts Meadow and Mad Horse Creek Wildlife Management Areas.
PJM officials said that while this solution was comparable to other projects based on such factors as cost, schedule and the ability to address the reliability concerns, the Hope Creek-Red Lion 500-kV line was superior in terms of constructability.
Seriously, PJM? Who's giving you advice about "constructability?" The same geniuses who thought PATH and MAPP were good ideas? Those two projects turned out not to be so "constructable" after all, and have left PJM ratepayers footing a bill for more than $350M for projects that never even put a shovel in the ground!
The New Jersey Board of Public Utilities said PJM’s analysis of the 500-kV option underestimated likely public opposition.
Ya think? Just because the new transmission line parallels an existing one does NOT mean that affected landowners will welcome it with open arms. In fact, these landowners already know what it's like to live with a transmission line across their land, and feel they have already made the ultimate sacrifice for "the public good." They will NOT want another one, and will fight tooth and nail to kill this project.
And, guess what? They'll have plenty of help from other transmission opposition groups that have perfected the art of public opposition. After all, we've had some of the best teachers in the world to show us all the ins and outs of transmission project strategy, and we like to "pay it forward."
So, if you're a landowner in Salem County, New Jersey, who already has a 500kV transmission line in your backyard, check out the map at RTO Insider to see if you're one of "the chosen." I am looking forward to meeting you!