...and they'rrrrrrrrrrrrrrrrre off!

Eager and hopeful transmission builders in PJM are now busy with their transmission line routing Etch-a-Sketches, drawing a new transmission line through your back yard, and hoping that their proposal will be anointed Miss Market Efficiency 2013 and take home the big prize.  In mid-August, PJM "began invit­ing com­pet­i­tive pro­pos­als for trans­mis­sion improve­ments to pro­vide relief at its 25 most con­gested locations."  According to RTO Insider, the deadline to submit new transmission proposals for consideration is September 26.

FERC's Order No. 1000 removed the historical "right of first refusal" to build new projects from incumbent transmission owners.  Under the prior scheme, when PJM determined that a new project was needed, it was first offered to the incumbent transmission owner in that zone.  If the incumbent declined to build it, then the project was opened to competitive bidding.  But I'm not sure that ever happened.  After all, what greedy transmission owner would ever turn down the chance to make more money with new transmission investments returning double digit interest?  Under the new scheme, when PJM identifies a new transmission building opportunity, a project proposal window is opened and all transmission owners who have been pre-qualified may submit new project proposals that solve the transmission issue.  PJM then descends into its secret underground lair with all the bids and makes a subjective selection of the contest winner.

PJM's "Market Efficiency" project "need" is based on identified "top 25 congestion events."  What is economic congestion?  It's when not enough transmission capacity exists to wheel the cheapest power available to all users.  It doesn't mean that someone's lights will go out if this power can't be transmitted from point A to point B.  It simply means that the user may have to pay slightly more for power produced locally, instead of relying on "cheaper" generators hundreds or thousands of miles away.  Economic congestion is a constantly shifting premise that can never be entirely eliminated.  At some point, the cost of building new transmission to ship power from point A is going to obviate any cost savings at point B.  Trying to build new transmission to solve an ever-changing economic and demand situation is like trying to herd cats.  And it's going to cost you... a lot!

So, where are these "top 25 congestion locations?"  RTO Insider has a handy-dandy chart here.  And it's a good thing they do, because if you want any more details than that, you have to know PJM's secret handshake to be allowed to delve into "Critical Energy Infrastructure Information" (CEII).  Transparent, right.

RTO Insider tells us that 8 of the 25 are flowgates between PJM and MISO, where power is traded between regions.  Within PJM, the most congested point is the AP-South inter­face with Bedington-Black Oak.  According to PJM, the Bedington – Black Oak Transfer Interface (Bed-Bla) includes the Bedington Black Oak 544 line, and the AP South Transfer Interface includes the Doubs - Mt. Storm 512 line and the Mt Storm – Meadow Brook 572 line.  Sound familiar, former PATH opponents?  Bedington is located in Berkeley County, WV, and was part of PATH's original configuration.  Black Oak is located near Rawlings, MD, in Allegheny County, just to the west of PATH's proposed Kemptown substation.

But, wait a tick... just last year, FirstEnergy told the WV PSC that everything was hunky-dory with its West Virginia transmission system.  Guess not, but then admitting your problems and fixing them before they get out of hand and cause the construction of new transmission projects doesn't bring home the bacon for Big Daddy Tony, now does it?

Earlier this summer, PJM's Steve Herling had much to say about PJM's new transmission proposal competition.

Steve Herling doesn't think much of you little people.  In fact, it appears that you are just so much doggie doo on his shiny, expensive shoes.  Herling sees you as someone who must be kept in the dark so that you don't interfere with PJM's "open and transparent" project selection process.

Such infor­ma­tion would include “a line from A to B, imped­ance mod­el­ing, so peo­ple can ana­lyze [the pro­pos­als],” Her­ling said. “We won’t put out right of way infor­ma­tion. You’d get the pub­lic all stirred up that ‘we’re look­ing at your property.’”

Right, Steve, but why shouldn't "the public" get stirred up about having their property taken by eminent domain to construct new transmission lines of dubious necessity?  We've already been stirred and shaken by PJM's last little foray into big, new transmission projects that brought us the wasteful, and since abandoned, PATH and MAPP projects.  We pretty much stay stirred here at StopPATH blog.  All.the.time.

And Herling also gives us a look at how PJM will evaluate project proposals in its secret underground lair:

“If you have half the right of way in hand, that cer­tainly will have an impact on cost and reg­u­la­tory risk and would prob­a­bly affect con­struc­tion time,” Her­ling said. “To give you credit, we would have to dis­close some infor­ma­tion. We don’t have to talk about indi­vid­ual pieces of prop­erty you have."

So, a transmission developer who has land held for future use in its collection of assets would have a leg up on building new projects?  That hardly seems fair, when that property was paid for by ratepayers, and the competition does not have the same ability to have the public pay to buy it valuable assets that can be used to win future transmission projects.  In fact, it's sort of like a new and even more lopsided ROFR, isn't it?  FERC said ROFRs are no longer legal in Order No. 1000.

In another thoughtless move, "the RTO plans to hire inde­pen­dent con­sul­tants to val­i­date devel­op­ers’ cost esti­mates and iden­tify poten­tial reg­u­la­tory risks, such as the like­li­hood of obtain­ing sit­ing for rights of way."

Gosh, I wonder where PJM is going to find an "independent" consultant who hasn't worked for any of the pre-qualified entities in the past and is not expecting to do so in the future?  Yeah, good luck with that, PJM.

Herling believes all this nonsense is transparent:

“If it becomes obvi­ous that we’re rely­ing heav­ily on one piece of infor­ma­tion we’re going to have to make it pub­lic — and you might still not get cho­sen,” he con­tin­ued. “… We’ll have to make sure it’s trans­par­ent and above board to defend our­selves against challenges.”

And now, thanks to the invaluable RTO Insider and this blog... it is a little more transparent than PJM envisioned it would be.  Now YOU know about it.  Stay tuned...