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PJM Thinks It Has You Handled

11/30/2023

PJM Interconnection has never been good at interacting with the regular people its projects impact. Part of the problem is that the place is chock full of engineers and socially inept geeks, and the other part is that they think they don't have to explain themselves to you or anyone else. Back around 2008, during the PATH transmission line fight, some public relations guy from PJM named Kerry Stroup told a local reporter here that "PJM answers to no one." But PJM is NOT an omnipotent dictator. PJM answers to the Federal Energy Regulatory Commission. All the power PJM possesses comes courtesy of FERC. If PJM doesn't follow its own FERC-approved planning rules, anyone can file a complaint at FERC.

After decades of digging a moat around itself in order to keep regular people out of its planning process, PJM's efforts have failed and they are now positively terrified of the ruckus you're about to cause.

Public relations has never been PJM's strong suit. In fact, PJM's public relations effort has been almost non-existent. PJM depends on the utilities it orders to build the projects to interact with the torches and pitchforks crowd later on, after there's no chance to influence the plan. But now, because impacted people have found out about PJM's plans before the projects have been awarded, PJM has made a feeble attempt to inform you about its "role" in ordering the new transmission projects that concern you.

Here's PJM's recently released Role in Regional Planning/2022 RTEP Window 3 document. You are supposed to read it and accept it, even though you may not agree, and even though PJM may have left out some important things. Here's PJM again telling people that it answers to no one and that PJM must build these things ASAP or your lights are going to go out. It's going to say the same things to your state utility commission when it appears as a witness for the utility that is assigned to build the project.

Our analysis shows without doubt that there are going to be real reliability impacts without further transmission reinforcements. These solutions are required to maintain the reliability of the system. If the transmission is delayed, load has to be dropped. We currently don’t have anything in the new services queue planning to come online in time. We are working with Talen Energy, the owner of Brandon Shores, on keeping those units in service past their proposed deactivation date of June 1, 2025, in order to ensure reliability.

PJM may provide supporting evidence on the need for a project from the perspective of grid reliability to help local officials better understand the project and its impacts.

Think about that... PJM says it cannot deny service to a new customer (data centers) but if new transmission to serve these customers isn't built on PJM's timeline, then "load has to be dropped." In other words, PJM will shut off service to certain customers. You can bet it won't be the data centers. So what PJM is really saying is that it is going to serve the new load and drop the old load.... unless you gladly welcome new transmission across your property, you selfish NIMBY. Kind of makes your head hurt, right? Remember, I said that PJM lacks public relations skill.

Here's the real answer that PJM isn't telling you... when a new customer asks the local utility for new service, the utility could certainly build new generators to produce the electricity for the new customers. Building new generation is something that the state could require the utility to do. Let's use Dominion as an example here because Dominion is the utility that serves the data centers. Dominion could decide to build a new generator (or generators) near the data centers and ask the Virginia State Corporation Commission to approve it and assign costs to Dominion's customers. But, with Virginia's "clean energy" goals enshrined into law, the chances that the VA SCC would approve a big, new baseload generator that could satisfy the data center's insatiable thirst for electricity are slim. Nobody wants a new electric power plant in their neighborhood and solar, wind and other renewables can't supply the kind of on demand 24/7 power needed for data centers. So Dominion and the Commonwealth of Virginia simply shrugged and passed the buck to PJM to find a solution to the reliability problem the new data centers have caused. And this is the result. You probably didn't envision this when Virginia passed its clean energy laws, but this is what happened because Virginia passed environmental goals that were NOT achievable when combined with the building of new energy-intensive data centers. This is Virginia's problem and it's about time they own it, don't you think?

PJM handled the hot potato it received according to its existing rules. PJM did not acknowledge that this is a new problem caused by state clean energy laws and out-of-control building. PJM pretended that it was a transmission problem, not a generation problem. Therefore, PJM sought out any usable generation in its region to solve Virginia's lack of power and designed new transmission line extension cords to plug it into the data center load. PJM cannot order new generation to be built, it can only order transmission. Therefore, when the only tool you have is a hammer, every problem looks like a nail. Virginia could order new generation, but it chooses not to because new generation could make it impossible to achieve its clean energy goals. Even the Federal Energy Regulatory Commission recently questioned whether new infrastructure caused by energy policies of certain states should be fully paid for by those states. If Virginia had to pay for the entire $5B cost of this new transmission, perhaps building generation might be a cheaper alternative. But Virginia thinks it can do it cheaper by choosing transmission that is cost allocated to other states that will not benefit from the data centers or clean energy laws.

Ten years ago, PJM's independent Market Monitor suggested to PJM that it create a process by which new transmission is forced to compete with new generation to evaluate who would pay the costs and accept the risks of each alternative. If PJM had only listened to the advice of its own expert, we'd be having a very different conversation right now. It wouldn't sound like PJM's "Role" paper, it would sound more like this blog.

So, what can you do to change PJM's preferred plan? The document gives you several options in the last couple of paragraphs. The first is to participate in PJM's Transmission Expansion Advisory Committee meetings. Been there, done that. It's frustrating and exhausting. At every turn, you are faced with the virtual moat PJM has constructed around its processes designed to keep regular people out. PJM wants to make it really hard on you to participate. If you do manage to get in, share your thoughts, and not give a damn what PJM thinks about you, prepare to be thwarted at every turn. This is what many of us have experienced since August of this year. The TEAC process for these projects is done. PJM has made its recommendations despite everything that was said in its meetings. Let's move along.

PJM's second suggestion is to send your comments to its Customer Service and Planning Departments. Don't waste your time here, either. PJM says it will "compile" these comments for the Board of Managers' perusal. In other words, PJM will sanitize your comments so that they support its recommendations. PJM only wants you to communicate with its Board of Managers through a filter it controls. You might as well not even bother.

The third option is the one you should use.

Any stakeholder may also provide written communication directly with the 10- member PJM Board on issues regarding PJM markets, operations or planning. This communication will be made public, consistent with rules related to “ex parte” communications as outlined in the PJM Code of Conduct. All such communications should be sent to the PJM Members Committee Secretary (Dave.Anders@pjm.com), who will ensure delivery to the Board of Managers. Notice of Board communications and documents are posted and available on the Board Communications page of PJM.com.

Write directly to the Board. Don't let PJM's TEAC filter your comments. All that nonsense about "ex parte" communications is meant to scare you away from this option, but it doesn't mean anything. So what if your comments are made public and posted on PJM's website? SO WHAT? Complete instructions for composing your letter to the Board of Managers can be found here. Remember, you are writing to the Board -- Dave Anders is just the mailman. Do not address your comments to Anders.

Deadline for comments to PJM's Board of Managers is Monday, December 4 (one week before the Board meets to consider approval of the projects on December 11). PJM "forgot" to tell you about that in its "Role" paper. Another Freudian slip that can derail your efforts. It seems that PJM is more about trying to keep people out of its processes than it is about inclusion. PJM doesn't care what you think and is going to do what it wants despite your best efforts. If PJM is trying to steer you away from a letter to the Board of Managers, then you can bet that's your best option. Maybe PJM is a little transparent after all... but not in a good way.

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Your Lack of Planning is NOT my Responsibility!

11/13/2023

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PJM Interconnection's solution to 2022 Window 3 transmission needs is comprised of a collection of new and upgraded 500kV transmission lines, along with a number of 230kV new lines and upgrades. Why does this matter? It's all about who pays.

PJM will assign project costs to different subregions of its territory according to its existing FERC-approved cost allocation rules. As noted in a recent FERC Order, these rules are:

PJM utilizes a hybrid cost allocation method, which the Commission found complies with Order No. 1000, for Regional Facilities and Necessary Lower Voltage Facilities that address a reliability need. Under this method, PJM allocates 50% of the costs of Regional Facilities or Necessary Lower Voltage Facilities on a load-ratio share basis and the other 50% based on the solution-based distribution factor (DFAX) method. PJM allocates all of the costs of Lower Voltage Facilities using the solution-based DFAX method. Cost responsibility assignments pursuant to the Order No. 1000-compliant cost allocation method are included in Schedule 12-Appendix A of the Tariff.

500kV lines are "Regional Facilities". It is likely that the 230kV improvements will be "Necessary Lower Voltage Facilities." Therefore, 50% of the cost of these new lines, estimated at $5.4B, will be allocated to ALL customers in the PJM region based on their load-ratio share. The load-ratio share, in layman's terms, is the amount of PJM's total load used by each sub-region. Everyone who pays an electric bill in PJM will pay for their share of $2.7B of new transmission that is only necessary because of the building of new data centers in Northern Virginia and the closing of fossil fuel generation made necessary by the clean energy laws of certain states. Although the reason for the lines is caused by only a portion of the region, everyone pays.

The other 50%, or $2.7B, of the costs will be allocated using the DFAX method which, in layman's terms, would be the specific sub-regions who use the new facilities.

This is set in stone and it cannot be changed unless PJM petitions FERC to change its cost allocation rules, or FERC takes the initiative to begin a proceeding to investigate electric rates that have become unjust and unreasonable.

This cost allocation for PJM's new projects is not fair. However, there is nothing you can do about it.

In a recent case, PJM filed a cost allocation document for recently approved projects intended to solve the closing of the Brandon Shores coal-fired plant in Baltimore. Most of the cost was allocated to the sub-region around Baltimore that would use the new facilities, with some smaller portions assigned to other sub-regions. Maryland regulators didn't like this. They thought PJM should have found other solutions to the generator closing instead of a quickly approved transmission plan that cost nearly a billion dollars. The Maryland regulators filed a protest in PJM's cost assignment FERC docket. FERC said that since the cost allocation PJM made was in accord with PJM's existing, FERC-approved cost allocation rules, there was nothing they could do but approve it.

However, something interesting happened there. Commissioner Mark Christie, a champion for electric ratepayers, said it wasn't fair, although he was obligated to approve it. You should read his Concurrence because it may be a harbinger of things to come.

PJM has told us that if we fail to approve those transmission projects in this RTEP driven by the closure of the Brandon Shores coal generating unit located in Maryland, the grid will likely suffer a severe voltage collapse in Baltimore and the surrounding zones, including Northern Virginia, the District of Columbia, Delaware and southeastern Pennsylvania. Such a result could be potentially catastrophic.
While these projects are very costly – and I take seriously the concerns expressed by the Organization of PJM States, Inc. (OPSI), Maryland Public Service Commission (MD PSC) and Maryland Office of People’s Counsel (OPC) – given this Hobson’s choice I concur with approving PJM’s RTEP filing.
While I concur, I note that this element of the RTEP filing raises more questions than it answers, and some of those questions are extraordinarily important.

Although perhaps he did not find the cost allocation fair, Commissioner Christie chose to approve it because of the extreme risk of blackouts if the projects were delayed by a FERC investigation into the justness and reasonableness of PJM's cost allocation policies.

We are hobbled by PJM's bad policies and poor planning practices into a future that never allocates project costs fairly. Will people complain about the upcoming cost allocation of PJM's 2022 Window 3 projects? Absolutely. But will FERC open an investigation, or will it be forced into another Hobson's choice?

Commissioner Christie shared his thoughts on how PJM's cost allocation rules have been rendered unjust and unreasonable by recent events.

Let me emphasize that the State of Maryland, within its sovereign police powers, clearly has the authority to mandate any particular mix of generating resources it prefers. Maryland’s new climate law is well within its inherent authority to enact. Such policies are for Marylanders to choose, not RTOs or FERC. But if the resulting transmission projects under protest in this RTEP filing are caused more by Maryland’s policy choices than by organic load growth and economic resource retirements, then a salient question that may be asked is whether these transmission projects are more accurately categorized as public policy projects, essentially the same as the transmission upgrades caused by New Jersey’s offshore wind projects?
And if they are more accurately categorized as public policy projects, should such projects be regionally cost-allocated, potentially to consumers in Pennsylvania, West Virginia, Ohio, et al.?

A very relevant question that can also be applied to the current problem with PJM's 2022 Window 3. Is the closing of more generation in certain states due to their climate laws, and the out-of-control building of new data centers that will only benefit one or two counties in Virginia, more of a public policy issue that should be paid for by the states/localities involved? After all, it is their choice to put pressure on the amount of generation available in PJM. Before passing laws that mandate the closing of existing generators, or before approving the building of new facilities that require extreme amounts of new electric supply, the states or localities responsible need to make sure that they still have adequate generation available to serve their load. It is within their power to include a provision in their law that the closing of generators must be balanced with the building of new generators. It is also within these state powers to make sure there is an adequate supply of generation in the state/locality to serve big, new electric customers like data centers, before approving them. Instead, the states/localities are making these choices and leaving the consequences on the doorstep of others who have no vote on that state's policy choices. This is not just and reasonable. It's irresponsible. It's selfish. It pushes the consequences of a state's policy choices off on residents of other states. In this same vein, do the voluntary policy choices of one state that requires new transmission also compel other states to use their eminent domain authority to take property from their state's residents to create easements for new transmission that serves the state making the selfish policy? Why would I be asked to give up my property to build transmission that is caused by the building of data centers in Northern Virginia?

The "New Jersey" approach Commissioner Christie refers to is what's known as the "state agreement" approach to cost allocation. It is a more recent construct that allows a state with a new public policy to voluntarily agree to shoulder all the costs of new transmission made necessary by their state policies. This construct would prevent the unjust and unreasonable allocation of costs to states that did not cause the need for new transmission. It's exactly where we find ourselves now. The question is, would FERC open an investigation to correct PJM's current cost allocation for Window 3 to order it be allocated according to the public policy "state agreement" cost allocation approach?

It is ultimately the job of each state to ensure resource adequacy to serve its consumers, even in a multi-state RTO.

Amen, Commissioner Christie! Perhaps if they did, they'd stop prematurely shutting down fossil fuel generators before replacement generation is available. And perhaps they'd stop approving new data centers without any viable means of powering them. Instead, it's been left on the doorstep of all the other states in the PJM region to pay for, and house, transmission only made necessary by the thoughtless politics of certain states and localities. This is not just and reasonable.

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MJMEUC Partners With GBE's Competition

11/11/2023

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Hit it, Alanis...

This is a rather long story, but it is deeply satisfying in an "I told you so" way.

You all know that Grain Belt Express has been in the works for years. In order to get approval from the Missouri Public Service Commission, GBE offered MJMEUC (now going under the acronym MEC) a sweetheart, below cost deal if only they would sign up for service on GBE. MJMEUC accepted and has been exclaiming over how much money GBE would save for its customers. GBE is the bomb, said MJMEUC.

A couple years ago, regional grid planner/operator MISO began to plan a new collection of transmission projects to increase connectivity and reliability across its region, known as "Tranche 1." Tranche 1 looks like this on a map:

There's a set of projects in Iowa/Missouri that would import wind energy from Iowa into Missouri. On the map, it's represented as Orient-Denny-Fairport-Zachary-Thomas-Maywood, the 9, 10, 11 projects on the map. When MISO was developing this plan, GBE got upset. GBE insisted that its project was a better deal for ratepayers and would obviate the 9, 10, 11 projects, if only they could build it. In order to cement its position and prevent these projects from being approved by MISO, GBE began complaining to MISO that if only MISO included a built version of GBE in its planning, then the 9, 10, 11 projects would no longer be necessary. MISO rejected that idea because it has no control over whether GBE will ever be built. MISO preferred not to put all its eggs in GBE's transmission basket and proceeded with its plan to build the projects because MISO thought those projects would be a better deal for consumers.

And that's the question -- what IS a better deal for consumers in Missouri? As you know, the GBE project must be fully paid for by voluntary customers like MJMEUC. However, the MISO projects would be cost allocated to all consumers across the whole MISO region, with Missouri only paying a portion of the cost of constructing the lines. Considering the cost differences between GBE ($7B) and the MISO lines ($84M so far), it's a fair question to ask. Of course, MISO can't touch GBE's special deal pricing to MJMEUC because it is BELOW COST, but that only applies for "up to 200 MW" of service, less than 5% of GBE's capacity. The remaining 95% would be offered to other Missouri customers at vastly increased rates. As well, the MISO projects are cost allocated to captive customers. That means everyone pays a share, whether they use it or not. MJMEUC (and all Missouri electric customers) will pay for a portion of the MISO lines, even if they sign up to use GBE. If you sign up to use GBE, you'd be paying for GBE AND the MISO lines and there's nothing you can do about it.

GBE also claimed that MISO's projects would hurt its project's economics. I can only believe that means that MISO's projects are going to be much cheaper for Missouri customers than GBE. If MISO is offering comparable service at a lower price, why would anyone sign up to use GBE at full price?

GBE felt so strongly about all this that it filed a complaint against MISO at the Federal Energy Regulatory Commission, demanding that FERC make MISO include GBE in its transmission planning. FERC has totally ignored GBE's complaint and it has now become obsolete without accomplishing anything.

MISO moved on and opened an RFP for the #9 project in its Tranche 1, a new transmission line and substation in Missouri known as Fairport-Denny. Ameren bid to build the project, and as part of its proposal it will be partnering with MJMEUC. Ameren will sell 49% of the new transmission project to MJMEUC upon completion. MJMEUC must think MISO's project is a good deal for its ratepayers. It must be cheaper than additional transmission service on GBE.

MISO recently selected the Ameren/MJMEUC project to be built. And they're off to the races...

With the MISO project in the works offering transmission service for importing new wind resources into Missouri, why would anyone in Missouri sign up for GBE and pay more for wind being shipped from SW Kansas on a more expensive transmission project?

If not for that "sweetheart deal" MJMEUC received, would MJMEUC even be GBE's customer? Indicators point to "no". MJMEUC only loves GBE because it got a sweet deal. MJMEUC doesn't seem to care if GBE ends up costing other Missouri customers more than the MISO projects. Isn't that a bit selfish?

And shouldn't MJMEUC re-examine its deal with GBE and compare to taking service on the new MISO lines instead? MJMEUC can get out of its GBE contract at any time. But will it stop being selfish long enough to acknowledge its mistake? Otherwise, MJMEUC is now competing against itself. Dumb decisions make dumb results. I told you so.

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Clean Line's Biggest Mistake Yet!

11/8/2023

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Get your popcorn, folks, it's shaping up to be an epic battle!

Last month, I wrote about Grain Belt's application for amendment to its negotiated rate authority at FERC, and a comment filed by the Missouri Landowner's Alliance.

Since then, several entities have intervened in the FERC docket. First there was MEC, formerly known as MJMEUC. Perhaps they're interested in the fact that MLA questioned whether their contract with GBE is even valid (hint: it's not because Clean Line never made the required FERC compliance filing). Then there was Ameren. No idea why they intervened. Perhaps it's because Ameren has been awarded new MISO transmission projects that compete with Grain Belt Express? Sierra Club intervened and filed a completely clueless comment about how great GBE is. It was completely irrelevant and had nothing to do with GBE's former (or future) negotiated rate authority. Maybe FERC can use it in the restroom if the other paper runs out? And then there was "Clean Line Investment LLC." What? Didn't Clean Line go bankrupt? According to one Michael Skelly, who filed the Petition to Intervene,

Clean Line Investment LLC (“Clean Line Investment”) is a Delaware Limited Liability Company that was formed for purposes of investments in independent transmission projects. Clean Line Investment was a financial partner in Clean Line Energy Partners LLC, which originally developed the Grain Belt Express Project. While Invenergy has acquired ownership and control of the Grain Belt Project, Clean Line Investment maintains a long-standing, direct interest in the successful implementation of this project. Given its originating role in this project, Clean Line Investment’s interests cannot be represented by any other party. Therefore, this intervention is in the public interest.

Oh for goodness sake... an "interest" in a proceeding means a LEGAL (financial) interest, not a driving-by-hoping-to-see-severed-heads rubbernecking interest. And why would any Clean Line company still exist? Maybe it's so Invenergy has a legal entity to blame this snafu on?

What's the problem? Well, after GBE filed a prohibited answer to MLA's protest that tried to brush all the allegations aside and pour so much mud in the water that it is impossible for FERC to see the sharks GBE let loose there, this morning MLA filed a response.

It's short and sweet... and it makes me laugh so hard!

20231108-5040_er24-59_response_final.pdf
File Size:	133 kb
File Type:	pdf

Download File

While GBE was busy telling FERC that there was no deadline for it to inform FERC that GBE had been sold, it couldn't see the forest for the trees. GBE told FERC that it would be selling interests in GBE and that it would apply for approval of these sales as required under Sec. 203 of the Federal Power Act. Section 203 requires

“No public utility shall, without first having secured an order of the Commission authorizing it to do so -- sell, lease, or otherwise dispose of the whole of its facilities subject to the jurisdiction of the Commission, or any part thereof of a value in excess of $10,000,000.”

Wait... didn't Clean Line sell GBE to Invenergy and dispose of the whole of its facilities subject to the jurisdiction of the Commission's negotiated rate authority? Yes. Yes, it did.

And did Clean Line first secure an order of the Commission authorizing it to do so?

NO. NO, it did not.

I wonder if Michael Skelly is still "interested" in his failure to get approval for the sale from FERC?

Pass the popcorn! Meow!

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National Transmission Needs Study Declares Itself Useless

11/2/2023

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Wait... was it just 10 minutes ago that I said giving the children running the U.S. Department of Energy a pot of money to undermine our current transmission regulatory system was a dumb idea? Here's another example!

This week the DOE released its National Transmission Needs Study. As expected, it supposes that we will need many new transmission projects everywhere in the future.

But what good is it? After a lot of pushback on its draft study contention that DOE has any authority whatsoever to plan the transmission system, the announcement says this:

The Needs Study is not intended to displace existing transmission planning processes and is not intended to identify specific transmission solutions to address identified needs, but it does identify key national needs that can inform investments and planning decisions.

Right. It's useless for planning purposes. Mainly because experienced planning organizations are NOT going to take advice from a bunch of politically-motivated babies who don't know how to plan lunch, much less a transmission system. But, bless their little hearts, the DOE babies still think they're influencing their superiors.

Let's look to the actual study.

The findings of this Needs Study are intended to inform regional and interregional planning, as well as help guide the Department in the execution of its transmission-related authorities. The Department understands the factors that drive industry transmission planning today and the entities and institutions that perform such planning. This Needs Study is not meant to displace these planning processes or the reliability standards they address. Rather, the Department believes it will be an important addition to overall industry and government planning efforts to reduce transmission congetion and capacity constraints that adversely affect consumers.

In other words, all of the stuff in here is useless. So why did all this taxpayer money get wasted? It only has comedic value at this point.

Appendix B contains a Comment Synthesis and Resolution.

This is the only part worth reading because the rest of it is collective fantasy. Reality intruded in the comments and watching DOE try to sidestep it is much more entertaining than the report itself. Imagine how hard I laughed to find my own name mentioned 36 times in the Comments section. Yes, I submitted comments. I had fun writing them. Apparently someone at DOE had fun reading them. And then some idiot tried to "resolve" them. I'm not going to list all the brainless responses to my comments, just the ones that made me laugh the most.

A few individuals express opposition to the basis of the Study and what they view as political or parochial goals of the Study. One individual, Keryn Newman, criticizes the discrepancy between needs identified in the 2020 Congestion Study and the draft Study, stating that in 2020, DOE did not find a need to designate transmission corridors. In contrast, this report finds significant transmission need “in an area so vast that if the DOE were to designate corridors to solve it, the entire continental U.S. would be one gigantic ‘corridor.’” Newman concludes that this discrepancy can only be attributed to the fact that the studies “are not based on data and science, but on political goals.

DOE's "resolution" to my comment? There wasn't one to this particular comment. And so it begins...

Keryn Newman criticizes the Study’s conclusion that large-scale transmission build-out is cost-effective. Newman cites the Study’s “vague claims of ‘economies of scale,’” arguing they are never justified and allow DOE to avoid a comprehensive analysis of the cost of transmission.

Again... not resolved. Perhaps the comment quoter had big intentions for some of these legitimate comments to be resolved, but the resolver preferred to make crap up and watch cat videos on Facebook.

Keryn Newman argues that the Needs Study does not include adequate consultation with landowners, whom Newman identifies as those who will most experience the devastating impacts of transmission development. Newman argues that the Study identifies landowner concerns as a barrier to transmission deployment but does not bother to consult these “barriers” or to devise solutions to mitigate their concerns. For this very reason, Newman also objects to the FERC Report on Barriers and Opportunities for High Voltage Transmission, which is cited in the Needs Study. Additionally, Newman argues that landowner interests should be represented on DOE’s Technical Review Committee.

Finally... we're getting somewhere! DOE's resolution to this issue is:

Department Response
In response to comments from parties requesting additional, targeted stakeholder and Tribal outreach and continued stakeholder engagement, the Department has made additional efforts to engage with entities beyond the Department’s consultation with states, Tribes, and regional entities pursuant to Section 216(a) of the FPA, as amended (16 U.S.C. §824p(a)(1)). The Department has continued to accept meeting requests from commenting and interested parties to discuss draft Study findings.
Further, the Department has created regional and national fact sheets to be appended to the final Study and released concurrently to help make Study findings more accessible. The Department hopes the final Needs Study will be used as an educational tool to engage communities in discussion about grid needs. Departmental communications on final Study findings are a tool to solicit additional feedback from stakeholders on what future iterations of the Needs Study should entail.
The Department agrees with commenters that landowner, community, stakeholder, and Tribal engagement is imperative. The Department added Section V.e. Siting and Land Use Considerations (pages 95–108) to the final Study on subjects of unique interest to the communities. This section contains discussion of best practices for developers in engaging with landowners and other affected parties.

Would any landowner who has had a meeting with DOE please raise your hand? DOE is lying about having meetings with landowners, or any contact whatsoever. As well DOE does not intend to CONSULT with landowners... it wants to dictate to landowners about how they should feel, what they should want, and thinks it needs to "educate" landowners to gladly participate in their goose-stepping march to government control. This is the kind of nonsense dreamed up by privileged babies who have never had to live life in the real world. The DOE's "Best Practices" did not come from discussions with actual landowners. They came from a bunch of urban dimwits who think meat comes from Walmart, a place where they would never set dainty foot! This is completely useless. What landowners want is a seat at the table, not a bunch of know-nothings speaking for them. DOE actually thinks if they read a number of studies done by fellow urban dimwits that pretend to speak for landowners that automatically makes them experts on what landowners want. It would have been a lot less time consuming and a lot more accurate to actually consult with landowners. What is it about us that *scares* these babies so much?

Keryn Newman objects to the Needs Study’s statement that “large amounts of low-cost generation potential exist in the middle of the country and accessing this generation through increased transmission is cost-effective for neighboring regions.” Newman argues this approach is only low-cost due to taxpayer-funded subsidies and lower-cost lands and that “turning rural America into an energy serfdom to provide power to far-away cities” benefits urban communities that do not want to build infrastructure in their own backyard. Newman also argues that the statement exhibits “cultural and political elitism.” Furthermore, Newman argues that the Study dismisses legitimate landowner concerns as “NIMBYism” and barriers to transmission development without attempting to address them. Accordingly, Newman concludes that the Study lacks awareness and empathy.

The use of quotation marks slays me. The response does not.

The Department stresses that addressing landowner concerns is critical to ensuring just and equitable outcomes in transmission deployment. The Needs Study makes no reference to “NIMBYism” and the Department has taken care to ensure that landowner concerns are not presented as a barrier to transmission deployment in the final Study.

Well, that demonstrates lack of awareness and empathy. Bravo!

Here's what DOE's "study" concluded about transmission on farmland.

Transmission can share much of its rights-of-way with other activities, such as agricultural fields or recreational paths, and are considered a “mixed use” activity.

This also demonstrates a complete lack of sense and an absolute disconnect with farmers. This is WHY DOE needs to consult with landowners.

This is how your hard-earned money is being wasted in Washington, DC.

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$1.3B Taxpayer-funded Giveaway To Merchant Transmission Begins

11/2/2023

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The children running the U.S. Department of Energy are out of control. Buoyed by legislation that never made sense, the DOE announced the other day that it was giving away $1.3B to purchase capacity contracts with three specially selected merchant transmission projects.

Many of you are familiar with how merchant transmission operates if you've been reading this blog. Unfortunately, Congress, DOE and the mainstream media have no idea. No idea at all. Congress included a provision in the IIJA (Infrastructure Investment and Jobs Act aka Bipartisan Infrastructure Bill) that grants DOE the ability to borrow up to $2.5B to facilitate construction of new transmission. One of the new authorities allows DOE to enter into capacity contracts with transmission developers for up to 50% of the project's capacity for a period of up to 40 years. These contracts provide taxpayer-funded revenue for merchant transmission developers that is supposed to enable them to get loans necessary for construction. Congress and DOE think that the government's support will "encourage" other customers to sign up and that DOE can escape without spending any money before the project goes into operation.

If you believe this you are extremely naive. The mechanics of negotiated rate authority for merchant transmission prevent this from happening. If these merchant projects want to sell to the government, and any other entities, they have to follow the Federal Energy Regulatory Commission's negotiated rate policy. First they have to apply to use the authority in the first place, then make compliance filings demonstrating how they followed the policy afterwards. Alternatively, they can just submit a whole package of junk afterwards and hope they did it right. I haven't seen the second option used... who wants that kind of uncertainty?

Once negotiated rate authority is granted, the developer must make broad announcement that it is selling capacity so that every interested entity gets an equal chance to bid on capacity. The developer can then negotiate with respondents based on criteria that would be approved by FERC. If you want to make up your own criteria without FERC approval you introduce uncertainty that it may not be approved after the fact. FERC requires the applicant to accept all market risk for its project. This means NO CAPTIVE CUSTOMERS who would be required to pay for a project, such as U.S. taxpayers.

The basic premise of negotiated rates is that the market rate for transmission capacity serves as a cap to keep rates negotiated just and reasonable. Nobody is going to pay more for merchant transmission capacity than they can pay for transmission capacity elsewhere. However, DOE selecting a merchant project and promising them a capacity contract for the express purpose of providing enough revenue to get the project financed is not competitive. While DOE pretends it will only pay "market" prices, where's the market? Where's the competition? And why is DOE's negotiation taking place completely outside any open season negotiations with other utilities?

Of the three projects guaranteed capacity contracts, only one has approved negotiated rate authority from FERC. That project received authorization in 2015 but never completed the steps to have its negotiated rates approved by FERC. Probably because it couldn't find any customers. That company is going to have to start fresh because its whole project, corporate structure and investors have changed.

But DOE's announcement says it will have its contracts that commit to buying capacity before the project begins construction in place early next year. How could that be fair? What other entities are being offered capacity on these projects at this time? How does DOE know that it even needs to enter these contracts if the project has not yet offered its service to the market? This whole scheme doesn't work and makes little sense.

DOE thinks that just by announcing it will buy capacity on transmission projects that it will create a flurry of interest in the projects. DOE Pollyanna believes that it won't actually have to spend any money because customers are going to be chomping at the bit to buy capacity from the selected projects. We're not painting Tom Sawyer's fence here. If merchant capacity was a good deal for utilities, they would buy it in the first place without DOE's encouragement. If it's not, they're still not buying it. In that case, the DOE is stuck using taxpayer funds to pay for a transmission project that nobody will ever use for 40 YEARS. In addition, it is likely that DOE will overpay for capacity and make the project even less cost effective. The only way DOE is going to get out of these unnecessary capacity contracts is to give the capacity away. Taxpayers are still out the cost of the overpriced contract for 40 years, with only pennies on the dollar recovered.

The DOE seems to be counting on an ignorant media to spread the word about this program. The stories are so completely ignorant that I'm not even going to comment on any particular one. Ignorant eco-warriors and poor little rich kids who moonlight as annoying climate activists don't buy capacity on merchant transmission. The only entities that would buy capacity are sophisticated utilities that probably think the DOE is dumber than I do. This program is on the fast track to failure.

DOE is buying something that it doesn't need and won't ever use, but will put a lot of money in the pockets of private investors who otherwise would have no buyers for their overpriced service. Can I just say "I told you so" in advance? This program is wasteful, illogical, and unfair.

Merchant transmission is a market-based alternative to regionally planned cost-of-service transmission necessary for reliability, economic, or public policy reasons. There is no actual need for merchant transmission. It's strictly for profiteers who think they can fill a need that market participants will pay for. When there is no market need for merchant transmission, it fails. This new program is supposed to prevent these merchants from failing due to lack of market need. Why are taxpayers paying for this speculative profiteering when they are also paying for the regionally planned projects they actually need to keep their lights on? Giving DOE a pot of money with which to undermine our transmission planning and ratemaking system is simply adding layers of chaos that will ensure that nothing beneficial is ever constructed.

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PJM's Altered Reality

11/1/2023

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Yesterday, PJM Interconnection held its monthly Transmission Expansion Advisory Committee (TEAC) meeting. At the meeting, PJM revealed its plan for massive transmission expansion around the Mid-Atlantic region to fix electric reliability issues caused by the closure of 11,000 megawatts of fossil fuel generation combined with 7,500 megawatts of increased demand from the out-of-control building of new data centers in Northern Virginia. It doesn't take a mathematician to realize that these numbers add up to a need for increased electric generation close to 20,000 megawatts. For reference, a good sized coal, nuclear or gas-fired electric generation station amounts to around 800-1000 megawatts. We need 20,000 megawatts of what's known as "baseload" power, generation that can be counted on to generate when called and is not dependent upon weather or other factors to produce electricity. Also for reference, a good sized solar farm may have the capacity to produce up to 100 megawatts, if it has the fuel (sunshine) necessary to generate. We're going to need 20-25 new baseload generation plants, or 200 new large solar farms. PJM does not order new generation to be built. It can only order new transmission to move existing generation around. And that is the purpose of PJM's new transmission plan. PJM plans to import electric generation to Northern Virginia from West Virginia and Pennsylvania, the only two states in the PJM region that still produce excess electricity from fossil fuels. In order to do so, PJM has planned numerous new extension cords from WV and PA that will connect with the "needy" areas in the DC - Baltimore metro areas. On PJM's map, it looks like this:

As shown, much of the burden of importing generation into the DC - Baltimore area is placed on rural areas to the north and west, who are expected to sacrifice their homes, businesses, and communities to make way for these new transmission extension cords.

One such project begins in WV's northern panhandle along the Ohio River at the Kammer substation and meanders southeast for hundreds of miles through 4 states before connecting to a new substation in Northern Virginia's "data center alley." PJM's map of this project looks like this:

At the western end, the extension cord is surrounded by old coal and gas electric generators in WV and SW PA. Look at them all! That's where the power will be produced. At the eastern end, the extension cord is surrounded by data centers. That's where the power will be used. This project proposes to build a new 500kV transmission line on new right-of-way adjacent to an existing line. People who have one line on their property will now have two. In some areas, it proposes to veer off the existing lines and create new rights-of-way in areas without transmission lines. In Jefferson County, WV, the proposal is to demolish and rebuild an existing 138kV transmission line on an expanded right-of-way to create a double circuit 500/138kV transmission line on new lattice steel towers up to 200 feet tall. In some areas of Jefferson, the project will veer off the right-of-way and create new right-of-way in areas that currently do not have transmission lines. Once the project crosses the Appalachian Trail and enters Virginia, it proposes to veer sharply south/southeast and create a new 500kV transmission line through areas that currently do not have transmission lines, such as Waterford. At its end point, it will connect with a new substation along the Dulles Greenway in Ashburn.

To the northeast, PJM proposes a new 500kV transmission line on new right-of-way in areas that currently don't have transmission lines in order to bring power from Pennsylvania produced by gas and nuclear to an existing substation in Frederick County, MD called Doubs. From Doubs, the project will create two new 500kV lines into data center alley built mostly on existing transmission line routes. On PJM's map, that project looks like this:

The major new lines that will require new transmission rights-of-way are in the west and north. Worse yet, PJM has assigned these greenfield projects to competitive transmission builders from other states. Much of the western line is assigned to NextEra, a company from Florida. The northern line is assigned to PSE&G, a company from New Jersey. These companies don't know our communities or how impossible it will be to plow through them with new transmission lines. And at the end of the day, they may not care... they won't be seeing it from the windows of their own homes.

Only in Jefferson County will the west project be assigned to incumbent FirstEnergy/Potomac Edison because it is a expansion and rebuild of a line they already own. These are the same guys who brought us the Potomac-Appalachian Transmission Highline, or PATH, project between 2008-2012. Won't we have fun the second time around?

And with that rough description of the plan presented, here's my report of yesterday's TEAC meeting.

The meeting was kicked off with a brief speech from PJM's Vice President of Transmission, Ken Seiler, who read from some canned speech about how this transmission plan is the result of transitioning to clean energy. You can read more about that here. PJM's can also included that article. But things didn't quite go as planned. I spoke up to state that PJM's plan is nothing more than a giant extension cord importing fossil fuel power from WV and PA into Northern Virginia. I asked how this comports with Virginia's "clean energy" laws. Are Virginia's clean energy goals nothing but a sham they hide behind while actually importing more fossil fuels from surrounding states?

PJM personnel tried to push back that its plan would connect "new resources" but it was half-hearted at best. There are no "new resources" anywhere near these lines.

PJM TEAC leaders explained how their plan would be read twice at TEAC meetings and then submitted to the PJM Board of Managers for approval. Once approved (because *gasp* that can be the ONLY outcome!) the projects would be assigned and the utilities would take it from there. PJM explained it would allow a whopping six, count 'em 6, days from second read to Board meeting. Because being boxed into a time crunch isn't my favorite thing, I asked how we could contact PJM's Board of Managers right now. PJM said it would send me the information, but that only poked the hornet's nest. Many other attendees also wanted the information so they could contact the Board. A gentleman from the Maryland Office of People's Counsel told PJM they should be running this more like a public hearing. Bravo! PJM's "transparency" with stakeholders leaves much to be desired. Many people have tried to sign up for meetings and found themselves in an impossible maze. Even if they finally do manage to sign up, they have to sit in the meeting for hours just to get an opportunity to comment on this plan, which is always the last item on the agenda. Ain't nobody got time for that! PJM offered up that it would take email comments, something I had to force them into months ago. PJM tried to direct comments to some "customer service" email that is nothing but a black hole. I know how to contact the Board directly and it was confirmed yesterday after much discussion. More to come on that front, but get your pencils sharpened and be ready to send your comments!

I asked PJM what would happen if this plan and all its separate parts are not approved and built by the "in service" date selected (June 2027). Will the lights go out? Will the utilities in No. Va. have to tell the new data centers that they cannot supply them with electricity? PJM's answer was long and winding about how much these new projects are "needed" but at its core I saw a glimmer of reality. Yes, they would have to stop serving new load so the lights won't go out. This is where PJM's reality diverges from the one the rest of us live in. PJM thinks these projects (all of them) will be built on time and on budget. PJM won't even entertain the reality that the vast majority of these projects won't be built on time, and several of them won't be built ever.

After the PATH failure, I've worked with landowner groups on at least a dozen other transmission projects around the country that were hotly opposed. Not one of them has ever been built. I know a transmission failure in the making when I see it, and I know how to push it off the possibility cliff. PJM is not being realistic, despite losing a lot of major transmission battles in recent memory.

I asked why PJM changed its plan to allow FirstEnergy to build the west project in Jefferson County at the very last minute before yesterday's meeting. It's because FirstEnergy owns the line that will be rebuilt. That's something I questioned at the last TEAC meeting where PJM insisted that NextEra would be doing the rebuild.

And speaking of FirstEnergy and the project in Jefferson County, I also asked whether the new solar "farms" in Jefferson that are being built adjacent to the existing line that will be rebuilt will lose service for an extended period of time while the rebuild is happening. These projects have waited years to interconnect to the existing line and now they may not have service after all until the project is completed. It could be many months because the existing line has to be shut off and torn down before the replacement is built. PJM's answer, if you can believe it, is that FirstEnergy did not come prepared to answer that question. In other words, we don't know or care. I thought PJM was a planner?

I asked what would happen if one of the segments of the West project was not approved by one of the 4 states that have siting authority. Would changes be made or would the project be cancelled? After all, if the little greenfield segment in Loudoun County is not approved, there's no need for the rest of it because it cannot connect to the data centers and we have no need for it here. PJM's answer is that would be up to the utilities building it. Another non-answer! It's up to the state regulators to condition any approval on the entire project being approved before any building starts.

PJM announced that the cost of all these projects would be more than $5 Billion. The cost would be added to the electric bills of every electric customer in the PJM region (that means you!). I asked if that cost included financial incentives granted by the Federal Energy Regulatory Commission, which can increase costs significantly. PJM said no. The utilities building these projects can apply with FERC to increase their profits with higher returns (interest) and other accounting treatments that allow them to start charging ratepayers right away for projects that may or may not be built until later. In addition, FERC can (and probably will) grant the abandonment incentive, which means ratepayers will pay for these projects WHETHER THEY ARE EVER CONSTRUCTED OR NOT. This "plan" is going to cost us a lot more than $5B.

PJM did agree to share the "constructabilty report" it created before selecting these projects. The report evaluates the risks and costs of each project, as well as the feasibility of actually constructing it when faced with opposition, and compares the projects to find the one with the greatest chance of success at the lowest price. Last month, I asked PJM to make this report public and it flat out refused. Now it says its report will be included in its recommendation paper to the Board of Managers. Baby steps...

Yesterday's TEAC lasted 6 hours and 49 minutes, according to the timer on my WebEx. It was a giant time suck that produced little new information, but we can't let them win because we don't show up.

PJM will recommend these awful transmission ideas to its Board of Managers on December 11. It is up to all of us to convince the Board to reject this ill-conceived plan and demand that TEAC come up with something better. How about something that will not place burden on communities that will receive no benefit?

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PJM Thinks It Has You Handled

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Clean Line's Biggest Mistake Yet!

National Transmission Needs Study Declares Itself Useless

$1.3B Taxpayer-funded Giveaway To Merchant Transmission Begins

PJM's Altered Reality

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