I believe that PJM should have conducted an evaluation to calculate the B/C ratio of the Reconfigured Project 9A with the H-L Project in the base case, consistent with its approach to evaluating Project 5E. Project 5E failed the B/C threshold in the latest reevaluation, but PJM repeated the analysis including the H-L Project in the base case because of its impending recommendation that the PJM Board approve the H-L Project. My understanding of the rationale for including the H-L Project in the base case is that with such a high benefit-cost ratio and a low total cost it is highly likely the H-L Project will be approved, and that project will impact the flows to Project 5E, making it more reasonable to review Project 5E with the H-L Project in the Base Case.
The Reconfigured Project 9A has a similar fact pattern, although the results are opposite directionally. The latest reevaluation of Project 9A passed the B/C threshold without the H-L Project, but it is reasonable to expect that, due to the proximity of the two projects, the addition of the H-L Project will alter the flows of power that produced the 9A benefits.
While we do not currently have all of the data needed to estimate the results of that case, it is possible that including the H-L Project in the Base Case will reduce the calculated benefits of the Reconfigured Project 9A.

Regarding “public utility,” the relevant statutory definitions contain no explicit requirement that an entity be operated for a public use in order for it to constitute a public utility. However, Missouri courts have held that such a “public use” requirement was intended.

Here, the evidence showed that when the Grain Belt project is constructed and begins operation, it will transmit energy from wind farms in Kansas to wholesale customers in Missouri. In the case of MJMEUC, those customers are Missouri cities and towns that serve as electric providers to approximately 347,000 Missouri citizens. An entity, such as Grain Belt, that constructs and operates a transmission line bringing electrical energy from electrical power generators to public utilities that serve consumers is a necessary and important link in the distribution of electricity and qualifies as a public utility.  Therefore, Grain Belt’s project will serve the public use, and Grain Belt qualifies as a public utility.

“We vigorously disagree with the court’s ruling upholding the Public Service Commission’s decision authorizing the use of eminent domain for the Grain Belt Express merchant transmission line. Grain Belt Express is not a public utility. Investors who want to negotiate rates privately and enter into contracts to sell electricity to the highest bidders should not be able to condemn land in order to build their dream project. Contrary to the court’s assertion, the Missouri Supreme Court has not suggested otherwise.”

One more potential obstacle that GBE faces is at the capitol. Legislation was recently pre-filed in both the Missouri House and Senate on our behalf. The House bill was filed by Representative Hansen and the Senate bill was filed by Senator Brown. We came very close to passage of the bill last session before time ran out. Since this year’s bills have been pre-filed in both houses with continued strong support from the Speaker of the House and other key leaders, we are optimistic the bills will be passed this session which begins at the first of the year. Stay tuned as we may be announcing a rally in Jeff City for the bills sometime this winter or early spring.

It is important to note that if Project 9A or Alternative Project 9A were to be removed from further consideration, PJM’s RTEP analysis has previously identified a number of reliability criteria violations starting in the 2023 study year. Some of these reliability criteria violations include conductor overloads on 500 kV transmission lines which, in PJM’s experience, are likely to be resolved only through the construction of additional greenfield transmission. Should these combinations of projects inclusive of Project 9A or Alternative Project 9A be removed from the RTEP, resultant reliability criteria violations would be identified during the 2020 RTEP analysis, and potential solutions to such reliability criteria violations would not be identified to the Board until late 2020 or early 2021. Furthermore, removing these combinations of projects from the RTEP would fail to address the congestion that would be re- introduced into South-central Pennsylvania and Northern Maryland. Any proposal window to address this re-introduced congestion would not be held until 2021, with solutions not likely to be presented to the Board until late 2021. In light of this timing, and based on the likely need for greenfield transmission, PJM predicts that new CPCN applications for not-yet-identified reliability and market efficiency drivers would not be filed until 2022 or 2023. Conservatively assuming one to two years for state siting proceedings, reliability and market efficiency solutions likely could not be constructed sufficiently quickly to remediate reliability criteria violations, and further would leave customers subject to significant congestion for a number of years to come.

Under the cost allocation formula attached as Exhibit B to the October 17, 2019 Petition
for Adoption of Settlement, PEPCO zone would be allocated Net Load Payment equal to 20.23% of the total costs for the Independent Energy Connection West (“ICE West”)
project under PJM analysis dated September 25, 2019. This represents a net present
value of $170,915,03, based on current assumptions.

District ratepayers represent approximately one-third of the load in PEPCO zone and
thus would be responsible for approximately one-third of any costs allocated to that
zone. Under current assumptions for the ICE West project, that would amount to a cost
allocation to District ratepayers of more than $55 million.

Significant outreach events in Kansas in the third quarter of 2019 included representatives of Invenergy, on behalf of Grain Belt Express, meeting with various state legislators and county officials to discuss the Project; additional, similar meetings are planned for the fourth quarter of 2019. Further, a representative of Invenergy presented at the Kansas Renewable Energy Conference, hosted by the Kansas Department of Commerce, on October 4, 2019 to discuss the Project.

PJM Interconnection -- a regional transmission organization that coordinates the movement of electricity in 13 states including Ohio -- mandated AEP build a new line in Dublin’s West Innovation District based on energy forecasts and projections, said Dublin Public Affairs Officer Lindsay Weisenauer.

Joe Demaree, a project outreach specialist for AEP, said Dublin residents and businesses -- and future residents and business -- would require more electricity. The summer of 2022 is when projected electrical capacity necessary to support businesses and residents would outpace existing infrastructure, he said.

The proposed transmission line, Demaree said, would fix that problem and avoid putting AEP’s power grid in jeopardy.

AEP has received requests for increased demand in the Dublin, Ohio area. Analysis shows Bethel - Sawmill 138 kV will be a constraint. Consequent inspection identified clearance violations along the Bethel - Sawmill 138 kV line. AEP has de-rated the thermal capacity of the line to mitigate potential safety issues. Brookside-Sawmill -> N-1-1=127%, N-1=117% Bethel-Brookside -> N-1-1=102%, N-1=92% (N-1-1: Bethel - Roberts 138 kV + Davidson - Roberts 138 kV) AEP believes that the loading issues exist today due to the recent 30% de-rate of the line. Newly connected customer loads are scheduled to ramp up, significantly contributing to area thermal concerns.

The Dublin-Sawmill 138kV circuit will experience loading of 116% under N-1-1 conditions involving the loss of Bethel-Davidson 138kV & Davidson-Roberts 138kV circuits. With load growth in the area, we anticipate this line to overload starting in 2022. AEP-Ohio has requested a third 138kV source to Dublin station to maintain acceptable reliability levels for the load at risk. Dublin Station serves 75 MVA of peak demand with minimal load transfer capability. Dublin station serves some critical loads. Newly connected customer loads are scheduled to ramp, significantly contributing to area thermal concerns.

Market Efficiency Process The MMU recommends that the market efficiency process be eliminated because it is not consistent with a competitive market design. (Priority:  Medium. New recommendation. Status: Not adopted.)

The MMU recommends that, if the market efficiency process is retained, PJM modify the rules governing benefit/cost analysis, the evaluation process for selecting among competing market efficiency projects and cost allocation for economic projects in order to ensure that all costs, including increased congestion costs and the risk of project cost increases, in all zones are included and in order to ensure that the correct metrics are used for defining benefits. (Priority: Medium. First reported 2018.  Status: Not adopted.)