Who benefits from the project? For this project, PJM projects $622 million in cost savings for consumers in 10 power zones. Those zones are listed below and displayed on the map to the right. Generally speaking, when low-cost electricity is introduced into the market, it helps drive the overall competitiveness of the electric grid for all power zones.

Benefiting Power Zones Identified by PJM:

American Electric Power Co., Inc, Allegheny Power Systems, Baltimore Gas & Electric, ComEd, Dayton Power and Light Company, Duke Energy Ohio and Kentucky, Duquesne Light, Dominion, East Kentucky Power Cooperative, Potomac Electric Power Company.

The high-voltage electric grid operates across towns, counties and state boundaries. As such, the benefit of this project is not confined
to geographical boundaries. Customer-driven improvement projects in one area of the grid can benefit customers on another part of the electric grid. For example, recent improvements made in Indiana and Westmoreland counties, more than 100 miles away, improved how the grid operates in York County.

"Because the system was designed with large, central-station generation as the primary source of electricity, significant amounts of new transmission may be needed to support renewable resources located far from load centers.216"

The studies (see Appendix B) that look into the distant future are exploratory only and represent initial investigations into how to implement high levels of VRE. They do not look into all the operational aspects of reliability due to the needed complex and computationally challenging modeling. Typical assumptions (sometimes implicit) include successful siting of (at times long multistate) transmission lines and new generation, sufficient new and existing economically viable conventional generation and other resources to support the VRE, institutional and market changes, and relevant grid modernization-type spending at both the transmission and distribution level. One study, for the ease of modeling, even assumes the nation’s 66 balancing authorities, including their governing boards and member states, would agree to one national joint dispatch). Some of these assumptions are non-trivial. These studies recognize that given enough time and money, power system engineers can make any resource and configuration reliable, as long as the laws of physics are not violated; whether the changes needed are indeed affordable, doable, and desirable may be a different question. Also, affordability was typically not in the scope of these studies.

Most of the contiguous United States’ wind power plants are installed in the center of the Nation, which has the best wind resources.

Technical and economic factors may drive power plant operators to run generators even when power supply outstrips demand. For example:
For technical and cost recovery reasons, nuclear plant operators try to continuously operate at full power.
Eligible generators can take a 2.2¢/kWh or $22/MWh[yyy] production tax credit (PTC) on electricity sold. This means that some generators may be willing to sell their output for as low as -$22/MWh to continue producing power. Typically, wind generators are the largest such group in any region.
There are maintenance and fuel-cost penalties when operators shut down and start up large steam turbine (usually fossil-fueled) plants as demand varies over a day or a week. These costs may be avoided if the generator sells at a loss to attract a buyer when demand is low.

As EIA notes, the PTC can create an incentive for wind generators to bid at negative prices. If other generators located at nodes in the areas affected by negative prices are unable or unwilling to reduce output, they will have to pay the negative price for their output. That scenario has unfolded on some buses in PJM, as outlined in comments to DOE from PJM staff:
Tax and subsidy policies have had an impact on the economics of certain types of generation. The Renewable Energy Production Tax Credit and renewable energy mandates have had the most significant impact on nuclear generation. Specifically, the nuclear and wind generation are competing to clear in the market during off-peak hours when wind resources are the strongest and load is reduced. In those off-peak hours, the production tax credit has created an incentive for renewable resources to bid negative prices as they must run in order to receive their payment from the federal treasury. Since 2014, PJM has seen prices go negative at nuclear unit buses in approximately 2,176 hours—representing 14 percent of off-peak hours.

RPS compliance costs were found to total $2.6 billion in 2014, averaging $12/MWh for VRE and equating to 1.3 percent of average retail electricity bills.ffff 451 The actual effects of zero-marginal cost electricity on consumers’ bills is situational, and growth in VRE can drive additional costs, including transmission and integration costs.452 453 Because many utility-scale VRE plants are built in locations distant from load centers, they sometimes require major transmission additions to connect the remote generation to the rest of the grid and to load centers. Over the past five years, a portion of the 24,000 miles of new transmission built (about twice the number of miles added from 2006–2010) and $102 billion invested to strengthen the grid and interconnect new generation has been made to interconnect VRE.454 455 Transmission investments (regulated or merchant) can increase bulk power costs and therefore increase customers’ retail bills to the extent that they are not offset by savings attributable to access to lower-cost generation or reduced congestion costs.

Studies on RPS compliance costs do not fully capture the “all-in” costs that the ratepayer (and taxpayers) ultimately bear. These other costs are harder to measure, but may not be insignificant. They may be harder to quantify for many reasons, such as having multiple drivers behind those investments and various distribution-level grid modernization investments (e.g., smart meters and others that are touted to aid VRE integration). New transmission (other than the direct transmission interconnection charged to the renewable generation project and thus reflected in their PPA), as well as effects of VRE variability on the dispatchable fleet, are other examples of costs often not included in grid integration cost studies. Costs of various tax and other subsidies are also not counted.

Numerous technical studies on electricity systems in most regions of the Nation have concluded that significantly higher levels of VRE can be successfully integrated without compromising resource adequacy.hhhh Demonstrating resource adequacy is essential, but achieving the modeled levels of VRE penetration requires a full consideration of “all-in” costs, land use, siting, and other environmental impacts; sustainable economics for non-wind and solar resources; for some studies, required changes at the distribution level; wholesale market design and organizational changes; spending on relevant transmission and distribution grid modernization activities; and ensuring all aspects of operational reliability.iiii These caveats are non-trivial, as they would be for any substantial major changes in the electric power system. However, these studies (particularly those examining high VRE levels) may often assume (or ignore) modeled conditions that could be difficult and/or costly to achieve in practice, such as a large transmission buildout that may face siting or other obstacles, ability of non-wind and solar plants to remain financially viable and thus available, institutional changes, or, for one study, synchronization of all three interconnections.

The challenge for building transmission continues to revolve around the three traditional steps involved, each of which can be time-consuming, involved, and complex: (1) demonstrating a need for the transmission project, also known as transmission planning, (2) determining who pays for the transmission project, also called cost allocation, and (3) state and Federal agency siting and permitting. FERC has taken steps to help with the first two, with reforms such as Order No. 1000, which remains a work in progress.258 259 260 261 262 Transmission planning entities, as well as regional state-based groups, are also contributing to improving these three necessary process steps. The current and past administrations, aided by various new Federal laws, have issued various Executive Orders and other initiatives to improve the processes involved in siting and permitting of transmission when Federal lands or waters are involved.
All three transmission building steps can be time-intensive and complex; in particular, siting and permitting for large networks or long multi-state lines is challenging. 263 264 265 The second necessary step of cost-allocation can be time-consuming as well. For example, large overlay networks now being built in MISO (“Multi-Value Projects”)266 and SPP (“Highway/Byway Plan”)267 required several years of sensitive negotiations among states brokered by the respective Organization of MISO States and SPP Regional State Committee to determine the cost allocation of each large transmission buildout.268 269

Fuel neutrality is essential for both monopoly-utility resource planning and competitive markets to manage risk and achieve reliability efficiently. Interventions to promote specific fuel types—such as bailouts for coal and nuclear or mandates and subsidies for renewables—skew investment risk and can undermine incentives for reliability-enhancing behavior (e.g., a public intervention to finance pipeline expansion removes incentives for the private sector to invest in fuel security). Fuel-specific subsidies and mandates replace individual choice with collective choice. This one-size-fits-all approach to risk mitigation ignores variances in individuals’ risk tolerances, results in high-cost risk mitigation, and creates perverse incentives for market participants by transferring risk and costs from the private to the public sector.

New technologies with very low marginal costs, i.e. VRE, reduce wholesale prices, independent of— and in addition to—the effects of low natural gas prices. To the extent that additional development of such resources is driven by subsidies and mandates, their price suppressive effect might place undue economic pressure on revenues for traditional baseload (as well as non-baseload) resources and could require changes in market design.

On modeling capacity factors for renewables: Each ISO and RTO calculates the on-peak contribution of renewable resources as a function of historic resource performance. Land-based wind plants are assumed to deliver four to 14 percent of nameplate capacity during peak summer afternoon periods, and solar resources are assumed to deliver between 10 percent and 80 percent of nameplate capacity. Note, however, that as the level of PV penetration increases, the cumulative amount of PV generation on summer afternoons is moving net load peak hour later.

Market designs may be inadequate given potential future challenges. VRE—with near-zero marginal costs and if at high penetrations—will lower wholesale energy prices independent of effects of the current low natural gas prices. This would put additional economic pressure on revenues for traditional baseload (as well as non-baseload) resources, requiring careful consideration of continued market evolutions.

Natural gas-fired generation has grown nearly continuously since the late 1980s (see Figure 3.19) for several key reasons. These plants have low capital costs and are, in general, relatively less expensive than some competing technologies.108 They are also much less land-intensive than many other types of generation, and thus often can be more easily sited in urban areas near electric demand.109 Similarly, natural gas pipelines can be built more quickly than electric transmission lines (in most states) because they have a comparatively streamlined permitting process, which often has made it easier for a plant developer to build a new gas-fired plant near a large electric load than to build a power plant farther away and transmit its electricity to large load centers by wire.dd

Interstate natural gas pipelines can often be built more quickly than transmission lines because the pipeline owners, once granted a FERC-issued certificate of public convenience and necessity, have eminent domain power under section 7(h) of the Natural Gas Act and the procedures set forth under the Federal Rules of Civil Procedure (Rule 71A). By contrast, electric transmission developers are dependent on states to grant eminent domain authorization.

Former FERC Commissioner Tony Clark summarizes today’s changing demands on centrally-organized markets: “Affordable power was the goal when markets were created. The current markets are still procuring affordable power, but many state public policy makers no longer see that as the only goal [...] other public policy goals [include...] incenting in-state jobs, promoting ‘green’ energy or other politically favored resources, preserving carbon-free resources, and retaining substantial tax revenues to state and local government.” Clark goes on to say, “[Markets] were never designed for job creation, tax preservation, politically popular generation, or anything other than reliable, affordable electricity.”

Our Mission

The Edison Electric Institute (EEI) is the association that represents all U.S. investor-owned electric companies. Our members provide electricity for 220 million Americans, and operate in all 50 states and the District of Columbia. As a whole, the electric power industry supports more than 7 million jobs in communities across the United States. In addition to our U.S. members, EEI has more than 60 international electric companies as International Members, and hundreds of industry suppliers and related organizations as Associate Members.
 
Organized in 1933, EEI provides public policy leadership, strategic business intelligence, and essential conferences and forums.

Our Vision
EEI will be the best trade association.

We will be the best because we are committed to knowing our members and their needs. We will provide leadership and deliver services that consistently meet or exceed their expectations.

We will be the best because we will attract and retain employees who have the ambition to serve and will empower them to work effectively as individuals and in teams.

Above all, we will be the best trade association because, in the tradition of Thomas Edison, we will make a significant and positive contribution to the long-term success of the electric power industry in its vital mission to provide electricity to foster economic progress and improve the quality of life.

When third-party organizations or public service commission staffs have attempted to protect ratepayers from funding political organizations in recent years, their attempts have met with fierce resistance from the utility companies.

This report explores how regulated utility companies are including their Edison Electric Institute (EEI) annual payments, along with payments to other trade associations, in their operating expenses. The widespread practice forces ratepayers to pay for political and public relations activities with which they may not agree, and from which they do not benefit. It also has the effect of ratepayers subsidizing the political activities of EEI and other trade associations. Utility commissions have a responsibility to protect ratepayers from paying for industry groups and their political work along with public relations activities. But utilities have become adroit at using EEI, and other organizations, to effectively and quietly influence policy while sheltering their shareholders from the bulk of the associated costs. Almost no other political organizations have the luxury of subsidization enjoyed by EEI and other representatives of the regulated utility industry.

The evidence in this report reveals that EEI is primarily and inherently a political organization, and that much of its work targets policymakers throughout all levels of government to build influence, specifically for their member companies but also for the industry at large. While many states have their established practices of how to code trade association dues, they should revisit outdated guidelines due to the nature of EEI’s modern activities to ensure that they are adequately protecting ratepayers. Throughout the past three decades, some regulators and consumer advocates have acted to protect ratepayers, but scrutiny has waned dramatically. Precedent exists for public officials to act in every state to investigate whether or not EEI’s inherently political work ought to be funded by ratepayers.

JCP&L spokesman Ron Morano said the utility is following procedures. "All costs associated with the project will be reviewed as part of that process," Morano said.

"I fear all we have done is to awaken a sleeping giant and fill him with a terrible resolve."  --  Isoroku Yamamoto

Perhaps the new mantra is “we’re going to make transmission great again,” Skelly said.

The organization, an initiative of the Energy Future Coalition, has held regional transmission conferences, but this was its first national event.

The coalition was formed in 2002 by former Sen. Tim Wirth, a Colorado Democrat; Republican C. Boyden Gray, who served as White House counsel to President George H.W. Bush; and Democrat John Podesta, a former aide to Presidents Bill Clinton and Barack Obama who chaired Hillary Clinton’s 2016 presidential campaign.

“I’d love to have more load growth. It ain’t going to happen,” Craig Glazer, PJM’s vice president for federal government policy, told the gathering.

Weak load growth will make it more complicated to finance upgrades for aging transmission, and the lack of a federal carbon tax or renewable mandate is making it difficult to integrate renewable generation, Glazer said.

Hoecker and Brown discussed FERC’s inability to gain “backstop” siting authority, saying it’s still very difficult to prevent individual states from blocking a project. The Energy Policy Act of 2015 amended the Federal Power Act to give FERC the authority to site electric transmission lines blocked by states, but court rulings have blocked the commission’s attempts to use it, prompting some in Congress to propose additional legislation strengthening FERC’s authority.

Brown said that Order 1000 hasn’t really helped SPP much with large regional projects.

“We need to decide what we want this grid of the future to look like,” Glazer said. For example, should it be a “localized grid” that can harness distributed generation? he asked. “There’s an added complication; it’s not even clear who is in charge,” Glazer said. FERC, state utility commissions and governors all have a say in siting decisions, he said.

If each governor is asked what infrastructure projects they want, the country will end up with a lot of state-based projects, not interstate ones, Clean Line Energy Partners President Mike Skelly said.

Perhaps the new mantra is “we’re going to make transmission great again,” Skelly said. The power to select infrastructure projects should not be taken away from transmission planners and placed in the hands of Congress, he said.

Skelly and others cautioned the Trump administration not to skimp on project reviews or stakeholder input. The key is that all projects must have “timelines” for regulatory approvals to avoid infinite delays, he said.

The executive director of the AFL-CIO’s Industrial Union Council, Brad Markell, said the labor movement agrees with the need for “hard timelines” to shorten the permit process.

Markell said that labor unions have been in contact with the Trump administration on potential infrastructure efforts.

“From our point of view, more power for the federal government and less power for the states [on electric infrastructure] would be a good thing,” he said.

Others deemed that unlikely. “I think we’re stuck with the system we have,” Glazer said.

Mary Anne Hitt, executive director of the Sierra Club’s Beyond Coal campaign, said that — contrary to what conference participants may have heard — her organization doesn’t oppose all power lines, only those that appear aimed to “prop up fossil fuels.”

The environmental group opposed the abandoned “coal by wire” Potomac-Appalachian Transmission Highline (PATH) project in PJM. On the other hand, it has backed the Plains and Eastern Clean Line Project, designed to move renewable energy from Oklahoma to Tennessee.

Hitt said she was concerned that President Trump’s nominee for EPA administrator, Scott Pruitt, opposed Clean Line in 2015 as Oklahoma attorney general.

Curiously, there are no sessions scheduled there addressing the unsettled question of whether the federal government has any legitimate interest in transmission siting.

A front group is an organization that purports to represent one agenda while in reality it serves some other party or interest whose sponsorship is hidden or rarely mentioned.

...immediately convene an independent audit of all public comment statements submitted to docket of Case No. CP16-22 since the opening of the comment period for the Draft Environmental Impact Statement; that the Commission strike Intervenors’ Exhibits A through O from the docket and grant leave to any intervenors to this proceeding to submit
further pleadings relating to striking other public comment statements from the docket; finally, that the Commission make a referral to its Division of Investigations, the U.S. Department of Energy Office of Inspector-General, the U.S. Environmental Protection Agency Office of Inspector-General, and the U.S. Postal Inspection Service.

As an energy consumer advocacy organization, CEA has developed a process of gathering grassroots support for affordable, reliable energy projects. As part of that widely accepted business process, CEA conducts automated telephone surveys with selected individuals. When an automated call is placed, and consistent with accepted industry practice, the call is directed to the individual listed in phone company records. The individual who participates in the survey is asked a series of questions from a scripted questionnaire to which he or she is requested to answer by pressing on the phone’s keyboard “1” for “yes” and “2” for “no”. But, it is the nature of automated surveys that the questions are not asked by a live person and there is no process to identify and confirm who answers the phone and responds to the question.

The survey used here began with an introductory statement telling the respondent that the Commission is considering whether or not to grant a permit to build the NEXUS pipeline and explaining the benefits of the pipeline, including creation of jobs in the region and reduction of energy costs for manufacturers and consumers. The survey continued with the express question on whether or not the respondent would give his or her permission to relay to the Commission his support for the pipeline. If the respondent replied with “no”, the survey would ask another question reiterating the importance of the Project and again ask the respondent if he or she would support the pipeline and authorize CEA to pass that view on to the Commission. On behalf of those respondents who indicated their support for the project and authorized CEA to forward that viewpoint to the Commission, CEA then generated the letter for the 347 individuals that were filed.

Moreover, it is implicit in the nature of any automated phone survey that from time to time there will be instances where the person who answers the phone and responds to the survey is not the person listed in the telephone company’s records as the householder. This would explain the inadvertent error that can occur when a supporting letter is generated in the name of the person listed as householder, but someone else actually answers the phone. So, even though the householder – in whose name the support letter was generated – may not be competent or even in agreement, the person who answered did respond affirmatively and authorize support for the Project. Similarly, in some instances the respondent may not fully understand the presented question, unintentionally answer it in the wrong way and later change his or her mind. Or, in some cases, the respondent may forget that the survey even took place, let alone that he or she gave the authorization for his comments to be filed with the Commission. CEA regrets any such misunderstanding or miscommunication that may have occurred.

Opponents used some of those arguments to successfully derail the Potomac-Appalachian Transmission Highline, a 290-mile line from Putnam County, W.Va., to Frederick County, Md., proposed by Allegheny Energy in 2008. The Greensburg company, acquired by FirstEnergy in 2011, suspended the project after it could not convince regulators the line was necessary.

PJM staff reviewed results of analyses showing reliability drivers no longer exist for the project throughout the 15-year planning cycle. The analyses incorporated the continued trends of decreasing customer load growth, increasing participation in demand response programs and the recent commitment of new generating capacity in eastern PJM.

While citizen groups have fought transmission projects — often successfully — by attacking the developer’s need to build them, the environmental regulations could usher in more projects and complicate opposition.

Changing drivers of transmission

Transmission companies see big potential for new projects, particularly from sparsely populated areas that generate wind energy to urban areas. “Just as trains carried cattle and other goods from the rural areas to urban centers, the Plains & Eastern Clean Line will carry renewable energy from the Plains of the Southwest,” states the website of one developer, Clean Line Energy of Houston, Texas.

Clean Line expects federal approval for its 700-mile Plains & Eastern Clean Line, designed to carry 4,000 megawatts of power from wind farms in the panhandle of Oklahoma. The line will terminate near Memphis, Tenn. Clean Line has four other projects in the pipeline.

“We anticipate a very busy 2016,” said company president Michael Skelly. 

...some wind mills and solar farms in areas with constant breeze and abundant sunshine

General Manager Bob Stevenson said Clean Line contacted the BPW about a month ago, offering the utility a draft letter of intent. Clean Line hasn't made a firm proposal, but Stevenson called prospective prices "very attractive." He declined to disclose them, citing confidentiality, but Lawlor estimated Grain Belt Express could deliver electricity in the 3- to 4-kilowatt-hour range.

Starting Line now hears about a number of people interested in running for Rick Olson’s house seat. That includes Beth Conley, Marc Wallace and Connie Boesen. Conley works at Clean Line Energy Partners, and has a history of working with wind energy projects.