While up to my elbows in dirt yesterday, I got a little buzz on my phone telling me that PJM had awarded the Artificial Island project to... LS Power. I laughed -- loud and hard. If you laugh in the garden, and nobody is around to hear it, did you really laugh? Or do your neighbors simply think that you've finally gone off the rails?
PJM's Artificial Island project window has been fraught with problems from the get-go. The RTO initially awarded the project to one of its favored incumbents, but was set upon by other competitors who made a convincing case that the process was not competitive.
PJM hired some wacky "constructability" study to try to prove that its selection was based on the ease with which the project could be constructed. That was a big waste of money. The study failed to note the single, most-important reason projects get delayed -- public opposition! Opposition is directly related to routing and the physical impact of the project, and the way its public relations are handled -- the worse the transmission developer does at this, the bigger the resultant opposition. That's a big, big factor in "constructability."
PJM got schooled on what "constructability" really means.
And the project PJM ultimately selected makes an underground crossing of the Delaware River and avoids protected wildlife refuges. Lesson learned, PJM?
Here's your "constructability" checklist, for future reference:
1. Does this project make use of existing infrastructure that could be upgraded or rebuilt to lessen impact of a new right-of-way?
2. Can this project be buried along existing or new rights-of-way?
3. Can this project be avoided entirely with non-transmission alternatives?
4. What alternatives are there to the project that you can share with the public?
If these things are truly considered, you could avoid the worst part of public opposition and win the "constructability" war.
It's also of note that LS Power proposed a cost cap for its project. LS Power now has a firm budget for its project. If it exceeds budget, it's going to have to justify why and beg on bended knee to recover its overruns. A cost cap also acts as a performance standard. If LS Power doesn't perform to get this project built on time and within budget, it does so at its own peril.
Let's hope the cost cap is also a lesson well-learned by PJM. It's what Congress intended when creating financial incentives for transmission, and cost caps effectively end the "the more we spend, the more we make" attitude so pervasive in the transmission industry today, to the benefit of electric ratepayers.
Progress?
PJM's Artificial Island project window has been fraught with problems from the get-go. The RTO initially awarded the project to one of its favored incumbents, but was set upon by other competitors who made a convincing case that the process was not competitive.
PJM hired some wacky "constructability" study to try to prove that its selection was based on the ease with which the project could be constructed. That was a big waste of money. The study failed to note the single, most-important reason projects get delayed -- public opposition! Opposition is directly related to routing and the physical impact of the project, and the way its public relations are handled -- the worse the transmission developer does at this, the bigger the resultant opposition. That's a big, big factor in "constructability."
PJM got schooled on what "constructability" really means.
And the project PJM ultimately selected makes an underground crossing of the Delaware River and avoids protected wildlife refuges. Lesson learned, PJM?
Here's your "constructability" checklist, for future reference:
1. Does this project make use of existing infrastructure that could be upgraded or rebuilt to lessen impact of a new right-of-way?
2. Can this project be buried along existing or new rights-of-way?
3. Can this project be avoided entirely with non-transmission alternatives?
4. What alternatives are there to the project that you can share with the public?
If these things are truly considered, you could avoid the worst part of public opposition and win the "constructability" war.
It's also of note that LS Power proposed a cost cap for its project. LS Power now has a firm budget for its project. If it exceeds budget, it's going to have to justify why and beg on bended knee to recover its overruns. A cost cap also acts as a performance standard. If LS Power doesn't perform to get this project built on time and within budget, it does so at its own peril.
Let's hope the cost cap is also a lesson well-learned by PJM. It's what Congress intended when creating financial incentives for transmission, and cost caps effectively end the "the more we spend, the more we make" attitude so pervasive in the transmission industry today, to the benefit of electric ratepayers.
Progress?
RSS Feed