As part of a series of decisions over transmission owner squabbles last week, FERC denied the complaint of Primary Power that we have been following.
You can read the Commission's Order here.
Read the statements of Commissioners Wellinghoff and Norris regarding these decisions.
FERC says that they had to follow the RTO agreements currently in effect. In the Primary Power case, they relied on PJM's findings that the SVC projects would be cheaper if constructed by the incumbents. Sounds great right? After all, who doesn't want to save money?
However, PJM's evaluation of the projects was based on completely bogus cost estimates from the incumbents. PJM's selection of incumbents to build the projects provides no guarantee that the incumbent projects will actually end up being cheaper. In fact, the way things are set up now, there is no cost control or performance standard for the incumbents to meet.
" Primary Power challenges the Dominion and FirstEnergy claims of lower cost and avoiding duplication of facilities as lacking technical analysis and development work. Primary Power claims that neither Dominion nor FirstEnergy proposed any SVC projects in the Meadow Brook or Mt. Storm areas prior to the November 2011 Advisory Committee meeting and notes that FirstEnergy initially objected to installing an SVC at Meadow Brook, favoring a static capacitor-based alternative. Primary Power notes that it committed to the PJM Board that it had “plenty of time” to obtain a certificate of public convenience and necessity and complete construction before the June 1, 2014 in-service deadline. Primary Power challenges FirstEnergy’s cost estimate, noting that FirstEnergy exceeded its estimate when it built the Black Oak SVC. Static capacitors, unlike SVCs, do not absorb VARs and do not provide a range in output, but may only be switched on or off."
The PJM cartel supposedly made its decision favoring the incumbents based on cost. PJM is always thinking about you ratepayers, you know, and putting your needs first. However, Primary Power claims that FirstEnergy and Dominion simply made up cost estimates based on rough calculations, with the goal being to arrive at a lower cost estimate than Primary Power's, which was already on the table. How easy was it to simply make crap up when the incumbents know they won't be held to their estimates?
FirstEnergy will most likely request incentives and add this project to their TrAILCo shell company's formula rate. Perhaps FERC can make these projects the first to be held to cost control and performance standards under a revamped system of awarding incentives. After all, PJM's reasoning for awarding the projects to incumbents completely fails if the projects end up costing more than Primary Power's estimates when fantasy meets reality. It would be just desserts for the incumbents to have to actually build these projects for the amounts they have estimated. I'm quite sure they'll have an audience.
You can read the Commission's Order here.
Read the statements of Commissioners Wellinghoff and Norris regarding these decisions.
FERC says that they had to follow the RTO agreements currently in effect. In the Primary Power case, they relied on PJM's findings that the SVC projects would be cheaper if constructed by the incumbents. Sounds great right? After all, who doesn't want to save money?
However, PJM's evaluation of the projects was based on completely bogus cost estimates from the incumbents. PJM's selection of incumbents to build the projects provides no guarantee that the incumbent projects will actually end up being cheaper. In fact, the way things are set up now, there is no cost control or performance standard for the incumbents to meet.
" Primary Power challenges the Dominion and FirstEnergy claims of lower cost and avoiding duplication of facilities as lacking technical analysis and development work. Primary Power claims that neither Dominion nor FirstEnergy proposed any SVC projects in the Meadow Brook or Mt. Storm areas prior to the November 2011 Advisory Committee meeting and notes that FirstEnergy initially objected to installing an SVC at Meadow Brook, favoring a static capacitor-based alternative. Primary Power notes that it committed to the PJM Board that it had “plenty of time” to obtain a certificate of public convenience and necessity and complete construction before the June 1, 2014 in-service deadline. Primary Power challenges FirstEnergy’s cost estimate, noting that FirstEnergy exceeded its estimate when it built the Black Oak SVC. Static capacitors, unlike SVCs, do not absorb VARs and do not provide a range in output, but may only be switched on or off."
The PJM cartel supposedly made its decision favoring the incumbents based on cost. PJM is always thinking about you ratepayers, you know, and putting your needs first. However, Primary Power claims that FirstEnergy and Dominion simply made up cost estimates based on rough calculations, with the goal being to arrive at a lower cost estimate than Primary Power's, which was already on the table. How easy was it to simply make crap up when the incumbents know they won't be held to their estimates?
FirstEnergy will most likely request incentives and add this project to their TrAILCo shell company's formula rate. Perhaps FERC can make these projects the first to be held to cost control and performance standards under a revamped system of awarding incentives. After all, PJM's reasoning for awarding the projects to incumbents completely fails if the projects end up costing more than Primary Power's estimates when fantasy meets reality. It would be just desserts for the incumbents to have to actually build these projects for the amounts they have estimated. I'm quite sure they'll have an audience.
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