In the NOI, Promoting Transmission Investment Through Pricing Reform, FERC is seeking comments about the effect of its incentives on promoting transmission. If you're going to comment, you need to understand what the incentives are, and what they are intended to do.
FERC wants your thoughts regarding "additional goals in Section 219," specifically the imbalance that exists between what FERC believes are differing goals in 219(b)(1) and 219(b)(3).
219(b)(1) calls for the Commission to promote "reliable and economically efficient transmission and generation of electricity by promoting capital investment in the enlargement, improvement, maintenance, and operation of all facilities for the transmission of electric energy in interstate commerce..." FERC believes "the enlargement" includes construction of new facilities.
219(b)(3) encourages "deployment of transmission technologies and other measures to increase the capacity and efficiency of existing transmission facilities and improve the operation of the facilities."
FERC wants to know why the vast majority of transmission projects applying for incentives have focused on new transmission lines (the enlargement) and few have focused on improvement of existing transmission lines.
It seems to me that BOTH sections of 219 are, in reality, pointing to the upgrade of existing transmission. However, the power companies have figured out that promoting projects that call for the addition of new, totally separate transmission projects are more lucrative to their bottom line. Modernizing existing transmission (average age 40 years) just doesn't cost as much and doesn't provide as much wiggle room for padding of expenses. Because the power companies earn a very high return on the amount invested, the more they invest, the more they profit.
FERC has stated that the "reliability benefits of operation and maintenance capital spending are obvious, and we expect applicants incurring this type of capital spending will be able to demonstrate reliability benefits and thereby be eligible for incentive treatment." However, the power companies are not interested in improving existing transmission. They may become interested eventually, when they have over built all the new transmission they can get away with and have to content themselves with the leftover crumbs, but it will take a whole bunch of improvement projects to equal the profit to be had on one new project.
In the meantime, our landscape is littered with aging, inefficient transmission lines that are increasingly subject to failure, which decreases reliability. The argument that aging transmission causes the need for supplementation by new transmission is a self-fufilling prophecy. Instead, if the focus was pushed toward rebuilding of existing transmission, it could obviate the need for new transmission. We witnessed this happening with the PATH project. For reasons I'm not going to get into, Dominion proposed the rebuilding of two existing transmission lines as an alternative to the new PATH transmission project. However, their proposal was given the run-around at PJM, who attempted to sweep it under the rug. PJM's favoritism of the PATH project (and thereby the PATH parent companies' financial gain at the expense of PJM's ratepayers) aptly demonstrated their bias and agenda to produce profit for their members, instead of their supposed mission of ensuring a reliable transmission system. I don't know what goes on in the other RTOs, but PJM demonstrated why improvement of existing transmission is not being proposed in PJM.
For these reasons, perhaps FERC should require an independent (and because of demonstrated bias, this would not include PJM) evaluation of new transmission projects to determine if upgrades to existing transmission would serve the same purpose quicker and cheaper before granting incentives. This would also satisfy the requirement that incentive projects benefit consumers and the whole "just and reasonable rates" mission.
Transmission owners should be required to evaluate their existing lines with an eye toward replacement before proposing new transmission projects, just as the staff of the WV PSC has suggested in their recent petition. I realize that some new transmission may still be needed to connect new generation, however new long-distance transmission like PATH, intended to increase existing power flows parallel to existing, but "congested"and inefficient, transmission lines won't be needed.
Now that you've contemplated new vs. existing transmission, go look at FERC's questions beginning on page 13 of the NOI and formulate your comments/suggestions for FERC. I'm sure you creative consumer "stakeholders" can make suggestions that the industry won't even ponder. The industry will be letting FERC know how they can and should sweeten the pot even further for them. It's up to you to provide balance with a little real world sanity.
If you found this helpful in crafting your comments, you are encouraged to browse the entire FERC Transmission NOI category at StopPATHwv.com for other useful material. You don't have to comment on all aspects of the NOI if that's too burdensome. In fact, if you want to concentrate in detail on just one aspect that interests you and about which you have strong feelings, that's a perfectly acceptable approach to producing effective comments.
FERC wants your thoughts regarding "additional goals in Section 219," specifically the imbalance that exists between what FERC believes are differing goals in 219(b)(1) and 219(b)(3).
219(b)(1) calls for the Commission to promote "reliable and economically efficient transmission and generation of electricity by promoting capital investment in the enlargement, improvement, maintenance, and operation of all facilities for the transmission of electric energy in interstate commerce..." FERC believes "the enlargement" includes construction of new facilities.
219(b)(3) encourages "deployment of transmission technologies and other measures to increase the capacity and efficiency of existing transmission facilities and improve the operation of the facilities."
FERC wants to know why the vast majority of transmission projects applying for incentives have focused on new transmission lines (the enlargement) and few have focused on improvement of existing transmission lines.
It seems to me that BOTH sections of 219 are, in reality, pointing to the upgrade of existing transmission. However, the power companies have figured out that promoting projects that call for the addition of new, totally separate transmission projects are more lucrative to their bottom line. Modernizing existing transmission (average age 40 years) just doesn't cost as much and doesn't provide as much wiggle room for padding of expenses. Because the power companies earn a very high return on the amount invested, the more they invest, the more they profit.
FERC has stated that the "reliability benefits of operation and maintenance capital spending are obvious, and we expect applicants incurring this type of capital spending will be able to demonstrate reliability benefits and thereby be eligible for incentive treatment." However, the power companies are not interested in improving existing transmission. They may become interested eventually, when they have over built all the new transmission they can get away with and have to content themselves with the leftover crumbs, but it will take a whole bunch of improvement projects to equal the profit to be had on one new project.
In the meantime, our landscape is littered with aging, inefficient transmission lines that are increasingly subject to failure, which decreases reliability. The argument that aging transmission causes the need for supplementation by new transmission is a self-fufilling prophecy. Instead, if the focus was pushed toward rebuilding of existing transmission, it could obviate the need for new transmission. We witnessed this happening with the PATH project. For reasons I'm not going to get into, Dominion proposed the rebuilding of two existing transmission lines as an alternative to the new PATH transmission project. However, their proposal was given the run-around at PJM, who attempted to sweep it under the rug. PJM's favoritism of the PATH project (and thereby the PATH parent companies' financial gain at the expense of PJM's ratepayers) aptly demonstrated their bias and agenda to produce profit for their members, instead of their supposed mission of ensuring a reliable transmission system. I don't know what goes on in the other RTOs, but PJM demonstrated why improvement of existing transmission is not being proposed in PJM.
For these reasons, perhaps FERC should require an independent (and because of demonstrated bias, this would not include PJM) evaluation of new transmission projects to determine if upgrades to existing transmission would serve the same purpose quicker and cheaper before granting incentives. This would also satisfy the requirement that incentive projects benefit consumers and the whole "just and reasonable rates" mission.
Transmission owners should be required to evaluate their existing lines with an eye toward replacement before proposing new transmission projects, just as the staff of the WV PSC has suggested in their recent petition. I realize that some new transmission may still be needed to connect new generation, however new long-distance transmission like PATH, intended to increase existing power flows parallel to existing, but "congested"and inefficient, transmission lines won't be needed.
Now that you've contemplated new vs. existing transmission, go look at FERC's questions beginning on page 13 of the NOI and formulate your comments/suggestions for FERC. I'm sure you creative consumer "stakeholders" can make suggestions that the industry won't even ponder. The industry will be letting FERC know how they can and should sweeten the pot even further for them. It's up to you to provide balance with a little real world sanity.
If you found this helpful in crafting your comments, you are encouraged to browse the entire FERC Transmission NOI category at StopPATHwv.com for other useful material. You don't have to comment on all aspects of the NOI if that's too burdensome. In fact, if you want to concentrate in detail on just one aspect that interests you and about which you have strong feelings, that's a perfectly acceptable approach to producing effective comments.
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