Ut-oh, Transource! UTTT-OHHHH! It's looking like the smoke and mirrors Transource and PJM have been using to prop up their unneeded Independence Energy Connection project didn't fool the Pennsylvania Office of the Consumer Advocate. In fact, it looks like PJM and Transource didn't manage to fool anyone... anyone at all.
Finally got around to looking at the initial briefs in the PA-PUC proceeding, and I recommend the OCA's extensive brief for some great reading! I have to admit that I didn't bother to even look at Transource's brief. There was no need after I read the OCA's. I'm convinced there's simply nothing Transource can say that would be even remotely convincing about a need for this project. And it's Saturday... why torture myself even further?
The OCA says
Finally got around to looking at the initial briefs in the PA-PUC proceeding, and I recommend the OCA's extensive brief for some great reading! I have to admit that I didn't bother to even look at Transource's brief. There was no need after I read the OCA's. I'm convinced there's simply nothing Transource can say that would be even remotely convincing about a need for this project. And it's Saturday... why torture myself even further?
The OCA says
The OCA submits, however, that this market efficiency project designed to address economic congestion on the bulk electric grid cannot meet the constitutional, statutory, and regulatory standards under Pennsylvania law. Under the evidence presented, actual congestion on the AP South Reactive Interface has diminished precipitously in the years since this proceeding began, subverting any reason to construct this Project. Moreover, PJM’s benefit-cost analysis, which the Company relies upon to allege that this Project will provide sufficient benefits in excess of the costs, contains significant deficiencies such that it cannot support the necessary findings under Pennsylvania law. Most importantly, PJM’s benefit-cost analysis ignores the detrimental impacts of increased wholesale power prices that accrue to certain transmission zones as a result of constructing the IEC Project, including many transmission zones in Pennsylvania seeing increased costs for Pennsylvania ratepayers. In addition, PJM’s process for approving the IEC Project failed to consider reasonable alternatives and did not address the serious environmental and property issues raised.
And
... the Commission should not approve the IEC Project based upon the Company’s claims of potential reliability violations occurring in 2023 in the absence of the IEC Project. The Company’s belatedly filed evidence is based upon limited testing and outdated data. Moreover, the facilities that may experience these potential violations are aging facilities that are due for an upgrade in the coming years. Indeed, since 2018, several of the facilities that the Company claims will overload are undergoing rebuilds that may increase capacity. The OCA submits that if the IEC Project is not approved, PJM has the means to determine if these potential future reliability violations will still occur and find more efficient, targeted proposals to correct these issues.
And
... Pennsylvania would also be burdened by new transmission infrastructure construction in Franklin and York Counties, including a new substation and a new transmission line in Franklin County, 13.6 miles of which will be constructed over presently unencumbered land, and lengthy re-builds of additional transmission infrastructure and a new substation in York county. Accordingly, these economic and environmental harms demonstrate that the IEC Project fails to meet the constitutional, statutory, and regulatory standards under Pennsylvania law.
And for these reasons
For the reasons set forth herein, the Commission should deny the Company’s Applications.
The company, with the help of IEC proponent PJM Interconnection, has completely failed to demonstrate need for the IEC. PJM has dug itself a real pit trying to dart and weave in order to bolster its continually failing justification for the IEC. PJM should have cut its losses and moved on long ago. But for some reason, PJM prefers to make up new numbers, change its processes, and engage in a general course of "magic math" endeavors to dig deeper and deeper into the realm of unreality in order to support a project that may have been a good idea once upon a time but has since become obsolete. This is nothing new... once PJM orders a project to be built it holds onto that project way beyond reason and will do immoral things to support the project's necessity. This does not serve ratepayers. This serves PJM's member transmission owners who stand to profit from building new transmission we just don't need.
According to PJM, the IEC would provide $844M of benefit over the first 15 years. The OCA's witness calculated that the IEC would also produce an unaccounted for increase in the cost of power in Pennsylvania by an estimated $812M during that same period. These two numbers must offset themselves, leaving a mere $32.5M of benefit for PJM consumers over the first 15 years of the project. To realize that $32.5M in benefit, PJM consumers must spend $527M over the same time period. This creates a benefit/cost ratio of 0.06. This means that for every dollar ratepayers pay for this project, they will receive 6 cents of benefit. As the OCA witness pointed out, this makes no sense.
According to PJM, the IEC would provide $844M of benefit over the first 15 years. The OCA's witness calculated that the IEC would also produce an unaccounted for increase in the cost of power in Pennsylvania by an estimated $812M during that same period. These two numbers must offset themselves, leaving a mere $32.5M of benefit for PJM consumers over the first 15 years of the project. To realize that $32.5M in benefit, PJM consumers must spend $527M over the same time period. This creates a benefit/cost ratio of 0.06. This means that for every dollar ratepayers pay for this project, they will receive 6 cents of benefit. As the OCA witness pointed out, this makes no sense.
...I reached the same conclusions whether we look only at Pennsylvania or whether we look at PJM as a whole. Either way this project makes no sense. You don't spend 350 or $400 million so you can save $12 million over a 15-year period. It makes no sense. Q. Only under your cost-benefit analysis; is that right?
A. Under any logical view of what's happening. If you build this project, you can save utilities in Maryland, Virginia, and the District of Columbia almost a billion dollars over 15 years; and, if you don't build that project, that same power is going to be used in Pennsylvania, Ohio, Illinois, and New Jersey at a cost of about $970 million.
So, yes, there is some congestion. There is a technical problem to be solved, and the value of that congestion as laid out in the most recent estimate we have is less than a million dollars a year over the next 15 years. So this project makes no sense. I don't care how you run the numbers or how you talk about it. Those are the latest numbers we have, and you can exclude them if you want to but that's reality.
Pennsylvanians are so fortunate to have a great consumer advocate! The OCA's work on this case is most likely crucial to the ultimate outcome. Let them know you appreciate their efforts!
Of course, it's not over until it's over. There's probably another round of reply briefs to come, followed by the decision of the administrative law judge assigned to the case. After that, parties may file further arguments for their position before the Commissioners vote on the matter. Will the PUC Commissioners toss out all the work of the judge and approve this project on an unsupported whim? That's going to be a whole lot harder to do, thanks to the OCA!
Of course, it's not over until it's over. There's probably another round of reply briefs to come, followed by the decision of the administrative law judge assigned to the case. After that, parties may file further arguments for their position before the Commissioners vote on the matter. Will the PUC Commissioners toss out all the work of the judge and approve this project on an unsupported whim? That's going to be a whole lot harder to do, thanks to the OCA!
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