Wondering what happened at the PJM Board of Managers meeting this morning?  So are the rest of us.  Of course, some folks already know... isn't that right?

Anyhow... PJM says they will be releasing a statement at mid-day Monday because they need to "brief the project developers." 

Uh-huh, PJM.  Transparent.

See you Monday!

PJM held a press briefing this afternoon to explain their decision to recommend that their Board of Managers cancel the PATH and MAPP projects at their upcoming August 24 meeting.  PJM blamed the cancellation on "the economy."  Nothing could be further from the truth.

Here are the REAL reasons why the projects were canceled:

PATH and MAPP (and Susquehanna-Roseland and TrAIL) were first and foremost parts of PJM's Project Mountaineer initiative.  Project Mountaineer was the 2005 brainchild of PJM's then President, Karl Pfirrmann.  Project Mountaineer was a plan to increase the transfer of coal-fired generation from Western PJM (the Ohio Valley) to Eastern PJM (the East Coast load centers) by 5,000 MW.  The plan was born out of an idea to "promote regional transmission planning and expansion to facilitate fuel diversity including expanded uses of coal-fired resources."  FERC held a technical conference on this subject in Charleston, WV on May 13, 2005, that was well attended by coal companies and electric utilities, as well as their political and regulatory cheerleaders, and Pfirrmann unveiled Project Mountaineer at this conference.

I'm not sure how "fuel diversity" was going to be "facilitated" by adding more "coal-fired resources" back in 2005, since coal has historically held the lion's share of the "resources" that produce electricity in this country.  Don't try to make sense out of the transcript.  It only holds entertainment value anymore.  Do a "find" in the document for the words "laughter" and "penguin" and you'll see what I mean.  It was a real riot, apparently.

Project Mountaineer was the opportunity to burn more coal and build very profitable transmission projects to transport it to new markets, and PJM's Regional Transmission Expansion Plan (RTEP) was proposed as the vehicle that would allow it to happen.

The coal-fired generators created projects designed to take advantage of the opportunity.  Allegheny Energy proposed the TrAIL Project.  AEP proposed its "I-765 Project."  PJM broke TrAIL down and combined part of this opportunity with part of AEP's I-765 Project to create the combined opportunity known as the PATH Project. 

That's right, the power companies created the opportunities before PJM had refined the exact vehicle.  PJM had yet to create a "need" for these opportunities that would act as the vehicle.  PJM went looking for, and "found," voltage violations, congestion, and reliability problems that would cause "brownouts and blackouts" if these opportunities were not built.  Instead of allowing a problem to present itself before designing a solution, PJM identified the solution first and then created a problem for it to fix.

As far back as 2007, opponents to new coal-by-wire high voltage transmission lines had produced testimony by experts that questioned PJM's determination of "need," and proposed that increased energy efficiency, demand management and the building of new generation closer to East Coast loads would solve the problem quicker, cheaper and more reliably than building billions of dollars worth of new long-distance transmission lines.

Today, PJM claimed that the reasons for PATH and MAPP's demise were:  "...reduced growth rate in customer load over the past years [energy efficiency]. We've seen a general increase in particular in eastern PJM in the amount of demand response that is available to us and most recently, earlier this year, we've seen a number of new generation additions in eastern PJM clearing through our capacity market."

These are the very same solutions that experts predicted would solve the problem without the building of new transmission lines FIVE YEARS AGO!

PJM claimed that they have been continuously re-evaluating these projects over the past five years, however their re-evaluations always continued to find a need for PATH.  It was only after the Virginia State Corporation Commission got tired of PATH's obfuscations and delays and ordered new supplemental analyses of the PATH project that it suddenly became clear that there were fatal flaws in PJM's "need" determination for PATH.  The analyses ordered by the VA-SCC were what put PATH into "suspension," where it has languished for the past year and a half.

Why did it take PJM five years and more than $225M (cost of PATH Project only) to find the solutions that had been freely handed to them in 2007?

The real reason PATH and MAPP were canceled is because they were never needed in the first place.  This unconscionable waste of time and money was caused by corporate greed and a massive planning failure by the PJM transmission cartel that these same greedy corporations control.

First, we need to set the proper mood.  Click here before reading the rest of this post.

Today, PJM staff released the rest of their analyses of the PATH and MAPP projects.

PJM recommends that PATH (and MAPP) be cancelled due to there being NO NEED to construct the projects to ensure reliability.

"PJM staff will be recommending to the PJM Board at their Friday, August 24th, 2012 meeting to cancel the PATH Project."

PJM also issued a press release.

"The PJM transmission planning staff will recommend to the PJM Board that the Potomac Appalachian Transmission Highline (PATH) and the Mid Atlantic Power Pathway (MAPP) lines be removed from PJM’s regional transmission plans. The recommendations are contained in slides posted today that will be presented tomorrow, Aug. 9, at a meeting of PJM’s the Transmission Expansion Advisory Committee.

A media briefing for reporters will be held Thursday at 3:30 p.m. following the advisory committee meeting. Steve Herling, vice president – Planning, will offer comments and take questions. To register for the briefing, please call PJM News at 866-756-6397.

Grid conditions have changed since the lines were originally planned, and our updated analysis no longer shows a need for the lines to maintain grid stability.

–         A slow economy has reduced the projected growth in the use of electricity.

–         PJM’s most recent capacity auction added 4,900 megawatts (MW) of new generation and procured 14,833 MW of demand response.

–         Although PJM’s analysis last year showed a diminished need for the two transmission lines the most responsible course was to wait to make a  recommendation after analyzing the updated forecast of peak use of electricity (the load forecast), the results of the 2012 capacity auction and the effects on grid stability of the anticipated announcement of generation retirements (16,000 MW) due to environmental regulations.

PJM’s regional planning process looks 15 years into the future to determine necessary changes to the transmission system to keep power flows stable. Planners study long-term growth in electricity use, generating plant retirements, broader generation development patterns, such as integration of renewable energy resources, and demand response and energy efficiency resources.

Since PJM’s first regional transmission plan in 2000, the PJM Board has approved more than $24.3 billion in new transmission lines and improvements and upgrades to existing facilities.

Just this year, PJM staff recommended and the board approved $2.8 billion in electric transmission improvements including new lines needed to keep the grid stable as generating units are retired in response to environmental regulations.

The staff recommendation will be presented to the PJM Board’s Reliability Committee later this month."

The State Journal was right on top of the story.  Click here to read Pam Kasey's story, PATH, likely canceled, cost $225 million.

All of the reasons PJM is now citing as reasons for cancelling (abandoning) the PATH Project are the very same reasons that PATH (and TrAIL) opponents have cited since the inception of the project in 2007.  Perhaps PJM should also take a fresh look at the Susquehanna-Roseland project at this time, because we don't need that one either.

PJM's errors in determining "need" for the PATH Project have cost PJM's 60 million ratepayers $95M in expenses since 2008.  In 2008, FERC granted PATH an incentive enabling the company to make a filing to recover the cost of its project from consumers in the event of abandonment.  PATH needs to prove to FERC's satisfaction that the company had no fault in the abandonment and that all amounts proposed to be recovered were prudently incurred.  PATH's current investment in the project totals slightly more than $130M.  $95M of our money + $130M of PATH's investment that they will attempt to recover from us = $225M wasted on the PATH project.

Goodbye, PATH!

Read more to find out why PJM cancelled PATH and MAPP here!

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.

See PJM's Transmission Expansion Advisory Committee Reliability Analysis Update for July 12, 2012.

PJM's PATH Project Analysis Update begins on page 9.  Page 12 says PATH is not needed for reliability reasons.

Under 15 year thermal test:
"No 500 kV potential thermal overloads identified."

Under MAAC Load Deliverability Voltage:
"CETL > CETO"

CETL stands for Capacity Emergency Transfer Limits and is the actual emergency import capability of the test area.

CETO stands for Capacity Emergency Transfer Objective and is the import capability required by an area to comply with a Transmission Risk of one event in 25 Years.

An area passes the deliverability test if its CETL is equal to or greater than its CETO.

So, how about it PJM, can we toss PATH onto the great scrap heap of failed transmission projects that have cost consumers millions without providing any benefit now?

Oh no, not yet!  PJM still has one more test to run, the N-1-1  power flow modeling test, which they say will be completed before the next TEAC meeting on August 9.

N-1-1 means they look at every combination of two separate – one after the other - transmission line outages throughout PJM to make sure PATH really isn't needed after all.  Not only are PJM's N-1-1 scenarios highly unlikely to ever occur, but they defy common sense.  If a grid-killing disaster happens (derecho, anyone?) that takes out two separate transmission lines, who's to say that said disaster won't also take out the PATH Project, or any other transmission line they propose as a backup?  As we've all found out over the past couple of weeks, a "robust" transmission system is only as good as the distribution system that brings the power to your home or business.  And as a group of Consumer Organizations pointed out to FERC last month, transmission incentives are pulling investment away from the distribution system.

The good news from today's TEAC meeting is that if the analysis continues to show that the PATH and MAPP lines are not needed, the TEAC will recommend to the PJM Board that the projects be dropped from the RTEP (and no longer held in abeyance).

Thank you, PJM Magic 8 ball!

PJM's Independent Market Monitor stuck their finger into the Primary Power pie at FERC, "[b]ecause this case has important implications for the Commission’s initiative in transmission competition policy, the Market Monitor urges the Commission to resolve the issues raised here in a manner that preserves and strengthens that policy."

Looks like the Market Monitor also smells a couple of incumbent rats exercising unfair advantage over their competition in the PJM cartel.  The IMM doesn't come right out and say that PJM is complicit, but what other conclusion could there be?  The IMM loves themselves some competition to make their little markets work, and PJM's decision to grant ownership of an independent transmission company's projects to incumbents smacks of uncompetitive, unfair advantage won through schmoozing and arm-twisting of PJM's management.  That's really nothing new.  The favoritism of incumbents has been going on at PJM for years, and will continue until a responsible entity puts a stop to it.  Bravo, IMM, for at least taking a stab at it.

IMM says, "PJM has not adequately justified its decision"
and thinks the following ambiguities in PJM's rules need to be corrected:

1.    "Sponsorship"
2.    New vs. Revised Projects
3.    Upgrades/rights of way/incumbent property rights

They also take issue with the fact that "PJM compares Primary Power’s costs to build the original projects against incumbent transmission owners’ cost to build the revised projects. There does not appear to have been a process that would have permitted direct competition between Primary Power and the Incumbents."

The IMM recognizes that PJM's "cost competition" arguments are bogus and cause undue expense for consumers and that some control needs to be put on cost estimates.  Perhaps the IMM should have weighed in on FERC's Transmission Incentives NOI as well, where this issue has been a part of discussions.

"The fact that the referenced costs are only estimates which cannot be enforced gives rise to significant questions about the significance of whether one project’s estimated costs are less than the estimated costs of another project. The Commission should consider whether transmission owners, whether incumbent or potential entrant, should provide firm, enforceable cost estimates. This would make a reasonable comparison of costs possible and would also define the assignment of risks between investors and customers."

PJM thinks they are omnipotent and invincible (because the incumbents tell them so while hefting their golf tackle around at ratepayer expense).  Someone needs to let Kerry Stroup know that PJM exists to serve CONSUMERS, and not the profit margins of their corporate members.

"They don't realize that PJM doesn't report to anybody ... although we are regulated by the Federal Energy Regulatory Commission," Stroup said."

Maybe FERC should spend less time in private "visits" with energy company CEOs, and start doing some regulating.

PSEG filed a Protest of PJM's compliance filing for their new planning process at FERC today.  I had to read it several times... and I'm still not sure what they're up to here, but at face value it makes them look like Sybil.  Overall, it's kind of like a pair of new shoes that rubs the wrong way, but you can't quite figure out what's causing the irritation.

First PSEG complains about PJM's new planning scenarios allowing decisions to be made within the mysterious "black box."  We've been complaining about PJM's mysterious "black box" for years, but because the old black box worked for PSEG, that was okay.  However, if PJM would now make black box decisions that include public policy considerations, that's not transparent enough for PSEG.

"The vague criteria of “the PJM’s engineering expertise and experience as the transmission planner and operator for the PJM region” does not provide sufficient clarity
regarding the decisional framework. PJM’s proposal is tantamount to black box decisionmaking. It fails to provide any decisional criteria that PJM would be obligated to follow in finalizing the RTEP before sending it to the Board for approval. It says nothing about how PJM will pick one scenario over another or whether such scenarios will be weighted based on any factors. As such, the issue of how PJM will be utilizing scenario planning in making RTEP decisions stands no clearer post compliance filing than before."

Next PSEG goes completely Sybil and complains that PJM puts no limits on how much an existing project could be modified and that such a modified project may no longer comply with market efficiency cost controls.  Yeah, I know... how can they say this with a straight face while simultaneously pushing their Susquehanna-Roseland white elephant??

"Further, the compliance filing puts no bounds on the extent to which an existing reliability or market efficiency project may be modified as a result of the sensitivity and scenario studies. Such an open-ended option puts at risk the cost control measures that
currently ensure that customers do not pay for projects that are neither economic nor “gold-plated” from a reliability standpoint. For example, under current rules, a market efficiency project must pass a cost benefit test in order to be included in the RTEP. Scenario planning may point to further project enhancements, but the compliance filing sets forth no requirement that such enhancements must also pass the same cost benefit
test. Without such a requirement, the fundamental cost controls that ensure customers do not pay for  uneconomic transmission upgrades would be lost."

PSEG puts the caboose on their crazy train by insisting that PJM align their RTEP assumptions with their RPM results.  PSEG (and PJM though the quote PSEG cited) insist that the RPM is working and responded perfectly to generation retirements, although the Market Monitor has been on the warpath about the new generation that cleared, saying that it skewed the market.  Now they're all fighting over who gets to wear the straight jacket!  PSEG says that "public policy" scenario assumptions that have not cleared the RPM should not be considered.  Okay... so let's apply that to S-R, shall we?  How about we retool that loser using the latest RPM results?

Is PSEG looking to dump their "gold plated reliability project" at this point in time?  C'mon PJM, step up here and be the hero.  Kill it, kill it, kill it!

Meanwhile, Atlantic Wind Connection made a filing complaining that PJM didn't include public policy scenario criteria in its compliance filing.  I guess they think they're about to be left at the alter...

I wonder if the FERC Commissioners can just send everyone to their rooms without supper?  Maybe some day we can make transmission decisions that are actually in the best interests of consumers, and not corporate bottom lines.  Call me a dreamer.

PJM spends a whole bunch of our money trying to manipulate their "markets" to be economic by expanding the transmission system to relieve economic "congestion."  Congestion simply means that "cheaper" power can't be transported to all points via the existing transmission system at certain peak load times.  That doesn't mean the lights are going to go out in those areas that can't import "cheaper" power, it simply means that they may have to crank up some more expensive generators closer to load. 

PJM has been whining for years about all the "congestion" between western PJM coal-fired generators and east coast load.  It was their basis for the failed $6B Project Mountaineer scheme.

See PJM's 2012 Market Efficiency Analysis Results presentation that is on the agenda for tomorrow's TEAC meeting.  As we've been telling you here and on The Power Line, PJM's "congestion" situation has changed dramatically since Project Mountaineer was proposed. 

Slide 3 tells us:

Significant drivers of congestion differences in 2011 and 2012 simulation results.

• Gas prices relative to coal much lower resulting in less coal units committed and less west to east transfers.
• Reactive upgrades on high voltage system led to significant increase in reactive transfer capability for future years.
• Decreased load forecast relative to previous years.
• Generation portfolio shifts to include more gas due to sustained lower gas prices, coal retirements and a net increase in natural gas generating capacity near load pockets.
• Emissions policies impact unit commitment/dispatch and shift to higher commitment of natural gas burning generation.

That's right... decreased load forecast on the east coast and new, cheaper gas generating capacity near east coast load pockets means less west to east (coal-fired) transfers, and that means Project Mountaineer is a big, fat, costly failure!  PATH might as well jump off that cliff they're perched on, and they can take MAPP with them (unless PJM re-purposes it as a east to west offshore wind transmission line).

As far as Susquehanna-Roseland goes, look at slides 4 & 5 where S-R and the Mt. Storm Doubs rebuild appear to alleviate "congestion."  While PJM pats themselves on the back for conquering the congestion monster, notice that some "congestion" simply moves to other areas.  Every change to the transmission system causes other changes.  They're never going to fix it all, just simply shift it among different consumers like a big electric bill fairy.

Now let's move on to slide 6 where we see "Constraints with at least $5 million Congestion Reduction and Upgrade(s) responsible for reduction."  Susquehanna-Roseland is credited with congestion reduction only twice in the table, and one of those instances is combined with reactive upgrades.  If we're generous here, we'll say S-R "saves" $32M per year in congestion costs for that line item.  The second reference to S-R credits it with saving $12M in "congestion" costs.  If we add those up, we've got $44M per year possible savings.  However, S-R is probably going to end up costing in the neighborhood of $200M per year when it's completed.  What the heck, PJM?  Thanks a lot for the "efficient" cleaning out of my wallet.

Abracadbra!  PJM's "efficient" markets have even more magic to perform for me!  That $44M in yearly "congestion" savings accrues only to the load pockets on the east coast (not me!), however S-R's $200M yearly cost is shared by all 61 million PJM consumers in the entire 13-state region (me included)!  Wow!  Sign me up!  It warms my heart to pay $156M to save other people $44M in "congestion" costs!  In fact, I'm now feeling so generous that I think I'll hop in the car, clean out my bank account, and then hand out money to all the winos hanging out on local street corners.  They'd probably spend my money more "efficiently" than PJM.

Oh, but wait, that's not all S-R will do for me.  It will also provide some illusory and hard to define "reliability."  $156M worth?  What kind of a rube do you think I am?

Won't someone pull the right lever and stop this out of control gravy train?  Please?

PJM has filed an answer to the complaint of Primary Power at FERC.  If you'll remember, Primary Power filed a complaint after PJM reassigned SVC projects Primary Power had spent 5 years and $5M developing to incumbent transmission owners Dominion and FirstEnergy.

PJM says they based their decision on three factors:

1.    The fact that the incumbents already owned land (their substations) on which to site the projects.

2.    The fact that the incumbents wouldn't need a CPCN because they would merely be "upgrading" existing transmission.

3.    Cost.

Wow!  That's it?  The crappy lawyering doesn't stop with the IOUs after all, but apparently also extends to RTOs as well.  1. & 2. are situations in which the incumbent will always prevail, effectively shutting the door on any independent projects and FERC's intent to encourage independent transmission ownership.  What a joke! 

But who said the projects won't need a CPCN or run into a siting buzzsaw in West Virginia if the incumbents construct them?  That's a lot of fallacious logic on PJM's part.  As I recall, somewhere in one of Primary Power's documents they said something about already having secured needed land, but I'm not going on a fishing expedition to find it.

And as far a 3. goes...  While Primary Power had a real cost estimate based on facts and figures, FirstEnergy and Dominion had back of the envelope guesses at cost.  PJM never did any independent cost evaluation to compare the alternatives.  Just like the PATH Project, the incumbent gets a free pass to underbid any competitors with estimates they pull out of thin air.  One of my favorite parts of PATH's fictitious cost estimate was demonstrated when the $1.8B project was reconfigured from twin 500kV lines from Bedington to Kemptown to a single 765kV line from a new  Welton Springs substation to Kemptown... and the $1.8B price tag remained exactly the same.  This proved that PATH's cost estimates were completely invented.

A plethora of parties have intervened in the Primary Power complaint at FERC.  Predictably, a bunch of PJM's favored incumbents protested the complaint and sided with PJM.  However, there was an equal number of independent transmission developers who intervened to support Primary Power's complaint.  If you want to browse through the filings, go here and enter Docket No. EL12-69.  Lots of good reading, but I'm not going to upload a whole bunch of them here.

The only party who can even claim some semblance of independence here is the Pennsylvania PUC, and guess who they sided with?  You'll have to read it to find out...

But what do I know about any of this... let's ask the PJM Magic 8 Ball if FERC is going to grab PJM by the scruff of its incumbent-lovin' neck and swat them with a rolled up newspaper...  take it away 8 Ball... "Outlook Good!"

According to PJM, its RPM capacity market is supposed to:

"...create long-term price signals to attract needed investments in reliability in the PJM region.

... stimulate investment both in maintaining existing generation and in encouraging the development of new sources of capacity – resources that include not just generating plants, but demand response and transmission facilities."

So, what is "capacity?"  Capacity is the amount of electricity a generator is capable of producing if it ran constantly.  However, generators don't run constantly, especially plants used only during peak demand.  But PJM must assure that enough capacity is available to meet that peak demand, therefore suppliers must purchase capacity, not just the electric power they may happen to use.  Capacity payments compensate generators for making capacity available, whether it ever actually produces a product that it gets paid for, or not.  A generator cannot afford to remain ready to dispatch if it never does, and never sells any product to produce an income. 

RPM auction prices are not "the cost of electricity," they just a small part of your total electric bill.  The larger part is the cost of the generation itself.  Different fuels (or no fuel in the case of renewables) and ways to produce electricity will produce different generation prices.  Coal is now more expensive than gas, therefore the cost of electricity produced from coal will be more expensive than electricity produced from gas, although both are receiving capacity payments to be available all the time.

PJM's markets are supposed to balance all this to ensure reliability -- an adequate supply of electricity at all times -- at the lowest possible cost.

However, it didn't quite work for New Jersey and Maryland, two states that pay some of the highest prices in the region because they are electricity importers.  Capacity prices were much higher than the rest of the region in those two states because they lacked adequate generation resources.  PJM's answer to that was to build billions of dollars of new transmission to import generation with cheaper capacity prices into those states.  New Jersey and Maryland waited years for PJM's capacity market to stimulate "development of new sources of capacity," but it never happened.  Therefore, New Jersey and Maryland decided to take matters into their own hands to stimulate "the development of new sources of capacity" in their own states.  Regulators in these states believe that local gas-fired generation will be a cheaper source of electricity for their consumers in the long run.  They wanted to be released from being held hostage by an ever-shrinking pool of dirty generators in western PJM and take control of their own electricity markets.

New Jersey implemented their LCAPP.

Maryland implemented their RFP process.

Both programs successfully stimulated proposals for new generation, which would mean that incumbent generators at the exporting end of all those new transmission lines would now have real competition.  The new generation proposals use currently low-priced gas for fuel.  The incumbents rely heavily on coal and some more expensive nukes, therefore their generation may no longer be economic to import to Maryland and New Jersey.  The incumbents have been screaming bloody murder and going to great lengths to try to halt Maryland and New Jersey's programs through the legal process.  PJM, being the cartel of incumbent generators that it is, sided with its most powerful members and joined in the state utility regulator beat down at FERC and in the courts.

In addition to the fuel cost disparity, PJM and the incumbent generators have another problem on their hands -- the cost of those new transmission lines needed to import their product to New Jersey and Maryland.  While the cost of a new generator will be paid for by those who use its electricity in New Jersey and Maryland, the cost of building new transmission lines is paid for by ALL electric consumers in PJM.  A consumer's share is dependent on their share of regional peak load, therefore consumers in areas far from these new transmission lines will end up paying a higher percentage of cost than those who are receiving the lower electricity price benefits that the transmission line supposedly provides. So, while clueless bloggers hyperventilate over the "subsidies" ratepayers will pay for New Jersey's new generation, they fail to consider the cost of the alternative to building new generation -- generation imports via new transmission lines that will be paid for by others who receive no benefit and end up costing consumers much more than "subsidized" new generation in the long run.

Maryland's project, and several of New Jersey's projects, cleared PJM's capacity auction last month, which was the hurdle they needed to overcome to get started.  The incumbent generators are completely beside themselves with worry that the captive market for their product is evaporating so quickly (never mind that decreased demand and fuel economics were already doing a nice job on their own).  Now the incumbent generators and their investors are on the war path to distort media understanding of a very complicated subject. More legal wrangling is absolutely guaranteed, along with some propaganda from the incumbent generators' front group, The Compete Coalition.

New Jersey regulators do a nice job of defending their LCAPP program in the clueless blog, however the blogger just doesn't understand the entire concept therefore, he doesn't understand them and remains a faithful lapdog for incumbent generators and their spinmeisters who want to throttle real competition in electric generation.