It looks like Primary Power has had another revelation about the shifty state of affairs at PJM. If you've been following the SVC issue, here's the latest.
Primary Power submitted a letter to PJM on February 29 to make a final plea to retain their prior selection to construct the projects. FirstEnergy wants to swoop in at the last minute and take over the project and they have been whining like a milksop champ.
In the letter, Primary Power makes a couple of astute observations:
"Continuing to allow a re-opening of the original recommendations made by the OI is tantamount to allowing the incumbent transmission owners to take over PJM’s role as the Transmission Planner in its NERC reliability regions, and PJM’s management of the stakeholder process."
and
"There are real problems with FirstEnergy’s claimed estimate that make it not credible, and not a valid basis for comparison to Primary Power’s well-founded estimate. First, Primary Power’s estimate is based on five years of development work on the Meadowbrook SVC and a design-basis cost estimate provided by the EPC contractor for the Primary Power SVC projects. In comparison, FirstEnergy has done no development work on a Meadowbrook SVC and its estimate is just an unvetted assumption.
Second, FirstEnergy’s track record on cost estimates for this very type of facility demonstrates that FirstEnergy grossly underestimates the cost of the facility in its initial estimate.
In the case of FirstEnergy’s Black Oak SVC facility, which was designated to FirstEnergy in the 2005 PJM RTEP, FirstEnergy’s initial estimate was $35 million. Within a year after FirstEnergy was designated to build the facility, the original cost estimate had ballooned from $35 million to $50 million. FirstEnergy underestimated the cost by almost 50 percent, and PJM selected the project based on that estimate.
If FirstEnergy has similarly underestimated the costs here, which is likely given that FirstEnergy has done no development or design work on the Meadowbrook SVC, then FirstEnergy’s $60 million initial estimate could easily escalate to $90 million, well in excess of the cost for Primary Power’s Meadowbrook SVC project. The lesson learned from FirstEnergy’s prior cost estimating and its off-the-cuff estimate for a project that it has not developed, is that care should be taken when comparing cost estimates."
So, FirstEnergy severely undervalues their "off the cuff," unvetted cost estimates in order to have them selected by PJM. And PJM continues to defer to the profit-driven bullying of its largest members. Anything new and striking in that for you PATH opponents? Nah, didn't think so. PJM is a dangerous cartel and its continued biased favoritism of projects awarded to certain incumbent TOs keeps cropping up again and again. Like water dripping on a stone...
Primary Power submitted a letter to PJM on February 29 to make a final plea to retain their prior selection to construct the projects. FirstEnergy wants to swoop in at the last minute and take over the project and they have been whining like a milksop champ.
In the letter, Primary Power makes a couple of astute observations:
"Continuing to allow a re-opening of the original recommendations made by the OI is tantamount to allowing the incumbent transmission owners to take over PJM’s role as the Transmission Planner in its NERC reliability regions, and PJM’s management of the stakeholder process."
and
"There are real problems with FirstEnergy’s claimed estimate that make it not credible, and not a valid basis for comparison to Primary Power’s well-founded estimate. First, Primary Power’s estimate is based on five years of development work on the Meadowbrook SVC and a design-basis cost estimate provided by the EPC contractor for the Primary Power SVC projects. In comparison, FirstEnergy has done no development work on a Meadowbrook SVC and its estimate is just an unvetted assumption.
Second, FirstEnergy’s track record on cost estimates for this very type of facility demonstrates that FirstEnergy grossly underestimates the cost of the facility in its initial estimate.
In the case of FirstEnergy’s Black Oak SVC facility, which was designated to FirstEnergy in the 2005 PJM RTEP, FirstEnergy’s initial estimate was $35 million. Within a year after FirstEnergy was designated to build the facility, the original cost estimate had ballooned from $35 million to $50 million. FirstEnergy underestimated the cost by almost 50 percent, and PJM selected the project based on that estimate.
If FirstEnergy has similarly underestimated the costs here, which is likely given that FirstEnergy has done no development or design work on the Meadowbrook SVC, then FirstEnergy’s $60 million initial estimate could easily escalate to $90 million, well in excess of the cost for Primary Power’s Meadowbrook SVC project. The lesson learned from FirstEnergy’s prior cost estimating and its off-the-cuff estimate for a project that it has not developed, is that care should be taken when comparing cost estimates."
So, FirstEnergy severely undervalues their "off the cuff," unvetted cost estimates in order to have them selected by PJM. And PJM continues to defer to the profit-driven bullying of its largest members. Anything new and striking in that for you PATH opponents? Nah, didn't think so. PJM is a dangerous cartel and its continued biased favoritism of projects awarded to certain incumbent TOs keeps cropping up again and again. Like water dripping on a stone...
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