Opponents Request PJM Withdraw Transource IEC Project

In a letter to the PJM Board of Managers last week, Transource opposition groups Citizens to Stop Transource, Stop Transource Franklin County, and Stop Transource Power Lines MD requested that PJM withdraw Transource's Independence Energy Connection from PJM's Regional Transmission Expansion Plan within the next month.

The opposition groups state that congestion savings have fallen, project costs have increased, electrical load in the target beneficiary area has decreased, overall congestion costs have been reduced 65%, use of existing rights-of-way is feasible, endangered species surveys have not been completed, and other utilities have done no work to complete their portions of the project.  It's a damning list of compelling reasons to halt the project before it incurs more costs that ratepayers will ultimately have to pay.

The groups say

While we understand that PJM feels a responsibility to Transource to allow them to fail gracefully at the state level after a protracted review, the facts demand that PJM cancel this project immediately. Millions of taxpayer dollars are being spent to review this project in two states, and landowners are fighting the project with their own attorneys.

The opportunity to "fail gracefully" also allows Transource to continue to spend money packing its construction work in progress account upon which it will receive a 10.4% return until reimbursed in full by ratepayers.  Continued spending on a project that will most likely never be constructed is irresponsible on PJM's part.  It's imperative to take a "time out" here to re-examine this project in depth.

In the past, PJM has allowed, and even eagerly supported, transmission projects that once placed in its RTEP are never revisited.  This blindly thoughtless ride on the process train has cost PJM ratepayers hundreds of millions of dollars in their electric bills for projects that have never been constructed.  Ratepayers pay a hefty penalty for PJM's lack of planning expertise, and who's to blame?  PJM, of course!  The opposition groups concluded:

The merits of this project are dwindling, the costs of the project increasing, and the timeline is slipping. By now PJM is certainly aware that there is little chance of approval. Until now, landowners have considered Transource to be their opponent, but unless PJM soon exercises its right to withdraw the project, we will hold PJM responsible. PJM will become the target of our media outreach, our legislative efforts, and potentially, our legal efforts as we hold PJM responsible for the tremendous costs incurred by landowners who will ultimately emerge victorious. Further PJM support of this project will be viewed as an abuse of process.

PJM, as a profit-neutral utility cartel, has no assets of its own at risk.  PJM's entire budget is financed by electric ratepayers in the region through rates added to customer bills.  It costs PJM nothing to continue to order and support projects that have a very low chance of being approved and built, and with federal abandonment guarantees granted by the Federal Energy Regulatory Commission, owners of these projects actually profit from proposing and trying to permit projects that stand little chance of success.  PJM is unharmed.  Transmission owners are unharmed.  Consumers shoulder all risk for these projects, although they have no part in determining their necessity or reviewing their risk profiles in the first place.  The words "fiduciary duty" come to mind here. 

A fiduciary duty is the highest standard of care.  The person who has a fiduciary duty is called the fiduciary, and the person to whom he owes the duty, is typically referred to as the principal or the beneficiary. If an individual breaches the fiduciary duties, he or she would need to account for the ill-gotten profit. His or her beneficiaries are entitled to damages, even if they suffered no harm.

Simply put, as an impartial regional transmission planner for benefit of electric customers in the region, PJM accepts a fiduciary duty to act in the best interests of the consumers who benefit from its actions.  PJM is failing here.  While sticking to a risky plan to cure supposed reliability violations may have some basis, when a doubtful project's only purpose is to save ratepayers money, continuing pursuit in the face of imminent failure can only be called reckless.  The only guarantee here is that the Transource IEC project is going to cost ratepayers money.  Benefits are a gamble, costs are a certainty.

Based on my years of experience assessing the probability of transmission proposals actually being approved and built as ordered, I find that the chances of the Transource IEC project being approved and built on time and on budget hovering near zero.  If PJM chooses to ignore the opponents and proceed on its merry way with the IEC, it deserves all the public scrutiny and anger it receives.  It's time to turn our attention to PJM and demand more accountability to ensure that the organization created for our sole benefit performs as intended.