We've been hearing for months that PJM would be re-evaluating the Transource Independence Energy Connection and would be releasing its results at the September Transmission Expansion Advisory Committee meeting yesterday. But that's not really what PJM did.
The afternoon before the meeting, PJM released its "analysis." The analysis supposedly found that the project was still providing enough "benefits" to continue, with a cost-benefit ratio of 1.42. That means for every dollar spent, the project would return $1.42 of "benefit" for PJM consumers. Never take PJM at face value. Ask questions, because the devil is in the details.
And that's just what IEC opponents from Maryland and Pennsylvania did yesterday when they attended PJM's TEAC meeting in person. Patti Hankins, Aimee O'Neill, Dolores Krick and Greg Goss asked pertinent questions and let PJM know that the IEC was a gigantic waste of time and money, and that there were better, cheaper alternatives.
And our heroes from StopTransource weren't the only ones giving IEC the hairy eyeball. There were plenty of others questioning PJM's re-evaluation process at the meeting, including regulators and other utilities. And it was slowly revealed during the meeting that PJM did not include much of the necessary data to make its re-evaluation meaningful. It was a total waste of time and effort and the result was useless. PJM said it had to "put a stake in the ground" and conduct the re-evaluation at this certain point in time. However, PJM did not have all the data it needed to perform a meaningful evaluation. How stupid and wasteful is that?
Here's what's missing from PJM's re-evaluation:
The afternoon before the meeting, PJM released its "analysis." The analysis supposedly found that the project was still providing enough "benefits" to continue, with a cost-benefit ratio of 1.42. That means for every dollar spent, the project would return $1.42 of "benefit" for PJM consumers. Never take PJM at face value. Ask questions, because the devil is in the details.
And that's just what IEC opponents from Maryland and Pennsylvania did yesterday when they attended PJM's TEAC meeting in person. Patti Hankins, Aimee O'Neill, Dolores Krick and Greg Goss asked pertinent questions and let PJM know that the IEC was a gigantic waste of time and money, and that there were better, cheaper alternatives.
And our heroes from StopTransource weren't the only ones giving IEC the hairy eyeball. There were plenty of others questioning PJM's re-evaluation process at the meeting, including regulators and other utilities. And it was slowly revealed during the meeting that PJM did not include much of the necessary data to make its re-evaluation meaningful. It was a total waste of time and effort and the result was useless. PJM said it had to "put a stake in the ground" and conduct the re-evaluation at this certain point in time. However, PJM did not have all the data it needed to perform a meaningful evaluation. How stupid and wasteful is that?
Here's what's missing from PJM's re-evaluation:
- Generation retirements. Early in the meeting PJM recited a list of retiring generators. And wouldn't you know it, there's a bunch of new retirements in southwestern Pennsylvania. When asked, PJM said it had not included any of that information in its analysis of the IEC. Let's see... the retirement of over 4,000 MW of generation in Pennsylvania won't have any effect on the economics of new transmission to bring "cheaper" power from Pennsylvania to Washington, D.C.? Of course it will!! Less generation coming from Western PA means less generation available to ship to D.C., and generation prices will be affected. Including this information won't do IEC any favors, so PJM simply ignored it. Remember, stake in the ground, so anything that happens after stake is placed is completely ignored. How convenient!
- New generation. There was a bunch of incomprehensible discussion about inclusion of FSA's, and an expected Order from the Federal Energy Regulatory Commission that will require PJM to include FSA's in its modeling. It seemed to be implied that inclusion of FSA's might change the re-evaluation numbers and obviate IEC. What's a FSA? Facility Service Agreement. A proposed new generator must go through a series of studies at PJM before it is permitted to connect to the system to make sure it doesn't cause problems. At the end of the study process, a generator signs an ISA (Interconnection Service Agreement) or FSA before connecting. But PJM excludes these proposed generators from its evaluation data, pretending that they will never be built or connect within the 15-year future used to evaluate market efficiency transmission projects. Would the connection of new generators closer to Washington, D.C. affect the need to ship generation all the way from Pennsylvania to serve that load? Of course it will! So, PJM isn't paying attention to any changes to generators when it evaluates market efficiency projects, although the existence and location of generators is the basis of need for a market efficiency project. How convenient!
- Costs of the IEC. Here's a big one! In order to make an effective cost-benefit ratio calculation, you'd think PJM would have to have accurate costs, right? Wrong! PJM posted an updated cost estimate for the project that increased cost around $25M. However, upon questioning, PJM revealed that the increased costs came from other transmission owners who were required to make improvements to their own systems to support IEC. The costs of IEC have not been updated since 2015! So PJM is using a cost number that has no validity to make its cost-benefit analysis! If the cost number increases (and it will) the cost-benefit ratio will change. PJM says it is still waiting for Transource to update its costs, but you know, stake in the ground, they just went ahead and wasted a bunch of time and money doing their evaluation with inaccurate cost data.
This is absurd, PJM!!! It's bad enough you didn't use good data to do your stake in the ground analysis, but then you announced your inaccurate results like they actually meant something! The new cost-benefit ratio of 1.42 means absolutely nothing. What a colossal waste of time and money! And whose money is PJM wasting doing stupid stuff like this? Yours and mine. PJM has no revenue of its own. It collects its entire budget from consumers who pay an electric bill in the PJM region. Every day the IEC farce goes on also costs us money because IEC has received an "incentive" that allows it to apply at the FERC to recover every dollar spent on the project (plus 10.4% interest) from ratepayers even if the project is cancelled. The more Transource spends, the more it makes!
PJM claims it is hostage to its own process. Once it orders a market efficiency project, it cannot cancel it unless the cost-benefit ratio falls below 1.25. PJM claims it has no authority to require cost updates by certain deadlines that synchronize with its stake in the ground re-analysis. Nor does it spend much effort attempting to verify any cost updates it does receive. Therefore it appears that a transmission owner can never update its costs, can fudge any cost update it does submit, and effectively prevent PJM from canceling any market efficiency project.
PJM claims it is hostage to its own process. Once it orders a market efficiency project, it cannot cancel it unless the cost-benefit ratio falls below 1.25. PJM claims it has no authority to require cost updates by certain deadlines that synchronize with its stake in the ground re-analysis. Nor does it spend much effort attempting to verify any cost updates it does receive. Therefore it appears that a transmission owner can never update its costs, can fudge any cost update it does submit, and effectively prevent PJM from canceling any market efficiency project.
Transource also wants to pretend it's trapped in PJM's Hotel California. It was ordered, ORDERED, to construct this project and it must continue to do so until PJM cancels it! However Transource isn't running for the door. It's barricaded itself in its room and is ordering pink champagne on ice on our tab.
PJM also wanted everyone to note that there are now supposed reliability violations when IEC is removed from the transmission expansion plan. Oh, c'mon! This isn't how PJM plans for reliability, and IEC was never selected to solve reliability violations. If there's a reliability issue, PJM needs to go back to the drawing board and find the best solution, not simply recycle one that now has no other purpose. Was pretending that IEC is now needed for reliability supposed to scare state regulators into going along with the plan? You're a day late and a dollar short on that, PJM. I'm thinking that all this nonsense is simply increasing entrenched opposition at the state level. Nobody likes to be lied to, especially state regulators.
Somebody needs to step in here and protect consumers from this nonsense. That role falls on state regulators. Yes, they're currently involved in a permitting process, but state regulators in the past have rescued consumers from this hell by requiring updated modeling and analysis that uses actual new data. Until that happens, it looks like its up to the consumers themselves to stay on PJM to demand better analysis and I'm pretty sure they will.
The Transource IEC is nothing but a cost burden right now and the sooner it's cancelled, the less we're going to have to pay for PJM's process failure.
PJM also wanted everyone to note that there are now supposed reliability violations when IEC is removed from the transmission expansion plan. Oh, c'mon! This isn't how PJM plans for reliability, and IEC was never selected to solve reliability violations. If there's a reliability issue, PJM needs to go back to the drawing board and find the best solution, not simply recycle one that now has no other purpose. Was pretending that IEC is now needed for reliability supposed to scare state regulators into going along with the plan? You're a day late and a dollar short on that, PJM. I'm thinking that all this nonsense is simply increasing entrenched opposition at the state level. Nobody likes to be lied to, especially state regulators.
Somebody needs to step in here and protect consumers from this nonsense. That role falls on state regulators. Yes, they're currently involved in a permitting process, but state regulators in the past have rescued consumers from this hell by requiring updated modeling and analysis that uses actual new data. Until that happens, it looks like its up to the consumers themselves to stay on PJM to demand better analysis and I'm pretty sure they will.
The Transource IEC is nothing but a cost burden right now and the sooner it's cancelled, the less we're going to have to pay for PJM's process failure.
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