Oh, PJM, don't you know that when you lie down with dogs you get up with fleas? PJM has killed its credibility with a recently issued "white paper" that purports to show the Transource Independence Energy Connection is still "needed." Guess what? Nobody believes you, PJM! In fact, it looks like the only one who paid any attention to your white paper was RTO Insider, and even they balanced their story with opposition claims that PJM's recent re-evaluation was rigged.
I'm not even sure what the purpose of that white paper was supposed to be -- was it a publicity stunt? Was it PJM's answer to expert testimony filed in Pennsylvania that showed how costly the project would be to ratepayers in that state, without any corresponding benefit? If this is PJM's feeble attempt to step outside its cartel headquarters and interact with the hoi polloi, it failed miserably.
We've been hearing for more than two months that PJM thinks the IEC is needed "for reliability," but there has been no actual data shown to back up this claim. There's still no public data, just vague assertions that "power flow results" indicate overloads on other transmission facilities that produce instability. Without the actual results, this claim is baseless. In fact, it looks like PJM is just making this stuff up as they go along. But now the potentially overloaded lines (and a transformer) have been identified. PJM claims that without the IEC, a TMI transformer, the Peach Bottom-Conastone, Hunterstown-Lincoln, Lincoln Tap-Lincoln, and Lincoln-Straban lines will overload in 2023. If these are actual, real overloads, PJM had better get cracking on solutions other than the IEC, because the IEC is not going to be approved by the states. PJM has no Plan B. If we believe PJM, then the lights are going to go out in 2023 if the IEC isn't constructed. What have you been doing with your time, PJM? Isn't it your job to keep the lights on? PJM claims, "A solution and estimated cost for a violation of this scope are typically non-trivial." Typically? Is that how PJM devises solutions to reliability issues? By making "typical" determinations? So there's absolutely no science to PJM transmission planning? It's just a bunch of guys pontificating at the snack bar about "typical" things? Doesn't PJM "typically" issue a problem statement on projected reliability violations and solicit competitive solutions? Absent that, doesn't PJM look to the incumbent owners of the problem assets to devise solutions to overloads? That's what "typically" happens. It's not "typical" to re-package a failed market efficiency project as a solution to a developing reliability issue. Perhaps other transmission owners could devise a solution to the reliability issue that is less costly and less invasive than the IEC, presuming a reliability issue actually exists. But since PJM isn't making the "power flow results" that show a reliability issue public, it is subverting competition to the detriment of consumers. Based on the evidence in this "white paper," I'm going to conclude that the purported "reliability" issue doesn't exist.
PJM is layering other transmission projects on IEC being built that may cause false reliability violations. Approving new projects that require a transmission project that is not approved by the states and will not be built is a planning failure. In addition, building IEC does nothing to update old transmission lines to increase their capacity. The old lines will still exist. Perhaps the entire AP South issue only exists because PJM refuses to update existing lines to increase their capacity. It wasn't too many years ago when the rebuilding of one of the AP South lines to increase its capacity obviated the new $2.1B PATH transmission project. PJM has learned nothing and continues to waste ratepayer cash on new projects while allowing existing lines to rot and fail. Rebuilds, PJM, rebuilds! Quit wasting our money and putting reliability at risk!
PJM also manages to confirm the testimony of Pennsylvania OCA's witness who says the "benefits" figure excludes the increases in costs to other zones. PJM says:
I'm not even sure what the purpose of that white paper was supposed to be -- was it a publicity stunt? Was it PJM's answer to expert testimony filed in Pennsylvania that showed how costly the project would be to ratepayers in that state, without any corresponding benefit? If this is PJM's feeble attempt to step outside its cartel headquarters and interact with the hoi polloi, it failed miserably.
We've been hearing for more than two months that PJM thinks the IEC is needed "for reliability," but there has been no actual data shown to back up this claim. There's still no public data, just vague assertions that "power flow results" indicate overloads on other transmission facilities that produce instability. Without the actual results, this claim is baseless. In fact, it looks like PJM is just making this stuff up as they go along. But now the potentially overloaded lines (and a transformer) have been identified. PJM claims that without the IEC, a TMI transformer, the Peach Bottom-Conastone, Hunterstown-Lincoln, Lincoln Tap-Lincoln, and Lincoln-Straban lines will overload in 2023. If these are actual, real overloads, PJM had better get cracking on solutions other than the IEC, because the IEC is not going to be approved by the states. PJM has no Plan B. If we believe PJM, then the lights are going to go out in 2023 if the IEC isn't constructed. What have you been doing with your time, PJM? Isn't it your job to keep the lights on? PJM claims, "A solution and estimated cost for a violation of this scope are typically non-trivial." Typically? Is that how PJM devises solutions to reliability issues? By making "typical" determinations? So there's absolutely no science to PJM transmission planning? It's just a bunch of guys pontificating at the snack bar about "typical" things? Doesn't PJM "typically" issue a problem statement on projected reliability violations and solicit competitive solutions? Absent that, doesn't PJM look to the incumbent owners of the problem assets to devise solutions to overloads? That's what "typically" happens. It's not "typical" to re-package a failed market efficiency project as a solution to a developing reliability issue. Perhaps other transmission owners could devise a solution to the reliability issue that is less costly and less invasive than the IEC, presuming a reliability issue actually exists. But since PJM isn't making the "power flow results" that show a reliability issue public, it is subverting competition to the detriment of consumers. Based on the evidence in this "white paper," I'm going to conclude that the purported "reliability" issue doesn't exist.
PJM is layering other transmission projects on IEC being built that may cause false reliability violations. Approving new projects that require a transmission project that is not approved by the states and will not be built is a planning failure. In addition, building IEC does nothing to update old transmission lines to increase their capacity. The old lines will still exist. Perhaps the entire AP South issue only exists because PJM refuses to update existing lines to increase their capacity. It wasn't too many years ago when the rebuilding of one of the AP South lines to increase its capacity obviated the new $2.1B PATH transmission project. PJM has learned nothing and continues to waste ratepayer cash on new projects while allowing existing lines to rot and fail. Rebuilds, PJM, rebuilds! Quit wasting our money and putting reliability at risk!
PJM also manages to confirm the testimony of Pennsylvania OCA's witness who says the "benefits" figure excludes the increases in costs to other zones. PJM says:
New production cost simulations based on these updated parameters results yielded a $600.73 million present value of net load payment benefit (for zones where payments decreased).
For zones where payments decreased -- this means that any zones where payments increased were left out of the equation. To calculate an actual benefit, PJM should have included all the zone payments, including those that increased. That's the benefit number that should be used in the benefit/cost ratio analysis. Instead, PJM used an artificially high benefit number devised only from zones that showed a decrease. This is crap, PJM! Even a third grader could see where you screwed up your math. When the decrease is balanced with the increase elsewhere, the benefit for the entire region is nominal.
And speaking of nominal, PJM says it used "Nominal Project Cost" in its evaluation. What's a "nominal" project cost? Nominal is an adjective.
And speaking of nominal, PJM says it used "Nominal Project Cost" in its evaluation. What's a "nominal" project cost? Nominal is an adjective.
(of a price or amount of money) very small; far below the real value or cost
So PJM used a project cost value far below the real cost and described it as "nominal."
We've got an artificially high "benefit" number compared to an artificially low "cost" number. This is magic math. It's not credible. PJM's benefit/cost ratio is artificially manipulated to fit guidelines. PJM's evaluation of benefit/cost has lost all credibility.
And speaking of costs, PJM says that it performed the required "independent cost evaluation" on the IEC several years ago as evidence that the current "nominal" costs are accurate. An evaluation of a prior cost estimate does not magically make all new cost estimates valid. If the costs change, then a new evaluation should be performed. From the PJM manual:
We've got an artificially high "benefit" number compared to an artificially low "cost" number. This is magic math. It's not credible. PJM's benefit/cost ratio is artificially manipulated to fit guidelines. PJM's evaluation of benefit/cost has lost all credibility.
And speaking of costs, PJM says that it performed the required "independent cost evaluation" on the IEC several years ago as evidence that the current "nominal" costs are accurate. An evaluation of a prior cost estimate does not magically make all new cost estimates valid. If the costs change, then a new evaluation should be performed. From the PJM manual:
For new economic enhancements or expansions with costs in excess of $50 million, an independent review of such costs shall be performed to assure both consistency of estimating practices and that the scope of the new Economic-based Enhancements or Expansions is consistent with the new Economic-based Enhancements or Expansions as recommended in the market efficiency analysis.
Uh huh. "New" enhancements (transmission). When does a market efficiency project become "new" and when does it become "old." Wouldn't it be "new" until it's actually built? Or does PJM's manual purport that a project becomes "old" after the initial evaluation? That makes no sense when cost estimates can change, along with the method by which they are calculated. A "new" cost figure requires a new evaluation. Did any "independent" review of Transource's recently revised cost estimates occur? Because it sure looks like Transource used magic math to devise an estimate that would compare favorably with PJM's recently revised "benefit" number. Transource's cost estimate has no credibility. A new review is warranted. Without it, PJM's credibility is zero.
And one last thing... how about a nice bowl of alphabet soup? PJM says that IEC will increase CETL for the BGE LDA. But that's mere gold-plating. Increasing CETL for any LDA (zone) is not necessary (if it were, it would be a reliability issue). CETL stands for Capacity Emergency Transfer Limit. It's the maximum amount of energy that can be transferred into a zone on existing transmission lines. Sure, IEC may increase the amount of energy that can be imported to BGE (Baltimore Gas & Electric), but increased imports are not needed for reliability purposes. They are "needed" to import lower cost electricity into BGE, instead of using higher-priced electricity available in BGE. And doesn't PJM's white paper say this already? The addition of CETL does nothing to increase need for IEC from a reliability standpoint, and that's the purpose of CETL. EMERGENCY, right? BGE needs to have enough capacity to import energy in an emergency to keep the lights on. Price is not an emergency! There's plenty of power in BGE to keep the lights on in an emergency without the addition of IEC. Therefore I can only conclude that PJM's introduction and use of CETL in its white paper is nothing more than an effort to confuse people with technical mumbo-jumbo that they don't understand. Maybe that works with the average consumer, but it's not going to work on the regulators who are evaluating this project.
So, since PJM likes alphabet soup so much, here's what I found in my bowl to describe PJM's recent efforts to bolster IEC:
FUBAR
SNAFU
SUSFU
TARFU
FUBU
BOHICA
Go ahead, look it up. Here's a link.
I guess it's all in how you stir your soup!
PJM's Transource IEC white paper is a complete and utter waste of time. Reading it was like sipping a big cup of dumb.
And one last thing... how about a nice bowl of alphabet soup? PJM says that IEC will increase CETL for the BGE LDA. But that's mere gold-plating. Increasing CETL for any LDA (zone) is not necessary (if it were, it would be a reliability issue). CETL stands for Capacity Emergency Transfer Limit. It's the maximum amount of energy that can be transferred into a zone on existing transmission lines. Sure, IEC may increase the amount of energy that can be imported to BGE (Baltimore Gas & Electric), but increased imports are not needed for reliability purposes. They are "needed" to import lower cost electricity into BGE, instead of using higher-priced electricity available in BGE. And doesn't PJM's white paper say this already? The addition of CETL does nothing to increase need for IEC from a reliability standpoint, and that's the purpose of CETL. EMERGENCY, right? BGE needs to have enough capacity to import energy in an emergency to keep the lights on. Price is not an emergency! There's plenty of power in BGE to keep the lights on in an emergency without the addition of IEC. Therefore I can only conclude that PJM's introduction and use of CETL in its white paper is nothing more than an effort to confuse people with technical mumbo-jumbo that they don't understand. Maybe that works with the average consumer, but it's not going to work on the regulators who are evaluating this project.
So, since PJM likes alphabet soup so much, here's what I found in my bowl to describe PJM's recent efforts to bolster IEC:
FUBAR
SNAFU
SUSFU
TARFU
FUBU
BOHICA
Go ahead, look it up. Here's a link.
I guess it's all in how you stir your soup!
PJM's Transource IEC white paper is a complete and utter waste of time. Reading it was like sipping a big cup of dumb.
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