W T
PPL?
I think PPL needs to do a round of drug testing of its employees. Whoever came up with this idiotic idea must be on something.
PPL announced today that it had "submitted an application to PJM" to build a 725-mile 500kV line, estimated to cost $6B, through four mid-Atlantic states.
Never going to happen.
Residents of affected states are still reeling from PJM's last big transmission building idea, Project Mountaineer, that cost them billions, including nearly half a billion dollars for planned projects that were never built. Try it, PPL, and you will experience coordinated, strategic opposition like you've never seen before!
The Morning Call seems to be the first media outlet to... err... call PPL out on its outrageous money-making scheme. PPL interstate transmission project both costly and lucrative: Project would fill utility coffers while costing ratepayers billions of dollars.
Morning Call says:
PPL announced today that it had "submitted an application to PJM" to build a 725-mile 500kV line, estimated to cost $6B, through four mid-Atlantic states.
Never going to happen.
Residents of affected states are still reeling from PJM's last big transmission building idea, Project Mountaineer, that cost them billions, including nearly half a billion dollars for planned projects that were never built. Try it, PPL, and you will experience coordinated, strategic opposition like you've never seen before!
The Morning Call seems to be the first media outlet to... err... call PPL out on its outrageous money-making scheme. PPL interstate transmission project both costly and lucrative: Project would fill utility coffers while costing ratepayers billions of dollars.
Morning Call says:
The project also would be a significant source of revenue for PPL Corp., PPL Electric Utilities' Allentown-based parent. Under Federal Energy Regulatory Commission rules designed to encourage infrastructure investment, utilities may earn a profit of 11.68 percent on transmission projects.
That translates into a profit of up to $700 million. PPL would share the money with any other utilities that participate in the project.
PPL customers, meanwhile, would see the cost, including utility profits, reflected in their rates — though the burden of paying for the project would be shared by ratepayers in all four of the states involved.
But, Morning Call only sees the tip of this iceberg. PPL can apply to the Federal Energy Regulatory Commission for transmission rate incentives that would up its profits significantly. In addition to incentive ROE adders that can increase the 11.68 percent several percentage points, PPL can also ask for guaranteed cost recovery in event of abandonment, a return on construction work in progress that enables them to begin earning that juicy return immediately, even before the project is completed, and many other outrageous financial rewards.
In addition, Morning Call's math is wrong. The $700 million profit the reporter calculated is only that earned in THE FIRST YEAR of operation. Transmission project rates work sort of like a 40-year mortgage. The return is calculated and paid on the depreciating balance of the project cost every year! So, in the first year of operation, PPL would earn a return on $6B and collect a certain amount of depreciation on the project assets that would lower the balance owed by ratepayers. The second year, PPL would earn a return on the depreciated balance, and additional depreciation. And so on, over the 40 year (or more) life of the capital assets. PPL's possible profit from this ridiculous project is a nearly endless goldmine!
And, one last thing Morning Call gets wrong -- this project will be paid for, in part, by ratepayers in all 13 states in the PJM region because of its size. A 500kV project built in PJM is cost allocated at 50% to all ratepayers based on peak usage, with the other 50% being assigned to the cost causers/beneficiaries.
Moving right along into PPL's feeble assertions that its project will:
In addition, Morning Call's math is wrong. The $700 million profit the reporter calculated is only that earned in THE FIRST YEAR of operation. Transmission project rates work sort of like a 40-year mortgage. The return is calculated and paid on the depreciating balance of the project cost every year! So, in the first year of operation, PPL would earn a return on $6B and collect a certain amount of depreciation on the project assets that would lower the balance owed by ratepayers. The second year, PPL would earn a return on the depreciated balance, and additional depreciation. And so on, over the 40 year (or more) life of the capital assets. PPL's possible profit from this ridiculous project is a nearly endless goldmine!
And, one last thing Morning Call gets wrong -- this project will be paid for, in part, by ratepayers in all 13 states in the PJM region because of its size. A 500kV project built in PJM is cost allocated at 50% to all ratepayers based on peak usage, with the other 50% being assigned to the cost causers/beneficiaries.
Moving right along into PPL's feeble assertions that its project will:
If approved, PPL predicts, the project will improve energy reliability and security and provide customer savings by eliminating transmission bottlenecks and encouraging development of lower-cost natural gas-fueled generation plants.
The new plants would help replace energy supplied today primarily by coal-fired plants that, under increasingly stringent federal air quality standards, are expected to be retired in coming years.
This doesn't even make sense. The coal-fired plants that will be closing are located in the Ohio valley, not on the east coast. Once those coal-burners are offline, it will free up significant transmission capacity for any new "mine mouth" Marcellus shale gas-fired plants built in the Ohio valley. Why would we need to build a new west to east transmission line when there's already plenty of them sitting idle due to coal-plant closings?
PPL says they will have a robust public input process to find out where to site the line. Seriously? That strategy doesn't work anymore. It's all about need for the line in the first place, not where to put it. Get with the brave new world of transmission opposition, PPL!
And speaking of siting the line... where is that new Maryland substation supposed to be on that featureless map? If you compare it to a real map of Maryland, it looks like it's in Howard or Carroll counties. But, what if there was land available in neighboring Frederick County for a proposed substation? Oh, deja vu!
This has got to be the most thoughtless transmission proposal I've ever seen.
Never going to happen.
PPL says they will have a robust public input process to find out where to site the line. Seriously? That strategy doesn't work anymore. It's all about need for the line in the first place, not where to put it. Get with the brave new world of transmission opposition, PPL!
And speaking of siting the line... where is that new Maryland substation supposed to be on that featureless map? If you compare it to a real map of Maryland, it looks like it's in Howard or Carroll counties. But, what if there was land available in neighboring Frederick County for a proposed substation? Oh, deja vu!
This has got to be the most thoughtless transmission proposal I've ever seen.
Never going to happen.
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