FERC has denied a complaint from RWE Clean Energy arguing PJM incorrectly identified network upgrades for a 125-MW solar and storage project, increasing the cost allocation over 50-fold during the third phase (EL26-7).

The company canceled its Maryland Blue Crab Solar and Storage project — which would have paired 100 MW of solar and 25 MW of storage — after PJM’s Phase III system impact studies determined the interconnection would require rebuilding eight miles of the Edge Moor-Linwood 230-kV line, increasing RWE’s cost allocation from $1.25 million to $71.6 million. The study found a 0.07% overload under one contingency. RWE argued PJM erred in using DC loading instead of AC, a difference that would have removed the line rebuild from the cost assignment.

In concurrences on the March 19 order and comments made during the same-day open meeting, commissioners stated the complaint underscores the uncertainty developers face when submitting interconnection requests.

“While I and my colleagues agree with the outcome of denying the complaint, the facts of the proceeding raise big-picture concerns for how we will develop much needed generation to meet historic load growth,” Chair Laura Swett said during the open meeting. “The developer in this case spent significant time and capital to advance a project through several rounds of interconnection studies, only to discover significant unexpected network upgrade costs of $71 million.

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“This caused the company to withdraw its service request entirely. We hope that PJM and the other RTOs will make reforms to reduce interconnection-cost uncertainty to facilitate the connection of much needed generation. There are many ways that RTOs can address these issues, but SPP’s [Consolidated Planning Process] that I just noted really stands out as a manner of solving them.”

RWE wrote that Manual 14B: PJM Region Transmission Planning Process requires planning staff to use AC loading in the six-step test used to determine whether a flowgate is overloaded. But the manual is silent on whether DC or AC should be used for the common mode outage procedure final determination. Without that specification, the company argued PJM should be required to use AC loading. The complaint asked FERC to reinstate the project’s queue position without the cost allocation for the Edge Moor-Linwood line.

PJM responded that RWE misunderstood how DC loading is used in the generation deliverability tests, specifically the common mode outage procedure. While the manual language detailing the common mode outage test does not specify if AC or DC should be used, PJM wrote it always used the DC, as it tends to be more stable, with fewer swings in infrastructure overloads between studies.

The response said RWE had not shown there was any misapplication of the generation deliverability procedures and its requested relief would harm other developers by shifting costs to other projects. That would violate the filed rate doctrine by requiring a waiver of the deadline for posting the security of the network upgrade costs the project was assigned.

All Phase III studies would have to be rerun after the completion of Transition Cycle 1, possibly requiring amendments to signed generation interconnection agreements. Granting planning staff the authority to apply the DC or AC loading case by case would undermine the consistency between studies and the assigning of network upgrades. Shifting the project to Transition Cycle 2 would result in cost-sharing between queues, which is prohibited by PJM’s tariff, the PJM response continued.

The commission found RWE had not demonstrated PJM failed to follow its governing documents and manual language, as none specify whether AC or DC loading should be used. Absent concrete manual or tariff language, the order deferred to PJM’s engineering judgment on which loading should be employed. It encouraged PJM to consider changes to reduce the uncertainty around interconnection costs and timelines as stakeholders on a review of whether the RTO’s markets are providing the incentives needed for new resources to serve forecast demand growth.

“Given the breadth of PJM’s review, we encourage PJM to consider whether there are regionally appropriate reforms that could reduce interconnection cost uncertainty and expedite the interconnection process in PJM,” the order states.

Rosner and Chang Concur, Recommend Changes to Interconnection Process

Commissioners David Rosner and Judy Chang wrote a concurrence stating that PJM had reasonably conducted its studies using a DC power flow rather than AC. But the complaint shows that developers are required “to take shots in the dark in pursuit of low-cost points of interconnection that fail to materialize.” They pointed to the “but for” approach to determining when projects are responsible for network upgrades as being responsible for “unmanageable risk”: The standard considers a project responsible for a network upgrade if the underlying violation would not be present “but for” the interconnection request.

“Although the band AC/DC once sang ‘a shot in the dark, makes you feel alright,’ reading the facts of this complaint felt more like being ‘on the highway to hell.’ This complaint is the latest example among many that shows how strict adherence to ‘but for’ cost allocation has made building a new generator too costly and too slow, making energy more expensive and less reliable for customers,” they wrote.

Rosner and Chang wrote that SPP’s Consolidated Planning Process shows how transmission planning and generation interconnection can be aligned. Approved on March 13, the process expands SPP’s long-term transmission assessment to include a generation expansion plan that aims to upgrade the system to be prepared for forecast growth, including specifying pre-planned locations where it would be most efficient to construct new resources.

Developers siting at those locations would enter into a generalized rate for interconnection development-contribution (GRID-C), providing interconnection costs up front before commitments are made. (See SPP’s Consolidated Planning Process a ‘Bold Step,’ FERC Says.)

“Needless to say, this level of unpredictability and variability could not be what the commission envisioned when it required grid operators to implement ‘but for’ cost allocation for generator interconnection over two decades ago,” they wrote.