By Rich Heidorn Jr.

In a trio of orders Thursday, FERC again rejected challenges to PJM’s transmission cost allocation methods in a long-running dispute in New Jersey.

The commission rejected requests for rehearing of its 2016 order that denied a complaint by merchant transmission operator Linden VFT alleging that PJM’s use of the solution-based distribution factor (DFAX) method for some projects in its Regional Transmission Expansion Plan was unjust and unreasonable. In the same order Thursday, FERC denied rehearing of its decision accepting PJM’s cost responsibility assignments under the RTEP, including the projects Linden cited in its complaint: the Bergen-Linden Corridor (BLC) project; the canceled rebuild of the 138-kV Edison-Meadow Road-Metuchen lines; and Sewaren upgrade projects (EL15-67-002, et al.). (See FERC: NYPA Must Pay PJM for Tx Upgrades.)

Linden VFT operates a merchant transmission facility with 330 MW of firm transmission withdrawal rights between the Public Service Electric and Gas and Consolidated Edison systems. Hudson Transmission Partners, which owns a 660-MW underwater HVDC line also connecting New Jersey and New York City, also sought rehearing, as did Con Ed, which formerly held rights to “wheel” power to Manhattan over PJM lines in New Jersey.

“As the commission found in the Linden complaint order, the solution-based DFAX method focuses on the benefits of the project as measured through relative use of the project, and that users of the complaint projects benefit from the project on an ongoing basis because the presence of the project ensures reliable delivery of power and alleviates future reliability concerns and reliability violations that could have otherwise caused operational issues,” FERC said.

The commission rejected complaints that PJM was treating similarly situated loads differently. “PJM nets the nodes of all transmission owners that have multiple nodes with positive and negative flows. However, because Linden, Hudson and Con Edison have only single delivery points in PJM, they do not have positive and negative flows to net. This merely is a reflection of their limited nodes, not discriminatory treatment,” FERC said. “The fact that, when economically beneficial, Linden may import power into PJM does not indicate that modeling the system based on Linden’s contractual right to export power at any time is unjust and unreasonable.”

The commission did acknowledge that the 2016 order mistakenly said that if Linden relinquished its firm transmission withdrawal rights, PJM would not need to proceed with the BLC project. PJM contends it needs the project even after Con Ed terminated its transmission service agreements (TSAs) for the wheel.

“The commission should have stated that the Bergen-Linden Corridor project would not necessarily be canceled if Linden exercised the option of changing to non-firm transmission withdrawal rights, but Linden could avoid cost allocation for the upgrades if it converted its firm transmission withdrawal rights to non-firm transmission withdrawal rights. However, as the commission stated in the Linden complaint order, as long as Linden chooses to retain firm transmission withdrawal rights, PJM can reasonably allocate costs of the complaint projects to it because those facilities are needed to ‘to provide reliable service’ up to the level of the firm transmission withdrawal rights.”

Con Ed ‘Wheel’

FERC also approved revisions PJM made to its cost allocations for RTEP projects to reflect Con Ed’s termination of its transmission wheel with PJM (ER17-950) and rejected Linden’s complaint over the assignments (EL17-68).

PJM filed the revised allocations in February 2017 after Con Ed terminated its TSAs with PJM for the wheel, which allowed it to send power to Manhattan over PJM lines in New Jersey.

Linden and the New York Power Authority sought rehearing or clarification of FERC staff’s April 2017 delegated order — issued when the commission lacked a quorum — approving the allocations subject to refund.

Linden had complained that PJM improperly reallocated costs assigned to Con Ed to Linden and Hudson for the BLC.

Linden and Hudson contended that they did not receive any additional entitlements as a result of the termination of the TSAs and that PJM made no attempt to quantify the benefits to them.

Linden also argued that it could not be reallocated costs previously assigned to Con Ed because it was not a party to the settlement agreement between the utility and PJM over the wheel’s termination.

“While neither the settlement agreement nor the Tariff established the method to be used for cost allocation, PJM is required to reallocate the costs previously assigned to Con Edison,” FERC said. “We find that PJM’s only option under its Tariff was to apply the currently effective provisions of Schedule 12, and we find the use of PJM’s currently effective cost allocation method to be just and reasonable.”