By Rich Heidorn Jr.
FERC said Friday that PJM must rebill parties with interest to reverse incorrect cost assignments for transmission projects to meet individual utilities’ planning criteria.
In 2015, the commission approved a PJM Tariff change that assigned 100% of the costs of Form 715 transmission projects to the sponsoring utility’s ratepayers. But FERC reversed itself last August after the D.C. Circuit Court of Appeals said it had erred.
The court said FERC’s approval was “arbitrary” and would result in a “severe misallocation of the costs” of projects that have regional benefits. (See FERC Opens Local Tx Projects to Competition, Cost Sharing.)
The commission on Friday rejected rehearing on its August order and clarified that PJM should issue refunds dating back to May 25, 2015, with interest (ER15-1387-005, ER15-1344-006).
The commission rejected arguments by Linden VFT and Consolidated Edison Company of New York that the commission should have limited its remand order to high-voltage facilities.
“PJM’s Tariff uses the solution-based DFAX [distribution factor] method to determine whether transmission facilities have benefits outside of the zone of the transmission owner constructing the project and allocates costs to zones based on the application of that methodology,” FERC said. “Because the benefits of lower-voltage facilities may accrue to other zones, we do not see a basis for limiting cost allocation for lower-voltage facilities planned under Form No. 715 local planning criteria to only the local zone of the constructing transmission owner.”
Linden also sought rehearing on the issue of refunds, arguing that the commission’s “default” policy is to reject refunds in cases of rate design.
The commission responded that it “does not have a general policy concerning refunds” but makes decisions based on each case individually.
“Here, the commission has found the facts and equities favor refunds,” it said. “For example, requiring refunds in this case requires only redetermining past payments; it does not involve the difficult issues often associated with the rerunning of auctions.”
The commission on Friday also accepted PJM’s compliance filing with revised cost responsibility assignments to correct the allocations made under the 2015 Tariff amendments (ER15-1387-006, ER15-1344-007).
PJM said it identified 443 transmission projects that had been assigned 100% to the zone of the TOs filing the Form 715 planning criteria between May 25, 2015, and the remand order on Aug. 30, 2019. It determined that it needed to revise allocations for 44 of the projects.
The new allocations reassigned costs for several projects in the Public Service Electric and Gas zone to Con Ed, East Coast Power, Neptune Regional Transmission System, Rockland Electric, PECO Energy and Jersey Central Power & Light.
Dominion Energy, which had been assessed for 100% of the rebuild of the Elmont-Cunningham 500-kV line, is now sharing the cost with 23 other utilities.
