PJM transmission owners warned in a strongly worded letter Friday that “PJM is at a crossroads” with an upcoming sector-weighted vote on end-of-life (EOL) projects at this Thursday’s Markets and Reliability Committee meeting.
The letter to the PJM Board of Managers said a proposal from a “handful of stakeholders” violates the Consolidated Transmission Owners Agreement (CTOA) between TOs and the RTO. It was signed by 10 of the 14 members of the TO sector: American Electric Power; Dayton Power and Light; Duquesne Light Co.; East Kentucky Power Cooperative; Exelon; FirstEnergy; PPL; Public Service Electric and Gas; UGI; and Dominion Energy.
The joint stakeholder proposal, brought by a group that includes American Municipal Power, Old Dominion Electric Cooperative state consumer advocates, the Public Power Association of New Jersey and the PJM Industrial Customer Coalition, would require TOs to notify PJM and stakeholders of any facility nearing the end of its life at least six years before its retirement date so the project could be included in five-year planning models and potentially opened to competitive bidding. The proposal would also modify the supplemental project definition to exclude EOL projects, which would become a new category of regionally planned projects.
A second proposal from PJM and endorsed by the TOs would require TOs to share how they make EOL determinations and potentially open at least some replacement projects to competition under the Regional Transmission Expansion Plan (RTEP) if they “overlap” with RTEP violations. The proposals are the result of deliberations over special MRC meetings since December.
The TOs said they “demand action” by the PJM board to “uphold the integrity of the stakeholder process” by presenting comments to the Members Committee prior to a vote being taken on either of the proposals.
“The stakeholder process moves forward with the specific objective of certain participants seemingly to leverage the stakeholder process to place PJM in the potentially awkward position of feeling compelled to make a FERC filing that it believes is legally flawed and operationally misguided,” the letter said. “Dialogue and the exchange of ideas is essential to the collaborative approach of PJM; however, where issues have been definitively decided by FERC, the continued debate of settled law is no longer dialogue; it is a dissent that should be appropriately appealed to the courts, rather than pursued in PJM committees.”
The TO letter comes on the heels of a contentious special meeting of the MRC on May 15 at which LS Power dropped its EOL initiative and endorsed the joint stakeholder proposal. (See TOs Back PJM End-of-Life Proposal.)
The joint stakeholders sent their own letter to the board on May 12 highlighting the “the mounting evidence that the majority of transmission planning in the PJM footprint is not occurring on a regional basis.” The letter came as PJM reported that TOs’ supplemental projects totaled almost $3.4 billion in 2019, more than double the less than $1.5 billion in regionally planned baseline projects. It was the fifth year out of the last six in which supplemental projects exceeded baseline projects. (See Stakeholders Urge PJM: Plan ‘Grid of the Future’.)
The TOs’ letter said the stakeholder proposals would impair system reliability and safety by taking EOL decisions away from the TOs and transferring planning authority to PJM. It argued that EOL issues are a subset of asset management and that decisions over those projects “are the sole responsibility of the transmission owners.”
The TOs said they were supporting the PJM proposal to increase transparency in the EOL process while preserving their responsibility for maintaining assets.
Responding Saturday to the TO letter, Sharon Segner, vice president of LS Power, said the TOs’ May 7 notification that they were considering a Federal Power Act Section 205 filing to amend the Tariff as an alternative to the proposals under consideration was an attempt to “memorialize a world of the transmission owners planning the grid of the future, not PJM.”
Segner said the joint stakeholder package puts PJM at the head of planning the future grid after TOs have made the technical determination that an asset is at the end of its operational life.
“We hope PJM embraces a world of PJM planning the grid of the future related to transmission facilities under their operational control,” Segner said. “FERC will ultimately decide these issues, and the board should move these issues quickly to FERC from the stakeholder process, should the members pass the Operating Agreement changes on Thursday.”
The TOs said PJM is planning the future grid “effectively in collaboration with transmission and generation owners.”
“It is undeniable that we have to maintain the current transmission grid to serve our customers while preparing ourselves for the future,” the letter said. “It is not an either/or decision between the current and the future; we must address both.”