Stakeholders challenged a proposal by transmission owners to amend the PJM Tariff regarding end-of-life (EOL) projects, accusing them of attempting to take power away from the RTO in the Regional Transmission Expansion Plan (RTEP) process.

The two-hour debate at the Transmission Owners Agreement-Administrative Committee (TOA-AC) on Monday came on the heels of a contentious vote at the Markets and Reliability Committee meeting May 28 in which a “joint stakeholders” proposal from American Municipal Power (AMP), Old Dominion Electric Cooperative (ODEC) and others was narrowly defeated. (See PJM End-of-life Proposals Fail at MRC.)

Financial Traders Joined TOs in Opposition

The joint stakeholders proposal won 64% support in a sector-weighted vote in the MRC, just short of the two-thirds threshold required to send it to a final vote of the Members Committee.

A review of voting records indicates the TOs were aided in their opposition by financial traders within the Other Supplier (OS) sector. The OS voted 22-15 against the stakeholders’ proposal at the MRC, with eight members abstaining.

When supporters of the proposal sought to suspend PJM rules to bring the issue to a vote of the MC despite falling short in the MRC, the OS voted 21-14 against the move, with three abstentions.

The MC reported that 13 of 15 financial traders in the sector opposed suspending the rules, with one abstention. Ten of the companies that voted against the suspension are represented by attorney Ruta Skučas of Pierce Atwood. Had the joint stakeholders been able to flip four OS votes at the MRC, the measure would have passed.

In an interview, Skučas acknowledged casting the votes on her clients’ behalf but declined to say why the traders opposed the proposal or how the EOL issue affects them.

“Part of this is being a member of a stakeholder body and working in coalitions and working in groups regardless of whether you’re directly affected,” she said.

Asked whether the traders had formed an alliance with the TOs, Skučas said, “I don’t want to go into specifics,” adding, “There are a number of TOs who engage in [financial transmission rights] trading.”

The traders could be calling in their chits soon, as PJM is planning to hire a consultant to recommend whether the RTO’s FTR and auction revenue rights (ARRs) markets should be changed to ensure more of the benefits go to load-serving entities rather than financial traders.

PJM’s draft of the proposed scope of work poses nine issues for the consultant to address, one-third of which question the current market’s balance between LSEs and other market players. Among the questions is whether “aspects of the current mechanism … result in profits to non-load-serving participants without commensurate or associated benefit to load.” (See PJM ARR/FTR Review Could Pit LSEs vs. Financial Traders.) The ARR/FTR Market Task Force is scheduled to meet June 17 to discuss the work scope.

M-3 Presentation

During the TOA-AC webinar Monday, Chad Heitmeyer, director of RTO policy for American Electric Power, gave a presentation on the TOs’ proposal to amend Attachment M-3 of the Tariff. Comments on the TOs’ proposal are due June 8, with the TOA-AC set to vote on it at its meeting June 10.

Heitmeyer’s presentation was similar to one he gave at a special meeting of the MRC on May 15. (See TOs Back PJM End-of-life Proposal.) He said PJM’s grid faces degraded performance and a heightened risk of failure as it nears obsolescence. The RTO has said two-thirds of all system assets are more than 40 years old, and more than one-third are more than 50 years old.

“It’s clear the system vital to our daily lives is aging,” Heitmeyer said.

The current M-3 process provides significant transparency, requiring stakeholder review of supplemental projects a minimum of three times prior to inclusion in the PJM plan, Heitmeyer said. He said the new language will increase transparency and improve planning coordination with PJM while honoring the TOs’ rights and responsibilities over asset management.

On May 7, the TOs gave notice that they were supporting the principles of a PJM EOL package and considering a Federal Power Act Section 205 filing to revise the Tariff to implement it. PJM’s proposal would require TOs to have a formal program for EOL determinations and to identify potential EOL projects five years in advance. Projects that “overlap” with RTEP violations would be included in a competitive window seeking regional solutions. The RTO’s proposal also failed to win consensus, with a sector-weighted vote of 1.77 (36%) at the May 28 MRC meeting.

Heitmeyer’s presentation included the red line changes proposed by the TOs in the Tariff, which include new sections on procedures for identifying and planning EOL needs and the coordination of EOL planning with PJM.

Process Challenged

Before Heitmeyer started his presentation, Ed Tatum of AMP questioned the process by which the TOs decided to announce the potential Section 205 filing, saying he didn’t recall a vote at the TOA-AC. Tatum is a member of the TOA-AC through AMP Transmission.

Takis Laios of AEP, the outgoing chair of the TOA-AC, said a “supermajority” of the TOs had approached him and said they had the votes necessary for a Section 205 filing they wanted to take before stakeholders.

“It’s not the proper manner of acting for a select number of TOs to make unilateral decisions and couch it on behalf of the TOA-AC,” Tatum said.

Sharon Segner, vice president of LS Power, said the TOs’ proposed Tariff amendments could lead to “fairly significant” changes in the RTEP process and were “significantly more expansive” than the language in PJM’s proposal. She asked the TOs for a page-turn review of the proposed amendments.

FirstEnergy’s Jeff Stuchell, the incoming chair of the TOA-AC, said a page-turn of the amendments had not been planned because of the scheduled length of the meeting and the time involved in a full review.

Segner asked to review the first page of proposed definitions as an “interesting place to start,” pointing to the definition of an “Asset Management Project,” which is “any modification or replacement of a transmission owner’s transmission facilities that results in no more than an incidental increase in transmission capacity undertaken to perform maintenance, repair and replacement work, to address an EOL need, or to effect infrastructure security, system reliability and automation projects the transmission owner undertakes to maintain its existing electric transmission system and meet regulatory compliance requirements.”

Segner said the definition seemed similar to language contained in two CAISO orders FERC issued in September 2018 (EL17-45 and ER18-370), which she said did not define “asset management” or “incidental increase.”

The TOs would define “incidental increase” as “an increase in transmission capacity achieved by advancements in technology and/or replacements … which is not reasonably severable from an asset management project.”

Attorney Don Kaplan, representing the TOs, said the definitions were included in the proposed amendments because of stakeholder input and that the crafted language “broadly” defines asset management and incidental increase to comply with the California orders.

Kaplan said amending Attachment M-3 is permitted for the TOs if approved by FERC and that definitions can be codified given that they are consistent with applicable law.

“This is an expansion of stakeholder consultation and opportunity for input, which is not required by Order 890, and is beneficial to the planning process,” Kaplan said.

Segner asked Kaplan why the EOL projects wouldn’t be handled in the RTEP process versus Attachment M-3.

Kaplan said projects would be handled in the RTEP if they were expansions or enhancements and they were needed to address PJM planning criteria. He said the TOs’ focus was projects that are not needed to address PJM planning criteria.

Segner cited language giving the TOs responsibility for planning and constructing “any other transmission expansion or enhancement of transmission facilities that is not planned by PJM to address … planning criteria,” including NERC reliability standards, individual TO planning criteria, criteria to address economic constraints, “state agreement” projects or RTEP projects.

Segner said the proposed language seemed to reduce the types of projects that are regionally planned. “It looks like a [power] grab to me,” she said.

Kaplan said the first four categories are the only planning responsibilities that have already been transferred from the TOs to PJM. Kaplan said the last clause expands the coverage of Attachment M-3 to projects not delegated to PJM.