PJM PC/TEAC Briefs: Jan. 11, 2018
Cost Cap Discussion Continues
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PJM remains disinclined to create procedures to analyze any other cost containment guarantees beyond construction cost caps.

PJM FERC cost containment Aliso canyon
Glatz | © RTO Insider

VALLEY FORGE, Pa. — Despite stakeholder requests, PJM remains disinclined to create procedures to analyze any other cost containment guarantees beyond construction cost caps, the RTO’s Sue Glatz said at last week’s Planning Committee meeting.

The issue arose during a discussion of proposed changes to Manual 14F that would allow PJM to consider construction cost caps, for which the RTO was seeking stakeholder endorsement. The position created an unusual endorsement vote, which had to be manually counted.

“This is representative of what we’ve decided we’re doing now,” PJM’s Steve Herling said.

The proposal passed with 83 votes in favor, one abstention and 27 votes in opposition, the last of which included LS Power, the Consumer Advocates of the PJM States (CAPS), the PJM Industrial Customer Coalition, American Municipal Power and the Public Power Association of New Jersey.

LS Power’s Sharon Segner was concerned that PJM seemed to have changed its stance from limiting itself to only enforcing construction cost caps because they provide the best opportunity for controlling costs, to deciding it doesn’t have the legal authority to consider other parts of proposals, such as return on equity.

“We think that PJM does have the legal authority. It’s really an issue of will,” Segner said.

“We don’t have the ability to enforce all those other elements. Those are regulatory decisions, and they have to be enforced through regulatory processes. We have the legal authority to do whatever FERC tells us to do,” Herling said. “We believe … based on our perception and our opinion that the most value is in capping the construction costs. … We’ll see what FERC says.”

“Any limit to cost caps … limits the benefit that customers can receive,” AMP’s Ryan Dolan said.

“We certainly want [PJM] more involved in this process,” said Greg Poulos, executive director of CAPS.

Planning Modeling Update

PJM cost containment
Worcester | © RTO Insider

PJM’s Alex Worcester informed stakeholders that the Trial 3B cases and contingency errors from the Regional Transmission Expansion Plan were sent to transmission owners Jan. 5 and that all “pre-final” RTEP cases will need to be delivered to the transmission planning division by Feb. 1. Pre-final cases for 2020 RTEP short circuits were sent to TOs on Dec. 22. Final cases will be sent on Jan. 16, along with draft 2023 cases. TO feedback is due Jan. 23, with the pre-final case sent back to TOs on Jan. 29.

Interconnection Agreements

PJM’s proposal to add another installment to its Manual 14 series created concerns for some stakeholders. The RTO is planning to move some information from Manual 14A into a new Manual 14G focused on generation interconnection requests.

The RTO would also change some procedures, including adding a clarification that developers that subdivide a project into multiple projects behind a point of interconnection (POI) will have one interconnection agreement with PJM and a single entity controlling the POI. This change would require all projects to be grouped into a single company, or move the POI closer to each cluster of generating units, rather than grouping them all together.

PJM cost containment
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“Moving the point of interconnection gives us pause in a couple of areas,” said John Brodbeck of EDP Renewables. He noted additional construction work and coordination “that adds a whole series of risks,” along with questions about who owns and operates the interconnection lines and whether that entity has regulatory obligations.

“We don’t know why PJM wants to move away from the shared facilities agreement. It works for us, and it seemed to work for you,” he said.

PJM’s Lisa Krizenoskas said the current process creates unnecessary complexity in the contracts and is administratively burdensome because all the agreements have to be updated to reflect later changes. There are also differences in requirements that can be hard to measure.

Brodbeck asked that PJM assure that requests already in the interconnection queue be able to retain their single interconnection agreement.

High-Voltage Solution in Dominion Zone Draws Questions

PJM’s plan to address high-voltage issues in southern Virginia by installing two static synchronous compensators, known as STATCOMs, raised eyebrows among some stakeholders who questioned whether cheaper alternatives were available. A STATCOM is an AC network regulating device that can act as either a source or sink of reactive power.

Mabry | © RTO Insider

“I’m just looking at it trying to determine if we are we adding options that we don’t really need,” said Dave Mabry, who represents the PJM Industrial Customers Coalition.

Dolan asked why “optimally” sized shunt reactors weren’t used instead.

“Switching of reactors is a pretty disturbing system event,” PJM’s Mark Sims explained. “We don’t consider the reactors in this situation to be a solution, which is why we’re recommending STATCOMs.”

“The bottom line is the reactor is not an acceptable solution,” Dominion Energy’s Ronnie Bailey said. “I don’t care how many you want to put on the system. … Can it meet the performance required for the job? It cannot meet the performance.”

Sims said that STATCOMs provide a “larger dynamically variable device.” The project is expected to cost $100 million.

PSE&G Project Sparks Prudency Debate

A $546 million project from Public Service Electric and Gas to replace a 50-mile 230-kV line in western New Jersey continued to cause debate at last week’s Transmission Expansion Advisory Committee meeting.

According to PSE&G, the facilities have reached their end of life based on FERC Form 715 criteria and condition assessments, but Dolan and Ed Tatum, also with AMP, questioned how those determinations were made. AMP argued that there’s no standardized analysis for others to confirm PSE&G’s findings, nor any scenario planning to determine if more or less construction is the best route.

PSE&G and PJM agreed the line can’t be removed completely, nor can it be determined — with several southern New Jersey generator closures imminent — what the future power flow will look like.

Stern | © RTO Insider

“We’re property constrained. We have a right of way. To do something out of that right of way would be cost-prohibitive, and we can’t do nothing,” PSE&G’s Alex Stern said.

“If it goes away, you could lose it forever,” Sims said. “We’re going to build it to double [circuit]; we’re going to string one circuit, then we’re going to wait and see.”

“If we’re accounting for scenarios, we should study for those scenarios,” Dolan said. “If the line’s loading [above its rating] … I’m not going to question that [prudence]. I’m just saying show it to us.”

Other stakeholders agreed that the right of way must be maintained.

“I like scenario planning, but it’s hard to get corridors, especially in New Jersey,” Calpine’s David “Scarp” Scarpignato said. “It seems prudent to me. I think it saves ratepayers money in the long run.”

Dolan expressed concern that PSE&G is “gold plating” the system. PJM’s Paul McGlynn said TOs have criteria that they build to.

“You can just thank me for my comment on this one and move on: My sense is you guys haven’t gotten all your homework done on this one,” Tatum said.

“OK. Thank you for your comment,” Sims responded.

“This is a 90-year-old line,” Stern said. “To say that it’s not prudent, that we’re gold-plating or that we haven’t done our homework borders on the absurd.”

PSE&G also addressed questions about whether it delayed presenting the project until it was needed immediately. The question arose from pictures of structural issues on the line that are dated from 2013. PSE&G said that year it did foundation-condition assessments in accordance with its maintenance practices. It reviewed the structure foundations and fixed any issues. However, the analysis confirming the end of life for the tower structures occurred after that and was only recently completed.

The project will be presented to the PJM Board of Managers for approval at its February meeting. Tatum asked if his remaining questions would get answered before the meeting. McGlynn said PJM would attempt to do so.

“I don’t think there’s any outstanding questions … is the facility at the end of its life or not,” Sims said. “It doesn’t change the need for the project or what we’re going to present to the board.”

— Rory D. Sweeney

PJM Planning Committee (PC)PJM Transmission Expansion Advisory Committee (TEAC)Transmission OperationsTransmission Planning

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