By Rory D. Sweeney

FERC last week granted approval for Linden VFT to contract potentially all of its transmission capacity through long-term “anchor customers” rather than its current recurring auction process (ER18-730).

Linden owns a merchant transmission line and three 105-MW variable-frequency transformers between the Public Service Electric and Gas system in New Jersey and Consolidated Edison on Staten Island, which began operation under PJM’s control in 2009. The company has rights to 330 MW of firm point-to-point transmission service from within PJM, 315 MW of export capability from NYISO and 315 MW of delivery into either PJM or NYISO.

Linden has held five “open season” auctions, through which it receives all of its revenue, since 2007. It told FERC there has been a “declining number and diversity of participants and qualified bidders, resulting in shorter-term contracts” and signaling reduced interest in its transmission scheduling rights.

PSEG Energy Resources & Trade will hold all those scheduling rights as of June, but Linden told the commission it has been approached by new customers seeking “longer-term, more tailored arrangements” and that “the ability to subscribe up to all of [its] transmission capability through such longer-term arrangements with anchor customers will allow it to explore more sustainable, alternative business models and allocate its transmission scheduling rights to the market participants who value them the most.”

FERC approved Linden’s request to amend its existing authorization so it can contract for service and negotiate rates, payment arrangements and agreement lengths and sell any remaining capacity at market-based rates through open solicitations. The company committed to filing a report within 30 days of a solicitation detailing its open-access characteristics, which allowed the proposal to pass the commission’s four-part analysis. Because it had changed its policies on reviewing negotiated-rate proposals since Linden’s project was originally approved, FERC decided to conduct a de novo analysis.

In December, Linden and Hudson Transmission Partners — another owner of merchant transmission between northern New Jersey and New York City — were approved to convert their lines from firm to non-firm service and avoid being saddled with hundreds of millions of dollars in cost allocations under PJM’s Regional Transmission Expansion Plan. (See NJ Merchant Tx Operators Win Relief on Upgrade Costs.)