By Rory D. Sweeney

VALLEY FORGE, Pa. — Facing what they called an “impasse” in stakeholder negotiations that began more than two years ago, PJM staff attempted to suspend the Transmission Replacement Processes Senior Task Force (TRPSTF) on Thursday, seeking to cease meetings until FERC responds to two compliance filings on the issue.

“It’s clear that we made progress here … [but] it appears that we are effectively at an impasse,” PJM attorney Chris O’Hara said in the early afternoon of what was scheduled as an all-day meeting, adding that it is “important that we get more guidance” from FERC. He confirmed the decision to suspend the task force was “informed by comments from [CEO] Andy” Ott.

Following stakeholder criticism, the group’s chairman said Friday that at least the next meeting, on July 31, will go on as scheduled.

PJM and its transmission owners submitted the filings in March in response to a commission ruling that TOs weren’t properly complying with their obligations under Order 890 to provide stakeholders with adequate information on “supplemental” projects — transmission expansions or enhancements not required for compliance with reliability, operational performance or economic criteria. (See Group Contests ‘Supplementals’ Ruling as PJM, TOs Advance.)

The ruling allowed for moving TOs’ responsibilities from the Operating Agreement to a new Attachment M-3 in the Tariff, but PJM and the TOs requested additional detail on how and when projects would receive stakeholder consideration.

“We are resource-limited at PJM,” O’Hara said, echoing comments Ott made at the Members Committee meeting on June 21, when the CEO took the unusual step of directly addressing members prior to a final vote on incorporating cost-containment measures into competitive bidding for transmission projects. Ott warned that implementing the measures would force staff to triage other revisions to the Regional Transmission Expansion Plan. (See Cost Containment Clears MC Vote Despite PJM Plea.)

“Stakeholders have indicated that their highest priority is that we focus on cost containment and [return on equity] capital structure commitments,” O’Hara said. “We have to dedicate our resources to implementing the processes that are on the table.”

Stakeholder Reaction

Many stakeholders were shaken by the announcement.

“I am baffled by the conclusions that a vote on anything at the [MC] indicates a stakeholder preference or prioritization. That is not what was in front of the membership. That is not what we were voting on,” said Carl Johnson, who represents the PJM Public Power Coalition.

American Municipal Power’s Steve Lieberman said the stakeholder process is designed for up-or-down votes on single issues, not votes that “enact a change in lieu of something else.”

Adrien Ford of Old Dominion Electric Cooperative said she was “taken aback” by the decision being made “without input from stakeholders.”

“It’s just a little disappointing to me right now,” added Ford, who joined ODEC a year ago after almost nine years with PJM. “This is unprecedented.”

AMP’s Ed Tatum said he was attempting to sort through his reactions to respond thoughtfully and “not in pure anger.”

“I’m pretty pissed off about this … but I think you probably already know that. The whole idea that we just stop a process here without the senior committee looking at it — that’s a bit tough. It goes against anything we’ve ever done in the stakeholder process,” he said. “PJM is once again jumping into a situation and preventing the process from moving toward a natural conclusion. You have done the PJM stakeholder process a great disservice today.”

The decision came unexpectedly in a meeting that started with reviewing proposals for the end-of-life supplemental project process. Supplemental projects are developed by incumbent TOs outside of PJM’s scrutiny because they are not required to fulfill any reliability obligations from NERC, FERC or the RTO. They’re paid for by the ratepayers in the TO’s zone but included in the RTEP for planning purposes. AMP and other stakeholders have argued that TOs are increasingly finding ways to funnel projects into those categories to build them without competitive bidding. (See Report Decries Rising PJM Tx Costs; Seeks Project Transparency.)

AMP and ODEC had offered a “hybrid” proposal on how PJM and TOs should implement their compliance filings. They discussed where the proposal aligns with and differs from the plans already outlined by PJM and the TOs.

O’Hara later attempted to end the discussion after TOs reiterated their refusal to negotiate anything beyond the filings. “I actually expected to spend hours with the comments and positions, and this was surprisingly short,” he said.

Tatum noted that stakeholders could have bypassed the task force and taken their proposals directly to the MC and the Markets and Reliability Committee. “We chose not to do that because we respect the stakeholder process, and I wish PJM had the same amount of respect for it,” he said.

Tatum was among the supporters of the cost-containment proposal, whose opponents have argued its sponsors violated the stakeholder process by bringing it directly to the MRC without any vetting through lower committees.

O’Hara later walked back his statement that the cost-containment vote at the MC indicated it was stakeholders’ highest priority. But he pointed out there is just one month to get a TRPSTF solution approved and implemented before the next RTEP cycle.

“We can’t build a consensus here. We need to focus on implementing what the commission ordered. We have resources; we just can’t have them going in two different directions,” he said.

‘Much Ado About Nothing’

PJM’s Ken Seiler, who chairs the Planning Committee, explained that staff are already dealing with implementing the cost-containment proposal and Attachment M-3, along with considering the grid resilience concerns, five separate planning models and “hundreds” of generation interconnection requests, all “without upsetting the apple cart.”

“Your assessment that consensus isn’t going to happen here is indeed correct, but we’ve known that for two years,” Tatum said, adding that he takes issue with the reasoning for waiting until FERC responds. “The purpose of this effort is to give stakeholders an opportunity to say what they would want to see to understand TO end-of-life project decisions.”

O’Hara said it might be “much ado about nothing,” as PJM expects FERC to respond soon.

Ford asked that no meetings be canceled until the MRC, which created the task force, has a chance to consider the issue. Greg Poulos, executive director of Consumer Advocates of the PJM States, asked that PJM write out an explanation of its reasoning that he can share with his members.

When pressed by Tatum, PJM’s Janelle Fabiano — an in-house expert on Manual 34, which spells out the stakeholder process — said she would “imagine there will be an announcement” at the MRC but wouldn’t commit to anything without discussing the issue with other staff.

O’Hara said Thursday that the RTO must receive the commission’s responses to the compliance filings at least five business days before the task force’s next scheduled meeting, on July 31, to avoid cancellation.

But PJM’s Fran Barrett, who chairs the TRPSTF, sent an email to stakeholders on Friday confirming a discussion at the MRC on July 26 and clarifying the TRPSTF will still hold its July 31 meeting. Barrett was unable to attend Thursday’s meeting.

“At that meeting, we will further discuss my recommendation as conveyed by Chris O’Hara yesterday that we seek guidance from the MRC whether to suspend TRPSTF meetings pending FERC action on the submitted compliance filings, complaints and request for rehearing,” he wrote. “In addition, we will discuss whether there is a workstream that we could focus productively upon that is distinct from the pending TO, PJM and transmission customer filings associated with Docket [EL16-71] and the Attachment M-3, such as end-of-life criteria for baseline upgrades.”