By Christen Smith

Tension among PJM sectors boiled over Thursday after members once again deferred a vote on proposed manual revisions that seek to clarify the intersection of regional and supplemental transmission planning.

It’s the fourth delay since LS Power returned to the Markets and Reliability Committee in April for endorsement of its proposed changes to Manual 14B that would stipulate PJM remove a supplemental project from its Regional Transmission Expansion Plan if regulators denied the proposal’s certificate of public convenience and necessity.

Some stakeholders said they just want to move forward — whether that’s through a vote on manual language or taking the dispute to FERC — while others suggested PJM and certain sectors were dragging their feet intentionally.

“The issues that remain are obviously the toughest,” said Sharon Segner, vice president of LS Power. “We are thinking through options such as declaratory motions [at FERC] and things in that light if we can’t reach consensus. We want to do everything we can in terms of working through the process.”

PJM Vice President of Transmission Planning Ken Seiler said Thursday that while staff “generally agree” that supplemental projects should not be converted to baseline RTEP projects, nor undermine the integrity of the competitive FERC Order 1000 process, there are still concerns about displacing supplementals and when to remove projects without unraveling the entire RTEP.

“What takes precedent? Baselines? Supplementals? Upgrades? What’s the timing on it; what does that look like; and how do we coordinate on it, and where does the cost allocation lie?” he said. “The difficulty in all of this is … we can come up with language to mitigate 90% of the issues, but there’s always the one-in-100,000 scenario that we couldn’t conceive of in this group.”

Supplemental projects — those PJM deems unnecessary for reliability, operational performance or economic efficiency — have tripled over the last 13 years, accounting for 62% of the submitted RTEP project costs since January 2017, according to an analysis from American Municipal Power. In 2018, AMP found, transmission owners added $5.7 billion in supplementals and just $1.5 million in baselines into the RTEP.

LS Power and other stakeholders argue PJM holds ultimate authority over supplemental projects and should approve manual language that clarifies when and how such projects get dropped from the RTEP, though RTO staff don’t see it that way — even going as far as rejecting stakeholder-endorsed revisions that would have stated as much back at the January MRC. (See PJM Rebuffs Stakeholders on Supplemental Projects.)

PJM’s unprecedented move spawned a special session of the Planning Committee that began meeting in February to piece together language that would satisfy stakeholders concerned about transparency and the possibility of supplementals displacing more cost-efficient regional transmission upgrades.

Aaron Berner, PJM’s manager of transmission planning, said that while conversations over the last nine meetings have been “robust,” there’s still more consensus to be found — a delay that left some stakeholders exasperated.

“From my perspective, we need to come to closure,” said Ed Tatum, AMP’s vice president of transmission. “This has to be done in 30 days.”

Bob O’Connell, director of regulatory affairs for Panda Power Funds, urged fellow members to consider delaying a vote until a proposal is ready, noting that he wanted to do anything to get the issue off the MRC’s plate.

“I don’t think we need to have this on the agenda month after month if they are not ready,” he said.

‘Unusual Circumstance’

Stakeholders approved the delay in a sector-weighted vote of 4.34 to 0.66, but the conversation was far from over.

Greg Poulos, executive director of the Consumer Advocates of the PJM States (CAPS), later presented a first read of Operating Agreement language crafted by the D.C. Office of the People’s Counsel and the Public Power Association of New Jersey to prevent PJM from unilaterally shelving endorsed rule changes without any recourse for disgruntled members.

“If stakeholders approve manual language and PJM says we cannot implement language, this OA language comes into play,” he said. “We’d ask stakeholders to be able to go to FERC. This is an unusual circumstance.”

Poulos said the language follows PJM’s choice in January to reject manual language that would have stated supplemental projects “should be based on written articulable criteria, models and guidelines that are measurable and, to the extent available, quantifiable (e.g., asset replacement prioritization) so stakeholders can replicate TO planning decisions and validate their proposed solutions.”

AMP, the author of the revision, cited the transparency principles in FERC Order 890, saying TOs should, to the extent available, disclose asset-specific condition assessments and the criteria and models supporting supplemental projects. LS Power’s language about removing supplementals was accepted as a friendly amendment to the proposal.

PJM, however, said such revisions were an “overreach of the RTEP” and inconsistent with FERC rulings. While special PC sessions have continued to work the LS Power amendment, AMP’s proposal remains “in limbo,” Poulos said Thursday.

“The ideal is that this is not even necessary because we’ve reached consensus on the manual changes,” the D.C. OPC’s Erik Heinle said. “That’s our preferred route.”

States’ Role

A second proposal from Poulos clarified states’ rights in the transmission planning process, noting that PJM should “wait to see” if the relevant state regulator has even considered the supplemental project, let alone approved it, before including it in RTEP modeling.

The presentation stirred up more frustration among stakeholders and PJM itself, which argued the proposed OA language was out of scope, incomplete and inappropriate for a first read at the MRC.

“I don’t want there to be any suggestion that this OA language is anything that PJM has worked on or approved or endorsed,” said Chris O’Hara, counsel for PJM. “There’s language about removing things from the base case. … There’s nothing in your language about how that’s done, the notice, the abandonment costs,” he said. “There are so many issues in your language … some of which should be in a problem statement and issue charge.”

Other sectors — including TOs, generators and load — argued they weren’t consulted on the proposal and worried about the “collateral damage” that may ensue because of it. Others said the conversation belonged in a lower committee — not a special session scheduled on short notice on Friday afternoons that few can attend regularly.

“I suspect I support the proposal in principle, but I’m always worried about making an exception to how we approach something,” said Marji Philips, director of RTO and federal services for Direct Energy. “I think it should have been discussed in a lower committee. My point is that you did not consult with all the stakeholders and that makes me very concerned.”

David “Scarp” Scarpignato of Calpine said generators “have a big interest” in the language, but none were involved in drafting it.

“At least Calpine is in favor of more competition in transmission, but we are against accidentally harming us if this is done,” he said.

Jason Barker, Exelon’s director of wholesale market development, agreed it’s “best practice” for such issues to undergo vetting through the lower committees “where the subject matter experts reside.”

“We would support such a motion for a more holistic discussion of the issues,” he said, noting that TOs weren’t involved in the proposal either. “This is something we would find a lot of tension with. It seems reasonable to step back and have a discussion about this at the Planning Committee.”

AMP’s Tatum pushed back against the suggestion that the language was out of scope or that sectors were shortchanged of involvement.

“Can we all please stop pretending that we haven’t been talking about this since January? There’s been nine special meetings,” he said. “This situation is such that PJM has not taken the role to develop the OA language. CAPS did. That’s it.”

Susan Bruce, representing the PJM Industrial Customer Coalition, said she agreed with much of what had been said, including that discussions at the special sessions have suffered from a lack of sector representation and quarreling over process versus substance.

“To Ed [Tatum]’s point, we’ve talked around this so much; further delays start disrespecting the legal process and we want to have more confidence in the transmission space than exists currently,” she said. “I feel like we need to do something differently to move the issue forward — to feel like we’ve done the right thing. But it can’t be something that takes a long time — that feels like customers are being prevented from bringing something up for a vote, which is where we are at.”

PJM’s Seiler agreed that “conceptually nothing is new” in the proposed OA language, but that “the devil is in the details.”

“Whenever we get into the wordsmithing, we get into new things,” he said. “A little bit more time to surgically work these issues would be helpful. Either we agree and move on and then take what we can’t agree on to FERC and call it a day.”

PJM will hold three additional special PC sessions before the MRC meeting in August.