By Christen Smith

VALLEY FORGE, Pa. — Electric distributors want PJM transmission owners to reveal more about how they decide when it’s time to replace infrastructure at “the end of its life,” a phrase some stakeholders consider too vague, instead preferring the term “asset management.”

The war of the words came to a head at Thursday’s Planning Committee meeting when American Municipal Power and Old Dominion Electric Cooperative presented a problem statement and issue charge to draft Operating Agreement language to address their concerns about the amount of information TOs provide during supplemental project decision-making.

“You say you’re willing to share it with the federales and the states,” AMP Vice President of Transmission Ed Tatum said. “There’s no reason you can’t share it with the people who are paying for it — who are the reason you’re doing it.”

TOs said they didn’t object to shining a light onto their analyses, per se, but believe new rules governing increased planning coordination belong in manuals, not the Tariff or OA.

Alex Stern, manager of transmission strategy for Public Service Electric and Gas, presented an alternative problem statement and issue charge. He said using the phrase “asset management” over “end of life” is consistent with acceptable industry terminology and, more importantly, FERC decisions.

“FERC talks about ‘asset management,’ ‘asset activity’ and ‘asset condition’ outside the RTO transmission planning process as opposed to fixed, arbitrary and subjective ‘end of life’ transmission planning criteria dictating replacement,” Stern later told RTO Insider. “It’s about employing reasonable asset management procedures and performing reasonable analysis of asset condition to ascertain whether the asset remains useful.”

Joining PSE&G in sponsoring its alternative was Dayton Power & Light, Exelon and PPL. AMP rejected the TOs’ request that it accept their language as a friendly amendment, leaving the second proposal to stand as its own motion.

The AMP/ODEC posting followed a Monday afternoon special session of the PC that further deepened the chasm between stakeholders over how to prioritize projects in the Regional Transmission Expansion Plan. Some members, led by LS Power, believe PJM should take more authority over supplemental projects — some of which include transmission maintenance and the replacement of end-of-life equipment — currently under the sole purview of TOs. (See Tensions Boil over on PJM’s Supplemental Projects.)

Supplemental projects are those that PJM considers necessary to address local TO reliability concerns that are not required for compliance with grid criteria governing system reliability, operational performance or economic efficiency. The RTO only conducts reliability planning studies to ensure the projects won’t upset the grid’s balance.

John Horstmann, director of RTO affairs for DP&L, said the AMP problem statement also excluded mention of:

• Supplemental projects for new customer load or increases to existing loads;
• Supplemental projects to treat load-serving entities comparably to incumbent TO retail customers; or
• Emergency projects required within one year (confirmed by studies performed or approved by PJM planning staff).

TO staff, in some cases, can also provide insight and expertise on local transmission projects that PJM planners — who view the system through a more regional lens — may not know, Horstmann said. “The reality of it is, the transmission is old and it’s not old in a nice linear fashion,” Horstmann said Thursday, noting that only 30% of the system is less than 40 years old. “There’s a big lump of old stuff out there, and its only getting older. … I kind of think we are not recognizing the elephant in the room to some extent: The stuff is old and is going to need to be replaced.”

“We agree with that. We fully get it,” Tatum said. “We’ve seen the studies done. We are just saying that if you are doing it, show how you’re doing it. We are paying for it, so show us.”

The PC spent nearly an hour debating the truncated timeline of both problem statements appearing on the agenda and AMP’s request for endorsement after a first read. The debate exposed tensions stemming back to manual language — sponsored by AMP and endorsed at the Markets and Reliability Committee in January — that PJM rejected as contrary to FERC rulings. (See PJM Rebuffs Stakeholders on Supplemental Projects.)

PJM’s decision spawned special PC sessions to craft new language targeting the supplemental planning process more generally.

Spending on supplemental projects has tripled over the last 13 years, accounting for 62% of the submitted RTEP project costs since January 2017, according to an analysis from AMP. In 2018, AMP found, TOs added $5.7 billion in supplementals and just $1.5 million in baseline projects into the RTEP.

Tatum said Thursday that TOs have proposed an additional $3.4 billion in supplementals so far in 2019, exceeding the baseline total.

“This is nothing new,” he said of the dispute. “The fact of the matter is, people, we’ve been talking about this a long time, and if there’s no hope under the sun of something being able to move forward, then we need to take that as it is.”

Other stakeholders wondered if the two problem statements could become one — an idea Tatum and ODEC rejected outright.

“This is not a bad problem statement and issue charge; it’s just not what we are talking about,” he said of the TOs’ initiative.

Stern disagreed, saying there is room for collaboration “so long as there is a genuine desire to explore opportunities for consensus.”

“That’s what the stakeholder process is supposed to be targeted at doing,” he said.

Tatum said that if the PC opts against the problem statement, AMP and ODEC will take the document to the MRC. Stern said he felt stakeholders expressed support for continuing the talks at the PC.

“There’s many other ways to get this in front of FERC,” Tatum said. “But in my heart of hearts, I believe the way to really do it is to give the PJM stakeholder community the opportunity to weigh in on it so the commission can have a complete record. And that is via the MRC and [Members Committee] on Operating Agreement language.”