Two utilities last week signaled their intent to oppose a proposed “multi-driver” approach for incorporating public policy goals in PJM’s transmission planning process.

Representatives of Public Service Electric and Gas Co. and Rockland Electric Co. objected at a teleconference Wednesday of the Regional Planning Process Task Force when participants were asked if there were anyone who “couldn’t live with” the multi-driver proposal.

In a non-binding poll May 14, 112 of 128 task force participants (88%) said they favored the multi-driver approach, which would integrate public policy requirements into PJM’s existing reliability and market efficiency analyses for transmission improvements. 85% of those participating said public policy upgrades should be allocated only the incremental costs they add to an identified reliability or market efficiency project.

Because of the utilities’ objections Wednesday, the task force was not able to claim a Tier 1 consensus and will schedule a formal vote to determine its recommendation to the Markets and Reliability Committee. As a result, the issue will not go to a first reading in the MRC until at least June 27.

Order 1000 Compliance

To require public policy transmission improvements to be funded only as standalone projects would result in unnecessary expense, said Walter Hall, of the Maryland Public Service Commission.  “If PJM doesn’t develop a rational approach [to public policy requirements] they will find themselves very quickly in violation of FERC [Order 1000] requirements,” he said. “… I really think we need more from these two objectors as to how to move forward.”

PSEG noted that FERC did not require PJM to incorporate the multi-driver approach.

In its Order 1000 compliance filing Oct. 25, PJM said it was committed to developing the multi-driver approach.  The RTO said it may allow “greater flexibility in developing more efficient and cost-effective projects that could include a combination of public policy components and reliability and/or economic components.”

Some commenters told FERC that PJM’s filing was not compliant with Order 1000 without a multi-driver approach.  AEP said PJM’s planning process does not credit proposals that more efficiently address multiple benefits because the planning process looks for solutions that solve individual needs. As a result, AEP said, projects that provide greater multi-driver benefits may be rejected in favor of a project that has a greater impact on only reliability.

FERC Won’t Force Multi-Driver

In its March 22 ruling on PJM’s compliance filing, FERC noted PJM’s commitment to developing the multi-driver approach and encouraged PJM and its stakeholders to “explore future enhancements to improve the regional transmission planning process.”

However, it ruled that the multi-driver approach was not required to meet Order 1000. “PJM has integrated consideration of transmission needs driven by public policy requirements into is transmission planning process by incorporating those needs into the sensitivity studies, modeling assumption variations and scenario planning analyses,” the commission wrote.

Benefit Determination, “Upgrade” Definition

The task force also received the results of a vote on how to determine benefits for regional market efficiency projects. 87% of respondents favored a proposal to calculate benefits on a 50/50 ratio based on its impact on production costs and net load payments (energy benefits) or impact on capacity costs and net capacity payments (capacity benefits). Only 29% favored continuing the current method, under which 70% of benefits are calculated based on production or capacity cost savings.

The task force also is developing a revised definition of trans­mis­sion reli­a­bil­ity “upgrades” in response to the March 22 FERC ruling. (See “PJM’s ‘To Do’ List.”)

Order 1000 reserved con­struc­tion of trans­mis­sion reli­a­bil­ity upgrades — which it defined as includ­ing tower change outs and recon­duc­tor­ing — to incum­bent util­i­ties. The com­mis­sion said PJM’s OATT and agree­ments con­tain ref­er­ences to sev­eral types of upgrades and it is unclear which PJM intends to include in the Order 1000 definition.

For combinations of new and existing transmission lines, PJM’s proposal would differentiate based on the following criteria:

• For lines shorter than 20 miles, the entire project is an upgrade only if the new line segment is less than 50% of total transmission line length.
• For lines 20 miles or longer the entire project is an upgrade if the new line segment is either less than 10 miles or less than 10% of the total transmission line length. For example, on an existing 120-mile line, an addition of 10.1 miles would be considered an upgrade because — although it is longer than 10 miles — it is less than 10% of the original length. An addition of 13 miles would be considered a new project because it is both longer than 10 miles and greater than 10% of the original length.