The Federal Energy Regulatory Commission last week rejected Consolidated Edison Co.’s attempt to avoid paying for a major transmission upgrade in northern New Jersey but suggested it might order PJM to recalculate the company’s bill.
FERC’s ruling (ER14-972) approved PJM’s cost allocation for 111 baseline reliability upgrades included in the RTO’s Regional Transmission Expansion Plan (RTEP), including 17 eligible for regional cost allocation under Order 1000.
Only one of the projects, a $1.2 billion project upgrade to address thermal overloads and short circuit problems in the PSEG transmission zone outside New York City, was challenged. (See PJM: Con Ed Protest over PSEG Upgrade Groundless.)
The project will convert Public Service Electric and Gas Co.’s Bergen-to-Linden 138 and 230 kV transmission line to 345 kV and add a second 345 kV transmission line between those points.
PJM’s cost allocation assigned $629 million of the cost to Con Edison under the Con Ed-PSEG “wheel,” in which PSEG takes 1,000 MW from Con Ed at the New York border and delivers it to Con Ed load in New York City.
Also challenging the cost allocation for the project is Linden VFT LLC, which owns a 315-MW merchant transmission facility that interconnects both PJM and NYISO. Linden said its RTEP bill would increase by $2.5 million annually as a result of the project.
FERC rejected Con Ed’s contention that it was not liable for the project because the reworked transmission grid would change its delivery point from that specified in its contract with PJM.
But the commission said it wanted more information on how PJM performed the distribution factor (DFAX) analysis that determined Con Ed’s share of the cost.
Con Ed says it was unfairly assessed almost 83% of the $762.6 million assigned through DFAX for its 1,000 MW wheel while PSEG was assessed only 7%, despite load of 11,000 MW. Con Ed said the cost distribution for the project is “grossly disproportionate to the relative loads” of the two companies.
“We cannot determine from this record whether the issues raised by Con Edison are generic issues related to the implementation of Solution-Based DFAX or are specific assumptions relating to this project,” the commission wrote.
Thus it ordered PJM to submit a compliance filing within 30 days “explaining and justifying the specific assumptions relating to the PSE&G Upgrade.”
