Transmission developers will have to include a $30,000 check with future “greenfield” proposals under a new rule approved by the Markets and Reliability Committee last week.
The fee, recommended by the Regional Planning Process Senior Task Force, is intended to cover the costs of PJM staff and external consultants performing analyses of new transmission projects under Order 1000 competitive “windows.” It will not apply to transmission owner upgrades, which PJM officials said do not require extensive analysis.
The fee was approved over opposition from Pati Esposito of Atlantic Wind Connection and Sharon Segner of LS Power, who said they favored an alternative that would require fees for transmission owner upgrades greater than $20 million in addition to a charge for greenfield proposals.
The fee received 68% support in sector-weighted voting by the MRC, enough to clear the two-thirds threshold.
PJM intends to implement the fee under a two-year test period beginning with the long-term proposal window that it will open this month.
Dan Griffiths, executive director of the Consumer Advocates of PJM States, urged members to approve the fee. “If we defer this for too long we could get flooded with proposals,” he said.
But Pat Hayes of Ameren said the fee was unlikely to discourage developers from making proposals. “It might cost three, four, five times that to come up with a proposal,” he said. “$30,000 is not going to generate the discipline you think.” Hayes said Ameren does not support imposition of any fees.
At the PJM Market Summit conference in Philadelphia earlier in the week, PJM Vice President for Federal Government Policy Craig Glazer said PJM’s resources had been strained by its first competitive window, to address stability problems at Artificial Island in New Jersey.
PJM received 26 proposals from eight developers in June 2013 and the review process has stretched on for more than a year. (See Two of 4 Artificial Island Finalists Offer Cost Caps.) “We don’t have the time or resources to do this every time,” Glazer said.
