By Suzanne Herel

Public Service Electric and Gas last week accused PJM of breaking its own rules in refereeing the competition for the Artificial Island stability fix, suggesting the RTO should scrap the process and start again.

PJM did not follow its process in two respects, PSE&G said in a Jan. 29 complaint with the Federal Energy Regulatory Commission (EL15-40).

Unilateral Modifications

“First, PJM unilaterally modified each proposal, rather than, as required, evaluating them and selecting the best proposal or, if none qualified as such, reposting the solicitation. Second, PJM allowed LS Power to modify its proposal more than one year after the proposal window closed and after PJM staff had recommended another proposal,” PSE&G said.

PJM staff had selected PSE&G as the winning bidder after eliminating two 500-kV lines from its proposal. The change reduced the project’s cost by more than three-quarters to a range of $211 million to $257 million, making it equal to a 230-kV proposal from LS Power that was the cheapest among the finalists.

PJM’s selection was criticized by environmentalists and spurned bidders, including LS Power, which offered to cap its project cost at $171 million — at least $40 million less than the PSE&G project.

In response, the PJM Board of Managers delayed action on planners’ recommendation and offered PSE&G and finalists Transource Energy and Dominion Resources to “supplement” their proposals in response to LS Power’s reduction. (See PJM Puts the Brakes on Artificial Island Selection.)

Artificial Island, home to the Salem and Hope Creek nuclear reactors, is the second largest nuclear complex in the country. Historically, according to PSE&G, special operating procedures have been employed to maintain stability in the area.

PJM issued a solicitation for a stability fix — its first competitive transmission project under FERC Order 1000 — in April 2013.

Independent Evaluator

In its filing last week, PSE&G noted that PJM has stressed its role in the process as an independent evaluator and the importance of not allowing bidders to modify their proposals after the window for entries has closed.

“PJM said this would ‘chill’ the competitive process and give one bidder an ‘unfair advantage’ over the others,” PSE&G said. “If PJM believes that none of the proposals submitted in 2013 represents the more efficient or cost-effective solution, PJM can re-post the Artificial Island solicitation and provide any additional guidance to prospective sponsors that PJM deems appropriate based on the experience it has gained over the last two years.

“PSE&G understands that granting this relief will delay the process somewhat, but the process has already languished for nearly two years, there is no other Tariff-based remedy for the violations that have occurred and the remedy is nondiscriminatory because it does not favor one bidder over another.”

More Delays

PJM planners intended to have a recommendation ready for the Board of Managers’ meeting in February after the four finalists squared off at a meeting of the Transmission Expansion Advisory Committee in December. But at the Jan. 7 TEAC meeting, officials said consultants were still studying various aspects of the plans, including sub-synchronous resonance issues involved in Dominion Resources’ proposal. (See Further Study Delays PJM’s Artificial Island Decision.)

Critics, including PSEG Nuclear, the operator of the nuclear plants, have said Dominion is employing untested technology that could damage turbine shafts and cause widespread outages.

Steve Herling, PJM vice president for planning, said that a recommendation should be ready to present to the committee this month, and that plans were underway to call a special Board of Managers meeting in March to review it.