By William Opalka

Consolidated Edison of New York says it will end use of the “PSEG wheel” to route power into New York City if it doesn’t win relief in a cost allocation dispute with PJM.

In a letter last month to PJM, Con Ed said it may end its use of the wheel when its current term expires on April 30, 2017.

“Although Con Edison will not decide until April 2016 whether or not to extend the agreements, we do think it is appropriate to inform you … that Con Edison’s analysis based on currently available information does not demonstrate that the agreements should be extended,” it wrote.

In a separate filing with the New York Public Service Commission (12-E-0503), Con Ed said it had identified less costly alternatives to the wheel, in which Public Service Electric and Gas takes 1,000 MW from Con Ed at the New York border and delivers it through New Jersey to Con Ed load in New York City.

On Oct. 23, Con Ed also asked FERC to reconsider its request that it force PJM to recalculate the cost allocation for two transmission upgrades in northern New Jersey (EL15-18). Con Ed asked FERC to consider PJM’s response in the cost allocation dispute over the proposed Artificial Island transmission project, in which PJM acknowledged weaknesses in its distribution factor (DFAX) cost allocation methodology. (See PJM: Artificial Island Cost Allocation Appears ‘Disproportionate’.)

“PJM previously responded to Con Edison’s arguments by asserting that DFAX is appropriate for all transmission projects,” Con Ed wrote. “However, in its answer to the Artificial Island complaint, PJM now concedes that DFAX can produce ‘an atypical cost allocation when applied to unique projects,’ by which it means projects that are not needed to address transmission overloads.”

PJM assigned Con Ed $629 million of the costs of a $1.2 billion transmission upgrade to address a short-circuit problem in the PSE&G transmission zone outside New York City. PSE&G was allocated $52 million of the cost. Con Ed was also assigned $51 million of PSE&G’s $100 million Sewaren storm-hardening project.

Con Ed says it should pay only $29 million for the two New Jersey projects. FERC rejected Con Ed’s request to change the cost allocations in June. (See Con Ed Rebuffed Again on NJ Cost Allocation Dispute.)

PSE&G, a unit of Public Service Enterprise Group, responded that a decision to terminate the wheel would not impact the cost allocation cases. There would be future consequences for planning of reliability projects over lines that extend from New Jersey into New York City, it added.

“We wish to make clear that if Con Edison does not extend the agreements, it may not rely upon the capability of the PJM or PSE&G systems … as a planning assumption in future reliability determinations,” the company wrote.

PSE&G and PJM transmission owners also asked FERC to reject Con Ed’s bid to use PJM’s Artificial Island filing in its cost allocation case.

They countered that the cases pose different technical challenges and that granting the motion would create an endless loop of interlocking disputes that would force FERC to continually revisit previously decided cost allocation decisions.

Con Ed’s peak load in New York’s five boroughs and Westchester County is more than 13,000 MW.