By Suzanne Herel

VALLEY FORGE, Pa. — PJM planners are rethinking a piece of the Artificial Island project, a move that could alter its scope and possibly require the RTO to solicit new bids under FERC Order 1000.

The move comes after Public Service Electric and Gas submitted estimates that nearly doubled the cost of its section of the stability fix from $137 million to $272 million. (See Cost Estimate of PSE&G Portion of Artificial Island Fix Doubles to $272M.)

“We are looking at options to mitigate the cost,” Steve Herling, PJM vice president of planning, told the Transmission Expansion Advisory Committee on Thursday.

PJM has been working with PSE&G and consultants to analyze the cost estimates and design, and their work is nearly done, said Paul McGlynn, PJM general manager of system planning.

The project involves building a 230-kV transmission line from the New Jersey complex housing the Hope Creek and Salem nuclear reactors under the Delaware River to Delaware. Calls for proposals went out three years ago.

After a long, contentious process, LS Power won the job of building the line, largely because of its promise to cap construction costs at $146 million.

LS Power: ‘Nothing Has Changed’

“From LS Power’s standpoint, we’re committed to working with PJM and looking at these alternatives,” Vice President Sharon Segner told the committee. “Our cost cap remains the same. Nothing has changed.”

PSE&G was assigned the tasks of expanding the Salem substation and building a static VAR compensator (SVC) at New Freedom. PSE&G’s work is considered an upgrade and does not include a cost commitment.

Pepco Holdings Inc. was tapped to oversee interconnecting the new substation to the existing Red Lion-Cartanza and Red Lion-Cedar Creek 230-kV lines in Delaware. (See PJM Staff Picks LS Power for Artificial Island Stability Fix; Dominion Loses Out.)

Herling said planners now are considering a new configuration that would terminate the transmission facility at Hope Creek instead of Salem. The buildings abut each other, and Hope Creek would give contractors more room to work, Herling said. However, unlike Salem, it is not on the water, where the horizontal directional drilling to bring in the line would end.

Overhead construction is not an option because of existing 500-kV lines, he said, so the line would have to be buried. But the drilling is not precise; it would have to be done in a wide sweep around the Salem substation, Herling said, or vaults would have to be built.

Timeline at Risk

Any significant change to the plan will affect the timeline, he said. “It could take another year, putting the system at risk,” he said.

There’s also the chance that altering the configuration would end up being just as expensive or simply move the cost from PSE&G’s end over to LS Power’s portion. Expense will have to be weighed with constructability and risk, Herling said.

“Clearly, this is a change in scope for LS Power and PSE&G,” Herling said. “We’re still looking at process implications.”

In an interview, Herling said if that change in scope is challenged, FERC could rule that the project needs to be rebid.

PJM will be reviewing the project with the Board of Managers, which meets next week, but will not be making a recommendation.

“The board may give us more things to go look at,” he said. “We will be working this as quickly as we possibly can to have the board make a decision.”

The project has been controversial not only among the companies that vied for the contracts, but as well as with regulators and consumer advocates in Delaware and Maryland, where most of the cost would be assigned.

In response to complaints, FERC suspended the project’s cost allocation pending additional review, which included a technical conference in January (EL15-95). (See Commenters: DFAX Cost Allocation Inappropriate.)