By Suzanne Herel

The Delaware House of Representatives last week unanimously passed a resolution aimed at blocking a proposed stability fix for New Jersey’s Artificial Island nuclear complex that could raise bills for the state’s ratepayers.

House Concurrent Resolution 89, sponsored by Energy Committee Chair Trey Paradee, directs the state Department of Natural Resources and Environmental Control to deny any easement request related to the project as long as the current cost allocation is in place.

That formula assigns $354 million of the $410.5 million project to customers in Delaware and on the Delmarva Peninsula, according to the resolution.

A number of agencies representing those customers, along with Delaware Gov. Jack Markell, have filed their opposition with FERC and PJM, saying the distribution factor cost allocation method (DFAX) is unjust and that the customers paying the most stand to receive just 10% of the load savings benefits. (See Officials Urge PJM to Reject Artificial Island Proposal.)

Under the proposal, an average residential customer could expect to see an extra $1 to $3 on their monthly electric bill. The charge would be much higher for commercial customers.

“This could cost businesses thousands of dollars a month and burden local residents for something that will not benefit them,” Paradee said. “That’s the definition of a bad deal. We might not have been successful in appealing to FERC, but we have the final say when it comes to environmental permitting.”

The project calls for the construction of a transmission line that will be buried beneath the Delaware River connecting Artificial Island to Delaware with the goal of improving reliability on the grid.

“Under current project plans, an easement will be sought from the Department of Natural Resources and Environmental Control to connect the line on the Augustine Wildlife Area … and the Augustine Wildlife Area is a renowned deer and waterfowl habitat in Delaware,” the resolution states.

When asked if the resolution could kill the project, Sharon Segner of LS Power, which is constructing the marine crossing, responded, “Absolutely not. It is a nonbinding resolution that must be passed by both the House and Senate in Delaware. A Delaware resolution does not have the force of law. In addition, a resolution expires at the end of the legislative session, which is in two weeks in Delaware.

“We continue to support the Delaware Public Service Commission’s efforts in addressing the cost allocation for the Artificial Island project, as this is the real challenge for Delaware. We hope FERC grants both the rehearing request of the Delaware PSC and LS Power.” (See Stakeholders Ask FERC to Rehear Cost Allocation Order.)

PJM issued a statement urging policymakers not to delay the project. “We are sympathetic to the concerns about cost allocation, which must be resolved by the federal commission,” it said. “It would be unfortunate to delay this necessary project and its reliability benefits.”

Following complaints about the cost allocation for this project as well as the proposed Bergen-Linden Corridor upgrade, FERC held a technical conference in January. It asked: Is there a definable category of projects for which the DFAX method might not be appropriate, and could a fair approach be developed for those occasions? The commission on April 22 upheld the cost allocation for both projects. (See FERC Upholds Cost Allocation for Artificial Island, Bergen-Linden Projects.)

The Artificial Island project faces other hurdles. After Public Service Electric and Gas submitted estimates nearly doubling the cost of its scope of work to $272 million, PJM planners decided to consider alternate configurations. One is to terminate the new transmission line at Hope Creek instead of Salem. However, if the scope of the work is changed substantially, it could require PJM to solicit new bids under FERC Order 1000. (See Artificial Island Cost Increase Could Lead to Rebid.)