By Rory D. Sweeney

FERC accepted PJM’s cost responsibility assignments for 33 of 34 baseline upgrades, ordering the RTO to change the billing for one Dominion Resources project and revise its Operating Agreement to address inconsistencies (ER16-736, EL16-96). PJM’s Board of Managers approved the projects in December as additions to its Regional Transmission Expansion Plan.

The commission rejected the cost assignment on Dominion’s 500-kV Cunningham-Elmont rebuild project (b2665), saying it should be funded solely by Dominion ratepayers rather than spread across the region.

FERC said PJM’s proposal was inconsistent with its February order that transmission owners should pay all of the cost of projects that solely address a TO’s local planning criteria. (See FERC Does 180 on Local Tx Cost Allocation in PJM.)

The commission gave PJM 30 days to submit a compliance filing “to reflect the appropriate cost responsibility assignment” — allocated to the transmission owners’ zones via the solution-based distribution factor (DFAX) method.

PJM had proposed the DFAX method for 30 other low-voltage projects addressing local planning criteria. Costs of the three other projects — involving 500-kV or double-circuit 345-kV lines — will be allocated 50% on a regionwide, postage-stamp basis and 50% via DFAX.

Commissioner Cheryl LaFleur dissented on the b2665 decision, noting it involved a 500-kV line. “High-voltage lines in PJM have inherent regional benefits that warrant some measure of regional cost allocation,” she said.

She also reiterated concerns she’s noted previously that incumbent TOs may be delaying action on transmission upgrades until the projects become immediately necessary and therefore no longer subject to competitive bidding under Order 1000.

“It is important that incumbent transmission owners report their transmission needs to PJM in a timeframe that allows PJM to meet them in a timely manner, and open them to competitive bidding requirements if they are not in fact immediate,” she wrote. “If it appears over time that incumbent transmission owners may be postponing identification of transmission needs to avoid competitive bidding, further action may be needed to ensure that customers receive the intended benefits of Order No. 1000 planning processes.”

OA Inconsistencies

The commission also ordered PJM to correct inconsistencies in its Operating Agreement.

The agreement requires that the transmission owner be the designated entity when 100% of the project costs are allocated to the transmission owner’s zone, as in Form 715 projects. However, another section of the Operating Agreement appears not to exempt Form 715 projects from the competitive proposal process. FERC required PJM to clarify that exemption and the process the RTO will follow in these situations.

The second inconsistency involved determinations for how proposals qualify as “immediate-need” reliability projects. The commission found it “proper” for PJM to use the date a reliability need must be addressed rather than the expected in-service date and said the agreement needs to reflect that.

FERC gave PJM 30 days to submit revisions or explain why such changes are unnecessary. Parties interested in intervening must file notices within 21 days.

The commission expects to file a final order on this proceeding with 180 days from publication in the Federal Register.