By Rich Heidorn Jr.

WILMINGTON, Del. — PJM will hold a special meeting from 3 to 5 p.m. Nov. 7 to address stakeholder concerns over how the proposed integration of the Ohio Valley Electric Corp. into the RTO would affect existing members.

RTO officials agreed to schedule the meeting after being unable to quell stakeholder concerns during a presentation by OVEC’s Scott Cunningham at Thursday’s Markets and Reliability Committee meeting.

Stakeholders expressed apprehension over the future of OVEC’s generation and costs of potential upgrades to its double-circuit 345-kV transmission network, most of which dates to the 1950s.

OVEC, which is headquartered in Piketon, Ohio, owns 2,200 MW of generation capacity but will have no load after a U.S. Department of Energy contract ends sometime before 2023. The company was created in 1952 to service roughly 2,000 MW of load from a uranium enrichment plant near Piketon operated by the defunct Atomic Energy Commission.

The company’s two coal-fired generating plants — the 1.1-GW Kyger Creek in Cheshire, Ohio, and 1.3-GW Clifty Creek in Madison, Ind. — are already pseudo-tied into PJM, and its eight “sponsors” can sell their portions of the output into the RTO’s markets. The generation would become internal to PJM following membership, eliminating the pseudo-ties.

MRC Chair Suzanne Daugherty said PJM had conducted operational and planning studies to ensure the integration would not harm reliability. General Manager of System Planning Paul McGlynn said testing also ensured the generation is deliverable.

But Steve Lieberman of American Municipal Power said stakeholders have not seen any analysis on the financial implications of adding OVEC. “There’s just a lot of things we don’t understand,” he said.

Six of OVEC’s eight sponsors — American Electric Power, Buckeye Power, Duke Energy, FirstEnergy/Allegheny Power, Wolverine Power Cooperative and Dayton Power and Light — are PJM members. Another sponsor, Vectren, is a MISO member. The final sponsor, PPL’s LG&E and KU Energy, does not belong to an RTO.

Cunningham said there had been “very little incentive” for OVEC to join PJM in the past because of the sponsors’ “different philosophy” and split between RTOs.

“All that has changed over the years,” he said. “For a small entity like ours, we have struggled with meeting compliance obligations.”

Direct Energy’s Marji Philips said the addition of OVEC’s 2,200 MW of 1950s vintage coal-fired generation is “very significant,” coming at a time when FERC is considering Energy Secretary Rick Perry’s proposal to grant coal plants cost-of-service rates. (Philips said PJM officials later informed her that 90% of OVEC’s power already flows into PJM, with 10% flowing to LG&E/KU.)

PJM’s internal “kick-off” discussion on integration was held June 6, according to spokesman Ray Dotter — nearly four months before Perry announced the proposed rulemaking.

Philips noted that the generators have been the subject of proceedings before the Public Utilities Commission of Ohio seeking to put them into the rate base. In March, for example, Duke Ohio asked PUCO to bill ratepayers for the costs of its 200-MW share of the plants, warning that “premature closing of the OVEC generating plants would have an immediate adverse impact on the communities in which these plants are located” (17-0872-EL-RDR).

“We do not anticipate them retiring any time soon,” said Cunningham, who said they had received “considerable” investments in environmental upgrades. “Those [subsidy requests] were made by the sponsors. We have never acknowledged that they were not economic.”

Delaware Public Service Commission staffer John Farber asked PJM for an estimated cost per mile for upgrading OVEC’s 345-kV transmission.

Vice President of Planning Steve Herling was reluctant to offer a number, saying “it would really depend” on the nature of the upgrade.

“Is it safe to assume it would be substantial?” persisted Farber, attending his last meeting before retirement. (See related story, Delaware PSC’s Farber Retires — Again.)

“I’m not jumping into that one,” Herling demurred.