By Rory D. Sweeney
VALLEY FORGE, Pa. — PJM members are questioning a request by the Ohio Valley Electric Corp. to join as a new transmission zone, but the issue is not up for debate, the RTO said last week. (See Unanswered Questions Force Special PJM Session on OVEC Integration.)
“So long as a [transmission owner] provides PJM with all of the required information, PJM studies that information and ensures it can reliably [integrate], then PJM must proceed,” Senior Counsel Jim Burlew said during a special informational meeting Tuesday. “PJM is the only entity to make a determination if a TO can integrate, and that’s based only on reliability.”
RTO officials said that procedure is based on the existing Tariff and Operating Agreement language. But members were not satisfied.
“I think the members have some concerns, and I think that PJM has a bit of an obligation to first of all hear, and second of all address, the concerns that may be raised in this forum,” American Municipal Power’s Ed Tatum said. “Why do they want to join the party?”
CFO Suzanne Daugherty, who chairs the Markets and Reliability Committee, agreed that “PJM has an obligation … to make sure you know what’s going on.” But she said CEO Andy Ott “is authorized to accept” membership applications if they don’t hinder reliability, as is the case with OVEC.
“This is consistent with several other parts of the Operating Agreement,” she said. “It’s an open party; there’s no cover charge.”
Tatum continued to press, saying “there is discretion,” and that PJM would be “well advised” to take in further perspectives from members before deciding. Members are concerned that OVEC’s integration will result in significant upgrade costs and increase the existing generation oversupply without providing more load for PJM generators to serve. Tatum said he is specifically concerned about costs from supplemental projects for aging transmission infrastructure and reliability improvements that could be needed if one or both of OVEC’s generating units retire.
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 a uranium enrichment plant near Piketon that ceased operations in 2001. The department ended the 2,000-MW contract in 2003 but maintains a load that can be 45 MW at its maximum but is generally less than 30 MW.
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.
“It might be older than Ed Tatum, and although I’m advocating strongly to not be replaced, it might need to be replaced,” Tatum said of OVEC’s transmission infrastructure. “We see major upgrades looming here … and that’s one of the concerns we have. … What we have here is a very unique situation in which you have very little load to allocate to.”
“Our infrastructure has been consistently maintained for 50 years, meets all NERC requirements and will meet all PJM requirements,” OVEC attorney Brian Chisling said.
OVEC’s representatives didn’t provide many additional details. When Tatum asked about plans for transferring OVEC’s existing load, Chisling said it involved a “feature” of Ohio’s Certified Territory Act and referred him to a proceeding of the Public Utilities Commission of Ohio (15-0892-EL-AEC).
Daugherty explained that any required upgrade would be billed to OVEC’s zone and then distributed proportionally to the eight companies that own OVEC.
PJM’s Mark Sims explained that OVEC is “required to have a plan” for upgrades before it joins but doesn’t need to have upgrades done.