PJM and other RTOs are seeing a “very dynamic” transmission system as older generation is retiring and a whole new class of generation comes online, Ken Seiler, PJM’s vice president of transmission planning, said at last week’s Mid-Atlantic Conference of Regulatory Utilities Commissioners’ (MACRUC) 26th annual Education Conference at the Nemacolin Woodlands Resort in Pennsylvania.

The impacts of generation retirements and additions on transmission were part of the discussion of the panel, “The Challenges of Interstate and Interregional Transmission: A Balancing Act.” The panel featured discussion on how PJM oversees interregional coordination among states with different decarbonization standards, the repercussions of canceling large transmission projects and how the RTO’s Regional Transmission Expansion Plan (RTEP) addresses state public policy objectives.

Seiler said the dynamic nature of the grid today is creating uncertainty for future planning, putting pressure on PJM and its engineers to envision how different transmission will look like even a year from now.

“We’re in the middle of a major transformation within our system, and the transformation’s going to be bumpy,” Seiler said. “It’s going to be uncomfortable for all of us, but it’s going to take a village in order to pull this all together to make this go smoothly.”

Decarbonization and the Grid

Delaware Public Service Commissioner Kim Drexler, who moderated the panel, asked Seiler what key steps PJM is taking to prepare planning for decarbonization and a decentralized grid.

Seiler said PJM is conducting renewable integration studies that are imagining what the grid may look like up to 15 years from today. Seiler said the studies look at what the grid needs to maintain reliability, what the system will resemble with increased renewable energy and the impacts of state renewable energy portfolio standards. (See PJM Annual Meeting Focuses on Balancing Decarbonization, Reliability.)

PJM is actively developing transmission plans to accommodate distributed energy resource and offshore wind goals, Seiler said, working through the DER and Inverter-Based Resources Subcommittee on the implementation of FERC Order 2222 and the state agreement approach with New Jersey for the interconnection of offshore wind. (See PJM Dusts off ‘State Agreement’ Tx Approach.)

Seiler said PJM will present its study findings by the end of the year.

Interconnection Queue

Drexler also asked Seiler about the challenges PJM is seeing in the growing interconnection queue for proposed generation projects.

PJM is seeing quadruple the volume of projects within the interconnection queue from just three years ago, Seiler said, and currently there are 200,000 MW of proposed generation in the queue for a grid system that currently handles 200,000 MW of generation. Seiler said the current system was only designed to handle 200,000 MW of generation.

“You’re not going to pepper in another 200,000 MW of generation on top of that and expect the transmission to be reliable,” Seiler said.

PJM is conducting interconnection reform at the stakeholder level to simplify the interconnection process, Seiler said, creating processes to allow for more flexibility for developers to change the size of units and the machinery used and to suspend projects for up to three years if issues arise. (See PJM Panel OKs Extension of Queue Deadline.)

Seiler said the current interconnection process has served PJM well for the last 20 years, but it was designed more for large combined cycle gas units that were being built in the early 2000s and not renewable energy resources.

PJM must simplify the interconnection process, Seiler said, to account for the renewable solar and wind units in the growing queue.

Maryland Public Service Commissioner Anthony O’Donnell said state commissions are getting unfairly blamed for being a “bottleneck” in the interconnection queue with renewable projects. O’Donnell said there are often good reasons a project takes longer to be studied by PJM, including significant changes that can create reliability issues.

State commissions will then take criticism from interested stakeholders that don’t realize a project has yet to come to them for approval.

“Oftentimes the fingers are pointed at the commissions, especially by the environmental community, the advocates and developers, and it’s really not in our wheelhouse yet,” O’Donnell said.

Canceled Transmission Projects

O’Donnell was asked about the impacts on states when large-scale transmission projects are canceled. Drexler highlighted the Mid-Atlantic Power Pathway that PJM’s Board of Managers canceled in 2012 and the recent decision by the Pennsylvania Public Utility Commission to reject the controversial Independence Energy Connection transmission project between the commonwealth and Maryland. (See Settlement on Abandoned East Coast Tx Line Wins FERC OK and Transource Challenges Pa. PUC Decision in Court.)

O’Donnell said the public doesn’t realize that when a project is approved at PJM through the RTEP process and then goes through an extensive hearing process at the state level, a great deal of money is spent on planning. He said those costs are ultimately passed on to consumers whether a project is approved or not or if work has started.

“These projects accrue costs, and these costs will be paid by our ratepayers,” O’Donnell said.

Seiler was asked how PJM “shifts gears” when a large transmission project is denied by a state or federal agency. Seiler said permit denials cause a great deal of work for PJM engineers who have to go back and re-examine all projects that were accounted for in the interconnection queue and do a “retool” of the removed projects.

“We have to restudy things to determine what is really necessary to come up with the most cost-effective and cost-efficient solution in order to maintain reliability of the grid,” Seiler said.

Cost Allocation Reforms

With large multistate transmission projects, O’Donnell said, cost allocation has become a controversial subject among state commissions. He said those controversies became evident in the region when the cost allocations of the Artificial Island project were being debated. (See Artificial Island Cost Dispute is Over — Almost.)

Seiler said PJM is taking an active role in revamping its policies on cost allocation as the need for more transmission grows clearer. He said if a customer causes a reliability issue, they’re charged to reinforce substations or lines.

“Cost allocation today is one of the leading obstacles to getting generation interconnected with our system,” Seiler said.

Advanced Energy Economy Managing Director Jeff Dennis, who previously served as director of policy development at FERC, said the states would “do well” to engage in conversations with the commission on cost allocation reforms. The current cost allocation policy was developed by FERC 20 years ago and dealt more with combined cycle generation, Dennis said, and the policy is going to need to change for future projects to multiply and be successful.

“It’s going to be so critical in terms of how your policies and the policies that are handed to you by your legislatures are achieved cost effectively,” Dennis said.

Rights-of-way Optimization

One of the most important concepts on the horizon of transmission planning is being in a situation with “limited rights of way,” Seiler said, by finding methods to optimize the existing transmission footprints and systems.

Seiler said more technologies are being developed to enhance existing transmission rights of way, pointing to smart valves and smart wires that can “choke off” a piece of line and increase electricity flows onto other lines.

PJM and the states need to look closer at advanced technologies to achieve decarbonization goals and grid modernization, Seiler said, but they also need help from FERC to develop incentives for new technologies.

“We have to start adopting some of these newer technologies that help us squeeze more megawatts through the existing transmission grid that we have today,” Seiler said.