Transmission owners have approved transferring filing rights over PJM’s planning protocols to the RTO through a package of amendments to the Consolidated Transmission Owners Agreement (CTOA).

The June 13 vote at the Transmission Owners Agreement-Administrative Committee (TOA-AC) greenlights the revisions to be filed at FERC, following a May 31 communication from the PJM Board of Managers announcing it had agreed to the proposed amendments.

The proposal would remove Schedule 6, which details the Regional Transmission Expansion Plan (RTEP), from the Operating Agreement (OA) and create a new corresponding Tariff Schedule 19. The proposal would also move the RTEP dispute resolution processes to the Tariff and cleanup references and definitions to point to the Tariff instead of the OA. During the May 6 MC meeting, PJM Associate General Counsel Jessica Lynch said the substance of the RTEP would remain unchanged by the shift.

Shifting the RTEP process to the Tariff would allow PJM to revise its planning processes through a Federal Power Act (FPA) Section 205 filing, which would not require the endorsement of the PJM membership and would not require a finding that the existing governing documents are unjust and unreasonable, as would be the case with a Section 206 complaint. The PJM board communication also stated that the 60-day timeline for FERC to respond to a 205 filing would allow faster action when prompt action is needed.

“It has become very clear that PJM will need to be more proactive and nimble in its planning efforts. As has been referenced in prior discussions, most all other ISOs/RTOs (and indeed virtually all other transmission planning public utilities in the United States) have Federal Power Act (FPA) Section 205 filing rights over transmission planning, which allows these entities to independently propose rules to FERC, and perhaps most importantly, receive a reaction from FERC, whether positive or negative, within 60 days. The Board views this ability to receive feedback from FERC in a timely manner as strategically important in determining how best to plan the PJM system for the energy transition in the coming years,” the board wrote.

The Members Committee voted against endorsing the revisions during its May 6 meeting, where the changes received 25% sector-weighted support. Several stakeholders argued that empowering PJM with unilateral filing rights over regional transmission planning would allow it to bypass the stakeholder process and that the proposed dispute resolution process included would create an inappropriate barrier to MC endorsed OA amendments being filed at FERC. (See Members Vote Against Granting PJM Filing Rights over Planning)

During the May 8 Public Interest and Environmental Organization User Group (PIEOUG) meeting, Ari Peskoe, director of the Electricity Law Initiative at Harvard University, said the language would allow create a “shadow governance” where CTOA signatories could challenge PJM prospective Section 205 filings, PJM regional plans, or other PJM actions through a confidential mediation process. He also argued that it would allow utilities to pre-empt PJM planning by submitting similar, but more expensive, projects of their own. (See Consumer Advocates, Environmentalists Urge Holistic Thinking at PJM)

Peskoe told RTO Insider he believes the CTOA amendments would violate the FPA and should be rejected by FERC. He said it’s unfortunate the PJM board accepted the agreement.

The May 31 letter from the PJM board said the RTO continues to value the stakeholder process, however there may be times that changes are needed even in the face of a deadlocked membership.

“As PJM has stated many times, having FPA Section 205 rights will not curtail stakeholder discussion of planning matters – never has it been more important to have stakeholders weigh in on the issues before us. But should Member consensus be unattainable, having FPA Section 205 rights will allow for PJM to still move forward with an FPA Section 205 filing with FERC, and in turn, receive a timely reaction from the Commission on a given planning rule change. This will better position PJM to continue to fulfill the reliability needs of consumers as we advance through this energy transition.”

Exelon Director of RTO Relations & Strategy Alex Stern told RTO Insider that the proposal would reinforce PJM’s independence and ensure that PJM, as the FERC-jurisdictional public utility, holds the authority to act when it determines reliability warrants change. He said that authority would be no different than what exists today for the RTO on the markets side.

“These revisions are a big step that those who own transmission don’t take lightly,” he said. “They afford PJM greater independence to plan the energy grid. This requires stakeholders, including Exelon, to compromise. However, to support reliability during the energy transition, Exelon believes it is critical that PJM has every tool at its disposal.”

As the PJM board noted in its May 31 correspondence, the lack of support at the MC for the revisions underscores the need for PJM to have the ability to operate independently from its membership when necessary.

Stern added that comments stakeholders made prior to the MC vote showed a mistaken belief that the membership, rather than PJM, has public utility rights and responsibilities to control regional planning. He said that is not the case under the status quo and creates a dynamic where PJM is responsible for planning a reliable grid without having the needed control over how it conducts that planning.

“With generation deactivations accelerating, energy demands increasing and a portfolio of new generation waiting to interconnect, PJM’s ability to ensure future reliability and affordability for customers is critical and would be enhanced by PJM having the ability to bring critical regional transmission planning issues to the Commission at the time it believes appropriate and as intended when PJM was formed,” Stern said.

Stern said there have been several efforts to expand PJM’s planning processes in the past that have been stymied by deadlocks in the stakeholder process, including establishing a paradigm for storage as a transmission asset (SATA), as well as efforts to enhance interregional planning. (See Vote Delayed on PJM SATA Proposal)