FERC on Feb. 18 approved PJM’s annual update to its tariff’s cost responsibility assignments for transmission projects set to be completed in 2025. The approval came despite protests regarding the use of the 1% de minimis threshold and the inclusion of a project that was the subject of a $6.6 million civil penalty imposed by the commission last year (ER25-775).
The update, filed Dec. 20, allocates costs for dozens of projects in the RTO’s Regional Transmission Expansion Plan, but the one that attracted the greatest attention was Public Service Electric and Gas’ 230-kV Roseland-Pleasant Valley (RPV) line. The commission approved a settlement between its Office of Enforcement and the utility on Dec. 5, 2024, subjecting the utility to a $6.6 million civil penalty to resolve allegations of it “failing to fully and accurately provide information” to PJM staff about the project (IN21-5). (See FERC Fines PSE&G $6.6M for Inaccurate Info on Transmission Line.)
In protest of the update, Public Citizen argued that RPV included imprudently incurred expenses and requested that component of the cost assignment filing be set for evidentiary hearing. The New Jersey Division of Rate Counsel said PSE&G should be required to demonstrate that its project and the scope of work were appropriate, which it argued could not be done through formula rate proceedings that lack the opportunity for a full prudence review. The agency also asked that FERC review PJM’s process for reviewing similar projects.
The utility answered that Public Citizen was improperly attempting to transform the cost allocation process into a prudence inquiry, which it said is outside the scope of the proceeding and should be done through a separate, standalone complaint. It also argued the organization had not identified any specific costs that were improper and had not met the standard for initiating such an inquiry. The commission agreed, finding both protests out of scope.
The Long Island Power Authority (LIPA) and Neptune Regional Transmission System argued PJM’s continued use of the 1% de minimis threshold and netting provisions of its solution-based distribution factor (DFAX) is in violation of the D.C. Circuit Court of Appeals’ ruling in Consolidated Edison Company of New York v. FERC, under which they said it is unlawful to base peak loads in the DFAX analysis on the threshold. They also protested that PJM had not provided evidence of how costs align with their derived benefits and had not detailed the drivers behind significant cost allocation changes. (See Paper Hearing Opened on PJM DFAX Method.)
PJM responded that the issues raised by Neptune and LIPA are the subject of other pending FERC litigation, and in the meantime, it is obligated to apply the effective tariff language. The commission wrote that PJM had applied its tariff properly and adequately provided detail regarding DFAX and its cost allocation methodology, which it noted permits challenges to the inputs.
