Direct Connect Development Co. on Monday filed a complaint with FERC that PJM’s tariff and Operating Agreement are unjust and unreasonable because the RTO requires merchant transmission facilities to complete a “profoundly delayed generation interconnection process” for studies and integration into the grid (EL21-85).

The Minnesota-based company — which is seeking to construct the interregional SOO Green HVDC Link transmission line to connect wind generation in MISO with the PJM market, said the commission should require PJM to modify its tariff and OA to allow merchant transmission facilities to participate in the Regional Transmission Expansion Plan (RTEP) process with other transmission projects without having to first pass the generator interconnection process. It also requested that FERC use its authority to order PJM to adhere to project timelines for the rest of the interconnection process.

Under the current PJM tariff and OA, merchant transmission facilities are not permitted to participate in the RTEP process directly.

PJM stakeholders originally approved an issue charge in June 2020 to consider integrating HVDC converters as a new type of capacity resource in the RTO. (See HVDC Initiative Endorsed by PJM Stakeholders.) Work at the HVDC Senior Task Force failed to reach a consensus on the issue. (See “HVDC Senior Task Force Update,” PJM MRC/MC Briefs: March 29, 2021.)

“Allowing merchant transmission facilities to participate in the RTEP process will relieve the unjust and unreasonable impacts caused to such facilities, including SOO Green, by their inclusion in the PJM generation interconnection queue,” the company said in its filing. “Requiring PJM to allow merchant transmission projects to be assessed in the RTEP, including demonstrating whether such projects would provide reliability or public policy benefits, would enhance and facilitate efficient transmission development.”

Project Stalled

SOO Green would be a 350-mile, 2,100-MW, 525-kV underground transmission line designed to deliver renewable energy from upper MISO to Illinois and the PJM grid.

Direct Connect is planning to install the line primarily along existing rail rights of way from Mason City, Iowa, to Plano, Ill. The company says it would be the first major transmission project crossing the MISO-PJM seam.

The filing said the expected total investment for the project exceeds $2.5 billion and is anticipated to provide about $2 billion in consumer savings over 20 years by injecting more than 2,000 MW of renewable energy into the PJM market.

The company is working on the required permitting in Iowa, the company said, and it has already received authorization from the commission last July in its application for negotiated rate authority. (See FERC Oks Negotiated Rates for Merchant Tx Line.)

The company said the development stage for the project was expected to conclude by the end of 2021, with the line operational by late 2024. However, it said PJM interconnection study delays have pushed the commercial operation date to 2026, halting construction absent an interconnection agreement with the RTO.

Direct Connect argues that PJM should have completed a system impact study by August 2020, but the RTO has notified it that the study is now expected to be completed by Nov. 30, a 15-month delay.

“At the current rate of delay, the project can be entirely constructed and operational in far less time than it will take for PJM to complete its studies,” the company said.

It said that in 2020, PJM took an average of 821 days to process facilities studies, and only five projects received their results on time. The studies are supposed to be completed in six months.

Direct Connect said PJM’s current implementation of existing transmission planning and generation interconnection study rules “constrain the ability of innovative transmission projects” to pursue market-driven opportunities.

“The current rules, which include merchant transmission in the generation or new services queue, have become unjust and unreasonable, raising barriers to entry by merchant transmission developers like SOO Green into PJM’s market,” the company said in its filing. “In essence, the current rules have exacerbated the very problem which they were intended to solve.”

Project Procurement

Direct Connect said it has been forced to “make difficult choices daily” regarding the procurement of parts necessary to complete the project.

“SOO Green faces an impossible choice: enter into supply agreements early and risk substantial penalties, or wait until the interconnection process is complete and not have the equipment necessary to build the project,” the company said in its filing.

On Monday, it announced it selected the Italian company Prysmian Group as its preferred supplier of HVDC cable systems for the project. The $900 million contract is still subject to finalization.

“As can be seen recently in Texas and California, the U.S. must invest in its transmission infrastructure, and SOO Green’s underground rail co-location model is a game-changer that can be replicated nationwide to build a clean energy grid,” Direct Connect CEO Trey Ward said in a press release. “Our partnership with Prysmian provides us with best-in-class cable to build a highly reliable and climate-resilient transmission line to supply U.S. households and businesses with affordable renewable energy for decades to come and bring manufacturing back to the U.S.”

In a response to the filing, PJM spokeswoman Susan Buehler said the RTO is currently studying the SOO Green project as part of the interconnection process. Buehler said the merchant transmission project is “treated much the same” as other merchant transmission projects with PJM studying the impact to the existing bulk electrical system and identifying needed transmission upgrades to maintain reliability.

Buehler said PJM was “surprised” by SOO Green’s complaint and its suggestion that SOO Green is “changing its business strategy.”

“PJM and its stakeholders have been in outreach meetings with SOO Green regarding SOO Green’s desire to have its line treated like capacity in our market design, which SOO Green repeatedly represented was necessary for its proposed line to be successful,” Buehler said.