The future of the controversial Independence Energy Connection (IEC) transmission project in Pennsylvania and Maryland is in doubt after the Pennsylvania Public Utility Commission (PUC) rejected siting applications filed by Transource Energy.

The PUC voted 4-0 during the commission’s public meeting on Thursday to reject a series of related applications and petitions filed by Transource for the siting and construction of high-voltage electric transmission lines in Franklin and York counties. Details of the decision were not made available until Monday when the PUC served copies of the commission’s orders to several hundred different parties involved in the case.

On Thursday, the commission elected to amend and adopt the recommended decision issued in December by PUC Administrative Law Judge Elizabeth H. Barnes, finding that Transource “failed to show need for the project within the meaning of commission regulations and the Pennsylvania Public Utility Code.” The PUC commissioners did not comment on the project during the vote, which was included with several other agenda items voted on in a single motion.

“We shall deny Transource’s siting applications based upon our finding that the company failed to establish, by a preponderance of evidence, the need for the proposed high-voltage transmission lines,” the commission said.  It rescinded the certificate of public convenience issued to Transource in 2018, which granted the authority to furnish electric transmission services in Franklin and York counties.

The project had received a certificate of public convenience and necessity (CPCN) from the Maryland Public Service Commission last June. (See Md. PSC OKs Independence Energy Connection Deal.)

The Ohio-based company’s transmission line proposals, known as the IEC East and West projects, were the subject of several rounds of investigation and litigation before the PUC and other state and federal agencies since 2017.

Transource’s plan for the eastern section of the project originally proposed extending 15.8 miles of transmission lines from a new Furnace Run substation in York County, Pa., to the Conastone substation in Harford County, Md. An updated configuration released in October 2019 and designed in consultation with UPDATED: Transource Files Reconfigured Tx Project.)

The western segment of the IEC project called for a 230-kV double circuit transmission line running 28.8 miles from Franklin County, Pa., into Washington County, Md.

The PUC’s actions officially denied all of Transource’s applications and petitions submitted to the commission, including:

• The application for approval of siting and construction for the East and West portions of the IEC project (A-2017-2640195; A-2017-2640200);
• The amended application related to the East portion of the project, which was submitted by Transource and PPL Electric;
• The petitions for waiver of local zoning regulations related to the construction of substations in Franklin and York counties; and
• Applications seeking approval for eminent domain action involving 77 landowners in Franklin and York counties (A-2018-3001881, et al.)

Project History

PJM had selected Transource’s market efficiency proposal in August 2016 to reduce congestion along the RTO’s AP South interface. The congested interface was included in its inaugural window for proposing such projects as part of PJM’s implementation of FERC Order 1000.

Then PJM CEO Andy Ott called it “PJM’s largest-ever market efficiency project,” saying the $383 million IEC project would save ratepayers $622 million in congestion costs over 15 years and that the eastern portion would relieve the Graceton-Conastone 230-kV line, which was the most congested line in PJM’s 2016 long-term analysis.

But the project quickly received criticism from some PJM stakeholders and landowners in Maryland and Pennsylvania who questioned the need for the transmission lines. (See Protesters Doubt PJM Analysis of Transource Alternative.)

Court Ruling

Judge Barnes’s decision in December played heavily in the PUC’s decision, with the commission citing 233 findings of fact and 16 conclusions of law made by the judge.

The commission said Barnes was “not persuaded” that Transource had carried the burden by a “preponderance of the evidence” to establish need after viewing the evidence of the case. Barnes found opposing arguments made by interested parties to be “more persuasive,” the PUC said, concluding that data used by PJM regarding congestion on the AP South interface was “not reliable enough to form the basis of need” for the project. (See PJM Analysis of Transource Alternative Challenged.)

Barnes also found Transource’s argument to be “unpersuasive” regarding additional benefits to Pennsylvania based on the “late-asserted alleviation of reliability violations.” The basis of the Independence project “has always been and remains, for the purpose of alleviating of economic congestion on the AP South reactive interface,” Barnes said.

The PUC rejected Transource’s arguments regarding the commission’s jurisdiction to provide an independent determination of the need for the project. Transource argued that the need of the project was satisfied under existing Pennsylvania standards and that “factors relied upon by PJM and the methodology and process for PJM-approval of a project should be the only criteria relevant to this commission’s review and such criteria is not subject to critical analysis.”

The commission said Transource’s argument was “flawed” because the need, established by FERC standards and implemented by PJM, may or may not be “consistent with the standard for need under Pennsylvania law.”

“It is for this commission, not PJM, to decide whether the PJM planning perspective is, or is not, in line with the Pennsylvania standard for ‘need’ under the code, commission regulations and relevant case law,” the PUC said.

Reactions

The next steps for the Independence project remained in question on Monday as parties involved in the project were reviewing the details of the PUC order.

Transource Energy Director Todd Burns said in a statement that his company was “disappointed” by the commission’s decision and was evaluating the order.

“PJM has shown this project is a necessary investment to address market inefficiencies and reliability issues,” Burns said, “These problems do not go away with today’s action, and ultimately they will need to be addressed. Pennsylvania will play an important role in transmission grid expansion given the evolving electrical needs in this region and the growing influx of new generation that is expected.”

Officials at PJM said they were also reviewing the PUC’s decision and that it “appreciates the commission’s consideration.”

“PJM will commence the appropriate planning studies to determine next steps, including identifying any potential reliability issues due to removal of the project from the Regional Transmission Expansion Plan,” the RTO said in a statement.