By Rich Heidorn Jr.

PJM stakeholders seeking to improve the transparency of transmission owners’ spending on end-of-life (EOL) projects urged the RTO Tuesday to swiftly conclude work on proposals that can be brought to a vote.

Over four special Markets and Reliability Committee meetings on transparency and end-of-life planning, American Municipal Power, Old Dominion Electric Cooperative and LS Power have proposed rule changes that would require TOs to share how they make EOL determinations, create a new category for EOLs within the Regional Transmission Expansion Plan (RTEP) and open them to competition.

“I just wanted to note I’ve only heard a solution from AMP, ODEC and LS Power. I’m aware that PJM is working on a solution. But … I’m not seeing a whole hell of a lot of engagement from others,” said Ed Tatum, AMP’s vice president for transmission, during Tuesday’s meeting, held via WebEx because of the coronavirus pandemic. “I appreciate that we’re in times that no one has ever lived through before. [But] there’s not a whole lot of new stuff coming here … . We are to a point in this process that we are very close to being able to finish it up.”

Proposals

The proposals would require TOs to have a transparent process for making EOL determinations based on industry averages, manufacturers’ recommendations and “good utility practice.” Once a TO has made a determination that a facility had reached the end of its life, that information would become part of the RTEP baseline planning process.

Currently, EOL projects developed under Tariff Attachment M-3 are designed based on assumptions and needs presented in local transmission planning meetings. For TOs that include EOL projects in FERC Form 715 planning criteria, the needs are presented in Transmission Expansion Advisory Committee and Subregional RTEP meetings.

The proposals would require all TOs to have a minimum 10-year look-ahead EOL program and to present their program’s criteria and guidelines to stakeholders at least annually.

TOs would have to present the methodology of their programs “in sufficient detail that stakeholders … can understand and, to the extent feasible, replicate the results for individual facilities determined to be EOL.”

Mark Ringhausen, vice president of engineering for ODEC, said this would apply to “bright line criteria” such as triggering new infrastructure based on the volume of outages. “I don’t think there’s going to be a lot of these, but we haven’t seen the TO criteria behind the scenes that are used for end-of-life determinations,” Ringhausen said.

EOL needs solutions developed by PJM would be subject to competitive bidding and would not be considered supplemental projects assigned to the incumbent TO.

PJM would conduct planning for all TO EOL replacements and retirements to ensure they don’t compromise reliability or create new critical facilities under FERC reliability standard CIP-014.

Timing Differences

The AMP/ODEC proposal would require TOs to notify PJM and stakeholders of any EOL conditions at least six years before the EOL date so that the project could be included in five-year planning models and opened to competitive bidding. The LS Power package would require six years’ notice for lower voltage facilities and at least eight years’ notice for facilities 230 kV and above.

Tatum and others have been attempting to gain more input on EOL spending since at least 2016. (See PJM TOs Oppose Proposal to Develop End-of-Life Criteria.)

Ringhausen said he believed the AMP-ODEC proposal complied with FERC precedent and existing rules and agreements.

But Exelon’s Robert Taylor said “we don’t share the same view that there’s no legal or contractual problems with” the proposal. “We want to see what PJM will say,” he added.

“These exact issues have recently been ruled on by FERC in the M-3 order, and some stakeholders want to go back to FERC and take it further,” Taylor said later via email. “We supported the changes in M-3 and are engaged in conversations to further improve transparency and address stakeholder needs, but to say we have been working on this for three years and done nothing is not accurate.” (See FERC Upholds PJM TOs’ Supplemental Project Rules.)

PJM Vice President of Planning Ken Seiler said RTO staff were “really looking hard at the three issues our board has asked us to work with the stakeholders on: … transparency, authority, as well as competition.”

And the authority to make the EOL determination, Seiler said, is with the TOs. “We’ve been very consistent about that message from day one: We are not in a position to make EOL decisions on transmission assets.”

He said any package backed by PJM must be consistent with FERC precedent and “be supported from a process and staffing viewpoint.”

He noted the new rules could have impacts on the planning process, the interconnection queue and cost allocation. “Does the load pay or does the generation interconnection customer pay?” he asked. “We have to be very careful and very surgical.”

In a letter to members Oct. 4, Dean Oskvig, chair of the Board’s Reliability Committee, pledged the RTO would continue efforts to improve transparency.

“PJM does not have the authority or expertise to assume responsibility for asset management decisions or to determine when a facility is at the end of its useful life or otherwise needs to be replaced. Those decisions are the sole responsibility of the Transmission Owner,” Oskvig said. He added, however, that in developing the RTEP, “in some circumstances, PJM may be in the best position to determine the more cost-effective regional solution to replace a retired facility.”

No Rush?

Exelon’s Taylor also pushed back on Tatum’s urgency.

“It is not the time to rush. Let’s get this right,” he said. “There [are] so many interlocking pieces.”

“We’re still anxiously waiting to hear from your organization as to what [Exelon’s proposal] would look like,” responded Tatum. “And so far, we’ve heard nothing. Part of the stakeholder process is to engage and to try to be part of a consensus solution.”

Taylor said the pandemic was occupying the minds of “a lot of folks who make these decisions for us.”

The project’s work plan is to target a vote on proposed packages at the May 28 MRC meeting, following a first read on April 30.

The MRC is scheduled to return to the issue in a special meeting April 17, but PJM staff said it may seek an earlier meeting date.