By Rory D. Sweeney
The PJM Board of Managers last week authorized $348 million in transmission projects. Coming two months after it greenlit $1 billion in projects, the approvals irked American Municipal Power, the RTO’s biggest critic when it comes to its Regional Transmission Expansion Plan.
“There was another $186 million of supplemental projects that will move forward in the PJM process. In other words, over a third of the transmission projects reviewed in this time frame were not approved by the PJM board,” American Municipal Power’s Ed Tatum said in an email. “These projects were not subjected to the same level of rigorous review afforded baseline projects, yet the cost of these facilities will ultimately be borne by the consumers in the constructing transmission owners’ zone.”
Tatum was referring to the separation within PJM’s RTEP between different types of projects: baseline projects requested to address reliability issues that receive significant RTO scrutiny; and “supplemental” projects proposed by TOs to address their own internal criteria that aren’t subject to the same level of analysis.
PJM must make recommendations and receive board authorization before assigning baseline projects, but TOs do not need RTO approval for supplementals.
“Another half-billion dollars of more supplemental projects are waiting in the wings. The sheer volume of projects moving forward absent adequate review for need and alternatives should be a grave concern to the PJM board,” Tatum said.
Last week’s decision by the board authorized 26 projects, most of which were reliability upgrades or replacements. There were three market efficiency proposals PJM staff recommended for authorization, though they accounted for less than $10 million. Twelve of them are in the Mid-Atlantic region of PJM’s footprint; 10 are in the Western area and four are in the Southern area.
The board also approved PJM’s installed reserve margin (IRM) of 15.8% for 2021/22. The IRM dropped from 16.6% thanks to an anticipated fleet-wide equivalent forced outage rate (EFORd) reduction from 6.59% to 5.89%. (See “IRM Results Approved,” PJM Planning/TEAC Briefs Oct. 12, 2017.) An IRM study earlier this year also created updated margins for other delivery years, which the board also approved: 16.1% for 2018/19 and 15.9% for 2019/20 and 2020/21.
The board also approved five targeted market efficiency projects (TMEPs) in conjunction with MISO that traverse the grid operators’ borders. The smaller, congestion-relieving interregional projects were also approved last week by MISO’s board. (See related story, MISO Board Approves $2.6B Transmission Spending Package.)
The portfolio of system upgrades has a combined cost of $20 million. On average, project costs will be allocated 69% to PJM and 31% to MISO, based on projected benefits, which are expected to reach $100 million.