PJM federal filings seek transmission planning reform

PJM Interconnection today filed with the Federal Regulatory Commission (FERC) two measures that emerged from its stakeholder process designed to reform the generation interconnection process and include public policy requirements in regional transmission planning.

“PJM and its members recognized early on that the regional planning landscape was rapidly changing”, noted Mike Kormos, senior vice president of operations. “The challenges presented by a lagging economy, growth of demand response, new environmental regulations and a Federal and state focus on renewable energy require we adapt our processes to enhance transparency and reduce uncertainty.”

The first filing, which modifies the Open Access Transmission Tariff, primarily alters the process for generation projects to be analyzed before being permitted to connect to the transmission grid. The generation interconnection reforms will provide certainty and transparency in transmission planning by decreasing the number of restudies and relieving congestion bottlenecks.

A PJM analysis showed that 87 percent of the planned facilities by capacity (MW) that entered in a Feasibility Study Agreement withdrew prior to going into service. In addition, about two-thirds of current active projects are 20 MW or less, largely reflecting renewable energy fuel sources that may withdraw after the feasibility or impact studies are completed.

“This has greatly increased the workload of our planning staff in keeping up with studies and restudies assessing the impact and feasibility of interconnection projects. It also has caused continuing business uncertainty for generation developers frustrated by delays in getting sign-off for viable projects,” Kormos said.

PJM worked with stakeholders to develop three main process solutions, which will relieve the bottlenecks in the queue and provide more realistic cost assessments. PJM proposes a six-month queue cycle which will replace the three-month planning cycle, and should result in fewer restudies and greater accuracy in the modeling used to assess the project.

Secondly, PJM proposes changes to its modifications section, which allows a project to decrease in size during the study process. However, under the change, the project will be required to move back to the next queue if the decision to decrease beyond a certain level would negatively impact a later queued project in timing or cost allocation. Requiring the project to “slide back” should reduce the need for restudies in the rest of the queue. 

The third primary reform establishes an alternate queue for smaller projects of 20 MW or less that connect to distribution level facilities and do not cause the need for upgrades to the PJM transmission system. This reform is intended to allow for a timelier queue process for both larger and smaller projects as the decisions from one group will not impact the results of the other group.

The second filing resulted from a PJM Board directive to examine the Regional Transmission Expansion Plan (RTEP), which led to the establishment of a member working group nearly a year ago. The proposed revisions to the planning process will enable PJM to expand its analysis beyond tests currently used for reliability analysis. The changes in the PJM Operating Agreement will add a definition of public policy requirements to the RTEP process, include scenario planning provisions for demand response and at-risk generation factors, and increase stakeholder participation in the RTEP process. One element of the latter is the formation of an Independent State Agencies Committee, an outgrowth of PJM outreach to state commissions through the Organization of PJM States Inc.

PJM also proposes an expansion of the current “bright line” criteria, which are rigid limits that determine the impact of a facility on the grid and whether reliability violations would require a transmission solution. This worked well until the recent dramatic swings in successive load forecasts resulted in a “whipsaw” effect on project planning decisions. The change will provide more flexibility in planning by expanding PJM analyses to include sensitivity studies, modeling assumption variations and scenario analysis. 

PJM is seeking a May 1 effective date for both filings.