FERC cites Primary Power precedent in Central Transmission decision

FERC on July 19 denied Central Transmission a request for rehearing in its complaint against the PJM Interconnection (PJM), citing the precedent created by the denial of a similar request filed by Primary Power.

Central Transmission in March 2010 alleged that the PJM’s open access transmission tariff (OATT) was unjust and unreasonable in that it favored incumbent transmission owners over independent transmission developers. The following June, FERC dismissed Central Transmission’s complaint, which had requested revisions to PJM’s operating agreement, finding that the company was permitted under the operating agreement to construct and own its proposed project, and that therefore, no changes were necessary.

Central Transmission had proposed the La Salle transmission line, a 160-mile, double-circuit 345-kV economic upgrade project that would relieve congestion in Illinois and Indiana. La Salle would connect  three PJM substations: Exelon’s (NYSE:EXC) Pontiac-Midpoint substation in Pontiac, Ill.; American Electric Power’s (NYSE:AEP) proposed substation to be constructed near the existing Reynolds, Ind..; and AEP’s Dumont substation in Indiana.

Central Transmission believed La Salle would connect ComEd‘s and AEP’s zones, which are physically separated by an area served by several utilities, mostly coops, operating in the Midwest ISO (MISO), and would create additional transfer capacity between the zones and provide economic and reliability benefits.

The company, which is a member of LS Power Group, specifically asked that FERC strike the language of Schedule 6 of PJM’s OATT, which states: “Notwithstanding the foregoing, with respect to any facilities that the [regional transmission expansion plan] designates to be owned by an entity other than a transmission owner, the plan shall designate that entity as responsible for the cost of such facilities.”

In FERC’s order concerning Primary Power’s similar complaint against PJM, the commission found that the OATT and operating agreement as written “permit PJM to designate non-incumbent transmission developers to build RTEP projects and that non-incumbent developers are eligible to seek cost-of-service rate treatment under Schedule 12 similar to other transmission owners providing service under Schedule 12. Based on that finding, we similarly find in this proceeding that Central Transmission is eligible to be designated to build the facilities under the OATT and operating agreement and eligible to seek cost of service rate treatment for the facilities.”

FERC also noted that additional language was included in PJM’s operating agreement in order to provide for greater participation of market participants in proposing projects.

About Rosy Lum 525 Articles
Rosy Lum, Analyst for TransmissionHub, has been covering the U.S. energy industry since 2007. She began her career in energy journalism at SNL Financial, for which she established a New York news desk. She covered topics ranging from energy finance and renewable policies and incentives, to master limited partnerships and ETFs. Thereafter, she honed her energy and utility focus at the Financial Times' dealReporter, where she covered and broke oil and gas and utility mergers and acquisitions.