In its Oct. 25 FERC Order 1000 compliance filing, PJM included a “state agreement” approach for public policy requirements that, according to Mike Kormos, senior vice president – operations with PJM, goes “above and beyond” what the order wanted to consider.
“[A]s we go through this process, there may be transmission projects that do not ultimately meet our standards for meeting the reliability of market efficiency tests [for instance]…but that states may believe ultimately they would still like to go forward with,” he said during a media briefing discussing the filing.
To address the issue, PJM set up a process through which states may ask it to study specific projects they are interested in and, assuming they can agree on cost allocation either in their own state or among several states, then those projects could be incorporated into the transmission plan.
“It’s really being driven based on their public policy and therefore, they are ultimately the decision-makers in deciding whether to move forward with a particular project,” Kormos added.
He also addressed the area of opportunities for competition, noting that PJM looked at four different project classes based on when a problem is expected and how immediate is the need.
According to his presentation, the classes involve immediate need reliability projects (two to three years or less); short-term reliability projects (four to five years); long-term reliability projects (more than five years); and market efficiency projects.
The length of a “proposal window” is tied to the reliability need – seven days, 30 days and 120 days, his presentation noted. Also, imminent reliability needs default to the incumbent transmission owner, but only in the case of reliability projects.
Cost allocation was also addressed in the filing, Kormos said, noting that the issue in PJM “has been litigated over a long number of years.”
The transmission owners have agreed to a new cost allocation involving 500-kV and above facilities and double-circuit 345-kV facilities, he said.
According to his presentation, that is split, 50% flow-based analysis and 50% spread across the PJM footprint.
“The cost allocation for these extra-high-voltage lines was sort of a compromise where they’re looking at 50% based on the flow that those lines will have on those and who is contributing to that flow,” he said. “That’s done through a distribution factor analysis to try to identify who will be using the new facilities in the future, but also recognizing that lines like this bring lots of benefits to the entire grid, not just simply those that are potentially putting megawatts on it, and therefore spreading 50% of it on a load-ratio share based on the peak load of everybody in PJM as well.”
PJM said highlights of its filing include enhancements to provide additional opportunities for consideration of alternative solutions and a transparent process for review and approval of transmission needs and solutions.
PJM CEO and President Terry Boston said in the statement, “We believe our approach provides additional opportunities for competitive solutions to transmission needs balanced with meeting our primary obligation of maintaining reliability.”
Among other things, Kormos noted that since the planning process has been in place, PJM has approved more than $21bn of transmission upgrades and has interconnected about 7,200 MW of renewable generation. Additionally, a number of 500-kV transmission facilities have been planned, sited, energized or are in construction, he said.
“We’ve already taken on some aging infrastructure issues,” he said. “We have actually put in a project that is currently under construction to rebuild one of our primary pathways from the west of our system into the east, which is the Mt. Storm-Doubs 500-kV line.”
That line is sponsored by Dominion Resources (NYSE:D).
PJM has also looked at incorporating newer technologies, such as phasor measurement units and battery storage, on its system, he said.
On the next steps, Kormos said PJM has begun looking into interregional planning with its neighbors, including the Midwest ISO and the New York ISO. PJM expects to make its interregional filing in April 2013.