PPL’s (NYSE:PPL) PPL Electric Utilities, in its Aug. 26 brief filed with Pennsylvania state regulators said its proposed Northeast-Pocono Reliability Project is required to resolve certain reliability and planning violations and reinforce the existing 69-kV systems in six counties by bringing a new source of 230-kV supply into the area.
Currently, the only source of supply to the Northeast Pocono region is provided by 138/69-kV transmission lines, PPL told the state Public Utility Commission (PUC), adding that it has been about 30 years since the last major regional transmission reinforcement in the region.
There has been substantial load growth in the area since then and it is expected to continue.
The lines serving the region are long and serve a significant number of customers who are exposed to prolonged outages in the event of the loss of one of those lines. The ability to restore service to those customers is limited due to the lack of 230-kV transmission sources in the area, PPL added.
PPL has proposed to build a new 58-mile, 230-kV line and about 11.3 miles of new 138/69-kV lines needed to connect the new West Pocono and North Pocono 230-69-kV substations with the existing 69-kV system.
It also seeks findings that the exercise of the power of eminent domain to acquire rights-of-way (ROW) across 29 tracts of land is necessary or proper as well as findings that that the locations of the buildings to shelter control equipment at the West Pocono and North Pocono 230-69-kV substations are reasonably necessary for the convenience or welfare of the public.
The current cost estimate is $247m and the project will be completed in stages with a scheduled construction start date of spring 2014 to meet staged in-service dates from November 2015 to November 2017.
The record evidence shows that the proposed project is reasonably necessary to provide safe and reliable service to customers; the route selection process was reasonable and the preferred routes will have minimum adverse environmental impacts, considering the public’s electric power needs, the state of the available technology and the available alternatives; the locations of the buildings to shelter control equipment are reasonably necessary; and the exercise of the power of eminent domain is necessary.
Accordingly, PPL added, David Salapa, administrative law judge, and the PUC should approve the pending siting application, two zoning exemption petitions and 29 eminent domain applications.
The unrebutted record evidence shows that the project is needed to address multiple violations and no party has contested that conclusion.
PPL also said that the construction of the West Pocono and North Pocono substations reduces the east-west and north-south distances between transmission substations, thereby reducing the length of the 69-kV lines that serve the customers. Those new substations bring the sources of bulk power closer to the customer load and, as a result, electric service in the area will no longer depend exclusively on 230-kV transmission sources that are outside of and do not enter the areas of population density, nor will electric service in the area depend on long and heavily loaded 69-kV lines.
PPL also said that the only contested siting issues raised relate to the West Pocono-North Pocono segment of the project. PPL acknowledges that any major transmission project will have environmental and social impacts but simply reciting those impacts without providing any alternative provides no basis for rejecting the company’s route selection.
The North Pocono Citizens Alert Regarding the Environment’s (NPCARE) argument that PPL has not “minimized the environmental impacts” of the project should be rejected for several reasons, including that the group has overstated the project’s environmental impacts, PPL said. For example, a NPCARE witness testified broadly about potential thermal impacts but did little actual analysis of the streams at issue, PPL said.
Among other things, PPL said that the project was approved by the PJM Interconnection board and included in the 2011 regional transmission expansion plan (RTEP) report as a series of baseline projects. Once a project is included in a PJM-approved RTEP, the transmission owners are then obligated to go forward to implement the project.
Others submitting briefs to the PUC include the state Office of Consumer Advocate (OCA) and the Township of Covington in Lackawanna County, Pa.
Office of Consumer Advocate
In its Aug. 26 brief, the OCA said its focus in the matter has been to ascertain whether there is a need for reinforcement of the transmission system in the subject area.
OCA witness Peter Lanzalotta concurred with PPL that reinforcement is needed to the current transmission system in the area, even considering the changes in the number of projected reliability violations. As the proceeding progressed, PPL performed an updated needs analysis, which showed that only four of the original seven projected reliability violations were still confirmed and being projected to occur. Of those four, one of the violations was only being projected to occur during the 2024/2025 time frame.
Based on PPL’s information, OCA added, Lanzalotta identified an alternative to the 230-kV project, called the 138-kV Alternative, which consists of converting existing single circuit 69-kV lines into double circuit 138-kV lines, building two new substations and replacing 37 distribution transformers.
The alternative would use existing ROWs and include rebuilding the aged 69-kV lines on those ROWs, the OCA said, adding that there is no dispute that the 230-kV project and the 138-kV Alternative would resolve the reliability issues identified by PPL.
The revised cost estimate for the alternative is $249m, while the updated cost estimate for the 230-kV project is $247m.
While the OCA has focused on the need aspect, it said it recognizes that environmental and land-related concerns have been raised by other parties. Intricately related to the environmental and land-use concerns is the potential taking of private property through the exercise of eminent domain.
The OCA also said that in order to exercise the power of eminent domain, PPL must prove, by a preponderance of evidence, that it has met every element of the applicable statutes and regulations of the PUC. The company must show that its proposed facilities are reasonable responses to the public need that exists and that it has met the requirements of the siting regulations.
“[T]he record here shows that some reinforcement of the transmission system is needed in the North East Pocono region,” the OCA added, noting that the two possible alternatives to remedy the projected reliability violations have their own benefits and detriments, and each at a fairly comparable cost.
The PUC should consider the total costs of either project, that is, the 230-kV and 138-kV projects. The evidence shows that PPL’s cost estimate for the 230-kV project includes no provisions for upgrade or rehabilitation of the existing transmission lines in the subject area that are at or near the end of their useful service lives. The 138-kV Alternative would include a substantial rebuild of those lines.
The OCA also said that it is important to recognize that neither the 230-kV project nor the 138-kV Alternative could be completed and put in service in time to resolve the three reliability violations that are projected to occur over the next few years. According to a PPL witness, the 230-kV project is scheduled for completion in November 2017, but the company is still projecting that several reliability violations will occur starting in the winter of 2014.
The 230-kV project would include the need for 58 miles of new ROW, with all the attendant environmental and land-use concerns that would accompany such a large-scale construction project, the OCA said.
The 138-kV Alternative has some disadvantages compared to the 230-kV project, including that somewhat more customers experience momentary outages when a fault occurs on a 138-kV line.
A significant distinguishing factor between the two proposed lines is the extent to which the environment would be affected, the OCA said, adding that the 230-kV project’s route would cross 27 “exceptional value” streams and 33 “high quality” streams, for instance. The alternative, in contrast, involves the rebuilding of existing lines on existing ROW, reducing the environmental impact of correcting the reliability violations.
In its Aug. 22 brief, the Township of Covington in Lackawanna County, Pa., said that the Northeast-Pocono Reliability Project has a significant and negative impact on the township and the PUC should order that PPL choose an alternate route that does not affect the township so negatively.
“The project blasts through the open areas and wrecks the judicious development plans of the township,” the township said. “It materially degrades the nature of the community.”
Another argument addressed the building to house the switching equipment, or the control equipment building. The township noted that the building is in a forested area along Frytown Road and asked if it is “going to be left with roads that are a mess in this area” once construction of the building is complete.
The PUC should order that PPL, among other things, obtain a building permit for the control equipment building and comply with inspections by the township building inspector.
The township also noted that it has developed and adopted a comprehensive plan to analyze the township and develop plans for development. The project materially affects the plan, the township said, adding that the project runs through residential and the special conservation district of Covington.
The township further noted that it has evolved into a bedroom community with residential development scattered throughout it and commercial development concentrated in the Daleville area. Much of the township remains undeveloped.
North Pocono Citizens Alert Regarding the Environment
In its Aug. 26 brief, NPCARE noted that since the time it submitted the application, PPL has agreed to several changes to the proposed project and has made one clarification. Those should be recognized in the PUC’s order if it approves the application. NPCARE also said it is withdrawing its specific objection to the proposed location of the line on one parcel.
The group said its brief is focused on opposing only activities that are proposed to occur at a portion of the route and not the whole route for the project. Specifically, the testimony is limited to the West Pocono to North Pocono segment; the West Pocono substation and its associated 69/138-kV connector lines; and the North Pocono substation and its associated 69/138-kV connector lines.
PPL must analyze impacts of the proposed project and must show that every reasonable effort has been made to keep impacts to a minimum. PPL must also show that the remaining harms are outweighed by the benefits to be derived from the project.
PPL’s testimony barely mentions many environmental attributes of the project area and fails to describe the project’s impact on those attributes, or what efforts will be made to minimize those impacts, NPCARE said.
The group also said that PPL claims that all environmental impacts will be addressed by other agencies in subsequent approval applications, but that ignores the fact that those agencies have jurisdictional limits and that PPL has a separate obligation to minimize impacts that are outside the jurisdiction of other agencies.
Those impacts include vegetation management practices, impacts to streams, wetlands and vernal pools, impacts to species and communities of special concern on private lands and other impacts that for various reasons are not, or are not sufficiently, regulated by other agencies.
“PPL has failed to evaluate and demonstrate minimization of such impacts,” NPCARE said. “Accordingly, PPL’s application should be denied.”
If the PUC grants the application, then it should impose conditions to ensure minimization of such impacts, including that on “Parcel 38,” the company will move the proposed route 300 feet southeast from the property line.
According to PPL’s brief, reply briefs are due Sept. 9.