FirstEnergy (NYSE:FE) has withdrawn its application filed with the New Jersey Board of Public Utilities (BPU) in relation to the company’s proposal to transfer certain transmission assets to the new affiliate, Mid-Atlantic Interstate Transmission LLC (MAIT), a FirstEnergy spokesperson told TransmissionHub on Oct. 10.
“We were disappointed that New Jersey regulators determined that a transmission-only company cannot be considered a public utility in the state, because a separate, transmission-only company typically carries a more favorable credit rating and thus can borrow money for less, resulting in lower costs to customers,” the spokesperson said.
A BPU spokesperson did not immediately respond for comment on Oct. 10.
As TransmissionHub reported in August, the Pennsylvania Public Utility Commission (PUC), in a “rewrite opinion and order” approved, with modifications, a joint petition for full settlement in relation to FirstEnergy’s proposal.
MAIT, Metropolitan Edison (Met-Ed) and Pennsylvania Electric Company (Penelec) in June 2015 filed a joint application to obtain PUC approval for Met-Ed and Penelec to transfer their existing transmission assets to a newly created, stand-alone transmission affiliate, MAIT, the PUC said in its order, which was adopted on July 21, and entered on Aug. 24. The joint application also sought approval for MAIT to be granted a certificate of public convenience conferring Pennsylvania public utility status on MAIT, and for approval of certain affiliated interest agreements.
At the same time that the joint application was filed with the PUC, two proceedings were initiated before other regulatory authorities. Jersey Central Power & Light (JCP&L), together with Met-Ed, Penelec and MAIT – collectively, the operating companies – filed an application seeking the BPU’s approval to transfer its transmission assets to MAIT; for MAIT to be granted public utility status in New Jersey; and for approval of certain affiliated interest agreements.
The PUC further noted that the operating companies and MAIT also sought and received an approval by FERC for the contribution of the transmission assets to MAIT under section 203 of the Federal Power Act (FPA).
In an Oct. 7 filing, JCP&L, FirstEnergy Transmission LLC, MAIT, Penelec and Met-Ed told FERC that MAIT and JCP&L on Sept. 8 withdrew their petition for approval of the transaction pending before the BPU. As a result, the companies added, JCP&L will not be a party to the transaction, and will not contribute its assets to MAIT under the transaction.
The spokesperson on Oct. 10 said that FirstEnergy’s original plan was to pursue transmission investments in both Pennsylvania and New Jersey under the MAIT subsidiary. MAIT was already approved by Pennsylvania regulators as well as FERC, the spokesperson noted, adding that the company has decided to withdraw its MAIT application at the BPU “and utilize the new transmission-only subsidiary to build timely, cost-effective projects in Pennsylvania. This will allow us to begin delivering the benefits of MAIT to our Pennsylvania customers as soon as possible.”
The spokesperson continued: “We will begin to work with the BPU and other stakeholders in New Jersey to try and find a way to deliver on the benefits MAIT would have otherwise delivered using a structure that can be supported by all interested parties. We remain committed to our transmission plans in New Jersey and will still pursue projects through Jersey Central Power & Light (JCP&L). Work will continue on a number of key transmission initiatives across the state, including the Monmouth County [Reliability] Project that’s pending before the New Jersey Board of Public Utilities.”
As noted on that project’s website, the Monmouth County Reliability Project involves a new $111m, 10-mile, 230-kV transmission line on an existing right of way between the energy substations in Aberdeen and Red Bank.
According to the preliminary project timeline, a filing is to be made with the New Jersey Department of Environmental Protection in late 2016. If approved, project construction would begin in August 2017, with Phase 1 of construction to be completed in June 2018, Phase 2 to be completed in June 2019, and the project being in service in June 2019, according to the timeline.