The Pennsylvania Office of Consumer Advocate (OCA), in a March 6 protest filed with the Pennsylvania Public Utility Commission (PUC), requested that the PUC not approve at this time Transource Pennsylvania LLC’s (Transource PA) application involving a PJM Interconnection-approved market efficiency project.
The OCA said that it is filing the protest in order to ensure that the application is approved only if it is “necessary or proper for the service, accommodation, convenience or safety of the public.”
As noted in the protest, Transource PA seeks PUC approval to furnish and supply electric service in Franklin and York counties in Pennsylvania as part of the project, which PJM has identified as Baseline Upgrade Numbers b2743 and b2752. PJM approved b2743 and b2752 through a competitive selection process initiated by PJM to alleviate congestion constraints across the Pennsylvania and Maryland border, the OCA said.
According to Transource PA’s Feb. 7 application filed with the PUC, PJM’s Baseline Upgrade Numbers b2743 and b2752, which are also described as Project 9A, involve upgrades at existing substations in Maryland, two new substations in Pennsylvania, and two new interstate transmission lines between Maryland and Pennyslvania.
The OCA, in its protest, claimed that the application lacks sufficient information regarding the necessity or public benefit of granting Transource PA’s request for a certificate of public convenience.
Noting that Transource PA concluded in its application that “the electric service to be furnished by Transource PA is reasonably necessary for the accommodation or convenience of the public,” the OCA claimed that the company’s filing does not include any testimony to support that conclusion, and instead, Transource PA’s conclusion regarding the public necessity of b2743 and b2752 is based on PJM’s findings.
PJM determined that “the facilities required by Baseline Upgrade Numbers b2743 and b2752 are expected to save customers approximately $620 million over 15 years,” the OCA said, adding that the PUC should hold an evidentiary hearing to investigate the basis of PJM’s findings.
The OCA claimed that the company’s filing does not include sufficient information or any testimony to support Transource PA’s position that the new transmission facilities “will enhance the electrical strength and reliability of the area’s electric transmission grid, provide additional and alternative paths to electricity in the case of transmission outages, and facilitate the interconnection of future reliability, generation, and load projects in the area,” as the company said in its filing.
The OCA also said that Transource PA’s application raises issues regarding the public benefit/cost analysis of implementing the project, noting that according to Transource PA, PJM selected the project because “it provided the best benefit-to-cost ratio, most total congestion savings, and the most production cost savings.”
The project has an estimated cost of about $320.2m and is expected to mitigate about $620m in energy market congestion based on a 15-year study period. However, the OCA added, transmission projects generally have a service life longer than 15 years, and the application does not provide sufficient information regarding the cost/benefit expectations after 15 years, or in the event that the project’s costs are exceedingly larger than expected.
“PJM identified that this project will help alleviate transmission congestion constraints and strengthen the reliability of the transmission grid for customers,” an American Electric Power (NYSE:AEP) spokesperson told TransmissionHub on March 13. “The project is expected to save customers approximately $620 million over 15 years.”
She noted that Transource made its FERC Section 205 filing in 2016. A Jan. 31 FERC order accepted the companies’ formula rates, subject to a compliance filing, and set the requested base return on equity for hearing and settlement judge procedures, the spokesperson said.
Transource Energy is indirectly owned by a partnership between AEP and Great Plains Energy (GPE).
Transource PA said in its application that the core of the baseline upgrade project comprises the transmission facilities designated by PJM to be built, owned, maintained, and operated by Transource PA and Transource Maryland LLC (Transource MD), which together are referred to as the Independence Energy Connection Project.
Transource PA is responsible for the Pennsylvania portion of the Independence Project, and would build, own, maintain, and operate the two new electric transmission substations in Pennsylvania, as well as the Pennsylvania portions of the two new 230-kV interstate transmission lines: the Rice-Ringgold 230-kV Transmission Line and the Furnace Run-Conastone 230-kV Transmission Line.
Transource MD, upon receipt of all necessary approvals, would build, own, operate, and maintain the Maryland portions of the two proposed 230-kV interstate lines associated with the Independence Project.
Upon receipt of all necessary approvals, the new Rice-Ringgold 230-kV line would be sited to extend about 27 miles, connecting the existing Ringgold substation, located near Smithsburg, Washington County, Md., and the new Rice substation, to be located in Franklin County, Pa. Transource PA also said that in addition to interconnecting with the Ringgold substation, the new Rice substation would tie into the existing Hunterstown-Conemaugh 500-kV Transmission Line.
Upon receipt of all necessary approvals, the new Furnace Run-Conastone line would be sited to extend about 15 miles, connecting the existing Conastone substation, located near Norrisville, Hartford County, Md., and the new Furnace Run substation, to be located in York County. In addition to interconnecting with the Conastone substation, the new Furnace Run substation would tie into the existing Three Mile Island-Peach Bottom 500-kV Transmission Line, the company added.
Upon project completion, and subject to receipt of all necessary approvals, Transource PA would provide electric transmission service within a transmission corridor to be sited from the new Rice substation to the Pennsylvania/Maryland border, and would provide electric transmission service within a transmission corridor to be sited from the new Furnace Run substation to the Pennsylvania/Maryland border.
The Pennsylvania portion of the Independence Project would be interconnected with existing transmission facilities of Pennsylvania electric distribution companies, which ultimately provide retail electric service to Pennsylvania customers, the company added.
While the primary benefits resulting from the Pennsylvania portion of the project relate to market efficiency and the reduction of congestion costs, the company said that the transmission facilities would also enhance the electrical strength and reliability of the area’s electric transmission grid, provide additional and alternative paths to electricity in case of transmission outages, and facilitate the interconnection of future reliability, generation, and load projects in the area by virtue of the presence of the new transmission facilities as part of the area’s transmission grid interconnected network.
Among other things, the company noted that after the PJM board approves a proposed market efficiency project, the successful project proponent must complete the project once PJM and the successful entity execute a designated entity agreement, which designates the entity or entities having construction responsibility for the project.
PJM in October 2014 opened a long term proposal window to solicit proposals to address transmission congestion across the Pennsylvania/Maryland boarder, and in response, Transource Energy submitted the proposal.
After extensive evaluation and review with stakeholders, PJM selected Project 9A to address the identified needs because it provided the highest benefit-to-cost ratio, the most total congestion savings, and the most production cost savings, the company said.
As TransmissionHub reported, PJM last August said that its board has authorized more than $636m in electric transmission projects to strengthen the grid and reduce electricity costs, including the Transource project.
PJM and Transource Energy, on behalf of Transource PA and Transource MD last November executed a designated entity agreement, and FERC approved the agreement on Jan. 12, Transource PA said.