The Kentucky Public Service Commission, in an order entered on March 16, granted to Kentucky Power a certificate of public convenience and necessity (CPCN) to rebuild its existing 6.5-mile Hazard-Wooton 161-kV Transmission Line in Perry and Leslie counties, and to perform the related replacement of the existing 161/138-kV single-phase transformer located at the Hazard substation with a new three-phase 161/138-kV transformer.
As noted in the order, Kentucky Power last November filed an application seeking the CPCN to rebuild the line, as well as to perform an upgrade, replacement, and installation of facilities and equipment at the company’s existing Hazard and Wooton substation. The total estimated cost of the project is $44m.
The commission added in its order that Kentucky Power’s request for a CPCN consists of two projects, with the first one being the proposed 6.6-mile rebuild of the existing 6.5-mile Hazard-Wooton 161-kV line, at an estimated cost of $20m. The proposed rebuild includes combining portions of the existing Hazard-Jackson 69-kV line and the existing Hazard-Wooton 161-kV line onto about seven double-circuit structures, mainly using the existing Hazard-Jackson and Hazard-Wooton rights of way (ROWs), as well as a small portion of newly acquired ROW. An existing 34.5-kV distribution line will be underbuilt on the double-circuit portion of the proposed rebuild, the commission added, noting that there will also be a reconfiguration of an approximately 1,900-foot section of the existing Hazard-Jackson 69-kV line. In addition, Kentucky Power proposes to replace the existing 161-138-kV single-phase transformer with a new three-phase 161/138-kV transformer at the Hazard substation.
The commission also noted that that project has been designated a baseline project by PJM Interconnection and Kentucky Power; PJM defines baseline projects as “projects primarily required to eliminate base-case reliability criteria violations found in the PJM Regional Transmission Expansion Plan (RTEP).
The second project, which PJM has designated as supplemental, consists of five improvements to the Wooton substation and 46 improvements to the Hazard substation, at an estimated cost of $24m. The commission added that PJM defines supplemental as “projects originated by the transmission owner that are not driven by an applicable PJM criterion.”
Kentucky Power states that of the proposed improvements to the substations, only the replacement of the existing 161/138-kV single-phase transformer with a new three-phase 161/138-kV transformer at the Hazard substation is directly related to, or required by, the transmission line rebuild, while the other proposed improvements are not.
The commission added that it finds that Kentucky Power has established sufficient evidence to demonstrate that the baseline portions of the application – namely, the proposed rebuild of the existing 6.5-mile Hazard-Wooton 161-kV line in Perry and Leslie counties, as well as the replacement of the single-phase transformer with the three-phase transformer at the Hazard substation – are necessary; that the construction is reasonable; and that it will not result in any wasteful duplication of services.
Wasteful duplication is defined as “an excess of capacity over need,” and “an excessive investment in relation to productivity or efficiency, and an unnecessary multiplicity of physical properties,” the commission noted.
The baseline portion of the project will replace an existing transmission line that was built in the 1940s and is at the end of its useful life. However, the commission added that it does not agree that Kentucky Power established the need for the $24m supplemental portion of the project.
In a March 5 brief, Kentucky Power addresses in some detail the necessity of the transmission line rebuild and the replacement of the Hazard substation transformer. However, the commission added, as to the necessity of the remainder of the project, the supplemental portion, the company states only that doing the supplemental substation upgrades simultaneously will permit “Kentucky Power to deploy engineering and construction resources in a more efficient manner….”
That may speak to efficiency but not to necessity, the commission said.
The Kentucky Attorney General – the only intervenor in the matter – argues that FERC recently issued an order addressing supplemental projects and the PJM Subregional RTEP process used by transmission owners to obtain PJM approval for such projects. In that order, the commission added, FERC found that the way in which the PJM transmission owners are carrying out the PJM Operating Agreement conflicts with the requirements and principals of transparency of FERC Order No. 890. The FERC order required PJM transmission owners to make a compliance filing within 30 days showing revisions to “Attachment M-3 of the PJM OATT.” The commission added that the FERC order also, for instance, set out a requirement that Subregional RTEP Committees review the criteria, assumptions, and models the transmission owners use to decide on supplemental projects.
The commission said that it finds that the evaluation of the present supplemental project has taken place under the previous review process that the FERC order has found to be flawed.
Among other things, the commission said that Kentucky Power’s request for a CPCN for improvements to the Wooton substation and Hazard substation set forth as a supplemental project is denied.