Monday, February 18, 2019

FirstEnergy Secures Recovery for Transource Project

By Rory D. Sweeney

FERC on Tuesday granted FirstEnergy Services’ request to recover “prudently incurred abandonment costs” if Transource Energy’s embattled Independence Energy Connection is canceled (ER18-2510).

The request was made on behalf of FirstEnergy affiliates Potomac Edison and Mid-Atlantic Interstate Transmission (MAIT). The authorization allows the companies to recover 100% of any costs incurred for the project after Nov. 27 and 50% of any costs incurred prior to that date, which is the same structure that the project’s other developers — Transource, Baltimore Gas and Electric and PECO Energy — have already received.

The companies told FERC the project must be permitted by both Maryland and Pennsylvania — where it needs easements across roughly 300 private properties — and that, as a market-efficiency project, it faces heightened risk of cancellation because it is subject to annual PJM re-evaluation until it is permitted. The request also noted “local opposition” to sections of the project.

“This local opposition, coupled with the need for … the companies responsible for the other elements to obtain permits from multiple municipal and state authorities, heightens the permitting risk,” the companies argued.

Once referred to as the AP South Congestion Improvement Project, Transource’s Independence Energy Connection project would consist of two lines. The western portion would run from the Ringgold substation in Maryland to the Rice substation in Pennsylvania. The eastern line would run from the Conastone station in Maryland to the Furnace Run station in Pennsylvania. | Transource

Residents in the area of the project have been fighting against the project for years. Half a dozen opponents took the rare step of attending the September meeting of PJM’s Transmission Expansion Advisory Committee to voice their displeasure with the project and request that the RTO withdraw its approval. PJM explained its role is simply to evaluate the benefit of the project, and that the residents need to lodge their complaints with the state regulatory commissions that oversee permitting. (See PJM Redirects Residents’ Protests of Tx Project to States.)

The $366.17 million proposal is the largest congestion-reducing project PJM has ever approved. It would consist of two separate 230-kV double-circuit lines, totaling about 42 miles, across the Maryland-Pennsylvania border. One line would run between the Ringgold substation in Washington County, Md., and a new Rice substation in Franklin County, Pa.; the other would run between the Conastone substation in Harford County, Md., and a new Furnace Run substation in York County, Pa.

PJM estimated that Potomac Edison will be assigned $62.06 million in costs for its part of the project’s construction, while MAIT will pick up $6.42 million. Despite criticism, the RTO has maintained that the project stands to provide more benefits than it will cost. (See PJM Reiterates Support for Embattled Transource Project.)