Friday, December 14, 2018

PJM Reiterates Support for Embattled Transource Project

By Rory D. Sweeney

PJM’s highly anticipated re-evaluation of its largest-ever congestion-reducing transmission project reiterated staff’s analysis that the project’s economic benefits to the region exceed its costs.

The $366.17 million project proposed by Transource Energy — the Independence Energy Connection — 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.

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. | PJM

The RTO published its findings in a white paper released Thursday that showed a final benefit-cost ratio of 1.4, down slightly from the 1.42 staff reported at the September meeting of the Transmission Expansion Advisory Committee.

The slight decrease is attributable to a roughly $8 million increase in the project’s 15-year annual revenue requirement to $505.85 million. The benefit — measured in decreased load costs — held steady at $707.29 million. The actual estimated project costs increased from $366.17 million at the TEAC meeting to $372.2 million in the white paper.

The 1.4 ratio is still higher than the previous 1.32 evaluation from February and well above the RTO’s 1.25 threshold to consider projects. The current analysis shows that without the project, reliability violations will materialize as early as 2023 on three 115-kV lines in Adams County, Pa., the 500-kV Peach Bottom-Conastone line and the 500/230-kV transformer at Three Mile Island.

The project will also increase the ability to import power into the Baltimore Gas and Electric locational deliverability area.

Opposition

Residents of the region where the lines are planned attended the September TEAC meeting to register their objections, but staff pointed them toward the ongoing project proceedings being held in both states. (See PJM Redirects Residents’ Protests of Tx Project to States.)

The inclusion of newly identified reliability benefits has done little to sway the residents’ opposition, who believe it’s a ploy to avert the project’s potential failure at the state level.

“Faced with near certain failure, PJM is trying to reposition the IEC as a reliability project,” Pennsylvania resident Barron Shaw wrote in a recent blog post. “This is a desperate assertion made by an organization that has no credibility remaining. … Why would anyone believe PJM’s assertion that this project was suddenly all about reliability? The load forecast for the target market is flat, and every year the forecast is decreased. New high-voltage lines in York and Harford County have been constructed and are operating at less than 50% capacity. Recent and pending upgrades to move power across the grid in Maryland have drastically cut electrical congestion. The project is simply not needed.”

Shaw also accused PJM of fixing the ratio analysis and decried the millions of dollars taxpayers and ratepayers are already on the hook for, whether the project ever gets built or not.

“PJM allowed Transource to announce their new cost estimates one month after PJM announced their recalculated benefits for the project, in effect giving Transource the ability to provide the ‘right’ answer and save the project from cancellation,” he said. “This project is dead, and it is time that PJM admits it and moves on … before people begin to question why PJM is needed at all.”

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