Wednesday, January 23, 2019

Cancel Transource Line, Md. Panel Says

By Rich Heidorn Jr.

Maryland officials have recommended the state’s Public Service Commission reject Transource Energy’s controversial Independence Energy Connection, saying the company and PJM failed to examine alternative solutions, as required by state law.

The Power Plant Research Program (PPRP) of the Maryland Department of Natural Resources asked the PSC on Dec. 20 to dismiss Transource’s application for a certificate of public convenience and necessity (CPCN) or put the filing on hold until the company and PJM review proposals to add capacity to existing transmission lines in the eastern segment of the project in Harford County (Case 9471).

The $372 million project would add two 230-kV double-circuit lines totaling about 42 miles across the Maryland-Pennsylvania border: a western line between the Ringgold substation in Washington County, Md., and a new Rice substation in Franklin County, Pa.; and an eastern line between the Conastone substation in Harford County, Md., and a new Furnace Run substation in York County, Pa. It would be PJM’s largest-ever market efficiency project.

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

The PPRP said Transource had failed to meet state law requiring the examination of alternatives if an existing transmission line “is convenient to the service area; or the use of the transmission line will best promote economic and efficient service to the public.”

“After substantial discovery,” the PPRP said, “it is clear that there was no examination to consider an existing transmission line as an alternative for the eastern segment of the project … prior to filing the CPCN for the project, even though the existing transmission lines appear likely to be both convenient to the service area and to best promote economic and efficient service to the public.”

The agency said the need for the eastern segment of the project could be met by the existing Furnace Run-Conastone and Furnace Run-Graceton 230-kV double-circuit transmission tower lines, which each have only one 230-kV circuit and could carry a second.

“Transource’s application did not identify, nor consider, these nearby existing tower lines as an alternative to the project,” the PPRP said.

The PPRP said it provided a “conceptual alternative” using the spare tower capacity, but Transource rejected it after initial modeling by PJM identified two single-contingency thermal criteria violations. The PPRP said the violations don’t eliminate the nearby lines as a viable alternative.

“It is not uncommon for PJM to identify thermal violations in its transmission planning process and then to seek out solutions. In fact, on the west segment of this project, transmission system enhancement projects were necessary to allow the IEC-West project to connect into Maryland,” the agency said. “With regard to the IEC-East project, there are other transmission line configurations using these existing tower lines that very well may not produce reliability concerns while providing regional benefits in a manner that minimizes the environmental and socioeconomic impacts to the state.”

The PPRP said PJM and Transource also rejected two other conceptual alternatives as “going beyond considering the use of existing transmission corridors [and representing] significant material changes to the electrical configuration of the project.”

“Alternatives utilizing the existing tower lines have not yet been examined in a manner that will allow the commission to complete its review under [state law]. Transource and PJM’s apparent unwillingness to investigate these existing tower lines leaves unresolved whether there is a viable and preferred alternative to the IEC-East project.”

Transource Response

In a response Monday, Transource insisted its application is complete and that it has made a prima facie case that the project is needed and “will provide enormous economic benefits to Maryland customers.”

“The application includes substantial evidence for the commission to carry out its obligation … including the consideration of existing transmission lines,” Transource said. “A dispute over the consideration, or lack of consideration, of any one hypothetical alternative, with no evidence whatsoever regarding its feasibility, among an infinite universe of similar ‘alternatives’ is not the proper subject of a motion to dismiss.”

The company said state law does not require applicants to conduct engineering analyses of every possible alternative. “Rather, disputes over whether the commission should consider an alternative are properly the subject of competing testimony at the evidentiary hearing.”

Reliability Value?

The state officials also said the commission should reject Transource’s attempt to justify the project — approved by PJM in 2016 to relieve transmission congestion — on reliability grounds.

PJM said in a November white paper re-evaluating the project that it would reduce load costs by $707.3 million in net present value over 15 years, producing a benefit-cost ratio of 1.4, exceeding the minimum 1.25 ratio required for inclusion in the Regional Transmission Expansion Plan. (See PJM Reiterates Support for Embattled Transource Project.)

It also “resolves burgeoning reliability issues,” PJM said. Although the project was not needed to address reliability violations when it was approved, the RTO said, it noted “that the project would inherently enhance system reliability by introducing additional transmission network paths.”

“In parallel with the September 2018 benefit-cost ratio re-evaluation, PJM assessed the extent to which the Transource project provides identifiable reliability benefits. Power flow results have confirmed that the Transource project does indeed solve identified 2023 overloads on a 500-kV line, a 500/230-kV transformer and other transmission facilities,” the RTO said.

The PPRP suggested PJM’s shift was a bait and switch. “If PJM has now determined that there are reliability concerns and an associated need for transmission system enhancements, it would be more appropriate to first investigate reasonable alternatives within the relevant PJM processes rather than latching solutions on to this discretionary market efficiency project,” it said.

Transource denied it was changing its position on the reason for the project. “The additional analysis provided by PJM was routine and anticipated, and the results of the analysis only add to need for the project, they do not substitute the purpose for the project.”

A group of residents who live in or near the proposed path supported the PPRP’s motion to dismiss. STOP Transource Power Lines MD said the line would disrupt existing farm and agricultural operations and damage land under permanent preservation easements.

“The failure on the part of the applicant and, to a lesser degree, PJM to consider alternative routes is particularly galling considering the substantial sums expended by the members of STOP Transource in the instant matter to date, which will increase significantly if this matter proceeds to a hearing,” the group said. “If, in fact, the existing towers can accommodate the lEC-East project, thus avoiding its devastating impacts to the members of STOP Transource and other individual property owners, they must be seriously considered.”

Pennsylvania Proceeding

Pennsylvania regulators will be receiving written testimony on Transource’s siting request until Feb. 11, with evidentiary hearings set for Feb. 21-22 and Feb. 25 to March 1 (A-2017-2640195).

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