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FERC Rejects Putting End of Life Transmission Projects Under PJM RTEP Planning Process

Paul Dumais's picture
CEO Dumais Consulting

Owner and CEO of Dumais Consulting (www.DumaisConsulting.com) which provides expert ratemaking services to energy companies. Dr. Dumais is a ratemaking and regulatory expert who specializes on...

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  • Jan 2, 2021
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In ER20-2308, PJM filed a proposal developed by PJM Stakeholders to provide a structure for end-of-life (EOL)-driven transmission projects to be reviewed and developed under PJM’s Regional Transmission Expansion Plan (RTEP).  The Proposal would: (1) obligate PJM TOs to submit a binding notification to PJM of facilities that will reach their EOL within six years; (2) require PJM TOs to develop an EOL program, including criteria, for facilities approaching EOL status; (3) require PJM TOs to provide PJM a 10-year, forward-looking list of facilities’ EOL Conditions; (4) exclude the planning of EOL facilities from the RTEP reliability exemption for transmission facilities under 200 kV; and (5) remove the planning of EOL facilities from Attachment M-3 and include all EOL facilities under the PJM RTEP planning process.  This proposal was opposed by the PJM TOs. 
FERC rejected the Proposal, finding that, under applicable agreements, the PJM TOs retain the rights to maintain their transmission facilities and when facilities should be retired, and that PJM’s authority extended to directing the operation of the transmission facilities, administering the PJM OATT, and administering the RTEP process.   FERC also found that a transmission project to address EOL Conditions that is limited to replacing existing equipment, or that involves only an incidental increase in transmission capacity, does not involve expansion or enhancement of the regional transmission system.  Such a replacement project does not fall under regional transmission planning under the PJM Operating Agreement as it relates solely to maintenance of existing facilities, and it does not “expand” or “enhance” the PJM grid.  Transmission projects to address an EOL Condition that replace existing equipment involve decisions regarding retirement and maintenance of existing equipment, a responsibility that the PJM TOs specifically retained.    

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Matt Chester's picture
Matt Chester on Jan 4, 2021

What was the motivation behind the PJM proposal-- how would EOL projects being placed under their expansion plan have been advantageous compared to the status quo that FERC pushed back with? 

Paul Dumais's picture
Paul Dumais on Jan 5, 2021

Transmission developers wanted these projects to be part of PJM's competitive RTEP process so they could bid on them.  The current process has these projects being built by the incumbent TOs.  

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