Another transmission planning win for IOUs...this time in PJM.

FERC approves IOU proposal to give themselves control over replacement of existing facilities, incentivizing them to rebuild existing lines rather than engage in regional planning.

http://elibrary.FERC.gov/idmws/file_list.asp?accession_num=20200811-3078 https://twitter.com/AriPeskoe/status/1288835989658636288

Background: In 2018, FERC found that PJM IOUs’ local planning processes (Supplemental Projects) failed to provide stakeholders with meaningful opportunities to participate and therefore violated FERC's transmission planning principles. http://pjm.com/-/media/committees-groups/task-forces/trpstf/20180223/20180223-item-02-ferc-ruling-on-docket-nos-el16-71-000-and-er-17-179-000.ashx

In their compliance filing, IOUs proposed to give themselves total control over the future of the local planning process by moving the relevant provisions from the operating agreement to the tariff. IOUs can unilaterally file changes to the tariff but not to the op agreement.

In that proceeding, FERC faulted IOUs for planning local projects in secret. IOUs responded that transparency is pointless where "the most obvious solution" is to rebuild existing, aging infrastructure. (See P 79 of previous link)

Of course, that response overlooks the entire point of transparency and stakeholder participation. "The most obvious solution will not always be the best solution."

Anyway, having gained the power to unilaterally file amendments to local planning, IOUs sought to expand that power in this proceeding by bringing additional categories of projects under the local planning process.

Opponents argued that the IOU proposal will result:
-mis-allocation of transmission costs and benefits
-less competition
-fewer regional projects
-creation of a "black box around transmission planning into which only the IOU and PJM may look"

FERC's response: "Protesters raise concerns that the majority of transmission planning in PJM is occurring outside the purview of the PJM RTEP process. We find these arguments to be beyond the scope of this specific FPA section 205 proceeding."

Since Order No. 1000, PJM IOUs have assiduously avoided regional planning, tripling spending on local uncompetitive projects as the value of PJM-approved regional projects has dropped by a third. https://www.pjm.com/-/media/committees-groups/committees/teac/2020/20200512/20200512-item-10-2019-project-statistics.ashx

This order will exacerbate that trend. As opponents argued - IOU-controlled local planning is now an "expansive catchall that allows the PJM TOs to declare whatever they choose to be a [local project] absent defined PJM criteria."

To justify their perpetual ownership of the PJM network, IOUs point to their 20-year old foundational contract with PJM. IOUs argue that they didnt transfer local planning or "asset management" activities to PJM and therefore they have "rights" in perpetuity over such activities.

But there is no law or contract that gives IOUs any such rights in the first place. They conjured them out of thin air. 100 yrs ago states effectively gave IOUs exclusive service areas for the purpose of providing local service, not owning the interstate delivery system forever.

If you like this thread but wish you could read an 80 page version, well I have a forthcoming article for you...