Delaware Division of the
Public Advocate

Deputy Public Advocate speaks at PJM Annual Meeting

Date Posted: Tuesday, May 23rd, 2017

Deputy Public Advocate, Ruth Ann Price, spoke at the PJM Annual Conference last week on cost containment. The RTO Insider article (May 21, 2017) link is provided below along with the excerpt of Ms. Price’s comments. We are proud to represent Delaware as the PJM stakeholder.

“PJM has yet to complete a competitively bid transmission project since FERC opened the process to competition with Order 1000. Its first attempt, a transmission line across the Delaware River that connects to the nuclear plants on New Jersey’s Artificial Island, has been mired in controversy for years. While the board resumed the project in April, complaints remain about PJM’s proposed method of allocating the costs to customers.

Representatives of Delaware, which stands to shoulder more than $260 million of the project’s projected $280 million cost, have offered the loudest and most consistent opposition, arguing that their state — which has far fewer ratepayers than other PJM member states — will be disproportionately impacted. They say PJM’s usual allocation method, which is based on resolving downstream power-flow issues, is not appropriate because the project is instead meant to resolve grid-reliability issues that are beneficial to all members.

Ruth Ann Price, Delaware’s deputy public advocate, called it “trying to fit a square peg into a round hole” and said the problem needs to be addressed communally because “if it goes badly, we’re all going to be blamed for this.”

She thanked the board for its “sensitivity” in considering Delaware’s perspective on the topic. The board suspended the project in August and called for a complete reanalysis by PJM staff. That analysis resulted in changes to the project’s scope that cut the price tag nearly in half. LS Power was awarded the project in part because its bid included cost caps that provided “greater cost certainty,” PJM said. In approving PJM’s analysis, the board instructed staff to report on cost-allocation alternatives. (See Board Restarts Artificial Island Tx Project; Seeks Cost Allocation Fix.)

For future projects, Price said, the board should require more transparency about submitted bids and ensure customers receive essential information. “States should know to a reasonable statistical approximation what these projects mean in terms of costs to their residents,” she said.

More transparency is also needed, she said, with incumbent TOs’ supplemental projects. “PJM must take more responsibility, I believe, in ensuring stakeholders that these projects are necessary and fundamental to the wellbeing of the transmission system,” she said.”

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