Gov. Jack Markell says he is continuing to fight plans by the regional grid operator to saddle Delaware ratepayers with the cost of a power line project that is of little direct benefit.
In a filing submitted Thursday to the Federal Energy Regulatory the governor commented on a case that could set a precedent for FERC’s decision on grid operator PJM’s proposed Artificial Island project. Markell supported a complaint brought forth by Linden VFT, an owner of power lines in New Jersey and New York that is disputing another PJM construction plan for similar cost allocation reasons.
“Both cases demonstrate the need for change in the process that decides who pays how much for power line construction,” said Markell. “The Artificial Island project is not an isolated instance, but rather part of a broader issue. FERC has an opportunity to modify how costs are allocated so that those who are required to pay transmission project costs align with those who benefit from the project.”
“Under PJM’s proposal, the Artificial Island project costs would be borne by citizens and businesses in the Delmarva region who would pay higher electric rates. This result is clearly unfair given that the project is being developed to maximize output from generators in New Jersey that serve customers throughout the PJM region, many of whom would not be required to pay any of the costs under PJM’s proposal.”
The complaint filed by Linden VFT came in response to a cost allocation proposal submitted by PJM to FERC for a 2013 transmission project. The projects involved several new facilities located in New Jersey. Linden is being assessed a large portion of those costs for the projects, while other parties receive the benefit.
Markell has previously weighed in on the Artificial Island project issue. In a letter to the PJM board, he stated that a cost allocation that results in Delmarva customers bearing almost all of the costs associated with the selected proposal, when the primary purpose of the project was “maximizing power from generating units in New Jersey that serve customers throughout the [13 state] PJM region,” would be “inequitable and unreasonable”.
The PJM board decided to move forward with PJM’s proposal to require Delawareans to pay for nearly all of the costs for constructing the new line. PJM is expected to file its cost allocation proposal with the FERC before the end of the month.
“This filing represents another opportunity for the State of Delaware to remind the FERC that while cost allocation is subject to FERC rules, those rules “require cost allocations to be reasonable and allocated in a manner commensurate with project benefits”; and that allocating most of the costs to Delaware and Maryland customers “is neither reasonable nor fair,” Markell said.
Electric costs have become an issue in Delaware, which is struggling with the loss of manufacturing jobs, the latest blow coming with the closing of the DuPont Edgemoor site next month.
Critics claim the state’s alternative energy policies and participation in cap and trade emissions limits have contributed to the higher costs.
