Gov. Jack Markell says utility customers have won a victory in a federal regulatory dispute over the cost of a power line operating from the nuclear power plant complex near Salem NJ.
The Federal Energy Regulatory Commission (FERC) concluded that power grid manager PJM’s plans “have not been shown to be just and reasonable, and may be unjust, unreasonable, or unduly discriminatory or preferential,” the decision stated.
“This FERC decision is an important first step to protect Delawareans from a significant electric rate increase,” said Governor Jack Markell.
The Markell administration had argued that the powerline, designed to improve the power grid in the region, would mainly benefit businesses and residents in other states.
“I want to thank the FERC for its review and very sensible conclusion that the costs of a project designed to maximize power production and improve reliability in New Jersey should not fall entirely on Delaware and Maryland consumers. I also want to thank the Delaware Public Service Commission’s members and staff and the Delaware Public Advocate for their efforts to reduce the costs that might have been imposed on Delawareans,” Markell stated.
The staff of the agency will conduct a study of the plan, although the wording of the order seems to indicate that a modification of the original proposal is likely.
The Markell administration has been under fire in some quarters for mandates on alternative energy sources and the use of cap and trade incentives to reduce emissions. The policies have contributed to high utility costs that have residents and businesses.
At the same time, customers have been demanding better reliability from utilities that are dealing with an aging grid. Projects to improve reliability have led to pushback from regulators worried that costs are not worth an increase in reliability of a few percentage points.
Those issues contributed to the proposed merger of Delmarva Power owner Pepco Holdings with Exelon. If the merger goes through Exelon would become the nation’s largest electric utility, with holdings on the East Coast, the Chicago area and the nation’s largest fleet of nuclear power plants.
Power grid manager PJM proposed the Artificial Island Project as a means of generating maximum power from the nuclear power generating units at Artificial Island and improving the reliability of area transmission lines.
PJM proposed the construction of a 230 kV power line from Artificial Island to the Red Lion substation in Delaware.
More than $100 million in costs associated with the construction of that line would have been paid for by residential, commercial and industrial consumers in Delaware, including customers of Delmarva Power & Light Company, Delaware Municipal Electric Corporation, and the Delaware Electric Cooperative.
“The State Chamber of Commerce and the Delaware Manufacturing Association are pleased that FERC will undertake a review of PJM’s proposed rate allocation for the Artificial Island Project,” said Richard Heffron, president of the Delaware State Chamber of Commerce. “As we have stated, along with Governor Markell and others, Delaware rate-payers, including businesses of all sizes, should not be penalized with undue transmission costs that don’t provide them with direct benefits.”
