As expected, the board of grid operator PJM Board approved lifting the suspension on a project to improve the electric distribution system.
The board did offer to supply information that could lead to a modification of the widely disliked allocation formula.
The controversial project would run a line into Delaware to provide more stability around the nuclear power complex that is some distance from many large users and heavily populated areas.
Government officials in Maryland and Delaware say the Delmarva Peninsula would bear the brunt of the costs of the project but would derive few improvements in reliability.
“Under the current cost allocation, this project is a bad deal for Delawareans and Delaware businesses,” said Gov. John Carney. “We are hopeful that new data and analysis from PJM will help lead to a fair cost allocation – one that doesn’t ask ratepayers on Delmarva to pay higher electric bills, without receiving much in return.”
“Without action from federal regulators, Maryland residents and businesses still stand to pay an unfair share of the costs. With that in mind, we welcome any action on PJM’s part to address our serious concerns,” said Maryland Gov. Larry Hogan. “This is a step in the right direction, but we will continue to advocate for fair and equitable division of costs among ratepayers.”
Delaware and Maryland have appealed the current cost allocation to the Federal Energy Regulatory Commission (FERC). Governor Carney and Governor Hogan urged PJM to support the rehearing in their letter.
The charges for the line would be added to electric bills, with a few large users paying thousands of dollars more each month, critics contend.
“The board reached its decision after thoughtful review of additional analysis and stakeholders’ input,” said Andrew L. Ott, PJM CEO. “We are satisfied that the original solution – with modifications – is the right solution to address operational performance and reliability issues related to Artificial Island generating facilities .”
The board initially approved the project in 2015 as a result of a competitive solicitation process. The board called for construction of a 230-kilovolt transmission line under the Delaware River. It designated LS Power to build the line and Public Service Electric & Gas and Delmarva Power for other portions of the project, including electric substation work.
In August 2016, the board suspended the project and directed PJM to perform an analysis to support a future course of action. PJM reviewed its analysis with a stakeholder advisory committee.
The board reinforced support for building the 230-kilovolt line from the area where the Salem and Hope Creek nuclear facilities operate to a new substation to be built in northern Delaware.
Among the modifications to the original solution, the line now will be connected at Hope Creek Substation instead of Salem Substation. The project is expected to cost about $280 million and expected to be in-service June 2020.
The Board of Managers directed PJM to offer information that could allow states to come up with another cost allocation proposal.
“Importantly, we anticipate this information will still demonstrate the logic supporting an allocation of project costs to beneficiaries located in the Delmarva region, along with beneficiaries in one or more neighboring states,” a PJM release stated.
