The Federal Energy Regulatory Commission (FERC) granted a rehearing to consider a lower cost allocation for Delaware and Maryland ratepayers related to the $278-million Artificial Island transmission line project.
Delaware Gov. John Carney and Maryland Gov. Larry Hogan issued the following statement:
Almost two years to the day since grid operator PJM approved the building of the Artificial Island transmission line, FERC has agreed with our request to grant a rehearing to consider more fairly allocating the costs of the project. Under the current cost allocation, residents and businesses in Delaware and Maryland would fund the vast majority of the project through higher electric bills, while receiving few direct benefits. As we have said all along, that is a bad deal for the residents of our states. We are pleased FERC has granted a rehearing.
Last summer, PJM published a report detailing two alternative methodologies for identifying the beneficiaries of the Artificial Island project. These methods produced a result that better represented the regional benefits to be obtained, and we are thankful to FERC for recognizing the validity of these alternatives and granted this paper rehearing.
Over the past several years, we repeatedly expressed our concerns over the previous cost allocation methodology, which put more than 90 percent of the cost of the transmission line on Delmarva Zone ratepayers. As we have stated many times, most recently in our November 27, 2017 letter to FERC, we are not opposed to the Artificial Island project itself, but object to unfair and unreasonable costs for our residents and businesses.
The project comes as concerns have been growing over the long-term future of the Salem nuclear plant complex as wholesale power prices drop due to abundant supplies of natural gas and energy conservation efforts.
Ratepayers are likely to subsidize the plant as the transition continues away from coal-fired generation.
The power line project would connect to the grid in Delaware as a way to stabilize power coming out of the massive complex that is located in an isolated area along the Delaware River and is some distance away from population centers.
Under the current formula, Delaware and Maryland ratepayers would pick up most of the tab for the project, even though they would derive little if any benefit. Power costs to business are already among the highest in the nation.
