OPC asks regional transmission operator to address inconsistencies and speculation in utility load forecasting
BALTIMORE – The regional transmission operator, PJM Interconnection, LLC, should clarify and add rigor to its current approach to forecasting large load increases, such as those triggered by data center customers, the Office of People’s Counsel said in a letter to PJM today.
PJM staff appear to be following a “business as usual” approach, OPC’s letter explained. That approach “does not in any way attempt to distinguish highly likely future load growth from highly uncertain and speculative components,” OPC said, further noting that utilities across PJM use inconsistent criteria in their load growth projections, resulting in a “distorted load forecast.”
“Load forecasts are a critical step in a process that can trigger massive transmission investments that flow through to utility customer bills,” said People’s Counsel David S. Lapp. “PJM’s lack of clear guidance on what utilities should include in their forecasts leaves customers vulnerable to utility investments that may never be useful. And those costs could be imposed on customers across the 14 PJM jurisdictions even if just one utility’s over-optimistic forecast turns out to be flawed.”
OPC’s letter notes that although PJM staff review utility projections of load growth and may reject them, PJM does not request information from utilities that would enable staff to understand the large customer’s level of commitment to actually build the facility for which load increases are projected. Some of those requests may be speculative, while for other requests the customer may have committed financially and thus have “skin in the game” that mitigates the risk of new transmission investments.
PJM currently does not ask utilities to provide information “that would be needed to evaluate how robust or likely the projections are or whether there are major inconsistencies in the various [utilities’] requests,” the letter explains.
The letter asks PJM to direct its staff to develop criteria and guidance for utilities to distinguish in their forecasts projected load growth that is likely to occur—based on historical projections, customer plans, firm commitments, and potentially other considerations—from customer requests or utility projections that do not have such support and are more uncertain.
Several other state consumer advocate offices joined OPC’s letter, including the Office of the Illinois Attorney General, the Delaware Division of the Public Advocate, the Illinois Citizens Utility Board, the Public Staff of the North Carolina Utilities Commission, and the Office of the Ohio Consumers’ Counsel.
The Maryland Office of People’s Counsel is an independent state agency that represents Maryland’s residential consumers of electric, natural gas, telecommunications, private water and certain transportation matters before the Public Service Commission, federal regulatory agencies and the courts.
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