PJM proposal would harm consumers by giving utilities greater control over electric transmission system planning, OPC tells federal agency
BALTIMORE – Proposals by PJM Interconnection, LLC, the regional transmission operator, and a group of transmission-owning utilities are aimed at changing transmission-planning protocols to give unique rights to the utilities and enable secret discussions between them and PJM, the Office of People’s Counsel said in protests filed yesterday. The proposals are contrary to federal requirements that PJM be “independent,” according to OPC’s protests, which were filed with the Federal Energy Regulatory Commission, with OPC asking the agency to reject both filings.
The enhancements to the utility transmission owners’ control over planning decisions would come at the expense of every other PJM member, including state consumer advocate offices, according to OPC’s filings. If approved as proposed, a single transmission utility could exercise new, unilateral rights to prevent PJM from implementing a least-cost transmission plan that may be unfavorable to the utility’s financial interests, while advancing its own investments that are more profitable to its shareholders.
“PJM’s ability to operate independently from its transmission-owning utilities is already highly suspect,” said Maryland People’s Counsel David S. Lapp. “Its current proposal would give utilities even greater influence over transmission planning, which we can expect would be used to further the interests of their investors—not their customers or state policy objectives.”
At issue before FERC are filings by PJM and the transmission-owning utilities that together would change how PJM conducts transmission planning by modifying the contracts between transmission-owning utilities and PJM, which contracts FERC previously approved. Together, the changes “would cement PJM’s planning process as one that is not open, transparent, or inclusive,” OPC’s filing said. FERC’s approval would defeat a core objective that FERC has articulated about PJM’s operations: “the principle that a member or group of members shall not have undue influence over the operation of the PJM Pool.”
In addition, OPC’s filings point out, the contractual changes PJM and the transmission-owning utilities are seeking would give utilities the ability to discuss and negotiate regional planning issues with PJM privately, leaving PJM with a “secretive transmission planning process.”
OPC’s filings warn that, if granted, PJM’s filings could be used by transmission-owning utilities to thwart competition for transmission projects, allowing those utilities to make unilateral decisions to plan or construct less-efficient, more costly projects.
“It is also reasonable to presume that many, if not all the incumbent PJM [transmission owning utilities], are not welcoming to competitive transmission development and view the award of competitively selected projects to nonincumbent transmission developers as contrary to their financial interests,” the filing explains.
OPC’s filings were joined by the New Jersey Division of Rate Counsel and the Office of People’s Counsel for the District of Columbia.
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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