Federal agency rejects proposal to give utilities more control over transmission planning, siding with OPC and others
BALTIMORE – The Federal Energy Regulatory Commission (FERC) on Friday rejected proposals by PJM Interconnection, LLC, the regional transmission operator, and a group of utilities to consolidate their control over transmission planning, agreeing with the Maryland Office of People’s Counsel and others that challenged the proposals. FERC found the proposals violated its requirement that PJM “be independent of control by any market participant or class of participants in both reality and perception.”
“FERC’s decision vindicates our concerns that this effort from the utilities and PJM would have further reduced PJM’s independence,” said Maryland People’s Counsel David S. Lapp. “The ruling sends an important message to PJM to refocus on providing reliable service for customers at the lowest reasonable cost rather than turning to strategies that largely serve the financial interests of its most powerful corporate players and that put customers at risk.”
FERC’s order addressed filings by PJM and the transmission-owning utilities—including Maryland utilities owned by Exelon (Baltimore Gas & Electric, Pepco, and Delmarva Power) and FirstEnergy (owner of Potomac Edison, which serves Western Maryland)—that together would have changed how PJM conducts transmission planning, in part by modifying the contracts between transmission-owning utilities and PJM. OPC argued that the changes “would cement PJM’s planning process as one that is not open, transparent, or inclusive.”
OPC’s filings further warned that, if granted, PJM’s proposed changes 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 and more costly projects.
In rejecting proposed changes to the agreement between PJM and the transmission-owning utilities, FERC said it was “concerned that these provisions violate the Commission’s independence requirement by providing a single stakeholder group, specifically, the PJM [transmission owners], with undue influence over transmission planning and expansion, and thereby reducing PJM’s independent governance.”
FERC’s order rejected a pair of filings from PJM and the transmission-owning utilities, accepting many of the arguments presented by OPC, other state consumer advocates, and a group of state regulatory commissions, including the Maryland Public Service Commission.
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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