Costly local transmission projects that avoid competition are causing unlawful rates, OPC tells federal regulators
BALTIMORE – A regulatory gap that allows local transmission projects to avoid regional planning is resulting in unjust and unreasonable rates for customers, the Office of People’s Counsel said in a complaint filed on Thursday with the Federal Energy Regulatory Commission (FERC). The complaint alleges that the failure of regional transmission organizations—including PJM Interconnection, LLC, the regional transmission operator for Maryland—to require planning for local transmission results in unneeded projects, high prices for consumers, and a transmission system that fails to address the challenges of a changing energy landscape.
“Transmission costs are surging,” said Maryland People’s Counsel David Lapp. “Of the billions of dollars spent on transmission in PJM since 2014, about 85 percent occurred through lower-voltage local projects, and nobody at PJM made sure these projects were cost-effective and made sense. PJM utilities have reported to Wall Street analysts they will spend more than $50 billion on transmission projects in the coming years. Maryland customers deserve effective oversight of these local transmission projects to make sure they aren’t just lining investors’ pockets.”
OPC filed the complaint jointly with a broad coalition of energy consumer groups, consumer advocates, and public interest organizations.
FERC’s rules require that regional transmission organizations plan and develop cost-effective transmission projects, the complaint explains. But FERC’s rules have a big loophole that allows lower-voltage transmission line projects that utilities deem “local” to be built with little to no oversight and without competition to select the most cost-effective developer.
Importantly, including low-voltage lines in the regional planning process means that the projects will be subject to a competitive project proposal window and oversight from transmission system planners. By contrast, current rules require only that the utility building the low-voltage line show that the project will not cause instability to the system.
“We hope FERC acts swiftly on this complaint to help ensure the transmission system can meet future needs at the lowest cost,” Lapp added.
The complaint asks FERC to require all lines 100 kV and above to be included in the regional planning process and for FERC to create an independent transmission planner to ensure the best projects for consumers and the interconnected grid is developed in the regional plan.
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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