Remember PJM's little boo-boo earlier this month that resulted in controlled little mini-blackouts of up to 8 hours for certain electric consumers in three states?

PJM still refuses to call it what it was... a failure of their planning process.  But, never fear, PJM and its "stakeholders" (not to include any people who were actually affected) intend to examine it ad nauseam and recommend changes.

Here's PJM's official sequence of events and excuse for its own failure.  PJM "sincerely regrets" their flub.

See another, better written and more understandable, unbiased version of events at RTO Insider here.

So, what caused this?

1. Too much generation and equipment offline for routine maintenance.  PJM pretends to be surprised that the weather was really hot during the first part of September.  I wasn't.  September can produce some really hot days -- do these guy live on the same planet as the rest of us?  Maybe PJM's historical data didn't warn them that this could happen, but have they noticed that climate change has produced some really "unusual" weather over the past few years?  Also, we could ponder what effect an odd really hot day would have on a system that keeps getting bigger and more interconnected while generators get bigger and farther away from load. 
   
2. Equipment failures.  Transformers and transmission lines in AEP & FirstEnergy's service territory failed, causing operators to have to shift loads, which caused overloads elsewhere.  Maybe if PJM didn't promote the building of new transmission to the detriment of maintenance and upgrading of existing transmission lines, equipment wouldn't be so vulnerable to failure at the first sign of stress. As well, both companies involved routinely brag to investors about cutting their maintenance costs in order to toss a few more cents into quarterly dividends.  When is PJM going to enforce proactive maintenance over shareholder dividends?  And, again, what if the PJM region wasn't increasingly dependent on long distance transmission to deliver electricity from greater and greater distances?  "Economies of scale" mean nothing when they cause expensive "load shedding" (aka BLACKOUTS).
3. Reserve generation didn't come online when called.  We pay these clowns to be ready to provide extra generation when PJM says it's needed.  But they just couldn't get it together -- because they weren't ready.

And speaking of clowns, let me introduce you to my "friend" Raymond from International Transmission Company (ITC) who opines:

Ray needs to ponder number 1 and 2 above.  This "event" can probably be blamed on increased transmission, which wasn't really "economic" at all when the lights went out in Michigan, Pennsylvania and Ohio.  Bigger, inter-regional transmission lines aren't the answer. 

Ray also needs to ponder the wonders of distributed generation microgrids, but that's not what ITC pays him to do.

Who wants to guess how much time and money PJM spends "investigating" itself... and will the lights stay on while they dither over avoiding the obvious?

After issuing a preliminary opinion that FirstEnergy's  Hatfield's Ferry and Mitchell power stations were necessary for grid reliability, PJM ultimately changed its mind last week and approved closure of the plants on October 9.

FirstEnergy, PJM and state officials have been playing a confusing game of life or death with these plants for months now.

Pennsylvania legislators and regulators have been raising a ruckus, giving plant employees false hope that they could find a way to keep the plants open.  Ultimately, all this posturing was only harmful to the actual working men and women at the plants, who have been buoyed along on false hopes, and may have squandered valuable time in securing alternative employment or training for other jobs.  Very sad.

At least nobody is playing FirstEnergy's plant closure game this time though.  Last time, FirstEnergy scored some very valuable reliability must run contracts to keep plants slated for closure open until new transmission could be built.  However, in the end, those plants will close too, and when they do FirstEnergy has nothing to offer to loyal employees.  The company simply doesn't care.

Of course we shouldn't be surprised.  PJM is a transmission operating and building cartel.  Its annual planning is based on a Regional Transmission Expansion Plan (RTEP).  Transmission is all PJM does, therefore when the only tool PJM has is a hammer, every problem looks like a nail.  While many uninformed people will blame some imaginary "war on coal," they'd be more effective pointing the finger at the pro-transmission lobby that is PJM.  Pay attention to PJM's new transmission project proposal window to find out why FirstEnergy decided to close these plants and replace them with transmission from other generators.  As PJM continues to expand, generation is increasingly centralized at generators located farther and farther  from load.  This isn't economic or reliable, but it puts money in the pockets of transmission owners, developers and suppliers.  This is the REAL enemy that closed Mitchell and Hatfield's Ferry.

So, FirstEnergy employees being kicked to the curb can develop new careers in transmission far from home, or they can invest in new opportunities in distributed generation in their own communities and join with the consumers opposing unnecessary transmission.  Whatever they choose, we wish them well.

Clean Line’s Rock Island Clean Line has been presented to the Illinois Commerce Commission as a merchant project that will export wind energy from Iowa into the east coast’s PJM Interconnection region.

We are told that east coast states have a need for imported renewable energy, so therefore Illinois must make the sacrifice for the good of society.

However, RICL now has some direct competition from another merchant project that has been developed that doesn’t require any sacrifice from Illinois landowners.

The Lake Erie CleanPower Connector, owned by merchant developer Lake Erie Power Corp., would deliver Canadian-generated electricity to the PJM grid that supplies power to 60 million Americans.  The project would involve laying two six-inch high-voltage direct current cables from Nanticoke, Ont., to Erie County, Pennsylvania, about 100 kilometres across Lake Erie.  The project is not expected to need hundreds of miles of new rights-of-way across non-renewable farmland, and therefore will not cause the kind of expensive, time-consuming public opposition that RICL has.

The transmission line is proposed to import power into PJM’s 13-state and the District of Columbia regional grid, where state renewable portfolio standards require load serving entities to meet renewable purchase mandates by supplying power from “clean” sources.  It is expected to cost $1B, much less than RICL’s proposal.

The project would be entirely financed by the private sector, and the company would make money by charging a fee to have the power transmitted across the Lake.  This is the same business model that RICL originally proposed to adopt, however doubts about RICL’s access to capital, and its sly insinuations in filings with PJM and FERC that it is worthy of having its costs regionally allocated, indicates that RICL may have plans to dump the cost of its project onto PJM ratepayers, including millions in Illinois.

Lake Erie Power has already applied to the Federal Energy Regulatory Commission for the right to transmit power. The company says a lot of environmental and engineering work has been done, and it has discussed the project with Ontario’s energy and environment ministries, and Canada’s National Energy Board.

The project’s main financial backer is Toronto-based JCM Capital, a private company that until now has invested mainly in solar power projects.

It looks like RICL now has some direct competition to supply “clean” energy to east coast states.  If the ICC approves RICL, there is no guarantee that the project will not be obsolete or have no customers before it is in service.  If other companies, such as Lake Erie Power Corp., are able to offer renewables to load serving entities in PJM at a lower cost, RICL will fail.

The ICC should carefully consider RICL’s proposal against other options and make the decision that we, as a society, will be comfortable living with for many years to come.  Illinois does not have to make the ultimate sacrifice for east coast states.  Lake Erie CleanPower Connector is a win-win solution.  RICL’s application should be denied.

Big doings tonight in Mendota, Illinois, the epicenter of opposition to Clean Line Energy's Rock Island "Clean" Line.  The Illinois Commerce Commission has scheduled a public comment hearing for 7:00 p.m.

And "the public" will be there... with bells on!

Read about it here.

Remember Matthew's story?

Here it is again, this time in the Topeka Capital-Journal.

The photo tells its own story.

These are real people.  They are not just points on a map or names on a list. 

And here's a quote that may come as a surprise to MISO and PJM:

"Developer Clean Line Energy estimated it would spend more than $900 million on the Kansas portion of the project, which would be recovered from the end users in Indiana and possibly farther east."

That's interesting, considering this project has not been approved for cost allocation in any regional planning process and has been sold to the permitting states as a merchant transmission project.  Who's going to pay for billions of dollars worth of Clean Line's transmission projects?

After years of wrongly insisting that we needed billions of dollars worth of new transmission lines to avoid "brownouts and blackouts," PJM Interconnection's incontrovertible transmission planning system failed massively on Tuesday, leaving thousands sweltering in record-breaking heat when it instituted rolling blackouts in order to avoid a cascading failure.

This story explains that PJM had allowed many different elements of its generation and transmission system to be out of service for maintenance on Tuesday, when one of FirstEnergy's transmission lines in Ohio failed.  The failure of this one line caused PJM to "order utilities to institute small, localized blackouts in Ohio and other states to prevent more widespread outages."

That's right... it was probably lack of proper maintenance as FirstEnergy continues to brag about cuts to its maintenance expenses in order to squeeze a few more pennies into shareholder dividends every quarter.

If this story is true however, then PJM has some 'splainin to do.  PJM told us we "needed" PATH because its system must be designed for contingencies where failure of one transmission line will not bring the whole system crashing down.  That would be irresponsibly poor planning.  Isn't that right, PJM?

...and they'rrrrrrrrrrrrrrrrre off!

Eager and hopeful transmission builders in PJM are now busy with their transmission line routing Etch-a-Sketches, drawing a new transmission line through your back yard, and hoping that their proposal will be anointed Miss Market Efficiency 2013 and take home the big prize.  In mid-August, PJM "began invit­ing com­pet­i­tive pro­pos­als for trans­mis­sion improve­ments to pro­vide relief at its 25 most con­gested locations."  According to RTO Insider, the deadline to submit new transmission proposals for consideration is September 26.

FERC's Order No. 1000 removed the historical "right of first refusal" to build new projects from incumbent transmission owners.  Under the prior scheme, when PJM determined that a new project was needed, it was first offered to the incumbent transmission owner in that zone.  If the incumbent declined to build it, then the project was opened to competitive bidding.  But I'm not sure that ever happened.  After all, what greedy transmission owner would ever turn down the chance to make more money with new transmission investments returning double digit interest?  Under the new scheme, when PJM identifies a new transmission building opportunity, a project proposal window is opened and all transmission owners who have been pre-qualified may submit new project proposals that solve the transmission issue.  PJM then descends into its secret underground lair with all the bids and makes a subjective selection of the contest winner.

PJM's "Market Efficiency" project "need" is based on identified "top 25 congestion events."  What is economic congestion?  It's when not enough transmission capacity exists to wheel the cheapest power available to all users.  It doesn't mean that someone's lights will go out if this power can't be transmitted from point A to point B.  It simply means that the user may have to pay slightly more for power produced locally, instead of relying on "cheaper" generators hundreds or thousands of miles away.  Economic congestion is a constantly shifting premise that can never be entirely eliminated.  At some point, the cost of building new transmission to ship power from point A is going to obviate any cost savings at point B.  Trying to build new transmission to solve an ever-changing economic and demand situation is like trying to herd cats.  And it's going to cost you... a lot!

So, where are these "top 25 congestion locations?"  RTO Insider has a handy-dandy chart here.  And it's a good thing they do, because if you want any more details than that, you have to know PJM's secret handshake to be allowed to delve into "Critical Energy Infrastructure Information" (CEII).  Transparent, right.

RTO Insider tells us that 8 of the 25 are flowgates between PJM and MISO, where power is traded between regions.  Within PJM, the most congested point is the AP-South inter­face with Bedington-Black Oak.  According to PJM, the Bedington – Black Oak Transfer Interface (Bed-Bla) includes the Bedington Black Oak 544 line, and the AP South Transfer Interface includes the Doubs - Mt. Storm 512 line and the Mt Storm – Meadow Brook 572 line.  Sound familiar, former PATH opponents?  Bedington is located in Berkeley County, WV, and was part of PATH's original configuration.  Black Oak is located near Rawlings, MD, in Allegheny County, just to the west of PATH's proposed Kemptown substation.

But, wait a tick... just last year, FirstEnergy told the WV PSC that everything was hunky-dory with its West Virginia transmission system.  Guess not, but then admitting your problems and fixing them before they get out of hand and cause the construction of new transmission projects doesn't bring home the bacon for Big Daddy Tony, now does it?

Earlier this summer, PJM's Steve Herling had much to say about PJM's new transmission proposal competition.

Steve Herling doesn't think much of you little people.  In fact, it appears that you are just so much doggie doo on his shiny, expensive shoes.  Herling sees you as someone who must be kept in the dark so that you don't interfere with PJM's "open and transparent" project selection process.

Such infor­ma­tion would include “a line from A to B, imped­ance mod­el­ing, so peo­ple can ana­lyze [the pro­pos­als],” Her­ling said. “We won’t put out right of way infor­ma­tion. You’d get the pub­lic all stirred up that ‘we’re look­ing at your property.’”

Right, Steve, but why shouldn't "the public" get stirred up about having their property taken by eminent domain to construct new transmission lines of dubious necessity?  We've already been stirred and shaken by PJM's last little foray into big, new transmission projects that brought us the wasteful, and since abandoned, PATH and MAPP projects.  We pretty much stay stirred here at StopPATH blog.  All.the.time.

And Herling also gives us a look at how PJM will evaluate project proposals in its secret underground lair:

“If you have half the right of way in hand, that cer­tainly will have an impact on cost and reg­u­la­tory risk and would prob­a­bly affect con­struc­tion time,” Her­ling said. “To give you credit, we would have to dis­close some infor­ma­tion. We don’t have to talk about indi­vid­ual pieces of prop­erty you have."

So, a transmission developer who has land held for future use in its collection of assets would have a leg up on building new projects?  That hardly seems fair, when that property was paid for by ratepayers, and the competition does not have the same ability to have the public pay to buy it valuable assets that can be used to win future transmission projects.  In fact, it's sort of like a new and even more lopsided ROFR, isn't it?  FERC said ROFRs are no longer legal in Order No. 1000.

In another thoughtless move, "the RTO plans to hire inde­pen­dent con­sul­tants to val­i­date devel­op­ers’ cost esti­mates and iden­tify poten­tial reg­u­la­tory risks, such as the like­li­hood of obtain­ing sit­ing for rights of way."

Gosh, I wonder where PJM is going to find an "independent" consultant who hasn't worked for any of the pre-qualified entities in the past and is not expecting to do so in the future?  Yeah, good luck with that, PJM.

Herling believes all this nonsense is transparent:

“If it becomes obvi­ous that we’re rely­ing heav­ily on one piece of infor­ma­tion we’re going to have to make it pub­lic — and you might still not get cho­sen,” he con­tin­ued. “… We’ll have to make sure it’s trans­par­ent and above board to defend our­selves against challenges.”

And now, thanks to the invaluable RTO Insider and this blog... it is a little more transparent than PJM envisioned it would be.  Now YOU know about it.  Stay tuned...

...Karma came a'knocking yesterday.

The Plain Dealer reports that FirstEnergy failed a Nuclear Regulatory Commission "force on force" exercise at its Beaver Valley nuke.

FirstEnergy says that its failure was a result of the way the NRC inspectors conducted the exercise.

In other news,  a group of local residents filed a lawsuit alleging that FirstEnergy's Hatfield's Ferry coal-fired generator was damaging their health and their property.  Hatfield's Ferry is one of two plants that FirstEnergy has slated for closure in October.  Political hijinks have ensued, attempting to keep the plants open.  PJM has determined that the plants are necessary for reliability, but FirstEnergy is pretending to proceed with closure, hoping it might get a better deal if it continues this silly game of chicken.

And, closer to home, a Potomac Edison publicity stunt went wrong yesterday when spokesflack Crapaud Meyers got cornered about how the WV PSC General Investigation was going.

Unfortunately, the wanna be journalists at WHAG's summer training camp turned it into a one-sided infomercial, but that didn't dampen Crapaud's enthusiasm for twitching his way through making crap up.  Crapaud now says Potomac Edison is working on solving the problem, when just a few months ago, the company told the PSC that there was no problem to be solved.

Watch the video to enjoy Crapaud's newly-evident twitch.  What it is that FirstEnergy does to its employees that makes them twitch like that when they lie?

Fitch Ratings issued a report* today that says PJM's recent capacity auction results "indicate that a strong rebound in regional power prices appears unlikely."

Despite a whole lot of big talk by investor owned utility CEOs over the past several years that demand is going to explosively rebound at any second, the analysts aren't buying it.  And furthermore, prospects for PJM merchant generators will remain "dim" for the foreseeable future.

What has killed prices on PJM's capacity market?

1.    Demand management (users who are paid to reduce usage at peak demand periods)

2.    Energy efficiency (users who are using less electricity overall through energy saving improvements to their home or business)

3.    Distributed Generation (users who are now producing their own electricity on site)

This isn't really a big surprise.  We've been talking about this here on the blog for quite a while.  What is news is that now the credit rating agencies are also acknowledging it.

"Fitch expects demand response (DR), energy efficiency (EE), and distributed generation (DG) will play a large and growing role in PJM, either reducing total demand or displacing existing traditional generation thereby exerting a restraining, secular influence on future power prices."

This is bad news for companies like FirstEnergy.

"Capacity auction prices under the reliability pricing model (RPM) signal ongoing pressure on electricity margins and credit metrics of merchant generation companies operating in PJM. Fitch expects these companies to continue to rationalize operations to mitigate revenue and margin pressure, and sustain creditworthiness. Utilities most at risk are investment-grade-rated affiliated generators with high debt burdens relative to cash flows and earnings."

Even FirstEnergy's plan to "sell" one of their merchant baseload coal plants into West Virginia's regulated environment can't save them now.  It looks like FirstEnergy will continue to flounder financially while it attempts to rip off its customers, and consumers in general, in order to try to fool investors and stay a float just a little while longer. 

This is good news for consumers!

*Registration required (but it's free and worth it!)

This article in the Pittsburgh Business Times says that FirstEnergy has begun issuing "layoff notifications" to employees of its Hatfield's Ferry and Mitchell plants that are slated for closure on Oct. 9.

Last week, PJM Interconnection determined that the two plants are necessary for the reliability of the electric grid it manages.  As a result of PJM's determination, FirstEnergy will be paid generously to keep the plants open until upgrades to the grid or new generators can come online.

Either FirstEnergy is playing coy in a sad attempt to up the ante on cost to remain open, or he really is going to run the two plants all by his lonesome, assisted by his completely useless evil hench-staff and a couple of cocktail waitresses.

Note to self:  Buy fuel for generator.