The RD [Recommended Decision] confuses federal and state roles by attempting to overturn PJM’s transmission planning role as approved by FERC. It is undisputed that states retain jurisdiction over transmission siting and construction issues. However, FERC has exclusive jurisdiction over interstate transmission planning and has approved PJM’s role as outlined in its tariff. FERC held in Order 1000 that the regional planning requirements, including transmission planning to address market efficiency considerations, were being adopted pursuant to FERC’s rate jurisdiction under Section 206 of the Federal Power Act. The Federal Power Act preempts state jurisdiction over the wholesale rates of electricity in interstate commerce.

to explain something to a woman in a condescending way that assumes she has no knowledge about the topic

In the simulation that PJM performed in 2015, the PROMOD model simulated a congestion cost of $110 million occurring on the AP South Reactive Interface in 2019. Tr. at 2936. According to the simulation, the AP South Reactive Interface had the highest congestion cost simulated in 2019 when compared to the Safe Harbor-Graceton, Conastone-Peach Bottom, and AEP-DOM constraints. Id. In reality, Congestion on the AP South Reactive Interface cost approximately $14.5 million in 2019, substantially lower than predicted by PJM’s forward-looking models. Tr. at 2921. This indicates the erroneous assumptions that were used to calculate the benefit-cost ratio that PJM relied upon when selecting the IEC Project for approval.

Transource is a foreign company asserting that economic congestion creates artificially low prices in the unconstrained region resulting in rates that are discriminatory and unfair for customers in the constrained region. I reject this premise as evidence to find “need” pursuant to the meaning of the term in 52 Pa. Code Section 57.76(a)(1). Economic congestion is not a form of rate discrimination that implicates the Commission’s authority, but may be an appropriate market-based response to the wholesale power market. Any difference in rates above versus below the point of congestion or constraint can represent reasonable differences in the cost to serve customers in the constrained region as opposed to those in the unconstrained region. I do not find rates in a constrained area necessarily per se discriminatory.

No one from Maryland or Washington D.C. testified at any public input hearing to complain about discriminatory rates in favor of the project. Some individuals from Maryland spoke against the project at public input hearings. For example, Patty Hankins of 229 St. Mary’s Road, Plyesville, Maryland testified against the project as there was insufficient cost updates from 2015 data to warrant the project. She feared projected costs kept escalating and she argued the existing Otter Creek to Conastone 230 kV line rebuilt by PPL could carry two 230 kV circuits but was currently carrying one as of June 1, 2018.  Ms. Hankins testified that the cost to add 230 kV lines to PPL’s existing transmission towers would cost less than the IEC project.

I heard no complaints from any individuals that rates were too high or prices discriminatory in Washington D.C. or in Maryland compared to Pennsylvania, or that they did not have reliable electric service in those areas. Only Transource’s witnesses testified that there was price discrimination. PJM did not identify or consider non-transmission alternatives to alleviate the projected congestion in the AP Interface.

PJM’s forward-looking model projects that if the IEC Project is constructed, the PJM region would only experience net benefits of $32.5 million over a period of 15 years and Pennsylvania, in particular, would experience a net increase of $400 million in wholesale power prices over that same period of time. This result would be produced by constructing a transmission project that is guaranteed to cost at minimum $476 million and will impact the natural, historic, scenic, and aesthetic lands of Franklin and York Counties, Pennsylvania, and the property rights/market values of those Counties’ landowners. Accordingly, while there may be some forecasted price differences in PJM’s forward-looking models, any reduction in “price discrimination” for regions below the constraints is outweighed by the anticipated harm caused to Pennsylvania by the IEC Project.

Route C selected as the Proposed Route for the West Portion of the IEC Project does not have less of an overall impact to the environment than would be utilizing at least in part the existing parallel route owned by West Penn Power already in existence. A separate bid by West Penn Power dubbed project 18h, was rejected by PJM during the competitive bidding process. However, from an environmental impact view, using a line and its ROW already in existence would have less environmental impact on Falling Spring, cross country course, organic farmland, vegetation, woodlands and wildlife along the West Portion of the IEC Project. Thus, I cannot find “minimum adverse environmental impact” as required by Section 57.76(a)(4). There is no evidence Transource and West Penn Power ever negotiated or agreed to any arrangement whereby West Penn Power’s existing parallel transmission system could be upgraded or utilized for an alternative route. I am persuaded by the business representatives, Superintendent, Quincy Township Supervisors, and landowners to find the environmental impact in Franklin County is not minimalized by the Western route.

The OCA submits, however, that this market efficiency project designed to address economic congestion on the bulk electric grid cannot meet the constitutional, statutory, and regulatory standards under Pennsylvania law. Under the evidence presented, actual congestion on the AP South Reactive Interface has diminished precipitously in the years since this proceeding began, subverting any reason to construct this Project. Moreover, PJM’s benefit-cost analysis, which the Company relies upon to allege that this Project will provide sufficient benefits in excess of the costs, contains significant deficiencies such that it cannot support the necessary findings under Pennsylvania law. Most importantly, PJM’s benefit-cost analysis ignores the detrimental impacts of increased wholesale power prices that accrue to certain transmission zones as a result of constructing the IEC Project, including many transmission zones in Pennsylvania seeing increased costs for Pennsylvania ratepayers. In addition, PJM’s process for approving the IEC Project failed to consider reasonable alternatives and did not address the serious environmental and property issues raised.

... the Commission should not approve the IEC Project based upon the Company’s claims of potential reliability violations occurring in 2023 in the absence of the IEC Project. The Company’s belatedly filed evidence is based upon limited testing and outdated data. Moreover, the facilities that may experience these potential violations are aging facilities that are due for an upgrade in the coming years. Indeed, since 2018, several of the facilities that the Company claims will overload are undergoing rebuilds that may increase capacity. The OCA submits that if the IEC Project is not approved, PJM has the means to determine if these potential future reliability violations will still occur and find more efficient, targeted proposals to correct these issues.

... Pennsylvania would also be burdened by new transmission infrastructure construction in Franklin and York Counties, including a new substation and a new transmission line in Franklin County, 13.6 miles of which will be constructed over presently unencumbered land, and lengthy re-builds of additional transmission infrastructure and a new substation in York county. Accordingly, these economic and environmental harms demonstrate that the IEC Project fails to meet the constitutional, statutory, and regulatory standards under Pennsylvania law.

For the reasons set forth herein, the Commission should deny the Company’s Applications.

...I reached the same conclusions whether we look only at Pennsylvania or whether we look at PJM as a whole. Either way this project makes no sense. You don't spend 350 or $400 million so you can save $12 million over a 15-year period. It makes no sense. Q. Only under your cost-benefit analysis; is that right?
A. Under any logical view of what's happening. If you build this project, you can save utilities in Maryland, Virginia, and the District of Columbia almost a billion dollars over 15 years; and, if you don't build that project, that same power is going to be used in Pennsylvania, Ohio, Illinois, and New Jersey at a cost of about $970 million.
So, yes, there is some congestion. There is a technical problem to be solved, and the value of that congestion as laid out in the most recent estimate we have is less than a million dollars a year over the next 15 years. So this project makes no sense. I don't care how you run the numbers or how you talk about it. Those are the latest numbers we have, and you can exclude them if you want to but that's reality.

OPC also submits that the Project could be detrimental to Maryland customers if Transource does not also receive approval from the Pennsylvania commission (or the Project is otherwise abandoned by PJM) because, if so, Transource and BGE may be entitled to the recovery of prudently incurred abandonment costs. The issue of abandonment costs is an appreciable risk. Regarding the mitigation of such costs, in Case No. 9470—a separate but related CPCN proceeding—Potomac Edison, the applicant transmission owner, committed to limiting its construction costs, to the extent possible, pending the ultimate approval of the combined IEC Project in Maryland and in Pennsylvania.   The Commission finds that a similar limitation under the circumstances is warranted. At the February Settlement Hearing, Transource witness Weber testified that Transource has incurred approximately $35 million to date, non-inclusive of Transource’s additional firm price contracts. Witness Weber stated that Transource would wait for approvals from both Maryland and Pennsylvania before beginning construction. The Commission will hold Transource to this commitment.

That as an additional condition of the Commission’s approvals in this matter, Transource and BGE are directed to minimize all construction activities and additional construction-related costs, as they relate to the Maryland portions of the IEC Project, pending the regulatory approvals of Alternative Project 9A by the Pennsylvania Public Utility Commission and final approval by the PJM Board.

The Transource Project (Project 9A) is an example of a PJM approved market efficiency project that passed PJM’s 1.25 benefit/cost threshold test despite having benefits, if accurately calculated, that were less than forecasted costs. This project also illustrates the risks of ignoring potential cost increases given that the costs included in the benefit/cost calculation are nonbinding estimates. The Transource Project was proposed in PJM’s 2014/2015 RTEP long term window. PJM’s 2014/2015 RTEP long term window was the first market efficiency cycle under Order 1000. The 2014/2015 long term window was open from November 1, 2014, through February 28, 2015. This window accepted proposals to address historical congestion on 12 identified flowgates. The AP South Interface was one of the 12 identified flow gates listed in the 2014/15 RTEP Long Term Proposal Window Problem Statement.

A total of 41 market efficiency projects were proposed to address congestion on the AP South Transmission Interface. Transource Energy LLC, together with Dominion High Voltage, submitted a proposal referenced by PJM as Project 9A (or IEC or the Transource project) to address AP South related congestion.


Project 9A was considered a subregional project based on its voltage level, meaning that changes in forecasted system costs were not considered for purposes of estimating the benefit/cost ratios. Instead, only reductions in zonal load costs were considered as a benefit of the project. Any increases in zonal load costs were ignored in the analysis.

The initial study had a benefit to cost ratio of 2.48, with a capital cost of $340.6 million. The sum of the positive (energy cost reductions) effects was $1,188.07 million. The sum of negative effects (energy cost increases) was $851.67 million. The net actual benefit of the project in the study was therefore $336.40 million, not the $1,188.07 used in the study. Using the total benefits (positive and negative) to compare to the net present value of costs, the benefit to cost ratio was 0.70, not 2.48. The project should have been rejected on those grounds.

Subsequent studies of the 9A project have reduced its benefit/cost ratio as a result of increased costs, decreased congestion on the AP South Interface since 2014 and a reduction in peak load forecasts since 2015.

Projecting speculative transmission related benefits for 15 years based on the existing generation fleet and existing patterns of congestion eliminates the potential for new generation to respond to market signals. The market efficiency process allows assets built under the cost of service regulatory paradigm to displace generation assets built under the competitive market paradigm. In addition, there are significant issues with PJM’s current benefit/cost analysis, which cause it to consistently overstate the potential benefits of market efficiency projects. The MMU recommends that the market efficiency process be eliminated.

The project is designed to provide a new electricity source for the region with the construction of 15 miles of transmission lines and improvements to four substations in Amherst, Appomattox, Campbell and Nelson counties.
The completed transmission line would strengthen the local power grid, increase reliability to the area and reduce the likelihood of power outages, according to APCo spokesperson George Porter. He said Albemarle, Appomattox, Amherst, Campbell and Nelson counties all would see increased service reliability.

There are also supplemental needs in the area that were evaluated together with the baseline violations. The supplemental needs in the area are driven by equipment condition for the Amherst – Clifford 69 kV and Clifford – Scottsville 46 kV circuits. The lines were built in 1960 and 1926 respectively, on wood pole structures and have many open conditions due to rot, woodpecker/insect damage, split poles, broken insulators, and damaged shield wire. The recommended solution addresses both the baseline and supplemental needs in the area and is the most cost effective. The estimated cost for this project is $85 million, and the required in-service date is December, 2022. Based on their FERC 715 TO Criteria, the local transmission owner, AEP, will be designated to complete this work.

Along the multiple possible routes, more than 300 landowners had the potential to be effected — largely by the 70- to 90-foot galvanized steel poles that would be constructed to carry the transmission lines.

Martin’s neighbors, Bill and Cole Carney, harbor similar fears. One of the proposed routes would cut through their property. Owners of the 1851 plantation home that gave Tin Top Place its name, they have been on the property for about a year. Budding farmers with plans to expand and potentially start an organic farm, Bill Carney said it will render swathes of their land useless, force acres of woods to be cut down and prevent them from moving forward with plans for the farm.
“How are we supposed to sell products if we have an industrial power line coming through our supposed organic fields?” said Cole Carney. “We never would have bought had we known this was coming.”

Harlan Electric representatives are securing subcontractors and will be working with local contractors such as Newville Construction of Newville.

"Jim spoke from his perspective as the owner of Eleven Oaks Farm on his experiences with utilities and agriculture. Transource has not yet made a selection of the construction companies that will build (the line), nor has it promised work to Newville Construction." 
Shuster said that is the case. He said he was approached by the International Brotherhood of Electrical Workers to appear in the video and testify about his experience with power lines and agriculture. He doesn't understand the opposition to the power line. "I wasn't paid a plugged nickel for that," he said. "I was not promised a dime's worth of work for doing it." 
The impact on the land is minimal, he said, and his company operates under the directive to leave the land in better condition than they found it, something that has earned the company awards and praise from conservation groups. 
Transmission and Agriculture video.mp4
"We're not some Ma and Pa operation with a backhoe," he said. "We're a $30 million-a-year business." 
He is angry with some of those who oppose the power line because, he said, they suggested that his farm is a hoax. About the opposition, he said, "It's one of the most hypocritical things I've ever seen." Unless those opposed to the transmission line have their own power plant, he said, the electricity they use flows through a power line on some other farmer's property. 

"I frankly don't understand what their problem is with it," he said. 

“Anytime jobs are created, it’s a win,” said Bernie Kephart, business manager for IBEW Local 126. “Our workers earn family-sustaining wages building the infrastructure that supports our daily lives. We’re proud to build infrastructure that saves customers money and reinforces the grid against power outages in Maryland and Pennsylvania.”
“We support clean, safe and affordable power,” said William C. Tipton Jr., business manager/financial secretary for Maryland IBEW Local 70. “Any conversation around energy comes to a quick halt if we do not have the transmission infrastructure to transfer that power to all who need it.”

Local companies contracted by Transource also completed much of IEC’s geotechnical survey work, which concluded last year.

“Trump and FERC are selling us out to the fossil fuel industry. They are adding billions of dollars in subsidies for coal, oil, and natural gas at the expense of green jobs and our health. They will now be getting over $6 billion a year just from our PJM grid alone, in addition to $15 billion a year in direct federal subsidies and all types of indirect subsidies. These dirty industries cannot compete with cheaper and cleaner renewable energy, so they are looking for a massive subsidy at our expense. This will hurt green jobs and public health,” said Jeff Tittel, Director of the New Jersey Sierra Club.

I believe that PJM should have conducted an evaluation to calculate the B/C ratio of the Reconfigured Project 9A with the H-L Project in the base case, consistent with its approach to evaluating Project 5E. Project 5E failed the B/C threshold in the latest reevaluation, but PJM repeated the analysis including the H-L Project in the base case because of its impending recommendation that the PJM Board approve the H-L Project. My understanding of the rationale for including the H-L Project in the base case is that with such a high benefit-cost ratio and a low total cost it is highly likely the H-L Project will be approved, and that project will impact the flows to Project 5E, making it more reasonable to review Project 5E with the H-L Project in the Base Case.
The Reconfigured Project 9A has a similar fact pattern, although the results are opposite directionally. The latest reevaluation of Project 9A passed the B/C threshold without the H-L Project, but it is reasonable to expect that, due to the proximity of the two projects, the addition of the H-L Project will alter the flows of power that produced the 9A benefits.
While we do not currently have all of the data needed to estimate the results of that case, it is possible that including the H-L Project in the Base Case will reduce the calculated benefits of the Reconfigured Project 9A.