Delaware News

Governor presses case against PJM project costs to Delawareans

Former Governor Jack Markell (2009-2017) | News | Office of the Governor | Date Posted: Thursday, August 20, 2015



Governor Markell files comments in support of a complaint in a related case, the outcome of which could set precedent for future projects, including the Artificial Island project.


Wilmington, DE – In a filing submitted today to the Federal Energy Regulatory Commission (FERC), Governor Markell continued his efforts to oppose power grid manager PJM’s plan to force Delaware residents to bear unreasonably high costs for a power line project that mainly benefits businesses and consumers in other states.

In his filing, the Governor commented on a case that could set a precedent for FERC’s decision on PJM’s proposed Artificial Island project. The Governor supported a complaint brought forth by Linden VFT, an owner of power lines in New Jersey and New York that is disputing another PJM construction plan for similar cost allocation reasons.

“Both cases demonstrate the need for change in the process that decides who pays how much for power line construction,” said Governor Markell. “The Artificial Island project is not an isolated instance, but rather part of a broader issue. FERC has an opportunity to modify how costs are allocated so that those who are required to pay transmission project costs align with those who benefit from the project.”

“Under PJM’s proposal, the Artificial Island project costs would be borne by citizens and businesses in the Delmarva region who would pay higher electric rates. This result is clearly unfair given that the project is being developed to maximize output from generators in New Jersey that serve customers throughout the PJM region, many of whom would not be required to pay any of the costs under PJM’s proposal.”

The complaint filed by Linden VFT was in response to a cost allocation proposal submitted by PJM to FERC for a 2013 transmission project. The projects involved several new facilities located in New Jersey. Linden is being assessed a large portion of those costs for the projects, while other parties receive the benefit.

Governor Markell has previously weighed in on the Artificial Island project issue. In a letter to the PJM board, he stated that a cost allocation that results in Delmarva customers bearing almost all of the costs associated with the selected proposal, when the primary purpose of the project was “maximizing power from generating units in New Jersey that serve customers throughout the [13 state] PJM region,” would be “inequitable and unreasonable”.

Despite recognizing that the Governor had raised “valid concerns about the specific allocation of costs,” the PJM board decided to move forward with PJM’s proposal to require Delawareans to pay for nearly all of the costs for constructing the new line. PJM is expected to file its cost allocation proposal with the FERC before the end of the month. 

This filing represents another opportunity for the State of Delaware to remind the FERC that while cost allocation is subject to FERC rules, those rules “require cost allocations to be reasonable and allocated in a manner commensurate with project benefits”; and that allocating most of the costs to Delaware and Maryland customers “is neither reasonable nor fair.” 

  

###

 

 

image_printPrint


Graphic that represents delaware news on a mobile phone

Keep up to date by receiving a daily digest email, around noon, of current news release posts from state agencies on news.delaware.gov.

Here you can subscribe to future news updates.

Governor presses case against PJM project costs to Delawareans

Former Governor Jack Markell (2009-2017) | News | Office of the Governor | Date Posted: Thursday, August 20, 2015



Governor Markell files comments in support of a complaint in a related case, the outcome of which could set precedent for future projects, including the Artificial Island project.


Wilmington, DE – In a filing submitted today to the Federal Energy Regulatory Commission (FERC), Governor Markell continued his efforts to oppose power grid manager PJM’s plan to force Delaware residents to bear unreasonably high costs for a power line project that mainly benefits businesses and consumers in other states.

In his filing, the Governor commented on a case that could set a precedent for FERC’s decision on PJM’s proposed Artificial Island project. The Governor supported a complaint brought forth by Linden VFT, an owner of power lines in New Jersey and New York that is disputing another PJM construction plan for similar cost allocation reasons.

“Both cases demonstrate the need for change in the process that decides who pays how much for power line construction,” said Governor Markell. “The Artificial Island project is not an isolated instance, but rather part of a broader issue. FERC has an opportunity to modify how costs are allocated so that those who are required to pay transmission project costs align with those who benefit from the project.”

“Under PJM’s proposal, the Artificial Island project costs would be borne by citizens and businesses in the Delmarva region who would pay higher electric rates. This result is clearly unfair given that the project is being developed to maximize output from generators in New Jersey that serve customers throughout the PJM region, many of whom would not be required to pay any of the costs under PJM’s proposal.”

The complaint filed by Linden VFT was in response to a cost allocation proposal submitted by PJM to FERC for a 2013 transmission project. The projects involved several new facilities located in New Jersey. Linden is being assessed a large portion of those costs for the projects, while other parties receive the benefit.

Governor Markell has previously weighed in on the Artificial Island project issue. In a letter to the PJM board, he stated that a cost allocation that results in Delmarva customers bearing almost all of the costs associated with the selected proposal, when the primary purpose of the project was “maximizing power from generating units in New Jersey that serve customers throughout the [13 state] PJM region,” would be “inequitable and unreasonable”.

Despite recognizing that the Governor had raised “valid concerns about the specific allocation of costs,” the PJM board decided to move forward with PJM’s proposal to require Delawareans to pay for nearly all of the costs for constructing the new line. PJM is expected to file its cost allocation proposal with the FERC before the end of the month. 

This filing represents another opportunity for the State of Delaware to remind the FERC that while cost allocation is subject to FERC rules, those rules “require cost allocations to be reasonable and allocated in a manner commensurate with project benefits”; and that allocating most of the costs to Delaware and Maryland customers “is neither reasonable nor fair.” 

  

###

 

 

image_printPrint


Graphic that represents delaware news on a mobile phone

Keep up to date by receiving a daily digest email, around noon, of current news release posts from state agencies on news.delaware.gov.

Here you can subscribe to future news updates.