Public Advocate Calls on White House to Deny Subsidies for Coal and Nuclear Plants

Dover, Del. – Delaware’s Public Advocate today issued a letter to the White House asking the Trump administration to deny a request for emergency bailouts for aging coal and nuclear power plants owned by a large regional energy supplier.

The letter addresses a recent filing from Ohio-based FirstEnergy Solutions asking the federal Department of Energy to issue an “Emergency Order” directing subsidies to the company’s plants using funds from ratepayers’ electric bills in Delaware and other states in the PJM region.

“Not only has FirstEnergy not shown why coal and nuclear subsidies are needed, but they are trying to circumvent the deliberative process that is ongoing at PJM,” said Delaware Public Advocate Drew Slater. “In a free market, price is a key determinant in business decisions. As coal and nuclear plants become uneconomic, ratepayers should not be forced to prop up old and inefficient technology just to protect the profits of a big power company.”

This week PJM, the regional grid operator serving 13 states and the District of Columbia, performed a reliability analysis given FirstEnergy’s recent bankruptcy and Emergency Order filings. PJM found that phasing out FirstEnergy’s coal and nuclear plants as scheduled would have no adverse effect on the reliability of the electric grid.

“Given that PJM has stated the system remains reliable, and absent a true emergency need, which has not been demonstrated, to subsidize uneconomic coal and nuclear plants, I ask that FirstEnergy’s request for an emergency order be denied,” Slater said.

In addition to the White House letter, the Division of the Public Advocate has intervened in the FirstEnergy case pending before the federal Department of Energy and provided comment on the proposed order along with many other stakeholders, including the Delaware Public Service Commission.

The Division of the Public Advocate advocates for the lowest reasonable rates, principally on behalf of residential and small commercial consumers, consistent with the maintenance of adequate utility service and consistent with an equitable distribution of rates among all classes of consumers.

 

 


Governor Carney, Governor Hogan Urge FERC to Expedite Review of Artificial Island Cost Allocation

As currently funded, $278 million project would unfairly burden electric ratepayers on Delmarva

WILMINGTON, Del. – Delaware Governor John Carney and Maryland Governor Larry Hogan on Tuesday sent a letter to members of the Federal Energy Regulatory Commission, urging commissioners to expedite their review of the $278 million Artificial Island transmission line project and consider a financing model that does not unfairly burden electric ratepayers on the Delmarva Peninsula.

Governors Carney and Hogan urged FERC to consider alternative cost methodologies presented in June by PJM’s Board of Managers. Under PJM’s alternative methods for cost allocation, Delmarva ratepayers would fund approximately 7-10 percent of the project costs.

As currently financed, residential and commercial electric ratepayers on Delmarva would fund more than 90 percent of the cost of the project through higher electric bills, while receiving few of the project’s direct benefits. Governors Carney and Hogan previously appealed the cost allocation to FERC, and urged PJM to support a more equitable solution for ratepayers on Delmarva.

“We remain optimistic that FERC will consider a financing plan for this project that will not unfairly burden businesses and families on the Delmarva Peninsula,” said Governor Carney. “As we’ve said all along, as currently financed, this is a bad deal for Delaware ratepayers, who would be asked to finance this project, while receiving few direct benefits. Thank you to FERC commissioners for considering our request to expedite their review. And thank you to Governor Hogan for his continued partnership and leadership on this issue.”

“Our administration has expressed our repeated opposition to any proposal that unfairly and inequitably allocates the costs associated with this project,” said Governor Hogan. “Maryland will continue to stand with Delaware to protect our citizens from disproportionately paying hundreds millions of dollars in rate increases, and we will continue to work with all stakeholders to reach a speedy, reasonable, and equitable solution to this process.”

 

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Related news:
Governor Carney and Governor Hogan React to PJM’s Alternative Financing Methods for Artificial Island Project
Governor John Carney and Governor Larry Hogan Respond to PJM Reevaluation of Artificial Island Cost Allocation
Governor Carney and Maryland Governor Larry Hogan Continue Fight Against Artificial Island Cost Allocation, Unfair Rate Hikes
Governor Carney’s Statement on Artificial Island Project Recommendations


Governor Carney and Governor Hogan React to PJM’s Alternative Financing Methods for Artificial Island Project

 

Governors thanked PJM and urged FERC to consider cost allocation that will not unfairly burden Delmarva ratepayers

WILMINGTON, Del. – Delaware Governor John Carney and Maryland Governor Larry Hogan on Friday thanked PJM’s Board of Managers for presenting alternatives to financing the $279 million Artificial Island transmission line project, and urged the Federal Energy Regulatory Commission (FERC) to consider a new cost allocation that will not unfairly burden electric ratepayers on the Delmarva Peninsula.

“This is a positive first step, and we’re optimistic that PJM has presented alternative financing for the Artificial Island project that would not unjustly burden electric ratepayers on Delmarva. We’re hopeful that the Federal Energy Regulatory Commission will seriously consider these newly-proposed alternatives. And we will continue to work closely – alongside Delaware’s Public Advocate, the Public Service Commission, and Delaware’s federal delegation – on this issue,” said Governor Carney. “As we have said all along, Delawareans and Delaware businesses should not be forced to finance this project through higher monthly electric bills, while receiving little in the way of a direct benefit. We’re thankful to the PJM Board for their thoughtful consideration of this issue.”

“It is encouraging that PJM listened to the concerns of the citizens of Maryland and Delaware and developed alternative cost allocation methods that are much more equitable to Delmarva residents and businesses,” said Governor Hogan. “This is a significant step in the right direction, however we will continue to push for FERC to adopt this new plan in a timely manner so the project can move forward in a way that treats Maryland ratepayers fairly.”

As currently funded, Delmarva Peninsula ratepayers would fund more than 90 percent of the cost of the project through higher electric bills, while receiving few direct benefits. Under PJM’s alternative methods for cost allocation, Delmarva ratepayers would fund approximately 7-10 percent of the project costs.

Governor Carney and Governor Hogan previously appealed the cost allocation to FERC, and urged PJM to support a more equitable cost allocation.

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Related news:

Governor John Carney and Governor Larry Hogan Respond to PJM Reevaluation of Artificial Island Cost Allocation

Governor Carney and Maryland Governor Larry Hogan Continue Fight Against Artificial Island Cost Allocation, Unfair Rate Hikes

Governor Carney’s Statement on Artificial Island Project Recommendations


FERC Agrees with Governor Markell: Artificial Island Cost Allocation to Delaware Not “Just and Reasonable”

Governor Markell thanks PSC and Public Advocate for their advocacy and FERC for its close review of PJM’s proposed cost allocation for the project; looks forward to a “technical conference” to identify a more just sharing of the costs.

Wilmington, DE – In a ruling favoring Delaware residents and businesses, late Tuesday the Federal Energy Regulatory Commission (FERC) concluded that power grid manager PJM’s plans to impose on Delaware residents the cost of constructing a more than $100 million transmission line from the nuclear facilities at Artificial Island across the Delaware River “have not been shown to be just and reasonable, and may be unjust, unreasonable, or unduly discriminatory or preferential.”

“This FERC decision is an important first step to protect Delawareans from a significant electric rate increase,” said Governor Jack Markell, who opposed 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.

“I want to thank the FERC for its review and very sensible conclusion that the costs of a project designed to maximize power production and improve reliability in New Jersey should not fall entirely on Delaware and Maryland consumers. I also want to thank the Delaware Public Service Commission’s members and staff and the Delaware Public Advocate for their efforts to reduce the costs that might have been imposed on Delawareans.

“This issue is not over. FERC’s staff will be conducting a technical conference to develop an alternative, and I look forward working with FERC and Delaware’s utility regulators on a more just sharing of these costs.”

Power grid manager PJM proposed the Artificial Island Project as a means of generating maximum power from the nuclear power generating units at Artificial Island and improving the reliability of area transmission lines. After an extensive review of various alternatives, PJM proposed the construction of a 230 kV power line from Artificial Island to Red Lion in Delaware as the technically superior means of accomplishing those goals. As a result of PJM’s tariff rules, more than $100 million in costs associated with the construction of that line would have been borne by residential, commercial and industrial consumers in Delaware, including customers of Delmarva Power & Light Company, Delaware Municipal Electric Corporation, and the Delaware Electric Cooperative.

“The State Chamber of Commerce and the Delaware Manufacturing Association are pleased that FERC will undertake a review of PJM’s proposed rate allocation for the Artificial Island Project,” said Richard Heffron, President of the Delaware State Chamber of Commerce. “As we have stated, along with Governor Markell and others, Delaware rate payers, including businesses of all sizes, should not be penalized with undue transmission costs that don’t provide them with direct benefits.”

Governor Markell opposed the allocation of those costs to Delaware electricity users in a July 10 letter to the PJM Board of Managers and in an August 20 submission to the FERC, which approves PJM cost allocations.

Today’s FERC order directs the FERC staff to establish a “technical conference” to explore whether projects like Artificial Island should be funded by an alternative allocation that does not impose costs entirely on the recipients of the electricity generated by these kinds of reliability projects.

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