Legalectric

Here’s an interesting case (oh, how I hate that word “interesting”).  It’s about whether a state can offer “incentives” over and above FERC wholesale electric rates that would incentivize construction of new in-state generation.  US SCt says NO!  The states can only regulate retail rates.

Hughes v Talen Energy Marketing_14-614 April 19, 2016

This is a case regarding Maryland “incentives” and PJM, but it’s applicable to our good friends at MISO too.

So do tell, what does this mean for FERC set rates of recovery and cost allocation for all this transmission to enable the wholesale market?  What happens when FERC rates stick their nose under the tent in state rate proceedings, i.e., Schedule 26A covering return and cost allocation for these big transmission projects we know and love?  From what I can see of Schedule 26A, they’re allocating a “retail share” and, well, what business does FERC, via MISO (in this area), have with retail rates?

Transmission Rate Information

Schedule 26A – Indicative Rate Charges MISO (last updated 3/31/2016)

Look at all the ways we’re charged for transmission:

Transmission Pricing – MISO

Difficulties are growing for “backbone” transmission for coal in the east.  Not long ago, Virginia staff had asked the Commission to deny the PATH proposal.  Now, after the hearing ended, after reviewing testimony, staff has again recommended the petition be denied.  This is the project where Maryland tossed it out because the applicant was not a public service corporations.  If one end of the project is taken out, it’s a project going nowhere.

West Virginia declined to dismiss the application, and instead has taken action, or taken inaction:

W.Va. delays power line decision until February 2011.

Now it’s time for Virginia’s reality orientation.

Va. staff again recommends denial of PATH project

Originally published December 11, 2009

By Ed Waters Jr.
News-Post Staff

A project to put a high-voltage transmission line across three states is facing another obstacle in its path.

On Wednesday, the Virginia State Corporation Commission’s staff again recommended the denial of the proposed PATH system in the Old Dominion.

After reviewing testimony on the issue, the SCC staff is advising the commission, which oversees utilities in the state, to turn down the proposal from Allegheny Energy.

The Potomac Appalachian Transmission Highline is a nearly 300-mile, $1.8 billion project beginning in West Virginia, crossing Virginia and ending in southern Frederick County at a proposed new substation. It is a joint project of Allegheny Energy and American Electric Power.

In November, the Virginia commission’s senior hearing examiner denied a similar motion by the staff members. Alexander F. Skirpan said continuing the project in Virginia gave the commission jurisdiction over the project.

The SCC staff has argued that without approval in Maryland of PATH, and a move by West Virginia authorities to postpone a decision on the project until 2011, the transmission line is going nowhere. Allegheny Energy said it will file a new application for PATH in Maryland within the next few weeks. The application in Maryland was initially turned down on legal issues.

“We only just received the Virginia commission staff’s testimony and will closely review the testimony over coming days. PATH Allegheny Virginia Transmission Corporation will respond to staff testimony with rebuttal testimony sometime near the end of December,” said Todd Meyers, manager of external communications for Allegheny Energy, on Thursday.

“The public regulatory review process in Virginia is extremely thorough and has a long way to go. The PATH evidentiary hearings before the Virginia State Corporation Commission are scheduled to begin in Richmond, Va., on Jan. 19, 2010, and are expected to last about two weeks,” Meyers said.
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By standing up for offshore transmission for wind, Delaware’s Gov. Jack Markell stands up to Midwest coal!

The Mid-Atlantic states have been standing up and opposing transmission from the Midwest.  They’ve gone on record in a number of venues, and in their opposition are citing Midwest transmission promoters’ disregard for eastern renewable efforts, that xmsn may well not be an economical way to get power to the east, and that THEY KNOW THAT MIDWEST TRANSMISSION PLANS INHERENTLY ARE ABOUT COAL. The plan they’re referring to is a massive transmission buildout known as JCSP, and it also applies to the big PJM buildout that includes the PA-NJ Susquehanna-Roseland transmission line that was the subject of a hearing last month.

Here’s JCSP (Joint Coordinated System Plan) note their site now talks about wind — but look where the transmission starts, DUH! The coal fields of the Dakotas:

Gotta give them, Delaware, Maryland and Virginia, a lot of credit for recognizing and stating what Midwest states have been unwilling to admit.

That said, here’s what Mid-Atlantic states are doing — they’re banding together to propose offshore transmission.  If it’s underwater offshore transmission, that’s an idea that’s hard not to like.  But I’ll bet it throws PJM for a loop, what with all their “backbone” transmission schemes, a la Project Mountaineer, that are in the works:

The FERC birth of Project Mountaineer:

Exhibit STL D-6a (PSEG Discovery Response)

Exhibit STL D-6B (PSEG Discovery Response)

And you can see that those lines in play now, PJM’s “backbone” transmission projects like Susquehanna-Roseland (NE part of Project Mountaineer Line 1) and MAPP (NE part of Project Mountaineer Line 4) are part of the plan… the big transmission plan that does not work for the east coast.

Here’s the Memorandum of Understanding between Delaware, Maryland and Virginia:

DE, MD & VA Wind Infrastructure MOU

And recently, Gov. Jack Markell addressed these issues before American Wind Energy Association’s offshore windfest — but given the PJM big-transmission-projects-from-hell are referred to as “backbone” projects, I wish they’d find another term:

Delaware energy: ‘Backbone’ power line pushed for wind farms

By AARON NATHANS
The News Journal

BOSTON — If the Eastern Seaboard is to one day be dotted with thousands of wind turbines, they may as well work in harmony.

That’s the message 10 eastern governors are sending to the federal government as they advocate for a major underwater power line parallel to the East Coast.

U.S. offshore wind farm projects, all still on the drawing board, are being planned to include cables from the turbines to a substation on land to bring the power to the existing transmission grid.

The “backbone” power line the governors envision would connect the wind farms to each other, making it easier to spread wind power from areas where the wind is blowing robustly at that moment to states where electricity demand exceeds supply.

They see the backbone as preferable to a national investment in a transmission line that brings wind power from the Midwest to the East.

Gov. Jack Markell broached the subject this week in his address to the American Wind Energy Association’s offshore wind workshop, the industry event of the year on this side of the Atlantic. Markell signed onto letters the governors sent to members of Congress this summer, and the Federal Energy Regulatory Commission last month.

Governors of Vermont, New Hampshire, New York, Virginia, Maryland, New Jersey, Massachusetts, Rhode Island and Maine also signed the letters.

In an interview, Markell’s natural resources secretary, Collin O’Mara, said he wants to find out if there’s a way to spread out the costs of such a project. Building a backbone would help states satisfy their renewable electricity purchase requirements, and relieve the “spaghetti” structure of the current power grid, he said.

“Let’s have the conversation,” O’Mara said. “It’s extremely worthy of further study.”

Transmission is vitally important to getting offshore wind energy to population centers, said Denise Bode, the wind association’s president. And Gov. Donald Carcieri, R-R.I., called it “the elephant in the room.”

The power grid is “organized like a patchwork to meet local needs” rather than as a planned national system — almost an assemblage of local roads compared with an interstate, Carcieri said. The developers and government officials in attendance were very much aware of the role transmission will play in whether the offshore wind industry lives up to its potential.

The discussion comes as various offshore wind projects are maturing from concept to permitting, construction and design. At the moment, NRG-Bluewater Wind holds the only contract for offshore wind power, with Delmarva Power.

It’s starting the permitting process, getting ready to build weather towers off Delaware and New Jersey next summer, and preparing to bid for the right to develop an offshore wind project in New York City.

Jim Gordon, president of the Cape Wind venture that hopes to build in Nantucket Sound, told the convention he has all of the permits he needs from the state and federal government, but is working to overcome a tribal challenge that the waters in Nantucket Sound are protected.

The developer is working with the local utility — National Grid — to develop a contract to purchase power from the wind farm.

National Grid is also negotiating with Deepwater Wind for a contract to provide power to Rhode Island’s Block Island from a small, five-to-eight turbine facility in near-to-shore state waters. The company is also planning a larger wind farm in federal waters off the Rhode Island coast, which will take longer to build.

Deepwater, Bluewater and Fishermen’s Energy are planning wind farms off the New Jersey coast and the state government has provided incentives.

Deepwater CEO Bill Moore said, in principle, the backbone transmission line is “a terrific idea. It makes a lot of sense.”

But he said it’s a “daunting task” to complete an infrastructure project that crosses state boundaries, impacts different developers, and brings together different regional power grids.

“It obviously won’t happen in the absence of federal leadership,” he said.

Fishermen’s Energy President Daniel Cohen said it’s a good idea, but “it’s another moving part.”

“What comes first? Do you build the project or the backbone? People need to make decisions soon,” Cohen said, noting that the answer affects financing arrangements.

Gordon van Welie, president of ISO New England, the regional power grid manager, said there has been some investment in transmission upgrades, but a national plan is needed before new elements are selected.

“The rhinoceros in the room is the transmission cost allocation” — who benefits from a transmission line, and who pays for it, he said.

He noted that the New England governors adopted their own long-term vision of renewable energy, which included $6 billion in lines to transmit power from inland and offshore turbines to population centers.

The benefits of building lines transmitting wind power from the Midwest are less certain, he said.

“It will be difficult to get progress in this area until there are clear national goals,” he said.

Steven Bruckner, conservation chairman of the Virginia chapter of the Sierra Club, looked kindly upon the backbone idea. He said he didn’t have environmental concerns, although he wondered whether such a project would be economical.

“You’re talking hundreds, thousands of wind turbines off the coast, eventually displacing those coal burning power plants,” he said. “It’s the scale. It’s the beginning.”

Note that “cost allocation” is raised.  Since the 7th Circuit decision tossing out FERC approval of PJM’s transmission cost allocation dream/nightmare, all transmission projects 500kV and over based on that cost allocation scheme are in limbo.

Illinois Commerce Commission v. FERC – August 6, 2009

So as noted, who pays, and submarine transmission is EXPENSIVE, is THE big issue now.  It’s the big issue for land transmission, it’s the big issue for offshore transmission, and, given the uncertainty since the 7th Circuit decision, maybe some of the sturm and drang could be circumvented if it’s designed at 345kV or below, and uses the “benefactor pays” theory.  We shall see…

Delmarva Power has been hosting meetings about its proposed Mid-Atlantic Power Pathway.   The next meeting is:

Wednesday, February 4 @ 6 p.m.

Millsboro Civic Center

322 Wilson Highway

This is an electrical superhighway through Delaware, the map makes that much clear.

What’s interesting is that Rep. Tom Carper seems to be taking an enlightened and informed position on this:

Carper said the question of the power line needs to be considered in a larger context. He harkened back to the construction of Del. 1 to handle an increase in north-south travel, noting that along with the new road came a look at expanding public transit, car-pooling, and other alternatives to driving.

“Upgrading power lines on the Delmarva Peninsula may be necessary, but I hope Delawareans will take this opportunity to look not only at where a power line might go, but also at how they could help reduce the need for a new line in the first place,” Carper said.

Today, there’s a long piece in the News Journal about it, with the above quote from Carper:

Power-line plan stirs environment fears

Bluewater Wind hails pathway for clean energy

By AARON NATHANS
The News Journal

Environmentalists are divided over the merits of a Pepco Holdings plan to string a 500-kilovolt power line through the heart of Delaware to better connect southern power plants with growing demand in the mid-Atlantic region.

Pepco’s proposed Mid-Atlantic Power Pathway would be like an interstate highway of electricity, designed to make more space on the often-choked power grid for electricity to flow to growing population centers on the East Coast.

Clean-air advocates say it could help carry clean wind power to the homes and businesses that need it, even as they worry it will also import dirty coal-fired power from the South and Midwest.

Wildlife and property-rights advocates are afraid the line will be a blight on the landscape, running through fragile areas along the Delaware River and Bay.

The most controversy in Delaware about the power line, which is now being examined by the public in a series of public hearings, is likely to focus on an eight-mile stretch of land in southern New Castle County.

The utility would need to acquire an easement through an area near the Delaware River that includes many wetlands and state-designated critical natural areas.

Officials at Pepco Holdings, the parent company of Delmarva Power, said the specific path there has not yet been chosen.

The planned power line would start in Dumfries, Va., cut through Maryland and across the Chesapeake Bay, then run through southern Delaware to the Indian River Power Plant. The line then would continue up the length of the state and across the Delaware River, ending in Salem, N.J.

It’s one of several large lines planned in this region to shore up electrical reliability. Utility officials say it’s especially needed on the Delmarva Peninsula, where power lines currently run only from the north. This would add a second path from the west.

Although power demand is down because of the recession, utility representatives say that won’t last, and demand will one day overtax the existing grid.

By connecting three regional nuclear power plants, the new high-capacity line will spread power along the coast as well as bring in power from the coal-rich Midwest.

The $1.425 billion line is expected to add 40 cents to the average residential monthly electric bill. The costs would be borne by all electric users in the 13-state PJM Interconnection regional power grid.

The immediate need for the line is to move current through Delaware, but it also could be a useful outlet for the thousands of megawatts of renewable electricity that could one day be generated by wind turbines off the state’s coast, said Joseph Minott, executive director of the Clean Air Council, an area environmental group.

Bluewater Wind plans to build a small wind farm off Rehoboth Beach and sell the electricity to Delmarva Power, but the firm also hopes to expand that farm in the future to feed more power to the grid.

If the transmission grid is strong enough, Delaware could export power throughout the region, Minott said, explaining why he favors the project.

“If you’re going to create a vibrant market for wind energy, you need to be able to transmit it further than the town at the end of the beach,” said Minott, who added that he had “trepidation and concerns” about the lines being used also to expand the reach for coal-generated power.

Rob Gramlich, policy director for the American Wind Energy Association, said a better transmission system is needed for onshore wind farms to carry their output to the wider populace.

Offshore wind is different, he said. Although it’s more expensive than onshore wind, its appeal is in its proximity to population centers, he said. It doesn’t take very many miles of transmission to get the power where it’s needed, he said — a problem for generators of wind power in the nation’s more sparsely populated heartland.

Nick DiPasquale of Delaware Audubon said he would rather see small, localized, mainly renewable power sources instead of big lines that carry power from big coal-burning power plants. He’s concerned about where the Power Pathway would go.

“If it means converting protected land to developed land — even if the profile is relatively small — I would find that a very troubling precedent,” he said.

Utilities lose power when current is transmitted over long distances, said Carol Overland, a Minnesota attorney and electrical consultant who has been active on Delaware environmental issues. She said conservation and renewable-energy projects, using the existing power grid, should be sufficient.

State Sen. George Bunting, D-Bethany Beach, expressed concern that electromagnetic force, or EMF, from power lines has been investigated as a cause of childhood leukemia.

In a letter to Sen. Tom Carper, D-Del., he wrote, “There is a grave concern amongst many Delawareans” about the line.

The Centers for Disease Control and Prevention says there is no scientific consensus on the health effects of EMF.

Pepco Holdings owns the rights to much of the land it needs. It’s planning to build the larger line along a right of way that already features smaller power lines.

But within the section of the line that runs from Indian River north to Salem, there will be areas where the right of way needs to be widened, the utility has said.

And there’s a yet-to-be-specified section in southeast New Castle County where the Pathway would break from the existing power line along Del. 9 and head toward the Delaware Bay, where it would cross and connect with the Salem/Hope Creek nuclear plant.

That will require Pepco Holdings to acquire eight miles of new right of way, company officials said last week.

“Whether it’s dry land, wet land, high land, I wouldn’t want to answer that question right now,” said Vince Maione, pathway project manager for Pepco. He added that the company wants to minimize impacts on the environment and the population.

PJM is still reviewing Pepco Holdings’ application for the portion of the line running north from Indian River. Once that confirmation comes, Pepco Holdings will develop the path in greater detail, Maione said.

To cross the Delaware River, the utility wants to build a second overhead crossing, about six to eight miles south of its current line.

The company has not been in touch with Delaware landowners regarding easements, said Matt Likovich, a Delmarva spokesman.

Delaware state government has little control over the portions of the line for which Delmarva already has rights of way. Unlike in Maryland, this state’s Public Service Commission does not have the authority to approve the location of a transmission line.

One of the few categories where state government has oversight is where a planned power line would cross natural areas like bodies of water and wetlands. Pepco Holdings has not been in touch to request a permit, said Philip Cherry, a state Department of Natural Resources and Environmental Control policy manager.

But Delmarva lacks leverage, at least on the state level, when it comes to expanding beyond its rights of way.

The state eminent-domain law doesn’t give the utility the right to seize land for a power project. Likovich said if the company can’t reach an agreement with a landowner, “we will have to construct the line by going around the property in question.”

But the utility may hold a trump card: the U.S. Energy Department last year designated Delaware part of a region where the federal government can order an electricity project finished if states fail to do so.

Delmarva officials say they’ll work hard to negotiate with landowners to avoid the issue of eminent domain.

“It doesn’t benefit anyone to take anyone’s land,” Maione said. Pressed about whether the utility would be OK with the government seizing land for the project, he said, “We’ll have to cross that bridge when we come to it.”

Meanwhile, in Sussex County, Pepco Holdings held a community meeting in Gumboro on Thursday night, attracting 50 members of the public. The next meeting is Wednesday night in Millsboro.

Carper said the question of the power line needs to be considered in a larger context. He harkened back to the construction of Del. 1 to handle an increase in north-south travel, noting that along with the new road came a look at expanding public transit, car-pooling, and other alternatives to driving.

“Upgrading power lines on the Delmarva Peninsula may be necessary, but I hope Delawareans will take this opportunity to look not only at where a power line might go, but also at how they could help reduce the need for a new line in the first place,” Carper said.

He said that could come by saving electricity, installing solar panels on their homes, adding insulation, purchasing Energy Star appliances, or taking other steps to save electricity.

Additional Facts
IF YOU GO

The next community meeting about the power line will be held Wednesday at the Millsboro Civic Center, 322 Wilson Highway, 6 p.m.