Feel Like a Sucker? You Are One.
Here is Keryn’s other great find in the new PJM TEAC report on congestion.
I’ll let Keryn speak for herself, because she does it so well:
Now let’s move on to slide 6 where we see “Constraints with at least $5 million Congestion Reduction and Upgrade(s) responsible for reduction.” Susquehanna-Roseland is credited with congestion reduction only twice in the table, and one of those instances is combined with reactive upgrades. If we’re generous here, we’ll say S-R “saves” $32M per year in congestion costs for that line item. The second reference to S-R credits it with saving $12M in “congestion” costs. If we add those up, we’ve got $44M per year possible savings. However, S-R is probably going to end up costing in the neighborhood of $200M per year when it’s completed. What the heck, PJM? Thanks a lot for the “efficient” cleaning out of my wallet.
Abracadbra! PJM’s “efficient” markets have even more magic to perform for me! That $44M in yearly “congestion” savings accrues only to the load pockets on the east coast (not me!), however S-R’s $200M yearly cost is shared by all 61 million PJM consumers in the entire 13-state region (me included)! Wow! Sign me up! It warms my heart to pay $156M to save other people $44M in “congestion” costs! In fact, I’m now feeling so generous that I think I’ll hop in the car, clean out my bank account, and then hand out money to all the winos hanging out on local street corners. They’d probably spend my money more “efficiently” than PJM.
Oh, but wait, that’s not all S-R will do for me. It will also provide some illusory and hard to define “reliability.” $156M worth? What kind of a rube do you think I am?
Won’t someone pull the right lever and stop this out of control gravy train? Please?
Yup. You read that right. PJM predicts that the S-R line will save NJ rate payers $44 million in congestion costs, but the S-R line will cost $200 million to build. And all rate payers in PJM, including those of us in WV, and as far away as Michigan and Illinois, will be paying that $200 million to save distant rate payers $44 million. This makes no sense.
Which is, of course, why the US 7th Circuit Court of Appeals has determined that the PJM/FERC cost recovery scheme for the S-R line is illegal.