Excellent Technical Facts in WV PSC Discussion

Lawyers for the Sierra Club/Highlands Conservancy just filed an excellent technical analysis in support of the WV staff’s motion to dismiss.  Here is the link.

In their recent attempt to delay the WV PSC process for the fourth time, the AEP/Allegheny lawyers claimed that the PJM-approved Mt. Storm-Doubs rebuild project will have no impact on their claims that PATH is needed and that a delay is required because PJM is releasing new demand projections.  Oh, and the power company lawyers never mention that PJM’s new information reveals that PJM is decreasing its projections about future peak demand in the PJM region, which is the basis for all their claims about PATH.

Here is what the Sierra Club/Highlands Conservancy lawyers said about these issues in their recent filing:

PATH WV has acknowledged that its application is incomplete in light of recent developments. See Applicants’ Response in Opposition to Staff Motion to Dismiss and Applicants’ Proposal to Toll Statutory Decision Due Date and Extend Procedural Schedule (“PATH Response”) at 1 (“Applicants wish to alert the Commission to an independent development that will require a revision of certain analyses by PJM Interconnection, L.L.C. (“PJM’) supporting the need for the PATH Project.”). According to PATH WV, PJM has “advised that [its] revised load projections may have an impact on the current in-service date for the PATH Project.” Id. at 5. In fact, PJM’s new load forecast may eliminate the alleged need for PATH or, at a minimum, delay the in-service date for PATH. PJM has reported that “[a] downward revision to the economic outlook for the PJM area has resulted in lower peak and energy forecasts in this year’s report, compared to the same year in last year’s report.” PJM Load Forecast Report, 1 (Dec. 20,2010), …(last checked Dec. 27, 2010). Reduced “peak and energy forecasts” below 2010 forecasts will almost certainly push back and/or eliminate the alleged thermal and voltage issues that PATH is purportedly intended to address.

Peak load demand is a primary driver dictating the projected timing and occurrence of alleged thermal violations. See, e.g., Testimony of Robert Fagan (filed on Nov. 17,2009 as Exhibit 2 to Reply of Sierra Club and West Virginia Highlands Conservancy in Support of Motion to Dismiss) (“Fagan Testimony”). Last December, sensitivity analyses ordered by the Virginia State Corporation Commission demonstrated that peak load reductions achieved through energy efficiency and demand side management eliminated all alleged thermal issues until 2021. See PATH VA Response to Hearing Examiner’s Ruling of December 4,2010, 1-3 & Attachment B “Scenarios 5 and 6 Thermal,” In re: Application of PATHAllegheny Virginia Transmission Corporation for Certificates of Public Convenience and Necessity to Construct Facilities, PUE-2009-00043 (filed Jan. 4,20 10) (attached as Exhibit 1).

Downward revisions in PJM’s load forecast should have a similar impact, pushing back the dates of alleged thermal overloads and resulting in projections more in keeping with the December 2010 sensitivity analyses that were premised on the lower 2009 load forecast.  Further, the alleged voltage issues that appeared for the first time in 2010 may well disappear in light of PJM’s revised load forecast, as they were purportedly attributable to “increased loads across the system” as between PJM’s 2009 and 2010 load forecasts:

Recall the April 2009 Study used 2014 load levels from the 2009 load forecast, while the 20 10 Baseline Analysis used 20 15 loads from the 20 10 load forecast.  These increased loads across the system require additional voltage support.  Generators support the voltages across the system. In general, as load increases, generators provide additional support to maintain voltages and, as a result, have less voltage support capability to respond to contingencies on the system.

Supplemental Direct Testimony of Paul F. McGlynn (Sept. 14,2010)…

Thus, as load decreases, “voltage support capability to respond to contingencies” should increase as well, resolving potential voltage issues for the foreseeable future.

In any case, there is no dispute that revisions of PJM’s load forecast bear directly on the timing and occurrence of any potential reliability issues. Thus, PATH WV cannot meet its burden to show that PATH is needed on the strength of the analysis presented in its current application.

The intervenors’ lawyers also address the impact of the Mt. Storm to Doubs rebuild project on PJM’s Capacity Emergency Transfer Objectives (CETO values) that completely underlie PJM’s argument that PATH is needed.  As the name states, CETO values refer to the capacity of PJM transmission lines to handle power transfers in emergencies.  If capacity is increased on the PJM system (Remember that Dominion claims the rebuild projects in its Alternative 1, including Mt. Storm to Doubs, will increase the thermal capacity of the rebuilt transmission lines by 65%.) then the required CETO values on the system as a whole will not have to be as high, because each power company (Dominion in this case) will be able to handle more emergency transfers within its own area.

Here is what the Sierra Club/Highlands Conservancy lawyers say:

If PATH WV is allowed to supplement its current application, it should be required to specifically address the alleged need for the PATH line in light of this Commission’s recent approval of the Mt. Storm to Doubs line rebuild project. As the Staff points out, this project will significantly increase transfer capacity among the load deliverability areas (“LDAs”) at issue in these proceedings. See Staff Motion to Dismiss and Applicants’ Proposal to Toll Statutory Decision Due Date and Extend Procedural Schedule (“Staff Motion”) at 6 & n.2. From the supplemental testimony filed by Applicants on September 14,2010, it is not clear that PJM accounted for this new level of transfer capacity when it analyzed the so-called “Dominion Alternatives” to PATH. See Supp. McGlynn Test at 45-47. Moreover, the results of previous analyses are no longer applicable: PJM must revisit its alternatives analysis in light of its revised load forecast.

Finally, it is no longer reasonable for PJM and Applicants to assert that PATH is the best solution to address alleged reliability issues now that the Mt. Storm to Doubs 500 kV project is slated to move forward. Given that the Mt. Storm to Doubs 500 kV project is now a reality as opposed to a proposed alternative to the PATH line, PATH WV and PJM must honestly assess what more modest transmission upgrades, if any, may be needed to maintain reliability in conjunction with the Mt. Storm to Doubs rebuild.

I like the phrase “honestly assess,” because we have yet to see any honesty from PJM and AEP/Allegheny.

PATH WV has acknowledged that its application is incomplete in light of recent
developments. See Applicants’ Response in Opposition to Staff Motion to Dismiss and
Applicants’ Proposal to Toll Statutory Decision Due Date and Extend Procedural Schedule
(“PATH Response”) at 1 (“Applicants wish to alert the Commission to an independent
development that will require a revision of certain analyses by PJM Interconnection, L.L.C.
(“PJM’) supporting the need for the PATH Project.”). According to PATH WV, PJM has
“advised that [its] revised load projections may have an impact on the current in-service date for
the PATH Project.” Id. at 5. In fact, PJM’s new load forecast may eliminate the alleged need for
PATH or, at a minimum, delay the in-service date for PATH. PJM has reported that “[a]
downward revision to the economic outlook for the PJM area has resulted in lower peak and
energy forecasts in this year’s report, compared to the same year in last year’s report.” PJM
Load Forecast Report, 1 (Dec. 20,2010), available at
http://~im.com/-/niedia/documents/re~ort1s0/ 12202 0-pim-load-forecast-report-status-uuo.ashx
(last checked Dec. 27, 2010). Reduced “peak and energy forecasts” below 2010 forecasts will
almost certainly push back and/or eliminate the alleged thermal and voltage issues that PATH is
purportedly intended to address.
Peak load demand is a primary driver dictating the projected timing and occurrence of
alleged thermal violations. See, e.g., Testimony of Robert Fagan (filed on Nov. 17,2009 as
Exhibit 2 to Reply of Sierra Club and West Virginia Highlands Conservancy in Support of
Motion to Dismiss) (“Fagan Testimony”). Last December, sensitivity analyses ordered by the