PJM Spinning Hard

PJM sent spinmeister (aka Chief Communications Officer) Terry Williamson to the WV State Journal to make sure we get PJM’s side of the story.  Here is a link to the article, which has not yet appeared on The State Journal’s Web site.

Mr. Williamson has a lot to say, very little of it accurate, but all of it designed to keep PJM smelling like a rose.  Here is the reporter’s account of his statements:

PJM’s latest analyses, however, indicate the need for the project has moved well into the future.

“Summer peak demand growth for PJM under the new information we got is projected to average 1.4 percent annually over the next 10 years and 1.2 percent over the next 15 years,” said PJM Chief Communications Officer Terry Williamson – a significant drop, he said, from the previous figures of 1.7 percent annually for 10 years and 1.5 percent over 15.

In addition, though , PJM has initiated a review of its ongoing RTEP process that may further change the analysis of the need for this line and two others in its 14 state region: the Mid·Atlantic Power Pathway from northern Virginia across Maryland to the Delmarva Peninsula and the Susquehanna-Roseland project from Pennsylvania to New Jersey.

“Essentially right now we can only improve transmission primarily to correct reliability problems,” Williamson said, explaining a limitation on the authority granted PJM by the Federal Energy Regulatory Commission.

But the world of transmission is becoming more complex, due in part to state policy initiatives requiring that certain percentages of power delivered come from renewable sources.

“Wind power from the Midwest,” Williamson said by way of example, ” probably wouldn’t, under our reliability criteria, result in transmission to bring that here,” but may need to be considered.

In addition, increasing amounts of  “demand response” by large electricity users – commitments to reduce use during peak periods, easing pressure on transmission – – have to be factored in, he said.

And if lines are built or upgraded for reasons other than reliability, who pays for that transmission, Williamson asked. Only the ultimate beneficiaries of the power? Or everyone in the region, under the assumption that everyone benefits?

“It really goes to the heart of the planning process for transmission,” he said, and noted that other grid operators face the same questions at this time.

Asked whether an earlier re·evaluation of the planning process would have changed the assessment of the need for PATH, Williamson said it would not.

Demand response, for exampIe, is relatively recent, he said.

Consumers’ voluntary commitments to reduce usage totaled more than 8,500 megawatts in 2010, approximately the equivalent of 10 large power plants and five times the commitment only four years earlier.

And on the question of whether the suspension might end up resulting in a cancellation of the line due to policies that make the cost of coal fired power unattractive, Williamson was cautious, citing complex and unknowable factors including uncertainty over regulation of greenhouse gas emissions and possible development of new nuclear generation.

He emphasized the importance to the public of transmission planning for maintaining reliability and said the planning process re-evaluation may add value by making it more possible to integrate electricity generated from renewable sources.

The biggest whopper in Mr. Williamson’s account is that PJM has felt “reliability” has been a “limitation” of their planning process.  It has been PJM engineers who have been screaming that reliability is the only thing that matters throughout the PATH and TrAIL project proposals.  Now, when the PATH project has run into a brick wall, PJM is saying reliability isn’t such a big deal.  So much for blackouts and brownouts.

It is also amusing to see Mr. Williamson refer to Midwest wind power as an example of how PJM has to accommodate renewable energy sources in its planning.  No mention of the massive new development of offshore wind farms just to the east of PJM’s Mid-Atlantic region?  No mention of the biggest solar power array east of the Mississippi at Perdue’s plants on the eastern shore of MD?  Mr. Williamson still seems to be listening to AEP’s concerns about getting their Texas wind farms hooked up to the high priced eastern markets.  Well, it just goes to show PJM is still focused on AEP’s profits and not the future of the electrical grid in the US.

I also found the reporter’s question about changes impacting coal fired power to be pretty humorous.  Mr. Williamson’s Rumsfeldesque reference to “unknowns” sounded mysterious, but all you need to do is look at AEP’s and FE’s repeated rate increases in WV to see the real changes to coal fired power.  Coal is already pricing itself out of the power market, without any help from government policies.  AEP has requested three rate increases in three years in WV.  The reason the company cited, every time, was rising coal costs.

Mr. Williamson says PJM is going to revamp its planning process.  To that I say, “It’s about time.”  Unfortunately, PJM is a cartel, accountable only to its members.  It’s two biggest members are AEP and FirstEnergy.  You can bet their needs and business strategies will be considered before anyone else’s when PJM comes up with its new planning process.