PJM Interconnection continues to make a mess of the investment situation in the electrical industry. The cartel that sets prices for power and determines winners and losers in the transmission business in the Mid-Atlantic states and upper Midwest has made a mess of its own transmission “planning.”
Yesterday, PJM VP Mike Kormos sent this letter to Pepco Holdings, Inc., the power company conglomerate that wants to build the MAPP line, that PJM is keeping MAPP in its 2011 RTEP, but that the start date for MAPP has been pushed back to 2019 at the earliest. So MAPP hasn’t disappeared from the PJM universe the way PATH did, but it’s not really here either. This goofy announcement has caused PHI to go to the MD PSC and the East VA SCC to request that the state regulators keep their application for MAPP on file, but make it inactive.
PJM has turned its “planning process” into a total disaster. As grid planning expert Hyde Merrill pointed out in his testimony in the MAPP case in 2009, PJM’s RTEP process is fatally flawed. The RTEP is only based on real simulations five years into the future. Anything beyond that is based on statistical “extrapolations” that are not derived from any real projections of power demand or grid operation. The fact that PJM has put MAPP off until 2019 in its 2011 RTEP puts it far out into this extrapolationland limbo.
PJM’s Mr. Kormos offers this gobbledegook in his letter to PHI:
Based on these latest results, the PJM Board has decided to hold the MAPP project in abeyance [they love that word], retaining it in its 2011 RTEP with a 2019-2021 in-service date. The planning process changes, currently under development through the stakeholder process, and the direction provided through FERC Order No. 1000 may have an effect on the treatment of public policy drivers in the RTEP and, therefore, impact the MAPP project. These changes are not likely to be fully resolved, and the subsequent analyses completed, until sometime in 2012.
The weasel word “abeyance” is neither delay nor abandon. Note also PJM’s self-adopted royal position in this sentence from Mr. Kormos’ letter:
The Board therefore directs PHI to limit further development and to proceed with only those efforts reasonably necessary to allow the MAPP project to be quickly re-started should these planning activities demonstrate the need to do so. This action does not constitute a directive by PJM to PHI to cancel or abandon the MAPP project. Rather, it is recognition of the uncertainties underlying the timing of the need for the project.
The purpose of a planning process is to provide certainty to investors, regulators and citizens affected by the project. PJM has just tossed MAPP and its whole RTEP up in the air, saying that everything depends on some new planning process that will come out at some point in the future. The PJM task force that Mr. Kormos refers to is rebuilding PJM’s planning around “public policy drivers.”
Want to see how reliable those “public policy drivers” are? Just take a look at what the PUC of Ohio did for FirstEnergy. They let FirstEnergy avoid complying with Ohio’s Renewable Portfolio Standard. How is PJM”s new public policy driven planning process going to take into account the bobbing and weaving of state RPS compliance over the next 20 years?
Meanwhile, FERC and state PSCs are expected to keep dead and dying transmission projects hanging around for decades based on PJM’s claim that someday, somewhere they might be needed. And rate payers will continue to pay for all of them using FERC’s incentive profit rate system and PJM’s cost recovery mechanisms.
And real solutions to grid reliability and real solutions will be starved for capital as regulators hang onto obsolete projects and obsolete technologies.