FirstEnergy Riding the PJM Gravy Train

FirstEnergy is now publicly bragging about how much gravy they pulled in from PJM’s recently announced transmission construction plans.  They have even branded it with their own marketing slogan.  Most of these new projects will be piecemeal “improvements” that include rebuilding transmission lines, replacing and adding transformers and static VAR compensators and some new transmission segments, most relatively short and lower capacity lines.

Following up on its attack on PJM’s “postage stamp” rate recovery system in FERC’s attempt to fight off the federal 7th Circuit Court, the Illinois Commerce Commission has filed a new case at FERC challenging PJM’s attempt to have it Illinois rate payers pay for PJM projects that don’t benefit Illinois.  The ICC is on the warpath, and they are taking no prisoners.

What a difference a year and a half makes.  Since FirstEnergy, one of Ohio’s power giants, swallowed Allegheny Energy, FirstEnergy has become a major player and rival to AEP in the PJM cartel.  FirstEnergy’s power and strategic acumen was shown clearly in their gaming of the PJM capacity auctions in the last couple of weeks.  Last fall, FirstEnergy announced the closure of relatively large numbers of coal-fired plants in OH and WV.  Their timing was perfect.

The impacts of the closures resulted in PJM’s Transmission Expansion Advisory Committee (TEAC) proposing the transmission changes that put FirstEnergy on the transmission construction gravy train.  The plant closures also created an artificial shortage of capacity in FirstEnergy’s home region in northern OH, which will result in PJM ordering the company to keep at least a few of its plants open.

Remember when Allegheny Energy was AEP’s lil’ buddy and was serving as AEP’s connection to East Coast power markets for Big Brother AEP and the PATH project?  Well, those days are gone forever.  FirstEnergy is now the rising star in the PJM cartel, and AEP is struggling.  Remember all that Project Mountaineer claptrap about congestion and high capacity prices in eastern PJM?  Now congestion prices are highest in western PJM and FirstEnergy is in the catbird seat.

One thought on “FirstEnergy Riding the PJM Gravy Train

  1. Yeah, well, I’m sure no landowner or ratepayer wants to hitch their wagon to FirstEnergy’s star. They simply can’t afford it, on many levels…

    AEP = chump. Ha ha ha. 🙂

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