PJM Cartel Exposed Again – The Atlantic Wind Connection Fights for its Life at FERC

Back in October 2012, PJM Interconnection filed a request to the Federal Energy Regulatory Commission for approval of a number of revisions to the cartel’s rules designed to comply with FERC’s Order 1000.  One of FERC’s main goals in Order 1000 was to grease the skids for big new multi-state transmission lines.

The big power company members of PJM, who really run the show, recognized an opportunity with all this Order 1000 compliance talk.  There is one organized group within PJM, the Transmission Owners committee, who saw their chance to change the rules about the cost recovery gravy train for big transmission lines.  The name Transmission Owners is really just a smoke screen.  Yes, it includes all the owners of transmission systems in PJM, but look at the list of members, and you see the same old names.  The Transmission Owners are just the big generators and other big power companies dressed up in different clown hats.

Of course, PJM is a classic cartel.  The dictionary definition of cartel – a combination of independent commercial or industrial enterprises designed to limit competition or fix prices – explains most of what goes on within PJM.

A company called Atlantic Grid Operations (AGO) is the owner and developer of the Atlantic Wind Connection, the proposed high voltage direct current (HVDC) transmission line that will run from East Virginia to New Jersey off the Atlantic coast to connect the series of offshore wind farms that will be built in the next few decades.  Poor old Matt Wald has his usual misguided take on the project, but his article at this link provides a description of the project.  Atlantic Grid Operations is also a member of PJM, but the fact that it is a new member and a project that is not based on fossil fuels makes it a threat to all the advantages that incumbent Transmission Owners enjoy as members of the PJM cartel.

As it turns out, one of the main goals of the PJM Transmission Owners in the flurry of activity surrounding Order 1000 compliance at FERC has been to make sure that AGO’s Atlantic Wind Connection never gets built.  AGO has applied to have its project financed from PJM’s cost recovery program, but the Transmission Owners want to stomp on that one, before it even has a chance.

Here is the story from a filing submitted to FERC by AGO earlier this week.

According to AGO (and remember, this is only AGO’s side of the story, but it seems credible), the Transmission Owners have proposed changes to PJM cost recovery rules that are deliberately designed to keep AGO from getting this privilege for their Atlantic Wind Connection.  As we saw from the PATH situation, PJM will only allow an owner of a high voltage transmission project if that project is identified as needed and is included in PJM’s Regional Transmission Expansion Plan (RTEP).  So the Transmission Owners want raise the bar to make sure AGO’s project will never be included in a PJM RTEP.

Here is AGO’s description of the Transmission Owners’ scheme:

  1. The TOs claim that the AWC isn’t a real transmission project, because its main purpose is to connect generators to the PJM system.  Real transmission lines carry electricity from substation to substation instead of just connecting a generator to the transmission grid.
  2. The TOs claim that the AWC, which is a direct current line rated at +/- 320 kV is below the required capacity threshold to qualify as a high voltage transmission line, which is currently set at 500 kV rating for an alternating current line.
  3. The TOs want to use their power to change the PJM Transmission Owners Agreement to dictate what projects qualify for the RTEP, a power that lies exclusively with the PJM Transmission Expansion Advisory Committee and the Board of Managers.
  4. The TOs claim that because the AWC is only designed to connect a few specific generators to the PJM grid, it has no regional-wide benefits that would allow it to be included in the RTEP for cost recovery from all rate payers in PJM.
  5. Here’s the real doozy – the TOs want to change the definition of high voltage transmission line to include double circuited AC lines rated at 345 kV.  So even as they are wanting to raise the bar for DC lines, they want to lower it for their own AC projects.

The real laugher here is item 2.  As AGO’s lead engineer patiently explains in the testimony attached to the filing, there is a reason that “+/-” is in front of the 320 kV rating for a DC transmission line.

Moreover, the explanation the PJM TOs provide in their Answer for this patently unjust result rests on a serious error. That error is to make a straight comparison of A.C. and HVDC voltages without adjusting for the differing electrical characteristics of these facilities. As explained in the attached affidavit of Dr. Mohamed El-Gasseir, to evaluate A.C. and HVDC facilities on a comparable basis, it is important to measure the voltage measure for A.C. lines using the pole-to-ground rating, whereas the voltage measure for HVDC lines is the pole-to-pole voltage differential, which is sometimes expressed by a “+/-” in front of the voltage number.  Thus, a project like AWC that has a +/- 320 kV voltage rating actually has a pole-to-pole (conductor-to-conductor) rating of 640 kV (the difference between + 320 kV and -320 kV), and a conductor-to-ground voltage of 320 kV. Conversely, measuring A.C. lines on a similar phase-to-phase basis (conductor-to-conductor) would mean that double-circuit 345 kV lines actually have a voltage rating of just 200 kV, conductor-to-ground, as Dr. El-Gasseir explains. PJM has recognized this important electrical distinction between A.C. and HVDC facilities; for example, in the case of the MAPP project which PJM described as having a pole-to-pole rating of 640 kV, which is the same rating as the AWC facility.

The PJM TOs, however, have accused Atlantic Grid of lowering the bar by making the factually incorrect comparison of voltages between A.C. and HVDC facilities without recognizing the significance of the “+/-” designation for HVDC lines. The PJM TOs thus defend their proposal against the charge that it is unduly discriminatory by arguing that “they apply to D.C. projects the same 345 kV minimum voltage threshold that they apply to double circuit A.C. projects.”

I agree.  The fact that the TOs apparently don’t know the basics of electrical engineering would be a pretty strong reason not to allow them to make decisions about what high voltage transmission lines should be included in PJM’s RTEP.  This is a pretty strong argument that adult supervision is required.

The TOs argument that the AWC is really just a generator tie line is a disingenuous claim.  Wind turbines must be ranged over a relatively large geographic area, compared with the relatively small footprint of a big fossil fuel generator like the coal-fired John Amos plant.  In the less energy dense wind power system, relatively high voltage transmission lines are required to manage the surges of current flows that result across the line in times of high wind.  This is a very different function from the short high voltage connectors that run for coal-fired plants to long distance transmission systems in the current centralized system.  Thus, the TOs, based on the obsolete centralized fossil fuel model, are trying to strangle the emerging renewable power grid in its cradle.

If you still cling to the idea that using “deregulation” as a ruse to create industry-controlled cartels to run the US electric grid was a good idea, check out the AGO filing.  It will open your eyes.

8 thoughts on “PJM Cartel Exposed Again – The Atlantic Wind Connection Fights for its Life at FERC

  1. This is confusing logic. I guess logic is not to be applied here.

    AWC is about solving a known existing problem of lack of transmission in the Northeast. There are too many people, towns, mountains, and restrictions to plow through with more powerlines. So AWC is proposing to go out in the ocean. Put the powerline out there where there are no people, mountains, towns or other obstacles. AWC is also proposing to take advantage of offshore wind energy….the best source of wind energy in the nation.

    But FERC, PJM, ISO New England as RTO’s see the only solution as building new powerlines from Iowa to Maryland.

    Who’s is regulating the regulators?

    Looks like FERC has chosen its horse in this race, and it is Clean Line and not AWC as Clean Line and FERC are partnering for federal eminent domain in Arkansas, one of RICL’s sister projects.

    That’s what happens when the federal government and Warshington picks winners.

    Somebody has to be the loser.

  2. You know, it is truly amazing how much is missed the first time something is read and is seen the second time. Why do we even have rules, if the standards are changed from company to company. Clean Line is a Merchant Tranmission Line. Clean Line now wants cost allocation. Clean did not want to be apart of future planning, because they might be held to a higher standard. Now Clean Line feels they are relevant, vital, and should be apart of regional plans

    Clean Line is not alone with ever moving standards.

    PJM sets standards. Standards are changed so they do not apply to AWC, including the deffinition of “voltage” if necessary.

    Is this how the industry operates?

    Standards are set. Rearends are promptly wiped with those standards as new ones are created.

    Does anyone regulate these RTO Cartels?

    OH. Wait, that would be FERC. OK, who regulates the regulators?

    And as a land owner, I am supposed to respect FERC’s authority in handing out eminient domain?

    What a circus.

    • Scott,

      Until deregulation in the 1990s, there was no need to regulate the national grid because there was no national grid. Almost all power companies were confined to state boundaries and regulated by state regulators. When Congress pushed deregulation on us, suddenly power could travel from coast to coast. Who was going to regulate that? Well, there was FERC, already in control of the national pipeline system. So FERC got the job of taking over the national grid. But there still wasn’t a national grid. There was something called PJM which was a 30 year old consortium that power companies in PA, MD and NJ used in emergencies to share power. FERC realized that they could pump up PJM into a regional transmission operator and use that as the model for other RTOs across the US. PJM is FERC’s baby. PJM is both FERC’s laboratory and its favorite child.

      Keep in mind also that PJM is not a regulator. PJM is a cartel that serves only its members. And some members are more equal than others.

    • Scott,

      PJM does not promulgate or enforce standards. NERC sets standards for reliability on the national transmission grid. PJM’s rules are all set in their OATT and their Transmission Owners Agreement. These “tariff agreements” are contracts that all PJM members have to sign to join the cartel. Becoming a member of PJM gives you all kinds of goodies that give you a competitive advantage over any business that is not a member. This is what cartels do.

      So the argument in the AWC filing is not about standards, it is about FERC approving changes to PJM’s membership rules that would grant more competitive advantages to one type of PJM member (existing owners of existing lines, all land based, mostly AC, and all overhead) over another member (a new member with one underwater HVDC line serving a new approach to generation).

      It’s about the goodies available from the cartel not standards of any kind.

  3. OK. This definition of voltage has been running around in the back of my brain like….a brain roach just running around in my head. I took 5th grade math and science. I learned some basic things about electricity.


    Now it seems to me this argument of what “high Voltage” means is a bit irrelevant. Total megawatts is 7,000. So AWC is +/-320 volts.. To produce 7,000 MW, and use half the volts, they have to run twice the amps through the line.

    In comparison, the Rock Island CLean Line is talking about 500 or 600 +/- volts but only 3,500 MW’s If they use twice the volts, they use half the amps.

    So isn’t 7,000 MW’s still twice the 3,500 MW’s of RICL regardless of the voltage?

    PJM’s argument about voltage seems to be silly school girl logic.

    Now….for 7th grade math. If you have a powerline producing 3,500 MW’s per hour, what is the annual projected output?

    But if the 3,500 MWh is coming from wind energy, what is the projected annual output?

    The answer is under ICC Docket 12-0560 Exhibit 10.0 Line 89. According to RICL the output is 15,000,000 MWH annually. My math at 24 hours a day and 365 days in a year comes out to more than twice that number?

    Who runs a powerline at less than 50% capacity?

    When a venture capital company sells the powerline will it stay as wind energy?

    Why not put coal on this powerline and run the powerline at 100% capacity?

    • Scott,

      I am not an engineer, so I can’t really give you an answer to your question. I don’t know the ins and outs of what amperages are possible on HV transmission lines. Keep in mind, though, that the voltage ratings on these transmission lines are simply capacity ratings on the conductors, not some measure of actual possible current flows. The main thing that matters in a transmission line is whether the conductor melts or not, which engineers call thermal capacity. Before a line actually melts, the big problem with an overhead line is whether the conductor expands too much and sags to the point where it becomes dangerous, the way FirstEnergy’s line sagged and was a big factor in the 2003 international blackout.

      I say all this to say that the rating of a transmission line may have a lot of other factors and limitations than simple current flows.

      I pointed to the bigger issue about the non-wind power that the AWC could carry shortly after the line went public. This is exactly the same issue that the RICL has. Transmission owners can’t pick and choose the source of electrons that pass through their lines. Here is a link to my earlier post about AWC. You will see the similarities to RICL.

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