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Bad Day at Black Oak

Beware even the best of attempts at apportioning grid rights and costs.

Fortnightly Magazine - October 2006

be allocated likewise.

Meanwhile, however, PJM’s RTEP allocation scheme for new transmission upgrades would remain in place, leaving it open to the types of objections noted above.

In the last few weeks, however, in an interesting twist, PJM has proposed an entirely new RTEP regime. This new regime, says PJM, would dispense with attempts to distinguish upgrades driven by reliability needs, versus upgrades driven by economic ones— e.g., to relieve congestion or promote access to cheaper power supplies. This change, notes PJM, would allow it to use its RTEP process to solicit upgrades to reduce total production costs (fuel plus O&M), total generator revenue, or total system-wide zonal load payments. In other words, it would free the RTO to build a grid of the future aimed more at promoting commerce over a wide geographic area, rather than simply solving various local problems. (See FERC Docket No. ER06-1471, filed Sept. 8, 2006.)

Also, in a brief filed in the transmission rate-design case, PJM appears to accept the inevitable rejection of license-plate pricing, with a wider regional allocation of costs, such as for grid facilities of 500 kV or higher. (See, PJM Brief on Exceptions, pp. 9-10, FERC Docket No. EL05-121, Aug. 14, 2006) .

And if that occurs, says PJM, FERC “should ensure than any implementation of such a change is synchronized with a concurrent change in the methodology for allocating ARRs.”

For that, however, Chambersburg may need to wait until Day 3.

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