PJM approves $100 million in transmission project plans

Ann de Rouffignac
OGJOnline

PJM Interconnection LLC�s board approved $100 million of transmission project plans in its region to help reduce electricity congestion Wednesday. The projects will connect new generating plants to the grid improving the supply of electricity and will relieve some congestion.

PJM received interconnection requests from transmission owners for over 150 projects, but just 40 received final approval. PJM is an independent system operator administering the open access tariff and the PJM energy market. Individual projects approved by PJM are still subject to state approval.

It administers about 8% of the total power in the US within the states of New Jersey, Pennsylvania, Maryland ,Delaware, parts of Virginia, and Washington DC. It has about 58,000 Mw of generation within its area.

Proposed transmission projects are placed in queues, defined by dates, and reviewed thoroughly. The expansion plans are developed through a coordinated process involving the transmission owners for the region and public review with stakeholder input through the PJM Transmission expansion advisory committee.

Plans approved must be consistent with the goal of relieving congestion, ensuring reliability, and promoting a robust power market, says Rick Drom, PJM vice-president and general counsel.

PJM coordinates the regional transmission expansion planning as a part of its responsibilities as an independent system operator.Once the projects get final approval from the board, the transmission owners then commit the funds to build the facilities, Drom says.

�The transmission owners agreed to abide by the regional transmission planning program approved by the board,� he says.

Getting cooperation from transmission owners to make necessary improvements that will benefit the entire region and not just their service territory is a challenge facing most electricity control areas, industry observers say.

�It wasn�t a matter of cajoling the transmission owners to sign the agreement,� Drom says. �They voluntarily did so for good reason.�

PJM established price signals called locational marginal pricing that reflect the true cost of power at particular points. This pricing system gives clear signals to transmission owners where the points of highest congestion are and where the most money can be made. The pricing system provides the incentives needed to get solutions proposed by the transmission owners to relieve that congestion.

The board then decides which projects benefit the region the most at the cheapest cost. For example, a utility in Pennsylvania proposed a transmission project that would cost $50 million to relieve congestion in its service territory, says Drom. But PJM discovered a neighboring utility could solve the problem at a cost of only $10 million.

�We got both utilities in a room with the PJM officials and solved the cost allocation,� says Drom. �We will relieve the congestion, saving $40 million.�