Cost Containment Passes Members Committee

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The discussion of cost containment proposals related to Order 1000 competitive transmission projects came to an end Thursday when members easily passed the package, including friendly amendments, at the Members Committee meeting.

The cost containment proposal – the amended LS Power proposed Operating Agreement revisions with a friendly amendment from Dominion clarifying rights and responsibilities – passed with 4.17 in a sector-weighted vote (3.335 was needed for approval).

PJM President and CEO Andy Ott addressed the meeting prior to the vote. He acknowledged that some of the recent processes in the Planning Committee and Transmission Expansion Advisory Committee have been “quite stressful” and that PJM staff’s resources are “not infinite.” Initiatives will be completed, he warned, but as a “reality check,” they are not all going to happen at the same time.

PJM has long been concerned with the volume of work related to the FERC Order 1000 competitive window process. Ott believes that PJM’s focus should instead be on supplemental project transparency and other RTEP enhancements where the cost and efficiency gains are potentially much higher.

He addressed member concerns about costs, especially on supplemental projects, and about how to improve the Regional Transmission Expansion Process. He said PJM and its members have work to do to improve the RTEP, and that improving transparency translates into lower costs.

“Overall, PJM supports providing greater transparency both in how we consider different components of competitive transmission projects and in the reasons for, and projected costs of, supplemental projects,” said Ott.

On cost containment considerations, Ott said PJM commits to developing the comparative framework to implement the cost containment proposal the committee passed, but it is “just a framework.”

He supported retaining the PJM sponsorship model but has concerns about what happens “if we add on to that. Is that going to be a workable circumstance?” Ott stressed that developing the RTEP needs to remain a timely process and whatever is developed under the cost containment provisions needs to address that requirement so the process does not become “more burdensome.”

He also asked stakeholders to consider the proposal from the Transmission Replacement Processes Senior Task Force that specifically reflects the Federal Energy Regulatory Commission’s direction on providing transparency on supplemental projects.

It is PJM’s role to facilitate, said Ott, but not to substitute its judgement for that of the transmission owners.

“That’s not our expertise. We can provide facilitation vehicles for information, and provide a helpful role.”

Dave Anders, director – Stakeholder Affairs, presented the discussion from Monday’s Members Committee Webinar regarding addressing stakeholder concerns about the volume of activity in the stakeholder process.

Anders said that PJM staff is working on a proposal to discuss at the July Members Committee meeting. PJM and its stakeholders are looking at a variety of issues and new problem statements and issue charges are introduced every month. There are a number of issues being worked simultaneously, many of high priority.

He added that one of the items to explore is timelines, and he posed a question about potentially staggering the timelines, so all the issues are not being worked on at the same time.

Mike Borgatti, Members Committee chair, discussed initial planning for an open all-day working session to begin developing a framework for ideas to enhance the stakeholder process.

 Approved during the consent agenda