On March 25, 2010, Central Transmission, LLC (“Central Transmission”) filed a complaint with FERC against PJM Interconnection, L.L.C. (“PJM”). Central Transmission claims that PJM’s tariff is unjust, unreasonable and unduly discriminatory because it does not provide the same regulated, rate-based recovery provisions to new transmission developers as it does to incumbent Transmission Owners.
Central Transmission is a member of the LS Power Group, which is planning to build a new 160-mile, 345-kV LaSalle transmission line to relieve congestion between Illinois and Indiana. On December 1, 2009, Central Transmission submitted a request to interconnect the project to the grid. Pursuant to the PJM’s Operating Agreement, Central Transmission submitted a request on December 17, 2009 for PJM to study the LaSalle Project as an economic upgrade, and stated that it wanted to own and operate the facility as well as receive regulated, rate-based recovery for the project.
PJM’s Regional Transmission Expansion Plan (“RTEP”) distinguishes between reliability and economic upgrade projects, and states that if an incumbent Transmission Owner is designated by PJM to construct and own an economic upgrade facility, the incumbent is entitled to recover costs from PJM’s transmission customers through regulated, rate-based rates. However, PJM’s current rules could be seen as allowing only incumbent Transmission Owners to receive such treatment, forcing non-incumbent owners to recover costs through a merchant transmission model (where they are only allowed certain financial rights, such as Incremental Auction Revenue Rights). Central Transmission claims this is a violation of the Federal Power Act because the cost recovery rules are applied based on the identity of the entity building the facilities.
Although this case is specific to PJM, Central Transmission is seeking cost assurances before it is designated as the company to perform the economic upgrade. Therefore, FERC’s actions in this case could provide precedent on how non-Transmission Owners will be treated in other regions with regard to transmission development and cost recovery in the future.
A copy of the full complaint is available at www.ferc.gov under docket number EL10-52.