On March 4, 2020, FERC denied rehearing of its prior order rejecting the New Jersey Board of Public Utilities’ (“NJBPU”) complaint alleging unjust and unreasonable cost allocations for the Bergen-Linden Corridor transmission project (“BLC Project”). FERC found that it had already fully addressed the issues raised in the original complaint and that there was no need for an evidentiary hearing to evaluate disputed facts related to the BLC Project.

The $1.2 billion BLC Project, a double circuit 345 kV transmission line located within the PJM Interconnection, L.L.C. (“PJM”) footprint, was selected by PJM as part of its Regional Transmission Expansion Plan.  As a result, costs for the BLC Project were allocated based on PJM’s Order No. 1000 regional cost allocation method set forth in Schedule 12 of the PJM tariff. The BLC Project costs were initially allocated amongst Consolidated Edison Company of New York, Inc. (“ConEd”), Linden VFT, LLC (“Linden”), Hudson Transmission Partners, LLC (“Hudson”), and Public Service Electric and Gas Company (“PSEG”). In 2017, ConEd terminated select transmission service agreements that allowed ConEd to wheel power through PSEG facilities within PJM, causing its cost allocation responsibilities to be reassigned to Linden, Hudson, and PSEG consistent with Schedule 12 of the PJM tariff. Subsequently, Linden and Hudson converted certain firm transmission withdrawal rights on the Project to non-firm rights, leading to their cost allocation responsibilities to be reassigned to PSEG pursuant to Schedule 12.

Independently, to prepare for ConEd’s wheeling terminations, PJM and the New York Independent System Operator, Inc. (“NYISO”) developed an Operational Base Flow (“OBF”) to ensure reliable flows between PJM and NYISO.

On December 22, 2017, NJBPU filed a complaint against PJM, NYISO, ConEd, Linden, Hudson, and the New York Power Authority (collectively, “Respondents”), arguing that the terminations of the ConEd transmission service agreements and conversion of Linden and Hudson’s rights were unduly discriminatory, unjust and an unreasonable. The NJBPU complaint also argued that the OBF allowed NYISO to receive capacity and reliability benefits from the BLC Project without commensurate compensation, thereby shifting the cost responsibilities for the BLC Project solely to PJM ratepayers. FERC denied the complaint, finding that PJM’s actions were proper under its tariff, and that, as NYISO did not voluntarily assume cost responsibilities for the Project, Order No. 1000 dictated that the costs of the BLC Project could not be allocated to NYISO (see May 29, 2018 edition of the WER).

On rehearing, NJBPU argued that FERC failed to look at the overall effect of the Respondents’ actions, and instead viewed them in individual silos.  NJBPU contended that it is the combined effect of the Respondents’ actions that led to unjust and unreasonable rates for New Jersey ratepayers. Further, NJBPU asserted that material facts remained in dispute with regard to the benefits NYISO and other parties would accrue from the BLC Project, and that such material facts should be evaluated through an evidentiary hearing.

In its order denying rehearing, FERC first found that each of the underlying actions taken by the Respondents had been appropriately reviewed by FERC. FERC reiterated that the cost responsibility reassignments related to the BLC Project from ConEd, Hudson, and Linden were consistent with PJM’s tariff, and that, because the BLC Project was planned solely by PJM without voluntary commitment from NYISO, the BLC Project costs were appropriately allocated solely to PJM as required by Order No. 1000. Finally, FERC found that any material facts in dispute in relation to the accrual of benefits to NYISO were not relevant to its decision, as NYISO did not voluntarily assume any cost responsibilities and could not be allocated costs under Order No. 1000. As such, FERC concluded an evidentiary hearing was unnecessary.

A copy of FERC’s order can be found here.