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PJM Reliability Projects - Cost Allocation and Competitive Process

On January 23, 2000, in Docket ER20-45, FERC approved a change to the PJM tariff that eliminates the exemption from the competitive proposal window process transmission projects included in the PJM Regional Transmission Expansion Plan (RTEP) to address transmission needs driven solely by individual transmission owner Form No. 715 local planning criteria.  FERC had required this change by PJM to recognize that these RTEP projects are no longer allocated to the zone where they are located but are allocated via DFAX and load ratio share.  For a current view of PJM’s differing RTEP projects and their cost allocation, click  on www.dumaisconsulting.com/blog or see below.

Please contact me if I can be of service to you or your clients.  

 

RTEP Reliability Projects

Description

(Reliability Projects are Required Transmission Enhancements that are included in the RTEP to address one or more reliability violations or to address operational adequacy and performance issues) 

Cost Allocation[1]

Regional Facilities

Required Transmission Enhancements included in the RTEP that are transmission facilities that:  (a) are AC facilities that operate at or above 500 kV; (b) are double-circuit AC facilities that operate at or above 345 kV; (c) are AC or DC shunt reactive resources connected to a facility from (a) or (b); or (d) are DC facilities that meet the necessary PJM.

Costs allocated using a hybrid cost allocation method – 50% allocated
on a load-ratio share basis and 50% allocated using solution-based distribution factor (DFAX) method[2]

Necessary Lower Voltage Facilities

Required Transmission Enhancements included in the RTEP that are lower voltage facilities that must be constructed or reinforced to support new Regional Facilities. 

Costs allocated using a hybrid cost allocation method – 50% allocated
on a load-ratio share basis and 50% allocated using solution-based distribution factor (DFAX) method

Lower Voltage Facilities

Required Transmission Enhancements that: (a) are not Regional Facilities; and (b) are not “Necessary Lower Voltage Facilities.

100% allocated using solution-based DFAX method

Local Planning (Form 715) Facilities

 

Annual Transmission Planning and Evaluation Report that any transmitting utility that operates integrated transmission facilities at or above 100 kV must file with the Commission on or before April 1 of each year.  Form No. 715 requires submission of transmission planning reliability criteria that the transmission owner uses to assess and test the strength and limits of its transmission system.

 

Allocated as Regional Facilities, Necessary Lower Voltage Facilities or Lower Voltage Facilities, depending into which category the Local Planning Facility fits.[3]

 

 

In developing the RTEP, PJM identifies transmission projects to address different criteria, including PJM planning procedures, North American Electric Reliability Corporation (NERC) Reliability Standards, Regional Entity reliability principles and standards, and individual transmission owner Form No. 715 local planning criteria.

1  Per Schedule 12 of the PJM OATT

2  The Solution-Based DFAX method evaluates the projected relative use on the new Reliability Project by the load in each zone and withdrawals by merchant transmission facilities, and through this power flow analysis, identifies projected benefits for individual entities in relation to power flows.

3  Compliance filing pending at FERC in Docket No. ER15-1344.

 


[1] Per Schedule 12 of the PJM OATT

[2] The Solution-Based DFAX method evaluates the projected relative use on the new Reliability Project by the load in each zone and withdrawals by merchant transmission facilities, and through this power flow analysis, identifies projected benefits for individual entities in relation to power flows.

[3] Compliance filing pending at FERC in Docket No. ER15-1344.

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