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PJM Transmission Cost Allocation: EL19-61

On January 18, 2018, FERC issued an order requiring PJM to revise its Operating Agreement to specify that transmission needs driven solely by individual transmission owner Form No. 715 local planning criteria are not subject to PJM’s competitive proposal window process.  FERC required that revision because it had accepted the PJM Transmission Owners’ proposed revision to the PJM Tariff to allocate 100 percent of costs for projects that are included in the PJM Regional Transmission Expansion Plan (RTEP) solely to address individual transmission owner Form No. 715 local planning criteria to the transmission zone of the transmission owner whose Form No. 715 local planning criteria underlie each project.  The PJM Operating Agreement provided for the transmission owner to construct projects allocated 100 percent to its zone.  The U.S. Court of Appeals for the District of Columbia Circuit (Court) reversed the Commission’s acceptance of the 100% local allocation, as the Court concluded that higher voltage facilities resulting from local planning criteria have regional benefits and should not be allocated 100% to the local zone.  In a companion docket, FERC recently rejected the 100% local allocation.  Because the costs of projects needed solely to address individual transmission owner Form No. 715 local planning criteria will no longer be allocated 100 percent to the transmission zone of the transmission owner whose Form No. 715 local planning criteria underlie each project, FERC is instituting this proceeding to require PJM to revise the PJM Operating Agreement to no longer exempt from the competitive proposal window process such projects, or to show cause why such changes are not necessary. PJM has 30 days to respond. 

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