PSE&G Files Complaint with Federal Agency Against Power-Grid Operator

Utility’s beef: PJM is not following own rules deciding who gets to build 18-mile transmission line

PSE&G Hope Creek
Public Service Electric & Gas is asking a powerful federal agency to order the operator of the nation’s largest power grid to follow its own rules in deciding who will build a new high-voltage transmission line in South Jersey.

In a complaint filed with the Federal Energy Regulatory Commission, the Newark utility charged the process to determine who will build the new line set up by PJM Interconnection is not working. Twenty-six energy companies were interested in the project.

The initiative is designed to address reliability problems related to three nuclear units in Salem County on Artificial Island in Delaware Bay, the nation’s second-largest nuclear complex, capable of producing 3,818 megawatts of power. One megawatt is enough to power about 800 homes.

For PJM, which oversees a grid stretching from the Eastern Seaboard to Illinois, the proposed project is the first transmission upgrade to be competitively bid out, instead of ordering the incumbent utility to undertake the task.

The staff of PJM last June recommended that PSE&G build the 18-mile transmission line, which, if approved, would cost between $280 million and $320 million. That recommendation, however, has not yet been acted on by the PJM board, which PSE&G claims has allowed other applicants to modify their proposals, allowing one company to change its paperwork one year after the window on applications closed.

“That defies the nature of a fair, competitive process,’’ said Karen Johnson, a spokeswoman for PSE&G.

For utilities like PSE&G, transmission upgrades are an increasingly lucrative strategy, driving much of the company’s earnings growth. Most of the utility’s capital budget in recent years has been spent on upgrading or building new transmission lines.

“There’s a lot of money at stake,’’ said Paul Patterson, an energy analyst with Glenrock Associates in New York City. “Anything that is new is going to cause controversy.’’

Ray Dotter, a spokesman for PJM called PSE&G’s complaint premature since no decision on the transmission line has been made.

“We disagree with many of PSE&G’s arguments and intend to respond to its complaint in detail,’’ Dotter said. “We have learned that any process involving competitive solicitations is complex and raises yet-to-be-answered implementation questions.’’

Johnson said the utility recognizes that there are growing pains with implementing any new process and believes PJM acted in good faith in trying to reach a reasonable conclusion.

“Unless the tariff process is followed and bidders know what to expect, there’s a strong possibility companies won’t or can’t bid on projects when the rules keep changing,’’ she said. “That will impact the quality of the responses and the entire quality and robustness of the process.’’

To the company’s knowledge, it is still a viable competitor to build the project, according to Johnson.

Even if approved by PJM, the project faces big hurdles. Under the PSE&G proposal, a portion of the initiative would require winning permits from the federal government to build a line underneath the Delaware River.

PSE&G’s proposed route would cut through a national wildlife refuge and state wildlife management areas. Environmentalists complain that many energy projects traverse lands set aside for conservation.

We’re in this together
For a better-informed future. Support our nonprofit newsroom.
Donate to NJ Spotlight