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PJM Interconnection's analysis continues to show a need for the Independence Energy Connection project, according to the company's latest report.

The benefit-to-cost ratio has to meet or exceed 1.25:1. The latest re-evaluation report shows that PJM's analysis is 1.42:1, senior engineer Nicolae Dumitriu confirmed.

The report was presented at a PJM Transmission Expansion Advisory Committee on Thursday, Sept. 13.

The Independence Energy Connection project is slated to run 16 miles of new overhead power lines in southern York County and 29 miles of power lines through Franklin County.

Capital costs of the project have increased from $320 million to $336.17 million, according to Dumitriu, but officials note that they do not have current cost estimates of the project from Transource Energy.  

The project “must have a ratio of no less than 1.25:1” benefit-to-cost ratio over a 15-year period, according to the Pennsylvania Office of Consumer Advocate. The new powerline showed a 2.48:1 benefit in 2016 and was re-evaluated at 1.32:1 in 2017.

Transource, hired to design, construct and obtain state approvals for the project, is currently working on bidding construction work, said PJM Vice President of Planning Steve Herling.

"Initial cost estimates included consideration for the variability of the costs" and "have not changed at this time," Transource Energy Director Todd Burns said. "PJM's most recent assessment includes a potential cost increase in the project and still shows an increased net benefit relative to their prior assessment."  

PJM has projected that the project will save ratepayers $866.2 million in congestion costs over 15 years.  

Landowners as well as representatives of the Pennsylvania Office of Consumer Advocate who attended Thursday's committee meeting questioned the validity of the benefit-to-cost ratio. 

If Pennsylvania and Maryland do not approve the project, PJM would have to start all over again, and the regional grid operator could possibly consider using an existing line, Herling said. 

Landowners who could be affected by the project had been optimistic the project could end with the report.

Maryland's Republican governor, Larry Hogan, as well as lawmakers in Pennsylvania and Maryland have applied political pressure on the regional grid operator to stop the project.

More: Political pressure against power line project gains momentum

More: Eminent domain battle looms over Transource project

More: PUC hearing raises questions about power line project in York, Franklin counties

“Understanding both the cost and societal impact a project may have, I assure you we do not embark on this responsibility lightly,” PJM President and CEO Andrew Ott wrote in a letter to Hogan. “As such, PJM undertakes a routine re-evaluation process of approved projects. This is done to ensure the project’s need persists.”

The York County portion of the project includes 16 miles of new transmission line that will run from Lower Chanceford Township to the existing Conastone Substation near Norrisville in Harford County, Maryland.

The Franklin County segment includes 29 miles of new transmission line that will run from Southampton Township to the existing Ringgold Substation, near Smithsburg in Washington County, Maryland.

“PJM annually reviews the costs and benefits of constructing new, previously approved market efficiency projects,” Ott explained in his letter to Maryland's governor. “Those re-evaluations are to identify if a project continues to prove cost beneficial to consumers.” 

Barron Shaw wrote in a statement before the meeting that he and other opposed landowners were "very hopeful that this decision gate will finally put an end to this ill-conceived market-efficiency project that offers little benefit to the wealthy suburbs of Washington, D.C., while placing almost all of the burden on rural farms in southern Pennsylvania and northern Maryland.”

Interest rates, labor costs and the cost of raw materials, “driven by recent tariffs, have all changed significantly since those first cost estimates,” Barron stated.

“While PJM touts the sophistication of their grid congestion simulator that attempts to predict congestion prices and economic benefits 15 years in the future, they have completely disregarded all of the known costs this project is causing to non-utility entities,” Barron wrote.

He claims that PJM didn’t include:

  • current legal costs to all entities fighting the process;
  • operating costs to all state governmental agencies charged with analyzing and regulating the application;
  • depreciation of property and business values caused by the transmission lines;
  • lost property tax revenues from depreciated land values;
  • lost revenues from agritainment and pick-your-own businesses;
  • long term agricultural losses caused by the lines.

“Regardless of PJM’s decision this week, we are committed to stopping this project and protecting our farms, families and heritage,” Barron wrote.

 

 

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