Cost of proposed York County powerline project grows
The cost of a new powerline project proposed for parts of York and Franklin counties has increased by $50 million.
Updated cost estimates provided to PJM Interconnection by Transource Energy recently for the Independence Energy Connection project were reworked “based upon recent market information," the contractor overseeing the project confirmed.
Transource Energy, working to obtain Pennsylvania and Maryland approvals, noted its latest increase is less than 3 percent in capital costs from the original project's scope, spokeswoman Abby Foster said.
"Transource’s original cost estimates provided for variability of the costs of components or portions of the project," she said. "As the company moves through the project development process and received major material and construction bids, the company has updated its project costs.”
The original cost of the project — estimated by Baltimore Gas and Electric, First Energy and Transource — was $320 million in 2015. The current estimated price is $372.23 million, said PJM Interconnection Media Relations Manager Jeff Shields.
Transource hasn’t hired a general contractor yet, although the energy company has received several bids that are in the process of being evaluated, Foster reported.
Reworked capital costs now include specific changes, such as incorporating the use of monopole structures instead of lattice structures, Foster continued.
The project needs Pennsylvania Public Utility Commission approval before construction can begin. It is slated to run 16 miles of new overhead power lines in southern York County and 29 miles of power lines through Franklin County.
One of the hurdles the project needs to overcome is proving it has a benefit-to-cost ratio of 1.25:1 or greater. A September re-evaluation of the project showed that PJM’s analysis is 1.42:1, PJM Interconnection senior engineer Nicolae Dumitriu confirmed.
With the cost increase, it is now 1.40:1, "still more than enough of an economic benefit to keep the project on PJM's Regional Transmission Expansion Plan," Shields said.
“The results demonstrated an increase in the project benefits from the last analysis and affirmed the regional transmission operator’s identified need to reinforce the electric grid and alleviate congestion,” Foster stated.
The final project's path hasn't been determined yet, and litigation fees also haven't been finalized. Those costs have not been tallied.
PJM Vice President of Planning Steve Herling said if the project is not approved, then the regional transmission operator would have to start over again.
He recently reported that in addition to the $866 million in congestion savings it would create, the IEC also would address “significant reliability issues that are emerging on the regional transmission system, including the potential overload of a key high-voltage line that carries electricity across the Pennsylvania-Maryland border.
“Without the additional transmission capacity provided by the Transource project, the system could face serious violations of federal reliability standards, which would require additional measures to address,” Herling said.
Estimate questioned: Industry experts who provided testimony to the PUC maintain the project's projected cost is not accurate.
Attorney Scott Rubin concluded that the cost estimate doesn't factor in how current electricity is already being used, among other factors.
“The analysis completely ignores increases in costs that would be incurred by zones outside of the region benefiting a project,” the attorney wrote. “That is, the economic analysis used by PJM and Transource completely ignores the fact that the lower-cost power that would flow into certain regions is already being used elsewhere.”
He noted Pennsylvania consumers would save millions if the project is not built.