Transmission Network Investment in Liberalized Power Markets by Unknown

Author:Unknown
Language: eng
Format: epub
ISBN: 9783030479299
Publisher: Springer International Publishing

7.5 PJM

PJM is by far the largest RTO/ISO in the country. Its origin can be traced back to a multi-state power pool created in 1927. PJM now covers generating and transmission facilities in 13 states plus the District of Columbia with about 180,000 Mw of generating capacity and 85,000 miles of transmission lines. About $30 billion of investment in transmission capacity has been selected in PJMs Regional Transmission Expansion Planning process (RTEP) since 2000.58 PJM manages a set of wholesale markets for energy, ancillary services, and capacity in the PJM region, relying on for the energy and ancillary services markets security-constrained bid-based market models with nodal prices.

PJM had a comprehensive regional transmission planning process and associated procedures prior to Order 1000 the Regional Transmission Expansion Plan or RTEP. Process changes to comply with Order 1000 took effect on January 1, 2014, though these are properly viewed as enhancements to existing processes. PJM began to implement a competitive planning process consistent with Order 1000 in 2013 when it opened two competitive “windows.”59 The PJM staff works with the stakeholder Transmission Expansion Advisory Committee (TEAC) and ultimately the independent PJM Board to approve changes to the regional plan, new projects falling into certain categories, and project cancellations. PJM publishes extensive information about these processes on its website.

As noted earlier, PJM has adopted what it calls a “sponsorship” model. Rather than specifying a particular project (e.g., build a 220 kV line from A to B to increase transfer capacity by X Mw), PJM publishes a set of reliability violations (reliability projects) or a set of highly congested interfaces (market efficiency projects) and solicits proposals from incumbent and non-incumbent transmission developers to resolve the violations or to reduce forecast congestion cost sufficient to justify the investment. Market efficiency projects must have a benefit/cost ratio great than 1.25. In order to solicit projects PJM opens various competitive “windows.” Projects that are five years out or more are solicited in a “long-term window.” Projects that are three to five years out are solicited in a “short-term” window. Projects that are less than three years out are classified as “immediate need” projects. If there is insufficient time to open a 30-day window and evaluate proposals for immediate need projects, PJM identifies a solution and designates an incumbent to implement the solution. There are other exclusions from PJM’s RTEP competitive planning projects. These include “supplemental projects,” which are projects designated by transmission owners to meet local planning criteria and to replace aging infrastructure, and “network projects” which are projects associated with the interconnection of generators to meet power delivery requirements. They are reviewed by subregional committees established by PJM and the TEAC but do not go through the same level of PJM review as projects designated to meet NERC and regional reliability criteria and market efficiency projects.60 Nor are they included in PJM’s competitive procurement windows.61 These exclusions from the competitive RTEP process are not trivial. Between 2013 and 2018, the estimated cost of new baseline RTEP projects was about $12 billion and the estimated costs of new supplemental projects was about $19 billion.

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