AEP Strains Trust of Marylanders

American Electric Power and its “little brother” Allegheny Energy want the Maryland Public Service Commission to grant permission for the construction of PATH.  (Action is suspended because the PSC told them they didn’t fill out the application properly.)

Meanwhile, the process continues in neighboring West Virginia.  The Applicant (AEP) and various intervening parties are trading testimony and interrogatories.

PATH has been criticized for being, among other things, a “coal-by-wire” project — a nearly 300-mile-long extension cord stretching from the coal-fired John Amos plant to Mt. Airy, Maryland.

“No, no, no, no” says AEP.  The one and only reason for the project is to improve the reliability of the multi-state, PJM-controlled transmission system.  This distinction is critical from a legal perspective.  After all, PJM rate-payers in Illinois and Michigan will all be paying for PATH.  The “benefit” they get in return is greater reliability.  (The Illinois Commerce Commission has challenged this very point in federal court.)

If, on the other hand, the coal-by-wire argument were true, then it would be unfair to charge rate-payers in Illinois and Michigan.  Instead, the cost of the PATH should be paid by either (or both) the generating plants and the consumers who benefit.  If that were to happen, then the project would probably not be built.

The fate of PATH turns on the answer to the question: Is it about reliability or coal-by-wire?

Let’s see… AEP proposed construction of PATH after AEP joined PJM.  PATH would provide a physical connection between AEP-owned John Amos plant and lucrative East Coats markets.  And yet, AEP argues that PATH has nothing to do with increasing sales from AEP-owned generating plants like John Amos.

Instead, PATH is an altruistic, community-spirited project intended to help everybody connected to the PJM system.

The PATH transmission project was identified to resolve a number of reliability criteria violations. In doing so, the PATH Project will enhance the ability of all generating resources in PJM, in aggregate, to be delivered to the aggregate customer load on the PJM system. The PATH project is neither intended to deliver any one specific generating resource or class of generating resources, nor is it designed to promote the future development of any class of new generation.

(This quote is from the Applicant’s response to Sierra-III-72 dated September 15, 2009, in West Virginia Public Service Commission Case No. 09-0770-E-CN.  This and other materials related to the case are available on the PSC website.)

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9 Comments

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9 responses to “AEP Strains Trust of Marylanders

  1. Tony

    How would PATH even increase the sales / revenues of Amos? Generally alleviating congestion is hand-in-hand with lower prices.

    • John Howley

      Tony highlights a very important question.

      According to an AEP press release entitled: “AEP proposes new 765-kv transmission superhighway in PJM
      Proposed project designed to relieve transmission congestion, enhance Midwest/Mid-Atlantic power flows and reliability” which you can find here: http://www.aep.com/newsroom/newsreleases/?id=1259. Presumably Amos and other AEP-owned generating plants are the ones whose power flows AEP hopes to “enhance.”

      Why should rate-payers in Illinois and Michigan pay to help enhance power flows and reduce congestion on the East Coast? Those are problems specific to the east/west PJM transmission interface. If that’s the purpose, then only the generators and consumers who benefit should be forced by FERC to pay for the new transmission. Which creates a legal problem for PATH.

      Which is why all of the current PATH promotional material refers SOLELY to reliability and says nothing about congestion.

    • Bill

      Tony,

      You should be aware that AEP and Allegheny Energy have admitted that they have never studied the impact of the PATH line on congestion costs in PJM.

      Here is a link to the full story, with source references. http://calhounpowerline.wordpress.com/2009/09/14/power-comanies-pjm-have-never-studied-congestion-costs/

      In a recent response to an interrogatory from the Sierra Club/WV Highlands Conservancy in the WV PSC case on PATH, the power companies responded as follows: “Neither AEP nor Allegheny has performed an analysis of the effect of PATH on congestion costs.”

      If they have never studied the question, how do they know if PATH will reduce congestion?

  2. Tony

    Are you indicating then, that congestion and prices in Ohio & further East do not effect Illinois and Michigan?

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  4. It’s all about coal. It’s all about Project Mountaineer, of which PATH is just a part. Susquehanna-Roseland is just a part. MAPP is just a part. TRAiL is just a part… and then there the Midwest transmission headed east, JCSP/MTEP08, it’s all connected.

    Here is the smoking’ stack: Read through the FERC Transmission for Coal docket, AD05-03. Read the transcript of a conference they had here, where it’s all laid out very neatly: http://legalectric.org/weblog/3147/

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  6. Major thanks for the article post.Really looking forward to read more. Cool.

  7. Pingback: Energy Efficiency and the Era of “Difficult” Hydrocarbons « Maryland Energy Report

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