UPDATED: Here’s the announcement just made by AEP and FirstEnergy:
American Electric Power (NYSE: AEP) today announced it will file, along with FirstEnergy Corp., to withdraw the applications for state regulatory approval of the Potomac-Appalachian Transmission Highline (PATH) project following an announcement by regional grid operator PJM Interconnection that the project has been suspended.
Today’s filings in Virginia, Maryland and West Virginia are in response to a directive by regional grid operator PJM Interconnection to suspend further development of the PATH project while PJM conducts a more rigorous analysis of the potential need for PATH as part of its continuing Regional Transmission Expansion Plan. PJM directed the construction of PATH in 2007 to resolve violations of national and local standards for reliable operation of the region’s transmission system. Since then, annual studies reaffirmed the need for PATH as the recommended solution for resolving these issues. However, PJM’s latest analyses indicate that the need for the project has moved well into the future.
“While we are certainly disappointed by the suspension of PATH and the uncertainties created by the PJM planning process, we do support a thorough and detailed analysis of the need for the project. We remain convinced that the project will be needed and plan to move forward with it when PJM completes its review,” said Michael G. Morris, AEP chairman and chief executive officer.
Here’s the announcement just in from PJM Interconnection, the group that manages our regional electrical transmission grid:
The outlook for a slower economic recovery has led the Board of PJM Interconnection to direct transmission owners to suspend efforts on the Potomac-Appalachian Transmission Highline (PATH).
The news release doesn’t appear to be on PJM’s Web site yet, and Here’s a link to the news release. Apparently the board decision was made on Friday. Here’s more:
PJM annually reviews its transmission expansion plans. A preliminary analysis suggests that the need for the line has moved further into the future. Therefore, the PJM Board has decided to hold the PATH project in abeyance in the 2011 Regional Transmission Expansion Plan (RTEP). The preliminary analysis used the most current economic forecasts, demand response commitments and potential new generation.
PJM will continue its analysis. The PJM Board will review the comprehensive analysis as part of its consideration of the 2011 RTEP.
And:
Over the last two years, the recession and the dramatic change in the economic outlook caused PJM to forecast lower growth in the use of electricity. Growth in the use of electricity correlates with economic growth. The forecasted slower growth rate likely will delay the need for the line.
The PJM Board’s action affects only PATH, which would connect the Amos Substation in West Virginia to the proposed Kemptown Substation in Maryland.
This announcement by PJM comes after the West Virginia Public Service Commission again delayed its hearings on the PATH project, amid mounting evidence that there are viable alternatives to the power line.
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This is just what the folks objecting to PATH have been saying all along, its not needed!
AEP/FirstEnergy have posted a press release on their former PATH Web site announcing that they will be withdrawing their applications before the WV and MD PSCs and the VA SCC. It looks like this thing may really be over.
http://www.pathtransmission.com/
Terry Boston, the president/CEO of PJM, had a lengthier statement about the board’s decision. In it, he cites three factors in deciding to “suspend” the project – (a) the drop in electricity forecasts, (b) the change in national energy policy, and (c) the spread of demand management programs.
I would have preferred that PJM kill the project entirely – particularly since at least two of those three factors will continue to mitigate against the “need” for PATH – but I also think there’s a possibility that this is a face-saving maneuver on PJM’s part, and at some point in the (hopefully) not too distant future, when the hubbub has died down and PJM can spare itself some embarrassment, it will get spiked for good.
AEP/FirstEnergy have just filed their motion to withdraw their WV application with the WV PSC. The document is listed on the PSC Web site, and the power company lawyers have sent it to all intervenors in the case, but the PSC does not have the document available yet.
Patience,
Here’s a link to the statement you’re referring to:
http://www.pjm.com/documents/~/media/documents/reports/20110228-bom-statement-planning-for-transmission.ashx
Perhaps importantly, it says:
“This action, however, does not, at this time, constitute a directive by PJM to the sponsoring Transmission Owners to cancel or abandon the PATH project.”
And here are the portions that have to do with the other factors you mention:
“Recent dramatic swings in economic forecasts and evolving public policies (particularly with respect to renewable energy) are adding greater uncertainty to our planning studies. Uncertainty about generation retirements, particularly in response to potential changes in environmental regulations, may also be diminishing the robustness of the current planning criteria.”
Ken.
I like the phrase: “robustness” of the “current planning criteria.”
It sounds a little like the lingo the counter-indurgency wonks use when they try to figure out how to persuade Afghan farmers to grow kumquats instead of pretty poppies. Or maybe when they evaluate night raids with drones in Pakistan. Engineer-speak.
We used it, too, in asking for more “robust” energy efficiency programs from the PSC. But it also is a good way — maybe a better use — to talk about coffee blends, no?
Anyway, this is a great win for the PATH skeptics and opponents, and for a “less is more” approach to our energy future. Thanks, you all!
“Robust” is the word PJM engineer Steve Herling has been throwing around for years. Unfortunately for him, WV law does not say the PSC must choose the most “robust” solution to reliability problems. WV law says the PSC must approve the “adequate and economical” solution. Which PATH certainly wasn’t.
Here’s the link to AEP/FirstEnergy’s motion to withdraw that was just filed at the WV PSC — http://www.psc.state.wv.us/scripts/WebDocket/ViewDocument.cfm?CaseActivityID=315499&NotType=%27servicelist%27&CaseServiceListID=25810
Bill and Tom,
In the context I quoted from, I believe that Terry Boston is talking not about a “robust” solution to reliability problems, but simply a more “robust” analysis of whether PATH is needed or not.
Ken.
Also, Bill, you cited only part of the test for PSC approval of a project of this nature … the entire test, for readers who don’t know is at W.Va. Code 24-2-11a,
(1) Will economically, adequately and reliably contribute to meeting the present and anticipated requirements for electric power of the customers served by the applicant or is necessary and desirable for present and anticipated reliability of service for electric power for its service area or region;
(2) Will be in the best interest of West Virginia customers and its citizens; and
(3) Will result in an acceptable balance between reasonable power needs and reasonable environmental factors.
http://www.legis.state.wv.us/WVCODE/ChapterEntire.cfm?chap=24&art=2§ion=11A#02
Ken.
Why is there no comment here about the tax dollars WV will lose because this line is not being built? Are there not pros AND cons? What about the cost of electricity in the area the line is going?
Governors of 10 states on the east coast have sent several letters to the US Dept. of Energy stating that they don’t want any new transmission lines bringing energy from West Virginia. There may be a few pros but they are far outweighed by the cons, here in WV and elsewhere.
Ken,
I was just adding another dimension to Tom’s comments on “robust” (a favorite PJM word). A robust analysis was something that PJM has not been doing. They have consistently rigged any analysis of alternatives to PATH, including hiring an engineering firm to review an alternative project while that firm already had a $1.5 million contract on the PATH project. I’m glad to see Mr. Boston has a new sense of “robustness” going forward. So far, PJM hasn’t done very well in the “robust analysis” business.
Altizer, there is no “tax revenue” that would be generated by the line – if anything, local governments would have seen a hit in their tax revenues as the PATH line hurt the property values of the landowners along the length of the line. And everyone’s rates would have gone up to help pay the $2.1 BILLION price tag (plus that 14.3% return on equity the federal government had promised them).
As for the cost of electricity where the line would have gone … That was always one whopping flaw in their case anyhow – none of the electricity was intended for Virginia or West Virginia, and Maryland was going to get just a fraction of it. Most of it was headed for New Jersey in the long term, when yet another massive line got built from Frederick Co., MD to Peach Bottom, NJ. BUT – and this is a big one! – New Jersey just passed a law in the past few months directing its [regulated] utilities to look at building generation plants in-state, in order to get OUT of having long-distance electricity shipped in.
That’s one of those inconvenient facts that PJM (and the two PATH companies) quietly chose to leave out of their reasons why the project wouldn’t go through …
Ken,
In the context of the Supplemental Direct Testimony submitted to the PSC by Steven R. Herling Vice President of Planning for PJM Interconnection, L.L.C. (“PJM”) Dated September 14, 2010, Page 2 of 31, Mr. Herling did write as follows: “As I will explain, PJM’s analyses (Were they robust???) during the past year, including the ongoing development of its 2010 RTEP, continue to demonstrate that the PATH Project is the most robust solution to resolve persistent, significant and widespread violations of NERC Reliability Standards.”
Thanks, John. I am aware of that quote. My only point above was that was not the context that the word “robust” was used in by Terry Boston. I generally try not to take people out of context. Ken.
You wanna talk about wasteful spending? Can anyone tell me how much AEP has spent over the past several years to retro fit their coal-fired plants with flue-gas desulpherization systems OR how much has been spent on the CO2 capture project?
Transmission line costs can be offset because the company is gaining an asset. These additions, however, are mandated to provide the same product (electrical energy) and add no economical value… simply deadweight on the end consumer (for pass through companies such as utilities).
If anyone wants to complain about their power bill, politicians are do as many complaints as utilities!
Altizer,
You wrote that pollution control systems added to AEP’s power plants “add no economic value” and are “simply deadweight on the end consumer.”
This is simply incorrect.
Just today, the U.S. EPA released a report that found that pollution controls put in place by the 1990 Clean Air Act saved 160,000 lives in 2010 alone. According to the study:
“The direct benefits from the 1990 Clean Air Act Amendments are estimated to reach almost $2 trillion for the year 2020, a figure that dwarfs the direct costs of implementation ($65 billion).”
That report is available online at http://www.epa.gov/air/sect812/prospective2.html …
It’s pretty easy to rant about “wasteful spending,” but in this case, your rant simply has no basis in fact.
Ken.
I would argue there is a conflict of interest in who enacted the Clean Air Act and who paid for the study. Of course if the EPA placed a mandate they can show it was worthwhile correct? Remember 90% of statistics are made up on the spot and can be subjective in how the numbers are calculated. Notice these statistics cover much more than coal fired generation…
I don’t mean to argue, just present the other side of some of the discussion I have been reading. There are both pros and cons to each topic we have discussed, yet I was only reading the cons.
The fact is these topics are very complex and I wish the politcal retoric would end. Ask 95% of Americans how a light bulb works and you would get blank stares or “it just does”.
Here is the way I see it: Our country is dependent upon electricity. This causes the required capacity to increase. There are several ways to combat this. 1) Lower consumption per person, 2) Build new generation, or 3) Create a transmission superhighway providing our current generation advantages to the areas without the resources to support demand.
I think a combination of all of these is the correct answer. We need to lower consumption, build new generation (wind, solar, nuke, coal, etc…) and build a tranmission system that links all three national grids. There is no renewable generation source that can support the demand of this country (AT THIS POINT). So why attack the capabilites we do have economically? The ones who hurt are the end consumers, not the politicians or utilities and that is exactly what you are seeing in WV.
Altizer,
That just doesn’t cut it … can you point to three items in the EPA study that you believe are “made up on the spot” or are incorrect?
Your views also ignore the clear science about the hidden costs to society from coal-fired power, http://blogs.wvgazette.com/coaltattoo/2009/10/19/national-academy-blockbuster-coals-huge-hidden-costs/ — The National Academy of Sciences put them at more than $62 billion … this means that the so-called cheap power you’re talking about isn’t really cheap if all of the costs are calculated.
Your analysis simply isn’t very sophisticated, and you’ve offered no links or citations to any published material that supports your views.
It’s fine if you want to argue that you would rather have cheap electricity and don’t care about the health impacts of that cheap power, but that’s just an opinion of yours, and it doesn’t undermine at all the very real costs that your way of doing things would impose on society.
Ken.
Unfortunately this is not entirely over. Read cautiously PJM’s remarks. They are in no way ruling this PATH project out entirely. I believe they will be back again in 2012 and this is just an attempt to “redo” their messed up incompetencies at their first attempt. They are just reorganizing. Read PJM remarks on this temporary “hold” on the PATH project. Keep watch folks. This is NOT over!
Soils in the areas where there used to be glaciers like the Northeast are very vulnerable to “acid rain.” Groundwater, lakes, streams, and rivers in the region were being made toxic and lifeless by sulfur emissions from coal burning, before sulfur scrubbers were put on.
The Clean Air Act protected and protects more than human health and lives. It protects soils and working farms and forests and wildlife and community water resources.