Delaware has few options in power line rate hike fight
A federal lawsuit is Delaware’s best option to fight a controversial project that will increase residents’ electricity bills, state officials say.
In fact, the state is already bracing for a lawsuit even though it is required to pursue another step before it can file litigation.
“We are ultimately going to court,” said Robert Howatt, director of the Delaware Public Service Commission.
PJM Interconnection, an Audobon Pennsylvania-based operator of power grids across the Mid-Atlantic plans to build a transmission line connecting the Artificial Island nuclear plant to a substation in Red Lion. The company claims the power line is needed because Artificial Island’s lines have become outdated and a connection upgrade would reduce power outages in the wake of a hurricane or other catastrophic event and limit individuals affected if an outage occurs.
But Delaware will be forced to pay for most of the project’s $165 million price tag, while only receiving 10 percent of the transmission line’s benefit. Legislators at a Delaware Senate hearing Thursday said residents could be forced to pay for as much as 90 percent of the project, but PJM contends Delawareans will pay about 60 percent. New Jersey residents will experience the majority of the transmission line’s benefits.
The cost will be tacked on to residents’ electricity bills, adding between $2 to $4 dollars per month over the next 40 years.
“If you add this $2 you are paying $22 a month before you even turn on a light switch,” said Drew Slater, Delaware’s Public Advocate. “And we won’t get charged until 2021, meaning we will be paying this until 2061.”
Delaware already has some of the highest electricity bills in the country with customers of Delmarva Power, the state’s largest utility, paying an average of $151 per month.
PJM had proposed a more expensive version of this project last year. That would have added between $9 to $13 per month to customers’ utility bills. PJM suspended that plan after facing fierce opposition from Delaware officials. The company’s board of managers will vote in early April on whether or not to move forward with the new transmission line proposal.
If PJM moves forward with the plan, Delaware will be forced to accept the cost allocation. PJM is the sole operator of the Mid-Atlantic region’s electricity grid and is responsible for managing and maintaining the system’s reliability. If Delaware were to separate itself from PJM, the state would have no electricity. The Public Service Commission and other state agencies have no authority over PJM. Only the federal government can regulate PJM.
In fact, a PJM executive blamed the federal regulators for the cost allocation placing a burden on Delaware. Steve Herling, vice president of planning for PJM, told state legislators last week that under federal guidelines, PJM is barred from considering cost allocation when selecting a project. Instead, PJM must choose based on a number of factors.
“We are not empowered to consider cost to individual groups of customers when selecting a project,” Herling said.
That leaves Delaware with few avenues to change the allocation. The state can file a request for a rehearing with the Federal Energy Regulatory Commission, or FERC, which regulates the transmission and sale of electricity in the United States.
