FEDERAL AGENCY SAYS NJ MUST BEAR FULL COST OF $1.2B TRANSMISSION LINE
BPU argues reliability upgrade mandated by regional grid operator benefits New Jersey and New York, but FERC says Garden State must foot the bill
The Federal Energy Regulatory Commission has denied a bid by New Jersey officials to overturn a decision in a multistate dispute concerning who gets saddled with the costs of a $1.2 billion transmission upgrade.
In a decision rendered last Thursday, the federal agency denied a complaint by the New Jersey Board of Utilities in a case state officials argued unreasonably left ratepayers here bearing the cost of a reliability upgrade mandated by the regional grid operator, PJM Interconnection.
In its complaint, the BPU argued the Bergen-Linden transmission project not only addressed reliability issues in northern New Jersey but also benefits other suppliers in the grid operated by the New York Independent System Operator — providing additional capacity from PJM into that system.
The case stems from a trend in which utilities across the nation are being pressed to modernize an aging power grid that faces multiple issues. These stem from the premature retirement of coal and nuclear power plants and a growing shift to renewable energy and other sources of distributed energy.
FERC referees fight
The federal agency ended up as the referee in the dispute between the BPU; and NYISO; Consolidated Edison; PJM; two transmission operators, Linden VFT and Hudson Transmission Partners; and the New York Power Authority.
Initially, the cost of the transmission upgrade was allocated among ConEd, the two transmission operators, and Public Service Electric & Gas, which built the transmission infrastructure. Essentially, all parties in the case sought to avert sharing the costs by terminating previous agreements tapping power from the new transmission line, with the exception of PSE&G.