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Delaware balks at power line funding formula

By: Jeff Montgomery |

Delaware utility regulators are balking at a plan to make Delmarva Peninsula customers help fund a $200 million power line project benefiting New Jersey and Pennsylvania.

New York-based LS Power is planning a 230-kilovolt line from the Salem/Hope Creek nuclear complex in New Jersey under the Delaware River to a transmission station in Red Lion, Delaware. The power will then be distributed to other areas outside the state. None of the electricity will be used by consumers in Delaware.

The proposal requires approval from PJM Interconnection, which manages the regional electrical grid. Construction costs will be shared by utility users across the entire system, even if they don’t receive the power. The funding formula is set by the Federal Energy Regulatory Commission.

Customers of Delmarva Power, Old Dominion Electric Cooperative and Delaware Municipal Electric Corp. will be responsible for 99.99 percent of the power line expense, officials said.

Delaware Public Service Commission Chairman Dallas Winslow in a letter to PJM said the arrangement is “neither fair nor equitable” and would unreasonably burden Delmarva Power customers. They are appealing the funding arrangement.

Map of the proposed PJM transmission line.
Delaware and Maryland are disputing a proposal to make ratepayers in the PJM power grid’s Delmarva Zone pay virtually all of the more-than $200 million in costs for a new transmission line between PSEG Nuclear’s Salem/Hope Creek complex on Artificial Island and transmisison lines in Delaware. Reliability improvements sought under the plan would mostly go to New Jersey customers. (Photo: The News Journal)

Delaware Public Advocate David Bonar said Delmarva Power may need to set aside an extra $30 million annually to cover expenses, a 25 percent increase in the transmission cost portion of its expense.

Bonar, whose office is charged with advocating for the lowest rates for utility customers, expects the case will end up in court.

“Putting the entire burden on us when another jurisdiction gets the benefit is patently unfair,” he said.

The Maryland Public Service Commission also has appealed the cost allocation.

PJM may make a decision as soon as next month. Spokesman Ray Dotter said PJM is only following the Federal Energy Regulatory Commission rules on how costs are shared.

“PJM just acts as the agent to carry out whatever FERC approved,” Dotter said. “To do a cost allocation differently, there would have to be some proceeding” before the federal agency.

The cost issue is the latest in a series of disputes over the transmission line plan, which some estimates suggest could cost up to $283 million. The project faces right-of-way and environmental approvals.