HVDC transmission developer asks FERC to act on PJM interconnection study delays

The merchant developer of a $2.5 billion high-voltage direct-current transmission line seen by some as a model for U.S. electric grid expansion has complained to federal regulators about yearslong study delays at the PJM Interconnection.

SOO Green HVDC Link ProjectCo LLC filed the June 21 complaint (EL21-85) after learning that study delays will push back the expected commercial operations launch date for its 350-mile transmission line from late 2024 to at least 2026.

At issue are PJM's rules for merchant transmission projects, which require proposed projects to undergo system impact studies and related facilities studies as part of the 13-state grid operator's generation interconnection process.

Approved by FERC in 2003, the rules were initially based on a six-month analysis cycle that recognized a close link between PJM's generation interconnection and transmission planning processes.

The problem, however, is that "the six-month analysis cycle and timeliness of the process no longer exists," according to SOO Green's complaint. In 2020, PJM's generation interconnection studies required an average of between 747 and 821 days to complete, the company reported.

SOO Green's 2,100 MW, 345-kV line will run from Mason City, Iowa, to Yorkville, Ill., connecting the Midcontinent ISO and PJM transmission systems. Most of the line will run underground along the Canadian Pacific Railway's existing tracks, enabling the project to avoid potential opposition from local landowners and the need to exercise eminent domain.

The project's original three-year development phase was expected to conclude by the end of 2021. However, SOO Green explained in its complaint that PJM recently said a system impact study for the project expected to be finished in August 2020 will now be completed in November 2021.

Following that study, PJM must perform a facilities study estimated to take at least two more years, meaning the project's original in-service date could be delayed by three years. The delays present significant risks for the project, SOO Green said.

"SOO Green faces an impossible choice: enter into supply agreements early and risk substantial penalties, or wait until the interconnection process is complete and not have the equipment necessary to build the project," the company said.

According to SOO Green, the delays can be avoided by allowing the project to move forward under PJM's regional transmission expansion plan, or RTEP, a process that typically takes between 12 to 18 months to complete. While PJM's current operating agreement allows merchant transmission projects to participate in PJM's RTEP, those projects must first complete PJM's generation interconnection process, SOO Green noted.

In contrast to PJM's generation interconnection queue, the RTEP process is "a planning-driven process" designed to maintain reliability, support competition, and respond to federal and state public policy requirements, SOO Green said.

The developer, therefore, asked FERC to direct PJM to eliminate its requirement that merchant transmission facilities must pass through its generation interconnection process before entering its RTEP. As an alternative, SOO Green asked FERC to use its authority under Section 309 of the Federal Power Act to require PJM to complete the project's system impact study by Nov. 30, 2021, and its facilities study by June 30, 2022.

PJM spokeswoman Susan Buehler indicated in a June 23 email that the grid operator was not expecting SOO Green's complaint.

"PJM and its stakeholders have been in outreach meetings with SOO Green regarding SOO Green's desire to have its line treated like capacity in our market design — which SOO Green repeatedly represented was necessary for its proposed line to be successful," Buehler said. "PJM is surprised by SOO Green's complaint, and its suggestion that SOO Green is changing its business strategy."

SOO Green is owned 80% by Copenhagen Infrastructure Partners Inc. subsidiary Copenhagen Infrastructure III K/S, 10% by Jingoli Power, LLC subsidiary Jingoli Power Transmission LLC and 10% by Siemens Energy AG subsidiary Siemens Energy Inc.

In April, the U.S. Department of Energy announced its loan programs office will consider applications for up to $5 billion in loan guarantees to support innovative transmission projects such as facilities sited along rail and highway routes as part of the Biden administration's goal of decarbonizing the power sector by 2035.

Meanwhile, PJM has established a task force to address interconnection challenges through its stakeholder process. Chairman Richard Glick is also expected to unveil a regulatory roadmap for FERC later this summer that focuses on problems associated with grid operators' interconnection policies.