The Federal Energy Regulatory Commission on Jan. 19 approved certain incentives for a new transmission line that NextEra Energy Transmission LLC wants to build to meet datacenter load growth in the PJM Interconnection LLC.
The planned $1 billion MidAtlantic Resiliency Link project includes the construction of a new 129-mile, 500-kV transmission line crossing through four states — Maryland, Pennsylvania Virginia and West Virginia — and a new 500/138-kV substation located in Virginia. Around 24 miles of the new line represent greenfield corridor development running through Loudoun County, Va., the largest datacenter market in the world.
NextEra subsidiary NextEra Energy Transmission MidAtlantic LLC (NEET MidAtlantic) will finance, develop, construct, own, operate and maintain the line in the PJM region through its subsidiary, NextEra Energy Transmission MidAtlantic Indiana. The company hopes to begin constructing the line later this year and for it to begin delivering power in 2027.
In a November 2023 request (ER24-472), NEET MidAtlantic Indiana said the new line is needed to meet "unprecedented load growth" from datacenters in northern Virginia. But construction of the new line faces certain risks, the company explained, including the need for state approvals and the potential for stiff landowner opposition in Loudoun County, one of the wealthiest counties in the US, as well as from other local communities.
In addition, supply chain issues could increase costs and cause delays, the company said, and completion of the line is also directly dependent on a 36-mile segment PJM assigned to FirstEnergy Corp. as the incumbent transmission owner in the area.
NEET MidAtlantic Indiana therefore asked FERC to grant two rate incentives: the ability to recover 100% of prudently incurred transmission-related costs if the project is abandoned or canceled for reasons beyond its control, and to include 100% of prudently incurred construction work in progress costs in rate base. And if FERC were to grant the incentives, the company sought permission to assign the requested incentives to any newly formed PJM affiliate of NEET MidAtlantic Indiana that is involved in the development and construction of the project.
FERC's Jan. 19 order approved the requests, finding NEET MidAtlantic Indiana demonstrated they are needed to address the risks and challenges it faces in undertaking the project.
FERC member Mark Christie, who has urged FERC to reconsider several of the rate incentives it regularly awards transmission developers that add to utility customer costs, concurred with the order. "In short, revisiting all these incentives is imperative at a time of rapidly rising customer power bills," Christie wrote in the concurring statement.
The NextEra Energy Transmission businesses are subsidiaries of NextEra Energy Inc.
