To understand the big picture that surrounds PATH and TrAIL, we need to understand what some words and phrases mean in the special language used by PJM Interconnection to describe what it does. I will offer these clearly non-technical explanations as a way to cut through the smokescreen surrounding the plans that PJM, AEP and Allegheny Energy have for the rest of us.
The fundamental rule of all electrical transactions on PJM Interconnection. If there is an increase in demand for power in any part of the PJM region, this rule requires that the lowest priced power from any part of PJM must be the first power sent to meet that increase, even if that power is generated 300 miles from where it is needed.
If a NJ utility needs more power, and the John Amos plant has the lowest cost power available, then PJM operators must move power from John Amos to NJ, even though NJ power producers may have power available.
When PJM, Allegheny and AEP use the word “congestion” it does not mean that there is no room on the grid for electricity to flow. Congestion on the PJM system means that if all of the lowest cost electricity cannot flow to new demand under the economic dispatch rule, then the system is considered “congested.” In the example above, if all the circuits between the Amos plant in WV and the NJ users are all full, even though there is plenty of power available in NJ to meet the new demand, PJM still considers the system to be congested.
The power companies have been talking a lot about reliability in their ads for PATH. They are not talking about the actual reliability of the PJM system under any crises that are even remotely likely to strike the region. In the TrAIL case, PJM engineers described the tests they used to analyze when their system would face major failures. Those tests were run on computer models only and involved scenarios such as having to move all of the electricity produced in the western two thirds of PJM into the eastern one third if almost all generating capacity in the eastern one third were taken off line. There have been no actual equipment failures or likely failures that come even close to justifying PATH or TrAIL.
NERC (North American Electrical Reliability Corporation)
NERC is an electrical power entity that has developed a set of national standards governing electrical equipment performance, operating procedures and emergency procedures that now govern all power companies in North America. NERC standards are in part voluntary and are also included in US and Canadian government regulations.
August 2003 Blackout
The massive electrical blackout that struck the electrical grid from Ontario to the east coast of the US. The blackout was NOT caused by any physical failure of power lines, transformers or substations. All investigators have concluded that although the regional grid was highly interconnected by 2003, operators were still governed by company specific standards and emergency procedures.
The massive emergency was caused as each individual power company tried to protect its own equipment by shutting down or cutting off its grid from the regional grid. This completely unregulated activity created chaos in regional electricity flows needlessly shutting down power to millions of customers.
The NERC standards put in place since 2003 make a repeat of that blackout highly unlikely. Much to power operators’ credit, NERC was a quick and thorough response to the 2003 crisis that has been a major success.
Energy Policy Act of 2005
The 2005 Energy Policy Act was pushed through Congress by the Bush (Cheney) Administration and the power industry lobby to put into federal law the industry’s plan for electric power. Industry lobbyists scared Congress and the public into thinking there was a major crisis of the grid infrastructure that would lead to more 2003 blackouts. At the very same time, industry and government investigators had actually concluded that power lines had held up very well in 2003 considering all the chaos in the switching of power in the region.
The Act created National Interest Electrical Transmission Corridors which essentially allowed federal seizure of private land for use by privately owned power companies, a revolutionary expansion of eminent domain power in federal law.
AEP lobbyists, as well as the rest of the industry, pushed hard for special treatment of companies that built new interstate transmission lines. In particular, they got a provision that FERC could allocate costs of new lines to all ratepayers using power from those lines. Lobbyists also got approval for extra high guaranteed profits on power line rates as an incentive to build new transmission lines.
The Act has given AEP and Allegheny many of the weapons that they will deploy against landowners and ratepayers to get their new power lines.