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Transmission Congestion on the Delmarva Peninsula
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  1. Transmission Congestion on the Delmarva Peninsula December 17, 2003 PA03-12-000

  2. Map of PJM

  3. Delmarva Peninsula and LMP • Since 1998 PJM has used LMP to manage congestion • Under LMP prices are higher in areas that do not have low cost generation and a transmission infrastructure that restricts imports • Delmarva Peninsula has experienced higher congestion costs due to these limitations on generation and import capability

  4. FERC Cases on Congestion • Congestion on Delmarva Peninsula has been an issue in several PJM proceedings including • Complaint filed by ODEC requesting relief from congestion charges • Transmission planning process for economic expansions • Allocation of Financial Transmission Rights • Local market power mitigation measures

  5. Fact-Finding Proceeding • May 12, 2003 -- Commission established a fact finding proceeding concerning congestion on the Delmarva Peninsula. • Explore causes, extent, costs, and possible solutions to such congestion. • October 10, 2003 -- the ALJ issued a decision with proposed findings of fact and recommendations

  6. Summary of ALJ Findings • Congestion on Delmarva Peninsula is a pricing issue, not a reliability issue • LMP reveals congestion, rather than causes congestion • Congestion highest in 2000 and 2001 due to temporary outages due to construction of transmission facilities • Limitations on generation and transmission contribute to congestion costs

  7. Summary of ALJ Recommendations • PJM should consider changes for • Scheduling transmission outages • Effect of transmission construction on LMP • Post contingency operations • PJM should expedite transmission planning for the Delmarva Peninsula • PJM should periodically conduct auctions for demand resources and generation

  8. ALJ Findings on Market Power • Record does not support allegation that market power increased congestion costs • PJM’s mitigation measures and active monitoring limited opportunities for exercise of market power • ALJ recommended that OMOI review the record for evidence of the existence and extent of market power on the Delmarva Peninsula

  9. PJM and ODEC Agreement • November 6 - Agreement on Process to Address Congestion • Stakeholder process to review potential changes to PJM market rules • PJM will file to implement its independent recommendations by May 3, 2004 • PJM may file changes not approved through stakeholder process

  10. Conclusion • Congestion has been reduced on Delmarva Peninsula • More infrastructure - generation, transmission, and demand response - would reduce congestion • Need cooperation with states and PJM to place infrastructure in place