Commissioner Cheryl A. LaFleur Statement July 11, 2016 Docket Nos. ER16-736-001, ER16-736-002, & EL16-96-000

PJM Cost Allocation Report

“I generally support the calls in today’s order, which should help address various inconsistencies in PJM’s transmission planning procedures. However, consistent with my partial dissent in PJM Interconnection, L.L.C., 154 FERC ¶ 61,096 (2016), I disagree with the order’s rejection of the cost allocation for project b2665, a rebuild of the Cunningham-Dooms 500 kilovolt (kV) line. I believe that, as explained in that partial dissent and as FERC has recognized, ¹ high-voltage transmission lines in PJM have inherent regional benefits that warrant some measure of regional cost allocation. I would therefore apply PJM’s Commission-approved cost allocation methodology for double-circuit 345 kV and 500 kV and above transmission projects that allocates 50 percent of the project’s costs on a postage stamp basis, and 50 percent through a solution-based DFAX analysis.

“Beyond the merits of this order, the record in this case potentially raises another issue regarding which I recently expressed concern at the Commission’s technical conference on competitive bidding: whether, as a reaction to Order No. 1000’s competitive requirements, incumbent transmission owners may be delaying action on transmission upgrades until those projects are needed in the near-term and therefore not subject to competitive bidding. It is important that incumbent transmission owners report their transmission needs to PJM in a timeframe that allows PJM to meet them in a timely manner, and open them to competitive bidding requirements if they are not in fact immediate. If it appears over time that incumbent transmission owners may be postponing identification of transmission needs to avoid competitive bidding, further action may be needed to ensure that customers receive the intended benefits of Order No. 1000 planning processes.

“Accordingly, I respectfully dissent in part.”

¹ PJM Interconnection, L.L.C., 142 FERC ¶ 61,214, at PP 413-414 (2013).