PHI has made significant investments to expand and upgrade the electric transmission system in all three of our territories. These efforts will continue, while making sure the transmission system complies with national, regional and local reliability standards. National standards are developed by the North American Electric Reliability Corporation (NERC), a federal organization with a mission of ensuring the reliability of the bulk power system in North America.
PJM Interconnection, LLC is the regional transmission organization (RTO) that coordinates the movement of wholesale electricity in all or parts of 13 states and the District of Columbia. It also acts as the independent transmission planning organization that administers reliability and economic criteria tests to ensure stability of the transmission grid.
All three PHI utilities are part of the PJM transmission system within the Eastern interconnection grid and are responsible for working with PJM on a number of functions. PHI works closely with PJM during the study process to ensure that data and analysis are accurate. PHI is also responsible for developing transmission solutions to mitigate any violations that may result from the PJM study process. Before they submit solutions to PJM, PHI transmission planners conduct a technical and feasibility review of alternatives to ensure they are supplying the most appropriate long-term, financially justifiable solutions. PHI also establishes more stringent local criteria for transmission planning for each of our utilities. The collaboration between PJM and PHI results in a reliable electric transmission system that can withstand various potential abnormalities or contingencies.
During 2013, a significant number of transmission projects were placed in service throughout the PHI territory. The majority of these projects were a result of the more stringent planning criteria that were developed after the Northeast blackout, requiring the interconnected transmission system to be N-1-1 compliant by 2013. To be N-1-1 compliant means interconnected transmission systems must be designed to withstand the loss of two bulk electric system components and continue operating. That is, transmission systems must have fixes in place to ensure continued operations in the event of multiple incidents or failures. In addition to N-1-1 projects, PHI utilities upgraded and placed new facilities in service and/or began work to mitigate additional planning criteria violations that include the retirement of generating units. Also during 2013, PHI continued to replace infrastructure based on asset condition.
Throughout 2014, PHI will continue to address conditions resulting from reliability planning studies. To promote continued reliability and maintain system integrity, a priority will be reviewing assets and replacing them as needed depending on their age and condition. As with much of the industry, the infrastructure across the three PHI utilities supporting the transmission system was placed in service several decades ago and in some cases is nearing the end of useful life. It is incumbent upon the local utility to ensure replacements are timely and planned so the system can function at required levels of reliability. Also, PHI will be working to plan projects that address multiple needs.
It is important to note that the issue of the Federal Energy Regulatory Commission’s (FERC’s) Order No. 1000 has significantly affected the transmission planning process, emphasizing the need for continued collaboration with internal and external PHI stakeholders. During 2013, PHI worked with two neighboring utilities, Exelon and Dominion, to propose two independent transmission projects to PJM. The project submitted with Exelon was part of PJM’s first request for proposal window, and continues to remain under study with several competing proposals. The proposal with Dominion to construct a new 230kV interconnection between the two utilities was approved by the PJM Board in February 2014. The landscape of the transmission space is currently very dynamic, and PHI is working to ensure we are prepared and responsive to the changes.