By Suzanne Herel
VALLEY FORGE, Pa. — The estimated cost for Public Service Electric & Gas’ portion of the Artificial Island stability fix has nearly doubled, from $137 million to $272 million, PJM told the Transmission Expansion Advisory Committee on Thursday.
“We certainly were surprised when we first saw the numbers,” Steve Herling, PJM vice president of planning, told RTO Insider. “In retrospect, we wish we’d had more foresight. We’re going to have to take a real hard look at what this tells us about our process going forward. We don’t like making an estimate that’s this far off.”
PJM stands by its selection of the project, which involves building a new 230-kV transmission line from the nuclear complex in New Jersey to Delaware.
“Based on what we have seen so far, we still believe we have the right project,” Herling said. “There are elements of the design that we continue to discuss, and we’re looking for opportunities to further optimize it and mitigate costs, but at this point we still believe we have the right project.”
LS Power was chosen to build the line, with PSE&G and Pepco Holdings Inc. assigned to construct the necessary connection facilities. LS Power won the deal in large part because it committed to limiting construction costs to $146 million. (See PJM Staff Picks LS Power for Artificial Island Stability Fix; Dominion Loses Out.)
“LS Power’s cost cap commitment has not changed, and LS Power continues to focus on successful development of its portion of the Artificial Island project,” company Vice President Sharon Segner said.
Paul McGlynn, PJM general manager of system planning, said the cost allocation of the project would remain the same, with the bulk of the price tag being designated to customers on the Delmarva Peninsula.
After Delaware and Maryland regulators and consumer advocates complained about the seemingly disproportionate cost assignment, FERC suspended PJM’s Tariff changes involving the project’s cost allocation pending additional review (EL15-95).
At a Jan. 12 technical conference ordered by the commission, stakeholders debated cost allocation based on the solution-based distribution factor (DFAX) method. (See related story, Commenters: DFAX Cost Allocation Inappropriate for Some Projects.)
So, how did PJM planners miss the mark so widely?
Herling said the Artificial Island project is unique and there was little to compare it to.
“This is the first time we’ve had to deal with so much work inside of a nuclear station,” he said. “We did our best to add substantial adders … but in some areas they weren’t big enough,” he said. “I don’t know how PJM could have done better with that other than doing more extensive detail design work,” which would be expensive and time-consuming, he said. “We will be talking about that, as far as how to do things differently moving forward.”
The Board of Managers, which approved the Artificial Island project, reviews cost increases but does not need to approve them unless the scope of the project is altered, Herling said.
“We review all significant changes with the board. They will ask us questions. They will ask us to get more information. They may suggest alternatives that we should be looking at. At the end of the day, we will do everything they ask us to do, and hopefully they will be satisfied with the information.” But, Herling said, “If the project continues in the [Regional Transmission Expansion Plan], the board does not have to approve revised costs.”
The board could decide to switch to another project, but that’s not likely, Herling said.
PSE&G’s portion of the project consists of three main elements: installing a static VAR compensator (SVC) at the New Freedom substation; putting in optical ground wire (OPGW) for high-speed relaying; and expanding the Salem substation. Herling noted that the SVC and OPGW work were common to all proposals and that any vendor likely would have run into the same cost issues.
The SVC work, which PJM estimated at $38 million, is expected to cost $43 million more, according to PSE&G, in part because of additional site work including wetland mitigation, storm water management and the relocation of a helicopter pad and several buildings. PSE&G also ran into higher vendor cost estimates, McGlynn said.
Additional site work for the OPGW installation increased PJM’s estimate of $25 million by $14 million.
The Salem expansion, estimated at $74 million, will cost an additional $78 million, in part because of the cost differential for security and access requirements needed to work in a nuclear facility.
“We understood that working in Salem would be more challenging than working at a 500-kV substation in the middle of a cornfield someplace,” McGlynn said. “What we’re trying to look at and consider and get a better understanding of is the difference in cost.”
A number of committee members were incredulous.
“Percentage-wise, this is a big miss as far as what we thought we were looking at,” said Dave Mabry, representing the PJM Industrial Customer Coalition, noting that there are no cost commitments involved in the PSE&G work, all of which is considered an upgrade as opposed to a greenfield project.
“We were at $250 million … now we’re up to $350 million,” Mabry said. “The concern here is, is there another shoe that’s going to drop?”
Duke Energy has appealed a $6.8 million fine levied by North Carolina for the catastrophic Dan River coal ash spill, calling the penalty “entirely arbitrary and capricious.”
Whole Foods Market Inc. has announced separate deals with NRG Energy and SolarCity to install solar systems on the roofs of many of its U.S. stores. The grocery store chain, known for selling natural foods and products, already has solar installations on 25 of its stores. With the new deals, 100 more stores will get solar panels installed.
The developers of the proposed Constitution Pipeline delayed the completion date of the 124-mile natural gas pipeline for six months after New York state regulators failed to approve permits in time for it to clear trees before the migratory bird season commences.
Consumers Energy has given the Michigan International Speedway a $29,460 energy efficiency incentive check to use toward the racetrack’s efforts to become the “greenest” NASCAR track in the country.
Just two years after it opened a 345-kV transmission line in the same area, American Transmission Co. proposed a new line near the Illinois-Wisconsin border to serve higher-than-expected forecasted power demand.
Construction has begun on a 25-MW natural gas-fired plant near Houston that will sequester its carbon dioxide emissions for use in industrial purposes or enhanced oil recovery.
Westar Energy is said to be in the early stages of exploring strategic options that could lead to a sale. According to Bloomberg News sources, the company is talking with potential financial advisers as it evaluates its options.
Cleco has asked Louisiana state regulators to revisit their decision to reject a coalition of Australian and Canadian investors’ purchase of the utility for $4.9 billion.
Public Service Company of New Mexico filed a request last month with the New Mexico Public Regulation Commission to install advanced meters for its 500,000 customers. The $87 million proposal could eventually lead to the layoffs of 125 employees and a customer charge of about $5 a year starting in 2020.
Arch Coal, which filed for bankruptcy protection two months ago, announced it has halted plans to open a new surface coal mine in the grasslands of southeastern Montana, blaming “capital constraints, near-term weakness in coal markets and an extended and uncertain permitting outlook.”
FirstEnergy said it idled the 2,500-MW Bruce Mansfield coal plant in Shippingport, Pa., last month because of sustained low energy prices. The last time all three units at the site were shut off was in 1999.
Dominion Virginia Power is preparing to close its 11 coal ash ponds and discharge the treated wastewater into state rivers, despite pressure from environmental activists.
Former Credit Suisse managing director Daniel L. Eggers has joined Exelon as senior vice president of investor relations. Eggers also will be part of the company’s executive committee.
Wisconsin-based Broadwind Energy announced it closed an order from an unnamed domestic turbine manufacturer to build $28 million worth of steel turbine towers.
CAISO has asked FERC to approve a new Tariff provision that would enable rooftop solar and other small 
“This was really the first real opportunity for folks to put some reality to their idea and try to marry up with the customers who stated a willingness to pay,” he said. “This is somewhat rare to have that in the neighborhood of a big idea.”
Coal-fired plants represented more than 80% of the 18 GW in generation retired in 2015, according to the U.S. Energy Information Administration.
The U.S. solar generation market is set to increase 119% this year, mostly from utility-scale projects in the pipeline, according to GTM Research in its 
A U.S. District Court jury in Scranton, Pa., hit Cabot Oil & Gas with a $4.2 million verdict, saying the company’s gas-drilling operations contaminated the well water of two Pennsylvania families.
The Nuclear Regulatory Commission released its annual assessment of nuclear power plant operations for 2015, and all but three units were graded in the two highest categories. Of the 96 highest-performing reactors, 85 fully met all safety and security objectives, the commission said.
A pump motor serving the reactor at the Watts Bar 2 nuclear station caught fire, forcing a declared “unusual event” before the Tennessee Valley Authority’s newest station produced any power.