FERC Grants Rehearing of Artificial Island

The Delaware Municipal Electric Corporation (DEMEC) applauds the Federal Energy Regulatory Commission (FERC) July 19th Order granting a rehearing for the cost allocation of the Artificial Island Project. In the FERC Order, they recognized that the cost allocation methodology for projects that address stability-related reliability issues, like Artificial Island, needed to be different from the current method for transmission projects.

“DEMEC is pleased that FERC has granted a rehearing and finds the current cost allocation to be unjust and unreasonable,” stated Patrick E. McCullar, DEMEC President and CEO, “The impact to all Delaware electric customers would have significantly outweighed the benefits of this project on our state. We will continue to work with the State and PJM to find a cost allocation that better accounts for the overall benefits of this project.”

This is not DEMEC’s first time fighting at FERC on behalf of Delaware’s electric customers. DEMEC consistently argues in front of FERC against inappropriate transmission charges requested by Delmarva Power and Light that would impact not only their member communities, but all Delaware ratepayers. Over the years, DEMEC has saved Delaware ratepayers millions of dollars in avoided transmission costs that would have been added to electric rates.

In August 2015 PJM filed cost allocations for the Artificial Island Project. This project would have placed 90% of the cost on electric customers living in the Delmarva Peninsula with very minimal direct benefits. After filing complaints, in 2016 DEMEC joined the State of Delaware, Delaware and Maryland Public Service Commissions, Delaware Public Advocate, and others in filing a request for rehearing to determine a better formula to account for the project’s overall benefit to the grid.

A paper hearing procedure was established by FERC in its latest Order, with responses due within 60 days.