Del., Md., Va. electric users face '25-30%' rate hike to aid nuclear neighbors

Federal energy regulators have approved a plan allowing utilities to pass $400 million in costs for improving the reliabile transmission of electricity from the Artificial Island nuclear power plants off the New Jersey coast of Delaware Bay, through the Delmarva Peninsula to distant urban markets, to be paid by industries and residents on the peninsula, overriding objections by state officials on the peninsula, state officials said today.

"In a 3-1 decision issued on Friday, April 22, 2016, the Federal Energy Regulatory Commission (FERC) denied a complaint filed by the Delaware Public Service Commission and others regarding the cost-allocation associated with the PJM Artificial Island (AI) transmission project," warns the Delaware commission in a statement today.

"The decision deals a blow to electric customers and economic development on the Delmarva Peninsula because the project may increase transmission costs 25%-30% for residential, commercial and industrial customers in Delaware, Maryland and Virginia," DPSC added.

Delaware electric customers have separately paid a subsidy of over $100 million over the past several years to the Bloom Energy manufacturing plant in Newark, Del., under a plan negotiated by Gov. Jack Markell, which was supposed to create hundreds of jobs but has so far disappointed.

"I'm shocked, frustrated and disappointed by the Federal Energy Regulatory Commission's decision to deny the State Commission's complaint on PJM's Artificial Island transmission cost allocation," wrote the Delaware commission's executive director, Robert Howatt. He said the Maryland Public Service Commission filed a joint complaint with Delaware complaning the proposed cost allocation was "unjust and unreasonable" in this case.

The Artificial Island project "was initiated by PJM," the Norristown-based regional power grid operating group, "to solve a reliability issue at the Artificial Island nuclear facility in southern New Jersey. Based on the cost allocation methodology, ninety percent (90%) of the cost of the project -- now almost $400 million dollars -- will be paid by Delaware, Maryland, and Virginia electric customers throughout the Delmarva peninsula, despite the fact that this project is not needed to maintain reliability on the peninsula.

"In fact, studies indicate that the peninsula will only receive ten percent (10%) of the economic benefits of this project." For more about the case, including why FERC thinks local allocation is fair instead of spreading the cost to electric users in Washington, Philadelphia and beyond, check www.ferc.com and search for Docket Number EL15-95-000