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FERC Orders DC's Pepco, PJM to Develop Plan to Preserve Regional Reliability

Finding that reliability standards are not being met during certain conditions and that the long-term reliability of the regional power grid in the Washington, D.C., area is compromised, FERC last Monday evening said that it has directed PJM Interconnection and Potomac Electric Power Co. (Pepco) to develop and implement a comprehensive plan to preserve reliability in the region.

FERC said that its action complements an emergency order issued by Energy Secretary Samuel Bodman last month requiring the Mirant Potomac River Generating Station in Virginia to operate as needed to meet demand if key transmission lines serving Washington, D.C., are out of service.

Bodman "acted under Federal Power Act emergency authority to address the near-term reliability concerns caused by the Mirant plant closure," Commission Chairman Joseph Kelliher said. "Today, the Commission acts under its Federal Power Act authority to assure an effective long-term solution that maintains a reliable and sound electric power grid for the region."

FERC directed PJM and Pepco to file within one month of the Jan. 9 order a comprehensive plan for the "operation, planning and construction of transmission facilities to address the current reliability risks to the system."

The Commission noted that the Department of Energy (DOE) emergency order "has not required the transmission entities to operate in accordance with applicable reliability standards or to identify the necessary operational, planning, and construction milestones necessary to address the reliability risk."

Acting for the first time under section 207 of the Federal Power Act, this week's order responds to a petition and complaint filed by the District of Columbia Public Service Commission citing reliability concerns regarding Mirant's cessation of operations at its 482 MW plant in Alexandria, VA.

Mirant shut down all of the facility's five generating units at midnight, Aug. 25, 2005, in response to emissions modeling concerns of the Virginia Department of Environmental Quality (DEQ), which regulates the facility under the federal Clean Air Act. Mirant restarted one of the plant's generating units on Sept. 20 at a reduced level.

In related news, Pepco and PJM recentlysent separate letters to Bodman in which the utility and the grid operator said that it would be a mistake to delay maintenance work on Pepco 230-kV power lines in the District of Columbia region that serve Potomac River's substation. Pepco said holding off on the power line maintenance work "would significantly reduce the reliability of the electric supply to the national capital region." The Pepco and PJM letters responded to recent correspondence sent to Bodman by the Virginia DEQ.

In late December 2005, Pepco provided notice of its intention to take one of the 230-kV transmission lines feeding into the Potomac River substation out of service on Jan. 9, 2006, for five days of maintenance. Pepco revised its notice on Jan. 4, 2006, to extend the out-of-service period on this transmission line from five to eight days. Pepco further provided notice on Dec. 29 of its intention to take the other 230-kV transmission line feeding into the Potomac River substation out of service on Jan. 23, 2006, for five days of maintenance.

But the DEQ asserted that Pepco's proposed action is in "flagrant violation" of the DOE's Dec. 20 order requiring that planned line outages be coordinated with the operation of Mirant's Potomac River Generating Station so that the plant utilizes "pollution control equipment and measures to the maximum extent possible to minimize the magnitude and duration of any exceedance of the" Clean Air Act's National Ambient Air Quality Standards (NAAQS).

The DEQ demanded that the DOE "order a postponement of Pepco's planned maintenance of the transmission lines until such time as the plant has installed and is able to operate pollution control equipment essential to assure that emissions from the plant do not injure the health and safety of the citizens of Virginia."

The DEQ said that under the terms of the DOE order, planned outages of the 230-kV transmission lines should occur no earlier than March 20, 2006, at which time Mirant projects that it will have an innovative SO2 control technology, called the Trona system, installed and operational on all five generating units at the plant.

In its Jan. 6 letter to Bodman, Pepco argued that waiting until the Potomac River plant has its full Trona capability in place "could result in a catastrophic outage." Moreover, "delaying the [power line] outages could result in further damage that could cause the transmission lines to be offline for longer periods of time, resulting in more extensive outages and a greater need for operation of the Potomac River Generating Station by Mirant," the utility added.

Pepco also said that good utility practice and PJM rules require that equipment degradation that impacts reliability be addressed as soon as possible. According to the utility, under normal operating conditions at the Potomac River facility, Pepco would have taken a power line outage as soon as possible after a Dec. 16 equipment failure.

A Jan. 9 start date, "while not as soon as desirable, is as soon as practicable given the condition that exists at the Potomac River Generating Station." Pepco warned Bodman that a delay in performing this work until late March "would expose the national capital region to unacceptable blackout risks for three months or more (depending on the success of Mirant's Trona testing)" and could lead to "a need for even longer outages of the transmission lines."

For its part, PJM said that "proceeding with the transmission facilities' maintenance as scheduled represents prudent action, particularly in light of the incident less than three weeks ago where one of the transmission lines serving the District [of Columbia] tripped."

In PJM's judgment, "it would be unacceptable to delay the maintenance pending the possibility of changed circumstances at the Potomac River plant that may, or may not, ultimately prove to satisfy the environmental interests of" the DEQ and the city of Alexandria, where the plant is located.

PJM said that in essence, both the DEQ and Alexandria have requested a stay of the Dec. 20 order issued by the DOE. "There is no basis to grant such extraordinary action. Indeed, to take such action would expose critical load in the District of Columbia to an unacceptable reliability risk," the grid operator added.

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