Delaware Rate Payers to Shoulder Artificial Island Costs

By James DeChene

As reported this week in the News Journal, Delaware received unfortunate news from FERC regarding the Artificial Island cost allocation proceedings. The agency has decided not to intervene in the cost allocation debate on whether Delaware rate payers should shoulder roughly 90% of the cost burden of constructing a power line across the Delaware River. Back in December, in response to the claims raised by the Delaware and Maryland Public Service Commissions (Docket EL15-95-000), regarding the cost allocation made by PJM as to who would pay for a new transmission line to be constructed between New Jersey and the Delmarva Peninsula, FERC determined that the cost allocation for Artificial Island filed by the PJM transmission owners may not be just and reasonable. FERC therefore accepted the cost allocations but delayed implementation for 5 months (subject to refund if FERC denies the cost allocation) and established a technical conference with PJM to determine whether there is a certain category of reliability projects for which the solution-based DFAX may not be appropriate and whether another cost allocation method could be established for such projects.

With that 5 month deadline came with it FERC’s response, along with news that the project will now exceed $400 million dollars, an increase of $135 million over last cost estimates. The ruling will be appealed, and the potential for a court case challenging the cost allocation remains prominent.
More details to follow as we know them.