FERC Rejects Complaint Against PJM Over Distribution Factor Method For Transmission Cost Allocation

On April 22, 2016, FERC denied a complaint filed by the Maryland and Delaware Public Service Commissions (the "Complainants") against PJM Interconnection LLC ("PJM") alleging that PJM's use of the solution-based distribution factor ("DFAX") method to allocate the costs for a new transmission project in PJM was unjust and unreasonable. In denying the complaint, FERC accepted the proposed cost allocation for the "Artificial Island Project."

On July 29, 2015, the PJM Board approved a new transmission project known as the Artificial Island Project, which includes the construction of a new 230 kV transmission line under the Delaware River to relieve certain system stability and operational issues at the "Artificial Island"—an area in southern New Jersey where the Salem Units 1 and 2 and the Hope Creek Unit 1 nuclear generating units are located. On August 28, 2015, PJM filed the cost responsibility assignments for the Artificial Island Project with FERC using the DFAX