Transource Pennsylvania, LLC v. Pennsylvania Public Utility Commission
| Decision Date | 05 May 2022 |
| Docket Number | 689 C.D. 2021 |
| Citation | 278 A.3d 942 |
| Parties | TRANSOURCE PENNSYLVANIA, LLC, and PPL Electric Utilities Corporation, Petitioners v. PENNSYLVANIA PUBLIC UTILITY COMMISSION, Respondent |
| Court | Pennsylvania Commonwealth Court |
Anthony D. Kanagy, Harrisburg, for Petitioner Transource Pennsylvania, LLC.
Darryl A. Lawrence, Senior Assistant Consumer Advocate, Harrisburg, for Intervenor, The Pennsylvania Office of Consumer Advocate.
James A. Mullins, Assistant Counsel, Harrisburg, for Respondent.
BEFORE: HONORABLE RENÉE COHN JUBELIRER, President Judge, HONORABLE ELLEN CEISLER, Judge, HONORABLE LORI A. DUMAS, Judge
OPINION BY PRESIDENT JUDGE COHN JUBELIRER
Transource Pennsylvania, LLC (Transource) and PPL Electric Utilities Corporation (PPL) (together, Petitioners) petition for review of the May 24, 2021 Opinion and Order of the Pennsylvania Public Utility Commission (Commission) that, in relevant part, denied an application and an amended application for the siting and construction of two high-voltage (HV) transmission lines related to the Independence Energy Connection (IEC) Project in Franklin and York Counties, Pennsylvania (Siting Applications), and rescinded the provisional certificate of public convenience (CPC) that the Commission had previously granted Transource for the IEC Project. The Commission concluded that there was no error or abuse of discretion in the Administrative Law Judge's (ALJ) determination that Transource failed to establish the requisite need for the IEC Project under Section 57.76(a)(1) of the Commission's Regulations (Regulations), 52 Pa. Code § 57.76(a)(1), or met the requirements of Section 1501 of the Public Utility Code (Code), 66 Pa.C.S. § 1501. The Commission held that the ALJ's findings of fact were supported by substantial evidence, in the form of the credited evidence submitted by opposing or objecting parties. The Commission further concluded that the ALJ's determinations, including that the Commission could evaluate the need for the IEC Project for purposes of Pennsylvania law independently of the evaluation of need for the IEC Project that had been performed by PJM Interconnection LLC (PJM), were consistent with the Code, the Regulations, and Pennsylvania law.1
On appeal, Petitioners argue that the Commission erred in interpreting Section 1501 of the Code and Section 57.76(a)(1) of the Regulations and used an incorrect standard in denying the Siting Applications. Petitioners assert that the findings of fact necessary to support the conclusion of a lack of need or necessity for the IEC Project were not supported by substantial evidence. As part of its evidentiary challenge, Petitioners assert that the Commission erred in rejecting PJM's findings as evidence of need for the IEC Project under Pennsylvania law and in focusing only on the negative impacts on local rates. Finally, Petitioners maintain that the Commission erred in rescinding the provisional CPC and not resolving the merits of Petitioners’ other Exceptions based on its decision on the Siting Applications, and, therefore, this matter must be remanded.
The Commission and Intervenors, the Office of Consumer Advocate (OCA), the County of Franklin (Franklin County), and Stop Transource Franklin County (STFC), respond that the Commission's interpretations of the Code and the Regulations were not clearly erroneous and, therefore, are entitled to deference. They further argue that the Commission applied the correct standard in determining that Transource did not meet its burden of proof on the Siting Applications and rescinding the provisional CPC. The Commission and Franklin County also assert that Petitioners have waived certain of these issues as they had not been raised before the Commission. Intervenors and the Commission further argue that the findings of fact are supported by substantial evidence and that Petitioners’ arguments to the contrary improperly seek to have this Court reweigh the evidence or to preclude the Commission from performing its own evidentiary review and consideration of the IEC Project. Finally, the Commission asserts there was no error in it not considering Petitioners’ other Exceptions based on its determination on the Siting Applications.
This matter involves the denial of the Siting Applications and the rescission of Transource's provisional CPC pursuant to Section 57.76(a) of the Regulations and Section 1501 of the Code. Section 1501 of the Code addresses, generally, the character of services and facilities of a public utility and provides, in pertinent part:
Every public utility shall furnish and maintain adequate, efficient, safe, and reasonable service and facilities, and shall make all such repairs, changes, alterations, substitutions, extensions, and improvements in or to such service and facilities as shall be necessary or proper for the accommodation, convenience, and safety of its patrons, employees, and the public. ... Such service and facilities shall be in conformity with the regulations and orders of the [C]ommission.
66 Pa.C.S. § 1501. Section 57.76(a) of the Regulations relates to the siting and construction of HV lines and states:
52 Pa. Code § 57.76(a)(1). Pursuant to Section 57.75(e)(1) of the Regulations, in reviewing a siting application, the Commission must accept evidence of, among other things, the "present and future necessity of the proposed HV line in furnishing service to the public." 52 Pa. Code § 57.75(e)(1).
In addition, this matter implicates Pennsylvania's participation in regional interstate power pools with other states, which is addressed in Section 2805(a) of the Code. Section 2805(a) provides:
The [C]ommission shall take all necessary and appropriate steps to encourage interstate power pools to enhance competition and to complement industry restructuring on a regional basis. The Commonwealth, the [C]ommission and Pennsylvania electric utilities shall work with the Federal Government, other states in the region and interstate power pools to accomplish the goals of restructuring and to establish independent system operators or their functional equivalents to operate the transmission system and interstate power pools. The [C]ommission, Pennsylvania electric utilities and all electricity suppliers shall work with the Federal Government, other states in the region, the North American Electric Reliability Council [(NERC)] and its regional coordinating councils or their successors, interstate power pools, and with the independent system operator or its functional equivalent to ensure the continued provision of adequate, safe and reliable electric service to the citizens and businesses of this Commonwealth.
66 Pa.C.S. § 2805(a).2
In 2014, PJM, the Regional Transmission Organization charged with managing electric utilities transmission systems in 13 states (PJM Region), that includes most of Pennsylvania, Maryland, Virginia, and West Virginia, performed an annual Regional Transmission Extension Plan (RTEP) of the PJM Region. (Commission Opinion and Order (Op. and Order) at 3.)3 As part of the RTEP, PJM conducted a market efficiency analysis to determine if there were areas where market congestion4 existed, which was found on the AP South Reactive Interface (APSRI). (Id. ) "[O]n October 30, 2014, PJM opened a long-term RTEP proposal window" and sought "market efficiency proposals in order to alleviate congestion on the AP[SRI]." (Id. ) During this process, it was projected that the "[c]ongestion on the AP[SRI] totaled approximately $800 million from 2012 to 2016." (Id. )
PJM received 41 proposals, and, on August 2, 2016, approved the market efficiency project, known as Project 9A, submitted by Transource Energy, Transource's parent, to alleviate the APSRI congestion. (Id. at 2-3.) Project 9A is a set of 4,500 kV transmission lines originating in West Virginia and terminating in Maryland. (Id. at 3.) The IEC Project is the Pennsylvania portion of Project 9A, and consists of IEC West, located in Franklin County, and IEC East, located in York County, and involves HV transmission lines from new substations in those counties to the Pennsylvania/Maryland border. (Id. at 3, 5-6.) Transource was "formed solely to carry out ... Project 9A." (Id. at 2-3.)
Transource filed an "Application for All of the Necessary Authority, Approvals, and Certificates of Public Convenience" relating to the IEC Project on February 8, 2017. (Id. at 4.) The Commission recognized that Transource was "a new type of entity in" Pennsylvania and was formed only to "carry out a particular market efficiency project." (Id. at 5 (internal quotations omitted).) On January 23, 2018, the Commission issued the provisional CPC, and its provisional approval referenced, specifically, Project 9A, including the IEC Project, as a means to resolve congestion on the APSRI.5 (Id. at 4 (citing Application of Transource, Pennsylvania, LLC , Docket Nos. A-2017-2587821 & G-2017-2587822, 2008 WL 5786507 (P.U.C. Jan. 23, 2018) ).) Although the provisional CPC was granted, "all parties reserved the right to challenge the need for the [IEC] Project when Transource file[d] a siting application with the Commission or to challenge any other project proposed by Transource." (Id. at 5.) Transource subsequently filed additional applications relating to the construction of buildings or shelters and the exercise of eminent domain over various properties in...
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