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Energy Conservation Council v. Public Utility Commission

July 11, 2011


The opinion of the court was delivered by: Johnny J. Butler, Judge

Argued: June 6, 2011



Energy Conservation Council of Pennsylvania (ECC) and the Office of Consumer Advocate (OCA) petition for review of the February 12, 2010 and April 23, 2010 orders of the Public Utility Commission (PUC) granting the Applications of PPL Electric Utilities Corporation (PPL) at Docket Nos. A-2009-2082652, A-2009- 2082832, A-2009-2088297, A-2009-2088337, A-2009-2088327, A-2009-2088340, A-2009-2088312, A-2009-2088360 to construct a new 500 kV transmission line and substation in Pennsylvania.*fn1 The issues before this Court are whether the PUC committed errors of law, acted arbitrarily and capriciously, violated Article I, Section 27, of the Pennsylvania Constitution, and/or abused its discretion by approving the proposed line and accompanying facilities, and by allowing construction to begin on the proposed line before a permit is received from the National Park Service for the Wallenpaupack to Bushkill segment. Based upon the following, we affirm the orders of the PUC.

ECC is a Pennsylvania non-profit organization consisting of over 1,600 members dedicated to energy conservation, and to the preservation of the natural beauty, historical sites, and the rural and agricultural character of the Commonwealth. PPL is a public utility and electric distribution company that supplies electricity in eastern and central Pennsylvania under the PUC's jurisdiction. PPL is a member of PJM Interconnection, L.L.C. (PJM), which is a regional transmission organization approved by the Federal Energy Regulatory Commission (FERC) charged with ensuring the reliability of the electric utilities transmission system, and coordinating the movement of wholesale electricity in all or parts of 13 states and the District of Columbia, including most of Pennsylvania and New Jersey. FERC adopted the North American Electric Reliability Corporation (NERC) as the electric reliability organization for the United States, many of whose standards are mandatory for regional transmission organizations, such as PJM, and their members, like PPL. PJM annually prepares a regional transmission expansion plan (RTEP) using complex computer modeling or load flow studies to analyze the electric supply needs of customers in its region. PJM uses load deliverability tests (which examine defined load zones in PJM's region and considers the ability of the transmission

Applications to exercise eminent domain across the properties of the Chaudri Family Limited Partnership, David Murphy and Marguerite T. Kranick, at Docket No. A-2009-2088337, and Kenneth and Linda Powell, at Docket No. A-2009-2088359, were withdrawn pursuant to an order issued July 2, 2009.

system to deliver adequate power to the load zone during a generation capacity emergency) and generator deliverability tests (which evaluate the capability of the transmission system to assure resources can be delivered to the remainder of the PJM system during peak load). PJM is required to apply certain NERC reliability standards to its planning process over the short (years 1 to 5) and long-term (15 years). If PJM identifies NERC criteria violations, it must develop and implement solutions to mitigate them, or suffer penalties. Each year, PJM also reviews previously-approved transmission plans in order to determine whether they are still required, and whether they are required in the year originally identified. This is referred to as retooling.

PPL performs independent analyses of its bulk electric system transmission facilities under PJM's control, in addition to its non-bulk electric system transmission facilities. It provides the results of its studies to PJM for consideration for its RTEP process. PPL's planning guidelines are consistent with PJM's criteria and, in some cases, are more stringent. As a result, PPL may recommend reinforcements and additional projects.

PJM's 2007 and 2008 RTEPs identified the need for a new line between Pennsylvania and New Jersey, because forecasts reflected that transmission facilities in Pennsylvania would be overloaded by early 2013 (i.e., loading on the transmission facilities was projected to exceed applicable ratings, which may cause permanent damage to transmission infrastructure and widespread power outages). The 2008 RTEP specifically identified twenty-three NERC Category A and B (single contingency) violations projected to occur beginning in 2012,*fn2 and twenty-seven NERC Category C5 (double circuit; lower probably event) violations.*fn3 Accordingly, PJM directed PPL and Public Service Electric & Gas Company (PSE&G) to construct a new line by June 1, 2012. PPL submitted three transmission line alternatives to PJM (no non-transmission alternatives were proposed). A retool study completed by PJM in March of 2009 reduced the number of potential Category A and B reliability issues from twenty-three to thirteen, and the Category C5 violations from twenty- seven to ten. Because it had the greatest positive impact over a 15-year planning horizon, PJM chose the 500 kV Susquehanna-Roseland transmission line, the

Pennsylvania portion of which would consist of approximately 101 miles that will run through portions of Lackawanna, Luzerne, Monroe, Pike and Wayne counties (proposed line).*fn4

On January 6, 2009, PPL filed an application with the PUC for authorization to construct the proposed line, part of which would result in the necessary modernization of the approximately 28-miles of the 80-year-old Wallenpaupack to Bushkill 230 kV transmission line, which must take place either as part of this project or as a separate project. Consolidated with that application was PPL's request for authorization to construct a new substation in Blakely Borough, Lackawanna County, to connect the 500 kV line to the regional transmission system in that area. PPL also filed applications for determination that the proposed exercise of eminent domain over five tracts of land is necessary for the service, accommodation and convenience or safety of the public. The applications were, likewise, consolidated. Notice of the applications was published.

Public hearings were scheduled based upon a request of the OCA and letters from two Pennsylvania state legislators. Notices of appearance were entered by OCA, the Office of Trial Staff (OTS). Petitions to intervene were granted for Winona Lake Property Owners Association,*fn5 UGI Utilities, Inc. (UGI), Pennsylvania American Water Company (PAWC),*fn6 Exelon Generation (Exelon), PPL Industrial Customer Alliance (PPLICA), and Donna Davis, Esquire.*fn7 Protests were filed by ECC*fn8 and the Saw Creek Estates Community Association, Inc. (SCECA) and various individuals. Two hearings were held on March 20, 2009.

On April 2, 2009, pursuant to a pre-hearing order issued by the PUC, PPL amended its application to reflect rerouting. Due to public interest, public hearings were held on May 21, 2009 (18 individuals offered testimony) and July 2, 2009 (21 individuals offered testimony). The PUC issued protective orders on June 8 and July 8, 2009, in response to PPL's unopposed motions.

Evidentiary hearings were held before an administrative law judge (ALJ) on September 1, 2, 4, 8, 9 and 10, 2009. On November 12, 2009, the ALJ issued a recommended decision granting PPL's application to construct the proposed line subject to certain conditions, finding that the exercise of eminent domain is necessary, and finding that construction of the substation in Blakely Borough is reasonably necessary. The ALJ recommended the following conditions for the project:

6. . .

A. That [PPL] replace or repair any damage to homes, residences, other buildings or property caused by the construction of this project.

B. That [PPL] comply with any and all restrictions on the permits received from any agency or entity from which a permit is required in order to construct this project.

C. That where possible, archeological resources identified in the transmission line corridor, in the direct path of access roads or at locations of proposed work areas will be avoided by relocation of structures, rerouting of access roads and reconfiguring and relocating of work areas consistent with agreements between [PPL] and the Pennsylvania Historic and Museum Commission and the Bureau of Historic Preservation protocols.

D. That [PPL] will follow protocols for cultural resource studies for the proposed . . . [l]ine project that have been agreed upon with the Pennsylvania Historic and Museum Commission and the Bureau of Historic Preservation. Any identified archeological sites that may be adversely affected will require an evaluation of eligibility for inclusion in the [National Register of Historic Places]. Any curation of artifacts would be coordinated with the State Historic Preservation Office.

E. That [PPL] will provide adequate advance notice to the [SCECA] and each Saw Creek resident whose property is burdened by the transmission line right-of-way of when construction will be performed within the Saw Creek Estates, including when a helicopter may be used. A copy of the notice will be served upon the [PUC]'s Bureau of [Conservation Economic and Energy Planning (CEEP)].

F. That [PPL] will develop a plan to educate communities located along the proposed route regarding the construction, the mitigation efforts to be used to ensure the safety of the citizens and property, and to provide basic information regarding line features, which shall be served upon the [OCA], [OTS], [ECC] and [SCECA] as well as the [PUC]'s Bureau of CEEP and Office of Communications within sixty days of the final Order in this matter.

7. That the request of [PPL] to replace the 230 kV line from Wallenpaupack to Bushkill in kind is granted but construction shall not commence until [PPL] has obtained or been denied all approvals necessary for construction of the [proposed line].

8. That the approvals granted in this Order shall expire unless construction of the projects commences within two years of the entry date of the [PUC]'s Order[.]

ECC Br., App. C at 296-297. Exceptions to the recommended decision were filed by PPL, OCA, OTS, SCECA and ECC. Replies to exceptions were filed by PPL, OCA, SCECA and ECC.

On January 14, 2010, the PUC adopted a final opinion and order,*fn9 subsequently entered on February 12, 2010, that adopted the ALJ's recommendations but added the following condition:

G. That [PPL] shall within 30 days of the release of [PJM]'s next update to the 2008 [RTEP], or a new baseline RTEP report, file a report with [the PUC] at this docket regarding PJM's latest findings regarding the forecasted reliability contingencies this project is intended to address. [PPL] shall identify whether it intends to defer its construction schedule, and if necessary, identify any needed revisions to the relief granted by the [PUC] in this proceeding.

ECC Br., App. A at 142-144. The PUC also stated more specifically that construction of the Wallenpaupack to Bushkill line "shall not commence until [PPL] has obtained the National Park Service permit for the portion of the line through the Delaware Water Gap Recreation Area [DEWA]," and ...

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