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Governor Larry Hogan and Governor John Carney Continue Fight Against Artificial Island Cost Allocation, Unfair Rate Hikes

Maryland, Delaware Governors Call on PJM to Support Request for Rehearing

ANNAPOLIS, MD – Governor Larry Hogan today released a joint letter with Delaware Governor John Carney to the Chair of PJM Interconnection’s Board of Managers in response to new information that Artificial Island’s transmission line extension project will still unfairly allocate the majority of the project costs, totaling approximately $250 million, to Delmarva Peninsula ratepayers.

“Since the beginning of this process, our administration has expressed our opposition, frustration, and disappointment about the burdensome costs associated with this project,” said Governor Hogan. “Delmarva Peninsula taxpayers should not have to disproportionately pay hundreds of millions of dollars in rate increases, especially given the majority of the benefits will go to other states.”

In June 2016, Governor Hogan and former Governor Jack Markell requested that the Federal Energy Regulatory Commission (FERC) reconsider their approval for a cost allocation method that would have required residents in Maryland and Delaware to pay nearly 90 percent of the costs, or about $350 million. Subsequently, the respective public service commissions for Maryland and Delaware requested a rehearing with FERC to modify the cost allocation. In August 2016, PJM temporarily halted the project for further analysis and is slated to make a final decision in early April that will likely not include any changes to costs for Delmarva residents and businesses. As such, Governor Hogan and Governor Carney are calling on PJM directly to support their request for a rehearing with FERC.

“This is a bad deal for electric ratepayers in Delaware and across Delmarva,” said Governor Carney. “I’m proud to stand with Governor Hogan to oppose the current cost allocation for this project, which would unfairly raise costs for businesses and families in Delaware and across our region. We will continue to work with the Public Service Commission, Delaware’s Public Advocate, members of the General Assembly and our congressional delegation to protect Delmarva ratepayers.”

According to the updated cost estimate of $279 million presented by PJM to the Transmission Expansion Advisory Committee on March 3, Delmarva Zone customers would still pay approximately $250 million. As a result, the average residential and commercial customer will still pay significantly higher rates.

“Our administration is proud to continue to stand with Governor Carney and Delaware in the hopes that this unfair and unjust cost distribution will be corrected immediately,” said Governor Hogan. “We will use every tool at our disposal to reach a reasonable and equitable solution that protects the interests of our taxpayers.”

 

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