By Kennedy Maize
The Federal Energy Regulatory Commission last week (May 13) rejected a rate proposal by three major investor-owned utilities for a $3 billion, 417-mile high-voltage electric transmission line running through Virginia and West Virginia and into a small portion of Maryland. 
The transmission line would be in the footprint of the PJM regional transmission organization and was selected by PJM under its plan for strengthening transmission in the region.
In a notational vote Chairman Mark Christie and commissioners David Rosner and Judy Chang agreed that the Valley Link project’s rate plan “may be unjust, unreasonable, unduly discriminatory or preferential, or otherwise unlawful” and ordered “proceedings to examine the Formula Rate, including, but not limited to, the proposed return on equity (ROE) and Protocols….”
Commissioner Lindsay See did not participate. She was West Virginia’s solicitor general before joining FERC in June 2024.
Christie issued a partial dissent, focused on his long-held opposition to transmission incentives. He wrote, “As Yogi Berra once said, ‘it’s like déjà vu all over again.’ Once again, a transmission developer asks the Commission to put already hard-pressed consumers on the hook for a laundry list of ‘incentives.’ And once again, the Commission approves almost all of the list. As I have said repeatedly over the past four years, it is long past time for this Commission to do its job of protecting consumers by cutting back on its unfair practice of handing out ‘FERC candy’ without any serious consideration of the impact on consumers already struggling to pay monthly power bills.”
In April, Utility Dive reported, “Valley Link is seeking a 10.9% base ROE, plus an additional 0.5% for belonging to PJM. It also asked for a suite of incentives for the project, including ‘construction work in progress,’ the ability to recoup any prudent costs it may have incurred even if the project is abandoned and a hypothetical capital structure of 60% equity and 40% debt.”
Christie also noted that the project is a partial clone of the failed Potomac-Appalachian Transmission Highline (PATH) project, which he has long railed against. “If that route sounds familiar,” Christie noted, “that is because one of the proposed 765 kV transmission lines appears to be planned to trace a very similar footprint as the PATH project, which itself was proposed to span the same three states. If PATH sounds familiar, that is because it is the transmission project for which PJM consumers paid approximately a quarter billion dollars without a single state ever approving a certificate of public convenience and necessity (CPCN) or a single ounce of steel ever being put in the ground. Like the Valley Link project, PATH was also selected through PJM’s RTEP process.”
Christie also noted the similarities in the ownership of PATH and Valley Link, as raised by the Maryland People’s Counsel, which opposed the project. The Maryland consumer advocate office wrote, “Valley Link is no ordinary start-up company.”
Indeed. Christie noted that “Valley Link MD, Valley Link VA, and Valley Link WV are wholly owned subsidiaries of Valley Link Transmission, which is a newly formed joint venture holding company among Transource Energy, LLC; FirstEnergy Transmission, LLC (FirstEnergy); and Dominion Energy, Inc. Transource is itself a joint venture of American Electric Power Company, Inc. (AEP) and Evergy, Inc.”
“That’s the family tree that brought us PATH,” said Christie. PATH was a 2007 joint venture between AEP and Allegheny Energy. Allegheny merged with FirstEnergy in 2011 becoming the upstream owner of Allegheny’s interests in the PATH project.
Maryland People’s Counsel David Lapp said in a news release, “FERC’s action will help address the bill increases customers are seeing from the costs of massive transmission spending. We consistently see utilities earning excessive returns for their investors in rates set by state and federal regulators. The success here is an important step toward protecting customers from those inflated costs.”
The Maryland independent state agency earlier estimated that Valley Link would cost customers in the state some $800 million.
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