Dive Brief:

• Last week, the PJM Board of Managers suspended the $272 million Artificial Island transmission project, directing PJM to come up with a comprehensive analysis to be completed by February before deciding the project's fate, according to a letter from the board. 
• The PJM Board noted that "it has become evident to all involved that the projected costs to resolve the problems at Artificial Island have increased significantly," and questions concerning its ability to operate as intended.
• The decision came after the Federal Energy Regulatory Commission (FERC) granted an appeal from the Maryland and Delaware Public Service Commissions reconsider cost allocation for the project. The governors of each state had petitioned FERC with worries their residents would shoulder the projects' costs with little benefit

​Dive Insight:

Building transmission lines is a notoriously difficult and oft-controversial process, and the Artifical Island project is no exception. 

Though the PJM board decision didn't address the concerns over the cost allocation directly, Delaware Gov. Jack Markell (R) released a statement commending PJM for its decision.

“This decision is one that the state of Delaware welcomes,” he said. “The project as it was proposed would have placed an unjust burden on the state, resulting in higher electric rates for our consumers and businesses. I hope that upon further review, a more equitable solution can be identified.”

The project has been in the works since 2013 and aims to connect the Salem Nuclear units 1 and 2 with the Hope Creek unit 1 in southern New Jersey to boost reliability in the area. 

In 2015, the PJM board approved a proposal to construct a 230 kV transmission line under the Delaware River, with LS Power building the line and Public Service Electric & Gas (PSE&G) and Pepco Holdings responsible for electric substation work.

But PSE&G's cost estimates for the substation work were higher than initial estimates prepared by PJM, leading to questions over whether or not that part of the project would work as intended.

The project will now be on hold until at least February, when PJM wants a review of the project completed.

"Questions have arisen about whether the currently proposed solution would perform as intended without further expense," the board wrote in the letter last Friday. "Because of these concerns, PJM has come to the conclusion that a pause in the project is necessary before any new financial obligations are incurred by the project developers."