IEEE Power & Energy Magazine - July/August 2016 - 69

environmental areas. The power electronics solution, while
technically acceptable, would have been the first application
of this technology on such a large scale in the immediate
vicinity of operating nuclear plants. Further, as PJM's analysis progressed, developers supplemented their proposals with
cost caps and other cost-containment approaches. The comparison of the proposals required PJM to do detailed constructability analyses, cost-estimate reviews, and technical reviews
to assess the pros and cons of each alternative. In the end, a
230-kV transmission line project was selected as the solution
that best addressed the problem. What the Artificial Island
process illustrates is the range of potential uncertainties and
the depth of analysis required to arrive at the best solution.
Another noteworthy aspect of window results is the
2014/2015 long-term proposal window, where PJM solicited
solutions for long-term transmission needs to address market congestion (i.e., market-efficiency projects). Per the PJM
Operating Agreement, market-efficiency projects are subject
to attaining a minimum benefit/cost ratio, with the benefits
attributed to transmission congestion reduction. Prior to the
inclusion of market-efficiency analysis into the competitive
solicitation process, there had been very few market-efficiency projects brought forward for implementation. However, as the window results show, the competitive solicitation
for market efficiency brought forth more than 100 proposals, a number of which contain significant benefit/cost ratios
that exceed the minimum thresholds and have been recommended for implementation.
Ultimately, 16 projects were approved and are moving
forward for construction. A number of other projects remain
under consideration. The increased number of valid marketefficiency projects provides further confirmation that developer creativity gets unlocked in the sponsorship model.

Lessons-Learned Process
In late 2014, after PJM and the stakeholders had accumulated
a first full year of experience with the PJM Order 1000 process, PJM began a lessons-learned exercise to solicit feedback from stakeholders. During a series of open meetings,
PJM gathered feedback, complaints, and suggestions from its
stakeholder community. After receiving this feedback, PJM
sorted the items into categories to better understand and prioritize the work needed to address the issues and concerns.
The feedback generally fell into three broad categories.
✔ Communication. How does PJM communicate with
the stakeholders-before the solicitation, during the
proposal submittal process, during the analysis process, and after the selection?
✔ Evaluation. What process does PJM use to select the
winner? What factors are used, how are they weighted, and so forth?
✔ Process. Should the sponsorship model continue or
not? What gets included in/excluded from the solicitation process? Can more time be provided to submit
proposals?
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Based on that feedback, PJM discussed potential approaches
to address the concerns and brought options forward for
stakeholder consideration.
A number of issues were found to be quickly resolvable.
For example, stakeholders had experienced difficulty exchanging large files electronically in the course of submitting proposals. PJM has to provide large files containing the results of the
analysis to the developers; then, the developers need to provide
large files back to PJM, which contain their proposed solutions
to the violations identified. Managing these large files became a
burden for both PJM and the developers. It was not uncommon
to have compact discs or other physical media being exchanged
in the mail to facilitate the sharing of the information. To solve
this issue, PJM implemented a file-transfer software package
that permits the secure exchange of large files electronically,
provided stakeholder training in using the software, and established a dedicated e-mail address to resolve issues related to
accessing the software or submission problems.
Requiring a more concerted stakeholder effort was the standardization of the templates used to document proposals. Prior
to this effort, developers provided their proposals in a format
they chose themselves. The variation in the submissions left a
greater potential for errors or omissions by the developer and
made analysis by PJM much more time-consuming. Based on
feedback, PJM developed standard templates for the submission of proposals. This change has dramatically reduced the
time necessary to sift through proposals and facilitates the
comparison effort that leads to the selection decision.
PJM continues to work with its stakeholders to address
additional items and to solicit feedback. Transparency remains
a key concern, and PJM is working on the issue in the near
term. Basically, the process is still somewhat new to both PJM
and the stakeholders, and more transparency likely will address
the uncertainties that exist in the identification of issues, the
proposal solicitation process, and, most notably, the selection
process and how the results are communicated to stakeholders.
Stakeholders also desire greater clarity about how cost-capping
and cost-containment mechanisms are evaluated.

What We Learned
With regard to the overall process, we learned that the sponsorship model entails a significant amount of work, far more
than we expected would be required under a single-project
solicitation model. Certainly, the workload is greater on the
proposing entities making technical assessments and decisions on multiple alternatives instead of preparing a proposal
for just one alternative. However, feedback from stakeholders generally supports their preference for the sponsorship
model, despite the extra work. Importantly, significant effort
is being devoted to smaller reliability issues, solutions for
which are relatively obvious and can be addressed by the
current asset owner without the effort of a competitive
process. In fact, most such solutions are small upgrades to
existing infrastructure, which are reserved by Order 1000 to
the incumbent transmission owner.
july/august 2016

Table of Contents for the Digital Edition of IEEE Power & Energy Magazine - July/August 2016