Today, utility companies in Virginia, West Virginia and Maryland withdrew pending applications to build a multi-billion dollar transmission line that was intended to bring coal-fired power to new East Coast markets. American Electric Power and Allegheny Energy, two of the nation’s largest coal-fired power producers, had been pushing for approval of the so-called Potomac Appalachian Transmission Highline, or “PATH line,” which was slated to run from Amos, West Virginia to Kemptown, Maryland. However, PJM Interconnection, the nation’s largest grid operator, has ordered the companies to suspend work on the project because recent analyses indicate that the new line is not needed.

In an announcement issued today, PJM explained that lower forecasts for electricity demand and increased availability of demand response resources (which reduce demand for electricity at peak hours, for instance hot summer days) are forcing PJM to rethink the PATH line and transmission planning more generally. “In particular,” PJM stated that “the growth of Demand Response can contribute to lower expectations for future peak demand, thereby extending the time period when transmission upgrades are needed.”

Earthjustice attorney Abigail Dillen, who is representing the Sierra Club in ongoing litigation over the line said, “PJM is basically admitting what we have said from the start—that there are better and cheaper alternatives to building a $2 billion transmission line. Demand response and other clean energy initiatives are working, so let’s not rush to build a terribly expensive project that only entrenches dependence on dirty coal plants.”

PJM’s decision to hold the PATH project “in abeyance” comes in response to an order issued by a Virginia State Corporation hearing examiner, who required new analyses of the PATH line to account for reduced load forecasts, demand response, energy efficiency, and new generation projects.

As predicted by the Sierra Club’s experts, the new analyses revealed that the PATH line will not be needed in 2015 as AEP and Allegheny Energy had previously claimed. In papers filed with the Virginia state commission on Tuesday, representatives for the companies were forced to concede that “under the present circumstances, withdrawing the application is in the public interest.”

In response to today’s filing, Glen Besa, Director of the Sierra Club in Virginia said, “We now have one point of agreement with the utility companies. Withdrawing their application to build PATH is absolutely in the public interest—economically and environmentally.”

The suspended PATH project would have flooded Northeastern cities with dirty coal energy and made it harder for clean energy producers to get a toehold in eastern power markets. The line also would have saddled ratepayers with extra costs for many years to come.