American Electric Power (AEP) has no plans at this time to pursue legal action in the wake of a move by Virginia lawmakers last Wednesday to place into immediate effect legislation that blocks AEP from transferring ownership of its transmission assets to PJM Interconnection prior to next summer.

Under the new Virginia law, both AEP and Dominion Virginia Power cannot shift control of their transmission assets to a regional transmission organization (RTO) before July 1, 2004. But FERC last week issued an order in which it said that AEP and Commonwealth Edison Co. could proceed with joining PJM.

For now, at least, AEP doesn’t plan to challenge Virginia’s stance on RTO membership in the courts. “That’s something that we haven’t talked about as an option,” AEP spokesperson David Hagelin told NGI. “I don’t know that it wouldn’t become one, but it’s not an option that we’ve talked about.”

Hagelin said that AEP is “well into the process” of working with the various state regulatory commissions to transfer transmission assets that it owns in seven eastern states to PJM. Along with Virginia, several other states need to give their blessings to such a move, including Kentucky.

“Now, frankly, we’re not sure [of] the timetable that this is on now,” Hagelin said. “Our original timetable was a bit more advanced than 2004,” he said, alluding to the Virginia legislation. “We had been talking as recently as a couple of months ago about AEP becoming fully integrated…this spring. So that timetable seems unlikely at this point.”

AEP recently urged FERC to seek to resolve state-level concerns over RTO formation through “a process of discussion and consultation with the states.”

In its order last week, FERC declined to dismiss filings related to AEP and ComEd’s transmission asset transfers. FERC said that the filings “are validly before the Commission, and we are accepting these filings under the FPA [Federal Power Act], and are not determining the effect of state law.”

FERC said that PJM “is already an RTO with well-established market rules, and the issuance of a final SMD rule should not result in significant changes to PJM’s market rules.” The Commission therefore “sees no reason to delay AEP’s and ComEd’s entry into PJM until this Commission completes its SMD rulemaking.”

©Copyright 2003 Intelligence Press Inc. Allrights reserved. The preceding news report may not be republishedor redistributed, in whole or in part, in any form, without priorwritten consent of Intelligence Press, Inc.