Illinois Power, now a subsidiary of leading marketer DynegyCorp., is changing its game plan, telling regulators it wants todrop out of the more conservative Midwest Independent SystemOperator (MISO) to join the Alliance Regional Transmission Operator(Alliance RTO).

An important consideration in the company’s decision is the factthat many members of the Alliance RTO operate in states that haveelectric choice, unlike most MISO members.

“This fact alone makes the Alliance RTO a better tool to helppromote competition in Illinois,” said Kathy L. Patton, IllinoisPower vice president and general counsel. “Our decision was alsoinfluenced by other benefits provided by the Alliance RTO,including price certainty and the elimination of stacked or’pancaked’ rates. Furthermore, as a for-profit entity, theAlliance RTO has the incentive to move power economically,efficiently and effectively.”

Members of the Alliance RTO include FirstEnergy Corp., AmericanElectric Power, Consumers Energy, Detroit Edison, and DominionVirginia Power. Alliance RTO members now will serve customerswithin 139,000 square miles in 10 contiguous states.

Illinois Power, which was one of the original members of MISO,must get approval for the switch from the necessary regulatorybodies, including the Federal Energy Regulatory Commission.

The MISO charter provides for withdrawal by members if ownershipof the transmission assets changes. The February 2000 mergerbetween Illinois Power’s former parent company Illinova Corp. andDynegy Inc. constituted such a change in asset ownership. Ifapproved, Illinois Power’s withdrawal from MISO would be effectiveno later than December 2001.

Patton said the move to join the Alliance RTO provides a bettertransmission operation platform for IP and its customers, and is”consistent with the movement of the marketplace toward realcompetition.”

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