Elizabeth Moler, former FERC chair and now senior vice-president at Exelon, last Wednesday urged the Commission to start providing some certainty in the area of regional transmission organization (RTO) formation, noting that several utilities are drawing a line in the sand on spending more money on RTO-related development until that certainty is offered.

Moler’s comments came during a lengthy presentation at FERC headquarters by representatives of several utilities that were formerly aligned with the Alliance RTO. Those utilities have now started to pick new RTO homes in the PJM Interconnection and the Midwest Independent System Transmission Operator (MISO). FERC last December rejected the Alliance Companies plans to create an RTO, while at the same time it gave RTO status to MISO.

The Commission asked the representatives to appear at the federal agency to expand on the reasons behind their companies’ RTO choices and explain how those moves will meet the agency’s objectives related to reliability and natural markets. FERC Commissioner William Massey has articulated concerns that plans by utilities to join grid operators based outside of the companies’ own backyards could lead to poorly crafted RTOs.

“One of the questions unspoken yet on today’s panel is how we get to yes,” Moler said. “Having had numerous orders approving the Alliance RTO and then suddenly ‘Oops! Well, we had to change our plans’ and now having filed our petitions for declaratory order and then having been given an invitation to choose where we want to go, we are now facing additional investments to actually get up and running by this fall,” she added.

“Some companies you will hear are saying ‘No more until we’re sure. No more money,'” Moler said. “We really need some certainty.” If FERC “had told us this afternoon at the end of the session…go for it, we’d be delighted, we’d go, but we really need some certainty.”

Meanwhile, Moler acknowledged that the decision by Exelon’s Commonwealth Edison (ComEd) subsidiary to join PJM “was a surprise to some.” But she refuted allegations that ComEd’s decision to join PJM “was principally due to our desire to benefit our affiliated generation.” She said that the move to PJM by ComEd benefits all generation interconnected to ComEd.

As for the reasons behind ComEd’s choice of PJM, Moler said that a number of factors came into play. “First and foremost, is the ability to ensure continued reliability of the ComEd transmission system. Second, PJM, with AEP [American Electric Power], is ComEd’s natural market. Third, the PJM market structure already supports retail access, which we have today in Illinois for all customers.”

Commissioners also heard from an official with Illinois Power as to why that utility selected PJM as its RTO choice. Illinois Power’s Kathy Patton told the regulators that from an operational and market perspective “PJM should be our choice hands down.” She said that the “transparency and robustness” of the PJM market will also better support and promote Illinois’ retail choice program and encourage new generation. “What attracted us most to PJM…was its several years experience as an operator and its ability to get us up and running fairly quick.”

As for why Illinois Power ultimately shunned MISO in its RTO search, Patton said that such a move — with AEP and ComEd part of PJM — would “strand” Illinois Power from available import markets. “Our only strong interconnection with MISO would be Ameren and Ameren has no ATC available either into or out of IP [Illinois Power] for this summer and we don’t expect that to change.”

Also appearing before the Commission on Wednesday were representatives of FirstEnergy Corp., NIPSCO, Ameren, Dayton Power and Light (DP&L), Dominion and AEP. First Energy, NIPSCO and Ameren have all chosen to join up with MISO, while DP&L, Dominion and AEP are going with PJM.

©Copyright 2002 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.