Seeking to ease the flow of power across a big chunk of the Eastern Interconnection, the Midwest Independent Transmission System Operator (MISO), PJM Interconnection and the Tennessee Valley Authority (TVA) on Wednesday announced plans to pursue the development of a multi-regional approach to strengthen electric transmission, operations and related transactions.

The memorandum of understanding (MOU) executed by the three grid operators initiates the first step of a process that would, when complete, facilitate a transparent market covering the movement of the most competitive sources of generation supply throughout a significant portion of the Eastern Interconnection.

The Eastern Interconnection refers to North America’s electric system east of the Rocky Mountains, excluding Texas. There are 622,000 MW of peak electric load in the Eastern Interconnection. The area comprised by MISO, PJM and TVA represents 270,000 MW, or 43%, of the Eastern Interconnection.

“This MOU is a critical first step toward beginning the development of standardized processes that will enable smooth coordination of power flows and ultimately bring the benefits of robust wholesale electricity markets to customers across the Eastern Interconnection,” said James Torgerson, MISO’s president. “Working with TVA will allow for better coordination of electricity flows not only east/west, but north/south, which is pivotal given TVA’s central position in the Eastern Interconnection.”

“This initiative will help realize the goals of open access and will further FERC’s directive of a joint and common energy market,” said Phillip Harris, PJM’s president. “We look forward to building on the successful integration of Allegheny Power into PJM’s market, which demonstrates that a common wholesale electricity market can meet the differing needs and reliability practices of multiple states and regions. This is a tremendous step forward in the advancement of competitive, transparent wholesale energy markets.”

“We recognize that as wholesale power markets develop there must be stronger regional approaches to ensure uniform access, standard computer protocols, equitable market rules and quality transmission service nationwide,” said Glenn McCullough, TVA chairman.

“This initiative, in combination with our continuing efforts with public power partners and SeTrans participants, like Southern Co. and Entergy, provides a mechanism to develop a broad and seamless approach to wholesale energy markets across a broad region.”

The three grid operators said that planning will begin in a manner consistent with MISO and PJM’s respective tariffs and the laws and rules pertaining to TVA’s status as a regional, non-FERC jurisdictional entity in the Eastern Interconnection.

MISO, PJM and the Southwest Power Pool (SPP) in January 2002 announced plans for the creation of a joint and common electricity market covering their collective regions.

But PJM last month warned that if American Electric Power (AEP) can’t join a regional transmission organization (RTO) until July 1, 2004, as called for under a new Virginia law, development of the MISO-PJM-SPP common market could be delayed. FERC has given MISO and PJM a deadline of Oct. 1, 2004 to establish a common market. AEP wants to hand over control of its transmission assets to PJM.

Meanwhile, MISO and SPP last month mutually agreed to terminate the consolidation of their organizations. SPP and MISO began discussing a consolidation in August 2001 and definitive documents were executed in March 2002. Both organizations have not precluded a future consolidation. MISO was given RTO status by FERC in 2001.

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