In seeking FERC certification as a regional transmissionorganization (RTO) last week, PJM Interconnection LLC and its ninetransmission owners claimed the regional independent systemoperator (ISO) already possessed the characteristics and functionsrequired by the Commission’s Order 2000 to qualify as an RTO.

“Indeed, PJM already has in place the functions that Order 2000allows other RTOs several more years to implement. For PJM, theCommission resolved most of the issues raised by Order 2000 nearlythree years ago when PJM became an ISO.PJM clearly meets all of thecharacteristics of an RTO,” the group said its RTO compliancefiling submitted last Thursday

In addition to citing the independence of its governancestructure and the absence of any financial interest by PJMemployees in the regional power market, the group touted the “scopeand configuration” of PJM, noting it is the “largest centrallydispatched control area” in North America and third largest in theworld.

As part of the filing, PJM’s nine transmission owners proposed a”transmission enhancement package” that contains “concretecommitments” on their part to upgrade the PJM-directed grid. Theyalso seek a rate moratorium on existing zonal transmission ratesthrough Dec. 31, 2004, authorization to defer cost recovery ofcapital investments in new transmission projects until after therate moratorium, accelerated depreciation of new transmissioninvestments until the close of the rate freeze, confirmation thatrisk adjusted rates of return for new transmission investmentwithin PJM are appropriate, and an extension of the currentdeadline for the phase-in of system-wide PJM rates during the ratesuspension period.

In related action, power marketer Morgan Stanley Capital GroupInc. urged FERC to eliminate the bid cap in the PJM to coincidewith the expiration of temporary bid caps in the New York and NewEngland ISOs this month. Also, it proposed that the installedcapacity (ICAP) requirement and deficiency charge be eliminated inPJM [RL01-3].

Transactions in the Pennsylvania-New Jersey-Maryland market werevalued at $1.8 billion in 1999, the PJM reported. The PJMadministers about 8% of the nation’s electric power, with pooledgeneration capacity of more than 58,000 MW. It has more than 190members, and serves about 22 million customers in the Mid-Atlanticregion.

The PJM transmission owners include Baltimore Gas and Electric,Conectiv Power Delivery (Atlantic City Electric Co. and DelmarvaPower & Light), GPU Energy (Jersey Central Power & Light,Metropolitan Edison and Pennsylvania Electric Co.), PECO Energy,PPL Electric Utilities Corp., Potomac Electric Power Co., PublicService Electric and Gas, UGI Utilities Inc. and Allegheny ElectricCooperative.

Susan Parker

©Copyright 2000 Intelligence Press, Inc. All rightsreserved. The preceding news report may not be republished orredistributed in whole or in part without prior written consent ofIntelligence Press, Inc.