Congestion is about a $100 to $200 million problem in thePennsylvania-New Jersey-Maryland (PJM) independent system operator(ISO) area, but it is being addressed through a combination ofmanagement and capital improvement steps that include a long listof natural gas-fired new generating plants, according to anexecutive with the PJM ISO’s regional power district, the largestin the nation.

There are some 119 proposed new power plants, totaling about40,000 MWh, in the queue for in and around PJM’s territory and itis nearly all gas, said Kenneth Laughlin, PJM’s vice president ofmarket services, who spoke to a GasMart/Power 2000 audience inDenver Monday. Laughlin said he is unsure if any of this new supplywill come on line in time for this summer’s peak load needs.

Although a California-based Western power marketer expressed aninterest in having more competitive RTO proposals in the 12 Westernstates now making up the voluntary Western States CoordinatingCouncil (WSCC), Laughlin said that customer satisfaction amonglarge wholesale traders is running better than 90% in the tightlyrun PJM, which depends heavily on a marketing committee that isconstantly changing its business rules to respond to feedback fromthe 160 utility, marketer, shipper and large industrial customermembers making up the PJM participants.

Noting that in California and other western states he thinksthere have been a lot of mistakes made, Gary Ackerman, executivedirector of the Western Power Trading Forum, said nevertheless theone thing California did get right is “market access.” Laughlinreiterated that statement for PJM.

Eventually, both RTO experts see increased competition in bothtransmission and generation attracting more market interestincluding a boost to retail markets, which Laughlin thinks havereceived quite a bit of stimulation in Pennsylvania and areexpanding to Delaware and New Jersey.

Price visibility for retail consumers “is the last piece in themarket restructuring,” Laughlin said. “Right now, consumers don’tcare because they are paying a fixed rate over a period of time.The goal should be to get consumers to pay some sort ofmarket-clearing price and in the near future they will know thatprice. Technology eventually will allow the wiring of every house,and some industries already have this.”

It is critical that everyone — shippers, marketers andgenerators — be able to see a real-time price anytime, Laughlinsaid, as a means of addressing congestion, which he estimatesoccurs about 25% of the time on the PJM grid.

In the West, Ackerman, whose association includes 28 directaccess wholesale electricity players, including the CaliforniaPower Exchange, Enron, Reliant and APS Energy Services, inCalifornia and the desert southwest, said the worst outcome from acompetitive market standpoint would be to have just one 12-stateregional, full-service ISO including the traditional WSCC.

An alternative now being looked at would be to create a regionalumbrella under which sub-RTOs, such as California’s existing ISO,would operate. It would be called the Western InterconnectionOrganization, whose primary purpose would be to provide real-timeinformation on what transmission paths are open and to coordinateintegrated transmission planning.

“My concern is that we’re going to end up with one, and that isthe worse of all possible options,” Ackerman said. “Then, I havenothing with which to compare the organization to. It will be thedominant RTO, and will become a spending machine without limits,and if its like California, it will never have a rate case, thereis no performance ratemaking and they spend everyone’s money likewater.”

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