TVA, MISO and PJM To Integrate Markets

NEW YORK, NY -- - Three of the biggest power grid operators in the eastern-half of the United States agreed to work together to integrate their power markets, the companies said in a joint statement Wednesday.

The Midwest Independent Transmission System Operator Inc. (MISO), PJM Interconnection (PJM) and the Tennessee Valley Authority (TVA) said this was the first step in a process that would, when complete, create a wholesale power market covering a significant portion of the nation east of the Rockies.

The announcement furthers the Federal Energy Regulatory Commission's (FERC) goal of creating a national standard market design (SMD) based, in part, on the PJM market model.

Separately, Exelon Corp.'s Commonwealth Edison utility on Wednesday set June 1 as a target date to begin connecting its transmission grid with the PJM system.

On that day, ComEd wants to allow PJM to operate an electronic bulletin board for scheduling flows across its 3,100 miles of transmission lines, the two groups said in a release.

In the PJM market, generators compete with each other to provide wholesale electricity. Generators offer to supply the power at various prices. The offers are accepted by PJM based on price, beginning with the lowest-priced offers, until the generating supply meets the demand for electricity.

The PJM system is the world's largest wholesale electricity market serving 25 million people in all or parts of seven states and the District of Columbia.

MISO operates the transmission serving some 24 million people in all or parts of 15 states and parts of Canada.

TVA is a federal corporation that is the sole power wholesaler to more than eight million residents in all or parts of Kentucky, Tennessee, Virginia, North Carolina, Georgia, Alabama and Mississippi.

Together the area covered by MISO, PJM and TVA includes: 295,000 megawatts (MW) of generating capacity, 150,000 miles of transmission lines and more than 57 million customers.

One megawatt of generating capacity is enough to power about 1,000 average homes.

PJM GROWTH

Last year Allegheny Power, which delivers power in five Midwest states, joined the PJM market, resulting in overall savings of more than $100 million to wholesale customers in the PJM region. Allegheny Power is the energy delivery business of Allegheny Energy Inc. of Hagerstown, Maryland.

In January 2002, MISO, PJM and Southwest Power Pool Inc. (SPP) said they would start taking steps to create a single energy market covering their collective regions.

In March 2003, however, PJM announced it would delay the May 1 date for the full integration into its wholesale power market of American Electric Power Co Inc. , Commonwealth Edison, and the Dayton Power & Light Co., a subsidiary of DPL Inc.

The implementation was delayed due to "necessary regulatory approvals," according to a statement from PJM.

FERC in April approved requests by ComEd and AEP to transfer grid control to PJM. That move put FERC at odds with Virginia's legislature, which passed a law barring AEP and Dominion Resources Inc. from joining a regional transmission group until 2004 -- and then only with express permission from the state.