[Federal Register Volume 68, Number 182 (Friday, September 19, 2003)]
[Notices]
[Pages 54897-54899]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-24086]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. ER03-262-001, et al.]


Order Announcing Commission Inquiry Into Midwest ISO-PJM RTO 
Issues

Issued September 12, 2003

Before Commissioners: Pat Wood, III, Chairman; William L. Masseyand 
Nora Mead Brownell.

    In the matter of: ER03-262-001, ER03-262-004, ER03-262-005, 
ER03-262-007, EC98-40-000, ER98-2770-000, ER98-2786-000, EL02-65-
006, EL02-65-000 et al., RT01-88-016; The new PJM Companies: 
American Electric Power Service Corp.; On behalf of its operating 
companies: Appalachian Power Company, Columbus Southern Power 
Company, Indiana Michigan Power Company, Kentucky Power Company, 
Kingsport Power Company, Ohio Power Company, and Wheeling Power 
Company, Commonwealth Edison Company, and Commonwealth Edison 
Company of Indiana, Inc. The Dayton Power and Light Company, and PJM 
Interconnection, LLC, American Electric Power Company, Inc., and 
Central and South West Corporation, Ameren Services Company, 
Illinois Power Company.

    1. In various proceedings and at a recent technical conference in 
Wilmington, Delaware,\1\ several Midwest and Mid-Atlantic states have 
supported efforts by their utilities to increase regional coordination 
by joining regional transmission

[[Page 54898]]

organizations (RTOs); other states have opposed or barred these efforts 
by the same utilities. The Commission and some of the Midwest and Mid-
Atlantic state commissioners expressed concerns about the current 
uncertainty regarding RTO formation in the Midwest and requested 
Commission action to resolve this uncertainty. In this order, the 
Commission announces an inquiry into RTO issues related to the Midwest 
Independent Transmission System Operator, Inc. (Midwest ISO) and PJM 
Interconnection LLC (PJM) to be conducted by the Commissioners, 
participated in by advisory staff, and facilitated by a presiding 
administrative law judge in the above-captioned proceedings. The 
purpose of this process is to gather sufficient information for moving 
forward in resolving the voluntary commitment made by several entities 
to increase regional coordination by joining RTOs and establish a joint 
and common market in the Midwest and PJM region. These entities include 
American Electric Power Company (AEP), Ameren Services Company 
(Ameren), Commonwealth Edison Company (ComEd), Dayton Power and Light 
Company (DP&L) and Illinois Power Company (Illinois Power). While these 
companies have voluntarily agreed to join either Midwest ISO or PJM, 
they have not yet fulfilled their commitments.
---------------------------------------------------------------------------

    \1\ This regional technical conference was held on August 28, 
2003. See Notice on (``continued) Technical Conference dated August 
19, 2003, Remedying Undue Discrimination through Open Access 
Transmission Service and Standard Electricity Market Design, Docket 
No. RM01-12-000.
---------------------------------------------------------------------------

    2. By taking this action, the Commission intends to explore ways to 
resolve the interstate disputes referenced above and enhance regional 
coordination to establish a joint and common market in the Midwest and 
PJM region.

Background

    3. On July 31, 2002, the Commission issued two interrelated orders 
\2\ which were designed to help establish a joint and common market in 
the Midwest and to support the establishment of viable, for-profit 
transmission companies that operate under an RTO umbrella and may, 
depending on their level of independence from market participants, 
perform certain of the RTO functions in the Commission's Order No. 
2000.\3\ In these orders, the Commission approved the voluntary 
commitments of certain utilities in the Midwest to either join Midwest 
ISO or PJM. Because of the necessity for close regional coordination in 
the Midwest, the Commission also required that Midwest ISO and PJM 
develop a joint and common market in 2004 that would provide for a 
seamless market in the Midwest.
---------------------------------------------------------------------------

    \2\ Ameren Services Company, et al., 100 FERC ] 61,135 (2002) 
and Alliance Companies, et al., 100 FERC ] 61,137 (2002), order on 
reh'g, 103 FERC ] 61,274 (2003).
    \3\ Regional Transmission Organizations, Order No. 2000, 65 Fed. 
Reg. 809 (2000), FERC Stats. & Regs. ] 31,089 (1999), order on 
reh'g, Order No. 2000-A, 65 Fed. Reg. 12,088 (2000), FERC Stats. & 
Regs. ] 31,092 (2000), appeal dismissed, Public Utility District No. 
1 of Snohomish County, Washington v. FERC, 272 F.3d 607 (DC Cir. 
2001) (Order No. 2000).
---------------------------------------------------------------------------

    4. By order issued April 1, 2003,\4\ in Docket No. ER03-262-000, et 
al., the Commission conditionally accepted for filing, suspended and 
set for hearing revisions to the PJM Open Access Transmission Tariff 
(OATT) that would allow AEP, ComEd, DP&L, and Virginia Electric and 
Power Company to join PJM. Subsequently, however, the Kentucky Public 
Service Commission denied transfer of AEP's transmission facilities to 
PJM.\5\ AEP has also asserted that recently-enacted Virginia law 
prohibits any firm that is a public utility in Virginia from 
transferring ownership or control of, or operational responsibility 
over, any transmission system to ``any person'' before July 1, 2004 and 
thereafter prohibits such a transfer without prior approval of the 
Virginia State Corporation Commission.\6\ At the same time, state 
legislation in Ohio and Michigan requires that AEP join an RTO. Also, 
by order issued March 15, 2000,\7\ in Docket No. EC98-40-000, et al., 
the Commission conditionally approved the merger between AEP and 
Central and South West Corporation (CSW), provided that AEP fulfill its 
commitment, set forth in that proceeding, to join an RTO.\8\ The 
uncertainty concerning AEP joining PJM has also resulted in uncertainty 
in the timing for ComEd and DP&L joining PJM. Requests for rehearing 
and compliance filings are pending in these proceedings.
---------------------------------------------------------------------------

    \4\ American Electric Power Service Corporation, et al., 103 
FERC ] 61,008 (2003).
    \5\ See Answer of Edison Mission Energy, et al., to Exelon 
Corporation's Comments on AEP Responses to FERC Data Requests, filed 
August 1, 2003.
    \6\ See AEP's Report on Compliance with Transmission-Related 
Merger Conditions, filed February 28, 2003 (AEP's February 28 
Compliance Report).
    \7\ American Electric Power Company,and Central and South West 
Corporation, 90 FERC ] 61,242 (2000).
    \8\ See Stipulation of American Electric Power Co., Central and 
South West Corp. and Commission Trial Staff at 2-4, Docket Nos. 
EC98-40-000 et al., (May 24, 1999).
---------------------------------------------------------------------------

    5. Illinois Power had originally proposed to join PJM. However, it 
subsequently has indicated that it may instead seek to join Midwest 
ISO. Illinois Power currently does not have an application on file with 
the Commission to join either RTO.
    6. Finally, Ameren had proposed to join Midwest ISO as part of 
GridAmerica LLC (GridAmerica). The Commission has recently received an 
application for GridAmerica to join Midwest ISO on October 1, 2003.\9\ 
However, at that time, GridAmerica would not include the facilities of 
Ameren.
---------------------------------------------------------------------------

    \9\ See Filing by GridAmerica Participants and Midwest ISO dated 
August 28, 2003, in Ameren Services Company et al., Docket No. ER02-
2233-010, et al.
---------------------------------------------------------------------------

Discussion

    7. The Commission will hold an inquiry into RTO issues related to 
the Midwest ISO and PJM to be conducted by the Commissioners, 
participated in by advisory staff, and facilitated by a presiding 
administrative law judge. As noted above, the purpose of this inquiry 
is to gather sufficient information to move forward in resolving the 
commitment made by several entities to establish a joint and common 
market in the Midwest and PJM region.\10\
---------------------------------------------------------------------------

    \10\ At this time, we intend to focus on the Midwest and the 
gaps in the Midwest. Thus, because Virginia Electric and Power 
Company is not in the Midwest, we are not including them as part of 
this inquiry at this time.
---------------------------------------------------------------------------

    8. With regard to these utilities, this inquiry will explore the 
impediments to these utilities in joining Midwest ISO or PJM and 
proposals for resolving those impediments. We note that the uncertainty 
regarding the Midwest-PJM participants is delaying the benefits to 
customers of greater voluntary coordination among utilities, and thus 
hindering the timely development of a joint and common market in the 
Midwest and PJM region, and the benefits of reliability that will 
result from such a market. Order No. 2000 adopted initially a voluntary 
approach to RTO formation which allows capturing reliability benefits, 
including regional infrastructure planning.
    9. We direct Midwest ISO, PJM, North American Electric Reliability 
Council, AEP, Ameren, ComEd, DP&L and Illinois Power to have a senior 
company official who can represent these entities as well as make 
decisions on behalf of the company present at the inquiry. We invite 
representatives from the affected states, including state commissions, 
to this inquiry. We invite Canadian parties who will be impacted by the 
common market to this inquiry, as well.
    10. We direct AEP, Ameren, ComEd, DP&L and Illinois Power to submit 
the following information in the form of pre-filed testimony by one or 
more witnesses by September 23, 2003: specify the impediments to their 
voluntary commitments to join RTOs;

[[Page 54899]]

and propose solutions to these impediments, including Commission 
actions necessary to move the process forward to establish a joint and 
common market in the Midwest and PJM region in an expeditious manner. 
This pre-filed testimony will be subject to cross-examination by the 
Commissioners and advisory staff at the hearing specified below. Any 
other interested parties may file similar testimony.
    11. The inquiry will be held on September 29 and 30, 2003, from 
approximately 9 a.m. to 5 p.m. in Hearing Room 1 of the Federal Energy 
Regulatory Commission, 888 First Street, NE., Washington, DC 20426. The 
Commissioners will attend and participate in the discussions. We direct 
the Chief Administrative Law Judge to appoint an administrative law 
judge to preside over the two-day inquiry, including swearing in 
witnesses, ruling on the admissibility of evidence and objections, etc. 
The presiding administrative law judge's involvement will be limited to 
the two days of hearing, and the Commission will take appropriate 
future action, as early as the October 22, 2003 meeting.
    The Commission orders:
    (A) The Secretary is hereby directed to publish this order in the 
Federal Register.
    (B) AEP, Ameren, ComEd, DP&L and Illinois Power are hereby directed 
to file the information discussed above by September 23, 2003.
    (C) Pursuant to the authority contained in and subject to the 
jurisdiction conferred upon the Federal Energy Regulatory Commission by 
Section 402(a) of the Department of Energy Organization Act and by the 
Federal Power Act, and pursuant to the Commission's Rules of Practice 
and Procedure and the regulations under the Federal Power Act (18 
C.F.R., Chapter I), the administrative law judge designated by the 
Chief Administrative Law Judge, shall preside over this inquiry, as 
discussed in the body of this order.
    (D) This inquiry shall be held on September 29 and 30, 2003, in 
Hearing Room 1 of the Federal Energy Regulatory Commission, 888 First 
Street, NE., Washington, DC 20426.

    By the Commission.
Magalie R. Salas,
Secretary.
[FR Doc. 03-24086 Filed 9-18-03; 8:45 am]
BILLING CODE 6717-01-P