Pennsylvania Power & Light Co. is one of the nine electric utility members of the Pennsylvania-New Jersey-Maryland power pool that filed a plan today (11/30) with the Federal Energy Regulatory Commission to restructure the regional power pool to increase electric utility competition in the region. A news release issued by the nine utilities is attached. For information on specifics of the plan, please use the contacts on the news release.
Mid-Atlantic Utilities Announce Proposed Restructuring Plan
Washington, D.C., November 30, 1995 — Nine electric utility members of the Pennsylvania-New Jersey-Maryland (PJM) Power Pool today filed with the FERC a detailed plan to increase competition in the region. This comprehensive plan offers to all generators and wholesale buyers of electricity a Pool-wide energy market and open access to Pool-wide high-voltage transmission lines.
The results of the plan will be greater availability of economic energy to a broader array of wholesale electricity buyers and sellers. "Our proposal is aimed at further development of a truly competitive wholesale market with broader participation," said Pierre R.H. Landrieu, Vice President, Electric Transmission, of Public Service Electric and Gas Company. "This will provide long-term benefits to consumers and will satisfy the goals of the Federal Energy Regulatory Commission (FERC)."
Four key components are embodied in the proposal:
Pricing Transmission Service
New Pool-wide transmission tariffs will provide open access, comparable service to all wholesale transactions. The rate structure will simplify making a transaction and accurately reflect costs to transmit electricity. A Pool-wide rate, to be administered by the Independent System Operator (ISO), is designed to eliminate dealing with each company separately for transactions through the Pool. A component of this rate will reflect local transmission facilities.
New Energy Market
A regional energy market will be implemented, with price-based dispatch, open to all wholesale bulk power buyers and sellers. Suppliers will post bid prices for energy available for interchange (spot market transactions). The ISO will dispatch on the basis of economic merit. This new arrangement will expand the options of the participants.
Ensuring Independent, Economic and Reliable Operation
An ISO will administer Pool operations, operate the regional energy market, and administer transmission service. By establishing a Board of Directors and changing the rules of governance, the existing PJM Interconnection Association will be transformed into an ISO for the region. Transmission owners, in the aggregate, will be limited to a minority on the Board of the ISO.
Coordinated Planning
The ISO will administer an enhanced Pool-wide transmission planning process pursuant to Mid-Atlantic Area Council principles, criteria and procedures to account for the planned needs of participants.
The PJM Companies expect to implement the new structure by year-end 1996.
The nine PJM Companies endorsing this proposal are:
Public Service Electric and Gas co., Pennsylvania Power & Light Co., Baltimore Gas and Electric Co., Jersey Central Power & Light co., Metropolitan Edison Co., Pennsylvania Electric Co. the three preceding companies are subsidiaries of General Public Utilities Corp.), Potomac Electric Power Co., Atlantic City Electric Co., and Delmarva Power & Light co. Some specific aspects of the plan are not endorsed by the tenth member of PJM, PECO Energy.
PJM was founded in 1927 and is the oldest centrally dispatched system in North America. It is the largest power pool in the U.S. with more than 56,000 megawatts of pooled generating capacity. The PJM Power Pool coordinates the operation of 540 electricity generators and more than 8,000 miles of transmission lines.