PJM ITC Tariff Splits With Midwest

National Grid balks, says FERC intended TransLINK as model for the East.

PJM has proposed new rules to govern the split of rights, duties, and functions between a regional transmission organization (RTO) and any independent transmission company (ITC, or transco), drawing a protest from National Grid, which claims that PJM's tariff will make it impossible for an ITC to be "viable" in PJM. National Grid adds that PJM's narrow view on the ITC role in grid planning runs counter to precedent set last spring by the Federal Energy Regulatory Commission (FERC).

But the real problem arises because of operational differences between PJM and the Midwest ISO, and what those differences mean for National Grid, which seeks a key role in coordinating markets between the two regions.

The Midwest ISO has not yet developed a central spot market with locational marginal pricing (LMP) to combine congestion management with energy prices. To compensate, MISO will pay $12 million over one year to National Grid and its local ITC affiliate, Grid America, for various grid services. National Grid seeks a similar role in the East, asking PJM for $9 million. That would help cement National Grid's role as the primary go-between to manage "seams" disputes between MISO and PJM.