(November 2008) Economic uncertainties are raising doubts over utility returns. Will regulators feel the need to consider broader economic effects when engaging in ratemaking? While...
Is the "pathway concept" the answer to Virginia's qualms?
PJM, at its annual meeting, announced a plan to integrate ComEd into PJM by Oct. 1, pursuant to FERC's April 1 order, despite Virginia's saying no to membership by American Electric Power (AEP) or any other jurisdictional utility, according to PJM spokesman Ray Dotter. PJM introduced the "pathway concept" as a way to work around that state while the jurisdictional issues are being fought at FERC. (May 16 was the deadline for filings at FERC on whether the integration can proceed.)
If AEP does not become a PJM member, Exelon, ComEd's parent, and other market participants would use firm transmission capacity that they have purchased from AEP to link PJM and ComEd. "So folks who are not using their firm transmission capacity can contribute that to an aggregation that would function as sort of a virtual transmission line" Dotter explained.
He added that it is not a single line, but the combination of capacities over whatever lines are between ComEd and PJM, and that pathway would be operated and managed by PJM as a dynamic transmission line. The line would be subject to the same constraints as an actual transmission line.
It will be a two-way link so that power can flow in both directions.
So far, a few hundred megawatts are available from ComEd and Exelon, but PJM believes others might also contribute. For example, if a plant goes down for maintenance, that capacity for a month's down time could be used.
Financially, Dotter compared the situation to subletting office space. "Think of a firm transmission right as leasing transmission capacity, and when it is not needed participants would in a sense sublet it through PJM to others to flow power back and forth," he explained. PJM is in the midst of developing a stakeholder plan and business rules for how it would work. The Market Implementation Working Group is discussing how the pathway might operate, and details are being worked out. July 15 is the target date for a FERC filing on how the integration would work, including the pathway.
Meanwhile, AEP spokesman David M. Hagelin says AEP is moving ahead with the state approval process and is "not waiting per se." He added that the decision to delay joining PJM was made for AEP, not by AEP. "We will comply with Virginia law," he says. Hagelin says AEP considers FERC's April 1 order a "green light" to join PJM, rather than a mandate to do so. Hagelin noted that AEP's intention still is to join PJM (for its ECAR assets), "but it is clear that the timeline will be later than we had projected."
Virginia-FERC SMD Dust Up: How PJM Got Caught in the Mix
The trouble for PJM started after it had an agreement in place for AEP and ComEd to join the RTO. Virginia, leery of competitive efforts, decided it was time to slow down. Back in March, the Virginia Corporation Commission first said it was moving forward with AEP's request to transfer control of its transmission facilities