Nine members of the Pennsylvania-New Jersey-Maryland Power Pool filed a revised plan at the Federal Energy Regulatory Commission to establish an independent system operator for the Mid-Atlantic power market.

The utilities have been battling with lone dissenter PECO Energy over the details of the ISO.

The nine utilities, dubbed the "supporting companies," agree on the form that an ISO should take. In November 1996, the FERC had rejected ISO proposals by both parties as having failed to comply with Order 888. The FERC ordered the companies and PECO to work together and reach a compromise. They "regrettably" failed to agree, according to Mary Meyers, PJM spokesperson. "We negotiated for many, many months, not only with PECO but with other stakeholders." The main sticking points are congestion pricing and transmission pricing.

The supporting companies believe the June 2 proposal meets the principles of Order 888, primarily because an unaffiliated governing board enhances the independence of the ISO. A second benefit of the PJM pool is reliability of power supply due to shared generating reserves. To preserve that benefit while adapting to retail choice, the long-term reliability provisions would mitigate shifts in capacity requirements if changes in suppliers result from retail access.

Transmission pricing would use a pool-wide, open-access transmission tariff in place throughout PJM. For network service, zonal pricing would be used. Meyers explained that there are 10 zones equivalent to the 10 former PJM power pool companies. Each zone would have its own transmission rate to cover the costs of each transmission company. For wheeling through and out of PJM (point-to-point service) a pool-wide average rate would be used. The supporting companies propose use of locational marginal pricing for transmission congestion.

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