The PJM Interconnection is what they call a "tight" power pool. As the Federal Energy Regulatory Commission has explained, tight power pools "extensively coordinate" their planning and operations, with central dispatch of generating plants. This coordination builds reliability--one of the long-term benefits, says the FERC, of a tight power pool.
Coordination also builds market power, however. And, as we all know from FERC Order 888, market power in transmission stands as "the single greatest impediment" to electricity competition.
This conflict--coordination versus competition--has prompted calls for an independent system operator to run the grid. What's at issue, however, is whether the ISO should also plan and manage power resources.
Are power pools wound too tight for true competition?
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PECO Energy believes that, as a tight power pool, PJM might just have to loosen up a bit to make way for competition.
On June 9, joined by others, including the Coalition for Competitive Electric Markets (an ad hoc group of power marketers), PECO filed documents with the FERC to counter plans filed a week earlier on behalf of PJM by the seven so-called "supporting companies," each a longtime utility member of the pool (along with PECO). The supporting companies had proposed a new ISO for PJM--one that would both manage the grid and operate the pool's new voluntary power exchange. This battle between PECO, power marketers and PJM member companies, appears very much like an East Coast version of the "poolco vs. bilateral" debate that played out in California over the past few years.