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Order 2000 and PJM: A Natural Match

Order 2000 and PJM: A Natural Match. Craig Glazer Manager of Regulatory Affairs PJM Interconnection, LLC. First ISO to enter service Effective stakeholder process Membership support from all stakeholder groups Currently operating efficient and robust competitive markets.

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Order 2000 and PJM: A Natural Match

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  1. Order 2000 and PJM: A Natural Match Craig Glazer Manager of Regulatory Affairs PJM Interconnection, LLC

  2. First ISO to enter service • Effective stakeholder process • Membership support from all stakeholder groups • Currently operating efficient and robust competitive markets

  3. FERC-approved congestion management mechanisms that rely on market forces • PJM playing key role in implementing retail competition in all PJM states

  4. Independence • Independent Governance and Board Right to Amend PJM Tariff to promote competitive markets and reliability

  5. Scope and Configuration • 180 Members • Market Transactions with a Value of $1.8 B • 120 Million MWHR of Scheduled Energy Transactions • 8,000 Miles of Transmission Lines, 8.7% of US Population and the Largest Energy Market in North America

  6. Scope and Configuration • Active committees addressing SEAMS issues with NY and New England -- • Progress can be tracked at www.isomou.com

  7. Operational authority • Short-term reliability • Planning and expansion • Market monitoring • Open architecture: • No structural impediments • The next step: PJM West

  8. Transmission Enhancement and Innovative Rates Component • Reaffirmation of T.O.’s commitment to build • Commitment to undertake economic enhancement projects • Rate Package: • Rate Moratorium • Cost Recovery Deferral of New Projects • Accelerated Depreciation of New Investments • Risk Adjusted ROE for New Transmission Investments

  9. Rate Package • Rate Moratorium Until 12/31/04 • Deferral of Capital Costs • Accelerated Depreciation of New Investments • Risk-Adjusted ROE • Continuation of Zonal Pricing • Development of Performance Measures

  10. Rate Plan Checks and Balances • PJM RTEP process provides an open, stakeholder process for review of need for transmission projects.

  11. The Next Step • PJM West -- a template for development of a uniform market over a larger region • An open architecture plan for evolution of ownership structures • SEAMS issues addressed through a single market across a wider region: Uniform Rules and Tariff while maintaining Zonal Prices and adjusting for special Regional Needs

  12. Inter-RTO SEAMS Coordination • MOU among New York, New England, PJM and Ontario

  13. Inter-RTO SEAMS Coordination • Operations Working Group • Coordinate Documentation and Terminology • Create Graphic Displays of Emergency Procedures and Coordinate Timelines for Accepting and Implementing Transactions

  14. Inter-RTO SEAMS Coordination • Planning Working Group • Establish Protocols for Coordinated Planning Activities • Facilitate Performance and Review of Joint Planning Studies • Review Analyses of Adequacy and Reliability among the Three ISOs

  15. Inter-RTO SEAMS Coordination • Business Practices Working Group • Identifying and Reviewing Existing and Planned Market Rules for Impacts on all Three ISOs. • Recommending Appropriate Regulatory Filings

  16. Inter-RTO SEAMS Coordination • Information Technology Working Group • Finding New Technology Solutions to Common Interface Issues

  17. Inter-RTO SEAMS Coordination • The Bigger Challenge: Different Markets with Different Rules of the Road • Software Solutions? • Uniform Market Rules Solutions? • Single Market Solutions?

  18. PJM West: The Single Market Concept • One Market • One Tariff • One OASIS • One Congestion Management System

  19. PJM West: Allowance for Regional Differences • Multiple Control Areas • Different Reliability Councils • Alternatives to RAA to Meet NERC “1 Day in 10 Years” Standard

  20. PJM West: Maintenance of Key Market Functions In RTO • Power Market Administration • Congestion Management • Market Monitoring

  21. PJM West: Maintenance of Key Market Functions In RTO • Physical, operational and functional control of facilities • Financial responsibility for assuring firmness of services sold

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