March 26, 2008

Duquesne Light's exit from PJM will likely be pushed back since the Midwest ISO had to delay the rollout of its Ancillary Services Market (RT, 3/14).
    That will let Duquesne and other PJM members settle some differences, especially since other firms filed comments at FERC highly critical of the exit plan Monday.
     FERC granted conditional approval for the Pittsburgh utility to leave PJM, but said the firm has to live up to the obligations it entered into through that RTO's markets.
     That includes Reliability Pricing Model charges -- the new capacity market construct that Duquesne said pushed it out the door.
     But in its compliance filing detailing an exit plan, the utility denied it has any RPM obligations and failed to list what it would pay if it were staying, said Allegheny Energy.
     That makes it impossible for other market participants to figure out how the market would change without Duquesne.  Allegheny wants FERC to reject the filing as insufficient and the utility wants to see Duquesne's obligations through the 2010-2011 RPM year in a new filing.
     The commission asked Duquesne to figure out whether it should held liable for transmission payments from PJM's Reliability Transmission Expansion Plan (RTEP) that might not be due until after it leaves.
     PPL believes Duquesne hasn't done enough work on RTEP payments, ignoring projects that will be assessed before it leaves but won't be billed until after that.
     PJM itself expressed concerns over the Duquesne filing's treatment of RTEP costs as it pleaded for some extra days to respond more fully, a motion that FERC granted.
     Duquesne believes it should only be liable for RTEP projects that benefit its own zone, walking away from $100 million in costs that will be shifted to other transmission owners including PPL.
     That $100 million includes costs for 500 kv and above lines that FERC ruled benefit large groups of consumers.
     One cost it proposes to ignore is its share of the $200 million to build a backup grid control room called the AC2 that benefits all of PJM, said PPL.
     Exelon agreed with PPL's concerns but would also like to see proof of how Duquesne dealt with auction revenue rights and financial transmission rights.
     Duquesne sold those rights to third parties, it said in its compliance filing detailing its plans for leaving PJM, but Exelon wants to see proof.
     The Pittsburgh utility has also failed to say how it will deal with charges that came about due to other members' defaulting on payments, said Exelon.