This month's Inside Lines informs PJM's stakeholders of various committee actions, upcoming training and other activities. PJM would like to highlight the following:

Department of Energy Releases Congestion Study
Electric transmission congestion costs millions of dollars annually and threatens reliability of the grid itself, according to the recently released National Electric Transmission Congestion Study. The study, done by the federal Department of Energy, was released during a media briefing in August. (more)

PJM’s Summer Performance Sets New Records
This summer PJM met successive record-setting peak demands for electricity. The last and highest peak was recorded on Aug. 2, when PJM met a record for 144,796 megawatts (MW). The previous record was set the day before at 144,000 MW. (more)

Early August Demand Response Produces $650 Million Savings
Conservation during heat waves not only stretches power supplies, it saves money. Reductions in electricity use during the early August heat wave produced price reductions estimated to be equivalent to more than $650 million in payments for energy for the week. (more)

Providing feedback about PJM.com drives enhancements
During the past three months, PJM has received many comments through the feedback form on the PJM Web site. Using that feedback, PJM works continually to make it easier for users of the Web site to find the information they need. Among the many enhancements, is the ability to sort the list of PJM members by name and by sector. This functionality is now available on the Member List Web page.

More improvements are coming, however, members can suggest additional ones by e-mailing PJM at webfeedback@pjm.com.

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We are unable to respond to account inquiries sent in reply to this e-mail. To contact us by phone, please call our member hotline at 610.666.8980 or toll free 866.400.8980.

What's Inside:

Committees Report
Highlights
Regulatory Reports

09.12.2006 PJM 101: The Basics
09.25.2006 – 09.29.2006 Load Serving Entity 201
10.02.2006 – 10.13.2006 Initial Training Program
10.17.2006 Generation 101
10.18.2006 Generation 201
10.19.2006 Generation 301
10.20.2006 Operations 101
10.24.2006 – 11.02.2006 Initial Training Program

Committee Meetings:

• Regional Planning Process Working Group (RPPWG)– 08.31.2006 – Topics: Generation Interconnection Timing, Cost Allocation for Market Efficiency Projects, Cost allocation for Spare Transformers.
• Planning Committee (PC) – 08.30.2006 – Topics: PCLLR Discussion, PJM Hot Weather Performance Update, *Reactive Limits Manual Language, NERC update, Planning Committee “Parking Lot”.
• Market Settlements Working Group (MSWG)– 08.30.2006 – Topics: FERC EQR Reporting, Marginal Losses Implementation, Administrative Items.
• Transmission Expansion Advisory Committee (TEAC) – 08.30.2006 – Topics: PJM will present its incremental transfer capability analysis of bulk power transmission alternatives proposed after the TEAC meeting held in Richmond on July 11.
• Governance Working Group (GWG) – 08.30.2006 – Topics: PJM will present a tutorial on the use of the eRooms product.
• Dispatcher Training Taskforce (DTTF)– 08.29.2006 – Topics: Report from SOS Liaison, eDART, PJM Operations Training 2006, Seminar Wrap Up, LMS, Upcoming Operator Training, PJM Drills, Revisions to PJM Operational Manuals, PJM Operator Certification, NERC Certification.
• Transmission Owners Agreement-Administrative Committee (TOA-AC)– 08.24.2006 – Topics: Administrative Items, 500-230kV Transformer Replacement Strategy, Pandemic Preparedness, PJM RTEP, Legal Issues Team Update, TOA-AC 2006 Work Plan update, DOE Congestion Study, Finance Committee Update, NERC TOs' and Operators' Forum, RFC update, Other Business.
• Demand Side Response Working Group (DSRWG)/Metering Issues Subcommittee (MIS) Joint Meeting – 08.24.2006 – Topics: Metering Issues Subcommittee – Review of Team Charter, Review Workshop Results, Metering Data Options, Options At The Customer Site, Roundtable Discussion of Billing and Settlement Issues in a “Future” Environment, Building the Agenda for the Next Meeting. Demand Side Response Working Group – Demand Side Response Reports, Metering Issues Subcommittee Update, eLOAD Response Update, Future eLOAD Response Enhancements.
• Data Management Working Group (DMWG)– 08.17.2006 – Topics: Roundtable Discussion eDART Method for Submitting EMS Model Changes, One-Line Diagrams, Presentation on PJM Contingency Lists Development, ICCP Link Availability Statistics.
• Nuclear Generation Owners/Operators User Group (NGOUG)– 08.17.2006
• 180 Day Report (180DRWG) – 08.16.2006 - Topics: Working Issues List, Action Items.
• Systems Information Subcommittee (SIS) – 08.16.2006 - Topics: Member Company Roundtable, PJM Operations, Inter-RTO Activities, eSuite Update, PJM Net, Electric Utility Security Issues, Communication and System Issues, Metrics, eTUG.
• Operating Committee (OC)– 08.15.2006 - Topics: Review of Operations, NERC Critical Infrastructure, System Operations Subcommittee (SOS), Black Start Services, PJM Winter Reserve Maintenance Scheduling Target, Voltage Schedule Working Group, Demand Side Response, Markets and Reliability Committee, Market Implementation Committee, System Information Subcommittee (SIS), Eastern Interconnection PHASOR PROJECT, Reliability First Update, OC Action Items.
• Regional Planning Process Working Group (RPPWG) – 08.11.2006 - Topics: Generator Interconnection Timing, Declining Generation Profiles, Cost Allocation.
• Governance Working Group (GWG)– 08.10.2006 - Topics: Working Group Protocols and Conduct of Meetings, Protocols for Sector Operations, Sector Definitions and Qualifications for Membership in Sectors, Alternate Governance Protocols.
• System Operations Subcommittee (SOS) – 08.9.2006 - Topics: Review of Operations, eDART User Group Update, System Operator Certification, Generator Limits and Ramp Rates via ICCP, ICCP Planned Datalink Outages, Reactive Issues.
• Finance Committee (FC)– 08.9.2006 - Topics: Second Quarter 2006 Unaudited Financial Statements, Second Quarter 2006 Quarter Financial Review, 2006 Forecast, 2007 Preliminary Budget, 2006 – 2010 Financial Projections, Proposed Tariff Scheduled 9-FINCON, Sector Elected Representative Requested Status Update.
• Markets Implementation Committee (MIC)– 08.8.2006 - Topics: Timing Changes for OASIS (JCM), Transmission Outage Acceleration Update, FTR Proposal, ARR Allocation Proposal, Loop Flow Update, Spinning Market Generator Performance, Generator Reactive Testing Notifications, eMKT User Interface, Demand Side Response Working Group Update, Black Start Services Working Group Update, Market Settlements Working Group, 180-Day Stakeholder Process.
• Members Committee (MC)– 08.03.2006 - Topics: Consent Agenda, Market Efficiency In The Regional Transmission Planning Process, Excess Congestion Revenue, Marginal Losses Allocation, Management Reports, ERO and ReliabilityFirst, State Activities, Annual Plan, Markets and Reliability Committee.
• Markets & Reliability Committee (MRC)– 08.02.2006 - Topics: Update On Summer Operations, Timing Changes for OASIS (JCM), Small Generator Interconnection Working Group, Demand Response, CT Offers In The Day-Ahead Market, Review of Proposed 2007 Projects, Planning Committee Report.

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Department of Energy Releases Congestion Study

Electric transmission congestion costs millions of dollars annually and threatens reliability of the grid itself, according to the recently released National Electric Transmission Congestion Study. The study, done by the federal Department of Energy, was released during a media briefing in August.

In addition, the growing demand for power is outpacing the ability to alleviate transmission congestion, the study said.

Among the most critically congested areas designated by the DOE study is the Atlantic coastal area from metropolitan New York to northern Virginia. DOE categorizes congestion into three types: critical congestion areas, congestion areas of concern and conditional congestion areas. An area is designated a critical congestion area where it is "critically important to remedy existing or growing congestion problems because the current and/or projected effects of the congestion are severe."

The study did not recommend national transmission corridors. However, DOE will make the national corridor designations based on this study’s findings and information from stakeholders. Designation by DOE would allow the Federal Energy Regulatory Commission (FERC) backstop authority to approve interstate lines in designated corridors. Backstop authority enables FERC to act on permitting if states fail to do so within a year.

PJM was among the first to seek early designation of two transmission corridors designed to address congestion problems, which now are identified in the DOE study. PJM’s two proposed corridors are the Allegheny Mountain Path, extending from the West Virginia panhandle region southeastward and serving population in Baltimore and Washington areas, and the Delaware River Path, extending from West Virginia region eastward and serving population centers around Philadelphia, New Jersey and Delaware. Congestion costs resulting from constraints in the Allegheny Mountain path totaled $747 million in 2005, with another $464 million on the Delaware River path that year.

The study also notes that, while the eastern portion of PJM experiences continuing load growth, it is also faces power plant retirements and limited new generation projects. Transmission constraints are causing significant congestion in both the western and eastern portions of PJM because the grid cannot accommodate delivering the available lower-cost Midwest coal- and nuclear-fueled generation to the East.

The DOE study was mandated by the Energy Policy Act of 2005. Comments on the study are due by October 10, 2006. The study recommends PJM as the authority for transmission planning and further recommends joint studies with the other northeastern RTOs.

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PJM’s Summer Performance Sets New Records

This summer PJM met successive record-setting peak demands for electricity. The last and highest peak was recorded on Aug. 2, when PJM met a record for 144,796 megawatts (MW). The previous record was set the day before at 144,000 MW.

The difference in peak between last summer’s and this year’s is more than 10,000 MW—enough electricity to power a large city.

During the August heat wave, Michael J. Kormos, PJM senior vice president-Reliability Services said that it was the members’ efforts that enabled PJM to meet the peak demand over successive days of extreme heat.

“We continue to witness outstanding performance by transmission system owners, generators, demand response providers and our system operators,” Kormos said.

Market-participating demand response contributed 400 MW of capacity during the peak hour on Aug. 2. In PJM’s wholesale electricity market, electricity consumers can be paid the market price for electricity for reducing their use of electricity. (See related story in this newsletter.)

Requests for voluntary conservation of electricity requests were called on a few days this summer because of high temperatures. In addition, utility customers on interruptible or curtailable rates were told to reduce their electricity use. These customers receive a special rate or payments from their electric utilities. The customers agree to eliminate or significantly reduce their use of electricity when told to do so.

Highest Peak Demands

* These numbers are subject to verification.

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Early August Demand Response Produces $650 Million Savings

Conservation during heat waves not only stretches power supplies, it saves money. Reductions in electricity use during the early August heat wave produced price reductions estimated to be equivalent to more than $650 million in payments for energy for the week.

On Aug. 2, when customers in the PJM region set the new record for power consumption, voluntary reductions in electricity use, known as demand response, resulted in price reductions estimated to be equivalent to more than $230 million in payments for energy.

“These voluntary curtailments reduced wholesale energy prices by more than $300 per megawatt-hour during the highest usage hours,” said Andrew L. Ott, PJM vice president - Markets. “While many wholesale customers, such as utilities, were hedged against high real-time spot-market prices, all customers will benefit from the dramatic price reductions because future longer-term electricity sales are based on prices set in the real-time market, where prices were lower as a result of demand response.”

Demand response involves reducing the use of electricity (demand) to meet a power grid need rather than increasing generation (supply). Customers offer to reduce their usage of electricity in return for being paid the market value of the electricity saved. Demand response can lower the price of electricity by avoiding the use of the most expensive generators.

Customers who curtail their usage receive payments based on the price to generate an equal amount of electricity. PJM payments to demand response providers for the heat wave during the first week in August were about $5 million.

“Transmission owners, generation operators and demand response providers played critical roles in allowing PJM to provide a record amount of electricity while maintaining reliable grid operations,” Ott said.

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Providing feedback about PJM.com drives enhancements

During the past three months, PJM has received many comments through the feedback form on the PJM Web site. Using that feedback, PJM works continually to make it easier for users of the Web site to find the information they need. Among the many enhancements, is the ability to sort the list of PJM members by name and by sector. This functionality is now available on the Member List Web page.

More improvements are coming, however, members can suggest additional ones by e-mailing PJM at webfeedback@pjm.com.

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FERC Orders

August

• 08.22.2006 ER06-491-001, ER06-497-001 (PDF)
  On August 22, 2006, in Docket Nos. ER06-491 and ER06-497, the Commission denied Requests for Rehearing from CED Rock Springs, LLC (CED) and Old Dominion Electric Cooperative (ODEC). The requests were based on a March 17, 2006 Order in which the Commission rejected the proposed rate schedules that would have allowed CED and ODEC to recover revenue requirement for certain costs, from transmission service customers, incurred in connecting their facilities to the transmission grid.
• 08.18.2006 Docket Nos. ER06-880-001, ER06-456-004 (PDF)
  On August 18, 2006 the Commission issued an order in Docket Nos. ER06-880-001 and ER06-456-004 granting rehearing for further consideration of the Commission order issued in this proceeding on June 19, 2006.
• 08.16.2006 ER06-1187-000 (PDF)
  On August 16, 2006, the Commission issued a letter order accepting PJM's compliance filing to implement Standards for Business Practices and Communication Protocols for Public Utilities pursuant to Order No. 676, effective 7/1/06 under ER06-1187.
• 08.15.2006 ER06-1194-000 (PDF)
  On August 15, 2006, The Commission accepted revisions to Attachment H-13, effective September 1, 2006.
• 08.14.2006 Docket No. ER06-1218-000 (PDF)
  On August 14, 2006, the Commission issued a letter order in Docket No. ER06-1218-000 directing PJM to file an informational letter describing how its Long-Term Transmission Rights (LTTRs) correlate to the Long-Term Transmission Rights Notice of Proposed Rulemaking (NOPR) in Docket No. RM06-8. The Commission requested a response from PJM within 14 days of the date of the letter order.
• 08.04.2006 ER06-1146-000 (PDF)
  On August 4, 2006, the Commission issued an order accepting for filing an executed interconnection service agreement among PJM, Brookfield Power Piney & Deep Creek, LLC, and Pennsylvania Electric Company, effective May 17, 2006, as requested.
• 08.03.2006 ER06-1144-000 (PDF)
  On August 3, 2006, the Commission issued an order accepting for filing an executed interconnection service agreement among PJM, Brookfield Power Piney & Deep Creek, LLC, and Pennsylvania Electric Company, effective May 17, 2006, as requested.
  

July

• 07.27.2006 ER03-1101-009, ER03-1101-010 (PDF)
  On July 27, 2006, in Docket No. ER03-1101, the Commission issued an Order on Compliance Filings accepting PJM's third and fourth six-month reports on the effects of PJM's credit policies on virtual traders which were required by the Commission's orders issued in this same docket on September 22, 2003 and December 20, 2004.
• 07.26.2006 Docket No. ER06-319-003 (PDF)
  On July 12, 2006 the Commission issued an order in Docket No. ER06-319-003 granting rehearing for further consideration of the Commission order issued in this proceeding on May 11, 2006.
  

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August

• 08.28.2006 Docket No. ER06-1177-000 (PDF)
  On August 28, 2006, in Docket No. ER06-177-000, PJM filed an answer to Indeck-Elwood, LLC's answer to PJM's answer to Indeck-Elwood's protest of PJM's proposed amendments to Part IV of the PJM Tariff concerning security requirements and the option to build.
• 08.28.2006 Docket No. ER06-1218-000 (PDF)
  On August 28, 2006, PJM made an informational compliance filing in Docket No. ER06-1218-000 in which it describes how PJM's LTTR Proposal correlates with each of the guidelines as set forth in the Commission's Final Rule as issued on July 20, 2006.
• 08.25.2006 Docket No. RM06-12-000 (PDF)
  On August 25, 2006, PJM filed comments in the Commission's Notice of Proposed Rulemaking (NOPR) in Docket No. RM06-12-000. In addition to offering specific proposals to be considered when adopting the final rule, PJM offered to work with the Commission in any technical conference or other procedures initiated in this rulemaking.
• 08.24.2006 EL06-97-000 (PDF)
  On August 24, 2006, Midwest ISO and PJM filed a Joint Motion to request that the Commission grant a ten-day extension of the comment date in the complaint filed at Docket No. EL06-97-000 to September 15, 2006. The extension is requested because of the complexity of the issues raised by the Complainants and the intervening Labor Day holiday. This proceeding involves a complaint by Wisconsin Public Service Corporation and some of its affiliates (collectively "WPS") requesting the Commission to direct Midwest ISO and PJM to institute joint unit commitment and dispatch of their respective systems and undertake certain other steps as part of their joint and common market effort.
• 08.24.2006 Docket No. EL06-90-000 (PDF)
  On August 24, 2006, PJM filed in Docket No. EL06-90-000 an answer to the Complaint of PPL EnergyPlus, LLC, et al.
• 08.23.2006 Docket No. ER06-1396-000 (PDF)
  On August 23, 2006, PJM submitted to the Commission an executed interim interconnection service agreement ("Interim ISA") among PJM, FirstEnergy Nuclear Operating Company, Duquesne Light Company and American Transmission Systems Incorporated. PJM submitted this Interim ISA as the parties required non-conforming changes to the form of Interim ISA in Attachment O-1 of the PJM Tariff to accommodate this interconnection. PJM requested waiver of the Commission's 60-day notice requirement to allow an effective date of August 15, 2006 for Original Service Agreement No. 1537.
• 08.23.2006 EL06-94-000 (PDF)
  On August 23, 2006, in Docket No. EL06-94-000, PJM filed an Answer to the Complaint of The Borough of Chambersburg, Pennsylvania and The Town of Front Royal, Virginia.
• 08.16.2006 ER06-1357-000 (PDF)
  On August 16, 2006 PJM Interconnection, L.L.C. filed with the Commission a Motion to Intervene in the matter of Docket ER06-1357-000.
• 08.15.2006 ER05-1410-000, EL05-148-000 (PDF)
  On August 15, 2006, PJM filed an answer opposing the late intervention of MaGrann Associates in Docket Nos. ER05-1410-000 and EL05-148-000.
• 08.15.2006 Docket No. ER06-1310-000 (PDF)
  On July 31, 2006, PJM Interconnection, L.L.C. submitted for filing with FERC an agreement for network integration transmission service between PJM and American Electric Power Service Corporation, et al., designated as Original Service Agreement No. 1536. On August 14, 2006, PJM amended its July 31 filing and submitted Substitute Original Service Agreement No. 1536. PJM requested that the service agreement be made effective July 1, 2006, as it had in the July 31 filing.
• 08.15.2006 Docket No. EL06-97-000 (PDF)
  On August 15, 2006, in Docket No. EL06-97-000, Wisconsin Public Service Corporation, Upper Peninsula Power Company, WPS Energy Services, Inc. and its subsidiary WPS Power Development, LLC, collectively "WPS" filed a complaint pursuant to Section 206 of the Federal Power Act and the Commission's May 16, 2006 order in Docket Nos. EL06-20-000, et al. against MISO and PJM.
• 08.14.2006 Docket No. ER06-826-000 (PDF)
  On August 14, 2006, in accordance with the Commission's July 14, 2006 Order, PJM submitted a compliance filing in Docket No. ER06-826.
• 08.14.2006 Docket No. EL05-121-000 (PDF)
  On August 14, 2006, PJM Interconnection, L.L.C. submitted for filing with the FERC it's Brief on Exceptions in Docket No. EL05-121-000.
• 08.11.2006 Docket No. ER06-xxx-000 (PDF)
  On August 11, 2006, PJM filed with FERC revisions to the chart in Schedule 2 of the PJM Tariff: (i) to incorporate revised or new revenue requirements of FPL Energy Marcus Hook, L.P., Old Dominion Electric Cooperative , UGI Development Company, and Allegheny Energy Supply, Company, L.L.C., for providing cost-based Reactive Support and Voltage Control from Generation Sources Service in the PJM region; and (ii) to delete the Reactive Power revenue requirement of ISG Sparrows Point, Inc. because the generator associated with that revenue requirement is operating behind the meter.
• 08.08.2006 Docket Nos. RM05-25-000 and RM05-17-000 (PDF)
  On August 7, 2006, PJM Interconnection, LLC, submitted Comments regarding the Order No. 888 OATT Reform Notice of Proposed Rulemaking (NOPR) in Docket Nos. RM05-25 and RM05-17.
• 08.07.2006 Docket No. ER06-199-000 (PDF)
  On August 7, 2006, in compliance with the FERC's July 7 order in Docket No. ER06-199, PJM filed revised PJM Tariff sheets revising certain of its small generation facility interconnection provisions.
• 08.04.2006 Docket No. ER06-1177-000 (PDF)
  On August 4, 2006 PJM filed an answer to the protest of Indeck-Elwood, L.L.C. in Docket No. ER06-1177-000 regarding PJM's proposed amendments to Part IV of the PJM Tariff regarding the option to build and security provisions.
• 08.03.2006 EL06-55-000 (PDF)
  On August 3, 2006, in Docket No. EL06-55-000, PJM filed PJM Tariff and Operating Agreement amendments that implement accounting for transmission line losses on a marginal rather than an average basis. PJM also included a proposal to allocate the surplus of funds resulting from this reform.
• 08.04.2006 Docket No. ER06-1343-000 (PDF)
  On August 3, 2006, PJM filed with FERC a Wholesale Market Participation Agreement (Q44) executed by Masonic Villages of PA, PPL Electric Utilities Corporation and PJM Interconnection, L.L.C. PJM is submitting this filing because Masonic Villages of PA desires to conduct wholesale sales of electric energy in the PJM markets from a generating facility connected to PPL distribution facilities.
• 08.02.2006 ER05-1410-000, EL05-148-000 (PDF)
  On August 2, 2006, PJM filed an answer opposing the late intervention of Conservation Services Group in Docket Nos. ER05-1410-000 and EL05-148-000.

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