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:

Members Express Views on PJM's Strategic Planning Initiative
Representatives of PJM's Membership offered a gamut of views on the Strategic Planning Process currently underway at PJM. Members discussed their views at a General Session meeting Nov. 16 in Baltimore, Md.

On Sept. 15, 2006, the PJM Board announced it would solicit members' views on issues relating to PJM's strategic direction. PJM requested input from chief executive officers of member companies about PJM's strategic direction.
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Site Acquired for Second Control Center
PJM marked an important milestone on November 9 when it acquired an 8.3-acre site and facilities in Bucks County, Pa. for its second control center. This purchase was the first actual acquisition of a site for PJM, which leases its other sites.

Several steps remain before construction begins. Final approval and recording of the land-use development plan was granted on November 16, allowing applications for construction permits. Through the balance of the year, construction contracts will be finalized and issued.

The two buildings on the site will be renovated and prepared for the installation of PJM systems and hardware. Construction is targeted for completion by the fourth quarter of 2007. System installation and testing will occur throughout 2008. The site is expected to be fully staffed and operational early in 2009.

The site, unoccupied for several years, formerly housed an AT&T communications, operations and switching center.
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What's Inside:

Committees Report
Highlights
Regulatory Reports

12.06.2006 – 12.07.2006 PJM 101: The Basics
12.11.2006 – 12.15.2006 System Dynamics
12.12.2006 Market Settlements Primer (GEN)
01.09.2006 – 01.10.2006 PJM 101: The Basics
01.16.2007 Generation 101
01.17.2007 Generation 201
01.18.2007 Generation 301
01.19.2007 Operations 101
01.29.2007 – 02.06.2007 Initial Training Program - Generation
01.29.2007 – 02.09.2007 Initial Training Program - Standard

Committee Meetings:

• Governance Working Group (GWG) – 11.30.2006 – Topics: Completion of Draft Committee Handbook Revisions for Working Group Protocols and Conduct of Meetings, Protocols for Sector Operations, Continued Progress on Enhancements to Sector Definitions and Qualification for Membership.
• Demand Side Response/Metering Issues Subcommittee Jt. Mtg. (DSRWG/MIS) – 11.30.2006 – Topic: MIS Recommendations for Electronically Communicating Curtailment Data (ECCD) to PJM – Draft Document Review.
• Market Implementation Committee (MIC) – 11.29.2006 – Topics: Intra-Planning Year ARR Allocation Proposal, Seasonal Allocation of ARRS, ARR/FTR Credit, MMU Analysis of Combined Regulation Market, Black Start Revisions (Tariff Schedule 6A), Synchronized Reserve Market Consolidation, Allocation of Transmission Rights Resulting from RTEP Transmission Upgrades, Transmission Outage Acceleration Update, Long-Term Interface Pricing, Review of Updated Manuals and Documentation, EMKT User Interface, Demand Side Response Working Group Update, Credit Working Group, Reserve Market Working Group, Long Term FTR Working Group.
• Dispatcher Training Task Force (DTTF) – 11.28.2006 – Topics: Report from SOS Liaison, eDART Updates, PJM Operations Training 2006-07, PJM Drills, Recent Revisions to PJM Operational Manuals: Manuals 03 Transmission Operations, PJM Operator Certification, NERC Training Standard for System Operating Personnel.
• Long-Term FTR Working Group (LTFTRWG) – 11.28.2006 – Topics: Preservation of ARR Capability, Long-Term FTR Credit.
• Credit Working Group – 11.28.2006 – Topics: Preservation of ARR Capability, Long-Term FTR Credit.
• Finance Committee (FC) – 11.20.2006 – Topics: Third Quarter 2006 Unaudited Financial Statements, Third Quarter 2006 Financial Review, 2006 Forecast, AC² - BCP Project Third Quarter 2006 Status, 9-FINCON.
• Reserve Markets Working Group – 11.17.2006 – Topics: PJM Market Monitor Report – Measures of Convergence and Update on Operating Reserves, Generator Credits and Deviations – Segmented Make Wholes/Parameter Limited Schedules, Ramp Limited Desired MW, Supplier Netting, Balancing Operating Reserve Allocation.
• General Session – 11.16.2006 – Topic: PJM’s Strategic Direction.
• Nuclear Generation Owners/Operators User Group (NGOUG) – 11.16.2006 – Topics: Roster Updates, Reactive Testing Update, EMS Modeling/Plant Notifications, NERC Reliability Standards, NERC Nuclear Plant Interface Standard, Fall Restoration Drill Update, SOS/OC Update, Update on INPO Activities or Visits, PJM Stability Analysis.
• Transmission Substation Subcommittee (TSS) – 11.16.2006 – 9:00 AM – 3:00 PM
• Markets and Reliability Committee (MRC) – 11.15.2006 – Topics: Frequently Mitigated Units, Associated Units Revisions (OA Schedule 1 Section 6.4.2), FERC Investigation on Electric and Gas Market Coordination, Market Implementation Committee Report, Operating Committee Report, Future Agenda Items.
• Members Committee – 11.15.2006 – Topics: Consent Agenda, Finance Committee, Governance Working Group, Annual Plan, Executive Report Markets, Executive Operations Report, Legal Report, Financial Report, State Activities, ReliabilityFirst Activities, Markets and Reliability Committee Report, Election of Vice Chair from Generator Owners Sector, Remarks of the Outgoing Members Committee Chair, Remarks by the CEO, Future Agenda Items.
• Systems Information Subcommittee (SIS) – 11.15.2006 – Topics: Member Company Roundtable, PJM Operations, Inter-RTO Activities, eSuite Update, PJM Net, Electric Utility Security Issues, Communication and System Issues, Metrics, Action Items.
• Transmission Owners Agreement–Administrative Committee (TOA-AC) – 11.14.2006 – Topics:
  NERC and RFC Issues, 500-230kV Transformer Replacement Study, PJM RTEP Update, TOA-AC 2006 Work Plan Update, Legal Issues Team Update.
• Operating Committee (OC) – 11.14.2006 – Topics: Review of Operations, System Operations Subcommittee, Reliability Pricing Model, Voltage Schedule Working Group, Markets and Reliability Committee, Market Implementation Committee, System Information Subcommittee, NERC Update, Reliability First Update, OC Action Items.
• Governance Working Group (GWG) – 11.09.2006 – Topics: Closure of Individual Task Area Items, Future Agenda Items.
• RPM Stakeholder Meeting/Avoidable Costs Workshop – 11.08.2006 – Topics: Revisions to the Original RPM Filed in FERC Settlement, Time Line for RPM Activities, Conversion of Existing Contracts, Avoidable Cost.
• System Operations Subcommittee (SOS) – 11.08.2006 – Topics: Review of Operations, PJM Realignment, eDART User Group Update, Dispatcher Training Task Force Update, Data Management Working Group Update, System Operator Certification, Generation Owner Survey, Fuel Inventory Reporting, Winter Capability Testing, Reactive Issues, Executive Summary – Operations Report, PJM Manual Changes, Future Agenda Items.
• At Risk Generation Sub-Group (ARG) – 11.07.2006 – Topic: At Risk Generation White Paper.
• Joint Tariff Advisory Committee / Markets and Reliability Committee – 11.06.2006
  Topics: Draft Tariff Schedule for ReliabilityFirst and NERC Billings and Collection, Joint TAC MRC Discussion – Draft Tariff Revisions – Participant Funded Transmission Rights.
• Alternate Dispute Resolution Committee – 11.01.2006 – Topics: Update on Mediator and Arbitrator List, Proposed Structure of ADRC, Proposed Schedule 5 Revisions.
• Planning Committee (PC) – 11.01.2006 – Topics: Relay Subcommittee Report, Event Investigation Procedure, Nuclear Interface Standard, NERC Update, Normalized and Forecasted Peak Reconciliation, Voltage Profile and Reactive Margin Working Group, Transformer Rating Methodology, NIETC Update, IRM Assumptions Preview, Planning Committee Parking Lot Issues.

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Members Express Views on PJM's Strategic Planning Initiative

Representatives to the PJM Members Committee offered a gamut of views on the Strategic Planning Process currently underway at PJM. Members discussed their views at the Members Committee meeting Nov. 15 at Baltimore, Md.

On Sept. 15, 2006, the PJM Board announced it would solicit members' views on issues relating to PJM's strategic direction. PJM requested input from chief executive officers of member companies about PJM's strategic direction. In addition to concerns of individual members, PJM requested responses to specific questions in five key areas: network service operations within the PJM region; regional system planning; market services administration; demand side response programs and access to markets; and PJM governance.

The Strategic Initiative Report is expected to be completed by March 2007.

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Site Acquired for Second Control Center

PJM marked an important milestone on November 9 when it acquired an 8.3-acre site and facilities in Bucks County, Pa. for its second control center. This purchase was the first actual acquisition of a site for PJM, which leases its other sites.

Several steps remain before construction begins. Final approval and recording of the land-use development plan was granted on November 16, allowing applications for construction permits. Through the balance of the year, construction contracts will be finalized and issued.

The two buildings on the site will be renovated and prepared for the installation of PJM systems and hardware. Construction is targeted for completion by the fourth quarter of 2007. System installation and testing will occur throughout 2008. The site is expected to be fully staffed and operational early in 2009.

The site, unoccupied for several years, formerly housed an AT&T communications, operations and switching center.

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FERC Orders

November

• 11.22.2006 Docket No. EL06-94-000 (PDF)
  On November 22, 2006, the Commission issued an order in Docket No. EL06-94-000 denying the complaint filed by the Borough of Chambersburg, Pennsylvania and the Town of Front Royal, Virginia regarding PJM's allocation of Auction Revenue Rights ("ARRs") for the time period from June 1, 2006 through May 31, 2007. The Commission found that PJM correctly applied its tariff, and that it would not be appropriate to re-run the ARR allocation process for the 2006/2007 planning period because parties already have made commitments based on that allocation.
• 11.28.2006 Docket No. ER06-1474-000 (PDF)
  On November 21, 2006, in Docket No. ER06-1474-000, the Commission issued an order accepting for filing, subject to compliance filings, PJM Tariff and Operating Agreement amendments that modify the economic planning component of PJM's RTEP. The effective date of the amendments is September 9, 2006.
• 11.21.2006 Docket No. EL06-103-000 (PDF)
  The Commission issued an order on 11/21/2006 denying Indeck-Elwood's August 31, 2006 complaint (Docket No. EL06-103-000) in which it alleged that PJM's policy of requiring interconnection customers to post cash or cash-equivalent security: (i) violates PJM's tariff and (ii) requires that article 36.8.4(b) of the tariff be revised.
• 11.17.2006 Docket No. RT01-98-009 (PDF)
  On November 17, 2006 the Commission issued an order in Docket No. RT01-98-009 granting rehearing for further consideration of the Commission's order issued on September 18, 2006, concerning the appropriate rate for transmission from the Richard H. Gorsuch Generating Station for a locked-in period of time.
• 11.16.2006 Docket No. RM06-12-000 (PDF)
  The Energy Policy Act of 2005 gave FERC backstop siting authority for transmission lines if states "withhold approval" on transmission proposals for more than one-year. The Commission established a rulemaking docket to determine how to implement this authority and on November 16, 2006, the FERC issued the Final Rule establishing the procedures that govern its transmission backstop siting authority. Two issues of interest to PJM addressed in the Final Rule involve the timing of the federal backstop process, and the definition of the term "withhold approval", the occurrence of which is the jurisdictional trigger for the federal backstop siting process.
• 11.15.2006 Docket No. ER07-47-000 (PDF)
  On 11/15/2006, the Commission issued an order accepting for filing the executed, non-conforming Interconnection Service Agreement (ISA) among PJM, Liberty Gap Winds Force, LLC (Liberty Gap) and Monongahela Power Company d/b/a Allegheny Power (Allegheny). The ISA provides for the interconnection of Liberty Gap's 155 MW wind generating facility to the PJM transmission system.
• 11.13.2006 Docket No. ER06-1497-000 (PDF)
  On September 19, 2006 PJM filed revisions to its Tariff and Operating Agreement that place a two year time limit on when parties can seek billing adjustments and on when PJM can make billing adjustments. The Federal Energy Regulatory Commission issued a Letter Order in Docket No. ER06-1497 accepting the revisions for filing and establishing an effective date of November 18, 2006.
• 11.09.2006 Docket Nos. ER06-1177-000, 001 (PDF)
  On 11/9/2006, the Commission issued an order accepting PJM's June 29 filing in the Option to Build proceedings, as amended on 9/12/2006, subject to conditions, to become effective 8/29/2006, as requested. PJM is to make a compliance filing within 30 days of the date of this order.
• 11.06.2006 Docket Nos. EL06-55-001, EL06-55-002 (PDF)
  On 11/06/06, in Docket Nos. EL06-55-001 and EL05-55-002, the Federal Energy Regulatory Commission issued an order (November 6th Order) that accepted PJM's marginal loss proposal filed on 8/03/06, to be effective 6/01/07. The November 6 Order accepted the Tariff and Operating Agreement revisions that implement marginal losses.
• 11.06.2006 Docket Nos. ER06-1083-000, 001, 002 (PDF)
  On November 1, 2006, the Commission issued an order in Docket Nos. ER06-1083-000, -001, and -002, accepting for filing an interconnection service agreement among PJM Interconnection, L.L.C., Premcor Refining Group, Inc., and Delmarva Power and Light Company, and a notice of cancellation of an interconnection service agreement that was superseded, effective May 3, 2006, as requested.
• 11.06.2006 Docket Nos. ER06-1336-000, 001 (PDF)
  On November 6, 2006, in Docket No. ER06-1336, the Commission accepted for filing an unexecuted ISA between PJM, Indeck-Elwood, L.L.C. and Commonwealth Edison Company, subject to the outcomes of Docket Nos. EL06-103-000 and ER06-1177-000. The Commission found the ISA to be in accordance with the expressed terms of the PJM Tariff and necessary as a result of Elwood's request to become a Capacity Resource.
• 11.03.2006 Docket No. ER06-133-000 (PDF)
  On 11/3/06, the Commission issued an order approving a Settlement Agreement ("Settlement") between the City of Geneva, Illinois (Geneva) and the Commonwealth Edison Company (ComEd). The Settlement resolves issues raised by Geneva in response to PJM's 11/1/05 filing of an unexecuted Network Integration Transmission Service Agreement (NITSA) between PJM and Geneva, and a revised Interconnection Service Agreement (ISA) among PJM, Geneva and the ComEd (collectively "Agreements"). The Agreements were filed to replace a grandfathered rate, under which Geneva had previously taken bundled transmission and distribution service from ComEd. The relevant charges were provided by ComEd and PJM took no position with respect to those charges. On 11/22/05, Geneva filed a protest that disputed the distribution charges. The Commission accepted and suspended the NITSA and revised ISA on 12/30/05, and established hearing and settlement judge procedures. On 6/22/06, Geneva and ComEd filed the Settlement, which resolved all outstanding issues relating to the charges assessed under the NITSA and ISA, and, the Commission accepted the Settlement as fair and reasonable and in the public interest.
• 11.01.2006 Docket Nos. ER06-1083-000, 001, 002 (PDF)
  On November 1, 2006, the Commission issued an order in Docket Nos. ER06-1083-000, -001, and -002, accepting for filing an interconnection service agreement among PJM Interconnection, L.L.C., Premcor Refining Group, Inc., and Delmarva Power and Light Company, and a notice of cancellation of an interconnection service agreement that was superseded, effective May 3, 2006, as requested.

October

• 10.24.2006 ER06-1510-000 (PDF)
  On October 24, 2006, the Commission issued an order accepting for filing an executed Interconnection Service Agreement and Construction Service Agreement among PJM, South Point Biomass, LLC and Ohio Power Company d/b/a/AEP, effective August 21, 2006, as requested.

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November

• 11.21.2006 Docket Nos. ER05-1410-000, 001, EL05-148-000, 001 (PDF)
  On November 21, 2006, PJM filed in Docket Nos. ER05-1410 and EL05-148 its answer to the motions of three parties that oppose the RPM settlement for leave to file replies to the settlement supporters' reply comments. PJM showed in its answer that the settlement opponents confuse the issues and do not provide useful or reliable information on which FERC could base its decision.
• 11.20.2006 Docket No. EL03-212-039 (PDF)
  On November 20, 2006, PJM and the Midwest ISO filed, in Docket Nos. ER05-6-023, EL04-135-025, EL02-111-043 and EL03-212-039, a motion for an extension of time to submit the economic transmission upgrades cross border cost allocation portion of the filing required by the Commission's November 21, 2005 Order, currently due on December 1, 2006.
• 11.16.2006 Docket No. ER07-xxx-000 (PDF)
  PJM, the New York Independent System Operator, Inc. ("NYISO") and ISO New England Inc. ("ISO-NE") jointly filed, on an informational basis, the "Procedure to Protect for the Loss of Phase II Imports" (the "Procedure") with the FERC on November 16, 2006.
• 11.14.2006 Docket Nos. ER04-375-017, 018, EL06-97-000 (PDF)
  On November 14, 2006, Wisconsin Public Service Corporation ("WPS") filed a letter with the Commission to briefly address the October 26, 2006 Joint Midwest ISO and PJM informational report filed in Docket No. ER04-375. WPS urges the Commission to grant the August 16, 2006 complaint filed in Docket No. EL06-97-000, which is still pending Commission action.
• 11.08.2006 ER05-1410-000, -001, EL05-148-000, -001 (PDF)
  On November 14, 2006, Wisconsin Public Service Corporation ("WPS") filed a letter with the Commission to briefly address the October 26, 2006 Joint Midwest ISO and PJM informational report filed in Docket No. ER04-375. WPS urges the Commission to grant the August 16, 2006 complaint filed in Docket No. EL06-97-000, which is still pending Commission action.
• 11.07.2006 Docket No. ER06-1474-000 (PDF)
  On November 7, 2006, PJM Interconnection, L.L.C. filed in Docket No. ER06-1474-000, a letter regarding an extension of time for FERC action in that docket.
• 11.01.2006 ER05-1410-000, -001, EL05-148-000, -001 (PDF)
  On November 1, 2006, PJM filed an Errata to the Reply Comments in Support of Settlement that were filed on October 30, 2006 in Docket Nos. EL05-148 and ER05-1410 with FERC regarding RPM.
  

October

• 10.30.2006 Docket No. EL06-97-000 (PDF)
  On October 30, 2006, in Docket No. EL06-97-000, WPS filed an Answer to Motion to Reject and Alternative Motion to Reply of Midwest ISO and PJM.
• 10.30.2006 Docket Nos. ER05-1410-000, 001, EL05-148-000, 001 (PDF)
  On October 30, 2006, PJM filed in Docket Nos. ER05-1410 and EL05-148 its reply comments in support of the RPM settlement. PJM showed in its reply comments that FERC has substantial evidence to find that the RPM settlement as a whole is just and reasonable, and that the opposing comments have not supported any requested changes to the settlement, nor demonstrated that the settlement is not just and reasonable.
• 10.27.2006 Docket Nos. EL06-62-000, ER06-765-000 (PDF)
  On October 27, 2006, H-P Energy filed notice of withdrawal of the Complaint against PJM without prejudice in Docket No. EL06-62-000.
  

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