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:

Winter outlook for power: Good
Preliminary forecasts are predicting a manageable winter, at least from an electric grid reliability standpoint. PJM expects to have sufficient generating capacity to serve the forecasted peak use of power this winter of 112,114 megawatts (MW)—an increase from last year’s 110,415 MW.
(more)

RPM Settlement Filed With FERC
A broad coalition of parties to PJM’s Reliability Pricing Model (RPM) proceeding at the Federal Energy Regulatory Commission (FERC) filed a settlement Sept. 29. If accepted by the commission, the settlement would resolve all outstanding issues and allow PJM to move forward with implementation of RPM next year. (more)

PJM Agrees with DOE’s Congestion Report; Asks for Corridors
PJM Interconnection has filed its comments on the U.S. Department of Energy’s (DOE) Congestion Report, which was released in August. The DOE report identified areas of the country with significant electric transmission congestion; the area from New York City to northern Virginia was identified as a "critical congestion area." (more)

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What's Inside:

Committees Report
Highlights
Regulatory Reports

10.24.2006 – 11.02.2006 Initial Training Program
11.08.2006 – 11.09.2006 Transactions 201
11.13.2006 Generation 101
11.14.2006 Generation 201
11.14.2006 – 11.15.2006 Transmission 101
11.15.2006 Generation 301
11.16.2006 Operations 101
11.17.2006 Market Settlements Primer (LSE)
11.29.2006 – 11.30.2006 System Restoration Workshop
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)

Committee Meetings:

• Market Implementation Committee (MIC) – 10.31.2006 – Schedule 1 Section 6.4.2), ARR Allocation Proposal, Marginal Loss Settlement Mechanics, Transmission Outage Acceleration Update, Summer Load Review, Process Diagram for Transmission Upgrades, Transmission Right Coordination, ARR/FTR Auction Schedule, New Market Initiatives Stakeholder Training (RPM and Marginal Losses), JCM Web Site Enhancements, Long-Term Pricing, Synchronized Reserve Market, eMKT User Interface, Demand Side Response Working Group Update, 180-Day Stakeholder Process Working Group Update, Credit Working Group Update, Reserve Market Working Group Update, Long-Term FTR Working Group Update.
• Transmission Expansion Advisory Committee (TEAC) – 10.31.2006 – Topics: Market Efficiency Scope and Assumptions, 2011 RTEP Re-tool, Scenario Planning, 500/230 kV Transformer PRA Recommendations, Generation Interconnection Studies, Review of Transmission Alternatives for 2012 through 2021.
• Regional Planning Process Working Group (RPPWG) – 10.27.2006 – Topics: Cost Allocation/ARR Discussion, Subscription Methodology for Economic Projects, At Risk Generation Sub-Group Update.
• Demand Side Response/Metering Issues Subcommittee Jt. Mtg. (DSRWG/MIS) – 10.26.2006 – Topics: Demand Side Response Working Group – DSR “Subsidy” Extension/Termination, 2006 DSR Activity Through September, eLOADRESPONSE Performance Assessment, PJM RT DR Requirements When Participants Schedule an Outage, Proposal – Maintenance Outages of Demand Resources. Metering Issues Subcommittee – Summary of Work to Date and Discussion of Whitepaper.
• Reserve Requirement Assumptions Working Group (RRAWG) – 10.26.2006 – Topics: Review Draft 2007 Reserve Requirement Study Assumptions Cover Letter, Discussion of High Ambient Impact on Unit Output, Review Draft Assumptions.
• Markets and Reliability Committee (MRC) – 10.25.2006 – Topics: Regulation Market Report, Frequently Mitigated Units, Associated Units Revisions (OA Schedule 1 Section 6.4.2), Black Start, Participant Funded Transmission Rights, Legal Report, Department of Energy Congestion Study Filing, Planning Committee Report, Market Implementation Committee Report, Operating Committee Report.
• Dispatcher Training Task Force (DTTF) – 10.24.2006 – Topics: Report from SOS Liaison, PJM Operations Training, PJM Drills, Revisions to PJM Operational Manuals: Manual 1 Control Center Requirements, PJM Operator Certification, NERC Certification and Training, DTTF Survey Results.
• 180-Day Stakeholder Process Working Group (180DRWG) – 10.24.2006 – Topics: Operations Process Improvements, Additional Analysis and Data, CT Offer Cost Development, Pre/Post Contingency Example, Status and Updates of Action Plans.
• At Risk Generation Sub-Group (ARG) – 10.23.2006 – Topics: At Risk Generation White Paper.
• Voltage Profile and Reactive Margin Working Group (VPRMWG) – 10.19.2006 – 1:00 PM – 3:00 PM
• Nuclear Generation Owners/Operators User Group (NGOUG) – 10.19.2006 – Topics: Stability Analysis Discussion, Lessons Learned – Oyster Creek VAR Limits, RFC Generation Sub-committee.
• Transmission Substation Subcommittee (TSS) – 10.19.2006 – 9:00 AM – 3:00 PM
• Systems Information Subcommittee (SIS) – 10.18.2006 – Topics: Member Company Roundtable, PJM Operations, Inter-RTO Activities, eSuite Update, PJM Net, Electric Utility Security Issues, Communication and System Issues, Metrics, eTUG, Action Item List.
• Metering Issues Subcommittee (MIS) – 10.17.2006 – Topics: DSRWG Update, MDSP Roles and Responsibilities, Metering Data for Demand Side Programs in ERCOT, Recommendations Workshop.
• Governance Working Group (GWG) – 10.16.2006 – Topics: Discussion of Future GWG Direction, Report/Closure of Individual Task Area Items.
• Long-Term FTR Working Group (LTFTRWG) – 10.13.2006 – Topics: Develop Principles, Potential Long-Term Auction Format.
• Reserve Markets Working Group (RMWG) – 10.11.2006 – Topics: Discussion of Operating Reserve and Reserve Market issues raised by the 180 Day Stakeholder Working Group.
• Operating Committee (OC) – 10.10.2006 – Topics: Review of Operations, System Operations Subcommittee, Loop Flow Analysis, Voltage Schedule Working Group, Markets and Reliability Committee, Market Implementation Committee, System Information Subcommittee, NERC Update, Reliability First Update, OC Action Items.
• Finance Committee (FC) – 10.10.2006 – Topics: Finance Committee Recommendation on 2007 Budget.
• 180-Day Stakeholder Process Working Group (180DRWG) – 10.06.2006 – Topics: Issues Assigned to 180 Day Working Group, Remaining Issues on Working List, Future Agenda Items.
• Planning Committee (PC) – 10.05.2006 – Topics: Summer Ambient Deratings Investigation, Summer Load Review, NIETC Update, Planning Committee Parking Lot.
• System Operations Subcommittee (SOS) – 10.04.2006 – Topics: Review of Operations, eDART User Group Update, Dispatcher Training Task Force (DTTF) Update, 2006 Spring Seminar Forum Issues, System Operator Certification, Voltage Profile and Reactive Margin Working Group Update, Reactive Issues, PJM Manual Changes, 2007 Drill Dates, Future Agenda Items.
• At Risk Generation Sub-Group (ARG) – 10.04.2006 – Topics: At Risk Generation Presentation, At Risk Generation White Paper.
• Transmission Owners Agreement–Administrative Committee (TOA-AC) – 10.03.2006 – Topics: 500-230kV Transformer Replacement Strategy, PJM RTEP, Legal Issues Team Update, TOA-AC 2006 Work Plan Update (not including 500-230kV Transformer Replacements), DOE Congestion Study – Update on Interest in Joint Response, NERC TOs’ and Operators’ Forum, Finance Committee Update, RFC Update.

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Winter outlook for power: Good

Preliminary forecasts are predicting a manageable winter, at least from an electric grid reliability standpoint. PJM expects to have sufficient generating capacity to serve the forecasted peak use of power this winter of 112,114 megawatts (MW)—an increase from last year’s 110,415 MW. This is a system-wide estimate of power demand for PJM’s 13 states and District of Columbia. The forecast is based on a 50-50 probability, that is, there is a 50-percent chance the winter peak will be less than 112,114 MW and a 50-percent chance it will be above that.

The winter season is not typically a time of record high power use. The PJM region is considered “summer peaking,” meaning that the time of the year for highest usage of electricity is during the summer time when high heat necessitates more air conditioning use. With increased use of electricity comes increased use of generation and transmission, often resulting in transmission congestion. Congestion can drive local bulk power prices higher and pose threats to the reliability of the grid.

While extreme winter weather can pose threats to the system, the forecasted demand for electricity is not expected to pose a challenge. PJM’s expected winter capacity is expected to increase by 900 MW—or enough electricity to power about almost 90,000 homes.
With the planned new generation, existing internal generation and capacity transfers included, total PJM capacity for this winter is projected to be more than 168,000 MW. This represents a reserve margin of 50 percent, which exceeds the minimum margin required to maintain system reliability.

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RPM Settlement Filed With FERC

A broad coalition of parties to PJM’s Reliability Pricing Model (RPM) proceeding at the Federal Energy Regulatory Commission (FERC) filed a settlement Sept. 29. If accepted by the commission, the settlement would resolve all outstanding issues and allow PJM to move forward with implementation of RPM next year.

The RPM is a capacity-pricing method to enhance reliability and ensure an adequate electric supply in the PJM region. Implementation of the RPM is crucial to maintaining reliable power supplies in the future.

After more than four years of discussions, PJM filed its RPM proposal with the FERC on Aug. 31, 2005. The FERC accepted the key principles of the RPM in April and ordered hearings and a technical conference to resolve details before putting RPM in place. Subsequently, a settlement process conducted by a FERC administrative law judge began in June.

The terms of the RPM settlement provide more long-term certainty for new generation and other capacity resources, especially in areas where new supplies are crucial, such as northern New Jersey. Under the RPM, both transmission and demand response have real opportunities to compete with generation to provide resources needed to ensure reliability.

The FERC’s approval of the RPM settlement by Dec. 22 will allow the RPM process to be in place for next year. The settlement filing is available on the PJM web site at: www.pjm.com/documents/ferc/documents/2006/20060929-er05-1410-el05-148-part1.pdf.

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PJM Agrees with DOE’s Congestion Report; Asks for Corridors

PJM Interconnection has filed its comments on the U.S. Department of Energy’s (DOE) Congestion Report, which was released in August. The DOE report identified areas of the country with significant electric transmission congestion; the area from New York City to northern Virginia was identified as a "critical congestion area."

In its comments, PJM expressed support of the DOE’s study results as they apply to the PJM region, agreeing that it is crucial to remedy existing or growing congestion problems in its area.

Further, PJM called for the designation of three National Interest Electric Transmission Corridors (NIETC) in its region. One NIETC in particular is urgently needed to avoid transmission system reliability issues in 2011 and beyond, the filing said. Designation as an NIETC is a federal recognition that an area meets certain criteria that establish a need that may be resolved by generation, demand-side resources or additional transmission capability. This designation also recognizes that proposed transmission lines in the area serve a national interest as well as a local one and enables the coordination of federal authorities if needed.

For several years, PJM’s planning process and proposals, such as the Mountaineer Concept, have identified growing transmission congestion and the need for major transmission expansion to keep the system reliable.

The three requested corridors are:

PJM's filing also indicated that aside from the challenges of transmission congestion, the PJM system faces expected growth of its electricity demand by an average of about 1.6 percent a year for the next 10 years. To meet projected demand by 2020, about 55,000 megawatts (MW) of new generation would be needed to connect to the system.

The DOE filing is available on the PJM Web site at: www.pjm.com/documents/doe-filings/20061010-doe-corridor-study-comments.pdf.

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FERC Orders

October

• 10.19.2006 Docket No. ER05-89-000 (PDF)
  On October 19, 2006, in Docket No. ER06-89-004, the Commission issued an Order clarifying its March 25, 2005, Order directed to UPPCO regarding refunds to be made to PJM. The order clarified that UPPCO was directed to make the necessary refunds, with interest, which refunds included the revenues between the market-based rate and a cost-justified rate, and the time value of those revenues.
• 10.18.2006 Docket Nos. ER06-1271-000, ER06-954-000, ER06-880-000, ER06-456-000, 001, 002 (PDF)
  On October 18, 2006, in Docket No. ER06-1271-000, the Commission issued an order in proceeding in which PJM filed a report and tariff sheets that identify the upgrades included in the most current RTEP and the associated cost allocations. The Commission accepted for filing PJM's tariff sheets and suspended them to become effective October 19, 2006. It further consolidated this proceeding with the pending hearing and settlement proceedings in Docket Nos. ER06-456-000, -001 and -002, ER06-880-000, and ER06-954-000, which also concern RTEP upgrade cost allocations.
• 10.12.2006 Docket No. ER06-1396-000 (PDF)
  On October 12, 2006, the Commission issued a Letter Order in Docket No. ER06-1396-000 approving PJM's filing of an interim interconnection service agreement (Interim ISA) among PJM, FirstEnergy Nuclear Operating Company, Duquesne Light Company and American Transmission Systems Incorporated. The Interim ISA was submitted for filing because the parties required non-conforming changes in Attachment O-1 of the PJM Tariff to accommodate the interconnection.
• 10.11.2006 Docket No. ER05-1181-004 (PDF)
  On October 11, 2006, the Commission issued an Order accepting for filing PJM's compliance filing in the Stated Rate proceeding, in which PJM re-filed certain tariff sheets to be in conformance with Order No. 614.
• 10.05.2006 ER06-1359-000 (PDF)
  On October 5, 2006, the Commission issued an order accepting revisions to Schedule 2 of the PJM Tariff to reflect new and revised allocations of Reactive Power of FPL Energy Marcus Hook, L.P., Old Dominion Electric Cooperative,UGI Development Company and Allegheny Energy Supply, Company, L.L.C. The Commission also accepted PJM's proposed removal from Schedule 2 of the revenue requirement for ISP Sparrows Point Inc., as the generators associated with that revenue requirement are now operating behind the meter.

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October

• 10.27.2006 Docket No. ER07-20-000 (PDF)
  On October 27, 2008, PJM filed to amend the October 6, 2006 filing in Docket No. ER07-20-000 to add language that was omitted due to an administrative oversight. The October 6, 2006 filing, as amended by this errata filing, revises the PJM Tariff to amend the timing requirements for Short Term Firm Transmission Service, Non-Firm Transmission Service and Secondary Network Service requests as a Midwest ISO joint and common market initiative. PJM requests an effective date of December 6, 2006.
• 10.26.2006 Docket Nos. ER04-375-017 and ER04-375-018 (PDF)
  On October 26, 2006, PJM and the Midwest ISO filed a joint 120 day periodic report on the RTOs' progress towards a joint and common market and implementation of the JOA.
• 10.26.2006 Docket No. EL02-23-008 (PDF)
  On October 26, 2006 PJM filed with FERC an unopposed motion for further extension of time to file a status report in Docket No. EL02-23.
• 10.24.2006 Docket No. EL06-90-000 (PDF)
  On October 24, 2006, PJM Interconnection, L.L.C. filed an erratum to its October 3, 2006 Answer in Docket No. EL06-90-000 to make a few minor typographical corrections.
• 10.20.2006 Docket No. ER05-1410-000 (PDF)
  On October 20, 2006, PJM filed in Docket Nos. ER05-1410 and EL05-148 a revised RPM settlement signature page from AFPA, listing an additional AFPA member.
• 10.19.2006 Docket No. ER05-1410-mittal (PDF)
  On October 19, 2006, PJM filed in Docket Nos. ER05-1410 and EL05-148 an additional signature page to the September 29, 2006 settlement in the case, which concerns the Reliability Pricing Model. Mittal Steel, which had not initially signed the settlement agreement, signed the agreement after the September 29 Filing was submitted, and asked PJM to file the additional signature page with FERC.
• 10.19.2006 Docket Nos. ER05-1410-000, 001, EL05-148-000, 001 (PDF)
  On October 19, 2006, PJM filed in FERC Docket Nos. ER05-1410 and EL05-148 its initial comments in support of the September 29, 2006 settlement in that proceeding, which concerns the Reliability Pricing Model. In its comments, PJM urged FERC to approve the settlement, without change or condition, by December 22, 2006.
• 10.18.2006 Docket No. ER06-1177-001 (PDF)
  On October 18, 2006, PJM filed Alternative Motions to Reject or Answer and Answer in response to a Protest filed by Indeck-Elwood in the proceeding in which PJM seeks to amend the Tariff provisions related to the Option to Build and security obligations when network upgrades are needed for interconnection projects.
• 10.18.2006 ER06-1474-000 (PDF)
  On October 18, 2006, in Docket No. ER06-1474-000, PJM filed an answer to protests in proceeding regarding PJM's proposed new economic transmission planning process.
• 10.17.2006 Docket No. EL06-97-000 (PDF)
  On October 17, 2006, PJM and the Midwest ISO filed the attached Motion to Reject or, in the Alternative, Motion for Leave to File a Reply and Reply in the WPS joint and common market complaint proceeding, docket no. EL06-97-000. The RTOs request that the Commission reject the impermissible Response filed by WPS in this docket on October 2, 2006. In the alternative and to the extent the Commission decides to accept the WPS Response, the RTOs request that this Reply also be accepted.
• 10.16.2006 Docket No. ER06-1474-000 (PDF)
  On October 16, 2006, PJM Interconnection, L.L.C. filed a Comment in Docket No. ER06-1474-000.
• 10.16.2006 Docket No. ER07-40-000 (PDF)
  On October 16, 2006, PJM submitted for filing revised tariff pages: (1) to incorporate language accepted by the Commission in prior versions of the PJM Tariff, but not previously integrated not its current effective pages; and (2) to correct minor typographical and formatting errors.
• 10.16.2006y Docket No. ER06-1445-001 (PDF)
  On October 16, 2006, in Docket No. ER06-1445-001, UGI Utilities, Inc. (UGI Utilities) filed a supplement to its August 31, 2006, filing of proposed revised tariff sheets to the FERC Open Access Transmission Tariff (OATT) as administered by PJM. In its filing, UGI Utilities proposed to implement a cost-of-service formula to determine its annual transmission revenue requirement under Attachment H-8 of the PJM OATT and provided additional information as requested by the FERC Staff.
• 10.12.2006 Docket No. RM05-25-000 and RM05-17-000 (PDF)
  On October 12, 2006, PJM filed the prepared written Statement of Michael J. Kormos to Support Oral Testimony Provided at the Federal Energy Regulatory Commission's October 12, 2006 Technical Conference in the Order No. 888 OATT Reform rulemaking proceeding, Docket Nos. RM05-25-000 and RM05-17-000. Mr. Kormos participated as a panelist at the Technical Conference on the Coordinated, Open and Transparent Transmission Planning panel.
• 10.12.2006 Docket Nos. ER06-1336-000, 001 (PDF)
  On October 12, 2006, in Docket No. ER06-1336, PJM filed an answer to Indeck-Elwood Inc.'s answer in proceeding regarding an unexecuted interconnection service agreement.
• 10.11.2006 Docket No. ER06-1218-001 (PDF)
  On October 11, 2006, PJM filed an answer in Docket No. ER06-1218-001. The Answer was filed in response to the protests that were submitted in response to PJM's August 28, 2006 compliance filing, which described how PJM's long-term transmission rights ("LTTRs") proposal meets the requirements of the Federal Energy Regulatory Commission's final rule on LTTRs issued in Docket No. RM06-8-000.
• 10.10.2006 Docket Nos. ER05-1410-000, EL05-148-000 (PDF)
  On October 10, 2006, PJM filed an answer to a motion to intervene out of time filed by Morris Energy Group, LLC in Docket No. ER05-1410-000. Because the RPM settlement was filed on September 29, 2006, PJM asks the Chief Judge to reject the intervention motion as untimely.
• 10.06.2006 Docket No. ER07-19-000 (PDF)
  On October 6, 2006, PJM filed proposed revisions to its Open Access Transmission Tariff to add a new rate schedule that authorizes the PJM to collect revenues to fund up to a $100,000 per year to be used by the Finance Committee to employ consultants for the purpose of exercising its rights and obligations under the OA. This proposal is being filed to implement part of the Stated Rate proceeding settlement agreement in Docket No. ER05-1181-000.
• 10.06.2006 Docket No. ER07-20-000 (PDF)
  On October 6, 2006, PJM filed proposed revisions to the Open Access Transmission Tariff to amend the timing requirements for Short Term Firm Transmission Service, Non-Firm Transmission Service and Secondary Network Service requests. The revisions are proposed in conjunction with an effort to align PJM's and the Midwest Independent System Operator's (Midwest ISO) OASIS transmission service products as a joint and common market ("JCM") initiative. PJM has requested an effective date of December 6, 2006.
• 10.05.2006 Docket No. AD06-11-000 (PDF)
  On October 5, 2006, the ISO / RTO Council filed with the Commission a Position Paper in Docket No. AD06-11-000 entitled "Implementing FERC's New Transparency Authority."
• 10.03.2006 EL06-90-000 (PDF)
  On October 3, 2006 PJM filed in FERC Docket Nos. ER05-1410 and EL05-148 corrections to certain minor errors and omissions in the September 29, 2006 settlement filing in those dockets. The corrections concerned errors in the table of contents in two of the documents, incorrect tariff sheet numbers, and two exhibits that were inadvertently omitted from one of the affidavits.
• 10.03.2006 Docket Nos. ER05-1410-000, EL05-148-000 (PDF)
  Docket Nos. ER05-1410-000, EL05-148-000 (PDF) On October 3, 2006 PJM filed in FERC Docket Nos. ER05-1410 and EL05-148 corrections to certain minor errors and omissions in the September 29, 2006 settlement filing in those dockets. The corrections concerned errors in the table of contents in two of the documents, incorrect tariff sheet numbers, and two exhibits that were inadvertently omitted from one of the affidavits.
• 10.02.2006 Docket No. EL06-97-000 (PDF)
  On October 2, 2006, WPS filed a Motion for Leave to Reply and a Reply to the Answer filed by Midwest ISO and PJM on September 15, 2006 in response to WPS' Complaint.
  

September

• 09.29.2006 ER05-1410-EL05-148 Part 1; ER05-1410-EL05-148 Part 2; ER05-1410-EL05-148 Part 3; ER05-1410-EL05-148 Part 4; (PDF)
  On September 29, 2006, PJM filed a Settlement Agreement on behalf of numerous specified Settling Parties in FERC Docket Nos. ER05-1410 and EL05-148, concerning the Reliability Pricing Model. The settlement, which is supported or not opposed by the great majority of parties in the proceeding, makes a number of changes to the RPM proposal filed by PJM on August 31, 2005, including changes to the demand curve, use of 3-year forward (instead of 4-year forward) auctions, a Fixed Resource Requirement Alternative, and a peak-period generator availability metric. The Settlement proposes to implement RPM with the annual planning period that starts June 1, 2007. To enable PJM and market participant systems and business practice changes for RPM auctions that will start in April 2007, the Settling Parties ask FERC to approve the settlement, without change, by December 22, 2006.
• 09.29.2006 Docket No. ER06-1550-000 (PDF)
  On September 29, 2006, PJM filed revisions to Schedule 2 of the PJM Tariff to incorporate the updated revenue requirements of Virginia Electric and Power Company d/b/a Dominion Virginia Power, for providing cost-based Reactive Support and Voltage Control from Generation Sources Service in the PJM region.
• 09.27.2006 Docket No. ER06-1445-000 (PDF)
  On to distribution facilities.
  

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