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Alliance Companies and National Grid file with FERC a roadmap for creation of a single Midwest RTO


March 6, 2002 — The Alliance Companies and National Grid filed with the Federal Energy Regulatory Commission (FERC) a proposal outlining cost-effective solutions to policy questions that could expedite the creation of a single RTO in the Midwest.

With FERC approval, the Alliance GridCo could operate under the Midwest RTO umbrella.

To pave the way for the Alliance GridCo to join the Midwest ISO, the filing asks FERC to approve a proposed division of responsibilities between National Grid and the Midwest RTO. It also seeks approval to use existing systems for startup of operations in order to speed up initial operations.

It requests approval for the Alliance GridCo to purchase services from Midwest RTO at incremental costs, and that the Midwest RTO refund the $60-million withdrawal fee, plus interest, to Commonwealth Edison, Illinois Power and Ameren Corp. In addition, the filing asks FERC to endorse the rate design and revenue distribution methodology that it approved last year as part of the Alliance-Midwest ISO Settlement Agreement, adjusted to take into account that it would now apply to a single RTO.

“We believe that, with this filing, we have outlined the substantive issues and reasonable solutions that provide FERC with a roadmap for the formation of a single RTO in the Midwest,” said Craig Baker, member of the Alliance Transmission Owners’ Committee and senior vice president of regulation & public policy for American Electric Power Service Corp.

“With National Grid managing Alliance GridCo under the Midwest RTO, transmission users would benefit from their expertise and their commitment to invest at least $1 billion in start-up and transmission acquisition costs.”

The filing proposes a division of responsibilities that calls for the Midwest RTO to calculate Available Transmission Capacity (ATC) and Available Flowgate Capacity (AFC) for the entire region; provides one-stop shopping for transactions by allowing customers to access the Midwest RTO OASIS to make reservations for the entire region; and provides for a single security coordinator – or reliability authority – for the entire region.

The Alliance Companies and National Grid also are continuing their negotiations with PJM Interconnection L.L.C. to determine the viability of operating the Alliance GridCo under the PJM umbrella.

With 51,400 miles of transmission lines stretching from Missouri to Virginia, a peak load of more than 100,000 megawatts serving a population of approximately 35 million in 11 states, the Alliance GridCo would be as large or larger than any proposed or approved RTO, including the Midwest ISO.

Alliance Companies include: Ameren Corp. (NYSE: AEE – news), American Electric Power (NYSE: AEP – news), Commonwealth Edison (NYSE: EXC – news), Consumers Energy/Michigan Electric Transmission Company (NYSE: CMS – news); Dayton Power & Light (NYSE: DPL – news), Dominion Virginia Power (NYSE: D – news), FirstEnergy (NYSE: FE – news), Illinois Power (NYSE: DYN – news) and Northern Indiana Public Service Company – a subsidiary of NiSource Inc. (NYSE: NI – news).

Alliance members Dominion Virginia Power and Consumers Energy (and its subsidiary Michigan Electric Transmission Company) are filing separately.