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NOTICE TO THE PUBLIC OF AN APPLICATION
BY THE POTOMAC EDISON COMPANY D/B/A
ALLEGHENY POWER, FOR AUTHORITY TO
TRANSFER MANAGEMENT AND CONTROL OF
ITS TRANSMISSION FACILITIES TO THE PJM
INTERCONNECTION, LLC, UNDER AN
ARRANGEMENT KNOWN AS “PJM WEST” -
CASE NO. PUE000736
On July 25,2001, The Potomac Edison Company, d/b/a Allegheny Power (“AP or “The Company”), filed an application pursuant to § 56-579 of the Code of Virginia to seek approval for the transfer of management and control of AP’s transmission facilities to the PJM Interconnection, LLC (“PJM”), under an arrangement know as “PJM West", together with the information required under Rule 20 VAC 5-32090 of the Commission's Regulations Governing Transfer of Transmission Assets of Regional Transmission Entities (“Rules”). In its application, the Company states that the Federal Energy Regulatory Commission (“FERC”) issued an Order on July 12, 2001, that: (i) accepted the PJM West arrangements subject to certain conditions, (ii) required a compliance filing within 60 days, and (iii) required AP and other participants to take part in a 45 day mediation process designed ultimately to achieve the creation of a single Regional Transmission Organization for the entire Northeast region, consisting of the PJM/PJM West Region as well as the New York and New England Independent System Operator regions. AP indicated that its present intent was to continue with the PJM West arrangement, unless unexpected developments occurred regarding certain rate revenue recovery issues and/or in the mediation process regarding the creation of the Northeast Regional Transmission Organization.
In its application and accompanying testimony, AP describes the rate impacts on it and its customers of the implementation of the PJM West arrangement. The Company alleges that upon implementation of the PJM West arrangement, PJM would become the transmission provider on the Allegheny System offering service under the PJM Open Access Transmission Tariff (“OATT"). Alleghany’s OATT would be withdrawn. The Company states that all service agreements filed pursuant to Allegheny’s OATT, including the Network Integration Transmission Service Agreements, would then terminate. Allegheny proposes to transfer service for customers served under its sen/ice agreements to the PJM OATT, and customers to excute service agreements under the PJM OATT which would bind them to the PJM OATT terms and conditions. The Company summarizes the changes these customers would see as follows: (i) a change from a load ratio share to a unit rate for network service; (ii) a requirement to pay their share of the PJM administrative costs and overhead contained in Schedules 9 and 11 of the PJM OATT and acquire ancillary sen/ices at the PJM rates; and (iii) potential liability for congestion charges under PJM’s operational framework. In its application and accompanying documents, AP has identified a net loss associated with joining PJM, and a total annual revenue target of $27,699,138, which the Company contends must be recovered to remain revenue neutral. AP proposes to recover the $27,699,138 through a Transition Revenue Neutrality Charge (“TRNC") added to the PJM through and out rate, and a Transition Market Expansion Charge (“TMEC”), contained in new Schedule 11 to the PJM OATT. The details of these and other Company proposals are set forth in AP’s application and accompanying documents. Interested persons are encouraged to review these documents for the details of these proposals.
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