• FERC Approves Plan to Allow PJM to Provide Ancillary Service in Midwest ISO
  • December 17, 2009 | Authors: Amie V. Colby; Kevin C. Fitzgerald; Peter S. Glaser; John Robert Varholy
  • Law Firms: Troutman Sanders LLP - Washington Office; Troutman Sanders LLP - London Office
  • On December 2, 2009, the FERC approved an uncontested settlement between PJM Interconnection LLC (“PJM”), Midwest Independent Transmission System Operator, Inc (“Midwest ISO”), and Buckeye Power Inc., and dismissed a complaint by Buckeye Power.  The settlement will allow PJM to serve Buckeye Power with ancillary services for load located within the Midwest ISO for the next three and a half years.

    Buckeye Power is a generation and transmission cooperative that relies entirely on PJM and Midwest ISO for open access transmission service.  Most of Buckeye Power’s load is within the American Electric Power Co. Inc.’s (“AEP”) Service zone of PJM, but a small portion is located in the old Cinergy Corp. (now Duke Energy) and FirstEnergy Corp. balancing authority areas within Midwest ISO.  Buckeye filed a complaint at FERC because in 2009, it was billed each month by both PJM and Midwest ISO.

    When AEP first joined PJM in 2004, it was agreed that Buckeye Power would be served ancillary services in Cinergy/Duke and FirstEnergy zones by PJM.  Then Midwest ISO’s ancillary service market began in January 2009, and Midwest ISO took over the balancing authority duties for the Cinergy/Duke and FirstEnergy zones.  Buckeye Power claimed Midwest ISO’s charges were improper under their tariff.

    Midwest ISO disagreed with Buckeye Power’s position.  Nonetheless, all parties entered into a settlement agreement to allow PJM to provide load-balancing ancillary services until June 1, 2013.  After that date, the Midwest ISO will begin to provide service to Buckeye Power.  The Commission deemed the settlement to be fair, reasonable, and in the public interest.

    Chairman Wellinghoff and Commissioner Kelly concurred in the decision, stating that the standard of review that the Commission must apply to changes proposed by either non-contracting third-parties or the Commission acting sua sponte is the “just and reasonable” standard of review. Both Commissioners also said that FERC retains the right to investigate the rates, terms, and conditions of the settlement under the “just and reasonable” standard of review set forth under section 20 of the Federal Power Act.

    The full opinion is available at www.ferc.gov under docket EL09-75.