FirstEnergy to Consolidate Transmission Assets into PJM Interconnection
AKRON, Ohio, July 31 /PRNewswire-FirstCall/ — FirstEnergy (NYSE: FE) today announced that it plans to consolidate all of its transmission assets into a single Regional Transmission Organization (RTO). The company will request the consolidation into PJM Interconnection (PJM) in a filing with the Federal Energy Regulatory Commission (FERC) that will be made in early August.
“Aligning all of our transmission assets with PJM will provide customers with the benefits of a more fully developed retail choice market and enhanced long-term planning that supports construction of new generation when and where it is needed,” said Anthony J. Alexander, president and chief executive officer of FirstEnergy. “In addition, PJM supports incentive-based demand response and energy efficiency programs that give customers more control over their energy use and encourage peak load reductions that drive down prices for customers.”
Most of FirstEnergy’s transmission assets in Pennsylvania, and those in New Jersey, already operate within PJM. FirstEnergy’s American Transmission Systems, Inc. (ATSI) subsidiary – which includes transmission assets within the service territories of Ohio Edison, Cleveland Electric Illuminating, Toledo Edison and Pennsylvania Power (Penn Power) – currently operates within the Midwest Independent Transmission System Operator (MISO).
The ATSI system is a better fit operationally with PJM. ATSI has 32 interconnections with PJM – physical transmission ties that connect to other utility systems – compared to just three with MISO. In addition, having a single RTO – with one set of rules, procedures and protocols – would enhance the company’s operating efficiencies. The consolidation into PJM also would provide greater access to merchant generation, resulting in enhanced flexibility to meet customers’ electricity needs.
“This change is not a reflection on the job MISO has done for us over the years,” said Alexander. “In fact, the service and leadership that MISO has provided has been excellent. It’s simply recognition that PJM is a better fit for our competitive focus.”
PJM operates within a largely deregulated region and its market rules are designed to better accommodate retail electric competition. FirstEnergy’s Ohio, Penn Power and New Jersey utility customers already have transitioned to competitive generation markets. PJM’s structure supports customer choice, as well as energy efficiency and demand response programs.
RTOs coordinate transmission to carry electrical generation across wide geographic regions, matching generation to the load instantaneously to balance supply and demand. Within their footprints, RTOs schedule the use of transmission lines, manage the interconnection of new generation, and administer and monitor the markets to ensure fairness and neutrality for all participants. Providing these services regionally is more efficient than providing them on a smaller scale, utility by utility.
With approval of our request by FERC, FirstEnergy intends to consolidate its transmission assets and operations into PJM on June 1, 2011.
FirstEnergy is a diversified energy company headquartered in Akron, Ohio. Its subsidiaries and affiliates are involved in the generation, transmission and distribution of electricity, as well as energy management and other energy-related services. Its seven electric utility operating companies comprise the nation’s fifth largest investor-owned electric system, based on 4.5 million customers served within a 36,100-square-mile area of Ohio, Pennsylvania and New Jersey; and its generation subsidiaries control more than 14,000 megawatts of capacity.
Forward-Looking Statements: This news release includes forward-looking statements based on information currently available to management. Such statements are subject to certain risks and uncertainties. These statements include declarations regarding our management’s intents, beliefs and current expectations. These statements typically contain, but are not limited to, the terms “anticipate,” “potential,” “expect,” “believe,” “estimate” and similar words. Forward-looking statements involve estimates, assumptions, known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Actual results may differ materially due to the speed and nature of increased competition in the electric utility industry and legislative and regulatory changes affecting how generation rates will be determined following the expiration of existing rate plans in Pennsylvania, the impact of the PUCO’s regulatory process on the Ohio Companies associated with the distribution rate case, economic or weather conditions affecting future sales and margins, changes in markets for energy services, changing energy and commodity market prices and availability, replacement power costs being higher than anticipated or inadequately hedged, the continued ability of FirstEnergy’s regulated utilities to collect transition and other charges or to recover increased transmission costs, maintenance costs being higher than anticipated, other legislative and regulatory changes, revised environmental requirements, including possible greenhouse gas emission regulations, the potential impacts of the U.S. Court of Appeals’ July 11, 2008 decision requiring revisions to the CAIR rules and the scope of any laws, rules or regulations that may ultimately take their place, the uncertainty of the timing and amounts of the capital expenditures needed to, among other things, implement the AQC Plan (including that such amounts could be higher than anticipated or that certain generating units may need to be shut down) or levels of emission reductions related to the Consent Decree resolving the NSR litigation or other potential regulatory initiatives, adverse regulatory or legal decisions and outcomes (including, but not limited to, the revocation of necessary licenses or operating permits and oversight) by the NRC, Met-Ed’s and Penelec’s transmission service charge filings with the PPUC, the continuing availability of generating units and their ability to operate at or near full capacity, the ability to comply with applicable state and federal reliability standards, the ability to accomplish or realize anticipated benefits from strategic goals (including employee workforce initiatives), the ability to improve electric commodity margins and to experience growth in the distribution business, the changing market conditions that could affect the value of assets held in FirstEnergy’s nuclear decommissioning trusts, pension trusts and other trust funds, and cause it to make additional contributions sooner, or in an amount that is larger than currently anticipated, the ability to access the public securities and other capital and credit markets in accordance with FirstEnergy’s financing plan and the cost of such capital, changes in general economic conditions affecting the company, the state of the capital and credit markets affecting the company, interest rates and any actions taken by credit rating agencies that could negatively affect FirstEnergy’s access to financing or its costs and increase its requirements to post additional collateral to support outstanding commodity positions, letters of credit and other financial guarantees, the continuing decline of the national and regional economy and its impact on FirstEnergy’s major industrial and commercial customers, issues concerning the soundness of financial institutions and counterparties with which FirstEnergy does business, and the risks and other factors discussed from time to time in its SEC filings, and other similar factors. The foregoing review of factors should not be construed as exhaustive. New factors emerge from time to time, and it is not possible for management to predict all such factors, nor assess the impact of any such factor on its business or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statements. FirstEnergy expressly disclaims any current intention to update any forward-looking statements contained herein as a result of new information, future events, or otherwise.
SOURCE FirstEnergy Corp.