FERC Filings
Initial Post Hearing Brief of EPSA re: The New PJM Companies, American Electric Power Co. and Central and South West Co.
The Laws, Rules Or Regulations Of Virginia And Kentucky Are Preventing AEP Both From Fulfilling Its Merger Commitment To Join An RTO And From Complying With Order No. 2000
The evidence shows that Virginia and Kentucky are preventing AEP from fulfilling its merger commitment and complying with Order No. 2000. For the past twelve months, AEP has made clear that the laws, rules and regulations of Virginia and Kentucky are impediments to AEP joining PJM. Almost exactly one year ago, Virginia passed a law delaying AEP’s Virginia subsidiary from joining an RTO. PJM’s witness Richard A. Wodyka testified that the Virginia action had a “direct and immediate adverse impact on the plans to integrate AEP into PJM.” Kentucky adopted a statute very similar to Virginia’s. Based on that statute, as well as the provisions of KRS 278.214, which requires that Kentucky retail consumers be given first priority in the event of a transmission curtailment on the interstate transmission system, the Kentucky Public Service Commission denied AEP’s application to join PJM.
The states’ response is two fold. First, they argue that other actions are causing a delay in AEP joining PJM. Second, they argue that they are continuing to address these issues.
Again, such contentions are easily dismissed. First, the actions mentioned by the VSCC are being addressed and are not an obstacle to AEP joining PJM. Second, the Commission should not delay this matter further in the hope that the continuing processes of Kentucky or Virginia will result in AEP being allowed to join PJM. Absent the steps taken by Kentucky and Virginia to prevent AEP from joining PJM, it is likely that AEP would have integrated into PJM by May 2003. Mr. Mathis concludes that the Kentucky and Virginia legislatures “ha[ve] thrown a monkey wrench into what was a very orderly process, a long, hard thought process, extremely important to . . . get AEP and then Commonwealth Edison into PJM.” To date, neither state has given any indication that it would even consider allowing AEP to join PJM in any timely manner under the scheme presently contemplated by the parties.
The fact that Kentucky and Virginia have additional ongoing processes to address these issues is of no moment. The antipathy with which these states have approached Commission policy initiatives should give the Commission little hope that the states will act in any timely fashion. Moreover, the Commission should be concerned that a state opposed to RTO development might initiate a process simply for the sake of process, and delay any meaningful action.