Opinion ID: 185758
Heading Depth: 2
Heading Rank: 2

Heading: The PJM Interconnection

Text: 5 The Pennsylvania-New Jersey-Maryland (PJM) Interconnection is a tight power pool. See Order No. 888, 61 Fed. Reg. at 21,594. The PJM power pool — the oldest and largest power pool in the nation — was formed as a voluntary organization comprised of investor-owned utilities that operate their generating and transmission facilities in a coordinated manner so that regional power loads can be met reliably and efficiently. It was formed in 1927, and became a tight power pool by operating as a single control area with freeflowing transmission ties in 1956. Under the 1956 operating agreement, the PJM members agreed to place their generating facilities under the control of a central system dispatcher. The PJM members formed the PJM Interconnection Association in 1993, an unincorporated association which served as the system dispatcher, responsible for administering the PJM service center and control center independent of any individual member of PJM. At no point in the power pool's history did FERC assert jurisdiction over the power pool under section 203 of the Act, which provides in pertinent part: No public utility shall sell, lease, or otherwise dispose of the whole of its facilities subject to the jurisdiction of the Commission, or any part thereof of a value in excess of $50,000, or by any means whatsoever, directly or indirectly, merge or consolidate such facilities or any part thereof with those of any other person, or purchase, acquire, or take any security of any other public utility, without first having secured an order of the Commission authorizing it to do so. 16 U.S.C. § 824b(a). 6 In response to Order No. 888 the PJM members submitted to FERC in 1996 an open access tariff and several negotiated agreements that proposed to revise the PJM governance structure to put in place an ISO. The utility petitioners filed the tariff and ISO agreement under section 205 and, at the same time, petitioned FERC for a declaratory order disclaiming jurisdiction over the ISO agreement under section 203. The proposal contemplated that the PJM Interconnection Association would be transformed into the PJM ISO, a separate incorporated entity, which would be responsible for administering operational aspects of the transmission network, including dispatching generation to customers. PJM utilities would continue to own and physically operate their transmission facilities, subject to the ISO's directives.