Energy Law

FERC Allows Duquesne to Exit PJM, but with Conditions

By Tracy Davis

FERC on January 17 conditionally approved Duquesne Light's request to withdraw from the PJM Interconnection and join the Midwest Independent System Operator.  Last November, Duquesne filed an application with FERC seeking approval to leave PJM over rising capacity costs as a result of PJM's new forward capacity market.  In comments and protests filed in December, PJM and other PJM market participants asked FERC to hold Duquesne be held to its financial commitments to the market and ensure that its withdrawal would not harm other market participants financially.

In the January 17 order, FERC agreed to hold Duquesne responsible for its commitments in the PJM forward capacity market.  FERC conditioned Duquesne's right to exit PJM upon the utility honoring commitments for all forward capacity auctions in which its load had been included.  This means that Duquesne will be liable for forward capacity costs through May 2011.  (Duquesne had asked FERC to make its withdrawal from PJM and termination of its obligations in the capacity markets effective May 31, 2008.)  FERC also directed Duquesne to submit further information on its remaining obligations, including how many and what its continuing obligations to PJM are, what its allocated share of costs for the PJM regional transmission planning process is, and how it will be integrated into the Midwest ISO.

Full post as published by Energy Legal Blog on January 29, 2008 (boomark / email).