The two states had barred AEP from joining the mid-Atlantic power grid this past year, after FERC had ordered AEP to join a regional grid operator market by December 2001 as a condition of its merger with Central & South West Corp. Virginia passed legislation in April that prevents utilities in its state from giving control of their lines to an independent operator until July 2004. And the Kentucky Public Service Commission ruled in July against AEP’s request to transfer transmission control to PJM. According to a Dow Jones Business News story by Jon Kamp, the commission had cited a cost-benefit study showing the move would cost local ratepayers US$3 million a year. It also cited a state law requiring certain protections for in-state utility customers that PJM can’t guarantee.
In FERC’s order last week, it said that Virginia and Kentucky were unjustly impeding AEP and directed an administrative law judge to hold public hearings on the matter, the Dow Jones story said. FERC said AEP’s entry into the mid-Atlantic market would eliminate integrated utilities’ ability to block other companies’ access to their power lines, provide more choices for customers and allow power to flow more easily over large areas, all of which should ultimately lower prices.
FERC said AEP’s move into PJM should also spur the integration of other utilities, according to the Dow Jones story, a number of which have said the uncertainty surrounding the company has delayed their own efforts to join regional power markets in the Midwest and mid-Atlantic.
