FirstEnergy 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.