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By Lois Caliri
981-3117
The federal government exercised its muscle Thursday, saying it has the authority to order American Electric Power to join a company in Pennsylvania that controls the delivery of electricity in a large part of the East. But it stopped short of ordering AEP to join the regional company. At stake, however, is whether the federal government is pre-empting state authority. Federal regulators got involved because of state objections to the plan. AEP has filed an application to join the Pennsylvania company, PJM Interconnection, a regional transmission operating company. Under a regional transmission plan, no single utility can influence how the lines are operated or prevent competitors from accessing their lines. That application is pending before the State Corporation Commission. State law requires AEP to join a regional transmission plan by Jan. 1 . The SCC staff, in March of 2003, said it expected AEP to provide a comprehensive and rigorous examination of the costs and benefits of joining PJM. The SCC then said Southwest Virginians would end up paying more for electricity if AEP joins PJM. That's because PJM would control the transmission lines, threatening the state's ability to assure reliable service at stable and reasonable rates. State regulators also said Virginia would lose its power to protect consumers if AEP turned over its transmission lines to PJM. Today, AEP's customers in Southwest Virginia pay some of the lowest rates in the country because of its low cost of producing electricity. Federal Energy Regulatory Commissioner Suedeen Kelly clarified her agency's position in a public meeting. She said the commission's vote wasn't an exertion of its authority under federal law. "We're determining we have the authority. We are not exercising our authority," Kelly said. "We're just saying we have the authority to order it if need be." The SCC staff expects to issue a cost-benefit analysis report Tuesday. The SCC is scheduled to decide July 27 whether it will approve AEP's transfer of control to PJM. "It is important to remember that the SCC is proceeding with its state-law required review of AEP's application to join PJM," the SCC said in a statement. That law says Virginia's utilities cannot join a regional transmission operation before July 1. The SCC said Virginia has not raised objections to AEP's joining PJM. "All Virginia has asked is that it gets a chance to conduct the required state proceedings as authorized by state law. Virginia's objections go to the usurpation of this state's sovereignty under FERC's application of a particular federal statute."
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