PJM cooperating with Justice Department records request

By the OGJ Online Staff

HOUSTON, Jan. 25, 2002 — PJM Interconnection LLC is cooperating with a US Justice Department civil investigation of the mid-Atlantic grid operator’s markets, a spokeswoman said.

The Justice Department in December asked PJM to produce documents concerning its reliability and capacity credit markets beginning in January 1999. The investigation is being conducted by the antitrust division of the Justice Department. PJM spokeswoman Beth Foley said the grid operator is supplying requested information.

Various participants, including industrial consumers, have complained about the PJM market. The Electricity Consumers Resource Council (ELCON) complained to the Federal Energy Regulatory Commission of a lack of liquidity in PJM. ELCON said most customers have already moved back to the affiliate of the incumbent utility. It said the problems surfaced after the market opened in 1999.

“We have been concerned about the PJM ICAP (installed capacity) market,” said John Anderson, ELCON executive director.

Last July New Power Co., a unit of NewPower Holdings Inc., Purchase, NY, complained to FERC that companies such as NewPower, which do not own generation are forced to pay “unreasonably” high capacity rates. Under current PJM market requirements, companies that own generation in the region, or have bilateral deals with generators, do not have to pay an ICAP charge.

And, in November Pennsylvania regulators opened an investigation after a finding by a PJM committee of evidence of alleged market power. But it is unclear if the Justice Department investigation is related to any of these specific complaints.

Investigators have asked PJM to produce communications that discuss possible manipulation, concern about market power, or the competitive effects of the capacity market, including the effect of the capacity credit requirement on retail electric markets and on the value of electric generating assets.

They also have requested information about changes to PJM’s reliability agreement, including names of anyone who proposed amendments to the documents and records of who voted for and against proposals. The Justice Department wants documents discussing the forecast pool requirements, including data used in the calculation.

It also asked for documents describing PJM’s policies, practices, and procedures relating to records retention and destruction.


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