Southwest Power Pool and Midwest ISO call off merger

March 20, 2003 — Southwest Power Pool, Inc. (SPP) and Midwest Independent Transmission System Operator, Inc. (Midwest ISO) have mutually agreed to terminate the consolidation of the organizations.

The companies began discussing a consolidation in August 2001 and definitive documents were executed in March 2002. Both organizations have not precluded a future consolidation though they are informing the Federal Energy Regulatory Commission of the termination of the proposed arrangement at this time.

The merger was envisioned to provide operating synergies between the two electric grid management organizations. Maintaining their separate, independent status, both organizations will continue to manage the operations of their respective grids.

“While the process has been long and involved, both organizations have benefited through working as a single organization for nearly one year,” said John Marschewski, president of SPP. Jim Torgerson, CEO and president of the Midwest ISO stated, “The conditions required to close the transaction will not be met in the foreseeable future. As such, it is now best that we focus the attention of our separate organizations on the immediate needs of our respective participants.”

“Though a seam will remain between SPP and Midwest ISO, our work with SPP in the past months puts us in a better position to manage this seam,” Torgerson added. “I’m pleased and gratified by the results of our joint efforts, and I know our combined constituencies have and will continue to benefit from this combination attempt,” said SPP’s Marschewski.

Southwest Power Pool, Inc. currently consists of 50 members serving more than 4 million customers across all or parts of eight southwestern states. This membership is comprised of investor-owned utilities, municipal systems, generation and transmission cooperatives, state authorities, federal agencies, wholesale generators, and power marketers.

SPP coordinates, promotes, and communicates about reliability in all aspects of the electric energy business. FERC approved the Midwest ISO as the nation’s first regional transmission organization (RTO) on Dec. 20, 2001. RTOs are responsible for ensuring the reliable operation of the wholesale electric transmission system and for ensuring fair access to the system.

Headquartered in central Indiana, the Midwest ISO serves as an agent for its transmission-owning members controlling, or under agreement to control, an interconnected transmission grid encompassing more than 122,000 megawatts of generation capacity over more than 111,000 miles of high voltage transmission lines in all or parts of 15 states and parts of Canada.

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