[Federal Register Volume 68, Number 96 (Monday, May 19, 2003)]
[Pages 27055-27056]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-12429]



Federal Energy Regulatory Commission

[Docket No. PA03-12-000]

Transmission Congestion on the Delmarva Peninsula; Facilitation 
of a Fact-Finding Proceeding

Issued May 12, 2003.
Before Commissioners: Pat Wood, III, Chairman; William L. Massey, and 
Nora Mead Brownell.

    1. The Commission is establishing a fact-finding proceeding 
facilitated by an administrative law judge (ALJ), concerning 
transmission congestion on the portion of the power grid on the 
Delmarva Peninsula operated by PJM Interconnection, L.L.C. (PJM). This 
exercise will benefit customers because it will help us evaluate the 
extent and costs of transmission congestion on the Delmarva Peninsula, 
help identify potential solutions to the problem, and also assist us in 
identifying lessons we can learn from this experience that may apply to 
other situations.
    2. The Commission has encouraged the development of methods to 
effectively and efficiently manage congestion on transmission systems. 
PJM uses a system of locational marginal pricing (LMP) and financial 
transmission rights (FTRs) to manage congestion on the PJM system. Some 
areas of PJM, in particular the Delmarva Peninsula, have experienced 
significant congestion over the last several years.\1\ Transmission 
congestion can increase the cost of delivered energy to wholesale 
customers. Customers who hold FTRs for the congested paths should be 
protected from paying these congestion costs. However, customers who do 
not hold FTRs will be exposed to these congestion costs. In a number of 
recent proceedings parties, including Old Dominion Electric Cooperative 
(ODEC), have argued that transmission congestion has been a persistent 
problem on the Delmarva Peninsula that needs Commission action to be 
resolved.\2\ Since our goal is to assure that the institutional and 
analytical frameworks for transmission system management are producing 
cost-effective and efficient solutions that meet the current and future 
needs of PJM's stakeholders, this fact-finding exercise will be 

    \1\ We note that PJM has performed studies to analyze the causes 
of this congestion. See, e.g., November 7, 2002, ``Delmarva 
Congestion Study'' by PJM's Manager--Transmission and 
Interconnection Planning; December 17, 2002 ``Delmarva Congestion 
Study,'' by PowerGEM (retained by PJM). These documents are 
available on the PJM Web site, www.pjm.com.
    \2\ These issues are also presently raised in PJM's compliance 
filing in Docket No. RT01-2 that sets forth PJM's proposal to plan 
for economic expansions to relieve persistent congestion.

    3. Accordingly, we direct the ALJ to conduct a fact-finding inquiry 
concerning congestion on the Delmarva Peninsula. In particular the ALJ 
should identify: (1) The historical and expected extent of the 
congestion and its cost, rate and reliability effects for wholesale and 
retail customers on the Delmarva Peninsula and elsewhere in PJM; (2) 
the causes of the congestion; (3) how FTRs have been and can be used to 
protect customers on the Delmarva Peninsula from congestion costs; (4) 
whether transmission upgrades currently planned for the Delmarva 
Peninsula will effectively moderate this congestion; (5) the costs, 
benefits and timing of transmission expansion to relieve congestion and 
who will benefit from such transmission expansion; (6) whether demand-
side, distributed generation or other generation solutions can 
complement new transmission to solve these problems over the near or 
long term; and (7) other opportunities for solutions to better manage 
congestion costs, and the obstacles and timeliness of possible 
solutions. The above list is not exclusive; the ALJ and participants to 
the proceeding may raise other issues that are directly related to the 
problem of congestion on the Delmarva Peninsula and possible solutions, 
in addition to those identified above.
    4. Our goal is for the ALJ to convene a group of interested parties 
from the affected area, drawing not only from the Delmarva Peninsula 
but also from across the PJM area as appropriate. We invite the Public 
Service Commissions of Delaware and Maryland and the Virginia State 
Corporation Commission to send expert staff members to participate, and 
even to send an ALJ to work with the Commission's ALJ if they wish. Any 
State Commission that is interested in having its ALJ participate in 
the case study should contact the Commission ALJ to make the 
appropriate arrangements. We expect the full participation of all 
wholesale transmission customers on the Delmarva Peninsula, as well as 
the PJM RTO. Interested entities should file notice of their intent to 
participate within ten days from the date of this order.
    5. We direct the Chief Administrative Law Judge or his designee to 
appoint a presiding judge to convene a conference no later than fifteen 
days from the date of this order. We direct the presiding judge to 
provide a report on the foregoing within sixty days from the

[[Page 27056]]

date of this order.\3\ State Commission ALJs or expert staff that 
participate in the fact-finding may offer written comments or 
conclusions that will be appended to the Commission ALJ's report.

    \3\ The ALJ report will not be an initial decision, so we will 
not entertain the filing of briefs on or opposing exceptions. 
Further, we do not anticipate the need for cross-examination of 
witnesses. The Judge need not create an exhaustive record, but may 
work with the parties to create the record that provides a thorough 
picture of the facts, problems, and opportunities, and lessons to be 

The Commission Orders

    (A) The Secretary is hereby directed to publish this order in the 
Federal Register.
    (B) Entities seeking to participate in this proceeding should file 
notices of their intent to participate within ten days of the date of 
this order. However, since this proceeding will not be a formal case, 
we direct the ALJ to welcome late participants to the proceeding rather 
than holding strictly to the formal rules of participation and 
    (C) Pursuant to the authority contained in and subject to the 
jurisdiction conferred upon the Federal Energy Regulatory Commission by 
Section 402(a) of the Department of Energy Organization Act and by the 
Federal Power Act, and pursuant to the Commission's Rules of Practice 
and Procedure and the regulations under the Federal Power Act (18 CFR, 
Chapter I), and the appropriate guidelines for Alternate Dispute 
Resolutions, the ALJ shall conduct whatever proceedings and hearings 
may be appropriate to determine the facts and solutions concerning 
congestion on the Delmarva Peninsula, as discussed in the body of this 
    (D) A presiding administrative law judge, to be designated by the 
chief administrative law judge, shall convene a conference in the 
proceeding to be held within fifteen days of the date of this order, in 
a hearing room of the Federal Energy Regulatory Commission, 888 First 
Street, NW., Washington, DC 20426. The presiding judge is authorized to 
establish procedural dates and to rule on all motions (except motions 
to dismiss) as provided for in the Commission's Rules of Practice and 
    (E) The presiding judge shall file a report within sixty days after 
the date of this order, as discussed in the body of this order.
    (F) Any State Commission that is interested in having its ALJ 
participate in the case study should contact the Commission ALJ to make 
the appropriate arrangements.
    (G) The Commission's Office of Administrative Litigation shall 
provide technical support to the ALJ and the parties in this 

    By the Commission.
Magalie R. Salas,
[FR Doc. 03-12429 Filed 5-16-03; 8:45 am]