Midwest ISO, PJM Interconnection, TVA Sign Agreement for Multi-Regional Approach To Ensure Electric Grid Reliability

The Midwest Independent Transmission System Operator, Inc. (Midwest ISO), PJM Interconnection (PJM) and the Tennessee Valley Authority (TVA) have signed a joint reliability coordination agreement that will provide for unprecedented cooperation in the management and operation of the electric transmission grid over a major portion of the eastern United States.

The agreement was signed by officials representing the three organizations:
- Midwest ISO President and Chief Executive Officer James P. Torgerson
- PJM Interconnection President and Chief Executive Officer Phillip G. Harris
- TVA Executive Vice President of Transmission/Power Supply Terry Boston

"This unprecedented agreement is the kind of proactive, pro-customer cooperation that helps maximize the benefits of electricity markets," said FERC Chairman Pat Wood, III. "Congratulations to TVA, PJM and the Midwest ISO for coming together and forging this groundbreaking inter-regional coordination agreement."

The JRCA will result in actively managing the reliability of seams between the wholesale electricity markets of the Midwest ISO and PJM and the service territory of TVA. It provides for the comprehensive management of reliability and relief of congestion within the three power systems. To accomplish this, the parties will share critical operating information, system models and extensive planning data to ensure that all have the best information possible in their day-today operations. This information-sharing will enable each transmission provider to recognize and manage the effects of its operations on the adjoining systems.

"We recognize that the dynamic wholesale power markets developing in the Midwest ISO and PJM service areas will change how our systems must be operated to ensure continued reliable service to our customers," said TVA Chairman Glenn McCullough. "Reliability coordination agreements, in combination with our efforts with public power partners and neighboring utilities like Southern Company and Entergy, will provide a mechanism to allow wholesale energy markets to develop in the Eastern United States while ensuring that power is delivered reliably to the customer."

The three organizations have also agreed to conduct joint planning sessions to ensure that improvements to their integrated systems are undertaken in a cost-effective manner and without adversely affecting reliability to any organization's customers.

"This is an important agreement that will help minimize the impact of seams between bordering regions," said Torgerson. "As a result, reliability within each system - and the entire area served by all three entities - will be improved. In many ways, this agreement represents an unparalleled level of coordination between power systems and could serve as a template for our industry."

"This significant agreement is a natural and necessary step forward in the evolution of the electric power grid and of wholesale electricity markets," said Harris. "I look forward to potential market agreements that would aid deliverability to Midwest ISO and PJM markets of electricity from independent generation in the TVA region. At all times, our first goal is reliability. The joint agreement enhances reliability for the people and businesses throughout our regions through providing the framework to cooperatively manage the inherent interactions among our systems and especially to better manage congestion. The agreement will strengthen reliability within and beyond our regions and facilitates the advantages of competitive electricity markets."

Planning will begin in a manner consistent with Midwest ISO and PJM's respective tariffs and the laws and rules pertaining to TVA's status as a regional, non-FERC jurisdictional entity within the Eastern Interconnection -- the wholesale electric transmission grid that serves much of the area from the Atlantic coast to the Rockies.

The area comprised by Midwest ISO, PJM and TVA has 264,000 MW of peak load, which is approximately 45% of the Eastern Interconnection peak. A megawatt is enough electricity to power about 1000 homes.

The scope of the area that encompasses Midwest ISO, PJM and TVA includes:
- 306,000 MW generating capacity
- 164,000 miles of transmission lines
- More than 68 million customers/end users

The Midwest ISO, PJM and TVA areas will include all or parts of 25 states, plus the Canadian province of Manitoba and the District of Columbia.

About Midwest ISO
The Midwest ISO manages one of the world's largest energy markets using security constrained economic dispatch of electricity. In addition, the organization administers Day-Ahead, Real- Time and Financial Transmission Rights markets as well as Locational Marginal Pricing at over 1,400 nodal locations. Consistent with FERC Order No. 2000 and its Midwest Markets Tariff, the Midwest ISO utilizes a market-based platform for grid congestion management. The Midwest ISO was approved as the nation's first RTO in 2001. Membership in the organization is voluntary. The Midwest ISO acts in close cooperation with the 15 states and the province of Manitoba, where it operates 97,000 miles of transmission lines. The organization is responsible for ensuring fair access and reliable operation of a system with a peak load of 119,000 MW and 131,000 MW of generation. The non-profit organization was founded in 1998, is governed by an independent Board of Directors, and is headquartered in Carmel, Indiana with an operations center in St. Paul, Minnesota. Visit Midwest ISO at www.midwestiso.org or www.midwestmarket.org.

About PJM Interconnection
PJM Interconnection ensures the reliability of the high-voltage electric power system serving 45 million people in all or parts of Delaware, Indiana, Illinois, Kentucky, Maryland, Michigan, New Jersey, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and the District of Columbia. PJM coordinates and directs the operation of the region's transmission grid; administers a competitive wholesale electricity market, the world's largest; and plans regional transmission expansion improvements to maintain grid reliability and relieve congestion. Visit PJM at www.pjm.com.

About TVA
TVA is a federal corporation and is the nation's largest public power provider. It is completely self-financed and receives no tax dollars. TVA provides power to large industries and 158 power distributors that serve approximately 8.5 million consumers in seven southeastern states. Visit TVA at www.tva.com.