News | January 7, 2005

Moody's Report Reaffirms PJM'S Aa3 Rating

– Moody's Investors Service has reaffirmed PJM Interconnection's stable financial outlook and Aa3 debt rating, one of Moody's highest investment grade rankings.

In support of the Aa3 rating on PJM's senior unsecured debt, Moody's points to the company's minimal risk based on the size, stability and liquidity of the PJM wholesale electricity market, the world's largest, as well as the provisions of PJM's operating agreement and tariff. The rating considers the stringent credit standards that all PJM market participants are subject to both upon application for membership and on an on-going basis.

"This vote of confidence is welcome by PJM and our 330 plus member companies," said Suzanne S. Daugherty, vice president, chief financial officer and treasurer of PJM. "The way PJM does business with its customers, our operating agreement, is the primary factor for the company's earning this excellent rating."

Moody's pointed to the fact that PJM is the first regional transmission organization to implement a regional transmission expansion planning process, citing PJM's authority to require members to upgrade systems to ensure electricity reliability now and in the future. In the PJM region, total approved upgrades to the electric transmission system now exceed $1 billion.

"Another key consideration for the Aa3 rating is the fact that the bulk of PJM market activity - approximately 65 percent - is transacted by companies with investment grade credit ratings," said Daugherty. "Their individual and collective financial characteristics strengthen the credit quality of the total membership of PJM. More than eight billion dollars in transactions pass through PJM annually; since 1997, transactions administered by PJM total more than $28 billion."

Moody's is a leading provider of market-based quantitative services for banks and investors in credit-sensitive assets serving the world's largest financial institutions.

PJM Interconnection ensures the reliability of the high-voltage electric power system serving 45.3 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

Source: PJM