RICHMOND, Va. - Dominion (NYSE: D) filed an application
Friday to join PJM Interconnection LLC to enhance transmission service reliability,
improve resource adequacy and bring savings to customers while fostering a more
efficient electricity wholesale market and enhancing customer choice in Virginia.
Under the terms of its agreements with PJM, Dominion would
continue to protect its “native load” customers by not curtailing
service to support capacity deficiencies elsewhere within PJM. Integration with
PJM will open the doors to approximately 170,000 megawatts, ensuring that the
reserve needs of customers are met into the future. Additionally, an independent
consultant estimated that Dominion’s customers in Virginia would save
nearly $500 million by the company joining PJM.
“Dominion’s participation in PJM ultimately will
give our electric customers, both wholesale and retail, broader opportunities
in selecting a supplier,” said Thos. E. Capps, president, chairman and
chief executive officer. “This structure will foster wholesale and retail
competition by providing public utilities, independent power producers, competitive
retail suppliers, and electric cooperatives greater access to the transmission
grid. At the same time, by combining to form a larger, independently operated
grid with expanded resources, reliability will be improved throughout Dominion’s
service area.”
Dominion made its filing with the Virginia State Corporation
Commission in accordance with Virginia law. The law requires transmission-owning
utilities in Virginia to join regional transmission organizations no later than
Jan. 1, 2005, subject to approval by the Commission. Dominion anticipates integrating
its transmission assets into PJM by Nov. 1, 2004.
Dominion will retain ownership of its 6,100-miles transmission
system, which will be integrated with the bulk electric power system throughout
major portions of five Mid-Atlantic States and the District of Columbia and
operated by PJM. Dominion’s electric service area will be administered
as a separate zone, PJM-South, much as transmission service to Allegheny Power’s
customers in northwestern Virginia is provided by PJM-West.
PJM is a non-stock company with roots going back almost seven
decades. It has operated an interstate wholesale electricity market since 1993.
“The PJM-South structure contains safeguards to ensure
that Virginia’s electricity needs are met reliably,” Capps said.
Additionally, Dominion’s participation in PJM will:
Ensure the Continuation of Native Load Protection
Dominion’s electric customers (often referred to as “native load”
customers) will continue to receive the same transmission service they receive
today, but over a broader footprint, thereby enhancing the reliability of
service. In the event of a regional capacity shortage, Dominion will not be
required to reduce power to its customers in order to provide electricity
to users in other states in the PJM system.
Lead to Customer Savings
The cost-benefit analysis, performed by Charles River Associates of Boston that
is included in Dominion’s application, concludes that Dominion’s
participation in PJM will result in estimated savings of as much as $477 million
over a 10-year period to Virginia retail customers. These are savings in addition
to the estimated $871 million identified by Chmura Economics & Analytics
of Richmond last year that Dominion’s customers will realize during the
transition to full retail competition.
Enhance Reliability
PJM’s broader region means increased generation resources to meet unexpected
shifts in demand or supply leading to a higher degree of reliability. At the
same time, local oversight will continue. Dominion’s System Operations
Center – where the company monitors the flow of electricity along its
transmission system -- will continue to operate. Dominion’s local experts
will work in conjunction with PJM’s central dispatching offices in Valley
Forge, Pa.
Improve Resource Adequacy
Dominion will continue to ensure it has a secure source of adequate reserves
for its franchise electric customers in Virginia and its reserve margin will
remain at the same level it stands today. Each utility or service provider in
PJM must maintain an appropriate reserve level and any utility or service provider
failing to maintain this level will be subject to significant penalties. This
region-wide discipline will ensure there are adequate reserves today and well
into the future.
Assist in Promoting Competition, Customer Choice
Dominion and Virginia’s participation in PJM is necessary to promote competition
and customer choice at the retail level. Regional transmission entities enhance
wholesale competition and lay the foundation for effective customer choice at
the retail level.
PJM Interconnection LLC (www.pjm.com), the country’s
first fully functioning regional transmission organization, operates the world’s
largest competitive wholesale electricity market and North America’s largest
power grid. The company currently coordinates a pooled generating capacity of
more than 71,600 megawatts and operates a wholesale electricity market with
more than 200 market buyers, sellers and traders of electricity. PJM has administered
more than $9 billion in energy and energy service trades since the regional
markets opened in 1997. More than 70 nations have sent delegates to PJM to learn
about its market model and the operation of the grid in a region including more
than 25 million people in all or parts of PA, NJ, MD, DE, OH, VA, WV and the
District of Columbia. With the April 1, 2002, addition of PJM West, for the
first time nationally two separate control areas now operate under a single
energy market and a single governance structure across multiple North American
Electric Reliability Councils. Visit PJM at www.pjm.com.
Dominion is one of the nation's largest producers of energy,
with a portfolio consisting of 24,000 megawatts of generation, 6.1 trillion
cubic feet equivalent of natural gas reserves, 7,900 miles of natural gas transmission
pipeline and more than 960 billion cubic feet of storage capacity. Dominion
also serves 5 million natural gas and electric customers in nine states. Additional
information about Dominion is available on the Internet at www.dom.com.
