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For Immediate Release

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PJM Files at FERC to Achieve RTO Status; PJM Transmission Owners Seek Incentives to Build Transmission

For Immediate Release
October 12, 2000

(Washington, DC, and Norristown, PA, October 12, 2000)- PJM Interconnection, LLC (PJM), and the nine PJM Transmission Owners late yesterday jointly filed with the Federal Energy Regulatory Commission (FERC) their Order 2000 Regional Transmission Organization (RTO) compliance report. PJM is the coordinating entity for buying, selling, and transmitting wholesale electricity to 22 million people in the Mid-Atlantic region.

Since its transformation into an Independent System Operator (ISO) in January 1998, PJM has been at the forefront of developing and implementing the requisites of an independent regional transmission entity. Today's filing seeks to move to the next step in this transformation by gaining: (1) FERC certification of PJM as an RTO; and (2) approval of the PJM Transmission Owners' rate proposal intended to promote and expedite new transmission investment.

"It is of critical importance that the reliability of the nation's electricity grid be maintained, while assuring that competition flourishes and prices are stable," said John M. Derrick, Jr., Chairman and CEO of Potomac Electric Power Company.

"PJM is pleased to be making this filing which demonstrates that it fully meets the FERC Order 2000 Regional Transmission Organization requirements," said Phil Harris, President and CEO of PJM.

PJM Meets and Exceeds Order 2000 RTO Requirements. PJM became a fully functional Independent System Operator on January 1, 1998. Progress in developing a robust wholesale electricity market in the Mid-Atlantic region did not stop there. PJM moved forward to set the standard in the electricity industry for independence, technical innovation, and efficient markets.

"Receiving RTO status will confirm that PJM's independent governance model, supported with technical innovation, establishes a balance of achieving competitive electricity markets over a broad region while maintaining safe and reliable grid operations," Harris added.

PJM Transmission Owners Facilitate Needed Expansion of Transmission. Crucial to the development of robust and competitive energy markets is the timely upgrading of transmission facilities to expand their capabilities and to meet reliability standards brought about by dynamic market needs. Today there is virtually no incentive to build transmission because of cost recovery and siting challenges. "Recognizing the vital role of transmission in the developing competitive electricity market is essential," Derrick continued. The PJM Transmission Owners, building on their long experience with capturing the synergies of jointly owned high-voltage transmission intend to advance to the next level of joint ownership with a proposal that will expedite needed facilities determined by PJM's coordinated transmission planning process.

Interregional Coordination Is A Top Priority in PJM. PJM and its neighboring systems stand on the threshold of an expanding interregional marketplace. PJM, together with the New York ISO, ISO-New England, and the Ontario Independent Electricity Market Operator, has been working toward standardizing reliability and market interface rules between the ISOs with the goal of achieving a broader competitive regional electricity market. The filing describes the progress to realize an efficient, seamless northeastern marketplace. The decision of Allegheny Power to come under the umbrella of the PJM ISO is a major step in expanding the Mid-Atlantic energy market. The alliance with Allegheny Power has the potential to extend the PJM market and congestion management to Allegheny, eliminating any seams issues with this western neighbor, and thus establishing the model for further western growth.

The PJM Interconnection, LLC, is an Independent System Operator, administering the PJM Open Access Transmission Tariff and operating the PJM Energy Market and Capacity Markets. PJM currently administers almost eight percent of the country's electric power, with a pooled generating capacity of more than 58,000 megawatts and a membership of more than 190.

The PJM Transmission Owners are: Baltimore Gas and Electric Company, Conectiv Power Delivery (Atlantic City Electric Company and Delmarva Power & Light Company), GPU Energy (Jersey Central Power & Light Company, Metropolitan Edison Company, and Pennsylvania Electric Company), PECO Energy Company, PPL Electric Utilities Corporation, Potomac Electric Power Company, Public Service Electric and Gas Company, UGI Utilities Inc., and Allegheny Electric Cooperative.

NOTE: The complete, 200-plus-page filing and 8-page Executive Summary can be found on PJM's website, www.pjm.com under the Document section.

For an electronic copy of the Executive Summary, please contact Mary Meyers, mjmeyers@pepco.com

Point of Contact:
Nancy Moses

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