PJM Interconnection, the regional transmission organization that manages the transmission of Duquesne Light Co.'s electricity, is protesting the utility's request for federal regulators to approve its withdrawal from the organization.
In its filing with the Federal Energy Regulatory Commission, PJM said Duquesne Light was obligated to pay for electricity that has been reserved for its service area between June 2009 and May 2010. PJM contracted with suppliers for the electricity in an auction held in October.
Duquesne Light first notified PJM of its intent to withdraw in August, and filed a request with FERC to that effect.
According to that request, the withdrawal would have been effective Jan. 1, and the company asked to be excluded from the auction scheduled for Oct. 1. On Sept. 28, FERC issued an order dismissing Duquesne Light's request.
When the Oct. 1 auction was held, PJM reserved 3,000 megawatts for Duquesne Light's service area for the 2009 delivery year, which runs from June 1, 2009 through May 31, 2010.
On Nov. 8, Duquesne Light filed a second request with FERC for withdrawal from PJM, effective May 31; in that filing, the company also asked the agency to rule that it would not be liable for capacity costs after that date.
Duquesne Light says it wants to leave PJM because the organization does not seek the lowest price from suppliers. The prices it accepts create an artificial floor, Duquesne Light company spokesman Joseph Vallarian said, so that a member utility cannot pay less, even if a supplier offered a lower price.
Remaining in PJM would be unfair to Duquesne Light customers, Mr. Vallarian said, "because the pricing models will force future generation rates to rise."
PJM spokesman Ray Dotter compared the situation with one that might arise among a group of friends going out for dinner.
"If a group of us went out for a meal, and we sit down and order our meal, once you place the order, the restaurant is committed to preparing that food," he said. If a member of the party then decides to dine elsewhere, "That food is going to be delivered to that table, and the folks remaining end up paying the charge for it."
In a similar fashion, he said, FERC's approval of Duquesne Light's request would leave a bill for 3,000 megawatts to be paid by other PJM members.
Some of those members are among the parties who have filed more than two dozen requests with FERC to intervene; the deadline for those filings was Nov. 29.