The Electricity Law Initiative filed a protest to proposed amendments of a contract between several utilities and PJM Interconnection. The Consolidated Transmission Owners Agreement (CTOA) dates back to PJM’s formation in the late 1990 as an independent system operator charged by the contract with administering regional energy markets and transmission rules. The utilities’ proposed CTOA amendments at issue in this proceeding would strengthen the utilities’ control over PJM’s decisions.
When FERC approved the creation of PJM in 1997, it required that PJM and other regional transmission organizations have their own decisionmaking processes that are independent of the transmission-owning utilities. FERC’s goal was to ensure that the PJM prioritized competition and efficiency over the parochial interests of utilities and other market participants. To meet FERC’s independence requirement, the new PJM would employ its own staff and be overseen by a board of directors that would not have any affiliations with the utilities or other market participants.
The utilities’ proposed CTOA amendments would undermine PJM’s independence for the benefit of the utilities. The new CTOA would compromise PJM’s decisionmaking processes by creating levers of control that the utilities could pull at their discretion to preempt PJM decisions or trigger secret negotiations with the Board about potential PJM actions.
The Electricity Law Initiative’s protest exposes how the CTOA amendments enable the utilities to interfere and obstruct PJM’s decisionmaking processes. The protest argues that FERC must reject the agreement because numerous proposed amendments are unjust and unreasonable, unduly discriminatory, or violate FERC precedent.