Mid-Atlantic Grid Monitors to Be Independent

Monitors of the Mid-Atlantic electricity grid will be moved outside the control of the grid's operator after a probe into the alleged silencing of an internal critic.

Under the settlement announced by the Federal Energy Regulatory Commission, the market monitoring unit will operate independently from PJM Interconnection management, take concerns directly to members and regulators through defined processes, and issue reports to interested parties at the same time.

PJM serves 13 states and the District. Power companies that participate in the grid include Constellation Energy Group and Exelon.

The external market monitoring firm, Monitoring Analytics, has a six-year contract and an initial budget of nearly $9.3 million, according to the settlement. Monitoring Analytics was formed by current market monitor Joseph E. Bowring.

"Our goal was to assure the independence of the market monitor and to preserve the integrity and smooth operation of the PJM market," FERC Chairman Joseph T. Kelliher said in a statement.

A PJM market monitor last April alleged that the Valley Forge, Pa.-based grid operator ordered him to modify findings that highlighted problems, including reports of price-gouging by power suppliers.

Kelliher said last year that any allegations of interference with the market monitors are taken "very seriously," and that the agency fast-tracked the complaints, a first for FERC. "We found there to be significant tension between PJM management and the market monitor that could compromise the monitor's ability to perform his" duties.

In September, the commission ordered that settlement talks be facilitated by FERC chief of staff John Moot. After an extended paper hearing, it determined that PJM had not violated its rules on rates, terms and conditions.

A PJM spokesman said the settlement "will enhance the independence and effectiveness" of the market monitoring unit. PJM looks forward to working with the firm "in a positive environment that ensures effective monitoring of the PJM wholesale markets, which have been and will remain competitive," spokesman Ray Dotter said.

FERC rejected requests for a rehearing by the two groups that filed the initial complaints alleging rule violations. The Organization of PJM States and a coalition led by the D.C. Office of the People's Counsel requested an evidentiary hearing, but FERC said the paper record was sufficient.

Representatives from the two groups were not available to comment yesterday.