METROPOLITAN EDISON COMPANY - Pennsylvania Public Utility ...

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VII. OPERATIONSBackground – The Stratified Management and Operations Audit of Metropolitan EdisonCompany (Met-Ed), Pennsylvania Electric Company (Penelec), and PennsylvaniaPower Company (Penn Power) (collectively referred to as the FirstEnergy PennsylvaniaCompanies or FE-PA Companies) conducted by the consulting firmBarrington-Wellesley Group, Inc. (BWG), released by the Pennsylvania Public UtilityCommission (PUC or Commission) on March 1, 2007, at D-05MGT002, D-05MGT003and D-05MGT004, contained three recommendations in the Operations chapter. BWGrated this functional area as needing minor improvement. In this chapter, two priorrecommendations and prior situations are reviewed and two follow-up findings and onerecommendation are presented.Prior Recommendation – Develop a proactive strategy for dealing with issues that limitthe transmission of electric power from west to east.Prior Situation – In order to serve the customers of the FE-PA Companies, FirstEnergyhad to deal with the issue of moving power from west to east. FirstEnergy Corp.(FirstEnergy) did not have a plan at the regulatory or transmission provider level toaddress west to east power transmission issues. FirstEnergy had taken several stepsto facilitate higher volumes of west to east power transfers such as working withinvarious committees and working groups of the regional transmission organization(RTO), the PJM Interconnection (PJM), to support the long range development of thePJM transmission system and capability. PJM manages the high voltage electric gridand wholesale electricity market that serves 13 states and the District of Columbia.FirstEnergy had also upgraded minor items which limited transmission line loading andutilized new technology high temperature conductors in order to make maximum use offacilities. FirstEnergy was also active in scheduling transmission maintenance andconstruction related outages such that congestion impacts were kept to a minimum.BWG suggested that in addition to working with PJM, FirstEnergy should developa cohesive plan for improving and enhancing its capabilities and options for makingMidwestern based power available to its Pennsylvania customers. Additionally, theconsultant recommended that the FE-PA Companies monitor and offer solutions tocongestion related issues as they evolve within PJM.Follow-up Finding and Conclusion No. VII-1 – FirstEnergy does not have adocumented strategy for moving large volumes of energy from west to east; buthas developed a Federal Energy Regulatory Commission (FERC) and RTO PolicyDepartment for dealing with transmission issues and has been an activeparticipant in PJM’s Planning Committee (PC) and the Regional TransmissionExpansion Planning (RTEP) process.FirstEnergy owns American Transmission Systems Incorporated (ATSI), asubsidiary that owns and controls transmission system assets that were previouslyowned by four of FirstEnergy’s electric distribution companies: Ohio Edison Company(Ohio Edison), Pennsylvania Power Company, The Cleveland Electric Illuminating- 46 -
Company, and The Toledo Edison Company. ATSI owns major high voltage facilitiesincluding approximately 7,100 miles of transmission lines with voltages of 345kV,138kV, and 69kV including 37 interconnections with six neighborhood controlling areas.ATSI’s transmission system offers gateways into the east via high capacity ties withPenelec and Met-Ed. In July 2009, FirstEnergy proposed to integrate ATSI’s footprintinto PJM effective June 1, 2011. FirstEnergy’s proposal was primarily based on therelative strength of the tie lines that connect the ATSI transmission facilities with thePJM system compared to the Midwest Independent System Operator (ISO).FirstEnergy expects that more optimum day-ahead commitments, and therefore areduction in the total congestion across the combined PJM and Midwest ISO systems,will be achieved by including the ATSI system in PJM, the transmission system to whichit is more strongly tied.In the fall of 2006, FirstEnergy developed the FERC and RTO Policy Departmentin order to deal with RTO policies and FERC matters. In order to improve power flow,the FERC and RTO Policy Department gets actively involved in stakeholder processesthat involve major transmission facilities. The primary objective of the FERC and RTOPolicy Department is to coordinate FirstEnergy’s participation in the FERC and RTOstakeholder processes and to develop and advocate a corporate mission on variousFERC and RTO initiatives. In FERC Order 890, FERC obligated transmission ownerssuch as FirstEnergy to address, among other things, transmission planning for thepurpose of alleviating transmission congestion. The FE-PA Companies implement thisrequirement through their participation in the PJM and Midwest ISO RTOs. PJM’sFERC approved Operating Agreement describes and provides for robust annualplanning that addresses identification and mitigation of congestion as it occurs on thegrid including the transmission systems of Met-Ed and Penelec.The Secretary of the PJM Planning Committee indicated that FirstEnergy is anactive member of the Planning Committee and the Transmission Planning AdvisoryCommittee (TEAC). FirstEnergy attends and interacts with these committees on amonthly basis. The PJM Planning Committee addresses technical and proceduralissues related to planning and the PJM RTEP process. The TEAC focuses mainly onthe results of the analytical studies and the proposed solutions. PJM’s RTEP identifiestransmission system additions and improvements needed to keep electricity flowing to51 million people throughout 13 states. Studies are conducted to test the transmissionsystem against mandatory NERC standards as well as PJM regional standards. Thesestudies project 15 years into the future to identify transmission overloads, voltagelimitations, and other reliability standards violations. PJM develops transmission plansbased on these studies in order to resolve violations that could otherwise lead tooverloads and/or blackouts.Working with PJM and FERC on transmission related issues is extremely vital,especially when working with transmission lines across state borders. By developingthe FERC and RTO Policy department, FirstEnergy has taken steps to ensure thattransmission issues are proactively acted upon and dealt with in a timely manner. Byincluding ATSI in PJM’s footprint, a reduction in total congestion across the combinedPJM and Midwest ISO systems has been achieved. Moreover, PJM conducted energymarket simulations using two different scenarios regarding the inclusion of the ATSI- 47 -
Page 5: METROPOLITAN EDISON COMPANYPENNSYLV
Page 8 and 9: • Support Services• Human Resou
Page 10 and 11: • Developed and implemented forma
Page 12 and 13: FIRSTENERGY PENNSYLVANIA COMPANIESM
Page 24 and 25: III. AFFILIATE INTERESTSBackground
Page 26 and 27: In addition, subsidiary or related
Page 28 and 29: BWG recommended that a detailed, wr
Page 30 and 31: management. Other potential uses of
Page 32 and 33: IV. CORPORATE GOVERNANCEBackground
Page 34 and 35: V. FINANCIAL MANAGEMENTBackground -
Page 36 and 37: the internal audit was to determine
Page 38 and 39: Committee citing the internal contr
Page 40 and 41: VI. ELECTRIC RELIABILITYBackground
Page 42: Exhibit VI-1Metropolitan Edison Com
Page 45 and 46: provide additional details to the C
Page 47 and 48: Exhibit VI-6FirstEnergy Pennsylvani
Page 49 and 50: All three FE-PA Companies have had
Page 51: FirstEnergy is following the right
Page 55 and 56: technicians. These strategies are u
Page 57 and 58: VIII. EMERGENCY PREPAREDNESSBackgro
Page 59 and 60: Routine periodic updating of the em
Page 61 and 62: Follow-up Finding and Conclusion No
Page 63 and 64: old excess inventory. Spare invento
Page 65 and 66: controls were automated. Moreover,
Page 67 and 68: Exhibit IX-6FE-PA CompaniesPercenta
Page 69 and 70: FE-PA Companies were unable to iden
Page 71 and 72: Staff’s Follow-up Recommendation
Page 73 and 74: Exhibit X-6Metropolitan Edison Comp
Page 75 and 76: Prior Recommendation - Develop a co
Page 77 and 78: Therefore, BWG suggested that First
Page 79 and 80: XI. CUSTOMER SERVICEBackground - Th
Page 81 and 82: Exhibit XI-2FE-PA CompaniesPercenta
Page 83 and 84: Exhibit XI-5FE-PA Companies Compare
Page 85 and 86: Exhibit XI-7FE-PA Companies Compare
Page 87 and 88: Follow-up Finding and Conclusion No
Page 89 and 90: uilding, in an effort to protect re
Page 91 and 92: Companies would submit a supplement
Page 93 and 94: 3. The "four-fifths" rule (underuti
Page 95 and 96: Met-Ed has female underutilization
Page 97 and 98: Exhibit XII-4Page 1 of 2FirstEnergy
Page 99 and 100: The number of years that FirstEnerg
Page 101 and 102: FE-PA Companies do track purchases

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