PJM West

I spoke with Craig Glazer, the new director for PJM regarding their concept
for PJM West, which includes the following:

- Single market, rules, and tariffs for all companies
- No seams
- Reliability criteria of existing control areas in ECAR etc,
- PJM West could use PJM market
- A power exchange such as APX could be established as a competitive option
for day ahead transactions.
- Designed to be flexible
- Native Load exception is eliminated
- LMP
- Transcos could be a part of it

We talked at length about LMP and I suggested the hybrid as an option for a
variety of reasons. He does not believe the hybrid method will work because
a study demonstrated that using past information to develop commercially
significant flowgates does not work since the paths will change, resulting in
insufficient coverage of costs which would have to be socialized. He further
stated that there is insufficient data in the midwest to identify the
constraints and we would have to rely on info provided by companies like AEP.

Given our current efforts to develop a single RTO, I think we should meet
with the PJM folks and talk to them about our issues and see if we can come
to some agreements. Craig thinks it is logical that FE might join PJM West.
I asked him if they were open to alternatives to LMP and he said he didn't
know.