Transmission Alliance Hires Vinson & Elkins and Arthur Andersen

Business Wire, Jan 7, 1999

AKRON, Ohio--(BUSINESS WIRE)--Jan. 7, 1999--The Transmission Alliance, a group of electric utility companies that have agreed to develop a proposal to form a regional transmission organization, announced that they have retained the law firm Vinson & Elkins as outside counsel and professional services firm Arthur Andersen as project manager. The Alliance companies -- American Electric Power (NYSE:AEP), headquartered in Columbus, Ohio; Consumers Energy (NYSE:CMS), headquartered in Jackson, Michigan; FirstEnergy Corp. (NYSE:FE), headquartered in Akron, Ohio; and Virginia Power (NYSE:D), headquartered in Richmond, Virginia -- are developing Federal Energy Regulatory Commission (FERC) documents which will be completed as early as Spring 1999.

"Vinson & Elkins and Arthur Andersen are important additions to the Transmission Alliance team and will help us move forward with our process," said Stan Szwed, chairman of the Alliance and FirstEnergy vice president.

"Vinson & Elkins brings a wealth of experience in energy and regulatory matters. We are particularly pleased to have the counsel of Betsy Moler, a V & E partner, who is a former deputy secretary of the U.S. Department of Energy and former chair of the Federal Energy Regulatory Commission. Her knowledge of restructuring issues will be invaluable," Szwed said. Moler is co-chair of V & E's domestic electric power practice group.

"Arthur Andersen's experience with utilities on issues such as Transco-ISO development will help us take the process to the next level. By coordinating between the Alliance working groups at the direction of the transmission owners, they will help us formalize structure, governance and pricing for the Alliance," Szwed said.

Arthur Andersen's team will be led by Lawrence M. Oliva, a business consultant with experience in utility restructuring. Arthur Andersen also will utilize the services of National Economic Research Associates, Inc. (NERA), an economic consultant that will assist with market design and implementation issues.

The regional transmission organization will be designed to meet the goals of providing non-discriminatory access to the transmission grid, ensuring transmission reliability, and reducing transmission costs that result from pancaked rates -- accumulated access fees resulting from transferring power over several transmission systems.

The final proposal will include details of the mechanisms needed to transition from an ISO to a TransCo in the event that the entity does not operate initially as a TransCo. It also will address tariff, congestion management, operations and planning issues, as well as encourage and assist development of a market approach to providing ancillary services.

The Alliance companies own 43,100 miles of transmission lines, serving a population of 23 million in Indiana, Kentucky, Michigan, Ohio, Tennessee, Virginia, West Virginia, Pennsylvania and North Carolina.