The formation of Regional Transmission Organizations (RTOs) to manage electric transmission and operate markets for bulk electric power has been one of the hallmarks of electricity restructuring in the United States. While the establishment of RTOs has been uneven across the US, at this point approximately two-thirds of US electricity demand is served in territories managed by RTOs. While RTOs cannot themselves make system investments in generation and transmission, they are responsible for planning new investments and allocating the costs to consumers in different areas within the RTO footprint. Our focus is on the PJM Interconnect, the RTO that manages the power grid in much of the Mid-Atlantic and portions of the Midwest. In particular, we focus on the institutional process of revising transmission cost allocation rules. PJM’s initial rate design to allocate the costs of transmission lines, implemented in 1997, was meant to last for five years and then be reconsidered. The fierce debate over the new rate design by stakeholders including transmission owners, generator owners, distribution utilities, public utility commissions, and the staff of PJM, lasted until 2009, when it was finally settled in the US 7^th Court of Appeals.  At its core, the debate was over three issues: the value and nature of reliability provided by high voltage transmission lines, how sunk costs of transmission infrastructure should be allocated in a fair manner considering that it was built in a very different regulatory and market structure (e.g. profit margins were determined by public utility commissions, there was no regional dispatch agency, rate pancaking was allowed), and how costs for new transmission infrastructure should be allocated.  The rate designs considered fell under three broad categories: the “license plate design” which divided PJM up into different regions and allocated costs differently for each; the “postage stamp design,” in which all parties would pay an equal share, and several “highway/byway designs” in which costs for high voltage transmission lines would be allocated in a manner similar to the postage stamp design, and lower voltage transmission lines would be allocated zonally.  Drawing upon documentation from the Federal Energy Regulatory Commission (FERC), PJM, and semi-structured interviews, the stakeholder network structure of PJM is examined and discussed to determine how its shape influences the debate and outcomes. Finally, PJM’s rate design justification is compared with that of the Mid-continent Independent System Operator (MISO), another RTO whose operating territory lies just to the west of PJM.