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FERC Investigates ISOs

Fortnightly Magazine - April 1 1996

either nonprofit or for-profit, but with a mechanism to promote efficiency. He sees ISOs establishing pricing policies, collecting revenues, distributing revenues, and coordinating with neighboring ISOs. He also thinks they should be regional, and that all generators should be eligible to participate. Finally, Draper advocates that the FERC offer incentives to transmission owners to join ISOs by allowing a temporary, higher return on equity for joining.

Steven Kean, vice president of Enron Power Marketing, Inc., said that ISO rules should be on file at the FERC to ensure that rules aren't changed midstream. He advocates turning existing power pools into ISOs, and designing ISOs to suit the market. Kean believes everyone should be on the same tariff, and that further corporate unbundling is required to make the system work. He noted that tying unbundling to stranded-cost recovery would make it more attractive.

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