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New York Finalizes ISO Proposal

Fortnightly Magazine - March 1 1997

New York Power Authority trustees have approved agreements to help it establish an independent system operator for the statewide electric transmission system, which could be partially implemented in 1997, and fully implemented by mid-1998, if approved by the Federal Energy Regulatory Commission.

Members of the New York Power Pool, the authority and the state's seven investor-owned utilities have worked for nearly two years to develop a proposal for an independent system operator, or ISO. The proposal and associated tariffs were submitted to the FERC.

The New York ISO would replace the New York Power Pool, and maintenance and basic operation of the system would remain the responsibility of the transmission owners. The ISO would be governed by 28 representatives of groups in the state: eight from transmission owners, eight from wholesale buyers, eight from wholesale sellers, and four from environmental and consumer groups. A vote of 17 of the 28 reps would be required to pass any measure. A voluntary, New York Reliability Council would be formed, consisting of an 11-member board to set reliability standards for the state.

A Power Exchange would be created to supply the needed power identified by the ISO. Transmission owners would establish one power exchange, but others could be set up. Governance would be based on the participation levels in the exchange. Transmission prices would be based on "locational-based marginal pricing," which reflects differences in energy costs at different locations. (em LB

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