Benchmarks

Fortnightly Magazine - March 15 1998
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THE MIDWEST INDEPENDENT SYSTEM OPERATOR PROposal raises the lingering question of whether the ISO model represents a "stepping stone" or a final form of electric industry transmission management. Many players are split on which model would best serve an open electric market: an ISO, or financial separation of the transmission and distribution system from electric generation.

Within the generalized ISO framework, individual members would retain ownership and operate and maintain transmission assets. Under such a system, individual members hold power and influence over the day-to-day operation of the entire transmission system. The ISO format is intended to mitigate market power. However, if members retain influence over the corporate structure, provide the initial personnel to the ISO and maintain the physical infrastructure, they could possibly receive some market advantage.

Most ISO plans propose a "code of conduct" that prohibits advantage in transmission allocation and does not allow agents to own generation assets. However, ISO rules regarding posting and availability of transmission capacity remain under development, and information flow could remain selectively open to members while excluding other parties. Whether such a code can compel former employees, and current corporate cousins, to pursue ISO objectives to the exclusion of generation objectives remains to be seen.

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