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Transmission 2000: Can ISOs Iron Out the Seams?

One Market? The Case for Consolidation
Fortnightly Magazine - May 1 2000

northeast ISOs were to merge - not something we oppose, but conversely, not something that needs to be done for the sake of doing - they'd still have seams to the south and west."

Nevertheless, Esposito doubts that business models and practices will ever be completely standardized.

"I don't think you are ever going to get uniformity interconnect-wide in procedures, but you may be able to get uniformity in definitions, communications protocols, and consistency in terms of scheduling time frames," he says. For example, scheduling time frames can be set so they do not conflict despite the fact that different RTOs may have different business models.

"I have a spreadsheet five pages long of the different committees such as NERC, regional reliability councils, different ISOs and RTOs. All impact business processes on how you schedule and how you transmit electric power across the grid," he explains.

Esposito would like his spreadsheet of different committees narrowed down to a page-and-a-half.

But beyond implementing common communication protocols, Esposito questions whether grid-wide standardization is a good idea.

"For example, at one ISO in the Northeast, if you want to change your schedule you have to change it an hour-and-a-half ahead of time and at another one it is an hour ahead of time. If I have one ISO or RTO region-wide, I might be stuck with the hour-and-a-half and not have the ability to say, 'hey we can do this in an hour,'" he says.

He hopes competition will develop the best practices among the RTOs.

PJM's Harris agrees that creating an RTO the size of the Eastern Interconnect is unnecessary because it could stifle competitive advantages among the RTOs.

ISO New England's Pellegrino, on the other hand, remains skeptical of the ITSC idea.

"I want to be objective. I want to learn more about it. But my initial reaction [is that] it appears on first blush to be redundant," he says. "I am concerned about redundancy and I am concerned about bureaucracy. I really feel that it may infringe on the duties and responsibilities of a well-functioning RTO."

Pellegrino worries that between an ITSC, NERC, and FERC, there may be too many layers of bureaucracy. Nevertheless, he says he will keep an open mind.

Says Pellegrino, "I am not going to go out to the bully pulpit and say I will have no part in an ITSC. What do the market participants think we need? It is their interests that we serve. Ultimately, they are our customers and they will have to pay for this."

Letter to a Friend: A Study in Cooperation

PJM in early March fired off a letter to the New York ISO complaining of some of the most problematic seams issues it had with its neighboring ISO.

In that letter, PJM's vice president for system operations, Bruce M. Balmat, described a trend of prescheduled contracts being routinely - and in some cases, significantly - curtailed. Balmat said that trend had caused "unacceptable" hardships to PJM operations.


Dear Chuck: Your Seam Is Showing

PJM tells New York of some "disturbing