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Transmission 2000: Can ISOs Iron Out the Seams?

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

because our markets are different," he says.

Museler believes there are several things his organization can do to alleviate the problem.

"The New York market has no choice but to evaluate transactions every hour because that is how our congestion management system works," Museler says. "On the other hand, PJM has a legitimate concern that if we make too many changes on the hour, that may cause things [to] be curtailed that shouldn't have been curtailed."

"We have to reduce the number [of transactions] that are changed on an hourly schedule, and part of that solution is already in the works," Museler says.

Gen Plant Siting: A Border Skirmish

Some generators denied permission to build power plants in one control area are locating on the borders of those areas in order to be dispatched first, say analysts. Such actions could cause reliability problems among the control areas.

"Certainly if they can't go one place, they try to do whatever they can if they think they can still get into the market economically. It looks like in Pennsylvania and New York, plants are still doing that," says Museler.

Museler explains that whether it becomes a reliability problem depends on where the generators locate. For example, two plants have applied for siting at the Ramapo, N.J., substation, a main interconnection point between New York ISO and PJM Interconnection.

"It helps in some ways and hurts in other ways. Clearly, preliminarily both plants can't be there economically because it would affect the transfer capability under certain circumstances," Museler says.

Even if a plant sited at the interface of the ISOs caused no problems within its control area, it may affect the neighboring control region.

Says Museler, "Under the old regime ... if the other control area thought it was being disadvantaged, they would file at FERC and the thing would go on forever."

He says there is no clear answer to the siting issue. The MOU planning group, however, is examining how to coordinate studies so all participants have the same analysis of the cost and effect of putting plants in various locations. Museler admits that it will be some time before such an effort would be completed, but he says these regional studies are good for establishing a common way to evaluate generation proposals.

"The states are still clearly going to be the deciding authorities for power plants, but we can show them the market analysis and the cost of transmission upgrades, which would go a long way towards generators making more logical decisions," he says.

Generation siting is not a big issue in the PJM control area, according to Harris. Interregional siting is another matter.

"PJM has already in place regional expansion planning protocol. It is approved by FERC. We already have in place approved new generation interconnections and how new generation connects to the grid," he says.

The difficulty, according to Harris, is that neither New York ISO nor ISO New England has the siting authority that PJM has. In addition, neither yet complies with the FERC's RTO standards to begin interregional