News Analysis

 

 

The ISO forges ahead, with or without its members.

What if you formed a regional transmission organization and nobody joined? That's the question in the Midwest, as one by one, utilities who once were members now say they will leave the Midwest Independent System Operator, even as the ISO ploughs forward, undeterred, with plans to upgrade its design to qualify as a full-fledged RTO under the rules in FERC Order 2000.

In fact, rather than take the defections quietly, the Midwest ISO in its Jan. 16 RTO filing asked the Federal Energy Regulatory Commission to deny the requests to withdraw. The non-profit ISO notes that it is considering structural changes, including adopting the for-profit "transco" model of its rival, the proposed Alliance Regional Transmission Organization-which continues to lure the MISO defectors.

All of this leads many to question whether the Midwest region can or should support two RTOs. And, as MISO's changes blur the differences between the two would-be RTOs, a single composite organization begins to appear more likely.

Tipping his hand as to what the FERC might favor, Commissioner William Massey made clear his support for a merged solution at a Jan. 10 FERC meeting. Noting that he was "chagrined" by the planned withdrawals from the MISO, Massey said, "I believe it's time for the commission to require the stakeholders in the Midwest to attempt to forge a single RTO."

Massey pointed out that since the formation of both Midwest organizations, the FERC had issued guidance on how hybrid organizations with both ISO and transco features might fit into the framework for RTO standards, set forth in FERC's Order 2000. Massey added that participants of the MISO and Alliance had consulted on how their organizations might move forward together.

"I understand that those discussions have found many areas of common ground, but have not yet been successful in forging a single RTO for the region," he said. "I believe those discussions should move forward."

A Troubled Time Line

Year 2000 Sept. 20 Dynegy subsidiary Illinois Power announces intent to withdraw from Midwest ISO, to join proposed Alliance RTO. Oct. 13 Dynegy and Ill. Pwr. file formal application to defect. . Oct. 31 Exelon subsidiary Commonwealth Edison says it will defect to Alliance. Nov. 9 Ameren Corp. says it will do the same. Dec. 4 NASUCA files protest against Dynegy and Ill. Pwr., as does the coalition of Midwest Trans. Customers. Dec. 13 MISO president and CEO Matthew Cordaro resigns. Former CFO James P. Torgerson takes over. Dec. 13 FERC sets agenda to decide on Dynegy request, but concludes meeting without acting on the case. Dec. 15 MISO asks FERC to OK second of two $100 million installments of interest-bearing senior notes, and to require any departing member to honor debt liability. . Dec. 19 Led by Madison Gas & Elec. and Wisconsin Public Power , a group of Wisconsin municipal utilities complains that MISO is faltering, asks FERC to act. Dec. 20 Gang of six— Hoosier Energy, Cinergy, Southern Indiana Gas & Electric, Wabash Valley Power