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New Analysis

The ISO forges ahead, with or without its members.
Fortnightly Magazine - February 15 2001

urged the FERC to OK the second tranche of debt and to include the requested language in its order as the sine qua non of any prospective debt financing.

However, this new request for funds has spawned opposition from some of the would-be MISO defectors.

On Jan. 12, Illinois Power, ComEd, Union Electric, and Central Illinois Public Service Co. opposed the request for funding, citing general FERC authority to deny securities issues "where the proceeds would be used to finance an overly risky enterprise."

Citing the obvious threats to MISO's integrity (their own and others' intentions to withdraw) the four utilities (in two separate motions) charged that MISO's proposal to sell additional debt was "incompatible" with FERC criteria to determine the public interest. And because they would want to protect themselves from liability for MISO debt after leaving the group (recall the sine qua non condition), they warned that any new debt issue by MISO would only "provoke litigation." They urged the FERC to defer action on the request "until such time as the composition and future plans of [MISO] are known with more certainty."

The RTO Future

On Jan. 16, the Midwest ISO proceeded anyway to file the documents required under FERC 2000 to declare its intentions on how it would comply with Order 2000, governing the formation of RTOs.

To comply with the minimum set of eight functions required for RTOs, MISO claimed that its existing protocols for congestion management satisfied the technical requirements of Order 2000, and that it planned to implement a market monitoring function. On the question of size and scope, MISO claimed that "given the pending addition of many of the transmission-owning entities with MAPP" (the Mid-Continent Area Power Pool), that its size would allow it to internalize "most, if not all" of the effects of parallel path flow from its scheduling activities.

MISO added that if the FERC should refuse to allow members to withdraw, it is ready to become a functioning RTO and asked the FERC to issue an order no later that 30 days from the filing date recognizing the MISO as an RTO. But MISO admits that it, too, is suffering from the uncertainty of the situation. The ISO notes that while its headquarters building in Carmel, Ind., is 85 percent complete, its staffing hires have been frozen at about 80 employees of an expected 190.

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