RATE UNBUNDLING: ARE WE THERE YET?
FEBRUARY 15, 1996
Transmission and ISOs
January RTO Filings. On Jan. 16, the handful of existing regional independent system operators (but not ERCOT), filed plans on how they would conform to rules set out for regional transmission organizations (RTOs) in FERC Order 2000.
- New England. Joined with six transmission owners (Bangor Hydro-Electric, Central Maine Power, National Grid USA, Northeast Utilities, United Illuminating, and Vermont Electric Power) to propose a "binary" RTO, with an independent transmission company (Northeast ITC) operating within the RTO umbrella. .
- New York. The current ISO members (Con Ed, Central Hudson Gas & Electric, Niagara Mohawk, Orange & Rockland, NYSEG, and Rochester Gas & Electric) joined to propose an RTO, and touted their new protocols for coordinating transmission planning and expansion. .
- Midwest. Claimed its RTO plan already conformed with the FERC's minimum set of RTO characteristics and functions. Alliant Energy led a group of nine utilities (plus American Transmission Co.) that filed separately to support MISO and ask the FERC to OK a revised rate structure for MISO, including a "revenues lost approach" similar to that already approved for the Alliance group. .
- Alliance. Claiming nine members (Ameren, American Electric Power, Consumers Energy, Exelon, FirstEnergy, Illinois Power, Dayton Power & Light, Detroit Edison, and Virginia Electric & Power), Alliance said it would be the largest proposed RTO, covering 174,500 square miles and serving 39.8 million people in 11 states, with a peak load of 108 gigawatts (115 gigawatts generating capacity). With new members in Illinois, it claimed it would no longer disrupt markets as a "tollgate," blocking access by Midwest power producers seeking to sell into PJM. FERC Docket No. RT01-88, filed Jan. 16, 2001. A week later, the FERC approved the proposed scope and configuration of the Alliance group on assurances of better "seams" management, but with commissioner Massey dissenting. .
- California. In a six-page letter that read like an apology, the ISO said it was still studying market redesign and afterwards would identify the steps needed to comply with RTO rules, but also was working to form a broader "Western RTO." California's three major investor-owned utilities filed separate RTO notices, each criticizing the ISO and questioning whether it could qualify as an RTO, given current market dysfunction. . -B.W.R.
Regional Coordination. On Jan. 16, the boards of directors of ISO New England and the New York ISO announced approval of a joint resolution establishing a joint task force on inter-control area market coordination to reduce barrier between the two markets.
California Postage-Stamp Pricing. Various municipal utilities and irrigation districts filed protests against the California ISO's proposed Tariff Amendment 34, filed late last year as the next step for the ISO in revamping its transmission rates to accommodate municipal electric utilities and members not owning transmission facilities, and to comply with a deadline imposed by state law.
The plan will phase-out license-plate pricing (based on utility-specific embedded costs) for high-voltage transmission service over 10 years, and then institute a flat, grid-wide, postage-stamp rate. Among other objections, the publicly owned utilities question how the new tariff will mesh