Don't Rush the Seamstress: Second Thoughts on the Marriage of the Northeast Grids

Deck: 
Why a standard design in each ISO is no guarantee of regional coordination.
Fortnightly Magazine - September 1 2001
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By Marija Ilic and Leonard Hyman

 

Why a standard design in each ISO is no guarantee of regional coordination.

How do you complete an efficient transaction that requires the cooperation of two or more markets when each is operated independently of the other?

That is the "seams" issue that so concerns the Federal Energy Regulatory Commission (FERC), and the participants in the electric utility industry. This problem-conducting power transactions between geographic areas under well-defined rules and transmission tariffs-marks one of the main obstacles to the growth of electricity trading across the U.S.

In response, the FERC issued Order 2000,1 with an implied assumption that the formation of regional transmission organizations (RTOs) would lead to the necessary upgrades of the transmission network. These RTOs would serve as improved, second-generation versions of independent systems operators (ISOs) which have already formed in a handful of regions around the country to manage the local transmission grid.

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