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Perspective

Wisconsinites don't fear 'Day 2.' But let's get the grid rights right.
Fortnightly Magazine - March 2004

"offer cap and scarcity pricing," "resource adequacy commitment (RAC) process," and "day-ahead market timeline." Additionally, stakeholder groups are working on delineating control area roles and responsibilities. 16

Wisconsinites know Swiss cheese when we see it. Significant seams exist between MISO and non-MISO members throughout the MISO footprint, and I remain concerned not only about the existing seams to our south resulting from Commonwealth Edison's decision to join PJM, but also the potential for a large number of unresolved seams issues between jurisdictional and non-jurisdictional utilities in the Mid-Continent Area Power Pool (MAPP) region. In the absence of any federal regulatory action to compel non-MISO MAPP utilities to join MISO, these seams issues could exist regardless of the timing of market implementation in the western portions of the MISO region.

MISO's business plan is very ambitious in the scope of what it plans to accomplish over a relatively brief period of time. A number of MAPP utilities have expressed both reliability and financial concerns about joining MISO under the present circumstances. Some have suggested that MISO consider alternative market implementation plans. Some non-MISO members of MAPP have very granular and reliable state estimators that took several years to develop. While MISO has made excellent progress in developing grid monitoring tools, including a state estimator model, it was not until January 2004 that MISO deemed its state estimator to be "production grade" and used it for real-time operations. 17

MISO needs to provide greater assurance to stakeholders in Wisconsin [which is split between the MAPP and the Mid-America Interconnected Network (MAIN) reliability councils] as well as to other MAPP utilities that they will not be worse off under MISO's Day 2 market design. This is significant for Wisconsin because the MAPP system is Wisconsin's only direct interconnection to the rest of MISO.

How MISO addresses these difficult tariff and seams issues will determine the ongoing level of stakeholder acceptance of MISO's market initiative in many parts of the Midwest. The cost of rushing into poorly designed LMP-based energy markets may far exceed any purported cost increases attributable to any future delayed start-up date for certain portions of the MISO region. One need not have attended law school to understand the significant risk of litigation for pursuing a Day 2 market that is not acceptable to a large number of MAPP members.

I hope industry observers will recognize that many of us in the Midwest believe in robust wholesale markets and in regional transmission organizations. Every region, however, should be allowed to fashion market implementation plans that will most effectively achieve those objectives. It was the practical, and not the theoretical considerations that compelled a large majority of MISO stakeholders to support MISO's tariff withdrawal last October. And it will be practical solutions that ensure MISO's success.

Endnotes

  1. FERC .
  2. Through state legislation passed in 1999, Wisconsin was one of the few states in the country that required its transmission owners to join the MISO. Wisconsin also unbundled transmission service and later enacted laws authorizing the divestiture of transmission facilities.
  3. See Comments of the Public