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Transmission Upgrades: Who Pays?

Transmission Upgrades:
Fortnightly Magazine - November 2004
  1. transmission service credits that amortize its initial cost of the "Network Upgrades" the transmission customer initially funded. The transmission customer receives interest on the unamortized balance, and any balance remaining after five years must be completely refunded.
  2. See New York ISO Technical Bulletin 062, "Locational Based Marginal Pricing - Meaning and Myths" dated Sept. 20, 2000.
  3. In RTOs where FTRs are directly allocated to loads, the load directly receives congestion payments. In RTOs that auction off the FTRs, the loads receive the auction revenues and the FTR holders receive congestion payments. Assuming that FTR auction revenues approximate actual FTR payments in total value, then the result, from the perspective of the load, is the same.
  4. Added redundancy reduces single contingency ("n-1") constraints that limit loading on facilities.
  5. Software such as NewEnergy's PROMOD IV® can be used to determine the forecasted impacts associated with an economic transmission upgrade.
  6. Although not yet a FERC-approved RTO, ISO New England is an example of another mixed region. While Vermont is the only state still vertically integrated, some public power entities do not offer retail choice.
  7. A "load-only" benefits test makes allocating transmission investment to zones straightforward since the costs can be allocated in proportion to the benefits in each zone.

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