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The Nation's Grid Chiefs: On The Future of Markets

Exclusive interviews with the CEOs of five regional transmission systems.

Fortnightly Magazine - October 2006

step at a time.

Fortnightly: How about in the other geographic direction? Do you foresee any expansion of MISO to the West?

Edwards: Well, I think that through the reserve sharing plan that we are going to implement in the latter part of this year with the Mid-Continent Area Power Pool region, with Mid-America Interconnected Network, and the East Central Area Reliability Coordination Agreement all combined into one for reserve sharing, that we will continue to build the coalition. We just have to take it one step at a time. A lot of the entities to the west of us are public power entities. We need to make sure that we can articulate and demonstrate the benefit and value of being a part of the Midwest ISO.

Can we grow the footprint? We would like to. I think the footprint is going to grow a little bit just through growth of our current market participants. But I would like to see some additional participants come in and become part of Midwest ISO to add value to their constituencies.

 

Yakout Mansour

President and CEO, California Independent System Operator Corp.

Fortnightly: How are you progressing on the California ISO’s new proposed market design, the MRTU (Market Redesign and Technology Update)? Can you give us an overview?

Mansour: The market design of California has been progressing since 2001. From the beginning, until we filed our final application this past spring, I think we have had something on the order of 20 separate FERC rulings on various aspects on the conceptual design.

This last filing was not a kind of big bang, if you like. It was a progression, one in a series of pieces—some of it detailed, some of it conceptual. We are hoping there will be no big surprise, regarding FERC’s answer to our latest filing. Our issues are not very different from what FERC has seen in other places. The development of the systems is on track, hopefully, for full implementation in November 2007.

Fortnightly: How did you conquer any prior opinions about things like FTRs (financial transmission rights) and locational marginal pricing with a full nodal model? Did you invite some people from PJM, New York, or New England to come out to California to win over your audience?

Mansour: Absolutely. We conducted workshops and yes, we did invite some people in who had experience. The California entities were a bit skeptical about some of those Eastern models, like LMP and what have you. And as you know, we went to a zonal kind of approach at first, but the zonal approach got to the point where we had to live with problems. Most of the congestion is inside the zones, so we had no effective, efficient mechanism to deal with it. It got to the point where the intra-zonal congestion got so high—and it was spread among all in the system—so it could not send the right signal.

Certainly the IOUs (investor-owned utilities), who have 75 to 80 percent of the load-serving responsibilities, are supportive of moving ahead. Some others,