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Letters to the Editor

Fortnightly Magazine - December 2006

to ensure a smooth and successful deployment in November of 2007. The MRTU program represents thousands of hours of work from many of the sharpest minds in the energy industry. The design is based upon proven concepts that are working in other organized energy markets around the country. While we acknowledge that some implementation issues remain, it is my hope that these comments further apprise your readers of the many benefits eagerly anticipated with the implementation of MRTU.

Charles A. King, PE, Vice President, Market Development & Program Management, California ISO


In September, after Mr. King’s letter was received, the Federal Energy Regulatory Commission (FERC) accepted key components of Cal-ISO’s proposed MRTU, paving the way for a new market design complete with day-ahead locational marginal pricing, a security-constrained dispatch on a fully nodal basis, and financial hedging of grid congestion through tradable transmission rights.

FERC acted on condition that the ISO and its stakeholders would conduct technical conferences to iron out differences on certain issues. Such issues included: (1) how to reconcile differences in operational rules between the ISO and neighboring areas (“seams issues”); (2) how to treat imported capacity under resource adequacy rules; and (3) how to develop business practice manuals containing the details on how the ISO will administer its new market design. (See, Docket No. ER06-615, Sept. 21, 2006, 116 FERC ¶61,274.)

By late October, in fact, FERC already had announced the first of these technical conferences (regarding seams issues), to be held Thursday and Friday, Dec. 14-15, in Phoenix.

FERC’s September ruling ordered two key changes to the ISO proposal, regarding: (1) ISO compliance with FERC deadlines for developing long-term transmission rights; and (2) the ISO’s proposal to mandate a generating reserve requirement for load-serving entities not subject to the jurisdiction of the state’s public utilities commission.

At the same time, however, FERC approved numerous other ideas that had proved controversial with stakeholders. Such items included the ISO’s proposals to calculate transmission line losses on a marginal basis, and to delay the onset of “convergence” or “virtual” bidding, in part to facilitate development of the software that will be needed to run the new market. – BWR