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ISO/RTO Markets: Building a Common IT Platform

Independent system operators and regional transmission organizations recognize the value in having a common IT architecture.

Fortnightly Magazine - August 2007

In today’s modern business environment, standards for products and services have become common—and expected—practice. Standards create consistency among the products and services offered by different companies, which ultimately helps businesses, consumers, and the economy.

The AC plug is a good example. Although slight variations of this ever-present device exist—grounded/ungrounded, polarized/non-polarized— virtually all AC electrical products used in North America employ the common two- or three-pronged interface between a device and its electricity supply.

This simple standard provides assurance of safe and reliable operation just about anywhere on the continent. Equally important, the AC-plug standard enables manufacturers to devise, build, and market consumer electrical products without the added time and expense a non-standard plug design would require.

Much like the National Electrical Manufacturers Association (NEMA), whose work led to the standard AC-plug configuration, the ISO/RTO Council, or IRC—consisting of the 10 independent system operators (ISOs) and regional transmission organizations (RTOs) from across North America—recognizes the value in having a common information-technology (IT) architecture for the systems used to operate inter-regional power systems and wholesale electricity markets.

Diverse Operating Structures And Computer Applications

As they balance electricity supply and demand within and across regional boundaries, ISOs and RTOs need to manage layers of information. Just as system operators need seamless, minute-to-minute access to their counterparts on the human level, their computer systems must talk to each other seamlessly as well.

Currently, many of the software applications used by ISOs/RTOs to run the bulk-power systems and wholesale electricity markets are based on similar software solutions, but diverse operating structures, market designs, and development paths have led to major disparities in software architectures.

As the operations of North America’s network of power systems become more integrated and electric reliability standards become mandatory, greater integration of the computer systems that regional operators depend on becomes imperative. These systems form the backbone for managing power generation and transmission, as well as the wholesale markets in which electricity is bought and sold.

When the ISOs and RTOs integrate their operations with one another, or when software from a vendor is implemented, innovative approaches are needed to reduce software customization costs and minimize application development delays.

To achieve this objective, the electric-power industry needs a coordinated effort to develop a common architecture for building, integrating, and implementing the complex software applications the industry depends on.

Such an architecture would enhance software-application innovation and reliability by embracing standards and encouraging re-use of applications by multiple companies—in the same way consumer software companies amortize their investments over thousands or even millions of users. Ultimately, electricity consumers would benefit from enhanced grid reliability and cost containment.

“The commission is pleased that the ISOs and RTOs are working cooperatively to develop a common IT architecture for the 21st century power grid,” said Joseph T. Kelliher, chairman of the Federal Energy Regulatory Commission, which oversees most U.S. ISOs