New York state's electric utilities in a joint filing at the Federal Energy Regulatory Commission have called for creation of an independent system operator, a power exchange and a reliability council, termed the "New York State Reliability Council."
The proposal stems from a collaborative process and is intended to complete the transition to full compliance with FERC Order 888. It includes numerous provisions:
• New York ISO. Would control state's bulk power transmission facilities;
• Transmission Pricing. Customers taking service under the ISO tariff would pay a service charge to cover the revenue requirement of whatever transmission provider serves the customer's location (method was said to avoid cost shifting between underground transmission systems in New York City and above-ground lines upstate);
• Power Exchange. A centralized PX would provide a vehicle for buyers and sellers to participate in the markets for energy, capacity and ancillary services. Market participants can establish other power exchanges;
• Energy Pricing. Customers pay a locational price for energy through the PX or can schedule bilateral transactions.
The new reliability council would ensure that the reliability of the state's electric service is maintained as the industry becomes more competitive. According to the utilities, the reliability rules would reflect their many years of experience in operating the state's complex electric system. The companies said the proposal reflected the special characteristics of the system, including complexities related to serving the New York City/Long Island metropolitan area.
The filing adds that New York's IOUs believe that a reasonable opportunity to recover stranded costs is required for restructuring. That issue is being discussed with the New York Public Service Commission in individual restructuring cases for each utility.
"Satisfactory resolution of this issue is necessary before the transmission providers will turn control of the appropriate transmission facilities over to the ISO," the filing states.
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