News Analysis

1 ISO terminology is complex and often misleading. A Stage 1 emergency occurs when the ISO does not meet its own reserve criteria. Stage 2 occurs when it cannot meet a 5 percent reserve margin. A Stage 3 takes place when it cannot meet at 1.5 percent reserve margin. An ISO emergency can take place even when local resources are available-so long as they have not been bid into its daily reserve purchasing.

2 Although the ISO has defended the poor operation of the units within its service territory, the simple fact is that these are standard units that have been in operation for many years. We would expect forced outage rates in the 5 percent area. Evidence from the ISO, as well as material from FERC, indicates that they units have averaged a 20 percent outage rate since May 22.

3 Since the ISO interprets a failure of the Power Exchange to match demand with sufficient supply as a capacity problem, the gap between supply and demand was treated as a load excursion or a plant outage. During many periods this summer, the gap between demand and supply at the ISO was as high as 30 percent of total requirements.