Chapter 9 An Overview of Transmission and Interconnection
C. Independent System Operators and Regional
Other than the transmission companies, themselves, ISOs and RTOs are transmission network balancing authorities, 18 “responsible for matching generation and load, . . . respon- sible for maintaining scheduled interchange with other Balancing Authority Areas, and . . . responsible for maintaining the frequency in real-time of the electric power system.” 19
18 Until the 1990s, balancing areas were typically operated by the vertically-integrated utility that owned it. Across large portions of the United States — primarily, in the Western Interconnection and in the Southeast — balancing areas remain operated by such traditional entities. In Orders 888 and 889, FERC encouraged the creation of ISOs to effi ciently ensure open access to trans- mission networks in areas with heavy demand. In Order 2000, FERC encouraged the regional administration of the transmission network, through the formation of RTOs.
19 Electronic Filing of FERC Form No. 714, Order No. 695, 72 Fed Reg. 20723 (April 26, 2007).
WECC
MRO
TRE SPP
ASCC
HICC
SERC
FRCC RFC
NPCC
RFC: Reliability First Corporation SERC Reliability Corporation SPP: Southwest Power Pool, RE TRE: Texas Regional Entity
WECC: Western Electricity Coordinating Council ASCC: Alaska Systems Coordinating Council
FRCC: Florida Reliability Coordinating Council HICC: Hawaiian Islands Coordinating Council MRO: Midwest Reliability Organization NPCC: Northeast Power Coordination Council
Figure 9.2 Regional Reliability Organization
Pursuant to FERC Orders 888, 889-A, 2003, and 2004, each ISO and RTO must ensure open access to its transmission system, and nonpreferential treatment between customers.
An ISO coordinates, controls, and monitors the operation of the electric power system within a single state. 20 The United States has three ISOs: (1) the New York Independent System Operator, Inc. (NYISO); (2) the California Independent Service Operator Corp. (CAISO); and (3) the Electric Reliability Council of Texas (ERCOT).
RTOs perform many of the same functions as ISOs, but span larger geographic areas. 21 The United States has four RTOs: (1) the Midwestern Independent Transmission System Operator, Inc. (Midwest ISO or MISO), which spans all or part of fifteen U.S. states and the Canadian province of Manitoba; (2) the PJM Interconnection, LLC (PJM), which encompasses all or part of thirteen states and the District of Columbia; (3) the Southwest Power Pool, Inc. (SPP), which includes all or part of seven states; and (4) ISO New England, Inc. (ISO New England), encompassing six states. 22 (See Figure 9.3 .).
III. PRO FORMA OPEN ACCESS TRANSMISSION TARIFF
In Orders 890-B and 2003-A, FERC introduced the Open Access Transmission Tariff (OATT) 23 and the Large Generator Interconnection Procedures (LGIP). 24 The LGIP
20 In addition to transmission operation and oversight, ISOs and RTOs also provide competitive wholesale market services. See, e.g. , Market Concepts Study Guide, Midwestern Independent Transmission System Operator (December 2005), available at http://www.midwestmarket.
org/publish/Document/20f443_ffd16ced4b_-7fa40a3207d2/Market % 20Concepts % 20Study % 20Guide % 2012_05.pdf?action=download&_property=Attachment (last visited May 2, 2009).
21 Order No. 2000 set forth twelve characteristics and functions that an entity must satisfy in order to become a RTO. The four minimum characteristics of an RTO as set forth in FERC Order 2000 are: (1) independence from market participants; (2) appropriate scope and regional confi gura- tion; (3) possession of operational authority for all transmission facilities under the RTO’s con- trol; and (4) exclusive authority to maintain short-term reliability. Pursuant to FERC Order No.
2000, the minimum functions of an RTO are to: (1) administer its own tariff and employ a trans- mission pricing system that will promote effi cient use and expansion of transmission and gen- eration facilities; (2) create market mechanisms to manage transmission congestion; (3) develop and implement procedures to address parallel path fl ow issues; (4) serve as a supplier of last resort for all ancillary services required in FERC Order 888 and subsequent FERC orders;
(5) operate a single Open Access Same Time Information System (OASIS) site for all transmission facilities under its control with responsibility for independently calculating total transfer capability (TTC) and available transfer capability (ATC); (6) monitor markets to identify design fl aws and market power; (7) plan and coordinate necessary transmission additions and upgrades; and (8) interregional coordination with neighboring control areas to ensure reliability and the provision of transmission services that cross system boundaries. Regional Transmission Organizations, Order No. 2000, 18 C.F.R Part 35, FERC Stats. & Regs. ả 61,285 (Dec. 20, 1999).
22 Although MISO and ISO New England are each an “independent system operator” in name, both are regional transmission operators. ISO/RTO Council, 2007 IRC Sourcebook, at 10 and 22, available at http://www.isorto.org/atf/cf/ % 7B5B4E85C6 –7EAC-40A0–8DC3–003829518- EBD % 7D/IRC_2007 % 20Sourcebook.pdf (last visited June 5, 2009).
23 Preventing Undue Discrimination and Preference in Transmission Service , Order No. 890-B, 73 Fed. Reg. 39,092, 39,126, 123 FERC Stats. & Regs. ả 61,299 (July 8, 2008) at Appendix B (Pro Forma Open Access Transmission Tariff).
24 Standardization of Generator Interconnection Agreements and Procedures, Order No. 2003-A,
PRO FORMA OPEN ACCESS TRANSMISSION TARIFF
also created the Large Generator Interconnection Agreement (LGIA) — a standard agreement to interconnect energy projects to the power grid. 25 The OATT and the LGIP encourage competitive bulk power markets, and minimize discrimination in the transmission and sale of energy. 26
69 Fed. Reg. 15,932, 106 FERC Stats. & Regs. 61,220 (Mar. 5, 2004) (hereinafter Order No.
2003-A), at Appendix B (Standard Large Generator Interconnection Procedures).
25 FERC Order No. 2003 requires all public utilities that own, control, or operate facilities used for transmitting electric energy in interstate commerce to fi le both standard procedures and a standard agreement in order to interconnect a Large Generator. It also requires such public utilities to fi le a revised OATT, if applicable, that includes both the LGIP and the LGIA. FERC has the authority to require public utilities to enter into the LGIA, and to follow the LGIP, pursuant to Order No. 888. Standardization of Generator Interconnection Agreements and Procedures, Order No. 2003, 104 FERC Stats. & Regs. ả 61,103 (July 24, 2003), 68 Fed. Reg.
49,846, 49,848 (Aug. 19, 2003) (codifi ed at 18 C.F.R. pt. 35), order on reh’g, Order No.
2003-A, 106 FERC Stats. & Regs. ả 61,220 (Mar. 5, 2004) (hereinafter Order No. 2003).
26 The OATT, the LGIP, and the LGIA were issued in response to new developments in the CAISO
MISO RTO AESO
IESO
ERCOT SPP RTO
NYISO ISO-NE
NBSO
PJM RTO
Midwest Independent Transmission System Operator NBSO: New Brunswick System Operator
NYISO: New York Independent System Operator PJM Interconnection
SPP RTO: Southwest Power Pool, RE AESO: Alberta Electric System Operator
CAISO: California Independent System Operator ERCOT: Electric Reliability Council of Texas IESO: Independent Electricity System Operator ISO-NE: ISO New England
Figure 9.3 ISOs and RTOs
Order No. 888 requires public utilities 27 to provide open access to transmission ser- vice on a basis consistent with the terms of the Pro Forma OATT. 28 Specifically, public utilities must (1) file open access transmission tariffs that contain minimum terms for nondiscriminatory service; (2) take transmission services for their wholesale purchases and sales of energy pursuant to the filed tariff; and (3) develop and maintain an Open Access Same-Time Information System (OASIS) that provides users with access to the same transmission information available to the public utility. 29