By the OGJ Online Staff
HOUSTON, Oct. 11, 2001 — ISO New England Inc. proposed equal representation from PJM, New York, and New England on a Northeast regional transmission organization board. PJM Interconnection LLC has asked for a majority of the board seats.
During the next few weeks, the Federal Energy Regulatory Commission is expected to make key decisions concerning the Northeast RTO’s structure and implementation, including selecting from several competing proposals for its governing board.
ISO New England said the decisions will have far-reaching implications for New England’s future energy markets. It has proposed a board with equal representation from PJM, the New York Independent System Operator, and ISO New England.
ISO New England said success of the federal agency’s plan for a combined northeastern wholesale electricity market is dependent on the crucial decision on governance for the new organization. ISO New England’s comments came in a filing with FERC responding to a Sept. 17 report by Administrative Law Judge H. Peter Young.
Young reported on 45 days of discussions he had mediated among ISO New England, PJM, and New York counterparts other stakeholders about how to create a new RTO for the Northeast. It would oversee a single wholesale market exceeding $20 billion/year with 140 Gw of generating capacity and consisting of 14 states and the District of Columbia.
ISO Pres. Gordon Welie noted Young’s report concluded the RTO governing board’s composition could predetermine policy decisions. “This underscores the importance of the board being organized in a way that ensures balance among the regions. This is the only way that people throughout the Northeast can have confidence that the RTO — and the new combined market — are being run fairly and independently,” he said.
Van Welie cited several vital concerns for sound implementation of the RTO, including:
— Creation of alternate control centers and redundant systems to ensure operational security even in the event of natural disaster or terrorist threat.
— Development of a robust plan with risk management and technology assessment in advance of the RTO’s implementation, consistent with Judge Young’s observations about the complexity of the needed technology.
— Implementation of an RTO design that reflects regional needs and characteristics, and that incorporates best market practices.
— Continued development of a proposed standard market design for New England to correct existing local market flaws before integration into a combined northeastern market.
ISO New England also argued all systems must be in place and approved by a new RTO board, existing ISO boards, and FERC before the RTO begins operations, rather than defining a time frame to get started and instructing management to “work out the details.”
Getting systems in place beforehand “provides existing ISO boards with a way to discharge their responsibilities for operation of the current markets and the security of the control areas in the Northeast and to hand over control to the new RTO board in a responsible way,” ISO New England said it is comments.