Midwest ISO outlines RTO strategy

Madison, Wisc.

Matthew C. Cordaro, president and CEO of the Midwest Independent Transmission System Operator (MISO), has outlined key operational issues the MISO is addressing in order to meet federal requirements for becoming a regional transmission operator (RTO).

Declaring that the ISO’s model would benefit the Midwest regardless of the status of ongoing restructuring efforts in the industry, Dr. Cordaro told the annual meeting of Wisconsin Public Power Inc. that the ISO is paying particular attention to four areas addressed in the Federal Energy Regulatory Commission’s (FERC) Order 2000-real time energy balancing, congestion management, ancillary services and generation interconnection.

Dr. Cordaro said that the MISO is considering a third-party independent market service for ancillary services and energy imbalance.

“Unlike several ISOs evolving from tight power pools, the MISO was not envisioned to operate a spot energy market,” he said, adding that the MISO model has the potential to protect the market from extreme volatility and manipulation.

He also commented that the ISO’s day-one interim congestion management plan is a market-based re-dispatch system. Cordaro pointed out that the MISO and its members have been analyzing several alternatives for the MISO’s long-term congestion management system.

“I can tell you that the feedback we are getting from our members leans toward a hybrid model that incorporates the strengths of the locational marginal pricing and flowgate models,” he said.

Locational marginal pricing (LMP) handles delivery time congestion using a least-cost re-dispatch system. The flowgate model accomodates a forward market in energy and transmission. The flowgate method also has potential mechanisms for resolving seams issues between control areas.

Cordaro added that the MISO tariff includes substantial provisions governing generation interconnection including impact studies and facility studies that will identify costs that must be paid, or new facilities that must be installed to honor a transmission request.

The Midwest ISO will be charged with overseeing the Midwest’s electrical grid when its control center in Carmel, Ind., is built and operational. Market trials are scheduled for June of next year, and the ISO will begin operations in November.

“The MISO is making significant pro-gress toward its goal of becoming operational,” Cordaro said. “I’m happy to report that in August the integrated control center system’s development system was installed at our temporary headquarters. Barring events clearly beyond our control, we are on track to start market trials on June 1, 2001.”

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