ELCON publishes RTO position paper
By Staff -- Purchasing, 6/3/1999
Two years after issuing its position paper on independent system operators (ISOs), the Electricity Consumers Resource Council (representing 34 large industrial end users of electricity) has released a new position paper on regional transmission organizations (RTOs). According to ELCON Executive Director John Anderson, the organization has become "disenchanted with the ISOs that are now operating," because they're either "too small, too bureaucratic, too parochial, or too unfriendly to the needs of traders, suppliers, and customers."In its paper, elcon advocates establishment of just three large RTOs, one for each existing interconnection (East, West, and Texas) to replace the 10 regional reliability councils and the ISOs that have been established to date. "Those who would argue for more than three RTOs [should have] the burden of proof to demonstrate that more rather than fewer, will better enhance reliability and competitive markets," Anderson says.
Here are the primary positions detailed in elcon's paper:
* Each RTO should enforce ferc-approved reliability standards, including acting as security coordinator for the interconnection.
* Each RTO, at least initially, should be a non-profit organization because its enforcement responsibility would conflict with a for-profit motive. (Under certain conditions, elcon suggests that such organizations could evolve into for-profit transmission companies with appropriate regulatory oversight.)
* Each RTO should have adequate control over transmission facilities. Activities would include: calculating and posting the amount of transmission capacity available in the market, administering a single grid-wide transmission tariff, processing requests for and scheduling transmission services, providing congestion management services, and monitoring and ensuring that ancillary services are being adequately provided and scheduled.
* The RTO should not operate a spot market (or power exchange) in any electricity commodity or service.
* Capacity rights across congested interfaces should be established and subject to an auction that ensures an efficient and fair allocation of capacity reservations. A secondary market for [capacity] reservation rights should be allowed to develop independent of the RTO. This market would establish valuations or specific congested interfaces and provide an important "price signal" for new investment decisions.
The entire paper, Profiles in Electricity Issues: Regional Transmission Organizations, can be found at www.elcon.org under "Resource Documents."
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