A wholesale pool spot market must be administered by the independent system operator: Avoiding the separation fallacy

Journal Article · Fri Dec 01 04:00:00 EST 1995 · Electricity Journal

DOI:https://doi.org/10.1016/1040-6190(95)90139-6· OSTI ID:376990

Hogan, W W

Short-term dispatch and short-term transmission are two sides of the same coin. They cannot be separated, but should be designed to support an efficient, non-discriminatory spot market administered by an independent system operator. To do otherwise would unnecessarily increase costs, create hidden subsidies and require more regulation. The notion of having an independent system operator (ISO) has gained some currency in discussions of electricity market restructuring. There are significant advantages in this approach, but the key to success will be in a careful specification of the ISO`s functions and responsibilities. Simple independence is not enough; the ISO should support an efficient, competitive market. There is wide recognition that there must be a system operator coordinating use of the transmission system. This control of the use of the grid means control of generation dispatch, at least at the margin, because adjusting the dispatch is the principal - in some cases, only - means of affecting the flow of power on the grid. That the system operator should be independent of the existing utilities and other sellers and buyers in the market is attractive; independence will facilitate achieving equal treatment of all market participants. The ISO would be providing a service, but would not be competing in the energy market. Hence, the easy-to-state but hard-to-enforce principle of comparability would be transformed into an easier-to-enforce principle of non-discrimination.

• OSTI ID: 376990
• Journal Information: Electricity Journal, Journal Name: Electricity Journal Journal Issue: 10 Vol. 8; ISSN ELEJE4; ISSN 1040-6190
• Country of Publication: United States
• Language: English

Related Subjects

29 ENERGY PLANNING, POLICY, AND ECONOMY
DEREGULATION
ELECTRIC POWER INDUSTRY
ENERGY POLICY
MANAGEMENT
SPOT MARKET