The future for ISOs
As everyone knows, the electric utility industry is moving rapidly from a heavily-regulated past to a dynamically competitive future. Not long ago, wholesale competition was more a hope than a reality. However, since the passage of the Energy Policy Act of 1992, wholesale competition has grown at an incredible pace. Order 888 requires 166 transmission-owning public utilities to open their wires for wholesale transactions, and hundreds of nonjurisdictional utilities must open their wires on a reciprocal basis if they want service from public utilities. Interest in retail competition is not far behind. Several states have authorized experimental or permanent programs for retail competition. A number of utilities have joined the chorus of customers in support of retail competition. And even important legislators on Capitol Hill are advocating comprehensive restructurings of the industry, including nationwide retail competition. In this context, a number of policymakers, lawmakers and industry experts are asking whether new institutions will be needed to manage the stresses and strains of competition, to absolutely guarantee nondiscriminatory access to the grid, to achieve the seamless and efficient movement of bulk power over larger regions, and to make a secure and reliable grid even more secure and more reliable. The concept of the independent system operator (ISO) arises in this context. The tight power pools are all working on development of ISOs. In Order 888, the Commission endorsed the development of ISOs. And certain principles were laid out to guide the development of ISOs. Among these guidelines, independence is the bedrock principle upon which all else must be built. In this article, the author will explain why he believes truly independent ISOs are important. The author also addresses some of the key ISO principles the Federal Energy Regulatory Commission (FERC) prescribed in Order 888, and why it adopted them.
- OSTI ID:
- 476830
- Journal Information:
- NRRI Quarterly Bulletin, Journal Name: NRRI Quarterly Bulletin Journal Issue: 4 Vol. 17; ISSN NQBUEK; ISSN 8756-632X
- Country of Publication:
- United States
- Language:
- English
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