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RTO-NE Update

RTO-NE Update. NEPOOL Reliability & Tariff Committee Combined Summer Meeting July 29, 2004 Stephen G. Whitley, Sr. VP and COO, ISO-NE. New England RTO: Background. In Order 2000, FERC required development of RTOs to encourage regional grid coordination and planning

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RTO-NE Update

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  1. RTO-NE Update NEPOOL Reliability & Tariff Committee Combined Summer Meeting July 29, 2004 Stephen G. Whitley, Sr. VP and COO, ISO-NE

  2. New England RTO: Background • In Order 2000, FERC required development of RTOs to encourage regional grid coordination and planning • RTOs to have certain functions and characteristics, including independence and geographic scope • ISO New England filed for RTO status in 2000 • FERC denied based on geographic scope and lack of independence • ISO New England and NYISO jointly filed for combined RTO status in 2002 • Filing addressed geographic scope issues • Filing ultimately withdrawn for lack of stakeholder support • ISO New England and New England Transmission Owners (TOs) filed in 2003 to establish an RTO for New England (RTO-NE)

  3. RTO-NE: Timeline To-Date • ISO/TOs filed RTO-NE proposal on October 31, 2003 • RTO Order issued March 24, 2004 • Directed NEPOOL/ISO to negotiate reversionary interests • ISO and TOs made 90-daycompliance filing on June 22 • Agreement on preliminary term sheet • Requested more time to comply regarding reversionary interests • FERC granted extension of time on June 28 • ISO/TOs/NPC agreed to final term sheet on June 29 • ISO/TOs request expedited action by FERC on certain open issues

  4. Overview of Structure in New England

  5. RTO-NE Governing Documents • Four primary new documents govern RTO-NE: • RTO Tariff • Transmission Operating Agreement (TOA) • Participants Agreement • Market Participants Services Agreement

  6. FERC RTO Requirements • RTO-NE satisfies FERC Order 2000 requirements for an RTO: • Independence • Scope and Configuration • Operational Authority, and • Exclusive Authority to Maintain Short-term Reliability

  7. Key Changes under an RTO Strengthening Independence • RTO-NE governance structure will strengthen ISO independence • Stakeholder advisory process will replicate NEPOOL committees/sectors • States seeking formal advisory role through Regional State Committee • ISO will have authority to file market rule and RTO Tariff changes with FERC • Alternate market-rule proposals with 60% NPC support will also be filed

  8. Key Changes under an RTO, cont. Strengthening Operational Control and Reliability • ISO will assume operational authority over transmission facilities • Clear responsibility and accountability to maintain reliability • Authority over outage schedules based on reliability/economics • ISO/TOs to collaborate on establishment of transmission facility ratings • TOs will have “obligation to build” in certain instances

  9. Key Changes under an RTO, cont. Improving Efficiency • ISO will become the transmission provider for New England • Unified RTO-NE Tariff • Provides “one-stop shopping” for transmission and market services Broadening Regional Scope • Regional system planning process will be enhanced/broadened • Planning will eventually encompass 14 northeast states and Canada • Seams-elimination initiatives will create larger virtual market

  10. Key Benefit of an RTO • Improved authority for ISO New England to ensure power system reliability • One set of hands on the wheel • Contractual and regulatory certainty for the role and authority of the independent system operator

  11. Next Steps • NPC to act on final settlement agreement and revised RTO documents at August meeting • FERC filing to follow • 30-day notice of Operations Date on/after final FERC approval

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