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RTO New England: Building a Better Model

RTO New England: Building a Better Model. Presented at RTO Roundtable by William McKinnon Director, Transmission Business Development Northeast Utilities. RTO New England: Four Years in the Making. 4/03 FERC allows RTO w/limited geographic scope (“compliant ISO”).

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RTO New England: Building a Better Model

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  1. RTO New England: Building a Better Model Presented at RTO Roundtable by William McKinnon Director, Transmission Business Development Northeast Utilities

  2. RTO New England: Four Years in the Making 4/03 FERC allows RTO w/limited geographic scope (“compliant ISO”) FERC mandate: explore NY/PJM/NE RTO (no resolution) 9/02 NY/NE RTO withdrawn by ISO-NE 6/99 FERC RTO NOPR 1/01 RTO NE Filing Stakeholder Process with ALJ (Boston) Stakeholder process with ALJ (DC) Extensive Stakeholder Process 7/01 FERC denies RTO NE on scope/governance 8/02 NY/NE RTO Filing 10/03 (Projected) RTO NE Filing 12/99 FERC Order 2000 New England TOs believe FERC is the most appropriate forum for resolution of remaining issues after four years of negotiations. Dates subject to verification.

  3. From ISO-NE to RTO NE – What’s Different? • Governance • Scope • 205 Rights • Transmission Maintenance • Incentives • Billing • Authority to Order Development • Long-Term Planning Stakeholder Concerns Have Had a Significant Impact on the Development of the RTO Filing: • Active discussions with NECPUC on several key items continue • RTO controls 205 rights for OATT’s terms and conditions, and market rules • RTO gains 205 rights for reliability and market efficiency concerns on rate design • Greater role for states through input from Regional State Committee, with allowances for ‘jump ball’ on cost allocation • Five-year moratorium on transmission cost allocation policy • Market-based solutions encouraged to meet regional needs, with allowance for ‘Gap RFP’ to meet immediate needs using variety of resources • Precisely detailed roles, responsibilities and accountability for every aspect • of transmission system operations

  4. Electric Bill Typical NE Residential Consumer Consumption 500/kWh month Electric Bill Electric Bill Consumption 500/kWh month Consumption 500/kWh month $60.00 Increase 4¢/month Increase 9¢/month 500 kWh/month Average rate: approx. 12¢/kWh RTO New England: Benefits Far Outweigh Costs Today 2004 2008 RTO-NE’s primary responsibility will be to impartially and seamlessly integrate and manage a fragmented energy market for the benefit of all New England consumers. • THE BENEFITS • Greater Independence • Broader Scope • Enhanced Reliability & Security • Long-Term Planning Authority • Clear authority, independent of market participants, • responsible for grid management and operation • Codification of responsibilities for RTO & market participants • Extensive and robust stakeholder process • One stop shopping for transmission services • Power system and wholesale market guardianship • Infrastructure development authority to meet regional • reliability and security needs • Regional management of power system emergencies

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