Questions specific to a Western Interconnection ISO

1. Is an ISO the size of the Western Interconnection impossible to manage from an operational perspective?

Independence

There will be eight member classes of the ISO: transmission owners; load serving entities; generators; transmission-dependent utilities; power marketers; large retail customers; small retail customers; and state regulators. The Board of Directors will be composed of five unaffiliated members. Transmission owners will lease their transmission facilities to the ISO.

Scope and Regional Configuration

The ISO will include all transmission facilities in the Western Interconnection. Transmission owners would lease their transmission assets to the ISO.

Operational Authority

At least in the beginning, existing control areas will continue to operate. Their operation will be under the control of the ISO. Control areas would be consolidated over time. The ISO will be a Security Coordinator.

Reliability

The ISO will have the exclusive authority to implement transmission schedules. It could order re-dispatch. It will approve all scheduled outages of transmission facilities. It will report to FERC if WSCC/NAERO standards hindered achieving the ISO's objectives.

Tariff

The Western Interconnection will be divided into access zones which may or may not be contiguous with utility service territories. Annual load-based access fees would be levied to recover the costs of the transmission owner.

Congestion Management

The Western Interconnection will be divided into congestion zones. There will an annual auction of FTRs for congested interfaces. FTRs will be tradeable in a secondary market. FTRs will be relinquished to the ISO if unused and offered for sale by the ISO in the hour ahead market.

Address Parallel Flows

Yes. The ISO would develop a new system to manage loop flow in the Western Interconnection that would replace the existing WSCC loop flow mitigation scheme by using a flow-based system of rights, scheduling and congestion management.

Ancillary Services

The ISO would create a market for ancillary services and be a provider of last resort. Ancillary services would be acquired by the ISO through a bidding process. There would be price caps on ancillary services in an area until the ISO found that there was a competitive market in the area.

OASIS Administrator

Yes.

Market Power Monitoring

The ISO will establish a market monitoring committee to collect and evaluate data that may indicate an exercise of market power, but will not take action to mitigate market power, except where such market power is derived from an ISO procedure (e.g., the bidding system used for acquiring ancillary services).

Transmission Additions

The ISO will implement an interconnection-wide transmission planning process to identify where transmission additions are needed. However, the ISO will not have the authority to direct that new transmission be constructed.

Multi-state Siting Agreements

The ISO will cooperate with any multi-state siting agreements.