FERC Filings
MOTION OF EPSA FOR LEAVE TO INTERVENE AND PROTEST, COMMONWEALTH EDISON CO., Docket No. EL00-25-000
III.
In this proceeding, ComEd, et al. are proposing to create an ITC that will operate under the "oversight" of the Midwest Independent System Operator (MISO). ComEd, et al. ask the Commission to find that their proposal meets the minimum requirements for an RTO, as set out in the Notice of Proposed Rulemaking (and presumably the subsequently issued Final Rule, Order No. 2000). They also ask the Commission to approve the incentive and performance-based ratemaking mechanisms contained in their proposal and to assign the ITC certain RTO functions, including, specifically, congestion management.
It is with this last request that EPSA takes issue. There has been much debate in the past year about the interrelationship between ITCs or transcos and Independent System Operators (ISOs). In the course of this debate, some have suggested that ITCs and ISOs are not competing forms of regional grid management, but rather that ITCs present an alternative form of grid ownership that can operate under the oversight of an ISO.
Conceptually, this idea has promise since ITCs can provide greater separation between transmission and generation than the current vertically integrated utility model. At least initially, ITCs will lack the regional scope necessary for RTO certification. Allowing them to operate under an ISO or RTO umbrella could address this problem. EPSA has no quarrel with this approach.
What is objectionable about the proposal now before the Commission, however, is that this ITC is asking for authority to usurp one of the most basic and fundamental roles of the RTO: congestion management. Despite the lack of regional scope presented in this proposal, ComEd, et al. is asking the Commission to allow it, not the MISO, to implement a system of locational based marginal pricing (LBMP) and financial transmission rights (FTRs) as a "principal means to manage and price congestion." This requests comes despite the fact that the MISO has yet to propose, or adopt, such a congestion management plan. In fact, a recently formed Policy Working Group within the MISO has begun working on a regional congestion management proposal.
The problem here is not with the ITC concept, nor with the concept of an ITC within an RTO, nor with LBMP and FTRs. The problem here is that the RTO, not any member, or group of members, within an RTO, must be responsible for regional congestion management. Order No. 2000 concludes "that an RTO must ensure the development and operation of market mechanisms to manage congestion. . . . [W]e will require that responsibility for operating these market mechanism reside either with the RTO itself or within another entity that is not affiliated with any market participant."(emphasis added)
The Commission will be undercutting one of the most important functions of an RTO, regional congestion management, if it permits ComEd, et al., or anyone else, to be certified as an RTO for the purpose of adopting its own congestion management system within an ISO or RTO. Unless an entity has the appropriate size and geographic scope to obtain RTO certification in its own right, whether it is an ITC or an individual transmission provider, it should not be granted RTO status for the purpose of managing congestion. Today, single transmission owners or ITCs perform many of the functions the Commission envisions RTOs assuming, such as congestion management (mainly through TLRs) or single OSIS sites. The purpose of RTOs is to have these functions performed more efficiently and effectively by a regional entity. Allowing small groups within an RTO to adopt their own congestion management systems, or to manage their own OASIS systems, do their own ATC calculations, file their own tariff proposals or plan their own system expansions will effectively undercut the entire premise of Order No. 2000.
The Commission should use this opportunity to send a clear message to ComEd, et al. that Order No. 2000 meant what it said: that ultimately, regional transmission organizations, not single transmission providers, regardless of their ownership form, must be responsible for regional congestion management.