FERC Filings
COMMENTS OF THE ELECTRIC POWER SUPPLY ASSOCIATION IN RESPONSE TO NOTICE INVITING COMMENTS ON TIMELINE AND REPORT BY THE NORTHEAST INDEPENDENT SYSTEM OPERATORS ON SEAMS RESOLUTIONS
BACKGROUND
It is important to put these current documents in perspective. The industry has been wrestling with these issues for quite some time. The initial benchmark event in the extensive effort to address seams problems was the Northeast Interregional ISO Coordination Conference held in Albany, New York on October 7th and 8th, 1999. The conference was hosted by the New York State Public Service Commission, and co-sponsored by thirteen state utility commissions and other Northeastern state agencies. Then FERC Commissioner Hebert and Commissioner Massey attended the conference; the keynote speaker was former Chairman Hoecker. Commissioner Brownell, then with the Pennsylvania PUC, also participated.
Indeed, overall, the optics of the conference provided some encouragement that a constructive effort was underway. Session topics were framed in bold terms, e.g. “discussion of the evolution of ISO coordination as restructuring of the electric industry progresses” and “explore technical issues involved in fostering greater inter-ISO coordination in both reliability and commercial transactions.” The conference concluded with a grand finale involving a group discussion among the FERC and state commissioners to review the conference presentations and “identify issues and consider some next steps to achieve greater inter-ISO coordination.”
Despite the best of intentions and notwithstanding the Commission’s actions at the conference, the subsequent effort to develop and implement a Memorandum of Understanding proved largely disappointing, falling far short of the lofty expectations coming out of the Albany conference. This event and its aftermath was an ominous indication of the difficulties ISOs would have in making the hard decisions required to resolve seams problems absent vigorous FERC direction and oversight. Accordingly, after several years of treading water following the Albany conference, on December 15, 2000, EPSA and other frustrated parties filed a joint motion at FERC requesting a technical conference on interregional coordination.
In addition to the ISOs’ inability or unwillingness to take the dramatic steps necessary to remedy seams problems, the Joint Movants noted that, due to the general nature of Function 8 in Order No. 2000, the efforts to develop RTO compliance filings due in October 2000 or January 2001 showed a blunt disregard for meaningful coordination. As we stated then, “[m]ost of the RTO proposals filed on October 16, 2000 reflect a failure either to expand geographic scope or to go beyond inchoate cooperative agreements.” Moreover, the joint filing observed that “[f]urthermore, while PJM is the only northeast ISO to file an RTO proposal to date, it is clear that the northeast MOU process has also proven to be ineffective as a means to achieving a ‘seamless trading area’ in a timely manner.”
EPSA was grateful that the Commission granted the request and conducted a technical conference on June 19, 2001. Further, EPSA appreciated the particular interest and concern that then-Commissioner Wood and other Commissioners expressed about the numerous examples provided of the inadequate progress in addressing seams problems, and the danger that significant monies will be expended on incompatible systems. Commissioner Massey even suggested that “we ought to have industry established inter-regional coordination standards by the end of the year and present them to this agency. Otherwise, I think the agency will have to do it itself.” Unfortunately, this idea was not followed-up and since the abortive NE RTO mediation last summer, this issue has been largely off the Commission’s radar.