Open transmission access: an efficient minimal role for the ISO

Abstract

This paper presents a vision of an efficient minimal role for an independent system operator (ISO) in a competitive market for electric power. The ISO framework could be achieved during the final stages of the transition to the deregulated environment. The chief responsibility of the ISO will be to maintain system reliability at all times. To achieve this end, ISO only requires information about the expected status of the system and scheduled transactions. There is no need for the ISO to engage in transactions in the bulk power market except for comparatively small amounts of power required to maintain reliability. The ISO will coordinate the actions of various market participants using technically sound rules, classified according to time frames. These rules include procedures by which the ISO can estimate congestion costs and allow markets to efficiently ration scarce flow capability. The paper also touches upon the ISO's key role in the ancillary services market. Finally, the paper discusses the regulated transmission company, and concludes that ISO-determined congestion costs should be collected by the transmission company.