Three Northeast ISOs to examine regional market

Three Northeast independent system operators have jointly issued a request for proposal for a feasibility study of a regional market for day-ahead electricity prices and schedules.

The New York Independent System Operator (ISO), ISO New England, and the Ontario Independent Electric Market Operator (IMO)agreed last year to address areas of mutual interest, especially the issue of broader and more seamless markets.

Rules for transactions often differ between regional control areas. Procedures are often different and even definitions for terms are different. The Federal Energy Regulatory Commission is encouraging formation of large regional transmission organizations in order to promote a robust regional market for electricity and eliminate the so-called "seams" between existing markets.

In addition, the three independent system operators said some market participants who operate in more than one ISO area have expressed interest in a more seamless market across the three contiguous ISO areas participating in the study.

"The study will provide a framework from which the ISOs can make solid business decisions as we move toward a more seamless marketplace," said ISO New England CEO Phillip J. Pellegrino.

The full study will address such issues as market rules, products offered, and market timing. Completion of the first of three phases is expected in March 2001. The first phase will be an analysis of various options and recommendations to be approved by the three ISOs.

The second phase will incorporate a system reliability study, executives said. And, finally, the third phase will produce specifications based on the outcome of the first two phases.

Together, the three control areas represent 90,636 Mw of electric generating capacity. The Ontario IMO is responsible for overseeing the Ontario bulk power market and will administer the competitive wholesale market for the province when it opens in 2001.

"This study will provide us with an opportunity to explore some of the international aspects of coordinating electricity markets, an area in which these markets must grow," said David Goulding, CEO of the IMO.