Eight utilities join Midwest ISO before deadline

By the OGJ Online Staff

HOUSTON, Mar. 2�Eight utilities submitted applications to join the nonprofit Midwest Independent Transmission System Operator, Inc. (ISO) before a Feb. 28 deadline, said James P. Torgerson, MISO chief executive.

Indianapolis Power & Light Co., Indiana Municipal Power Agency, Lincoln Electric System, Minnesota Power Co., Otter Tail Power Co., Sunflower Electric Power Corp., and UtiliCorp United Inc. applied for membership in the Midwest ISO. Another, Manitoba Hydro, intends to participate through a coordination agreement.

"The willingness of these parties to apply for membership in the Midwest ISO reflects the broad support from customers, state regulators, consumer groups, marketers, and others for the settlement in creating a seamless market for transmission throughout the Midwest,'' Torgerson said.

In a settlement proceeding held by the Federal Energy Regulatory Commission (FERC) in February, representatives of the Midwest and Alliance regional transmission organizations (RTO) reached an agreement in principal that calls for continuation of two regional transmission organizations, while establishing a single pricing structure and an inter-RTO coordination agreement that will help facilitate seamless bulk power transactions in the Midwest.

February's settlement process resulted because three Illinois companies, Illinois Power Co., Commonwealth Edison Co., and Ameren Corp., filed to leave the Midwest ISO to join the adjoining Alliance regional transmission organization (RTO). The RTO settlement agreement, which was reached last Friday, allows the three companies to complete their transfer to Alliance, but only if they meet specific conditions.

To be eligible to move power in either the Midwest ISO or the Alliance RTO under a "superregional'' tariff, an entity had to sign either organization's transmission owners' agreement by Feb. 28.

The new tariff is one component of a settlement among numerous parties reached last week. The settlement agreement, which was the product of a month of negotiations ordered by FERC is scheduled to be filed with the commission by March 19 for approval.

Under Order 2000, adopted in December 1999, FERC encouraged voluntary formation of regional transmission organizations. The federal oversight agency said larger regional organizations were needed to eliminate rate "pancaking"�the practice of billing a supplier of power several times as it passes through various control areas.

"The rationale is that if an entity that owns no generation controls transmission, all generation owners and power marketers should have equal opportunity to compete without fear of having transactions either prevented or curtailed unfairly," said Daryl Hanson, Otter Tail's director, system engineering and operations.

The Midwest ISO may evolve toward a for-profit model. Hanson said. It already allows for-profit independent transmission companies as members.