Terry M. Winter

1
Status of RTO Formation- CAISO Perspective -

• Terry M. Winter
• President and Chief Executive Officer
• CAISO

November 1, 2001
2
Background

• CA ISO filed at FERC for certification as an RTO
  on June 1, 2001
• CA ISO believes that it satisfies the basic
  characteristics and requirements of an RTO
• CA ISO requests that FERC recognize the need for
  California to remain a stand-alone RTO until
  dysfunctions in the California market can be
  remedied.

3

Inter-Regional Functions

• Achievable Near-term Regional Functions
• The CA ISO supports efforts to quickly establish
  the principles and structure for West-wide
• Market Monitoring
• Inter-regional or Interstate Transmission
  Planning
• OASIS (ATC and TTC)
• Scheduling Practices

4

Inter-Regional Functions

• Market Monitoring
• The CA ISO believes that, for market monitoring
  to be effective, it must be done on a coordinated
  regional basis
• The California experience - regional and
  sub-regional markets interact, providing
  opportunities for gaming and arbitrage between
  markets
• Clear and appropriate information disclosure and
  exchange arrangements can ensure local oversight

5

Inter-Regional Functions

• Inter-State Transmission Planning
• The CA ISO believes that planning for the
  high-voltage (interstate) transmission system
  must be done on a regional basis
• Supports Western Governors Association initiative
• Supports Western Electricity Coordinating Council
  coordination efforts as a necessary transition
  mechanism with three RTOs
• Path 15 - an example of TX plannings future?

6

Inter-Regional Functions

• OASIS and TX Scheduling
• The CA ISO supports the development of a single
  OASIS site where Market Participants can observe,
  reserve and obtain TX service
• ATC and TTC should be calculated on a coordinated
  regional basis
• Market Participants should be able to go to
  single OASIS node, even with three RTOs
• Transmission scheduling practices should be
  seamless across the West

7

Next Steps

• Three RTOs, One Market
• The CA ISO supports efforts to get three RTOs up
  and running in the West. Next steps
• Focus on Inter-Regional Coordination efforts
  pricing reciprocity, market monitoring, regional
  planning
• Ensure market and systems compatibility (TX
  rights, EMS)
• Develop and refine standard or compatible market
  products (FTRs, Ancillary Services)