1. What ISOs are Doing

1
NYISOs Response to FERCs RTO Order
2000 Presented by John P. Buechler Director
of Regulatory Affairs, NYISO Massachusetts
Electric Restructuring Roundtable January 29,
2001
2
RTO Characteristics Functions

Characteristics 1. Independence 2.
Scope and Regional Configuration 3.
Operational Authority 4. Short-Term
Reliability Note Bold Denotes a
Major Issue
3
RTO Characteristics Functions
Functions 1. Tariff Administration and Design
2. Congestion Management 3. Parallel Path
Flow 4. Ancillary Services 5.
OASIS 6. Market Monitoring 7.
Planning Expansion
8. Interregional Coordination Open
Architecture Note Bold Denotes a Major
Issue

4
NYISO RTO WGGeneral Approach

• Filing MUST be acceptable to FERC
• Focus on Major Issues
• Governance
• Planning
• Scope Interregional Coordination
• Objective To achieve consensus

5
RTO Working Group Process

• 12 Meetings held since August
• All stakeholder classes represented
• Initial Meetings
• Reviewed minor issues
• General Consensus
• Later Meetings
• Focus on Major Issues
• Governance/Planning/Scope
• Review of Draft Filing

6
RTO WG - Results

• Collaborative produced a joint RTO filing
• Management Committee Approved - 71
• NYISO Board Approved
• Filed with FERC on January 16th
• Joint Filing of NYISO and jurisdictional TOs
  (supported by LIPA and NYPA)

7
NYISO RTO Filing

• NYISO will satisfy all of Order 2000s RTO
  requirements, based on
• NYISOs existing characteristics bolstered by
• Proposed tariff/agreement changes to clarify its
  governance structure and reinforce Board
  authority and provide for a comprehensive
  transmission planning process
• Intensification of NYISOs interregional
  coordination efforts

8
Governance Consensus

• Highlights
• Maintain shared governance
• Maintain 205 concurrence for tariff changes
• Maintain Committee responsibilities per ISO
  Agreement
• Exigent Circumstances filing sunset provision
  extended from 120 days to 180 days, unless
• MC votes to approve the change
• FERC has approved under Section 206
• Exigent Circumstances actions do not sunset if
  MC does not vote within 180 days of filing
• MPs can require a special meeting of MC to
  address an exigent circumstances filing

9
Governance Consensus

• Highlights (contd)
• Clarification of Staff responsibilities
• Clarification that Staff authority does not
  extend to changes in policy
• Clarification that President can act under
  exigent circumstances on matters other than
  tariff changes
• President shall use best efforts to notify the
  major committee Chairs Vice Chairs in advance
• Such actions on matters otherwise assigned to a
  Committee are subject to ratification by that
  Committee

10
Transmission Planning Consensus

• Highlights
• Transmission Planning Committee a permanent
  sub-committee reporting to both BIC OC
• TPC has same membership voting as BIC OC
• Reports to both committees on policy matters and
  development of the Consolidated Transmission Plan
• Reports to OC only on application of policies
• Bring all planning functions under the TPC
• TPC will develop cost allocation criteria for
  reliability based transmission expansion
• TPC will consider incentive mechanisms for
  reliability based transmission expansion

11
Transmission Planning Consensus

• Highlights
• Consolidated Transmission Plan (CTP) will include
  all transmission facilities needed to ensure
  reliability
• CTP will include all existing and planning
  facilities, as appropriate and will evaluate
  alternatives to assure reliability
• CTP process to be coordinated with neighboring
  ISOs and state regulatory agencies
• TPC can go directly to MC with the CTP, if
  necessary to break a deadlock
• Board has final authority to approve CTP or can
  remand to the MC for modification

12
Transmission Planning Consensus

• Highlights
• TOs commit to construct Reliability Projects
  included in the CTP, provided
• TO is assured full recovery of all reasonably
  incurred costs by the appropriate regulatory
  authority
• All federal, state and local approvals are
  obtained
• All technical requirements are met for the
  expansion
• TOs retain right to expand their transmission
  facilities subject to regulatory approval/order
• TOs will allow merchant transmission, subject to
  negotiation re ownership, franchise rights, etc.

13
Scope Interregional Coordination Consensus

• Highlights
• NYISO Scope is adequate for the present
• Northeast is moving in the direction of
  establishing a virtual RTO
• Expedited initiatives announced between NYISO
  ISO-NE
• MOU process is moving to resolve seams issues
• Investigation of feasibility of Regional DAM is
  underway
• NYISO participation in NPCC/NERC provides a broad
  regional perspective

14
Joint Board Resolution Between NYISO and ISO-NE

• Executed January 16th
• Boards are committed to efficient regional
  markets
• ISOs will work together to enhance interregional
  coordination
• Objective is to reduce barriers to transactions
  between the two markets
• Complements other regional efforts
• Participation is open to other ISOs

15
NYISO/ISO-NE Joint Agreement

• Highlights
• Establish Joint Task Force to expedite seams
  issues
• Initial objectives include
• Uniform rules for Day-Ahead Markets
• Compatible schedules for inter-ISO schedules
• Reserve sharing protocols
• Uniform standards for generator interconnections
• Establish Joint Monitoring Committee
• NYISO ISO-NE Market Advisors
• MMUs to share information across ISOs
• Review assess markets, rules and procedures