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Enron Mail |
Jim,
As per our meeting on Jun 15 below is a list of my top 10 (6) RTO issues: Independent Board with stakeholder (advisory) board(s). Once an RTO become= s fully funded and operational it is essential that there is an independent= group of individuals responsible for making business decisions. However b= eneath this organization should be specific stakeholder groups which work o= ut details of issues to be decided upon by the Board. The advisory groups = should included at least a planning, market operations and monitoring commi= ttees. Balancing Energy / Ancillary Service Market(s). (Defining market as a plac= e for participants to conduct trading business - not commit resources as in= PJM, ISO-NE or NY and a place for the RTO to "post" requirements for ancil= lary services, etc.) The market does not have to be run directly by the RT= O but I believe, for the sake of liquidity, you need one centrally utilized= (endorsed) market available for participants to access. This would NOT pre= clude any other markets from operating in parallel. Based upon the CA expe= rience, where, once the CalPX folded, there was not a significant increase = in activity on APX. Our real time traders need a market with sufficient de= pth to be able to liquidate outstanding positions in the physical market. = Without a single balancing energy/ancillary service market operated or sanc= tioned by the RTO these markets would become disbursed and we would suffer = until the market itself sorted out which one it preferred to use. Congestion Management - The rights can either be physical or financial. Th= ere are two key elements, there needs to be some type of flow-based methodo= logy for assignment and scheduling, and there must be a form of "use-it or = lose-it" stipulation. First, the mapping of the rights to the actual use o= f the system eliminates ahead of time most of the curtailments currently be= ing experienced in the eastern interconnection. A flow-based reservation a= nd scheduling scheme, with proper information sent to the market, allows pa= rticipants to be pro-active in resolving any potential congestion either by= re-scheduling, offering counter-flows or simly accepting re-dispatch costs= . Second with no use it or lose it rule there will not be a robust seconda= ry market of unused transmission rights. All one has to do is look at the l= ack of liquidity and trading of FTR's in PJM and CA and TCCs in NY to see t= here is NO incenmtive for the holders of those rights to dispose of unused = rights or sell them to an entitiy who would find value in acquiring them. = A secondary market for transmission rights is essential for several reasons= not the least of which is initial distribution of rights to incumbents and= grandfathered contracts. If these two procedures limit the amount of avai= lable transmission on a firm basis to the market, at least with a well desi= gned secondary market this should make transmission capability available, a= t least on a short-term basis. In addition it is key that the RTO process = schedules in a timely manner and post to the marketplace unused transmissio= n capability which would be available on some type of recallable basis. Interconnection Agreement - If at all possible there should be an RTO-wide = interconnection agreement (IA) available. In DSTAR the stakeholder group h= ad reached a consensus that they should have a regional IA, however before = the TO's filed their informational filing with FERC they pulled the common = IA and plan on filing TO specific IA's. (Not being familiar with state by = state rules the possibility for a multi-state RTO to actually implement a r= egion wide IA may not be possible, but we should still promote this concept= .) Penalties - Depending upon design we need to be vigilant to biased ancillar= y service and scheduling requirements and penalties. Web Site - This may be better described as market data transparency. It wo= uld be better to be inundated with market information, as with PJM, than no= t to have information, as with the CAISO. Transparent pricing information = has NOT hurt the PJM region, in fact it has more than likely helped keep th= e markets operating as well as they have. In the case of DSTAR it would ap= pear that they should have sufficient market data posted, but as with every= thing else we need to remain vigilant.=20 I hope you find these comments useful. I'd be happy to discuss them with y= ou anytime. Kind Reagrds, Dave
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