Regional Transmission Organization Matters

The establishment of an accessible transmission highway throughout the U.S. has created significant challenges for electric utilities, unregulated utility subsidiaries, merchant power project developers and large electricity end-users. The ongoing formation of Independent System Operators (“ISO’s”), Transmission Service Organizations (“TRANSCO’s”), and Regional Transmission Organizations (“RTO’s”) has created a host of new ground rules and procedures for purchasing and selling power through the transmission grid. Numerous issues exist today concerning the physical and transactional aspects of transmission access by third party users. ERG staff have extensive experience in assisting clients of successfully meeting the challenges of the evolving transmission highway. In particular, ERG provides the following consulting support for transmission open-access matters:

• Independence – Evaluation of the level of independence which exists in a TRANSCO or RTO to assure competitive open access transmission supply exists.
• Structure – Analysis of proposed management and voting structure of TRANSCO’s and RTO’s to assure that no one player has undue competitive advantages.
• Market Power Evaluation - Evaluation of generation market power and determination of “must run” generation.
• Congestion Management Pricing – evaluation and analysis of competing pricing theories to determine what methodologies promote the most efficient price signals to encourage economic transmission expansion and or new generation placement.
• Congestion Management Hedging – Determination of the appropriate level and price of physical and or financial transmission rights end users or generators should hold to hedge congestion management costs.

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