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RTO New England: Building a Better Model. Presented at RTO Roundtable by William McKinnon Director, Transmission Business Development Northeast Utilities. RTO New England: Four Years in the Making. 4/03 FERC allows RTO w/limited geographic scope (“compliant ISO”).

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slide1

RTO New England: Building a Better Model

Presented at RTO Roundtable

by William McKinnon

Director, Transmission Business Development

Northeast Utilities

slide2

RTO New England: Four Years in the Making

4/03

FERC allows

RTO w/limited

geographic scope

(“compliant ISO”)

FERC mandate:

explore

NY/PJM/NE

RTO

(no resolution)

9/02

NY/NE

RTO

withdrawn

by ISO-NE

6/99

FERC

RTO

NOPR

1/01

RTO NE

Filing

Stakeholder

Process with ALJ

(Boston)

Stakeholder

process with ALJ

(DC)

Extensive

Stakeholder Process

7/01

FERC denies

RTO NE on

scope/governance

8/02

NY/NE RTO

Filing

10/03

(Projected)

RTO NE Filing

12/99

FERC

Order 2000

New England TOs believe FERC is the most appropriate forum

for resolution of remaining issues after four years of negotiations.

Dates subject to verification.

slide3

From ISO-NE to RTO NE – What’s Different?

  • Governance
  • Scope
  • 205 Rights
  • Transmission Maintenance
  • Incentives
  • Billing
  • Authority to Order Development
  • Long-Term Planning

Stakeholder Concerns Have Had a Significant Impact on the

Development of the RTO Filing:

  • Active discussions with NECPUC on several key items continue
  • RTO controls 205 rights for OATT’s terms and conditions, and market rules
  • RTO gains 205 rights for reliability and market efficiency concerns on rate design
  • Greater role for states through input from Regional State Committee,

with allowances for ‘jump ball’ on cost allocation

  • Five-year moratorium on transmission cost allocation policy
  • Market-based solutions encouraged to meet regional needs, with allowance for

‘Gap RFP’ to meet immediate needs using variety of resources

  • Precisely detailed roles, responsibilities and accountability for every aspect
  • of transmission system operations
slide4

Electric Bill

Typical NE

Residential Consumer

Consumption

500/kWh month

Electric Bill

Electric Bill

Consumption

500/kWh month

Consumption

500/kWh month

$60.00

Increase

4¢/month

Increase

9¢/month

500 kWh/month

Average rate: approx. 12¢/kWh

RTO New England: Benefits Far Outweigh Costs

Today

2004

2008

RTO-NE’s primary responsibility will be to impartially and

seamlessly integrate and manage a fragmented energy

market for the benefit of all New England consumers.

  • THE BENEFITS
  • Greater Independence
  • Broader Scope
  • Enhanced Reliability & Security
  • Long-Term Planning Authority
  • Clear authority, independent of market participants,
  • responsible for grid management and operation
  • Codification of responsibilities for RTO & market participants
  • Extensive and robust stakeholder process
  • One stop shopping for transmission services
  • Power system and wholesale market guardianship
  • Infrastructure development authority to meet regional
  • reliability and security needs
  • Regional management of power system emergencies