The Board of Directors of ISO New England Inc., Holyoke, Massachusetts, U.S., last week decided to move ahead with the creation of a Regional Transmission Organization (RTO) for New England, and plans to file a joint proposal with the New England Transmission Owners at the Federal Energy Regulatory Commission (FERC) by the end of October. Upon the request of the New England Conference of Public Utilities Commissioners, the Board agreed to move the date of the filing from mid-October to a tentative date of Oct. 31, 2003. The proposal reflects significant input from all market participants.

“The creation of an RTO for New England will strengthen the independent oversight of the region’s bulk power system and wholesale electricity marketplace, thus assuring for power system reliability and a competitive wholesale market for the region’s consumers and its economy,” said Gordon van Welie, President and CEO of ISO New England Inc.

“These long-term benefits far outweigh the objections raised last week by the Attorneys General and the lack of majority support for this proposal from the New England Power Pool,” stated van Welie. “The objections by the Attorneys General were based on faulty assumptions because the RTO proposal does not authorize any financial incentives for transmission companies. Therefore, the RTO proposal will not result in ‘automatic rate increases.’” Transmission companies will be required to file separate requests with the FERC for approval for any rate change.

According to William W. Berry, Chairman of ISO New England’s Board of Directors, a truly competitive wholesale electricity market cannot be managed by those with a financial interest in the region’s marketplace. “An RTO will provide clear, operational control of the power system and enhanced authority over the development and implementation of market rules. An independent entity, without a financial stake in any sector or segment of the market, is much better positioned to make impartial decisions concerning the region’s power system and wholesale marketplace. This change is of paramount importance to the objective of protecting the interests of New England consumers.”

Berry continued: “Experience tells us that a single point of control is essential to effectively maintain reliability. The areas of the country most affected by the recent Northeast Blackout had multiple control centers and suffered from a lack of coordination and quick decision-making. The value of reliable electric service may be difficult to quantify with precision, but disruptions come at a great cost to government, business and residential consumers. An RTO will also ensure that there is always – and only – one set of hands on the wheel operating the system.”