FERC last week gave New York utilities a conditional go-ahead tocreate the New York Independent System Operator (NYISO), making itthe fourth ISO that the Commission has approved so far.
“From a market perspective…this is hopefully the beginning ofthe evolution of the bulk power environment in that state and inthe Northeast,” said Chairman James Hoecker. The order “moves thecompetitive flag further up the pool…”
He noted the proposal for the ISO was in “many respects”preliminary, and that the ISO wouldn’t begin operation immediately.Moreover, Hoecker pointed out that it was a single-state ISO, whichcarried with it “inherent problems” and certain “limitations”because it had the potential to favor in-state market participants.
The proposal by the New York utilities called for the formationof two additional entities: a New York State Reliability Council(NYSRC) to develop bulk power reliability standards and a New YorkPower Exchange [ER97-1523].
Commissioner William Massey voted in favor of the order, butcited concerns over the issue of the proposed structure of theNYSRC. “I continue to have some concern that there is potential forthe transmission owners to dominate this council and perhaps theISO as well.”
He said he supported the order for three reasons: 1) the NewYork ISO is headed by a board of directors that is independent ofany industry segment; 2) the board of directors has the authorityto immediately suspend the effectiveness of any reliability rulesthat it objects to; and 3) any disputes involving the NYSRC and theNew York ISO that affect matters subject to FERC jurisdiction underthe Federal Power Act must be brought to the Commission.
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