ISO/RTO Council Comments on ERO NOPR - IESO

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200510075145 Received FERC OSEC 10/07/2005 03:11:00 PM Docket# RM05-30-000Moreover, transmission facility owners and operators should not be allocated ashare of ERO costs, except to the extent they also act as load-serving entities. Facilitiesdo not exist for their own right, but to serve loads. If transmission owners and operatorswere to also be assessed, end users could face paying twice for the reliability functions ofthe ERO and the regional entities—once through charges assessed against an <strong>RTO</strong>/<strong>ISO</strong>,an ITC, or the transmission function of a vertically integrated company, and a secondtime through an assessment against their load serving entity. To avoid this potentialdouble count, end users should be assessed through their load serving entity. This wouldnot preclude, however, an <strong>ISO</strong> or <strong>RTO</strong> acting as a billing agent for ERO charges, to takeadvantage of existing settlement systems. Such settlement logistics should be left to theinvolved parties to arrange as appropriate.B. Section 38.4 – Approval of Reliability Standards1. Deference to Regional StandardsFPA section 215(d)(2) provides that the Commission is to give “due weight” tothe technical expertise of the ERO with respect to the content of North Americanreliability standards, and to the technical expertise of a regional entity formed on aninterconnection-wide basis as to the content of reliability standards applicable within thatinterconnection. 5Section 215(d)(3) provides that the ERO shall rebuttably presume thata reliability standard proposal from a regional entity formed on an interconnection-widebasis is just, reasonable, not unduly discriminatory or preferential, and in the publicinterest. The statute is silent on the deference to be afforded regional entities that5As discussed in the following section of these <strong>Comments</strong>, the statute provides thatthe Commission “shall not defer” with respect to a reliability standard’s effect oncompetition.7
200510075145 Received FERC OSEC 10/07/2005 03:11:00 PM Docket# RM05-30-000comprise less than an entire interconnection. Moreover, the statute does not require theCommission, in its review of a reliability standard, to afford either the ERO or a regionalentity formed on an interconnection-wide basis the benefit of any presumption that aproposed reliability standard meets the statutory standards.The Commission must be careful that its implementation of these provisionspromotes strong and clear reliability standards for the North American power grid, anddoes not lead to balkanization of that grid on reliability matters. The ERO’s clearcontinent-wide reliability standards should be both strong and broad—designed in thefirst place with awareness of such regional implementation issues as local gridtopography and reliance on organized markets. Regional variances in standards can thenbe targeted to legitimate regional needs, leaving any further regional or local concerns tobe addressed through implementation, and thus not end up swallowing Congress’ overallintent that there be a single international electric reliability organization promulgatingreliability standards. Neither the Commission nor the ERO should “over-read” therebuttable presumption language (which is only an evidentiary procedure) as carteblanche for creating a vastly different system of standards development and regulatoryoversight between the western and eastern interconnections. The Commission alsoshould make clear that it will respect the technical expertise of a regional entity organizedon less than an interconnection-wide basis 6 and the fact that some such regions may needto have more stringent reliability rules.6The existing regional reliability councils, whether or not formed on aninterconnection-wide basis, have considerable expertise in the specificcharacteristics of the portions of the bulk power system in their regions; and withcoordinating how operations in their region impact other operators in such region,or impact other regions in the relevant interconnection. For example, the existing8
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ISO/RTO Council Comments on ERO NOPR - IESO

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