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FERC staff report addresses possible common metrics for RTOs/ISOs and non-RTO/ISO utilities


From the September 2, 2014 issue of Public Power Daily

Originally published September 2, 2014

By Paul Ciampoli
News Director
Marking a milestone in a process that has been underway for several years, the Federal Energy Regulatory Commission staff has released a report assessing possible common metrics for evaluating the performance of independent system operators, regional transmission organizations, and utilities in regions outside ISO and RTO markets.

The report represents the culmination of five years of effort by ISOs, RTOs and utilities in regions outside ISO and RTO markets to develop performance metrics in a FERC staff-led metrics initiative. The analysis framework discussed in the report consists of 31 common metrics that measure performance for the six ISOs and RTOs and five utilities in regions outside ISO and RTO markets for the 2006-2010 period.

Prior metrics-related reports include a report submitted to Congress on performance metrics for ISOs and RTOs, and a FERC staff report on performance metrics in regions outside ISOs and RTOs.

The American Public Power Association has participated in related proceedings at FERC in recent years. For example, in May 2012 APPA joined with several other parties in submitting initial comments in response to FERC proposed metrics for utilities in regions with no RTOs or ISOs.

APPA and the other parties "have long supported the development of comprehensive performance measures to evaluate the benefits and costs of regional wholesale electricity markets," they said in their joint comments. "But the commission’s process for developing such measures has severely limited the value of the resulting metrics." APPA and the others noted at the time that they were not making specific recommendations on the proposed performance metrics for commission-regulated utilities in non-RTO regions. "Instead, these comments will explain why the entire process is fundamentally flawed." APPA and the other parties urged FERC to "start anew to develop comprehensive performance metrics for both RTO and non-RTO regions."

The August 26, 2014 report looks at which of the 31 metrics identified as candidates to be common metrics would be suitable for vetting the performance of ISOs, RTOs and utilities in regions outside ISO and RTO markets "and provides the first comprehensive review of performance metrics data," FERC staff said.

ISOs and RTOs that submitted metrics reports were: ISO New England, New York Independent System Operator, PJM Interconnection, Midcontinent Independent System Operator, Southwest Power Pool and California Independent System Operator. Utilities submitting reports were: Duke Energy, Southern Company, Louisville Gas and Electric and Kentucky Utilities, PacifiCorp and Arizona Public Service Co.

ISOs, RTOs, and utilities submitted "extensive performance metrics data, thereby providing the basis for a comprehensive performance review over the 2006–2010 review period," the August 26 report said. Commission staff said that a five-year review period was chosen to ensure that performance evaluations would be based on long-term trends and not on short-term aberrations.

The report notes that of the 31 metrics, only one metric failed to pass muster in terms of being a suitable common metric – specifically, the metric for transmission loading relief (TLR) and unscheduled flow events. TLRs or unscheduled flow events "are not used universally in the industry and the data might not be a reliable indicator of their role in managing reliability," FERC staff said. "As a possible alternative, a more suitable common metric might be a measure of the megawatts managed by all manual actions as a percentage of total megawatts subject to congestion management." Such a measure would cover the full range of manual procedures used by ISOs, RTOs and utilities and it would not count TLRs that are not implemented.

The report said that the other common metrics have a common definition across RTOs, ISOs and utilities in regions outside of RTO/ISO markets that apply to the same activities. FERC staff said that a number of the reliability metrics are based on North American Electric Reliability Corporation reliability standards that apply to all transmission providers. "Accordingly, these metrics are suitable as common metrics since they are based on common definitions that are well understood by all transmission providers and have been reported on by these entities for a number of years."

Concurrently with the issuance of the report, FERC issued a separate notice seeking public comments on the report. The notice and the report are available at FERC’s website, www.ferc.gov.
 

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