Panel: Regional Transmission Organizations and Decision-Making
(Natural Resource Security, Energy and Environmental Policy)

Saturday, November 8, 2014: 8:30 AM-10:00 AM
Enchantment Ballroom C (Hyatt)

*Names in bold indicate Presenter

Panel Organizers:  David Solan, Boise State University
Panel Chairs:  David Solan, Boise State University
Discussants:  Larry Blank, New Mexico State University

Decision-Making and Design in Regional Transmission Organizations: Caiso and the Energy Imbalance Market
David Solan, Stephanie Lenhart and Natalie Nelson-Marsh, Boise State University

Integrating Wind into the Electric Grid: The Case of the Midcontinent Independent System Operator
Elizabeth Wilson and Benjamin Stafford, University of Minnesota

Rate Design Decision Making in Pjm Incorporated
Seth Blumsack and Nick Johnson, Pennsylvania State University

Building, maintaining and transforming complex infrastructure systems such as energy requires decisionmaking across multiple jurisdictions and institutions in the collective development of policies that will ensure seamless system operation. The North American electric power system is challenged to make fundamental transformations in the way that electrical energy is produced, delivered and consumed as individual states have increasingly mandated utilization of renewable sources of electricity. The integration of utility-scale intermittent or variable renewables, such as wind and solar energy, is among the most complex issues that face the electricity industry, policymakers, and stakeholders. The technical challenges due to the variability of when wind and solar resources are available are accompanied by challenges related to scheduling and dispatching generators, planning to meet future needs for electric transmission and managing its current availability, and creating restructured markets that integrate renewably generated power among regulated and unregulated entities. This panel will examine these challenges through three papers that examine different cases in the three largest Regional Transmission Organizations (RTOs): the California Independent System Operator (CAISO), PJM (the Mid-Atlantic region stretching west as far as Illinois), and the Midcontinent Independent System Operator (MISO), operating from the upper-Midwest down through Louisiana. The CAISO case study examines the design and development of the Energy Imbalance Market, whose aim is to address the variability of renewable energy by providing reciprocal services outside of its jurisdiction. Transmission planning and the very contentious issue of transmission cost allocation are addressed by the PJM case study. Finally, the MISO case study investigates how the RTO is addressing the historical curtailment of wind power through the design and implementation of Dispatchable Intermittent Resources rules, and integrating the variable wind power into wholesale energy markets. The RTOs remain an understudied area of management scholarship considering their importance in meeting energy needs as well as addressing policies such as climate change. While membership is voluntary, RTOs have the responsibility for planning and operating electric power systems and their markets over broad swaths of the country, meeting demand for about 70% of delivered electricity in the US. The role of the RTO is to plan and operate transmission systems in a non-discriminatory fashion and to broker wholesale electricity transactions between electricity generators and distributors; but the RTO itself is a not-for-profit entity that cannot own physical assets or take financial positions in wholesale or retail markets for electricity. RTOs aim to preserve reliability, yet are motivated by not only their member utilities concerns but also policymakers (e.g. economic development and climate change) when planning future rules and policies. RTOs also serve as a space where electric grid planning is evolving to create new paradigms for planning and new rules for grid operation. This space brings many constituencies together, such as state officials, utility companies (public and private), transmission owners, and environmental and consumer groups to plan the future electricity system and make decisions in regard to rules for electricity market operation.