UNITED STATES OF AMERICA
BEFORE THE

FEDERAL ENERGY REGULATORY COMMISSION

)

Settlement Intervals and Shortage)

Pricing in Markets Operated by)Docket No. RM15-24-000

Regional Transmission Organizations)

and Independent System Operators)

COMMENTS OF THE ISO/RTO COUNCIL

The ISO/RTO Council (IRC)1 respectfully submits these comments in response to the
Federal Energy Regulatory Commission’s (Commission) Notice of Proposed Rulemaking
(NOPR)2 proposing to revise its regulations to require that each regional transmission
organization (RTO) and independent system operator (ISO): 1) settle energy transactions in its
real-time markets at the same time interval it dispatches energy and settle operating reserves
transactions in its real-time markets at the same time interval it prices operating reserves; and 2)
revise its regulations to require that each RTO/ISO trigger shortage pricing for any dispatch
interval during which a shortage of energy or operating reserves occur.
The IRC supports the Commission’s goals of aligning prices with resource dispatch instructions and operating needs.  The IRC specifically supports the Commission’s proposal to settle energy transactions in its real-time markets at the same time interval it dispatches energy. The IRC also believes that these principles should apply to the interties.  The IRC respectfully

1 The IRC is comprised of the Alberta Electric System Operator (AESO), the California Independent

System Operator Corporation (CAISO), the Electric Reliability Council of Texas, Inc. (ERCOT), the Independent
Electricity System Operator (IESO), ISO New England Inc. (ISO-NE), the Midcontinent Independent System
Operator, Inc. (MISO), the New York Independent System Operator, Inc. (NYISO), PJM Interconnection, L.L.C.
(PJM) and the Southwest Power Pool, Inc. (SPP). ERCOT, AESO and IESO are not FERC-jurisdictional and are not
joining these comments.

2 Settlement Intervals and Shortage Pricing in Markets Operated by Regional Transmission Organizations and Independent System Operators, 152 FERC ¶ 61,218, 80 Fed.Reg. 58393-01(2015) (NOPR).

requests that in its final order the Commission provide sufficient flexibility so that each of the
ISO/RTOs can meet the Commission’s directives leveraging off their existing market platforms.

I.COMMENTS

A.The IRC generally supports alignment of dispatch, pricing, and settlement of

energy.

The IRC supports the Commission’s efforts towards aligning settlement and dispatch

intervals by requiring that each ISO/RTO settle energy transactions in its real-time markets at the
same time interval it dispatches energy.  The IRC agrees that where the ISO/RTOs dispatch
resources every five minutes but perform settlements based on an hourly-integrated price, a
misalignment is created between dispatch and settlement intervals that may distort the price
signals sent to resources.  Many of the ISO and RTOs have already modified or taken steps
toward modifying their systems to align their energy dispatch and settlement consistent with the
Commission’s goal in the NOPR.  The IRC agrees with the Commission that aligning settlement
intervals with energy dispatch intervals will make resource compensation more transparent by
increasing the proportion by which resources are paid through payments based on the price for
energy as opposed to being compensated through uplift.  The IRC notes that some ISOs and
RTOs will have to undertake significant settlement system upgrades in order to achieve
compliance and, as noted below, urges flexibility in implementation deadlines as a result. .
The IRC also believes the requirement to align dispatch and pricing should also apply equally to intertie transactions as it does to internal transactions.  Bifurcation of settlement
intervals between internal nodes and interties creates price discrepancies that may lead to greater
uplift on the system.

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B.The Commission’s Final Rule should provide sufficient flexibility to meet

the Final Rule requirements by leveraging existing market structures.

While the various centralized energy markets in the country regulated by the

Commission, all share the same principles of locational marginal based pricing, they are not all
identical, and all have unique features and ways in which they have met Commission directives
in the past.  In addition to these comments, the individual ISOs and RTOs will be submitting
separate comments that address more specifically their individual markets.  As the Commission
formulates its final order on this matter, it should recognize that meeting the new directives
should not force the ISO/RTOs to substantially reform their existing market structure and engage
in a major redesign.  The IRC asks that the Commission carefully consider each party’s
comments separately and consider any necessary clarifications to ensure each ISO/RTO can
readily meet the Commission’s requirements within their individual market structure.

II.CONCLUSION

WHEREFORE, the IRC respectfully asks that the Commission accept the IRC’s

comments.

Respectfully submitted,

/s/ Anna McKenna
Roger E. Collanton,

General Counsel
Anna A. McKenna,*

Assistant General Counsel,

California Independent System Operator Corporation

250 Outcropping Way
Folsom, California 95630

amckenna@caiso.com

*Designated to receive service

/s/ Carl F. Patka

Robert E. Fernandez,
General Counsel
Raymond Stalter

Director of Regulatory Affairs Carl F. Patka*

Assistant General Counsel Garrett Bissell,

Senior Attorney

New York Independent System Operator, Inc.

10 Krey Boulevard
Rensselaer, NY 12144

cpatka@nyiso.com

*Designated to receive service

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/s/ Theodore J. Paradise/s/ Craig Glazer

Raymond W. HepperCraig Glazer*

Vice President, General Counsel,Vice President-Federal Government Policy

and SecretaryRobert V. Eckenrod*

Theodore J. Paradise*Senior Counsel

Assistant General Counsel,PJM Interconnection, L.L.C.

Operations and PlanningSuite 600

ISO New England Inc.1200 G Street, N.W.

One Sullivan RoadWashington, D.C. 20005

Holyoke, Massachusetts 01040202-423-4743

tparadise@iso-ne.comCraig.Glazer@pjm.com

Robert.Eckenrod@pjm.com

*Designated to receive service

*Designated to receive service

/s/ Stephen G. Kozey/s/ Paul Suskie

Stephen G. Kozey*Paul Suskie*

Vice President, General Counsel, andSr. VP Regulatory Policy

Secretary& General Counsel

Erin M. Murphy*Mike Riley

Managing Assistant General CounselAssoc. General Counsel

Midcontinent Independent SystemSouthwest Power Pool, Inc.

Operator, Inc.201 Worthen Drive

P.O. Box 4202Little Rock, Arkansas 72223-4936

Carmel, Indiana 46082-4202psuskie@spp.org

skozey@midwestiso.org

*Designated to receive service

*Designated to receive service

Dated: November 30, 2015

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CERTIFICATE OF SERVICE

I hereby certify that I have served the foregoing document upon the parties listed on the
official service lists in the above-referenced proceedings, in accordance with the requirements of
Rule 2010 of the Commission’s Rules of Practice and Procedure (18 C.F.R. § 385.2010).

Dated at Folsom, California this 30th day of November 2015.

/s/ Anna Pascuzzo

Anna Pascuzzo