IT Awaits Standard Market Design Criteria

There's a regulatory movement afoot that could significantly impact IT project prioritization by utilities in 2003 and beyond.

In late July, the Federal Energy Regulatory Commission (FERC) announced a series of sweeping changes to the wholesale electricity market aimed at fostering competition, building more efficient transmission systems, improving reliability, creating more customer options and reducing costs.

Although several independent system operators (ISO) have cropped up to form regional wholesale electricity markets over the past decade of industry deregulation, FERC is trying to create a more competitive national market for wholesale electricity under the so-called Standard Market Design.

At present, ISOs in areas such as California, New York, New England and the mid-Atlantic region are upgrading their IT infrastructures with real-time information systems "to manage real-time markets and transactions for pricing power and transmission," said Jim Walker, an analyst at Forrester Research Inc. Under the Standard Market Design, utilities will have to interconnect their generation, transmission and distribution systems to ensure the smooth flow of power from generating stations to consumers across geographies, he said.

FERC will be gathering feedback from industry participants through mid-October. In December, it's expected to issue a ruling that will include data, software and cybersecurity provisions. Under the current FERC proposal, public utilities that own, operate or control interstate transmission facilities will have to file an implementation plan that complies with the regulations by July 31, 2003.

However PG&E CIO Roger Gray said if FERC ordered "fundamentally different business processes" than what's in place under the California ISO, "that would have a huge business impact."

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