In addition to the governance changes Lynne suggests, wouldn't IOU RTO membership also need to be mandatory in order to "quarantine the monopoly"? Haven't there have been instances where simply by an IOU proposing to leave an RTO, new transmission lines have been prevented from being built?
Robin, that opens a Pandora's Box! A default rule of "you have to join the CJV to get market access" will essentially have that effect. I'd like to see more discussion and analysis of these types of questions and scenario analyses of their implications.
Thanks for your thoughtful response! Um, I can't resist opening "the Box" a little wider:
Above you said: "A default rule of 'you have to join the CJV to get market access' will essentially have that effect [of incenting IOU's to joing CJV's]." This makes logical sense to me, although this makes me wonder about the political feasibility of CJV's [e.g. many state legislatures have adopted the competition-unfriendly "ROFR's".] Are there any examples of real-life CJV's, and if yes, briefly what was the political coalition that facilitated their adoption?
One more question: If an IOU faces the choice of joining multiple CJV's, might they join the one that brings about less consumer benefits? [I'm thinking of the example Aneil Kovvali & Josh Macey point out in "Hidden Value Transfers"(@43): When Entergy, under investigation by DOJ, promised to join an RTO, Entergy joined MISO, and not SPP - where SPP was the RTO in which Entergy had more connection.]
In addition to the governance changes Lynne suggests, wouldn't IOU RTO membership also need to be mandatory in order to "quarantine the monopoly"? Haven't there have been instances where simply by an IOU proposing to leave an RTO, new transmission lines have been prevented from being built?
Robin, that opens a Pandora's Box! A default rule of "you have to join the CJV to get market access" will essentially have that effect. I'd like to see more discussion and analysis of these types of questions and scenario analyses of their implications.
Lynne,
Thanks for your thoughtful response! Um, I can't resist opening "the Box" a little wider:
Above you said: "A default rule of 'you have to join the CJV to get market access' will essentially have that effect [of incenting IOU's to joing CJV's]." This makes logical sense to me, although this makes me wonder about the political feasibility of CJV's [e.g. many state legislatures have adopted the competition-unfriendly "ROFR's".] Are there any examples of real-life CJV's, and if yes, briefly what was the political coalition that facilitated their adoption?
One more question: If an IOU faces the choice of joining multiple CJV's, might they join the one that brings about less consumer benefits? [I'm thinking of the example Aneil Kovvali & Josh Macey point out in "Hidden Value Transfers"(@43): When Entergy, under investigation by DOJ, promised to join an RTO, Entergy joined MISO, and not SPP - where SPP was the RTO in which Entergy had more connection.]