The ABCs of RTOs
While utilities may own their own generating stations and power lines for distributing electricity to their customers, much of the operation of these assets occurs through their participation in a regional transmission organization (RTO), sometimes called an independent system operator (ISO). RTOs operate the transmission grid over a multi-state region on behalf of utilities—ensuring greater system reliability and reducing costs. As part of this process, RTOs “dispatch” power plants to start running as electricity demand increases, and they stop the plants when demand decreases. Typically, RTOs dispatch plants based on cost (lowest cost first), regardless of where in the multi-state region they may be located. As a result, overall cost and emissions implications can be complex, and may take little account of state borders.
In a 60-minute webinar held on April 20, 2016, veteran air and utility regulators David Littell of RAP and Doug Scott of Great Plains Institute examined the evolution of RTOs, how RTOs work today, the cost and emissions implications of their operations, and how state policy decisions may affect these regional entities.