# Presentation: 359441

## RTO Benefits Quantified

- April 22, 2000

**Notes:**
Perhaps a better title for this presentation would be our attempts to quantify some of the benefits of forming an RTO.

## Studies Performed

- Environmental Assessment for FERC Order 2000 ($2.4 billion nation wide) (EA, available at (www.ferc.fed.us )
- DOE Analysis for the Comprehensive Electricity Competition Act ($20 - $32 billion nation wide)  (The study, DOE/PO-0059, is available at _[www.doe.](http://www.doe.gov/news/release99/maypr/pr99124.htm)__[gov](http://www.doe.gov/news/release99/maypr/pr99124.htm)__[/news/release99/](http://www.doe.gov/news/release99/maypr/pr99124.htm)__[maypr](http://www.doe.gov/news/release99/maypr/pr99124.htm)__[/pr99124.](http://www.doe.gov/news/release99/maypr/pr99124.htm)__[htm](http://www.doe.gov/news/release99/maypr/pr99124.htm)_ )
- IndeGO Benefit Analysis ($100 million Northwest Benefit)
- Analysis of Removing Rate Pancakes Using Aurora Model(amount to be determined)

**Notes:**
We are not the only ones who have been trying to quantify the benefits of forming an RTO.   These are three other studies I know about.

I don’t want to take the time to discuss these studies here, but just to make you aware of them.  I can give you  a reference where to find these studies if you want to read them.

The EA studies three scenarios:
Transmission Efficiency, Generation Efficiency, New Entry.  WSCC benefit was estimated to be $400 - $425 million/yr.  It was not possible to determine what would be the NW share

DOE study estimated a price decrease from $41.5 to $39.2/MWh in 2000, increase $39.6 to 40.5/MWh in 2005, decrease $38.8 to $38.4/MWh in 2010, and increase $37.3 to $38.9 /MWh in 2015.  Assuming 10% discount, and average NW load of 44,000 MW you get around $200 milllion/yr benefit.

## Potential Benefits

- Better ATC estimates
- Effective management of parallel paths
- Increased coordination between separate state regulatory agencies
- Facilitated tradable transmission rights
***Elimination of rate pancakes***
- Improved congestion management
- Reduced transaction costs
- Larger regional market with access to more potential suppliers
- Improved market performance
- Improved grid reliability

**Notes:**
The benefit analysis group produced a matrix of potential benefits.  This is not an exhaustive list.  I just wanted to show you we are only trying to quantify one of the benefits.  Most of them are to hard to quantify.

## RTO Benefit Analysis Group

**Work Group**
- Amy Blauman - FERC
- Cherl Speer - BPA TBL
- Coe Hutchison - Snohomish PUD
- Geoff Carr - NRU
- John Leland - MPC
- Kevin O’Meara - PPC
- Kristien Bartlett - BPA PBL
- Larry Nordell - Mont. DEQ
- Lon Peters - PGP
- Margaret Pedersen - BPA PBL
- Phil Carver - ODOE
- Vickie VanZandt - BPA TBL

**Focus Group**
- Audrey Perino - BPA PBL
- Dennis Phillips - BPA PBL
- Jeff King - NWPPC
- Kurt Granat - PacifiCorp
- Linc Wolverton - ICNU
- Matt Staneff - Snohomish PUD
- Ray Bliven - RCS for DSI’s
- Rob Anderson - BPA PBL
- Robert Petty - BPA PBL
- Warren Winter - EPIS
- Lee Barney - EPIS
- Ned Lesnick - APSC
- Don Matheson - BPA TBL

**Notes:**
You can see here that we got together some of the finest analysts in the industry in our focus group.  One conclusion we could all agree on is that it is really difficult to quantify the benefits.

In all seriousness, I want to thank the analysts and their respective organizations for letting them participate in this study.

Introduce Ray to discuss where we are with the study.