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28 Energy L.J. 543 (2007)
Ensuring Consideration of the Public Interest in the Governance and Accountability of Regional Transmission Organizations

handle is hein.journals/energy28 and id is 551 raw text is: ENSURING CONSIDERATION OF THE PUBLIC INTEREST IN THE GOVERNANCE AND ACCOUNTABILITY OF REGIONAL TRANSMISSION ORGANIZATIONS By Michael H. Dworkin' & Rachel Aslin Goldwasser2 Synopsis: Regional Transmission Organizations (RTOs) have become an integral element of the Federal Energy Regulatory Commission's (FERC) encouragement of wholesale electricity markets. These organizations operate regional electricity transmission systems for two-thirds of the load in the United States. Yet years after the first RTOs were approved by the FERC, the adequacy of their governance structures and the ways in which they are held accountable for their actions are significant areas of debate and controversy. Using ISO New England (ISO-NE) as a primary example, we begin by outlining the current RTO governance structure and highlighting some pitfalls inherent in that structure. We go on to more closely question to whom RTOs are held accountable. Finding severe limitations in how the current structures protect the public interest, we outline several strategic and tactical recommendations to ensure that considerations of the public interest are reflected in RTO governance. The most important of these is a clear affirmation by the FERC that it will not approve market-based pricing for wholesale power transactions in organized markets in the absence of an RTO governance structure that is adequate to ensure that the RTOs will design, monitor, and manage such transactions to produce just and reasonable rates within the meaning of the Federal Power Act's requirements. I. Introduction ................................................................................................... 544 A . Public Interest A ccountability ........................................................... 544 B . R TO G overnance ............................................................................... 547 II. Introduction to R T O s ..................................................................................... 55 0 A. Why is Providing Efficient, Competitive Markets in Electricity D iffi cult? .......................................................................................... 550 B . W hat are R T O s? ................................................................................. 551 C . H ow to V iew an RTO ......................................................................... 554 D. The Power Dynamics of an RTO ....................................................... 558 I. Michael H. Dworkin is Professor of Law and Director of the Institute for Energy and the Environment at Vermont Law School. Professor Dworkin has been a litigator for the U.S. EPA, a management partner in an engineering firm, and a utility regulator. He was Chair of the Vermont Public Service Board from 1999 to 2005, and he chaired the National Association of Regulatory Utility Commissioners (NARUC) Committee on Energy Resources & the Environment. During this time, he was closely involved with the development of the Regional Transmission Organization for New England. Currently a non-utility Director of the Electric Power Research Institute and a Director of the Board of the American Council for an Energy Efficient Economy (ACEEE), he holds his B.A. from Middlebury College and his J.D. from Harvard Law School. 2. Rachel Aslin Goldwasser is law clerk to the Honorable John A. Woodcock, United States District Court, District of Maine. She holds her A.B. from Dartmouth College, her M.E.M. from the Yale School of Forestry and Environmental Studies, and her J.D. from Vermont Law School.

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