In this filing Dr. Marija D. Ilic and Mr. Y.T. (Philip) Yoon, of M.I.T. in Cambridge, MA jointly bring forth a comprehensive proposal which they consider to be essential for the progress as the electric power industry continues to change. Dr. Ilic has been one of the most active researchers in the field worldwide, and Mr Yoon has been working under her guidance for more than five years, as a Ph.D. candidate at MIT, in the Department of Electrical Engineering and Computer Science. Jointly, they have made numerous presentations to the community on the subject of transmission provision and reliability under open access [2], [3], [6], most recently regarding the formation of Regional Transmission Organization (RTO) in New England (NE) [7]. Mr. Yoon will complete his doctoral degree at M.I.T. by the end of January 2001 and will assume a postdoctoral position at the M.I.T. Energy Laboratory following the degree completion of the next two years. His postdoctoral research studies involve working full time toward a further development of the ideas presented in his doctoral thesis [14] concerning the formation of Independent transmission company (ITC) and the development of long term transmission markets.
This filing provides a summary description of the overall vision for forming an RTO, with many technical details provided in the attached documents. The summary is attempted to give a big picture as well as many details of the necessary ingredients for forming a successful RTO; it further suggests the role of the proposed RTO design in light of the overall performance and the effect of the proposed designs on the individual entities. As it is well recognized, deregulation has brought about strong incentives (good and bad) to individual unbundled entities with their own business objectives. The ultimate challenge is to have all the pieces work toward the social welfare improvements over the longer periods of time under various uncertainties, when the individuals business operate to meet their own objectives. It is in putting these pieces together, and understanding their interplay, that market design rules and right regulation play fundamental role, which gives incentives for offering value to others at the carefully designed tariffs. It is our strong belief that, because of the overall complexity of the regulatory, economic and engineering interplay never before experienced in any other industry restructuring, this big picture must be kept in mind as particular proposals for RTOs are being evaluated.