ISOs have conferred significant advantages in terms of the efficiency of the American power sector. Yet by becoming free-trade zones unto themselves, they in some ways make it difficult for those outside the ISO to trade into it.
Efficient Solutions for Issues in Electricity Seams
- 1) The electricity markets of the United States operate in silos, even though many of them are physically interconnected and trade a commodity that moves at the speed of light. Electricity markets need to seek out ways to facilitate trade between them, across what experts call their “seams.”
- 2) There are “software” solutions that can make our grid more efficient, even before we spend money on additional “hardware,” like new transmission lines.
- 3) When we do need more “hardware,” we should consider innovative business models to pay for its construction, and the FERC is currently paving the way to do that.