What is a regional transmission organization?
The transmission system is the nationwide infrastructure network that moves electricity from generating plants to large substations. This high-voltage system is like an electricity interstate, moving large amounts of power across the country.
RTOs are non-profit organizations designed to ensure open and nondiscriminatory access to transmission systems for all entities that need access to large amounts of electricity. They provide an independent platform for efficient regional energy markets, and there are several of them across the U.S. The Federal Energy Regulatory Commission offers some brief information about each of them.
Entergy customers are part of the Midcontinent Independent System Operator RTO. MISO works across 15 states in the Midwest and the South, extending from Michigan and Indiana to Montana, and from the Canadian border to Louisiana and Mississippi. MISO also serves as the reliability coordinator for additional systems outside of this market area, primarily to the north and northwest of its market footprint.
What does an RTO do?
RTOs, such as MISO, monitor, coordinate and control transmission systems, often across multiple states. They work to enable the reliable delivery of low-cost energy through the efficient coordination of all member generating resources available to serve customers, enhance and maintain system reliability, and coordinate regional investment planning on the transmission system. On a day-to-day basis, the grid operators at RTOs do the very complex work of balancing supply and demand for energy on the transmission grid in real time, but RTOs are not responsible for building generation or transmission.
Does an RTO make money? How are RTOs funded?
RTOs are non-profit organizations. Entergy’s RTO, MISO, produces an annual operating and capital budget. MISO's Board of Directors reviews and approves this budget each year.
Who does an RTO answer to? Who has oversight over them?
In the mid-90s, the Federal Energy Regulatory Commission began issuing orders (888, 889, 2000) to promote competition in the wholesale electric market. These orders eventually led to the establishment of RTOs. As such, RTOs are regulated by the FERC, not by state public service commissions.
Must I (or the electric company that serves me) belong to an RTO?
No. Membership in an RTO is voluntary. However, membership often results in customer cost savings. For example, during the first five years of Entergy’s membership in MISO (from 2014-2018), our utility customers saved approximately $1.3 billion on their electric bills. And, from 2014 through 2020 savings for customers have amounted to $1.78 billion.
How does an RTO make decisions about activity on the grid and calls for conservation?
Grid operators at RTOs are managing supply and demand on the transmission grid in real time. To do that work effectively, a number of data points are measured: historical demand on the grid for the time of year, projected load for each hour of each day, weather and temperature forecasts, available generation, contingencies if a source of generation or transmission unexpectedly goes out of service, and other factors. Grid operators also work to maintain required headroom on the transmission system to ensure that each line and piece of equipment can carry the needed supply of electricity safely and reliably.
When these data points add up to a potential demand for energy that the system cannot safely meet, grid operators will require utility members to call for conservation, asking consumers to voluntarily reduce their electricity usage.
RTOs also have other measures they may take to try and overcome a power shortfall, such as importing more power from other regions of the country or tapping into emergency reserves.
How does an RTO make decisions about activity on the grid and forced outages?
When the demand for electricity exceeds supply, and no other measures are available, RTOs will require utility members to initiate targeted forced outages to prevent longer, more widespread outages and catastrophic damage to the entire system. This step, which is only used as a last resort, is called “load shedding.” Several factors can lead to load shedding, including extreme weather, increased demand, unplanned plant outages, transmission constraints, unavailability of purchased power or a combination of these situations.
How quickly must these decisions be carried out, and why?
Load shedding is implemented as a last resort and requires immediate action to protect the energy-delivery system from catastrophic damage. For example, when Entergy receives the order to execute from MISO, our customer service teams begin the process of alerting customers. However, outages follow quickly and often before notifications can be made.
An order for a forced outage may come at any time, day or night. Utility RTO members are provided little notice and must comply with the order from MISO to prevent longer, widespread uncontrolled outages that could extend for weeks and even months.