July 2017

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Did You Know - How is the Electric Grid Organized?

The Unites States does not have a single unified electric grid. Rather there are a series of RTOs (Regional Transmission Organizations) and ISOs (Independent System Operators) that control and manage the different portions of the grid. They are responsible for the transportation and flow of electricity over large regional areas across the country. These RTOs and ISOs have different operating practices, and rates and tariff structures. The seven primary organizations are:

• ISO New England
• NYISO - New York Independent System Operator
• PJM Interconnection (Pennsylvania, New Jersey, Maryland, and extends to Illinois)
• MISO - Midcontinent Independent System Operator
• SPP - Southwest Power Pool
• ERCOT - Electric Reliability Council of Texas
• CAISO - California Independent System Operator

RTOs and ISOs are formed at the direction or the recommendation of the Federal Energy Regulatory Commission (FERC). A primary reason for the establishment of these regional bodies was to open up electricity markets to deregulation, allowing retail choice for consumers. Until the RTOs were established, single local entities owned and controlled the entire generation, transmission, and distribution of power. Consumers had little to no choice as to the source of the electricity that they were buying.

There are regions of the United States where RTOs and ISOs do not exist. Much of the west and the majority of the Southeastern states do not participate in wholesale markets. The utilities in these regions interact with each other through bilateral contracts and purchasing agreements in order to comply with FERC requirements.


Chicago Taking the Lead in Green Office Buildings

In the most recent annual study published by CBRE Group Inc. and Maastricht University, a Dutch institution. 66% of the square footage of Chicago's office buildings are now LEED certified. Chicago, ranking first in the United States by percentage, is followed by San Francisco, Atlanta, Houston, and Minneapolis / St. Paul.

Chicago has incentivized office buildings to make energy sustainability the norm rather than the exception. Furthermore, Mayor Emanuel has pledged to have all city-owned buildings committed to 100% renewable energy sources by 2025.

For more details about this story, click here

Deregulated Markets Benefit Consumers

Yet another comprehensive study has shown that consumers who are offered a choice in retail electricity marketsfare far better than those who are subject to utility monopolies. The White Paper (linked below) was sponsored by the Retail Energy Supply Association and authored by Philip R. O'Connor, Ph.D., former chairman of the Illinois Commerce Commission.

Dr. O'Connor shows that in the states with deregulated and competitive energy markets, prices have trended downward. All the while, states with monopoly utility regulation have seen an 'inexorable' rise in prices.

Additional states have recently begun to more vigorously debate the merits of deregulated markets as a result of this downward trend in pricing.

For more details about this study, click here. The RESA website can be found here.

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