Independent transmission company (ITC) and markets for transmission

In this paper we describe a fundamental structure for the transmission provider (TP) composed of the independent transmission company (ITC) and the system operator (SO). Under the proposed structure, the ITC and the SO are two entities working cooperatively to carry out the functions of the TP. The entities are differentiated through the ownership and the operational authority. Roughly speaking, the ITC owns the regional network, provides various services connected with the longer term (physical and financial) energy trade, and carries out the related functions including making investment decisions. The SO, on the other hand, has the operational authority over the entire network, provides many services linked to the shorter term (physical) energy trade, and carries out the associated functions including managing transmission congestion. At the minimum, there are three groups of entities and three infrastructures important for a proficient management of the electric power network. The three groups refer to the regulator, the TP composed of the ITC and the SO, and the market participants consisting of generators, loads and marketers. The three infrastructures are spot market for energy balancing, forward markets for transmission and the open access same-time information system (OASIS). This paper describes the role of TP with an emphasis on the ITC and the forward markets for transmission. It is shown that the new structure is essential for fostering the operation and planning of the electric power network by the TP with a desirable level of efficiency and reliability while supporting the regional energy markets.