On June 19, 2009, the National Association of State Utility Consumer Advocates (“NASUCA”) released a report that recommended changes to the governing structures of regional transmission organizations (“RTOs”) and independent system operators (“ISOs”). The report was prepared by a NASUCA special committee, and has since been adopted by resolution of NASUCA members. The recommended changes include the composition of board members, the corporate structure, and the stakeholder process. The NASUCA recommendations are designed to ensure that end-use customer interests are represented.

The NASUCA report noted that the various RTO/ISOs held between 57 and 611 meetings during 2007, and that consumers and their advocacy groups lacked the funds to actively participate in all of the meetings. This information, coupled with the U.S. Energy Information Administration conclusion that retail customers account for 40% of electricity revenue, led NASUCA to recommend the changes. “The decisions made by RTO/ISOs have a direct impact on the monthly electric bills of all retail customers…yet the perspectives and interests of retail customers are virtually unrepresented,” a NASUCA press release stated.

The NASUCA recommended changes include:

  • Require at least two seats (approximately 20 percent) on each RTO/ISO board of directors for members who have expertise and experience in representing retail customers, at least one of which has expertise with residential customers;
  • Develop a standing committee of each RTO/ISO board of directors for consumer issues;
  • Implement a department charged with investigating consumer interests into the corporate structure of each RTO/ISO, responsible for addressing and furthering consumer interests; and
  • Establish funding for use by public consumer advocates to participate in the RTO/ISO and FERC proceedings, and that will allow them to engage with consultants.

NASUCA believes the incorporation of these changes into the RTO/ISO structure will allow for the advancement of FERC Order No. 719, which noted the significance of an RTO’s “commitment and responsiveness to customers and other stakeholders, and ultimately to the consumers who benefit from and pay for electricity service.

A copy of the NASUCA report on “Model Corporate Governance for Regional Transmission Organizations and Independent Systems Operators” can be found at: http://www.nasuca.org/Model%20Corporate%20Governance%20RTO%20ISO-6-19-09.pdf.