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How SMD Helps Diminish Seams
ISO New England's implementation of SMD will further accelerate the reduction of seams between regions in the northeastern United States. The adoption of PJM market rules along with the ICAP arrangements and a market mitigation plan substantially similar to those of the New York ISO, coupled with the application of consistent scheduling rules across all its external ties, will significantly reduce the differences among the markets of the Northeast. By designing SMD in this way, seams issues will be reduced and market participants trading within the three control areas will find it easier to do business regionally.
ISO New England's SMD is consistent with the guidelines issued by the FERC and accounts for trading and operational differences between markets in the region.
What Are the Benefits?
Eliminating seams reduces trading barriers that exist between electricity markets in the Northeast and eastern Canada. For participants, the ease of conducting business across regions leads to a larger potential electricity market. This, in addition to more streamlined operations, enhances trading flexibility and choices offered to wholesale market participants, advances competition among participants, and increases the reliability of the bulk power system.
