Jim,

As per our meeting on Jun 15 below is a list of my top 10 (6) RTO issues:

Independent Board with stakeholder (advisory) board(s).  Once an RTO becomes fully funded and operational it is essential that there is an independent group of individuals responsible for making business decisions.  However beneath this organization should be specific stakeholder groups which work out details of issues to be decided upon by the Board.  The advisory groups should included at least a planning, market operations and monitoring committees.
Balancing Energy / Ancillary Service Market(s).  (Defining market as a place for participants to conduct trading business - not commit resources as in PJM, ISO-NE or NY and a place for the RTO to "post" requirements for ancillary services, etc.)  The market does not have to be run directly by the RTO but I believe, for the sake of liquidity, you need one centrally utilized (endorsed) market available for participants to access. This would NOT preclude any other markets from operating in parallel.  Based upon the CA experience, where, once the CalPX folded, there was not a significant increase in activity on APX.  Our real time traders need a market with sufficient depth to be able to liquidate outstanding positions in the physical market.  Without a single balancing energy/ancillary service market operated or sanctioned by the RTO these markets would become disbursed and we would suffer until the market itself sorted out which one it preferred to use.
Congestion Management - The rights can either be physical or financial.  There are two key elements, there needs to be some type of flow-based methodology for assignment and scheduling, and there must be a form of "use-it or lose-it" stipulation.  First, the mapping of the rights to the actual use of the system eliminates ahead of time most of the curtailments currently being experienced in the eastern interconnection.  A flow-based reservation and scheduling scheme, with proper information sent to the market, allows participants to be pro-active in resolving any potential congestion either by re-scheduling, offering counter-flows or simly accepting re-dispatch costs.  Second with no use it or lose it rule there will not be a robust secondary market of unused transmission rights. All one has to do is look at the lack of liquidity and trading of FTR's in PJM and CA and TCCs in NY to see there is NO incenmtive for the holders of those rights to dispose of unused rights or sell them to an entitiy who would find value in acquiring them.  A secondary market for transmission rights is essential for several reasons not the least of which is initial distribution of rights to incumbents and grandfathered contracts.  If these two procedures limit the amount of available transmission on a firm basis to the market, at least with a well designed secondary market this should make transmission capability available, at least on a short-term basis.  In addition it is key that the RTO process schedules in a timely manner and post to the marketplace unused transmission capability which would be available on some type of recallable basis.
Interconnection Agreement - If at all possible there should be an RTO-wide interconnection agreement (IA) available.  In DSTAR the stakeholder group had reached a consensus that they should have a regional IA, however before the TO's filed their informational filing with FERC they pulled the common IA and plan on filing TO specific IA's.  (Not being familiar with state by state rules the possibility for a multi-state RTO to actually implement a region wide IA may not be possible, but we should still promote this concept.)
Penalties - Depending upon design we need to be vigilant to biased ancillary service and scheduling requirements and penalties.
Web Site - This may be better described as market data transparency.  It would be better to be inundated with market information, as with PJM, than not to have information, as with the CAISO.  Transparent pricing information has NOT hurt the PJM region, in fact it has more than likely helped keep the markets operating as well as they have.  In the case of DSTAR it would appear that they should have sufficient market data posted, but as with everything else we need to remain vigilant. 

I hope you find these comments useful.  I'd be happy to discuss them with you anytime.

Kind Reagrds,

Dave