Michigan-Ontario power PARs seen on by Q3

* Lake Erie loop flow has cost NY almost $100 mln

* Traders waiting for PARs for 10 years

* Hydro One installing equipment in Ontario for PARs

NEW YORK, May 13 (BestGrowthStock) – ITC Holdings Corp (ITC.N: ), a
power transmission company in the U.S. Midwest, this week said
the phase angle regulators, or PARS, on the Michigan-Ontario
border would be ready to enter service by the third quarter.

Specifically, ITC said it expects the PARs at the Bunce
Creek Station in Marysville, Michigan, on the Michigan-Ontario
border, to be ready for service by the third quarter.

That is a few months later than some power traders had
expected. Earlier this year, some traders said they thought the
PARs would enter service in May, before the start of the peak
summer air conditioning demand season.

The PARS are important because they will help prevent the
so-called Lake Erie loop flow, which cost the New York power
market millions of dollars a few years ago.

Loop flows occur between all interconnected transmission
systems, like New York and Ontario, as electricity follows the
path of least resistance, which is not necessarily the path the
power was scheduled to move over.

The PARs on the Michigan-Ontario border are supposed to
help the region’s grid operators stop power from flowing in an
unscheduled direction.

The Lake Erie loop flow moves power around the lake from
New York to Ontario to Michigan to Ohio to Pennsylvania and
back to New York.

In the first seven months of 2008, the New York ISO, which
operates the state power grid, estimated the loop flow around
Lake Erie cost the market almost $100 million.

The power market has been talking about the PARs for about
a decade. In 2008, the New York ISO said it had been expecting
the commissioning of four PARs on the Michigan-Ontario border
for more than three years.

The New York ISO also said in 2008 three of the four PARs
were in place and capable of operation. The fourth PAR failed
and was at that time in the process of being replaced.

In mid April, Hydro One, the transmission and distribution
owned by the Ontario province company, said it would take about
six to eight weeks to install the communications equipment
needed to enable PARs in Michigan after the province approved
of the construction plan.


While waiting for the PARs to enter service, the New York
ISO in 2008 imposed market rules to temporarily ban traders
from scheduling power flows on certain power lines to reduce
the magnitude of the Lake Erie loop flow.

Before implementing its rules, the ISO said a small group
of traders were taking advantage of the loop flow to move power
from New York to PJM via an indirect route around Lake Erie
(from New York to Ontario to Michigan to Ohio to Pennsylvania)
rather than directly from New York to Pennsylvania.

It was those transactions in part that cost the market
about $100 million during the first seven months of 2008.

PJM, the former Pennsylvania, New Jersey, and Maryland
power grid, operates the power system in 13 Mid-Atlantic and
Midwest states and the District of Columbia.

The power grid operators around Lake Erie — the New York
ISO, PJM, the Midwest ISO in Michigan and Ohio, and the
Independent Electricity System Operator (IESO) in Ontario —
with the help of the U.S. Federal Energy Regulatory Commission
are working on rules to operate and pay for the PARs.

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(Reporting by Scott DiSavino; Editing by Rebekah Kebede)

Michigan-Ontario power PARs seen on by Q3