The Federal Energy Regulatory Commission approved the greater collaboration of the two power grids serving New England and New York, saving $126 million annually.
ISO New England and NYISO are not formally merging under the agreement - an idea considered and abandoned 10 years ago - but the two grids will be working more closely together to offer lower cost power to ratepayers in both regions.
The FERC's approval of the Coordinating Transaction Scheduling means the two ISOs can make more efficient use of transmission lines so lower cost power on either side of the boundary can be accessed more easily. This includes eliminating several fees that impede efficient trade between the regions.
New England is expected to save $60 million annually in the new agreement while New York saves $66 million.
The two organizations are lowering the barriers impeding power companies from getting electricity on the other side of the line. Utilities can make these cross-border purchases now, but they typically have to be done a day in advance. With the new initiative, these purchases can be made in 15 minutes.
Upgrading the software necessary to facilitate this cooperation and savings should take about 18 months.