Independent System Operator (ISO) / Regional Transmission Organization (RTO)

An Independent System Operator is an independent, federally regulated entity that coordinates transmission across a region without discriminating between the various utilities and generators using it, and ensures the safety and reliability of the electric system in that region. A Regional Transmission Organization performs a similar function but over a larger, multi-state footprint and must meet a specific set of characteristics FERC established (following FERC Order No. 2000) to be certified as one. In practice, ISOs and RTOs both operate the day-to-day wholesale electricity markets and grid operations for the regions they cover; the distinction between the two terms is largely historical and organizational rather than functional.