In the U.S., wholesale electricity markets are run by two kinds of nonprofit grid operators: Independent System Operators (ISOs) and Regional Transmission Organizations (RTOs). Both manage the grid and run competitive power markets, but they differ in structure and legal origin.
What Is an ISO?
An ISO is a nonprofit entity that operates the transmission grid and wholesale power markets within a single state or region, created in response to FERC Order 888 to separate grid operation from utilities that also generate power. ISOs do not own transmission lines; they operate them independently to ensure fair market access.
What Is an RTO?
An RTO does everything an ISO does, but typically spans a larger, multi-state footprint and takes on additional FERC-mandated responsibilities, including regional transmission planning and interregional coordination. Every RTO functions as an ISO, but not every ISO has been designated an RTO.
The Seven U.S. ISOs and RTOs
Seven organizations cover roughly two-thirds of U.S. electricity demand: CAISO (California ISO), ERCOT (Electric Reliability Council of Texas, an ISO operating largely outside FERC jurisdiction), ISO-NE (New England), MISO (Midcontinent ISO, an RTO), NYISO (New York), PJM Interconnection (an RTO spanning 13 states plus D.C.), and SPP (Southwest Power Pool, an RTO).
Why the Distinction Matters
For traders, utilities, and policymakers, the ISO/RTO label affects which FERC rules apply, how transmission is planned, and how neighboring regions coordinate during extreme weather or generation shortfalls. Watts & Wire covers all seven markets — see our Data Sources & Disclaimers page for where each one publishes its public market data.