3 Electricity Industry Issues We Are Watching in 2017

[vc_row][vc_column][vc_column_text]The electricity industry continues to face uncertainty about future energy policy and regulations. Fuel prices, emerging technologies and other factors further limit predictability. Yet, these factors all impact the future of electricity production and delivery – something that MISO must be able to plan for and accommodate today and in the future.

The MISO region has experienced a significant shift in the resource portfolio over the past decade:

  • In 2005, coal (76%), nuclear (13%) and gas (7%) powered the Midwest with the help of a negligible amount of renewable generation.
  • By 2016, coal had fallen below 50%; gas grew to 27% and 16 GW of installed wind produces 8% of our energy today

We expect this trend to continue as the industry further invests in lower carbon-emitting resources

As we move into the second quarter of 2017, we remain focused on our strategic objectives; Market and Grid Positioning, Serving and Growing Membership and Providing Independent Thought Leadership. Doing so enables us to continue to provide reliable least cost energy and provide increased value to our members. During this week’s Board of Directors meetings, we spent time talking specifically about the following three topics affecting MISO stakeholder right now.[/vc_column_text][vc_message message_box_color=”grey” icon_fontawesome=”fa fa-check”]

Regional Transmission Overlay Study (RTOS)

Heraclitus, the Greek philosopher once said, “Change is the only constant in life.” And, a quick view of the last ten years in the utility industry provides ample support. That is why MISO designed a transmission planning process that accommodates uncertainty. We work with stakeholders to develop potential scenarios to help us “book-end” uncertainty. These scenarios take into account current and potential issues that could affect the generation fleet for the next 15 years. We use these scenarios to come up with efficient and reliable transmission solutions.

The Regional Transmission Overlay Study (RTOS) is a multi-year, value-based planning effort. Through RTOS, we will position the transmission grid to support the changing resource mix across the MISO footprint.[/vc_message][vc_message message_box_color=”grey” icon_fontawesome=”fa fa-check”]

Transmission Cost Allocation

Over the years, we have worked alongside our stakeholders to create fair cost allocation principles – one of which is to ensure that project costs get allocated roughly commensurate with projected benefits.

The last time MISO evaluated cost allocation was in 2011 when it created the cost-allocation methodology for Multi-Value Projects, designed to support public policy drivers such as State Renewable Portfolio Standards.

Given the evolution in our industry, we are working with stakeholders to evaluate new approaches to cost allocation. Some of the drivers include:

  • Resource portfolio evolution
  • Order 1000
  • Changes in footprint size

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Market System Evaluation

MISO’s ability to execute its strategy requires having secure systems, tools and information. In 2016 we initiated a study to evaluate the security and capabilities of our critical operating system. Through this ongoing study, we are looking at:

  • Performance and resiliency
  • Business enablement
  • Optionality

Preliminary findings show that security and Critical Infrastructure Protection requirements are outpacing the capability of our current platform. We also know vendor support will diminish as attention turns to next-generation technology. While the evaluation is still underway, MISO will propose a strategy to incrementally address system needs and define the criteria and considerations that will guide the selection of a new market platform. This will enable us to maintain and grow the value we create.

[/vc_message][vc_column_text css=”.vc_custom_1490620176670{margin-top: 1px !important;border-top-width: 1px !important;padding-top: 1px !important;}”]We believe that addressing challenges head-on and collaborating on the best ways to capitalize on the opportunities inherent in our evolving industry is what enables MISO to be the most reliable, value-creating RTO. As we move through 2017 we look forward to working closely with our stakeholders on these and other emerging issues.[/vc_column_text][vc_column_text][/vc_column_text][/vc_column][/vc_row]

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