How Much Does Reliability Cost?
By Jim Vess
Just this month the MISO Transmission Expansion Plan 2015 (MTEP15) was approved by the Midcontinent Independent System Operator (MISO) board of directors. The plan, which represents $2.75 billion in new transmission investment, consists of 345 new projects that will support both reliability needs and congestion relief of the transmission system.
The new transmission projects in MTEP15 are divided into the following four categories:
• 90 Baseline Reliability Projects (BRP) totaling $1.2 billion. BRPs are required to meet North American Electric Reliability Corporation (NERC) reliability standards.
• 12 Generator Interconnection Projects (GIP) totaling $73.6 million. GIPs are required to reliably connect new generation to the transmission grid.
• 242 Other Projects totaling $1.38 billion. Other projects include a wide range of projects, such as those that support lower-voltage transmission systems and/or provide economic benefit, but do not meet the threshold to qualify as Market Efficiency Projects.
• The Duff-Coleman 345 kilovolt (kV) line in Southern Indiana, a Market Efficiency Project totaling $67.4 million. This project will be eligible for competitive bidding under rules established by FERC Order 1000. MISO will begin the bidding process in January 2016. This is the first MTEP competitive transmission project.
MTEP is an 18-month planning process in which MISO coordinates its member companies, regulators and neighboring transmission systems. The planning process seeks to identify projects that ensure the reliability of the transmission system, provide economic benefits, facilitate public policy objectives (meeting Renewable Portfolio Standards), and address other issues or goals identified through the stakeholder process. As the MISO region, which covers 15 states and the Canadian province of Manitoba, experiences change and growth the process looks at specific issues to ensure the region is well-positioned to meet future demand and regulatory mandates.
Since the first MTEP report in 2003, $10.5 billion in projects have been constructed in the MISO region. An additional $3.2 billion of MTEP projects are expected to go into service in 2015. There are currently $20.6 billion of approved and pending projects in various stages of design, construction, or already in-service through the MTEP15 cycle.
“These investments in the region will continue to position MISO for future challenges and changes in the industry,” John R. Bear, president and CEO of MISO said in a press release. “As our region grapples with the Clean Power Plan and a shifting generation portfolio, MISO’s transmission planning efforts are even more important. Ensuring a robust transmission system will allow us to meet these challenges in a way that protects reliability.”
A reliable transmission system doesn’t come cheap, but the investment can pay off in the long run.