By Amanda Durish Cook

ST. PAUL, Minn. — The rate of MISO’s grid transformation is at once distressingly slow and unbelievably quick, RTO members said last week in a session directed at guiding future market decisions.

And no one yet knows how high prices could go when renewables have the lion’s share of the market.

Stakeholders selected a rather broad topic for MISO’s quarterly “Hot Topic” discussion, choosing to focus on the pace of change and new directions in the markets and grid strategy during an Advisory Committee meeting Wednesday.

“This isn’t Festivus. This isn’t the airing of grievances,” moderator Kevin Gunn, an energy attorney and former chairman of the Missouri Public Service Commission, joked as he opened the discussion.

Gunn instead urged the committee to advise MISO on big-picture ways it could transform markets.

John Moore, representing the Environmental and Other Stakeholder Groups sector, called for “more active” cooperation between MISO and its participating states, saying that while the RTO appears ready to roll out more market services and products to meet demand, resource adequacy is ultimately the proprietary role of states.

“When you have high levels of renewable energy on the grid, you’re going to want to make sure you can meet the need, and folks on the distribution side of the grid will play a big role in meeting that need,” Moore said.

Arkansas Public Service Commission attorney Christina Baker reminded MISO and members that public service commissions have jurisdiction over utilities but not the data collection companies that could provide visibility into distributed resource participation.

“It’s a wider range sitting at the table than has been before,” she said.

Municipals, Cooperatives, and Transmission Dependent Utilities sector representative Chris Norton agreed that it was going to take much more communication between MISO and distribution facilities to manage supply.

The Independent Power Producers and Exempt Wholesale Generators’ Travis Stewart pointed to the poor financial outlook for merchant suppliers in MISO. He said the harsh winter in the northern footprint reinforced the need for suppliers outside the usual regulated utilities.

“Consumers really needed those electrons on the system to maintain their quality of life and safety,” Stewart said.

“One of the themes … is how fast this needs to happen,” MISO Director Nancy Lange observed, asking for members’ opinions on the necessary rate of market change.

“We need the price signals that will encourage us to build. And we’d like to see those sooner rather than later, because we’re on a 15-year planning horizon for storage builds,” Advisory Committee Chair Audrey Penner said.

Multiple members said the resource mix is changing much faster than MISO’s current transmission planning can accommodate. The IPPs’ Adam Sokolski said more transmission development is needed now.

“Markets, pricing can adapt a lot faster than transmission planning,” Sokolski said “It’s that transmission side, where we’re going to have to speed up that transmission regulatory review and execution.”

Legacy Costs

But Baker pointed out that customers all over the footprint are still paying for coal plant construction, even though coal plants are now generally deemed obsolete.

“We have to be able to balance that rates are still in the past,” Baker said. “Shiny new things are great,” she said, but she urged utilities and MISO to be mindful of the cost of new builds.

Norton agreed that “shiny new toys” saddle customers with legacy costs over multiple decades. Multiple stakeholders also said that while market pricing is very low today, rates in comparison are high because transmission and generation assets are bundled in.

Several stakeholders asked for fair market prices and incentives across all resources.

The Union of Concerned Scientists’ Sam Gomberg said that he perceived tax credits as a means for renewable resources to play catch-up with other heavily subsidized traditional resources. However, he warned MISO that absolute recovery across all resources is unattainable.

“You can’t ask a nuclear plant to follow load; you can’t ask a wind farm to be available next July 15 at 3 p.m.,” he said.

‘Catch-up’ to Corporate America

Transmission Owners sector representative Jeff Dodd said MISO and transmission owners must find a way to accelerate the study of projects in the interconnection queue.

“Everybody sees these corporate renewable goals and these companies saying, ‘We’re going to get there with or without you,’” Dodd said.

“The biggest buyer of renewable energy is Corporate America, not utilities,” Eligible End-User Customers sector representative Kevin Murray pointed out. “So, the train has left the station — we’re playing catch-up.”

Murray also noted that, the very next day, MISO’s board would decide whether to admit Google as a member in the End-User sector, which it ultimately did. (See related story, “MISO, Meet Google,” MISO Board of Directors Briefs: Sept. 18, 2019.)

To the Disruptors, Goes the … Bill?

Baker said that if utilities pivot to catering to industrial customers with renewable appetites, then rates will have to shift so that companies shoulder more costs of sometimes expensive technologies.

“Why are 60% of costs being borne by residential customers?” she asked rhetorically.

Wisconsin Public Service Commissioner Mike Huebsch added a caveat to what he dubbed a “transformative shift on the side of the angels.” He said a transformation must be tempered so reliability doesn’t suffer. He wondered aloud if “Corporate America” is as ready to accept unintended consequences of 100% renewable energy as it is willing to drive the change.

“It’s not going to be an inner-city townhouse in Milwaukee that loses heat; it should be Google that shuts down for an hour,” he said.

“The pace of change is never going to be fast enough for the threat of climate change,” Gomberg added.

TDU sector representative Kevin Van Oirschot said the conversation reminded him of an oft-repeated line of a colleague at Consumers Energy: “The rate of change will never be this fast again, and it will never be this slow again,” he said to laughter. “I think that perfectly captures this moment.”

“‘With all deliberate speed.’ Got it,” Gunn summed up the members’ conversation, quoting the infamously vague phrase in the Supreme Court’s Brown v. Board of Education decision.

A day after the talk at the board meeting, Board of Directors Chair Phyllis Currie thanked members for at least the consensus that new measures are necessary.

“We all agree that change is coming. We’ve had some deniers in the past,” she said.