ST. PAUL, Minn. — FERC Commissioner Tony Clark told the MISO Board of Directors meeting last week that the biggest surprise in the Environmental Protection Agency’s final carbon emission rule was that it put a “bull’s-eye” over MISO and SPP, giving their states the toughest compliance targets.
Clark said he was optimistic that the electric industry will ensure reliability but that the Clean Power Plan will result in “hundreds of millions [of dollars]” in stranded generation that will be forced to retire before the end of its operating life. There’s “only expensive and really expensive” ways to comply, he said.
Claire Moeller, executive vice president of transmission and technology, said the final rule reduced MISO’s overall carbon limit, tightening caps for eight states and relaxing them for seven. “So most of the input assumptions in [MISO’s modeling based on the draft rule] were dead wrong,” he said. (See MISO: EPA Carbon Rule Will Mean ‘Multibillion Dollar’ Transmission Build-Out.)
Moeller said, however, that the modeling helped planners understand “the intersection” of the gas and electric industries and determine whether the lowest cost compliance means more gas pipelines or more electric transmission. “Unsurprisingly it’s a combination of those things,” he said.
Moeller said EPA’s two-year delay in the interim compliance targets “really didn’t take the pressure off” states because of the long lead time needed for compliance measures.
He questioned EPA’s prediction that the rule will result in a “dramatic” load reduction that will result in reduced end user bills despite the compliance costs. “Lots of people worry about that assumption,” he said to laughter from the audience.
Director Baljit “Bal” Dail agreed, noting that many consumers in MISO’s footprint struggle to pay their day-to-day bills. “The notion that they’re going to go out and upgrade their appliances [to more energy efficient models] is highly unlikely,” he said.
Moeller also criticized the “vagaries” of EPA’s modeling, which will credit existing wind turbines differently from new generators.
He said it is impossible to estimate now what the cost of the rule will be to end consumers because much will depend on how states choose to comply. Moeller noted that Arkansas has no renewable portfolio standard, and little wind power. “Will they build wind or will they retire coal and build new gas [generation]?” he asked.
He said staff will share its plan for analyzing the impact of the final rule at the October board meeting.
Board May Slow Term Limit Transition
MISO’s board is considering slowing the transition to the term limit rule it enacted in June, concerned that a rapid transition could leave it without enough “institutional knowledge.”
Chairman Judy Walsh called on the board last week to amend the rule, which limits directors to three three-year terms.
“Without some thoughtful transition, we will very shortly find ourselves with a majority of our directors who will have three years of experience or less,” Walsh said. “The implementation of term limits will work out that three directors could easily term out in the same year. So I would like to request the Governance committee to consider a transition … to keep greater institutional knowledge on the board and ideally to have only one director terming out each year.”
Corporate Governance & Strategic Planning Committee Chairman Eugene Zeltmann said the committee is already considering the request.
Directors Michael Evans and Michael Curran had expressed misgivings about the term limits at the June meeting. (See MISO Sets Term Limits for Board.)
The three-term limit already comes with a caveat: Directors may petition for a waiver allowing a single additional term upon the determinations by the board and the Governance committee “that a director’s continued service is necessary to retain his or her skills or expertise, to maintain geographic or other diversity of the board, or is otherwise in the best interest of” MISO.
In a related matter, the board discussed guidelines for the Nominating Committee process. Walsh asked for revisions to make it clear that the document “should be helpful to the Nominating Committee but not [too] prescriptive.”
Director Dail said the Nominating Committee is reviewing 29 resumes of director candidates.
TOs Make Joint Order 1000 Filing with PJM
MidAmerican Energy’s Dehn Stevens noted that MISO and its transmission owners made their most recent Order 1000 interregional compliance filing jointly with their counterparts in PJM. The filing was submitted July 31 (ER13-1943).
In 2013, MISO and PJM filed competing proposals because of disagreements. (See PJM in Standoff with MISO, NYISO on Order 1000 Filing.)
“This time around we were able to bridge the gap,” Stevens said, calling it “a pretty significant accomplishment.”
Consumers Energy Joins TO Sector
Consumers Energy, which sold off its high-voltage transmission in 2001 to what is now ITC Holdings, was approved last week as MISO’s newest member of the Transmission Owners sector.
The company sold about 5,400 miles of 345-kV and 138-kV transmission and 80 substations in Michigan’s Lower Peninsula, while retaining its radial 138-kV lines.
Jim Anderson, Consumers’ executive director of electric transmission and high-voltage engineering, said the shift in the company’s MISO membership reflected the North American Electric Reliability Corp.’s reclassification of Consumers’ 138-kV transmission as part of the Bulk Electric System (BES).
FERC approved a new BES definition, which refines the exclusions for radial facilities and local networks, in March 2014. (See FERC Refines Bulk Electric System Definition.)
In April, FERC approved Consumers’ request to reclassify as transmission 65 138-kV line segments and six substations connecting those lines to the company’s bulk power substations (ER15-910). (See Consumers Energy, Wolverine Power OK’d to Reclassify Facilities as Transmission Assets.)
Consumers had been a member of the Municipals, Cooperatives and Transmission-Dependent Utilities sector.
— Rich Heidorn Jr.
