By Amanda Durish Cook
ST. PAUL, Minn. — MISO released a five-year operations business plan last week that calls for new products, technology upgrades and a better-trained workforce.
The Board of Directors reviewed the plan at its Markets Committee meeting last week.
The plan includes “investment in forward-looking, strategic products to respond to tightening reserve margins, increasing reliance on renewables and need for increased gas-electric coordination.”
“Looking forward, the confluence of technology, market, policy, regulatory and other external drivers will accelerate the pace of change,” MISO said. “To continue to deliver and to extend [MISO’s] value proposition, we must invest in our markets, organization and technology.”
It also calls for developing existing staff and “modifying hiring criteria” to improve the organization’s strategic and commercial skills while also streamlining current processes and incorporating more automation.
MISO said the plan would cost $13 million and yield $30 million in benefits next year. The RTO expects the entire plan to cost $51 million in operating and capital expenses and deliver annual benefits of more than $100 million through 2021.
“I’m not accustomed to seeing [returns on investment] in the thousands percent, so … it makes me somewhat skeptical. We’re going to need some more information,” Director Thomas Rainwater said.
Jeff Bladen, MISO’s executive director of market design, said the annual benefits assume that the RTO can allocate the research costs and that the technology is in place in time. He said MISO would make more presentations on the plan.
“This assumes that we have the people and technology in place that allow us more flexibility,” Bladen said.
The plan includes MISO’s introduction of a separate forward capacity auction for competitive areas next year, followed by seasonal and locational capacity market changes in 2018.
The plan also sets the following goals for 2018-21:
- Replacing the 2004 “freeze date” reference point in MISO’s flowgate allocation process by 2018;
- Allocating feasible auction revenue rights and nominating infeasible long-term transmission rights in 2019;
- A multiday financial commitments market, a multiyear financial transmission rights auction and a short-term capacity reserve market by 2020; and
- A special pricing structure for voltage and local reliability (VLR) commitments and a virtual spread market product by 2021.
Among the benefits cited by MISO are a reduced likelihood of outages; more capacity availability; improved reliability; improved congestion hedging; reduced production costs; and more efficient real-time interchange and better price convergence with its neighbors.
Independent Market Monitor David Patton said it would be helpful if MISO designed more flexible software so entirely new code isn’t needed every time the RTO makes a market change.
