By Amanda Durish Cook
MISO has selected LS Power’s Republic Transmission to build the RTO’s first competitive transmission project.
St. Louis-based Republic and partner Big Rivers Electric, a generation and transmission cooperative in Henderson, Ky., beat out 10 other qualified developers for the Duff-Coleman 345-kV transmission project in Southern Indiana and Western Kentucky. Hoosier Energy will acquire a share of Republic in exchange for providing maintenance and operations for a segment of the project located in Indiana.
Priti Patel, regional executive for MISO North and executive director of MISO’s Competitive Transmission Administration, said Republic’s $49.8 million proposal was “the clear and decisive winner” among the 11 proposals, which ranged from $34 million to $55.7 million. MISO had estimated the project at $58.9 million. (See 11 Developers Vie for MISO Duff-Coleman Project.)
“Republic Transmission’s project proposal exhibited the best balance of high-quality design and competitive cost, best-in-class project implementation and top-tier plans for operations and maintenance,” Patel said. She said the proposal carried the highest sense of certainty, the most details, the lowest risk and a low cost. “It comes down to providing the greatest value,” Patel added. “That encompasses more than just cost.”
Republic will be required to deliver quarterly status reports to MISO. The company also must execute a binding developer agreement using commitments from its bid proposal and competitive requirements from the MISO Tariff.
“With the evaluation and selection phases of the competitive developer selection process now over, we look forward to working closely with Republic Transmission, stakeholders and the Organization of MISO States to ensure the success of this project,” said Patel.
The project, approved as part of the 2015 MISO Transmission Expansion Plan, is expected in service no later than Jan. 1, 2021. Construction includes a pair of substations and a 28.5-mile 345-kV connecting line in Southern Indiana and Western Kentucky.
‘Decisive’ Winner
MISO used four FERC-approved criteria to weigh the proposals: cost and design, project implementation, operations and maintenance and participation in the planning process.
Alongside Tuesday’s announcement, MISO published a 135-page selection report that said all competitive bidders “demonstrated the necessary breadth and scope of capabilities, and the financial wherewithal, to design, finance, construct, operate and maintain the project.” However, MISO said Republic’s proposal scored a 95 out of 100 possible points, while other proposals scored between 41 and 80 points.
Proposed route lengths varied from 28 to 36 miles. All proposals scored an ‘acceptable’ or better rating from MISO. Republic’s proposal scored a ‘best’ due to a “well-thought-out” route; “ample” right-of-way width; a specific operations-and-maintenance plan; and a “strong cost cap” with a 9.8% return on equity for the life of the project.
Brian Pederson, a senior manager in MISO’s competitive transmission unit, said the report seeks to explain the analysis behind the RTO’s selection, be transparent “within the bounds of the Tariff confidentiality provisions” and encourage future participation in the Order 1000 competitive process.
Review Begins
Pederson said MISO will convene a new Competitive Transmission Task Team reporting to the Planning Advisory Committee to suggest potential improvements and lessons learned from the first solicitation.
“In January, we want to focus on attaining stakeholder feedback,” Pederson said during MISO’s Dec. 14 Planning Advisory Committee. By mid-2017, he envisions stakeholders and MISO finalizing Tariff revisions to the competitive developer selection process.
MISO will also use 2017 to continue to refine the minimum design requirements required of competitive projects in Business Practices Manual 029. The RTO is expected to sunset its Minimum Design Requirements Task Team and funnel final design requirement changes through the Planning Subcommittee in January. Changes to BPM 029 should become effective in the spring. The new rules establish a more detailed set of ratings that projects must meet. (See “MISO Releases Minimum Requirements for Competitive Tx Projects,” MISO Planning Subcommittee Briefs.)
The RTO has also committed to reaching out to the bidders of the 10 rejected proposals to explain its decision in one-on-one meetings during January and February.
