High employee turnover concerns leadership
MINNEAPOLIS — Employee churn has MISO tracking its highest-ever rate, with 130 staff exits expected by the end of the year.
“At the current pace, MISO’s year-end turnover will be between 12% [and] 13%, reflecting the highest level of regrettable turnover in MISO’s history,” MISO said in a Board Week presentation.
The grid operator said every departing employee “creates a compounding challenge based on the current labor market,” where it increases the offered salary to attract applicants and grants equity raises to existing staff to avoid triggering more exits.
Allegra Nottage, vice president of human resources, said Thursday she doesn’t expect turnover to slow in the energy industry anytime soon and said MISO’s current level of resignations is “unsustainable.”
“The unfortunate side of having a talented work force is that it becomes a recruiting pool” for other companies, Nottage said.
She said it’s difficult for MISO to compete with 30% pay increases offered by other employers and said market rates for jobs are changing on a “day-to-day basis.”
The RTO is about $6 million over budget this year due almost exclusively to higher salaries and benefits. It has spent nearly $170 million, higher than its budgeted $164 million in base expenses.
MISO director Barbara Krumsiek called the presentation unusual for an open meeting but “so necessary.”
“In many ways, we’re chasing a moving target,” she said.
2023 Budget Contains Salary Hikes
CFO Melissa Brown said MISO expects to spend $373 million in its 2023 budget, split among base operating expenses ($310 million), project investments ($37 million) and other operating expenses ($26 million).
Base operating expenses are up about 10% over 2022 due to retaining and recruiting staff and inflationary pressures on salaries, Brown said.
“MISO is a people-heavy group. That’s what drives us … Approximately 70% of our budgets is salaries,” Brown told the Advisory Committee Wednesday. She said the RTO doesn’t maintain an extraordinary amount of infrastructure but values staff’s brain power and creativity.
The grid operator plans to increase staff in 2023 to address its long-range transmission planning, processing its record generation interconnection queue, and preparing operations for a transformed generation fleet.
MISO is keeping its membership rate unchanged in 2023, maintaining the $0.45/MWh tariff revenue rate it has had in place since 2021.
“There have been some ups and downs in our budget this year, but we’re ultimately proposing a flat rate,” Brown said.
Board Will Remain Same in 2023
The board will likely look the same into 2023, with MISO advancing current board members Todd Raba, Barbara Krumsiek and H.B. “Trip” Doggett for reelection to three-year terms.
Staff counsel Andre Porter said electronic voting will soon be opened to its membership.
The monthlong board elections require a minimum 25% participation rate among the nearly 140 voting-eligible members to achieve quorum. Members can vote for, against or abstain from selecting any of the candidates. Candidates must earn a majority of supportive quorum votes to be installed.
The board also unanimously approved the membership applications of Dallas-based Leeward Renewable Energy; Steelhead Americas, a subsidiary of Danish wind turbine manufacturer Vestas; Crayhill Renewables, a Nashville-based renewables affiliate of Crayhill Capital Management; and Chicago-based solar developer Nexamp, Inc.
New Market Platform Has 2024 Finish
MISO’s market platform replacement is poised for a late 2024 finish and has not been meaningfully affected by some delays that have cropped up.
Chief Digital Officer Todd Ramey said during a Tuesday Technology Committee meeting of the board that MISO and its General Electric vendor hope to complete factory acceptance testing and delivery of the new day-ahead clearing engine by the end of the year. Staff then aims to get the clearing engine into production next year and discontinue its current mechanism by the third quarter of 2023.
The real-time market-clearing engine will not be replaced until 2025.
The grid operator began the process of swapping out its legacy market platform for the new, modular platform in 2017. The project has been affected this year by staff turnover and supply chain impediments, Ramey said.
That has forced MISO to extend parallel operations of the legacy and new modeling tools. Ramey said that undertaking will be completed by the end of this year instead of the third quarter as originally planned.
However, staff will roll out a new energy management system (EMS) for parallel operations sometime before the end of the year, as scheduled. MISO operators use the EMS to monitor and analyze the bulk electric system and fulfill the RTO’s responsibilities to NERC as reliability coordinator and balancing authority.
MISO has allocated a little more than $20 million this year for the platform replacement. Next year, it anticipates spending roughly $15 million. The full market platform replacement is expected to cost about $141 million.
