MISO CFO Melissa Brown said last week that payroll and medical benefit expenses will push the grid operator over budget through year-end.
Brown said during a Wednesday meeting of the Board of Directors’ Audit and Finance Committee that as of April, base expenses are almost 3% over budget by $2.9 million. MISO expects to spend $324.5 million in base expenses and be over budget by $14 million, or 4.5%, before the year is up.
She told board members expenses are over budget mostly because of staffing levels, employee compensation and medical benefits.
Brown said MISO originally budgeted a 6.5% vacancy rate this year, expecting the same employee turnover it has experienced since 2021. However, that rate recently dropped to 4%. She said Human Resources Director Allegra Nottage and her team are doing a good job keeping MISO adequately staffed.
“We didn’t know how successful we’d be in getting our vacancy rate turned around. It’s very difficult to prepare for,” Brown said of the anticipated continuing trend of a tight labor market or a recession. She said MISO will forecast a further decline in its vacancy rate, “bringing us closer to full employment.”
Director Robert Lurie asked whether staff should be more conservative in forecasting spending given the current financial uncertainty. Brown said MISO will analyze this year’s variables and reflect those dynamics in next year’s budget.
MISO’s project investment expenses are under budget by about $1 million (10.6%) year-to-date, driven by equipment delivery delays and limited external resources. Brown said supply chain issues continue to persist, leading to “ups and down” among the RTO’s internal projects.
Brown will deliver a second financial report to the full board in Madison, Wis., this week.
Lurie asked that going forward staff include a statement in future financial reports that MISO is complying with its investment policy. The policy is conservative in nature because it invests its members’ funds to securities backed by the U.S. government, highly rated money market investments and dollar-denominated obligations held by entities rated AAA by at least one organization.
Lurie said that because MISO manages other people’s money, it is appropriate that it reiterate that investments comply with the policy.
