MISO announced last week that it saved its membership roughly $5 billion in 2023 by providing a resource sharing pool for utilities.
Most of the estimated $3.9 billion to $5.8 billion in savings is derived from MISO members having to maintain fewer grid assets to meet peak demand versus operating as isolated utilities; it includes management of shared capacity, demand response and economical renewable generation dispatch.
MISO said 2023 savings also stem from more efficient use of members’ existing grid assets through its energy and ancillary service markets, its reliable system management and its FERC and NERC compliance activities on behalf of members.
MISO estimates the value it provides annually and publishes it under its Value Proposition.
The RTO said its total benefit-to-cost ratio was 15:1 last year, up from 12:1 in 2022. Last year, MISO said it saved members $4 billion in 2022. (See MISO Says 2022 Value Proposition Tops $4B.)
MISO said despite inflation, it expects the value of its markets and planning efficiencies to rise in coming years because it will help members navigate a “hypercomplex” system dotted with more intermittent energy sources. By 2030, the RTO said single-year benefits could conservatively range between $4.3 billion and $5.8 billion and by 2040, they could nearly triple to between $11.6 billion and $14.3 billion.
“Although costs may continue to increase due to the current environment, MISO expects these costs to remain a small fraction of the benefits provided now and in the future,” MISO said, pointing out that it holds its cost of membership at or below inflation.
MISO estimates that since 2007, it has saved members more than $45 billion. The grid operator said the annual benefits it delivers have increased significantly from about $600 million in 2007.
MISO said the more substantial savings this year can be attributed to its members’ resource capacity sharing at anywhere from $2.5 billion to $4.1 billion; savings achieved through the RTO’s energy and ancillary service markets at $795 million to $878 million; and integrating renewable energy into planning at $402 million to $472 million.
MISO’s newest value proposition comes as multiple organizations are voicing concerns that consumers aren’t realizing the full potential of possible benefits in MISO South.
Center-right think tank R Street Institute last week said MISO South has a pattern of safeguarding its transmission constraints, resulting in utility-owned power plants that are insulated from competition with lower-cost resources.
MISO South suffers from “overcapitalizing self-built generation and transmission … the opposite of what regional markets are supposed to accomplish,” R Street said.
Renewables watchdog organization Energy and Policy Institute has voiced similar concerns. Both have cited a working paper from the National Bureau of Economic Research, concluding that a more integrated MISO South grid would have dropped Entergy Arkansas’ and Entergy Louisiana’s net revenues by a combined $930 million in 2022.
