CARMEL, Ind. — MISO doesn’t think it needs to step up cost monitoring on its ever-larger transmission projects even as some stakeholders call for tighter measures.

Speaking at a Feb. 25 cost allocation working group meeting, MISO’s Jeremiah Doner said the RTO doesn’t see a need to upend its current variance analysis process, the mechanism it uses to investigate projects that incur cost overruns or other difficulties.

“We think that the current process is designed to sufficiently monitor and track projects,” Doner told stakeholders.

MISO’s End-Use Customer sector in December asked the RTO and stakeholders to discuss transmission cost containment measures. The request coincided with MISO announcing it would investigate one long-range transmission project from its first portfolio, which experienced a 2.5-times increase in costs. (See Cost Overruns on Project in 1st LRTP Prompt MISO Analysis.)

MISO staff perform variance analyses on regionally cost-shared transmission projects that encounter schedule delays, permitting challenges, significant design changes or experience at least a 25% cost increase from original estimates. The studies are also triggered when developers find themselves unable to complete the project or if they default on the terms of their selected developer agreement.

After completing the analysis, MISO can either let a project stand, develop a mitigation plan for it, cancel it or assign it to different developers if possible. A committee of MISO employees selected by RTO executives makes calls on how to deal with such projects.

The End-Use Customer sector and the Coalition of MISO Transmission Customers have said that MISO’s 25% trigger is too high.

Some stakeholders have suggested MISO lower the current 25% cost-increase limit to around 10%. They have also said the RTO should consult with state regulators to review the cost mitigation measures it prescribes to some developers.

MISO settled on the 25% threshold 10 years ago, Doner said.

“There were stakeholders who wanted the value to be higher, there were stakeholders who wanted the value to be lower,” he said.

Zachary Callen, an economic analyst at the Illinois Commerce Commission, asked if MISO has considered notifying stakeholders about projects with up to a 24% cost overrun that might run the risk of a variance analysis.

Doner said MISO thus far hasn’t encountered too many projects that have cost overruns that come close to the 25% limit.

“There still is room for some modest enhancements,” argued attorney Ken Stark, representing MISO end-use customers. He added that the End-Use Customer sector is willing to come before the working group in April to propose some stiffer requirements to “layer on” to the existing process.

“The world has changed. The portfolios that are coming in aren’t exactly cheap,” said consultant Kavita Maini, representing MISO industrial customers. She said for a billion dollar transmission project, costs could spill over by $250,000 before MISO commits to examining them.

“That’s a lot of money. … It seems like this threshold should be much lower,” Maini said. She said she believes there’s more to do to make the variance analysis more transparent and ensure proper monitoring of projects.

Doner maintained that the process is sufficiently transparent. He said MISO staff uses the publicly available reporting that developers submit to MISO to review projects. However, he acknowledged the RTO can’t always share confidential project information.

“We think that the tools are there. We’ve been able to track costs with projects and make changes, if need be,” he said.

Although MISO so far doesn’t seem receptive to increased variance analysis activations, Doner said it plans to more clearly provide notice to stakeholders through its public planning committees when it finishes a variance analysis and develops an action plan.

MISO has completed nine variance analyses to date. For most studied projects, the RTO has either drawn up mitigation plans or let projects stand. While the grid operator has never reassigned a project developer through the analysis, it has canceled one 500-kV project due to a new right of first refusal law in Texas. (See FERC Rejects Last-ditch Effort to Save Tx Project.)