The great pause brought on by the novel coronavirus pandemic could have one upshot for MISO: It will likely save millions of dollars this year.
The RTO is currently 3% — or $2.6 million — under budget in base operating expenses for 2020, primarily the result of a halt in employee travel and training initiatives and lower staffing levels because of a slowdown in new hires.
“COVID has introduced quite a bit of volatility in our financials,” CFO Melissa Brown told MISO’s Board of Directors during a virtual meeting Thursday.
Reductions in utility bills and building maintenance also contributed to the savings, as have delays in work being done by third-party contractors, a product of physical distancing measures, she said.
And while it was “challenging” to conduct remote interviews with prospective MISO employees while lockdowns were at their strictest, Brown said the RTO is now back to interviewing and onboarding.
“I think it’s the shock factor that occurred during the March-April time frame,” she said. “Most of delays, we’re already seeing reversals out, and we expect them to reverse completely by the end of the year.”
Still, MISO predicts to be about $7.3 million — or 2.7% — below its base operating budget by the end of 2020. Brown cautioned the board that MISO’s year-end prediction could change as the pandemic evolves. The RTO had a $264.7 million base operating budget planned for 2020.
“There are still quite a lot of unknowns in the back end of the year,” Brown said. “We expect to continue to have a lot of variability. It could go up or down, and we don’t claim to know the future.”
Other MISO budgets have suffered larger impacts from the pandemic.
Brown said MISO’s other operating expense budget is so far $6.8 million — or 18% — below what was budgeted for 2020, as fewer FERC assessment fees roll in and the third-party studies the RTO depends on for its own engineering studies are held up. By year-end, MISO expects other operating expenses to be down nearly $16 million. And project investments so far this year are down $1.4 million, or a little more than 9% below budget, she said, though MISO expects to be back on track in spending for those investments by the end of the year.
MISO also earned $3.9 million less than it projected to make in interest so far this year.
“What we’re seeing in interest is a marked reduction on interest income,” Brown said, adding that MISO expects to make about $10 million less than it originally anticipated in interest income by the end of 2020.
However, MISO still expects to have a $150.3 million year-end cash balance, slightly higher than the $148.7 million it planned for in its 2020 budget.
