By Amanda Durish Cook

INDIANAPOLIS — MISO’s multiyear effort to replace its market platform will likely come in slightly over budget and is at risk of delay because of project snags with vendor General Electric, the RTO’s Board of Directors learned this week.

MISO now expects it will fully migrate to the new modular market platform by 2024, about a year later than it initially projected in 2017. The project’s cost is predicted to increase from $130 million to just under $134 million. (See MISO Makes Case for $130M Market Platform Upgrade.)

The platform replacement was discussed in multiple committee meetings during MISO Board Week.

Todd Ramey, MISO vice president of market system enhancements, said current platform vendor General Electric reported a “significant increase in the work requirement” in early May. Kevin Caringer, executive director of MISO’s IT team, said the RTO recently determined that GE was “too optimistic” in its original timeline, especially concerning estimates on the complex software needed to clear the day-ahead market. He acknowledged that GE got off to a “slow start” in recruiting and hiring staff for the project in 2017 and estimated the company is about five or six months behind schedule.

“We did express our disappointment” in response to GE’s proposed timeline, Caringer said, adding that MISO is working with PJM and ISO-NE to consider a counterproposal to GE’s timeline. The modular platform’s design is being jointly developed with those RTOs, which also use GE-designed platforms. (See MISO Sets Target for Market Platform Upgrade Decision.)

Although MISO executives said the RTO will likely have to adjust timelines for the remainder of the project, they maintain the overall replacement effort remains “generally on target.”

Sunk Costs

A separate third-party vendor was this year expected to deliver a development and testing platform to evaluate new components from GE. MISO now says that plan “is at risk of minor delays beyond July 31 due to vendor negotiations and lead time needed.”

Caringer said he thought MISO could meet its self-imposed 2018 deadline on the testing platform, but he added the RTO “used up a lot of [its timeline] flexibility in negotiations” with the third-party vendor.

Director Baljit Dail pointed out that MISO’s original $130 million budget provides for an additional 20% in contingency funds for unforeseen expenses.

“In the event that things happen — like they’re happening now — we have that buffer,” Dail said.

Director Theresa Wise asked how much in sunk costs MISO would risk if it decided to switch vendors at this point. Executives estimated the RTO has so far spent $2 million to $3 million with GE on developing the platform.

Soon after the question, MISO lawyers said that any discussion on alternative plans should be saved for closed session. Multiple directors responded that they would reserve more specific questions about vendor performance for a closed meeting.

Dail later reported that the board had a robust, nonpublic discussion on GE’s performance.

“General Electric’s woes are being well publicized; they’ve recently dropped out of the Dow Jones. We need to send a strong message to GE and its management because they are critical in this path. … I think we’re all very concerned, and I think we need to send a strong message that they need to step up their game,” Dail said during a June 21 board meeting.

“Could you convey at least one director’s disappointment … in the primary vendor?” Director Thomas Rainwater asked MISO executives during the same meeting.

Board Chairman Michael Curran said the situation was not unlike the adjustments made while developing transmission projects.

“You think you can understand what that vendor can do, you think you have a plan, but once you break ground, shifts may occur. They’re a natural part of the process, and we look forward to you managing it well,” Curran told executives at the end of the week.

MISO reported it is ahead of schedule on at least one aspect of the platform replacement: the hiring of extra staff for the project is occurring earlier than expected.

Caringer explained that the board previously expressed concern that skill shortages might cause delays in hiring technical talent. “While this risk is real, MISO has been able to attract the right skills so far, although this will continue to be a challenge.”

Limited Improvements for Old Platform

MISO reported again that its existing platform and new FERC directives are restricting which market improvements it can undertake.

Executive Director of Market Development Jeff Bladen said about a third of projects under the RTO’s Market Roadmap cannot be implemented because the existing market platform cannot manage the complexity required for the improvements.

However, MISO said it would complete at least two projects on its legacy computer system: 1) the creation of a short capacity reserve market by early 2020 that can deliver reserves within 30 minutes (a Market Roadmap item); and 2) compulsory compliance with FERC Order 841 to create a participation model for energy storage by late 2019.

MISO said other market system-dependent changes on the Market Roadmap will be deferred until the new platform can accommodate them. The deferral includes the plan to create a more sophisticated model that can mimic different combinations of combined cycle units and their dependencies. The project had previously been planned for implementation on the legacy system.

Bladen also explained MISO is not currently planning to implement an integration model for distributed energy resources on the legacy system. He said staff have been in contact with FERC since an April technical conference to explain that the RTO’s footprint doesn’t contain enough growth in DERs to warrant a significant rule change just yet. MISO will be able to transition technology platforms before the need for DER rules emerges, he said.

Dail thanked MISO for the analysis. “This is a very, very complex needle that we’re trying to thread,” he said of undertaking improvements as the platform replacement unfolds.

“It’s almost like there’s a new criteria [for market projects]: impacts to the legacy platform,” Curran said.

MISO President Clair Moeller agreed that it is a balancing act to select market design improvements while not “distracting from the market system enhancement.”

Meeting with Members’ CIOs

MISO has also begun holding biannual nonpublic meetings with member companies’ chief information officers to discuss cybersecurity, NERC critical infrastructure protection and adaptation to the new platform, among other technology issues.

MISO Chief Information Officer Keri Glitch said CIOs and chief information security officers from nine member companies attended a second meeting in St. Paul, Minn., in mid-May.

Glitch said MISO will hold another meeting of the group, now called the CIO/CISO Technology and Security Advisory Council, in St. Louis sometime in November.