By Amanda Durish Cook
A key MISO committee is recommending that RTO leaders sign off on a $370.2 million preliminary budget for 2018 — the largest spending package ever.
The Audit and Finance Committee of the Board of Directors on Tuesday unanimously approved the draft budget, which includes a $264.9 million base operating budget and $29.6 million in capital spending. The final budget will be presented to the full board in early December.
MISO’s total expense budget represents a 9.5% increase from 2017, while the operating budget is up 9.6%.
The RTO next year expects to collect 750 TWh of rates at an average 40 cents/MWh, earning $303.7 million, compared with this year’s projected accumulation of $279.3 million.
CFO Melissa Brown said MISO was able to partly reduce the 2018 budget estimate by $5.5 million by deferring certain technology improvements, which will allow the RTO’s information technology division to better manage a heavy workload, which will include a NERC audit, IT security improvements and a multiyear market platform replacement, in addition to dealing with day-to-day operations. The platform replacement will cost almost $22 million spread across the operating and capital budgets.
Other savings come from deferring some pseudo-tie change solutions with PJM for a year because FERC has not yet ruled on related filings, Brown said.
Alliant Energy’s Mitchell Myhre, chair of the Finance Subcommittee, said his group reviewed the budget and recommends that MISO focus on reducing noncritical work and create “efficiencies to limit cost increases going forward.”
Myhre said that MISO’s expenses usually increase 1% year-over-year, but the 2017 and 2018 budgets combined have increased by about 5% on average. He noted that MISO has promised to limit expense increases to a 1.9% compound annual growth rate from 2017 to 2021.
Next year’s spending increase will be driven primarily by employee pay increases and medical costs, new hires in MISO’s interconnection queue planning and security staffs, IT improvements, cyber and physical security improvements and the market platform replacement, Myhre said. He asked for MISO to monitor budget items stemming from the platform replacement and present them individually during budget discussions for the sake of transparency.
“I think it’s critical for our stakeholders who bear the cost that we be very vigilant about this,” Director Phyllis Currie said of spending money prudently.
