MISO’s Board of Directors last week unanimously passed a $239.1 million operating budget and a $29.9 million capital spending plan for 2017. (See “MISO Predicts Budget Increase in 2017, Introduces 5-Year Business Plan,” MISO Advisory Committee Briefs.)
The RTO had proposed a $238.6 million budget before the board’s Human Resource Committee approved a 3.5% increase in the salary budget, as recommended by human resource consulting firm Mercer.
The firm’s review of MISO’s compensation recommended a 3% increase in merit-based compensation and a 0.5% increase for employees’ promotional increases.
“We looked at things like GDP and inflation rates; we looked at anecdotal things,” Director Paul Bonavia said at the committee’s Dec. 6 meeting.
MISO CEO John Bear said he consulted with the CEOs of 11 member companies on the proposed increase.
“The range we have in mind is in line with their thinking,” Bear said. He said a key concern among the CEOs was the aging workforce and attracting younger staff.
MISO expects to exceed its $225 million 2016 operating budget by $600,000, resulting in a maximum 0.3% possible overrun.
The RTO has spent $187.9 million of the $188.6 million allowed to date, leaving less than 0.3% of the budget untouched, acting Vice President of Finance Tony Guisinger said at MISO’s Dec. 8 board meeting.
MISO anticipates between $30.5 million and $31.5 million in capital spending for the year, potentially exceeding its $31 million budget.
Guisinger also said MISO hopes to procure financing in 2018 for technology needs and said talks will begin in early 2017 on the amount it will request.
MISO to Welcome 3 New Board Members, Thanks Departing Directors
Board Chair Judy Walsh and Directors Michael Evans and Paul Feldman will exit MISO at year-end, replaced by former ERCOT CEO H.B. “Trip” Doggett, former Calvert Investments CEO Barbara Krumsiek and Todd Raba, who is leaving Twenty First Century Utilities and has served as CEO of both GridPoint and Berkshire Hathaway’s Johns Manville.
During the meeting, Senior Vice President of Compliance Services Steve Kozey confirmed election results and said all three candidates received sufficient votes in the electronic voting process. “No lapse in security; no Russian hackers,” he joked.
Former MISO Director Eugene Zeltmann called in to congratulate the trio of departing board members.
“You certainly presided over an incredible transformation of an extraordinary organization,” said Zeltmann, who left the board a year ago.
“We couldn’t have done this without you,” Walsh replied to Zeltmann.
Organization of MISO States President Sally Talberg called the three directors a “bedrock” for MISO.
“In my first meeting, we had two directors that had been thrown out, we had hostile stakeholders and cost overruns. At that time, it was a dicey deal indeed to see if MISO would succeed in becoming an organization,” Walsh said. She felt the board was being left in “very good hands,” she said.
The board also adopted two motions pertaining to itself — the elimination of post-service restrictions and a pay raise.
MISO will make a FERC filing by the end of the year to eliminate the post-service restriction and trim the pre-service restriction, leaving it with only a one-year pre-service restriction. Directors cannot have served as “a director, officer or employee of a member, user or an affiliate of a member or user engaged in the electric utility industry or participating in wholesale electricity markets” during that period.
“MISO was the only RTO in the nation with a post-service restriction,” Director Tom Rainwater said. Rainwater said MISO was having trouble attracting new board members with its two-year pre- and post-service prohibitions from utility and wholesale energy market participants. (See Board OKs Pay Hike, Change to Independence Rules.)
Rainwater said the board and MISO discovered that the Transmission Owner’s Agreement subjects “key” MISO employees to a 12-month “cooling off” period after leaving the RTO, during which they cannot have “any involvement … on behalf of any parties other than MISO with regard to any matters in which they were substantially involved when serving for, or employed by, MISO.” Bear has agreed to compile a list of employees that would be subject to a restriction for board approval.
The board also adopted a $4,000 annual pay increase for directors. Rainwater said the changes will up the yearly retainer from $55,000 to $89,000 but eliminate meeting fees for the first six scheduled board meetings and two annual strategic retreat meetings. (See Board OKs Pay Hike, Change to Independence Rules.) A typical MISO director who attends those eight meetings and serves on three committees is expected to earn about $116,000 annually.
MISO Still Undergoing FERC Audit
A little over a year later, MISO is still undergoing a FERC compliance audit, Chief Compliance Officer Joseph Gardner told the board. Gardner said it is not unusual for RTO audits to last 18 to 24 months. He said FERC staff has been on-site at MISO headquarters for two visits during the audit.
“No big concerns that I’m aware of have come up,” Gardner added.
— Amanda Durish Cook
