By Chris O’Malley

MISO planners who just completed the third phase of a study on the Clean Power Plan said last week that a “multibillion dollar” transmission build-out will be necessary in almost every compliance scenario they’ve anticipated.

“Our final rule analysis will look to characterize the amount of that and the scope of it and what needs to be done. But we definitely see a big impact coming to the MISO system,” Jordan Bakke, senior policy studies engineer at MISO, told the Planning Advisory Committee.

The estimated costs for transmission expansion to meet compliance could be up to $10.8 billion in net present value over 20 years, according to the study.

“Transmission expansion will be needed to mitigate reliability impacts as well as economic congestion impacts of compliance. And a lot of this is driven by the level of coal plant retirements,” Bakke added.

The study also agreed with those by PJM and SPP in concluding that regional compliance with the Environmental Protection Agency’s carbon emission rule will be more cost-effective than if states go it alone.

MISO’s study concludes that a regional approach — including MISO, SPP, PJM, NYISO, the Tennessee Valley Authority, the Midwest Reliability Organization and the SERC Reliability Corp. in the Southeast — will save $4 billion to $11 billion in net present value over 20 years versus individual state compliance.

A sub-regional approach — through MISO’s North, Central and South areas — would save $2.5 billion to $11.5 billion over state compliance.

Coal Retirement, Transmission Needs Still Fuzzy

Planners said they won’t know how many plants will retire until they get a better read of the final EPA rule and get more feedback from stakeholders.

The analysis looked at five compliance scenarios, including increased cycling of coal units and higher utilization of combined-cycle units and combustion turbines.

The location of new gas and renewable generation will pose infrastructure challenges. Some of the new gas generation units, for example, will be located near existing gas pipelines but will be farther out from the existing transmission system. Generation will be coming from different parts of the system, “parts that the transmission system historically was not designed to fully deliver,” Bakke said.

The study found that the cost of adding electric and gas infrastructure for new or converted gas generators would be comparable regardless of the siting assumptions.

The study, which took more than a year, looked at candidates to relieve congestion identified in the draft rule analysis. In June, 107 congested areas were identified for potential economic transmission expansion. In July, that list was narrowed to 34 potential transmission projects related to the Clean Power Plan.

“This creates a first step,” Bakke said, adding that more potential transmission projects resulting from the rule will need to be reviewed.

Regional Approach More Cost-Effective

Another outcome of the study was confirmation that regional compliance approaches will be more cost-effective than more numerous, sub-regional approaches.

“We found this throughout our different phases that we looked at … It was more cost-effective from production cost standpoint, from a resource capital build-out — a variety of different metrics,” Bakke said.

Although the analysis is based on EPA’s draft plan and not the final rule, Bakke said the study allows MISO to “hit the ground running.”

Next, MISO will dive into more than 1,500 pages of the final rule and supporting documentation. “We’re confident that the generic or the overall framework is good, and we’re going to be taking feedback on how we can improve it going into our final rule analysis,” Bakke said.

Further Study Challenging

Stakeholders had a number of questions. Miles Taylor, an engineer at Northern Indiana Public Service Co., asked how MISO would deal with issues such as whether there might now be fewer coal plant retirements than some had expected initially.

Bakke said that while MISO looked at a variety of scenarios, it is hoping to get more specific feedback from stakeholders as they make more sense of the final rule in the months ahead.

George Dawe, vice president of Duke-American Transmission Co., representing the transmission developer sector, asked how MISO would assess the future if several individual states decide to go it alone rather than engage with a regional compliance solution.

Bakke replied that initial state plans are due to be filed just over a year from now. “We should at least have an indication going into that what states have planned to do.”

MISO said that if some states refuse to file a compliance plan, the RTO could make some modeling assumptions based on what EPA would likely prescribe for a state.

One thing that’s clear is that there’s an appetite for the information that MISO will gather in the next phase of its Clean Power Plan study. Darren Kearney, an analyst at the South Dakota Public Utilities Commission, said states will rely on the RTOs to help them understand the least-cost compliance options.

Bakke assured him that MISO will provide as much information as it can as soon as it can.