MISO early benefits in new region surpass estimate

OREANDA-NEWS. First-year benefits to the Midcontinent Independent System Operator's (MISO) expanded territory in Arkansas, Louisiana, Mississippi and Texas were well in excess of the initial \\$524mn estimate, the grid operator said.

MISO estimated 2014 net benefits to the MISO south region of between \\$730mn and \\$954mn, or roughly 30pc of the grid agency's total 2014 benefit of \\$2.2bn to \\$3.1bn across 15 US states.

MISO president John Bear told an industry group last week that the \\$524mn estimate was based on the integration of Entergy's six utility units into MISO in late 2013. The addition of Cleco, NRG Energy and a number of public power agencies increased the benefits, he said.

More than three-fourths of the estimated savings, between \\$570mn and \\$756mn, was attributed to "generation investment deferral," a category that includes the diversity of generation across a broader footprint and improvement in generation availability, according to updated figures posted on MISO's website.

Other benefits were seen in more-economical dispatch and improved system reliability.

The savings were partially offset by \\$51mn of MISO's \\$257mn cost structure.

MISO is expected to explain assumptions used to calculate the benefits on 26 February during a board meeting in New Orleans.

"There are things we still need to work out, but generally, people are pretty happy with the way it is going," Bear told a day-long briefing sponsored by the Gulf Coast Power Association.

State regulators and others at the conference were less enthusiastic about the early success of Entergy's integration which came after a decade of complaints from public power and independent generating companies.

Louisiana Public Service Commission member Erik Skrmetta said Entergy's utilities have benefited from MISO's economic dispatch but he wants more interaction between the commission and MISO staff on proposed transmission projects in the state.?"Our concern has always been to maintain our jurisdiction," Skrmetta said in separate remarks at the briefing.

Skrmetta likened the integration to an "engagement," saying members of the Louisiana commission have yet to decide if they want to make the MISO relationship permanent.

Texas Public Utility commissioner Ken Anderson said he is waiting to see plans for new transmission in Texas, but he likes MISO's transparency which shows the price impact of grid congestion. "Entergy joining MISO has been an improvement, at least in transparency," Anderson said.

Savings from unit commitment and economic dispatch are substantial, agreed MISO market monitor David Patton. But a protracted grid fight between MISO and the Southwest Power Pool has limited power flow between MISO regions, preventing some customers from seeing full benefits.

Arkansas utilities may have seen the greatest benefit due to less congestion on that state's transmission system, GDS Associates principal Garrett Cole said.

Joining MISO "was the right decision," NRG Energy senior vice president Jennifer Vossburg said, citing MISO's open stakeholder process.

"But there is still a learning curve" and differences in the way things work in MISO south, Vossburg said. "It is not one-size-fits all. We have a lot of work to do," she said.