Total $24,540 million transmission investments projected at MISO over the next 5-10 years.
- Oct 9, 2020 10:59 am GMT
Midcontinent Independent System Operator (MISO) is one of the first Regional Transmission Organizations approved by the Federal Energy Regulatory Commission (FERC) in the US. Part of the RTO responsibilities is regional transmission planning. Every year in December, MISO's independent Board of Directors approve a set of transmission projects that are cost shared across the RTO footprint based on their project classification.
This "state of the planning" report is called the MISO Transmission Expansion Plan (MTEP). By current and past MTEPs, I would estimate the size of transmission investments needed at MISO over the next 5-10 years (2030) is approximately $24,540 million dollars.
This is how I arrived at that estimate.
- MISO current MTEP i.e. MTEP 2020 has $7,828 million under consideration of Board approval. These include "Appendix A" projects - projects that are up for approval this annual cycle, as well as "Appendix B" projects - projects that are not quite ready for this year but close for approval next year. For the most part, this estimate includes projects that fall out of local Transmission Owner (TO) planning criteria aka "Bottom-Up" projects.
- MISO Board approved Multi Value Project (MVP) in MTEP 2011. That plan at that time was $5.2 billion. Now, in 2020, with increased cost estimates and accounting for present value - costs $6,572 million. There is a high likelihood of the MISO Board approving another MVP like package in the next 5-10 years. Whether that portfolio will be called MVP or something else - to be determined. But per current MISO tariff, if a "portfolio" of projects meets reliability, economic, and policy criteria - they are MVPs.
- Competitive transmission projects - another $140 million. How? Based on a recent 500 kV project estimate that went through the Competitive Transmission Administration process at MISO. MISO has a lot of experience planning, and approving portfolio of projects like MVP. But MISO does not have enough experience with the competitive transmission administration process.
- Asset retirements - guessing $500 million here. Even though some transmission asset retirements can be captured under Appendix A process, there might be others left out. Accounting for that contingency, I am estimating $500 million for assets such as substations, radial lines, transformers.
- Network Upgrades sitting in the Generator Interconnection Agreements - estimate $1,000 million. It is no secret that interconnection customers are dropping out of the MISO generator interconnection queue on one hand, and others including solar developers are requesting interconnection on the other hand. One of the reasons behind drop outs is, high upgrade costs to interconnect. I estimate this opportunity is huge. Hence the recent MISO, SPP announcement to jointly conduct a planning study.
- Merchant High Voltage Direct Current (HVDC) projects in the MISO queue - estimate $8,000 million. I took the estimate of $8,000 per mile of HVDC from a recent ICF report. I also estimate there is an opportunity of 1,000 miles for HVDC wiring in MISO footprint, just because of the geographic distance to cover. It is 1,000 miles from my place in Minnesota to Dallas-Fort Worth (DFW) metro area.
- Inter-regional project estimate at $500 million. This estimate is not based of any past data point but acknowledges the opportunity of MISO planning together with PJM, SPP and others. And if that planning results in project recommendations - they would be interregional projects.
Let's put this rough estimate of $25 billion in the context of political debates. Not much discussion about the infrastructure plans, even though "roads and bridges" are mentioned now and then. We know intuitively any plan for US costs upwards of a Trillion dollars. Now you know, MISO transmission investments alone could be a quarter of that Trillion. Perhaps more when all is said and done.
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