The Midcontinent Independent System Operator (MISO), the US’ first Federal Energy Regulatory Commission (FERC)-approved regional transmission organisation, has released its approved 2023 MISO Transmission Expansion Plan (MTEP23). The scale and pace of grid evolution in the region, driven by electricity companies’ plans to decarbonise their generation mix and tackle anticipated load growth and ageing infrastructure, require prompt attention in order to attract efficient and cost-effective investments to ensure grid reliability.
Grid investments are imperative to accommodate the expected changes in the generation mix. Over the next two decades, the region is expected to more than double its installed capacity, adding over 300 GW of renewable energy and retiring over 100 GW of existing capacity. MISO’s generator interconnection (GI) queue has experienced extremely high volumes over the past years. In 2022, MISO received 956 individual project requests, the majority of which were from solar, storage and hybrid project developers. As of August 2023, the queue had 1,365 projects, representing 235.23 GW of capacity. However, not all of them will fructify. Generators have been exiting the queue with generator interconnection agreements (GIA) due to project delays caused by supply chain, regulatory and contractor-related issues. As of August 2023, MISO had nearly 50 GW of new generators with GIAs that were not yet online. It has refined its queue process by making improvements, and is now tackling additional reforms to improve entry and exit procedures to further streamline the GI process and meet its goal to quickly bring new resources into the system.
MISO conducts an annual comprehensive grid planning process under the MTEP to evaluate transmission solutions in order to build and maintain a reliable and economic infrastructure for the region. Since its inception in 2003, over $58 billion of MTEP projects have been approved by MISO’s board of directors. The projects include recommendations of the board and require approvals from other regulators for completion. With around $34 billion of MTEP projects already in service, over 120,701 km of transmission networks provide electricity to approximately 45 million people across 15 US states and the Canadian province of Manitoba.
Notably, MTEP23 marks the largest plan in MISO’s history in terms of both scale and investment (excluding the two years of accounted multi-value projects [MVPs] and long-range transmission planning [LRTP] portfolios). It has allocated $9 billion to fund 572 projects, primarily focusing on critical aspects such as ageing infrastructure, accommodating new load requirements and integrating additional generation capacity necessitated by the retirement of traditional resources. These projects collectively span around 1,194 km of new or upgraded transmission lines.
Power Line presents an overview of MISO’s planning process and the highlights of MTEP23…
MISO planning process
The latest planning guiding principles, adopted by the MISO board in June 2023, will be enacted by MISO through its value-based planning approach, ensuring that local needs are integrated with regional requirements. This approach includes local planning (based on member plans and reliability standard requirements in the near term [less than 10 years]), regional planning (longer-term broader system needs, including LRTP efforts), policy assessment (to study the impact on the transmission system and resource mix), resource planning (system changes required to accommodate new resources) and interregional planning (through collaborations with neighbouring grid operators).
Local planning: MTEP aims to identify and support the development of cost-effective transmission infrastructure that is robust enough to meet reliability needs, enable a competitive energy market, support policy goals and allow for competition among transmission developers in the assignment of transmission projects. The local planning process ensures compliance with FERC Order 890 (on the regulation of electricity transmission access and charges) transparency requirements for transmission owner submissions. Depending on project submissions, MISO’s role ranges from alternative assessment, need validation (including compliance with applicable National Electric Reliability Organisation [NERC] and Regional Reliability Organisation [RRO] reliability standards), no-harm tests (to ensure that the submitted project does not create system issues) and transparency requirements (also known as post-only, which are miscellaneous and substation projects that do not impact the physics of the transmission system). Approved projects are recorded under Appendix A of the MTEP report and represent the preferred solutions to the identified transmission needs of the MISO transmission planning process. MISO is responsible for monitoring all previously approved Appendix A projects.
Among the previous MTEP cycles, MTEP11 (worth $7.3 billion, driven by the MVP portfolio) and MTEP21 ($13.4 billion owing to LRTP Tranche I) witnessed higher-than-average MTEP investments of approximately 4.5 billion. Between 2023 and 2030, approximately 10,058 ckt km of planned new or upgraded transmission lines are expected to be built under Appendix A. This includes 6,300 ckt km of upgraded transmission lines on existing corridors, of which 59 per cent will be at ≤230 kV, and 41 per cent at 345 kV and above voltages. Further, 3,757 ckt km of new transmission lines are expected to be built on new corridors, of which 63 per cent will be at 345 kV and above voltages, and 37 per cent at 230 kV and below voltages. In terms of investments, there has been a shift in the past six cycles (MTEP17-MTEP22) towards substation and line upgrade investments, as against new lines dominating investments prior to that period. Further, 50 per cent of the total active investments ($29 billion) occurred in the past five MTEPs.
Regional planning: MISO is undertaking regional planning through LRTP, identifying regional portfolios to address future needs in the longer term (10 to 20 years). LRTP will not replace the annual MTEP efforts, instead, it complements its local reliability and interregional planning studies to establish a regional transmission backbone. It consists of four tranches. In July 2022, the MISO Board approved the $10.3 billion LRTP Tranche I, focusing on the Midwest subregion to enable around 56 GW of new renewables. Studies for Tranche II, also focusing on the Midwest, are under way, with targeted approval in 2024. It will meet the needs outlined in MISO’s “Futures”, which are forward-looking scenarios developed by MISO to serve as guides for its grid planning initiatives, including MTEP. The MISO South subregion will be the focus of LRTP Tranche III, while Tranche IV will examine the portion of the system that connects the Midwest and South subregions.
Resource planning and adequacy: In 2023, MISO introduced new naming conventions for MISO Futures, with cohorts of Futures being referred to by series. Series 1 MISO Future scenarios were used in LRTP Tranche 1. No new Future scenarios were developed specifically for MTEP23, but within the framework of LRTP Tranche II, Series 1A scenario development commenced in 2022. LRTP Tranche II will develop a portfolio that meets the needs of Future 2A (F2A) within Series 1A. Based on refreshed input data gathered from updated member plans, F2A illustrates the continuing impacts of the energy transition, with a significant acceleration in thermal retirements, renewable capacity build-outs and decarbonisation. Under F2A, MISO region’s installed capacity is projected to increase from 200 GW in 2022 to 466 GW in 2042, including 103 GW of retirements and 369 GW of new additions, largely renewables.
To adequately meet their forecasted electricity demand and required levels of reserves, load serving entities (LSEs) in the MISO region are required to have sufficient resources. Notably, for 2023-24, LSEs have adequate capacity due to the delay of some previously announced retirements, along with the region obtaining additional capacity through imports. Further, this year’s resource planning survey of LSEs by MISO and the Organisation of MISO States, comprising state regulatory agencies, indicates a similar trend for 2024-25, with a surplus of 1.5 GW. However, the survey indicates that the region could have a capacity deficit of 2.1 GW in the summer of 2025-26, which is expected to increase consistently to 9.5 GW by 2028-29. This indicates that the current actions taken to provide capacity may not be available in the future, and more generation capacity needs to be built.
Interregional planning: In addition to LRTP, MISO collaborated with Southwest Power Pool (SPP) for the Joint Targeted Interconnection Queue study, which identified a five-project portfolio (at 345 kV) with an estimated cost of $1.06 billion to address the significant transmission limitations restricting the interconnection of new generating resources near the MISO-SPP seam. MISO, SPP, Minnesota state agencies and transmission owners have applied for the US Department of Energy’s Grid Resilience and Innovation Partnership programme, the award for which is pending.
MTEP2023 – key highlights
MTEP2023 includes five types of projects – baseline reliability projects (BRPs), generator interconnection projects (GIPs), market participant-funded projects (MPFPs), and MVPs. BRP pertains to network upgrades identified in the base case to ensure that the system complies with applicable NERC and RRO standards. Related project costs are allocated to local transmission pricing zones. GIP refers to new transmission access projects, the costs of which are mainly borne by generators. However, upgrades at 345 kV and above voltages are eligible for 10 per cent cost recovery from load on a system-wide basis. MPFP refers to network upgrades fully funded by one or more market participants, but owned and operated by a transmission owner. MVP refers to those that provide regional or sub-regional public policy, economic and/or reliability benefits. Costs are shared for loads and export transactions in proportion to energy withdrawals or export schedules. Projects that provide local economic benefits but do not qualify as any of the above projects are categorised as “others”.
MTEP23 includes 45 BRPs worth $1,723 million, 142 GIPs worth $1,227 million, an MVP project worth $4 million, two MPFPs worth $1 million and 382 other projects totalling $6,023 million. Of the latter, 56 per cent are driven by reliability issues, including those pertaining to load additions and generation retirements; and 25 per cent by age and condition. The majority of other projects address localised reliability issues caused by load growth needs, local-specific reliability needs and ageing transmission infrastructure.
The projects are spread across the whole region served by MISO. Excluding the larger-than-usual 47 per cent share of the total investment dedicated to the South region (which includes Arkansas, Louisiana, Mississippi and parts of Texas), the investment distribution across MISO’s footprint is consistent with recent MTEP cycles — 25 per cent of the total for the Central region (including Missouri, Illinois, Indiana and Kentucky), 20 per cent for the West (including parts of North Dakota, South Dakota, Montana, Michigan and Illinois, and all of Iowa, Minnesota and Wisconsin) and 8 per cent for the East (including Michigan).
Among the states, Louisiana and Texas together accounted for 44 per cent of the total investment at $3.9 billion. This was due to generation retirements and the heightened load associated with economic development in these areas.
The investments also vary by project type, with 44 per cent dedicated to new lines under new right of way permissions in the MISO region; 30 per cent to substation- or switching station-related construction and maintenance (including new substations as well as terminal equipment work, circuit breaker additions and replacements); 20 per cent to transmission line upgrades (including rebuilds, conversions and relocations); and the remaining 6 per cent to voltage devices, transformers and miscellaneous categories. Notably, the South region accounts for approximately 82 per cent of the total new line investment. Overall, over 70 per cent of all projects are scheduled to come online by 2026.
In terms of the transmission lines, MTEP23 projects total approximately 1,194.1 km of new or upgraded lines. Of this, 55 per cent will be operational within the next three years (till 2026) and 86 per cent within five years (till 2028). The majority of the lines, that is, 87 per cent or 1,034.8 km, will be at 161 kV or below voltages, while only 122.3 km are projected to be at 230 kV or above levels.
The energy landscape of the MISO region is evolving rapidly, driven by the energy transition ambitions of its members and the anticipated load growth. Grid evolution has driven record investments in MTEP23. These investments will ensure that robust and resilient transmission systems are in place to effectively and efficiently move energy to demand areas at all hours of the year. The key lies in the timely implementation of new as well as previous MTEP projects.