Informal Feedback (202312)

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End Use Sector Comments Regarding Long Range

Transmission Plan (LRTP) Future 2A and

Related Analysis[1]

 

  1. Introduction

The End Use Sector represents manufacturers and large industrial and institutional users of electricity who operate facilities throughout the MISO footprint and who ultimately will be asked to pay for a proportionately large amount of the billions of dollars in transmission investment being contemplated and cost allocated through the LRTP process. The justness and reasonableness of this planned transmission spend is therefore critical to the customers that we represent. Accordingly, the total dollar magnitude of these potential investments requires careful consideration and thorough vetting to ensure end-use customers are not asked to bear costs for duplicative facilities or for facilities that are not yet needed and might ultimately never be needed.

 

Costs must be prudently incurred, and consumers should only have to pay for projects that are used and useful in providing regulated transmission service to customers.  In this regard, it is crucial that MISO relies on a base representation of a scenario into the future (Future) that is realistic and realizable since the related generation expansion and siting will be foundational to developing the Tranche 2 portfolio of projects.  In addition, adequate robustness testing should be conducted to test the sensitivity of a Future representing lower load growth and decarbonization assumptions compared to the base Future.  That is, given that a long-term planning horizon is prone to some level of speculation when hypothesizing about scenarios 15-20 years into the future, it is imperative that MISO ensure the robustness of its assumptions and conservatively only include the projects that are truly needed. To that end and as discussed below, the End Use Sector strongly urges MISO to adjust its base Future to account for the concerns of MISO’s Independent Market Monitor (IMM) and our sector, and to conduct robustness testing.

Ultimately, the End Use Sector’s recommendations below are aimed at asking MISO to conclusively demonstrate that its forthcoming Tranche 2 portfolio of projects includes only necessary projects or a “least regrets solution” to meeting long term needs.

 

  1. Background

MISO is using Future 2A expansion results as a basis for the forthcoming LRTP Tranche 2 portfolio of transmission projects.  Future 2A incorporated 100% achievement of updated utility IRPs and announced state and utility goals within their respective timelines, and a resulting 76% decarbonization floor assumption.[2] Future 2A introduces an increase in electrification, driving an approximate 0.8% annual energy growth rate.  The Figure below shows that Future 2 A results in the retirement of 98GW of generation and addition of 369 GW of generation respectively. 

 

  1. Issues Associated with Future 2A
  2. Current Future 2A generation expansion assumptions are not realistic. The End Use Sector agrees with the IMM’s view that MISO’s Future 2A is not realistic or realizable. We highlighted our concerns about Future 2A in previous comments submitted approximately one year ago.[3]  As highlighted in our past comments, and practically speaking, the aggressive amount of GW additions contemplated in this future is not realistic enough to be realized. Supply chain challenges and constraints associated with MISO’s generation interconnection queue are bound to temper the pace with which generation is actually installed.  For example, at the present time, even generators with Generator Interconnection Agreements (GIA) have not reached commercial operations. MISO notes the following on page 39 of its MTEP 2023 report:

Since the pandemic, a troubling new trend has emerged for generators that exit the queue with a GIA. Supply chain and regulatory issues have increased the time it takes for new generators to be built and reach commercial operations. As of August 2023, MISO has nearly 50 GW of new generators with a GIA and not yet online. MISO expects this number to increase to as much as 63 GW by end of 2023. Interconnection Customers and Transmission Owners report that supply chain issues on both the generator and transmission equipment are the main reason for the extended timelines.

Thus, it is important that MISO revisit its generation expansion assumptions and revise them to incorporate assumptions that are realistic and realizable. Further, as discussed below, MISO likely has incorporated more capacity related to this Future than necessary in the first instance.

  1. MISO’s modeling of Future 2A generation expansion needs adjustments. MISO first used the EGEAS model to identify the expansion plan associated with Future 2A, and later added 29 GW of “flexible” generation after finding out through PROMOD modeling analysis that there was an energy deficiency in certain hours of the year. This approach is flawed for two reasons and needs to be addressed:

 

  • First, the End Use Sector supports the IMM’s view that MISO did not revisit its expansion plan to ascertain which generation potentially would be removed after adding 29 GW of flexible resources. An addition of 29 GW of flexible attribute units should result in removing resources that were added initially to fulfill planning reserve margin requirements, since the flexible units are necessarily capable of meeting such requirements as well as energy requirements.[4] Further, it should be noted that the flexible resource additions are more likely to effectively address declining accredited capacity for the renewable generation compared to existing assumptions.  In addition, at the October LRTP workshop, MISO Staff verbally indicated that modeling results showed excess or dump energy at 6% in 2042 – this equates to 67,320 MWhs (1122 TWh of energy in 2042 for Future 2A multiplied by 6%), which is significant and symptomatic of too much generation in the model that is redundant and which should not be included.[5] All of these factors seem to suggest that the expansion capacity and resource mix currently used for Future 2A are overstated and not reflective of the generation mix consistent with cost effectively meeting energy and capacity needs.

 

  • Second, it is not clear why MISO chooses to use a model that does not simultaneously evaluate energy and capacity needs in the same model in the first instance. MISO’s current approach leads to inefficiencies and the associated expansion plans are susceptible to not being optimized because of the piecemeal approach.

In light of the above, it is important that MISO revisit its expansion plan related to Future 2A to demonstrate the impact of the 29 GW of flexible attribute units and accordingly revise its plan (i.e., exclude appropriate generation previously chosen by EGEAS) and related siting assumptions.

  1. Robustness Testing.

At the December workshop, MISO verbally reinforced its commitment to conduct robustness testing.  The End Use Sector appreciates this commitment to ensure that the resulting MVP Tranche 2 portfolio is least regrets. We have the following feedback with regards to robustness testing:

  1. MISO is proposing to use Future 1A as the low end case, which contemplates lower load growth and decarbonization assumptions than Future 2A.[6] Prior to testing with this Future, it must be ensured that Future 1A has the appropriate generation mix. To the extent that MISO determines that a similar issue exists with Future 1A as was encountered with Future 2A and flexible attribute units are needed in this Future in addition to the units identified through EGEAS, it is critical that MISO revisit and revise the capacity in the original expansion plan. Specifically, MISO should replace some capacity that was chosen originally with the flexible attribute units (instead of simply adding more generation and creating unnecessary redundancy).

 

  1. Include Joint Targeted Interconnection Queue (JTIQ) projects in the models given that MISO received DOE funding for these projects, and they have a high probability of being constructed.

 

  1. Include MTEP 2023 Board approved, planned transmission projects in the models, since the MISO Board has already approved these projects.

 

Thank you for giving us the opportunity to provide feedback.  If you have any questions, please do not hesitate to contact any one of us.

Kavita Maini

End Use Sector PAC Representative

KM Energy Consulting, LLC (Consultants to MIC and MLEC)

(262) 646-3981

kmaini@wi.rr.com

 

Ken Stark

McNees Wallace & Nurick LLC (for CMTC)

(717) 237-5378

kstark@mcneeslaw.com

 

Jim Dauphinais

Brubaker & Associates, Inc.

(Consultants to ABATE, IIEC, LEUG, NLCG and TIEC)

(636) 898-6725

jdauphinais@consultbai.com

 

Ali Al-Jabir

Brubaker & Associates, Inc.

(Consultants to ABATE, IIEC, LEUG, NLCG and TIEC)

(361) 994-1767

aaljabir@consultbai.com

 

 

[1] These comments are being submitted on behalf of Association of Businesses Advocating Tariff Equity (ABATE), Coalition of MISO Transmission Customers (CMTC), Illinois Industrial Energy Consumers (IIEC), Louisiana Energy Users Group (LEUG), Midwest Industrial Customers (MIC), Midwest Large Energy Consumers (MLEC), NIPSCO Large Customer Group (NLCG) and Texas Industrial Energy Consumers (TIEC). ABATE, CMTC, IIEC, LEUG, MIC, MLEC and TEUC are all MISO members in the End Use Sector. NLCG is a non- MISO Member stakeholder whose members include large end-use customers within Indiana that are interruptible and/or have cogeneration facilities and that take service under NIPSCO Rate Schedule 831, which allows limited market purchases through Northern Indiana Public Service Company (NIPSCO).

 

[2] Future 2A contemplates a 60% decarbonization assumption.  However, in order to meet updated utility goals, the decarbonization was increased to 76% .See https://cdn.misoenergy.org/20231002%20LRTP%20Workshop%20%20Draft%20Series1A%20Futures%20Report630365.pdf

 

[3] See https://www.misoenergy.org/engage/stakeholder-feedback/2022/pac-futures-f2a-expansion-results-20221129/

[4] Indeed, the IMM’s Future 2A analysis shows that wind and solar generation capacity is significantly less in IMM 2A compared to MISO Future 2A. https://cdn.misoenergy.org/20231201%20LRTP%20Workshop%20Item%2005%20IMM%20Presentation631085.pdf

 

[5] For instance, the 6% excess energy reflects 17% of the total energy requirements growth between 2022 and 2042.  Energy TWh in 2022=732 and Future 2A=1122. Therefore, net amount =390 TWh and 67.2 TWh is 17% of this net amount.

[6] See https://cdn.misoenergy.org/Series1A_Futures_Report630735.pdf

 

Minnesota Power Appreciates the opportunity for information feedback.  We are very engaged in the MISO stakeholder process and look forward to working with all stakeholders and MISO in seeing continued improvements in all aspects of MISO market designs and operations.  These comments will be frank and actionable, as we are facing times with continued resource transformation, and numerous presentations on the need for continued levels of reliability, amidst the challenges.  In summary, we need more quantified results of both the current portfolio and future portfolios that clearly demonstrate an understanding of the system reliability.

1. MISO resource attributes needs to have clear metrics of how much of what type of resources are needed to maintain system reliability.  The reporting thus far sets the stage, but doesn't get to a point of knowing either where we are at today, nor what is needed in the future transformed portfolio.

2. MISO needs to provide the system level view of system reliability that is shown in increments of resource transformation.  At this time, the only thing that stakeholders have to provide insights in the retirement decisions is the results of the PRA - is there enough capacity on the system?   FERC has asked if additional approval scrutiny is needed to retirement decisions, and State regulatory bodies have a very limited spotty and non-standard means of assessing reliability.  

3. The main tangible decision point for stakeholders related to system reliability is the timing of resource retirements.  This is why point 2 is so crucial.  

Proposed means of quantifying system reliability:

1. Build on the RRA work to show a projected seasonal level of PRMR, accredited capacity by fuel/gen type, and reserve MW.  This summary can also be shown in ICAP terms for capacity by fuel type.  

2. Energy long and short positions using a chronological 8760 hour model that demonstrates energy adequacy, flows from one zone to another, and MISO NSI.  The summary needs to demonstrate the portfolio performance on a handful or subset of the LOLE level of modeling to show energy adequacy.  

3.  Show energy adequacy using 3-4 years of recent history of hourly generation MW by fuel type, scaling the total generation type with a future scenario.  There are many hours in a year where a scaled level of wind and solar would not nearly come close to meeting the system load from 2023 summer, and looking at this closely will be a useful sanity check to provide a more tangible level of understanding of the capabilities of a proposed portfolio.  

 

comments on the resource accreditation:

1. Quantifying the PRMR using the LOLE model across the entire resource portfolio is a proven methodology to show the total amount of accredited resources on the system.  Taking the LOLE model and moving to a process of quantifying the accredited capacity by generation type requires that the LOLE model provide the following:

a. the LOLE model must show the resource mix and load where the system does not have adequate resources to serve load

b. at that exact LOL hour, the model is also assumed to have the technical capability of quantifying the availability of each type of resource for that exact LOL hour.  All LOL hour performances are summarized into one MW value for all MWh of performance for the LOL hours.  I do not believe that a Monte Carlo model that can clearly take a performance value such as a forced outage rate and creating an hourly representation of the availability of a resource across thousands of simulation draws, can come up with the same metric of performance as the average value.  I don't believe the Monte Carlo modeling capability is technically possible to model a given resource availability for a system LOL hour condition.  I believe that the datasets for resource availability as correlated to the system LOL hour(or tight margin to show the operating level of how this occurs).  We simply have no information that correlates the outage for a resource with the overall system tight margin conditions.  We are taking a technical leap too far in this endeavor, and this issue has not been technically scrutinized or proven.  

Summary -  At this point, I do not see any defined path that moves us from our current system and current level of system reliability to a future transformed resource portfolio.  The issues and challenges are continually presented, at all levels and reporting, but the opportunity for MISO to provide the metrics and show the incremental impacts of resource transformation are not shown quantitatively.  

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