The Midcontinent Independent System Operator (MISO), which is the US first Federal Energy Regulatory Commission (FERC)-approved regional transmission organisation (RTO), recently released its 2023 MISO Transmission Expansion Plan (MTEP23). The scale and pace of grid evolution in the region, driven by the plans of electricity companies to decarbonise their generation mix and tackle anticipated load growth and ageing infrastructure, require prompt attention in order to develop the most efficient and cost-effective investments that will ensure grid reliability in the future.
Notably, the 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 [MVP] and long-range transmission planning [LRTP] portfolios). The MTEP23 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 742 miles (1,194.1 km) of new or upgraded transmission lines.
This article presents a brief overview of MISO’s planning process and the highlights of the MTEP23…
MISO’s planning process
The latest planning guiding principles, adopted by the MISO board in June 2023, will be enacted through the system operator’s 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: The 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.
Depending on the project submissions, MISO’s role ranges from alternative assessment, need validation (including compliance with the 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 a system issue) and transparency requirements. Approved projects are recorded under Appendix A of the MTEP report and represent the preferred solutions to meet the identified transmission needs of the MISO transmission planning process. The system operator is responsible for monitoring all previously approved Appendix A projects.
Among the previous MTEP cycles, the MTEP11 (worth $7.3 billion, driven by the MVP portfolio) and MTEP21 ($13.4 billion owing to LRTP Tranche 1) witnessed higher-than-average MTEP investments of approximately $4.5 billion. Between 2023 and 2030, approximately 6,250 circuit (ckt.) miles (10,058.4 ckt. km) of planned new or upgraded transmission lines are expected to be built under Appendix A. This includes 3,915 ckt. miles (6,300 ckt. km) of upgraded transmission lines on the existing corridors, of which 59 per cent will be at ≤230 kV, and 41 per cent at 345 kV and above voltages. Further, 2,335 ckt. miles (3,757.8 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. Meanwhile, there has been a shift in terms of investments in the past six cycles (MTEP17-MTEP22) towards substation and line upgrade investments, as against new lines dominating investments prior to that. Further, 50 per cent of the total active investments ($29 billion) have occurred in the past five MTEPs.
Regional planning: MISO is undertaking regional planning through LRTP, and identifying regional portfolios to address future needs in the longer term (10 to 20 years). The LRTP is not replacing the annual MTEP efforts, but is complementing 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 1, focusing on the Midwest subregion to enable around 56 GW of new renewables. Studies for Tranche 2, 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 the operator to serve as guides for the grid planning initiatives, including the MTEP. While Tranche 3 of the LRTP will focus on the MISO South subregion, Tranche 4 will examine the portion of the system that connects the Midwest and South subregions.
Resource planning and adequacy: To adequately meet their forecasted electricity demand and the required levels of reserves, load serving entities (LSEs) in the MISO region are required to have sufficient resources. For 2023-24, LSEs have adequate capacity as some previously announced retirements have been delayed, and the region has obtained additional capacity via imports. Further, this year’s resource planning survey of LSEs by MISO and the Organisation of MISO States (OMS), 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 in subsequent years to 9.5 GW by 2028-29. This indicates that actions taken this year to provide capacity may not be available in the future, and more generation capacity needs to be built.
Interregional planning: In addition to the LRTP, MISO collaborated with the Southwest Power Pool (SPP) for the Joint Targeted Interconnection Queue (JTIQ) 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, the SPP, Minnesota state agencies and transmission owners have applied for the US Department of Energy (DOE) Grid Resilience and Innovative Partnership (GRIP) programme, the result for which is pending.
MTEP2023 – Key highlights
The MTEP2023 includes five types of projects – baseline reliability projects (BRPs), generator interconnection projects (GIPs), market participant-funded projects (MPFPs), MVPs and others. The BRPs refer to network upgrades identified in the base case to ensure that the system complies with the applicable NERC and RRO standards. Related project costs are allocated to local transmission pricing zones. The GIPs pertain to new transmission access projects, the costs of which are mainly borne by generators. However, upgrades at 345 kV and above are eligible for 10 per cent cost recovery from load on a system-wide basis. The MPFPs refer to network upgrades fully funded by one or more market participants, but owned and operated by a transmission owner. The MVPs are those projects that provide regional or subregional public policy, economic and/or reliability benefits. Costs are shared for loads and export transactions in proportion to energy withdrawals or export schedules. The projects that provide local economic benefits but do not qualify as any of the above projects are categorised as “others”.
The 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 of projects are driven by reliability issues, including those pertaining to reliability of 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. Except for the larger-than-usual 47 per cent share of 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 the new right-of-way permissions in the MISO region; 30 per cent to substation- or switching station-related construction and maintenance (includes new substations as well as terminal equipment work, circuit breaker additions and replacements); 20 per cent to transmission line upgrades (includes rebuilds, conversions and relocations); and the remaining 6 per cent to voltage devices, transformers and miscellaneous categories. Notably, the South region accounts for close to 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, the MTEP23 projects aggregate approximately 742 miles (1,194.1 km) of new or upgraded lines. Of this, 55 per cent will go into service within the next three years (2026) and 86 per cent within five years (2028). The majority of the lines, that is, 87 per cent or 643 miles (1,034.8 km), will be at 161 kV or below, while only 76 miles (122.3 km) are projected to be at 230 kV or above.
The top 10 projects based on investment represent roughly 43 per cent or $3.9 billion of the MTEP23. US-based integrated energy company Entergy will execute the top three projects, which involve an investment of over $3.1 billion.
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 investment in the 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.
