The Midwest’s electricity grid operator later this year is expected to add more than 15,000 miles of transmission and 30,000 megawatts of generation to its system overnight — at midnight, to be precise, on Dec. 18.
That’s the date MISO, pending a few remaining regulatory hurdles, will assume responsibility for operating the electric grid in much of Arkansas and Louisiana and parts of Texas and Mississippi.
The area’s transmission has been run since the 1950s by Entergy, a group of southern utilities that was recently pressured by regulators to give up grid management and focus on power generation.
MISO says its new scale and “footprint diversity” will help improve reliability and efficiency and save money, with annual benefits to existing member utilities exceeding $1.2 billion.
Wind energy advocates are also hopeful the integration could pave the way for grid and policy changes to help clean energy reach one of the “last frontiers” for renewables: the Southeast.
Entergy’s integration into MISO follows decades of lawsuits over how each state’s ratepayers should share the cost of transmission and generation projects.
Arkansas utility regulators, who thought their state’s residents were unfairly subsidizing costs for Louisiana ratepayers, threatened to prevent Entergy Arkansas from recovering certain costs if it didn’t study options for changing its relationship with the other Entergy companies.
Cost-benefit studies showed that having all of Entergy join MISO would be preferable to Entergy Arkansas managing its own transmission, or to joining the Southwestern Power Pool, another regional transmission organization like MISO.
Utility regulators in Arkansas and Mississippi have signed off on the transfer, as has the New Orleans City Council. Louisiana and the Federal Energy Regulatory Commission still need to approve the arrangement.
If all goes as planned, by the end of the year generators will be bidding daily on MISO’s market to sell Entergy customers the lowest-cost electricity, a change that’s expected to save Entergy customers $1.4 billion in the first decade.
‘Advantages to both sides’
MISO’s existing utilities expect to see savings as well. MISO will have some new costs associated with the expansion, but operating costs will be spread out among more utilities after the Entergy companies join.
Meanwhile, seasonal differences between the two sections will give MISO new options for meeting peak demand and balancing the grid, said Todd Hillman, MISO’s vice president of customer and stakeholder relations.
For example, in early summer when the windows are open in Minnesota but air conditioners are already running in Louisiana, there will be potential to use excess generation capacity in the Midwest to meet cooling demand in the south.
“The ability to have some diversity there and flow megawatts between the two regions will be an advantage to both sides,” Hillman said.
The two regions have different generation mixes, too. Coal makes up the largest share in the current Midwest footprint, while oil and gas are dominant in the Entergy region.
Opportunity for renewables?
The Entergy footprint currently has no significant renewable power on its grid. Sixty-nine percent of its power comes from oil and gas, 20 percent from nuclear, and 11 percent from coal.
The MISO integration improves the prospects for being able to export Great Plains wind to the region, but not until new transmission lines and new policies are place, according to Beth Soholt, executive director of Wind on the Wires, a nonprofit that works on wind and transmission issues (and a member of RE-AMP, which publishes Midwest Energy News).
“We have a number of years of groundwork to do before we can probably see something significant happen,” Soholt said.
The main interconnection between the MISO and Entergy areas is a 1,000 megawatt transmission line in New Madrid, Missouri. Other routes exist that would require paying fees to other utilities or grid operators.
There also aren’t renewable portfolio standards to drive demand for clean energy in Arkansas, Louisiana, Mississippi, or any of their neighbors to the east, making the Southeast one the “last frontiers” for renewables, Soholt said.
Soholt said MISO’s market tools have been a game-changer for renewables in the Midwest, allowing wind farms to bid against fossil fuel power plants to provide utilities with the lowest cost electricity to meet the next day’s forecasted demand.
While much of MISO’s planning work in recent years has focused on finding ways to move more wind power from the western plains to cities in the east, the organization is mostly agnostic about electricity sources.
“For us, it’s not so much that it’s wind but that it’s low-cost generation,” Hillman said. “[Wind] will have equal opportunity to compete, based on the market rules and the transmission system.”
Planning is already underway on how to improve the transmission infrastructure in the Midwest, in the Entergy area, and combined, he said. MISO will be proposing projects aimed at mitigating congestion and improving reliability and efficiency.
Through discussions on those proposals and other issues, the MISO expansion might also lead to more cross-pollination of policy ideas between the northern and southern areas, Hillman said.
“It opens up a lot of new possibilities,” Soholt said. “There’s just a lot of work to be done.”
Originally published February 05, 2013 at 05:00AM at Midwest Energy News http://www.midwestenergynews.com/2013/02/05/midwest-grid-operator-expands-south-to-last-frontier-for-renewables/