Summer Heat Testing Transmission Network

As we approach the summer season, the power industry is keeping an eye on preparations to ensure reliability as worries persist about plant retirements or extended maintenance for units affected by recent regulatory requirements.

At MISO, the Midwest Independent Transmission System Operator, we have been actively working to address this pressing and complex issue to ensure we continue to reliably operate the bulk electric system while providing the lowest-cost delivered energy to customers. 

The large MISO Midwest Region – 11 states and almost a million square miles – relies heavily on coal generation — which will be affected the most by the regulations — to meet the energy needs of households and businesses. Historically, between 70 and 80 percent of the energy produced in our Midwest Region comes from coal-fired power plants, making this a particularly significant issue for our footprint. 

We expect fuel diversity from the full integration of our Southern Region to help both MISO South and MISO Midwest meet some challenges during winter heating seasons. No one wants a reliability problem. That’s why MISO has been engaged with and will continue to work with generation owners, state and federal regulators, and the gas pipeline industry to develop the solutions to ensure regional reliability. 

That coordination is essential to resolve such issues as supply chain feasibility, lengthy outage requirements for retrofits, and the significant investment needed to ensure resource adequacy. 

Our most recent quarterly survey indicated that three-quarters of the coal-fired generation in MISO’s footprint — or 49.2 gigawatts, the equivalent energy output to serve 49 million homes — is affected by the regulations, particularly the Mercury and Air Toxics Standard. 

This equates to approximately 37 percent of MISO’s total generation capacity. With a 2015 deadline for compliance pressing in on the industry, lack of action or delay could challenge wholesale reliability. MISO has historically had excess generation capacity, but the retirements of units will remove most, if not all, of the excess reserves on the system. 

To provide a temporary bridge to the deadline, we have a special provision in our tariff to keep a power plant running if taking it out of service threatens transmission system reliability. 

If, after thorough analysis, we believe such a situation may occur, MISO will deem the power plant essential to maintaining wholesale system reliability and will designate it as a system support resource (SSR). If an alternative solution to the reliability issue does not exist, an SSR is required to remain operational and available for MISO’s use in maintaining reliability until a permanent solution can be implemented. 

The Federal Energy Regulatory Commission recently approved our request to designate two power plants in Michigan slated for retirement as SSRs for 12 months, while an alternative solution is collectively sought among state regulators, the generation owners and MISO. 

The combined effect of environmental regulation and sustained low natural gas prices has caused a recent shift in MISO’s generation resource mix to an increased utilization of gas-fired resources. Consequently, wholesale fuel delivery to those gas generators has taken on added importance. 

Given that, MISO has championed increased gas-electric harmonization, including formalizing the stakeholder led Electric and Natural Gas Coordination Task Force to engage both the electricity and natural gas industries in collaborative discussions. 

By fostering a better understanding of each other’s operations and business models, MISO is responding to the call to examine increased utilization of gas-fired generation to meet electric needs. MISO also participates in FERC’s regional technical conferences to further awareness of the issues and effects, and to support efforts to improve integration between the gas and electric industries. 

MISO works collaboratively with our state regulators through the Organization of MISO States to study resource sufficiency across MISO to provide state and federal regulators with factual, multi-faceted analyses that lead to reliability solutions for units affected by compliance with the environmental regulations.

MISO remains committed to ensuring both long and short-term system reliability while focusing on the lowest delivered cost of energy to consumers, and we welcome new opportunities and solutions for providing reliable, lowest-cost energy for years to come.

John Bear is president and chief executive officer of MISO.

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