E-3: Commissioner See’s Concurrence on Invenergy Transmission LLC v. MISO

America needs more energy infrastructure to meet the country’s growing electricity demand.  Equally true: America must make smart energy infrastructure decisions to protect the consumers who depend on reliable power and who foot the bill for it.  The Commission’s oversight role includes ensuring that transmission providers make informed, cost-conscious decisions to both speed along needed infrastructure and to discourage overbuilding—which lets consumers get the most value for their money.

A wrinkle to achieving these goals is that transmission investment inherently involves uncertainty about future grid conditions.  Tools like scenario analysis and least-regrets planning can help encourage responsible dollars spent despite the uncertainty.  Although the Midcontinent Independent System Operator, Inc. has been a pioneer in putting approaches like these to work, the record in this case shows that some key questions remain unanswered.  Specifically, when MISO recommends new transmission investment—investments that could cost tens of billions of dollars—it is currently unclear whether it is providing stakeholders and the MISO Board with the best information possible to assess true grid needs.

Here, the Commission heard a consistent refrain that MISO should do more.  That call came not only from the complainant, but also from state regulators,[1] transmission customers,[2] other merchant transmission developers,[3] and the independent market monitor.[4]  They all urged us to find that MISO can and should provide additional information to help ensure that stakeholders and the MISO Board are confident in the substantial transmission investments that MISO recommends.  I’m persuaded by them that when it comes to merchant transmission projects, the record demonstrates that the current lack of detail in MISO’s Tariff is unjust and unreasonable.

So I fully support the Commission’s directive that MISO’s Tariff must specify how it treats merchant transmission projects in its transmission planning processes.  And while today’s order appropriately affords MISO discretion to decide how to adjust its Tariff in response, I’ll note that my vote is also informed by the ways the record shows how sensitivity analyses for late-stage projects can provide substantial value in informing stakeholders about the robustness—and accuracy—of MISO’s transmission planning assumptions. 

Applied to this case, it’s critical to know if MISO’s Long Range Transmission Planning tranches of projects will actually result in the benefits MISO claims should the Grain Belt Express merchant transmission line eventually reach commercial operation.  My state colleagues have it right when they observe that:

“Absent intervention by the Commission, MISO customers will be at risk of paying tens of billions of dollars for MISO-preferred transmission facilities that may be unnecessary because advanced stage merchant projects may already provide those benefits.”[5]

“The lack of clarity [in MISO’s Tariff] not only complicates merchant transmission development but could lead to identification of inefficient transmission solutions, which may have a negative impact on customers.”[6]

“[I]nvestment decisions must be based on all available information,” but “MISO’s failure to consider this project (even as a sensitivity) in the LRTP Process could lead to the construction of duplicative transmission facilities that offer little additional or no benefits at a cost of hundreds of millions of dollars to retail customers.”[7]

Comments like these underscore the practical consequences when the Tariff is murky about how and when MISO considers merchant transmission projects in the transmission planning process.  Today’s order is thus intended to help not only merchant developers, but the ratepayers who ultimately pay for MISO’s transmission buildout.  To be sure, I recognize the competing factors that come with deciding how and when to factor merchant transmission projects into MISO’s analysis.  For instance, accounting for projects as a done deal too soon could have serious reliability consequences if a line does not reach commercial operation on the developer’s projected timeline.  Similarly, MISO should continue to heed stakeholders’ concerns that appropriately accounting for merchant transmission projects does not shift onto ratepayers the upgrade costs the developer would otherwise pay during the interconnection process.[8]

So with appreciation for these nuanced questions, I commend MISO to act in response to today’s order with an eye toward demonstrated consumer value.  When billions of dollars in infrastructure projects are at stake, more confidence in the accuracy of MISO’s planning and cost-benefit assumptions is not too big an ask.  Judiciously using sensitivity analyses to help ratepayers get the most value for their money may be one tool well worth its weight.
 

For these reasons, I respectfully concur.