Mid-Continent Independent System Operator (MISO) Overview. INCMA February 15, 2017

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1 Mid-Continent Independent System Operator (MISO) Overview INCMA February 15,

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3 ISO s/rto s manage flows on the transmission system by directing generator usage 3

4 North American Electric Grid Operators 4

5 MISO is an independent, non-profit organization in 15 U.S. States and one Canadian province MISO by-the-numbers High Voltage Transmission 65,853 miles Installed Generation Installed Generation Peak System Demand 177,388 MW 1,594 Units 127,125 MW : MISO North : MISO Central : MISO South Mission Work collaboratively and transparently with our stakeholders to enable reliable delivery of lowcost energy through efficient, innovative operations and planning. 5

6 MISO was formed by members to open wholesale markets - growth has been based on reliability and value creation for members and their customers Reliability Coordination & Tariff Administration Market Implementation Energy & Ancillary Services Markets Value Expansion Portfolio Evolution Discussions begin to form MISO FERC approval as an RTO Reliability Coordination Tariff Administration under MISO s Joint Open Access Operating Transmission Tariff Agreement with PJM Energy Markets Implemented 2005 Ancillary Services Implemented 2009 Resource Adequacy Value-based Transmission Planning 2011 South Region Integration 2013 Federal Rule Discovery 2015 State Rule Discovery Efficient Environmental Implementation FERC issues orders 888/ FERC issues order FERC issues order FERC issues order Legislative Timeline 6

7 MISO Governance Federal Energy Regulatory Commission (regulatory landscape) Advisory Committee (guidance) Board of Directors (direction) MISO Management North American Electric Reliability Corporation (compliance) 7

8 Key RTO Functions and Benefits What RTOs Do Provide non-discriminatory open access transmission service Platform for wholesale energy and capacity markets Perform system operations through energy markets Long-term transmission planning, resource adequacy constructs Implications Facilitates competition between generation resources Incentivizes efficient and cost-effect generation dispatch, and new generation investment Least-cost dispatch that accounts for reliability needs Enhanced long-term reliability 8

9 MISO s strategic objectives reflect our broad response to the nation s changing energy landscape MISO Vision The most reliable, value-creating RTO 9

10 MISO s 2015 Value Proposition Measures our Recent Achievement $2,316 ($267) Benefit by Value Driver (in $ millions) $2,585 $251 $285 Improved Reliability Reliability ($181) Compliance ($104) More Efficient Use of Existing Assets Dispatch of Energy ($147) Regulation ($71) Spinning Reserves ($33) Reduced Need for Additional Assets Footprint Diversity ($1,620) Generator Availability ($238) Wind Integration ($346) Demand Response ($112) MISO Cost Structure Total Net Benefits 10

11 Trend towards lower carbon fleet has been underway for some time and will continue going forward MISO Generation Portfolio Evolution 2% 13% % 2% % 7% 76% 2% 16% 27% 46% 2% 15% 22% 9% 52% Existing Fleet No carbon regulations modeled but some reductions expected due to RPS and economics Future Scenarios 2% 14% 15% 33% 36% Policy Regulation Carbon regulations targeting a 25% reduction across all aggregated unit outputs are enacted. 26% 14% 2% 28% 30% Accelerated Technology Increase in carbon emissions results in carbon regulations targeting a 35% reduction across all aggregated unit outputs to be enacted. 11 Enabling these strategic scenarios will require a review of: Transmission Requirements System Capabilities Cost Allocation Methods

12 One day in ten PRM (15.2%) OMS-MISO survey showed capacity declining but sufficient in 2017 to mitigate zonal deficits 2017 Outlook, GW (% Reserves) 2.7 (17.4%) Projected Capacity against Reserve Requirement* (GW) (15.9%) to to to 1.5 Surplus / Deficit with only High Certainty Resources Incremental Surplus / Deficit with Low Certainty Resources MN, MT, ND, SD, West WI East WI and Upper MI -1.2 IA IL MO IN and KY Lower MI AR LA and TX 10 MS *Positions include reported inter-zonal transfers Publicly announced potential retirements as of June 1, 2016 were included as low certainty resources Exports from Zone 1 were limited by the zone s Capacity Export Limit to 0.6 GW Exports from Zone 8, 9, and 10 were limited by the Subregional Power Balance Constraint to 0.98 GW 12

13 1 day in 10 PRM (15.2%) but continued action is required in the near term to ensure sufficient resources in future years Projected Capacity Position in GW (% Reserves) Surplus / Deficit with only High Certainty Resources Incremental Surplus / Deficit with Low Certainty Resources 2.7 (17.4%) 2.2 (16.9%) 2.5 (17.1%) (15.9%) (16.1%) (15.5%) (14.9%) -0.5 (14.8%) -1.9 (13.8%) -2.6 (13.2%) Regional outlook includes projected constraints on capacity, including Capacity Export Limits and the Subregional Power Balancing Constraint Resources with publicly announced potential retirements or suspensions as of June 1, 2016 were counted as low certainty. These figures will change as future capacity plans are solidified by load serving entities and state commissions. 13

14 For Additional Questions: Bob Kuzman