The Role of Transmission The Electrical Interstate Highway System

Transcription

1 The Role of Transmission The Electrical Interstate Highway System NCSL Advanced Coal Technologies Energy Institute November 20, 2008 John Bear President & COO

2 Midwest ISO Overview The Midwest ISO is an independent, non-profit 501(C)(4) organization. We serve as the reliability coordinator for the transmission of high voltage electricity via a security constrained economic dispatch across all or parts of 15 states and Manitoba. Control centers in Carmel, Indiana and St. Paul, Minnesota Began Reliability Operations on Dec. 15, 2001 Began Tariff Administration and Scheduling Operations on February 1, 2002 Energy Market Operations since April 1, 2005 ASM Operations to launch in Large footprint (~947,000 square miles) 133,000+ MW of generating capacity 97,000 miles of transmission lines Over $12 billion installed assets $ Cleared per year = $31 billion (2007) Annual Budget = $250 million 2

3 The Midwest ISO s Role What We Do Provide Independent Transmission System Access Deliver Improved Reliability Coordination Perform Efficient Market Operations Coordinate Regional Planning Foster Platform for Wholesale Market Development Implications All parties have equal and non-discriminatory access Substantial regional reliability improvements Lower cost unit commitment, dispatch and congestion management Integrated system planning Encourage infrastructure investment and facilitate regulatory initiatives 3

4 Midwest ISO Value Proposition Midwest ISO Annual Benefit by Value Driver 1 (in $ millions) ,085 (250) Qualitative Value Drivers Price Transparency Data / Informational Transparency Planning Coordination Seams Management Regulatory Compliance Wholesale Platform for Demand Response Improved Reliability Dispatch of Energy Dispatch of Reserves Contingency Reserves Generation Investment Deferral Gross Benefits Midwest ISO Cost Adders NET BENEFITS Wholesale Platform for Renewable Portfolio Standards 1 Figures shown reflect annual benefits and costs reflected in 2007 dollars 2 As of 7/31/08, the 12-month rolling average savings = $135 million 4

5 National Highway System Mandate for Change President Eisenhower 1955 State of the Union A modern, efficient highway system is essential to meet the needs of our growing population, our expanding economy, and our national security State of the Union road construction needed for personal safety, the general prosperity, the national security of the American people. If we are ever to solve our mounting traffic problem, the whole interstate system must be authorized as one project, to be completed approximately within the specified time. Only in this way can industry efficiently gear itself to the job ahead. Only in this way can the required planning and engineering be accomplished without the confusion and waste unavoidable in a piecemeal approach. 5

6 Interstate Highway System Met the Nation s Growing Transportation Needs and Changing Uses Without the Interstate Highway System With the Interstate Highway System 6

7 The Current State of the Electric Transmission System Parallels the National Highway System in the 1950s National Highway System 1950s Design, Planning and Funding Designed for Intrastate travel Planned at state level Funded at state level Usage Patterns changing Intrastate Regional Interstate Growing steadily (~ 5% per year) Other Considerations Roads in poor physical condition Insufficient for emergency conditions Electric Transmission Current Design, Planning and Funding Designed for single company use Planned at company level Funded at company / state level Usage Patterns Changing Company Regional Interstate Renewable power Growing steadily (~ 2% per year) Other Considerations Reliability margin shrinking Congestion growing $713M Midwest ISO Infrastructure Aging 60% of T/D/G is at or near the end of planned life 20% of T/D/G is past its planned life Average Age of Infrastructure Baseload Gen. = 42 yrs Transmission = 40+ yrs 7

8 Transmission Expansion Impediments to Progress Lack of True Regional Planning Past planning practices were logical Local utility planning for local usage To move a utility s generation to load served by that same utility That same local utility planning practice does not meet current needs Regionally based economic dispatch to all load in the region to enhance reliability Financing Investment capital has been available, but Certainty of cost recovery has largely kept it on the sideline Reliability versus Economic Federal vs. State Issues 8

9 Transmission Expansion Role of the Midwest ISO Independent facilitator / coordinator of transmission planning Individual transmission owners submit their proposed expansion plans Midwest ISO Evaluations proposals based on regional benefits reliability and economic Consolidates proposals into a regional package Regional view Midwest ISO Regional Transmission Expansion Plan (MTEP) Regional Generation Outlet Study Joint Coordinated System Plan Midwest ISO / PJM / SPP / TVA Process Improvements Generation interconnection queue reform Regional Expansion Criteria and Benefits Task Force Proffer true regional alternatives 9

10 Transmission Expansion Role of State Legislator Enable State Commissions to redefine the public interest from a regional perspective Generation portfolio diversity Renewable portfolio standards Carbon legislation Transmission planning Cost recovery Protect customer (local rate payer) by applying a regional perspective Driver Regional utility plan will enable local economic development Local utility plan will work against each other to stagnate economic development throughout the region State inaction could lead to federal action 10