The Midcontinent Independent System Operator expects to have sufficient reserve margin going into the coming winter, stakeholders learned Wednesday.
The Board of Directors' Markets Committee meeting discussed winter readiness with Todd Ramey, MISO vice president for system operations and market services.
While MISO should have enough power this winter, a formal winter assessment is under way, Ramey said, with initial assessment results to be presented at a workshop on Monday.
Enhancements made after the Polar Vortex event of the 2013-2014 winter include improved gas-electric coordination, enhanced fuel assurance transparency, and market changes, Ramey said.
Regarding natural gas supplies, MISO has improved operator tools and monitoring practices for pipelines and pricing, he said. MISO also conducts a fuel survey on fuel contracting practices and backup fuels.
Also, the settlement of MISO's seams dispute with Southwest Power Pool and extended locational marginal pricing, have also improved resource availability, he said.
Formerly known as "convex hull pricing," the ELMP model includes start-up costs in LMPs for fast-start resources and uses offline fast-start resources in price formation under scarcity conditions. It was implemented in March.
During Wednesday's MISO Advisory Committee meeting, Mitch Myhre, who chairs the Finance Subcommittee and serves Alliant Energy as manager for regulatory affairs, said MISO plans to spend as much on operating expenses in 2016, $281.6 million, as is now budgeted for 2015, but will increase its capital budget by $6.6 million to $32 million.
The 2016 operating budget includes an $8.5 million increase in salaries and benefits, to $149.3 million, partly to account for general pay raises but also as management expenses to decrease its average job vacancy rate to 4% from 6%. This increase is more than offset by a $10.6 million decrease due to the full depreciation of the ancillary service market system.
The 2015 operating budget had to be adjusted upward by $2.3 million mainly to address new North American Electric Reliability Corp. Critical Infrastructure Protection regulations, which go into effect April 1, 2016, said Jo Biggers, MISO vice president for finance.
The average cost for the 2016 budget will be 34.6 cents/MWh, compared with 34 cents/MWh in 2015, Myhre said, due to an expected decrease in energy use, from 777.1 TWh in 2015 to $775 TWh in 2016. The cost/MWh was 33 cents/MWh in 2014 and 37 cents/MWh in 2013.
The capital budget increase is driven by key initiatives including systems that improve operations, build skills, enable the use of more technology and enhance MISO's market position, Myhre said.
The next step is for the 2016-2018 budgets to be presented to the board's Audit & Finance Committee over the next few weeks, Myhre said. The board is to consider the budget for final approval in December.
