MISO’s Electric & Natural Gas Coordination Efforts by John Lawhorn, Senior Director, Policy & Economic Studies – MISO

John Lawhorn is currently directing the MISO's EPA and Gas/Electric Infrastructure studies

John Lawhorn is currently directing the MISO’s EPA and Gas/Electric Infrastructure studies

The Midwest Independent Transmission System Operator (MISO) is looking forward to tackling new initiatives in 2013 and continuing its commitment to providing reliable and low cost service to stakeholders.  One of the most pressing and complex issues that MISO faces, along with other ISOs and RTOs across the country, is EPA compliance.

Compliance by power generators with new and proposed EPA regulations may have profound effects on the industry’s ability to reliably deliver electricity.  In particular, retrofitting or replacing coal and oil-generation plants to meet the EPA’s air quality rules, including the Mercury and Air Toxics Standard (MATS), could cost utilities within the MISO footprint $33 billion.  Additionally, it could take 57 gigawatts of generation out of service for extended outage retrofits, a serious impact on resource adequacy and grid reliability in Missouri and across the Midwest.

MISO conducted an extensive EPA Impact Analysis in 2011 to further evaluate compliance risks and facilitate optimal solutions.  This study identified an estimated 12 gigawatts of coal fleet capacity at-risk for retirement in the MISO footprint.  Economics dictated that gas-fired resources would replace much of this capacity, a scenario that was examined in a two-phase study carried out in 2012 by Greg Peters of EnVision Energy Solutions for MISO.  The Phase I study (Gas and Electric Infrastructure Analysis), completed in February 2012, found that additional gas pipeline infrastructure in the MISO footprint may be needed to accommodate the changing resource mix over the next three to five years.  The follow-up analysis (Embedded Natural Gas-Fired Electric Power Generation Infrastructure Analysis) came out in June.  This analysis captured the impacts of significantly lower gas prices on the shift from coal to gas in the MISO footprint.  The Phase II study found that over 90% of the pipelines in the MISO footprint may experience at least one day per year of insufficient capacity to handle the fuel needs of existing generators plus incremental units forecasted to replace coal retirements.

MISO remains focused on working with regulators, policy makers and asset owners to facilitate coordination and minimize the potential negative impacts.  Toward this, MISO will work in connection with an Organization of MISO States (OMS) led effort to analyze resource sufficiency across the footprint.  This process will result in a multi-faceted analysis to inform our stakeholders in Missouri and other impacted states about possible strategies, including potential tariff changes and risk-management processes, to best comply with the regulations.

To provide an official forum for discussion of EPA compliance-related issues, with a focus on gas-electric harmonization, MISO and its stakeholders formed the Electric and Natural Gas Coordination Task Force.  This group is the culmination of an ongoing conversation with stakeholders that began in May at the MISO Gas-Electric Interdependency Workshop and continued over the course of the year.  Additionally, MISO has engaged the gas industry in the discussion by sitting down with individual pipeline companies to foster a better understanding of each other’s operations and business models.  MISO has also responded to the call from FERC for an examination of the increase in utilization of gas-fired generation to meet electric needs by providing comments and presenting MISO Stakeholders’ concerns in FERC’s regional technical conferences.

Click to view the high level timeline of work performed on gas issues over 2012.

MISO is committed to working with stakeholders to ensure that the EPA compliance process runs as smoothly as possible, ensuring both long- and short-term system reliability, and we welcome new opportunities and solutions to provide reliable energy for years to come.