The Midcontinent Independent System Operator’s failure to include Invenergy Transmission’s Grain Belt Express project in its transmission planning process likely led the grid operator to overstate the benefits of a system buildout, according to MISO’s market monitor.
The benefits of MISO’s roughly $10.3 billion Tranche 1 and $22 billion Tranche 2.1 transmission expansion plans would have been reduced if the proposed Grain Belt Express project was included in MISO’s planning process, David Patton, president of Potomac Economics, said in a filing at the Federal Energy Regulatory Commission on Thursday.
Patton urged FERC to act on a complaint Invenergy filed in August 2022 over MISO excluding the Grain Belt Express project from its transmission expansion planning.
Chicago-based Invenergy plans to build the 5-GW Grain Belt Express transmission line in phases from Kansas to Illinois. The U.S. Department of Energy in November conditionally agreed to a loan guarantee of up to $4.9 billion for the project’s first phase. Missouri Attorney General Andrew Bailey on March 6 urged the Department of Government Efficiency to cancel the loan guarantee.
Overall, Patton contends that MISO’s transmission plans and business case analyses are “highly biased in favor of over-building transmission.”
A “properly calculated” benefit-cost ratio for the Tranche 2.1 transmission projects would be less than 0.4, according to Patton. MISO estimated the portfolio of transmission projects — approved by the grid operator’s board in December — have a benefit-cost ratio of 1.8 to 3.5.
There has been little independent oversight of how MISO develops its planning scenarios, selects transmission projects to be built, establishes its cost-benefit methodologies or sets the assumptions and inputs for its models, Patton said.
MISO recently tried to limit Potomac Economics’ ability to monitor the grid operator’s transmission planning process, saying it is outside the scope of the market monitor’s duties, according to Patton.
“Given the enormous economic incentives for certain segments of MISO’s participants to over-build transmission, at the expense of its transmission customers, we believe more effective independent oversight by the Commission is urgently needed,” Patton said. Acting on Invenergy’s complaint “would be the first step in providing such oversight.”
As a 501(c)(4) nonprofit social welfare organization and a regional transmission organization, MISO is required operate in the public interest and to be independent of any market participant, Brandon Morris, a MISO spokesman, said in an email.
“Our transmission planning efforts go through a rigorous, transparent stakeholder process and our efforts have been described as a model for grid operators across North America,” Morris said. “As electricity demand accelerates, we will continue working with our stakeholders to develop value-based transmission plans to ensure reliability today and into the future.”
Meanwhile, earlier this month, commissioners from the Arkansas, Mississippi and North Dakota public service commissions, along with the Coalition of MISO Transmission Customers, said FERC should act on Invenergy’s complaint.
The construction of merchant lines, which are paid for by their customers, could save utility ratepayers money, the state regulators and coalition said in joint comments.
“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,” the state regulators and coalition said.
