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IURC Summer AssessmentSummer Assessment2000 2010 2020 2030 2040 2050 0 1 2000 2010 2020 2030 2040...

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IURC Summer Assessment Summer Assessment John Bear MISO President & CEO May, 2011 0
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Page 1: IURC Summer AssessmentSummer Assessment2000 2010 2020 2030 2040 2050 0 1 2000 2010 2020 2030 2040 2050 0 Coal 1 as CCS Retrofit New Coal + CCS 7 Source: EPRI, “The Power to Reduce

IURCSummer AssessmentSummer Assessment

John BearMISO

President & CEO

May, 2011

0

Page 2: IURC Summer AssessmentSummer Assessment2000 2010 2020 2030 2040 2050 0 1 2000 2010 2020 2030 2040 2050 0 Coal 1 as CCS Retrofit New Coal + CCS 7 Source: EPRI, “The Power to Reduce

Discussion Outline

• MISO Summer Assessment• Resource EvolutionResource Evolution• MISO Resource Initiatives

– Resource Adequacy– Transmission Planning

• Membership Changes

1

Page 3: IURC Summer AssessmentSummer Assessment2000 2010 2020 2030 2040 2050 0 1 2000 2010 2020 2030 2040 2050 0 Coal 1 as CCS Retrofit New Coal + CCS 7 Source: EPRI, “The Power to Reduce

MISO current resource adequacy construct enables capacity sharing while leveraging traditional bi-lateral methodologiesmethodologies Setting Planning Reserve Margins (PRM)

– Load Serving Entity establishes load forecast– MISO establishes/recommends PRM based on Loss of Load

Expectation Study– Local regulators have authority to modify for their jurisdiction

Term – Monthly Clearing obligation is met by bringing resources to meet load forecast plus

their Planning Reserve Margin– Owned resources– Controlled resources– Voluntary Capacity Auction

Penalty - Failure to meet resource obligation results in a settlement charge based on Cost of New Entry (CONE) – currently $95,000 / MW-month

2

Page 4: IURC Summer AssessmentSummer Assessment2000 2010 2020 2030 2040 2050 0 1 2000 2010 2020 2030 2040 2050 0 Coal 1 as CCS Retrofit New Coal + CCS 7 Source: EPRI, “The Power to Reduce

For the 2011 summer season, there are sufficient resources to manage weather, load and outage uncertainty

Reserve Margin 201117.4%

Reserve Margin Change

23.8%

17 4%6.4%

Margin Increase Drivers

15.4% 2.0%

12.1%

5.3%

17.4%Drivers• Increased

Forecast Error• Forced Outage

Rate• Decline in

C ti

Diversity Benefit

Congestion

Reported Reserve Margin

Planning Reserve Margin

Surplus2010Planning Reserve Margin(PRM)

2011PRM

2011PRM (relative to non-coincident peak)

3

Page 5: IURC Summer AssessmentSummer Assessment2000 2010 2020 2030 2040 2050 0 1 2000 2010 2020 2030 2040 2050 0 Coal 1 as CCS Retrofit New Coal + CCS 7 Source: EPRI, “The Power to Reduce

The primary changes from last year are driven by changes in capacity registered in MISO’s resource g p y gadequacy process

• Total installed 2011 summer capacity reflects:p y– Addition of 1,500 MW of wind (although only 382 MW

registered under MISO’s Resource Adequacy program)S bt ti f 18 156 MW f t it t– Subtraction of 18,156 MW of system capacity not registered under MISO’s Resource Adequacy program, including:

• 1,800 MW mothballed,• 2,300 MW extended planned outages,• 5,000 MW external commitments.,

• Forecast demand increased 1.3%– Excludes impacts of FE exit and Big Rivers integration

4

Page 6: IURC Summer AssessmentSummer Assessment2000 2010 2020 2030 2040 2050 0 1 2000 2010 2020 2030 2040 2050 0 Coal 1 as CCS Retrofit New Coal + CCS 7 Source: EPRI, “The Power to Reduce

The future resource portfolio will be shaped by a host of influences

Energy PolicyFederal RPS?Clean Energy

Technology

Clean Energy Standard?

EPA Regulations?

Nuclear C i i ?

Resource Supply/Demand Balance

Economic Factors

Development & Adoption

Crisis?Crisis?

Smart GridEnergy Efficiency

PortfolioEvolution

BalanceConstruction CostsOperational Costs

(Fuel, O&M)

gy yDemand ResponseSupply-Side

Technologies

A versatile transmission system and regional resource adequacy are required to accommodate multiple potential resource futures

5

Page 7: IURC Summer AssessmentSummer Assessment2000 2010 2020 2030 2040 2050 0 1 2000 2010 2020 2030 2040 2050 0 Coal 1 as CCS Retrofit New Coal + CCS 7 Source: EPRI, “The Power to Reduce

63%

63%Resource portfolios vary across the USreflecting the resources of each region

14% 17%

14%9% 9% 5%

ISO NEC lNuclear

NYISO

14%7%

0%51%

31%

ISO-NE

27%34% 34%

CoalGas & OilRenewablesOther

64%7% 9%

1%

MISO 18%

41%36%

%

40%47%4%

27%

1%

WEST

8%1%

27%

1%

70%

5%1%

PJM7% 6%0%

SPP 34%

46%

WEST

CALISO

5%

18%

7%0%

12%7%

2%

SOUTH%

ERCOTSOUTH

6Source: U.S. Energy Information Administration and RTO data, 2010

Page 8: IURC Summer AssessmentSummer Assessment2000 2010 2020 2030 2040 2050 0 1 2000 2010 2020 2030 2040 2050 0 Coal 1 as CCS Retrofit New Coal + CCS 7 Source: EPRI, “The Power to Reduce

Technology development/adoption will be a key driver of the evolution of the nation’s resource portfolio …

7 7Limited Portfolio

CCS, PEVs not deployedNo expansion / replacement of

nuclear fleet

Full PortfolioCCS, PEVs availableAdvanced nuclearAccelerated improvements in

er y

ear

5

6

er y

ear

5

6

Demand Reduction

Demand Reduction

nuclear fleet Accelerated improvements in end-use efficiencies and renewables costs

n kW

h pe

3

4

n kW

h pe

3

4

Nuclear

HydroHydroWind

WindBiomassBiomass

Solar

Trill

ion

2

3

Trill

ion

2

3

CoalG

Gas Nuclear

2010 2020 2030 2040 205020000

1

2010 2020 2030 2040 205020000

1CoalGas

CCS Retrofit

New Coal+ CCS

7Source: EPRI, “The Power to Reduce CO2 Emissions”, October 2009

2010 2020 2030 2040 20502000 2010 2020 2030 2040 20502000

Page 9: IURC Summer AssessmentSummer Assessment2000 2010 2020 2030 2040 2050 0 1 2000 2010 2020 2030 2040 2050 0 Coal 1 as CCS Retrofit New Coal + CCS 7 Source: EPRI, “The Power to Reduce

… and regional resource portfolios will continue to reflect local resources and regional energy policy decisions

2,000

EAST

1,000

1,500

EAST

Wh

1 500

2,000

MIDWEST1,500

2,000

WEST0

500

,

TW

500

1,000

1,500

TWh

500

1,000

TWh

02010 2020 2030 2040 2050

2,000

SOUTH0

500

2010 2020 2030 2040 2050

02010 2020 2030 2040 2050

1,000

1,500

SOUTH

TWh

0

500

T

Coal-CCS (New)CCS Retrofit

GasSolar

8

2010 2020 2030 2040 2050CCS RetrofitCoalNuclear (New)

Nuclear (Existing)Gas-CCS

SolarGeothermal

BiomassWindHydro+

ImportsTotal Energy for Load (after EE)

Source: EPRI 2010 Summer Seminar Presentation, “Prism 2.0: Preliminary Insights from EPRI’s Regional Model”

Page 10: IURC Summer AssessmentSummer Assessment2000 2010 2020 2030 2040 2050 0 1 2000 2010 2020 2030 2040 2050 0 Coal 1 as CCS Retrofit New Coal + CCS 7 Source: EPRI, “The Power to Reduce

The actual MISO reserve margin remains high (24%), but the generation fleet is aging and little baseload capacity has been built in the last twenty yearsbeen built in the last twenty years…

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Page 11: IURC Summer AssessmentSummer Assessment2000 2010 2020 2030 2040 2050 0 1 2000 2010 2020 2030 2040 2050 0 Coal 1 as CCS Retrofit New Coal + CCS 7 Source: EPRI, “The Power to Reduce

MISO is proposing to modify its Resource Adequacy construct to address deliverability concerns, price transparency and other concernstransparency and other concerns

Planning Reserve Margin Methodology – Unchanged T 1 b i i i 2013 2014 l i Term – 1 year beginning in 2013-2014 planning year Clearing functions

– Adds an annual resource adequacy auction that establishes a market clearing price

– Load Serving Entities may “opt-out” by providing resource plan to meet their obligations

Penalty – Unchanged New features

– Zonal deliverability assuranceZonal deliverability assurance– Resource portability across seams (to other markets)

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Page 12: IURC Summer AssessmentSummer Assessment2000 2010 2020 2030 2040 2050 0 1 2000 2010 2020 2030 2040 2050 0 Coal 1 as CCS Retrofit New Coal + CCS 7 Source: EPRI, “The Power to Reduce

MISO’s integrated transmission system is designed to reduce the delivered cost of wholesale energy

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Page 13: IURC Summer AssessmentSummer Assessment2000 2010 2020 2030 2040 2050 0 1 2000 2010 2020 2030 2040 2050 0 Coal 1 as CCS Retrofit New Coal + CCS 7 Source: EPRI, “The Power to Reduce

Entergy’s recent decision to join MISO will add scope and diversity to our generation fleet

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Page 14: IURC Summer AssessmentSummer Assessment2000 2010 2020 2030 2040 2050 0 1 2000 2010 2020 2030 2040 2050 0 Coal 1 as CCS Retrofit New Coal + CCS 7 Source: EPRI, “The Power to Reduce

Indiana will benefit from Entergy’s decision

Reduced pro rata share of regulation requirementReduced pro rata share of contingency reserveReduced pro rata share of contingency reserve

requirementReduced per MWh cost of MISO administrative feesp Increased economic trade opportunities Increased footprint diversity will likely resulted in

d d l i i t f I direduced planning reserve requirement for Indiana utilities

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