MISO Analyzes State Impacts of Clean Power Plan

Notwithstanding the stay of the Clean Power Plan, the Midcontinent Independent System Operator (MISO) is forging ahead with investigating potential CPP impacts in the MISO region. MISO released the final installment of its near-term CPP modeling at its Planning Advisory Committee meeting last Wednesday, February 17, 2016.  This analysis looks at impacts to MISO’s member-states under different compliance and capacity scenarios.  Prior analyses examined the range of available compliance pathways and regional impacts.

MISO found that both rate- and mass-based compliance will result in generation changes, and as a result, transmission expansion needs will be comparable regardless of which compliance scheme a state elects.  MISO’s modeling also indicates that mass-based compliance will produce a more balanced mix of buyers and sellers in the allowance and Emission Rate Credit (ERC) trading market.  States selling ERCs, however, will see more value under rate-based compliance.

In four of the five different capacity scenarios that MISO modeled, the majority of MISO states had lower production costs under mass-based compliance.  According to MISO, rate-based compliance would be less expensive for states only if the MISO region achieves heavy penetration of renewables and energy efficiency.  Even then, rate-based compliance will be cheaper only for a few states (Illinois, Louisiana, Wisconsin, and Arkansas); most states will see little cost difference between compliance schemes.

In addition to the various capacity scenarios, MISO ran two “patchwork” compliance scenarios—the first assuming states would split 50-50 between rate-based and mass-based compliance, and the second assuming 70% of states would elect mass-based compliance.  Under the 50-50 scenario, nine MISO states reaped cost advantages under mass-based compliance, compared to just five states (South Dakota, Louisiana, Michigan, Mississippi, and North Dakota) that saw cheaper costs under rate-based compliance.  Under the 70-30 scenario, however, mass-based compliance was cheaper for fourteen MISO states.

MISO will unveil the initial results of its mid-term analysis, which will look closer at preparing the transmission grid for compliance, at its March Planning Advisory Committee meeting.  MISO says that it will work with stakeholders to determine the effects (if any) of the recent CPP stay on its future planning efforts.

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