Unless the regulatory paradigm fairly balances the interests of both load and generation, the utility industry will be condemned to continued upheaval.
Partners in Power
Complex problems call for collective measures.
Mogensen: Everyone understands that if they have local needs they should pay for the projects required to serve those needs. But what they don’t necessarily get is that a project in the western end of MISO provides significant benefit to customers on the eastern end of MISO. CapX2020 provided another vehicle for cost allocation under MISO.
Parts of the CapX2020 projects were focused on the more traditional need-benefit story, and the bulk of those costs were shared by the utilities that were involved with those projects. That went smoothly and didn’t end up to be much of an issue.
When you look at projects like the Brookings-Hampton line that are judged to have a broader regional benefit, the question is how do you have a corresponding contribution by utilities in the region? Working through the MISO MVP process, the stakeholders came together and had some really epic battles on what was a fair way for these projects to move forward and for everyone to share the costs. There were various appeals, and the outcomes weren’t always to every stakeholder’s satisfaction; that will probably always be the case. But it was resolved to MISO’s satisfaction, and was approved by FERC, asking customers to pay to support a broader regional need.
It’s an iterative process and will continue to be. It’s built on consensus and agreement of mutual needs and benefits.
Kaul: Despite all that’s happened over the last eight years, this model continues to thrive. When we started, the participants were saying, ‘I guess I’ll invest if I have to.’ And now you have people fighting over shares of transmission investments. The world has changed radically.