OPSI Meeting

Planning for Renewable Energy

Delivery in MISO

April 3, 2013

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• Make the benefits of an economically efficient energy market

available to customers by identifying transmission projects which

provide access to electricity at the lowest total electric system cost

• Provide a transmission infrastructure that upholds all applicable

NERC and Transmission Owner planning criteria and safeguards

local and regional reliability through identification of transmission

projects to meet those needs

• Support state and federal energy policy requirements by planning

for access to a changing resource mix

• Provide an appropriate cost allocation mechanism that ensures

that costs of transmission projects are allocated in a manner

roughly commensurate with the projected benefits of those

projects

• Analyze system scenarios and make the results available to state

and federal energy policy makers and other stakeholders to

provide context and inform the choices they face

• Coordinate planning with neighboring planning regions to seek

more efficient and cost-effective solutions

MISO

Board of

Director

Planning

Principles

Fundamental

Goal

The development of a comprehensive expansion plan that meets

reliability needs, policy needs, and economic needs

Guiding Principles: MISO Transmission Expansion Plans

MISO Value Based Planning

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• Objective of value based

planning is to develop the

most robust plan across a

variety of scenarios – not

the least-cost plan under a

single scenario

– The “best” transmission

plan may be different in

each policy-based future

scenario

– Transmission plans that

provide value under a

range of scenarios should

offer the most future

value in supporting the

future resource mix

The Road to the First Multi Value Project Portfolio

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2005

2006

2007

2010

Board of Directors Guiding Principles

2008

Value-Based Planning Process

MTEP 06 Energy Market Planning Analysis

Joint Coordinated System Plan

2009

FERC Order 890

6 States in MISO have Renewable Portfolio Standards

10 States in MISO have Renewable Portfolio Standards

Regional Generation Outlet Study I

Regional Generation Outlet Study IIOMS Cost Allocation and Regional Planning Work Group Created

Multi Value Project FERC OrderCandidate Multi Value ProjectPortfolio Analysis

2011

FERC Order 1000

Multi Value Project Tariff Development

Upper Midwest Transmission Development Initiative Created

Midwestern Governors Association supports Energy Zones Methodology

2003 MTEP03 Exploratory Study

MTEP 05 Exploratory Study

First Multi Value Project Portfoliorecommended to BOD

Explorations of the policy, processes, and transmission solutions required to provide the best value for consumers began in 2003

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Before transmission is built a

number of conditions must

be met

- Increased consensus on

energy policies (current

and future)

- A robust business case

that demonstrates value

sufficient to support the

construction of the

transmission project

- A regional tariff that

matches who benefits with

who pays over time

- Cost recovery mechanisms

that reduce financial risk

Conditions Precedent to

Regional Transmission Build

Policy ConsensusState Renewable Portfolio Standards

• MISO believes an informal consensus has been reached regarding appropriate planning for energy policies.

• This belief is based on the widespread implementation of Renewable Portfolio Standards across the MISO footprint and the work of many stakeholders, spearheaded by the:

� Midwest Governor’s

Association

� Upper Midwest Transmission

Development Initiative

� Organization of Midwest ISO

States Cost Allocation and

Regional Planning

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Where will the wind come from…

Wind Zone Development Was Key to Establishing Transmission Needs

The low cost approach to wind generation siting, when both

generation and transmission capital costs are considered, is

a combination of local and regional generation locations. 8

Transmission Portfolio of 17 Projects Developed

92011 Approved Multi Value Project Portfolio

Proposed Multi Value Project

Existing/Planned Transmission

345 kV Proposed

765 kV Proposed

345 kV

500 kV

735 kV and above

DC Line

Proposed Multi Value Projects (MVPs) State Voltage

Big Stone-Brookings SD 345 kV

Brookings, SD -SE Twin Cities MN/SD 345 kV

Lakefield Jct.-Winnebago–Winco–Burt area & Sheldon–Burt area–Webster MN/IA 345 kV

Winco–Lime Creek–Emery-Blackhawk–Hazleton IA 345 kV

N. LaCrosse-N. Madison-Cardinal & Dubuque Co.-Spring Green-Cardinal WI 345 kV

Ellendale-Big Stone ND/SD 345 kV

Adair-Ottumwa IA/MO 345 kV

West Adair to Palmyra Tap MO 345 kV

Palmyra-Quincy-Merdosia-Ipava & Meredosia-Pawnee MO/IL 345 kV

New Pawnee-Pana IL 345 kV

Pana-Mt. Zion-Kansas-Sugar Creek IL 345 kV

New Reynolds-Burr Oak-Hiple IN 345 kV

Michigan Thumb Loop Expansion MI 345 kV

New Reynolds-Greentown IN 765 kV

Pleasant Prairie-Zion Energy Center WI/IL 345 kV

Fargo-Oak Grove IL 345 kV

Sidney-Rising IL 345 kV

Multi Value Projects reliably and economically

enable established energy policy choices

• Transmission Portfolio creates a robust transmission system that provides value when tested under a wide range of policy, economic, and operating conditions

• Enables 41 million MWh of wind energy to meet renewable energy mandates and goals

• Maintains system reliability by resolving more than 6,700 system conditions

• Provides benefits in excess of costs under all scenarios studied, with its Benefit-to-Cost ratios ranging from 1.8 to 3.0

– Congestion and Fuel Savings; Wind Turbine Investment ; Planning

Reserve Margin; Transmission Line Losses; Future Transmission

Investment; Operating Reserves

– Range based on scenarios

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Multi Value Projects create benefits that are spread across MISO in a manner commensurate with costs

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MISO Local Resource Zones

1.6 – 2.9

2.0 – 3.3

1.6 - 2.8 1.8 - 2.81.8 - 3.2 1.8 - 3.0 1.7 - 3.0

Zone 1:MN, MT,ND, SD,

Western WI

Zone 2:Eastern WIand Upper

MI

Zone 3:IA

Zone 4:IL

Zone 5:MO

Zone 6:IN, KY, OH

Zone 7:Lower MI

Benefit/Cost Ratio RangesLocal Resource Zones

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1 Big Stone-Brookings SD

2 Brookings, SD-SE Twin Cities MN/SD

3 Lakefield Jct. - Winnebago-Winco-Burt area & Sheldon-Burt

Area-WebsterMN/IA

4 Winco-Lime Creek-Emery-Black Hawk-Hazelton IA

5 N. LaCrosse-N. Madison-Cardinal & Dubuque Co.-Spring

Green-Cardinal (a/k/a Badger-Coulee Project)WI

6 Ellendale-Big Stone ND/SD

7 Adair-Ottumwa IA/MO

8 Adair-Palmyra Tap MO/IL

9 Palmyra Tap-Quincy-Merdosia-Ipava & Meredosia-Pawnee IL

10 Pawnee-Pana IL

11 Pana-Mt. Zion-Kansas-Sugar Creek IL/IN

12 Reynolds-Burr Oak-Hiple IN

13 Michigan Thumb Loop Expansion MI

14 Reynolds-Greentown IN

15 Pleasant Prairie-Zion Energy Center WI

16 Fargo-Galesburg-Oak Grove IL

17 Sidney Risng IL

Proj.

No.

Multi-Value Project Status

StateProject NameReg. Const.

Status

• 3 under construction

• 4 pending state

regulatory hearings

• 10 pending state

filings as necessary