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Wisconsin Utilities Confirm Benefits Of Midwest ISO Wholesale Power Markets

Utilities in the Midwest are realizing the benefits of membership in the Midwest ISO (MISO) regional transmission organization (RTO), according to recent filings made by Wisconsin public utilities in a state proceeding on future energy assessments. Access to more electricity supply, improved transmission efficiency, better operational dispatch of power plants, more precision in planning for future generation and transmission needs, greater liquidity and price transparency, improved reliability and additional opportunities to reduce fuel costs are part of the many benefits identified by Alliant Energy’s Wisconsin Power & Light Co. (WPL), We Energies and Wisconsin Public Service Corp.

In mid-September filings to the Wisconsin Public Service Commission (PSC) on the commission’s Strategic Energy Assessment for 2006-2012, the utilities all noted that quantifying benefits was difficult since MISO’s wholesale market has only been operating since April 1, 2005. Further, they identified some implementation issues such as timely financial settlement of transactions. Nonetheless, they were able to catalog the benefits outlined above.

WPL, in particular, said that it has seen more efficient pricing and improved reliability. In addition, WPL noted that it has seen greater short-term efficiencies through regionwide economic dispatch of generation and greater long-term efficiencies in terms of transmission and generation investment through more transparent price signals. This transparency and improved information on marginal energy prices, according to WPL, allows for lower-cost energy purchases.

WPL acknowledged the RTO’s role in enhancing regional reliability, saying that “MISO’s improved ability to redispatch generation over a larger footprint will lessen the potential impacts that transmission congestion or outages will have on WPL during periods of adverse operating conditions.”

In addition, WPL expects that “the centrally dispatched market offered by MISO within an expanded footprint should offer additional trading opportunities, greater liquidity and transparency providing for more efficient pricing.” Such opportunities are expected to lead to lower costs for the utility, with savings passed down to retail customers.

As part of the formulation of the state’s long-term energy plan, the PSC had requested that the state’s utilities answer a number of questions including, what costs and benefits Wisconsin’s utility customers have seen from MISO’s wholesale power market and are likely to see in the near future.