Managing the energy grid: Inside MISO and SPP

When regional transmission organization (RTO) Midcontinent Independent System Operator literally turns on the power switch to its state-of-the-art command center in West Little Rock on June 1, Arkansas will be at the epicenter of the nation’s ongoing and often raucous debate on the safety and reliability of the nation’s energy grid system.

Along with Southwest Power Pool’s $62 million relatively new campus with its own real-time data and operations center about 3.4 miles from the MISO headquarters, both nonprofit grid operators now staff a specially-trained group of engineers that oversee the smooth flow of nearly one-third of the nation’s power generation across all or parts of at least 23 states and Canada.

Once fully operational, MISO’s 50,000-square-foot Little Rock campus will control the organization’s (RTO) South region, which includes 18,000 miles of transmission, 50,000 megawatts (MW) of general capacity, and 30,000 MW of load into the MISO southern footprint across parts of Arkansas, Louisiana, Mississippi, Texas and the city of New Orleans.

The company’s initial 42 employees are primarily experts in engineering and technology, adding to the growing number of science, technology, engineering and mathematics (STEM) jobs at high-tech companies throughout Arkansas.

“We hope to use our presence here not only as a resource to the greater Little Rock community, but as a magnet for other energy-sector firms,” MISO President & CEO John Bear said at the grid operator’s grand opening on March 24.

As one of the largest RTOs overseeing power grid operations across North America, MISO manages a 15-state region stretching from the Gulf of Mexico to Manitoba, Canada. MISO’s $22 million Little Rock operations center will also work in tandem with a similar facility in Carmel, Ind., MISO’s corporate headquarters outside of Indianapolis, and a third facility in Eagan, Minn., near Minneapolis. Employees at all three MISO locations work together in real-time operations, market operations, customer services, government and regulatory affairs, information technology and administrative support, officials said.

FORMIDABLE FACILITIES
During a recent tour of MISO’s space-age looking command center, Todd Hillman, MISO’s vice president of South Region Operations, proudly chaperoned visitors through the grid operator’s facility located just off Kanis and Bowman Roads in West Little Rock. On this particular day, engineers were testing computers and other hardware connected to a giant “live map” covering one large wall, displaying every power plant and distribution line where MISO operates.

Notwithstanding the impressive engineering epicenter, the other facilities and operations at MISO’s Little Rock location are just as notable. They include a train-sized backup power generator, a solar-paneled outdoor car garage, open-space workstations with “Jetsons”-like computers and phone systems, National Security Agency-level security and sports-inspired meeting rooms named after the Arkansas Razorbacks and other SEC schools.

Among his many hats as ambassador for MISO’s South Region, Hillman said his main job is consistent with the grid operator’s mission of providing safe low-cost and reliable energy to consumers across MISO’s massive geographical territory. And although there have been many questions about the reliability of the system in the news, Hillman said during the tour of the command center that utilities, regulators and grid operators are always working to improve the efficiency of the nation’s energy system, often through innovation, upgrades and “smart grid” technology developed after major events like Hurricane Sandy or Midwestern tornadoes that temporarily take thousands of electric consumers offline.

“The grid has always been reliable,” Hillman said quietly when questioned about Hurricane Sandy in 2012 and the Northeast blackout of 2011.

He argues with ready available statistics that, although problems will occasionally occur in the nation’s grid that are caused by weather or human error, the U.S. still has the most expensive, sophisticated and reliable system in the world when compared to other countries.

PREDICTING CONGESTION

In addition, Hillman said technology that now allows MISO and other grid operators to see the energy grid in real time also allows engineers to now immediately correct energy overload and congestions problems they see each day. The command center in Little Rock and other MISO locations also allow the grid operator to run scenarios to help predict and alleviate congestion and other issues that may cause future blackouts and power surges.

“The thing MISO brings to the table is tools that have far-reaching [capabilities],” he said. “We can see the over-arching picture from a reliability standpoint. At MISO, we are able to run 9,000 contingencies every 90 seconds – it just blows your mind the amount of analysis.”

He added: “There are actual facts that show that MISO being in the South in one year has made the [grid] system more reliable.”

Hillman, like other grid operators and industry watchers, describes grid operators as the “air-traffic controllers” of the nation’s complex and often-maligned energy grid, ensuring the delivery of reliable least-cost energy to wholesale energy customers.

In his office after a tour of the still-new-smelling MISO headquarters, Hillman talked passionately about the Little Rock center that was literally hewn out of the famous rock that gave the city its name. Outside his office window sits one of those impressive car-size boulders that Hillman said will help keep him grounded about the mission of grid operators in Arkansas and the other states he oversees.

‘FRIENDLY’ RIVALRY
But MISO’s decision to move to Little Rock is largely related to its current rivalry with SPP that both grid operators call “friendly.” After first exiting its system agreement in 2005, Entergy Arkansas evaluated a number of alternatives before considering whether to continue its independent arrangement with SPP or deciding to join another RTO like MISO, which had no Southern roots at the time.

During that period, SPP made the argument before the Arkansas Public Service Commission (PSC) that it was in a better position to serve Entergy Arkansas and its Arkansas ratepayers.

“If Entergy joins SPP as a full member, two large adjacent power grids will be consolidated, Entergy will have a voice in SPP’s decision-making process, it will continue contributing to our regional energy reserves, and the APSC will have real and meaningful influence through SPP’s Regional State Committee,” SPP President and CEO Nick Brown said during that process.

Finally in November 2011, after months of often contentious public discussion, cost-analysis studies and regulatory hearings, Entergy Arkansas officially filed a “change of control” request to join MISO.

“Our proposal for Entergy Arkansas to join MISO is monumental for our customers,” Hugh McDonald, president and CEO of Entergy Arkansas, said at the time. “It provides the answer to a commitment we made to customers in 2005 to terminate Entergy Arkansas’ participation in a contract that simply created too much uncertainty and litigation risk for our customers and company.”

As part of the decision to allow Entergy Arkansas to join with the Midwest grid operator, the PSC issued a 112-page order that dictated specific steps Entergy Arkansas had to take before the deal was complete. Those mandates included giving special recognition to other electric companies in Arkansas, such as SWEPCO and the Arkansas Electric Cooperatives Corp.

The PSC edict also required Entergy Arkansas to maintain operational independence from its parent company, Entergy Corp., and sister operating companies in Louisiana, Mississippi and Texas.

In late 2013, Entergy Corp. completed the integration of its transmission system into MISO following more than two years of planning and preparation with the New Orleans-based parent of Entergy Arkansas and numerous other stakeholders.

‘VERY GOOD TRANSITION’
Today, both Entergy Arkansas’ McDonald and MISO’s Bear say the integration process went smoothly, and the initial projections of more than $1 billion in savings to Entergy utility customers over the next decade is ahead of schedule.

“It has been a great decision,” McDonald said in a recent interview. “The estimates of customer savings that we had over the entire Entergy [system] was like $1.4 billion over the first 10 years, and our [Entergy Arkansas’] share of that was about $263 million for that same period. And after being with MISO for a year now – we are on track.”

In looking back on the entire process that took years to complete, McDonald termed the cooperative deal with MISO a rousing success. “We joined at 11 p.m., Dec. 18, 2013,” McDonald said. “Things went very smoothly without a hitch, and it’s been a very good transition. The MISO team has done a great job in helping us, and our customers are benefitting from that in the form of lower energy and fuel costs.”

MISO’s Indiana-based chief executive said much the same before the grand opening of the grid operator’s Little Rock operations. “Everything went as well as it could have gone,” Bear said. “The best news for me is that I have met with every [stakeholder] and every person has said they have met or exceeded the benefits that they projected.”

LOOKING TO THE FUTURE
Despite the long and often contentious bid with MISO for the right to oversee Entergy’s vast energy portfolio, Southwest Power Pool has rebounded nicely from the disappointing news with the state’s largest utility that would have expanded the Arkansas grid operator’s Southern footprint substantially.

Still, the board of the Little Rock-based RTO approved more than $1.7 billion in new projects in early 2012 that will span over the period of 10 years. Part of the plan included about $251 million in new transmission projects over five years and another $1.5 billion in targeted transmission upgrades over 10 years.

SPP also successfully implemented its Integrated Marketplace process in March 2014, becoming the first RTO to design, build and deliver a FERC-mandated marketplace program that will improve grid reliability and improve the regional balancing of energy supply and demand.

“The Integrated Marketplace program is the latest and most complex incremental step in SPP’s evolutionary approach to improving our service to members and the region,” SPP President & CEO Nick Brown said a year ago.

Founded in 1941, SPP’s footprint includes 48,930 miles of transmission lines and 370,000 square miles of service territory. The Little Rock grid operator has 76 members in Arkansas, Kansas, Louisiana, Mississippi, Missouri, Nebraska, New Mexico, Oklahoma and Texas that serve more than 15 million energy customers.

And despite their obvious differences, including a FERC-refereed disagreement over how compensation and energy flow issues in areas where the two grid operators’ Southern boundaries cross, MISO and SPP representatives often run in the same local circles, appear at the same events and support the same causes.

In fact, both RTOs have recently released white paper and public reports saying that President Obama’s Clean Power Plan could cost its members billions of dollars to comply with the EPA’s proposed rules to shutter most of the nation’s coal-fired energy generation plants.

The two nonprofit grid operators also speak the same acronym-laced language that often leaves journalist and industry outsiders trying to interpret the meaning of commonly used alphabetic phrases like RTO, EPA, SPP, MISO, FERC, PSC and ADEQ.

Likewise, both grid operators are leaders in bringing attention to the need for adding STEM-related jobs to the Arkansas economy, boasting annual salaries for their respective employees that are well above $80,000 a year.

“Little Rock can become a major center for science, engineering and technology jobs which will mean a bright future for the city and enhance Little Rock’s reputation as an energy capital,” MISO’s Bear said at the grid operator’s Little Rock grand opening.

And as the RTO with Arkansas roots going back more than 65 years, SPP’s 575-person workforce at its nearly new 200,000-square-foot headquarters in West Little Rock is already one of the most tech-savvy workplaces in Arkansas. There, at its four-story office headquarters with a 36,000-square-foot operations data center, the nonprofit RTO monitors the power grid for such utility giants and energy powerhouses as Conoco Phillips, Kansas City Power & Light and the Tennessee Valley Authority.

COMMUNITY RELATIONS
Both grid operators are also strong corporate denizens, actively supporting their employees’ involvement in nonprofit and charitable activities in Central Arkansas. For example, when an F-4 tornado nearly destroyed the suburban communities of Mayflower and Vilonia in late April 2014 and left 16 people dead, SPP employees donated time and money to each other and their neighbors who were affected by the disaster, company spokesman Tom Kleckner said.

“Our staff volunteers with – or contributes to – more than 70 nonprofits and charities,” Kleckner said. “They participate in blood drives, charity runs, cook-offs, and as mentors to area students.”

The SPP spokesman noted that the grid operator also “once again” led the Little Rock area’s Summer Cereal Drive, contributing more than 28,000 boxes of cereal to the Arkansas Foodbank and accounting for 13% of the drive’s total. The Little Rock RTO’s charity golf tournament also raised $13,000 for CareLink, which reaches more than 18,000 people a year in Central Arkansas through Meals on Wheels, home care, senior fitness and wellness programs, and helping family caregivers, he said.

Although MISO is still not yet fully staffed, Hillman and Bear said during a tour of the facility that the grid operator began establishing community and charitable roots in Little Rock starting in 2013 when the decision was first made to establish a Southern presence in the city.

Hillman, an Indiana native, said the regional grid operator has already contributed to the community in ways beyond the operation of the electric grid and salaries to employees. For example, MISO’s employee base is already actively involved with the Make-A-Wish Mid-South Arkansas office, and Hillman serves on the board of directors of Make-A-Wish Mid-South, which serves Arkansas, West Tennessee and North Mississippi.

During the tour of the facility at the grand opening, company officials proudly showed artwork featured in the main entrance of the facility that was created by a local artist with the assistance of Make-A-Wish children.

In addition, Katherine Prewitt, MISO’s senior director of South Region Operations, serves on various boards like the Women’s Foundation of Arkansas, the Arkansas STEM Coalition and the Arkansas School for Mathematics, Sciences and the Arts.

Hillman said MISO is also developing relationships with the University of Arkansas engineering departments and other similar programs across the state to collaborate on future industry research projects and to potentially recruit new employees in the future.