MONEY IN TRANSMISSION

2010 Value Proposition Reveals $1.3B-$1.6B in Annual Benefits; 10-Year Regional Benefits Estimated from $11.2B-$14.6B
January 25, 2011 (Midwest Independent System Operator)

"…[The Midwest ISO 2010 Value Proposition] reflects the quantitative and qualitative benefits the regional transmission organization provides to the region through its grid reliability and efficiency measures. The study identifies between $1.3 billion to $1.6 billion in annual benefits to the region. Over the next 10 years, the Midwest ISO estimates the region could receive between $11.2 billion and $14.6 billion in benefits on a net present value basis…"

"The analysis shows realized annual benefits ranging from $650 million to $875 million from the Midwest ISO’s greater grid reliability and efficiency measures. In addition, the study identifies benefits of between $600 million and $760 million from reduced generation investment. The generation investment benefit will be realized as load grows or current generating infrastructure retires due to age or environmental restrictions.

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"Like prior Value Proposition studies, the Midwest ISO’s analysis included input from all interested stakeholders in an open and transparent process. The 2010 study measured 10 value drivers in which the Midwest ISO’s members and their customers are benefiting…[including] Improved reliability…Market commitment and dispatch - Dispatch of energy, Unloaded capacity, Regulation, Spinning Reserves…Wind integration …Generation investment deferral…[and] Demand response (dynamic pricing and direct control interruptibles)…"

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"New in 2010 was the addition of Wind Integration as a quantitative benefit. Midwest ISO’s regional planning enabled more economic placement of wind, resulting in annual economic benefits between $34 million and $42 million. The regional transmission organization’s Regional Generation Outlet Study (RGOS) shows that a combination of wind placed in states with renewable portfolio standards and regional areas enable a significant reduction in the cost of generation compared with only building the wind generation locally. This area of benefits will grow as the region continues to build wind turbines to meet state renewable portfolio requirements.

"In addition to the quantitative benefits, the Midwest ISO also demonstrated significant qualitative benefits that wholesale market participants receive from the Midwest ISO including…Price and informational transparency…Planning coordination…Regulatory compliance…[and] Seams management…"