Two years after approving the largest-ever portfolio of new transmission projects, Midwest grid planners are now doubling down on plans for high-voltage wires to enable more renewable energy and battery technology across the region.
The Midcontinent Independent System Operator’s (MISO) board Thursday approved a $30 billion package of new electric transmission and upgrades across the nation’s central region. The centerpiece of the plan: $21.8 billion for two dozen new regional power lines creating a high-voltage “backbone” in the Midwest.
The plan would enable more than 100 gigawatts of new generation — roughly the same as adding 100 large power stations. And some of the enhancements are aimed at bolstering resilience against more frequent and severe storms.
Two dozen states and most of the nation’s electric utilities have made zero-carbon commitments that require upgrades to regional grids. In MISO alone, it is estimated that $100 billion in new power lines will be needed to meet goals over the next 20 years. That estimate came before recent forecasts projecting surging demand from new data centers, manufacturing expansions, electric vehicles and green hydrogen production.
“We need to get ahead and start planning for this projected load growth, which is going to be immense,” said Brian Drumm, director of regional policy and RTO engagement at ITC Holdings, the nation’s largest transmission-only utility.
“It’s data centers, it’s [artificial intelligence], it’s industrial processes, electrification, EVs,” Drumm said. “These things are really starting to hit all at once, and they’re big and they’re widespread.”
In addition to the package of regional power lines, MISO’s board also approved $1.65 billion for a series of transmission projects to better connect the region with its neighbor to the west, the Southwest Power Pool, and $6.7 billion for more than 400 local transmission projects across its territory.
The process that culminated with Thursday’s approval of the expansion started taking shape five years ago in a very different economic environment. The Covid-19 pandemic raged. The economy teetered on a recession. The Inflation Reduction Act, which is accelerating renewable energy growth and spurring domestic manufacturing, didn’t exist. And electricity demand from data centers serving an AI boom wasn’t on anyone’s radar.
The planning process was in response to utility plans that provided a glimpse of the future — one where coal plants that were no longer profitable enough were shutting down. Wind power in the Midwest and Great Plains, in particular, would require long-distance power lines to get that power to population centers.
Today, MISO spans from North Dakota to southern Louisiana. But some of those closest to the planning process agree it was the support of governors in the upper Midwest and regulators that, as one former utility regulator put it, gave MISO “political cover” to push forward when they encountered opposition.
The push for current long-range transmission planning efforts began in 2019 when utility commissioners from a dozen MISO states, red and blue, adopted a one-page statement of principles that laid out guidelines for grid planners to follow.
The backing has continued since then with several letters from Midwest governors stating the need for an updated grid.
The most recent of those letters came this week from three Democratic governors in the Midwest — Illinois Govs. J.B Pritzker of Illinois, Tim Walz of Minnesota and Gretchen Whitmer of Michigan — urging MISO’s board to approve the historic investment in new regional power lines.
The governors, all of whom have signed laws to transition their states to zero-carbon power, said MISO’s planning efforts are “even more critical given the potential for long-term local growth from the reshoring of American manufacturing, the growth of electric vehicle adoption, and the recent emergence of data center growth.”
Estimates show a more robust grid that enables cheap wind and solar power to be moved more easily across state lines could avoid the need to build 20 gigawatts of generation. That alone represents a savings of $16.3 billion, according to MISO.
“MISO has done a ton of economic and engineering work to show what these lines enable,” said Beth Soholt, executive director of the Clean Grid Alliance, a trade association for renewable energy and transmission developers.
‘Significant’ reliability benefits
MISO estimates the new regional transmission projects, which connect nine Midwestern states from the windy Upper Great Plains to Michigan to southern Indiana, will produce economic benefits totaling at least 1.8 times the portfolio’s $21.8 billion price tag.
Grid planners measured benefits across nine different categories with the greatest value, according to MISO, coming from lower-carbon electricity generation, avoided capacity and reliability.
Joe Sullivan, a member of the Minnesota Public Utilities Commission, said the reliability benefit that the lines will bring is “significant.”
“As we’ve seen in Winter Storm Uri and the polar vortex events, these big regional lines are wheeling power across a huge footprint and that is what keeps the lights on,” Sullivan said in an interview.
The calculation of the benefits ratio, a key source of contention among some parties, including North Dakota utility regulators, was key to the approval under MISO’s tariff with the Federal Energy Regulatory Commission.
Clair Moeller, MISO’s outgoing president, told reporters during a press briefing ahead of Thursday’s vote that maximizing the value of transmission investment, rather than simply minimizing cost, underpins how the grid operator plans and engineers projects.
“Rather than the balkanized planning that 60 years of history would have given us, we changed the objective to say, can we make a bigger investment to make people’s bills go down?” he said.
Advocates for transmission expansion believe the plan approved Thursday has benefits well in excess of the initial 20 years, which is what MISO is required to demonstrate, and the portfolio will unquestionably be a good deal for consumers
“These projects are going to serve customers in the region for over 40 years, so we’re all going to benefit from them,” Natalie McIntire, a senior advocate for the Natural Resources Defense Council’s Sustainable FERC Project, told MISO’s board. “We are at a turning point of sorts in the history of this industry, and today we need a rapid transformation of our grid.”
Staggering growth
While there was broad support for the transmission portfolio approved Thursday, it came over criticism and objections.
They include Midwest industrial energy users, who said they’ll ultimately pay a “proportionately large amount” of the $21.8 billion investment in new regional lines. The large energy users challenged the calculation of certain project benefits and said the portfolio, as approved, isn’t cost-effective and had asked MISO to delay approval.
The group’s concerns echo those of MISO’s market monitor as well as the North Dakota Public Service Commission, which also questioned how grid planners put a dollar value on benefits, including decarbonization. By MISO’s math, the transmission lines approved Thursday will produce at least $7.2 billion in savings related to lower carbon emissions.
“For North Dakota, this is especially concerning, as MISO’s model imposes decarbonization benefits that conflict with state law,” the PSC said in formal comments.
Still others told MISO’s board that they’re disappointed to be left out of the regional plan.
A Louisiana environmental and consumer group said it’s disappointed that regional projects have yet to be approved, or even proposed, in MISO’s South region. The region includes Entergy’s utility service area in parts of Arkansas, Louisiana, Texas and Mississippi.
The decision was a conscious one after Entergy and Gulf State regulators pushed back years earlier in discussions over how the costs of Midwest transmission projects would be allocated among states. Ultimately, MISO officials decided to move forward by splitting its Midwest and South regions and focusing initially on getting projects approved where there’s enough political support.
While MISO has promised that a third phase of regional transmission planning will focus on the Gulf South, it’s unclear how soon that will happen.
In the meantime, states, utilities and grid operators are all scrambling to figure out how they’ll respond to staggering growth projections.
MISO, which operates and plans the bulk power grid across all or parts of 15 central states, estimated this week that electricity demand across its territory could increase 60 percent by 2040.
That rate of growth wasn’t anticipated when planners and engineers set out to begin modeling regional transmission expansion five years ago. But their work included a series of economic scenarios, including one that assumed aggressive load growth, mostly driven by EVs.
Today, even MISO’s ambitious projections look modest.
“Five years ago … everyone thought we were deranged, that we were nuts to expect that there would be that much load growth,” Aubrey Johnson, MISO’s vice president of system planning and competitive transmission, told board members. “Now everyone’s saying we’re nuts, we don’t have enough load growth.”
