MISO Cost-Estimation Process
for MEP/MVP Projects
Planning Advisory Committee
July 29, 2015
Why Cost-Estimating?
• Historically prior to Order 1000
– Transmission Owners & stakeholders provided cost-estimates for large
projects such as MEPs & MVPs in the planning phase (example RGOS)
• Order 1000 Impacts to Transmission Planning
– ROFR elimination is intended to create a competitive environment for
regionally cost-allocated transmission projects (MEP/MVP)
– Cost information becomes competitively sensitive in this new
competitive environment
– MISO Transmission Owners and PAC requested MISO involvement
Why Cost-Estimating?
• Increases in cost scrutiny
– BPM-020 has newer language on project reporting
– MISO BOD has increased awareness of project construction costs
– MEPs/MVPs subject to reevaluation if costs exceed some threshold
– Essentially three separate & distinct costs values exist for scrutiny:
• MTEP cost-estimate
• Cost-estimate from New Transmission Proposals/Selected Transmission Developer
• Actual project cost
• What level of detail is needed for estimates?
– Book Ends: Planning Estimate versus Full Design Estimate
– MISO chose to calculate an estimate somewhere in between
MTEP Cost-Estimating Process
Solution Idea
Submittal
MISO Review of
Planning
Estimate
Transmission
Issue Identified
Purple
Blue
Green
Solution
Screening
MTEP Cost
Estimate
Stakeholder
Review
Project Short
List
Final Short List
– Stakeholder action
– Market Congestion Planning Study (MCPS) action
– MISO cost-estimation action
MTEP Cost-Estimating Process
• Development Background
– MISO investigated various cost estimating software tools
– Selected the Chief Estimator software and developed a cost database
– Database constructed by MISO consultant utilizing publicly available data
– Data reviewed by a task force within the Transmission Owner sector
• Cost-estimation process utilized in MTEP15
– MCPS North/Central study & MCPS South study
– Duff-Coleman 345kV project estimate
• https://www.misoenergy.org/Events/Pages/PAC20150729.aspx
MTEP Cost-Estimating Next Steps
• Increase Transparency
– Cost-estimation data publicly posted with today’s materials
– Soliciting feedback on cost-estimation data
• Process refinement & improvement
– Continue process documentation/mapping
– Identify any refinements or improvements
– Create annual review of cost-estimation data
• Questions?
MTEP Cost-Estimating Contacts
• Kathy Beaman
– [email protected]
– 651-632-8614
• Tony Hunziker
– [email protected]
– 651-632-8434
MISO’s Seven-Step Planning Process
STEP 1: MULTI-FUTURE
REGIONAL RESOURCE
FORECASTING
STEP 2: SITE-GENERATION
AND PLACE IN
POWERFLOW MODEL
STEP 7: COST ALLOCATION
ANALYSIS
STEP 6: EVALUATE
CONCEPTUAL
TRANSMISSION
FOR RELIABILITY
STEP 3: DESIGN
CONSEPTUAL
TRANSMISSION OVERLAY
BY FUTURE IF NECESSARY
STEP 4: TEST
CONCEPTUAL
TRANSMISSION FOR
ROBUSTNESS
STEP 5: CONSOLIDATE &
SEQUENCE TRANSMISSION
PLANS