2010 Value Proposition Reveals $1.3B-$1.6B in Annual Economic Benefits to Midwest ISO Region

CARMEL, Ind., Jan. 25, 2011 /PRNewswire/ -- The Midwest ISO announced today its annual Value Proposition study for 2010, which reflects the quantitative and qualitative benefits provided 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 Midwest ISO Value Proposition affirms our core belief that a collective, region-wide approach to grid planning and management delivers the greatest benefit to the heartland," said John R. Bear, president and CEO of the Midwest ISO. "This analysis breaks down and analyzes hard data to show exactly where savings occur."

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.

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 value drivers in which the Midwest ISO's members and their customers are benefiting from the regional transmission organization's operations in the following areas:

• Improved Reliability
• Market commitment and Dispatch
  • Dispatch of Energy
  • Unloaded Capacity
  • Regulation
  • Spinning Reserves
• Wind integration
• Generation Investment Deferral
  • Footprint Diversity
  • Generator Availability Improvement
• Demand response
  • Dynamic Pricing
  • Direct Load Control Interruptibles

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
• Seams management

The full 2010 Value Proposition, including detailed calculation methodology, is available online at www.midwestiso.org.

About the Midwest ISO

The Midwest ISO ensures reliable operation of, and equal access to high-voltage power lines in 13 U.S. states and the Canadian province of Manitoba. The Midwest ISO manages one of the world's largest energy markets, clearing nearly $23 billion in energy transactions annually. The Midwest ISO was approved as the nation's first regional transmission organization in 2001. The non-profit 501(C)(4) organization is governed by an independent Board of Directors and is headquartered in Carmel, Ind., with operations centers in Carmel and St. Paul, Minn. Membership in the organization is voluntary.

SOURCE Midwest ISO