States will eventually relinquish control over infrastructure decision-making – Azar

State commissioners will eventually cede control over decision-making when it comes to certain infrastructure, Lauren Azar, senior advisor with the U.S. Department of Energy, said.

During the Midcontinent ISO’s (MISO) stakeholder meeting on June 19, Azar extolled the successes of the RTO, its capturing of economies and facilitation of regional planning, and said that decision-making responsibilities will gradually shift to more regional or national bodies.

“To be quite frank with state commissioners, … more and more control over some of the infrastructure [is] going to be moving from the states into a more regional or national decision-making mode, … which is going to save everybody money but is scary,” Azar said.

As an RTO, MISO has been able to save consumers money through its “enormous economies,” and has “more than paid for itself,” she said.

The deployment and utilization of synchrophasors in the MISO region will be instrumental in determining beneficiaries and allocating costs appropriately. Azar noted that one of the challenges during MISO’s regional planning process revolved around cost allocation and whether there was accurate and granular data.

“Synchrophasers are going to help give us granularity that is going to be needed to allow us to drill down further with regards to where the beneficiaries are in relation to load flows and how cost allocation will be spread out over the beneficiaries,” she said.

Trillions of dollars need to be invested in the United States’ energy infrastructure, and having an entity such as an RTO act as arbiter in the interests of several states, rather than just one, will ultimately help facilitate large-scale investments, Azar said. Having an effective cost allocation process will also make these investments easier.

“It’s the kind of coordinated action that we see within MISO that I think is going to be critical for us to be able to afford that and to get the kind of infrastructure we need,” she said.

While she praised MISO, she also commended state commissioners for moving to RTOs and giving up certain jurisdictional privileges, which she acknowledged was not an easy thing to do.

“I hope stakeholders give the states credit, because joining an RTO is very difficult for state commissioners,” she said. “[T]he fact that we’ve given up jurisdiction and we don’t quite control things the way we used to can be difficult.”

But she urged that stakeholders look to the big picture, to what is best for the region, rather than to the interests of a single constituency.

She and other speakers said that it was paramount that state commissioners and stakeholders have faith in governance structures and keep the long-term goal in mind. Though there is a robust stakeholder process in MISO, ultimately the MISO board of directors makes the final decisions.

“That’s part of the sense of state commissioners losing something and it’s a difficult thing but as long as you have trust and there is legitimacy in the board of directors and that they’re doing what’s right for the region, you may lose in this specific issue but in the end, you’re going to win in other decisions,” she said. “[T]he high tide lifts all boats. That’s what we’re looking for in RTOs and in fact the history of MISO has already shown that that is indeed the case.”

Such solidarity may help avert contentious situations, in which a utility tries to exert pressure in order to secure certain advantages. State regulators can help with this by talking to their utilities and telling them that though such posturing may help it in the short-term, other utilities may do the same thing, which will hurt everyone in the long term.  

“If you’re looking to win every battle you’re not on the right battlefield,” she said. “[T]his is about working together to get a group of decisions, a series of infrastructure that helps everybody.”

 

About Rosy Lum 525 Articles
Rosy Lum, Analyst for TransmissionHub, has been covering the U.S. energy industry since 2007. She began her career in energy journalism at SNL Financial, for which she established a New York news desk. She covered topics ranging from energy finance and renewable policies and incentives, to master limited partnerships and ETFs. Thereafter, she honed her energy and utility focus at the Financial Times' dealReporter, where she covered and broke oil and gas and utility mergers and acquisitions.