An analysis from grid operator Midcontinent ISO found that new gas generation in Michigan and expanded transmission with Canada are not economic, given the limited export capability between the regions. MISO on Dec. 15 released the Exploratory Transmission Study Final Report, which is the second part of a study Michigan Gov. Rick Snyder and the state's Agency for Energy requested in August. Because the state and region have retired a number of coal plants and experienced changes to their supply mixes, the state requested a study of the costs and benefits coming from adding gas generation in Michigan's Lower Peninsula and expanding transmission with Canada and between Michigan's two peninsulas.
The study reviewed 16 possible transmission solutions and found that all are uneconomic. All the transmission solutions require a new tie between Ontario and Michigan's Upper Peninsula because there are no current transmission connections between the two regions. Certain transmission solutions were uneconomic because of limits to the amount of power that can be exported between Michigan and Ontario before reliability issues occur, and costly upgrades to the existing system are needed.
"Due to significant and widespread reliability issues identified at higher transfer limitations (greater than 125 MW) and relatively high costs, the amount of economic potential was limited," MISO officials concluded. "Generation and transmission in the Upper Peninsula provided comparable amounts of economic benefits for similar costs,"
Canada's Independent Electrical System Operator, or IESO, with whom MISO coordinated on the study, determined three export levels in the summer — 50 MW, 125 MW and 375 MW — that are feasible given the 16 transmission solutions, but their modeling showed reliability issues at the 375-MW level, according to the report. For generation solutions, the study considered adding new gas combined cycles in Chippewa County in the eastern part of the Upper Peninsula and Kalkaska County in the northern part of the Lower Peninsula.
The transmission and generation solutions ranged between $92 million to about $1.3 billion per solution, according to estimates in the report. Some of the projects involved upgrades to existing lines within Michigan, while more expensive solutions, costing more than $1 billion, involved building new lines and substations.
The modeling also incorporated results and findings from the first phase of the study, which examined Michigan's ability to maintain reliability in the event two of Michigan's nuclear plants — Palisades and Fermi 2 — are out during very hot weather conditions, a situation that occurred in 2012. Phase 1 of the study found that demand response programs, which provide incentives for consumers to reduce demand, and 400 MW of additional capacity to serve peak load could help maintain reliability and maintain healthy reserves.