The Midwest Independent Transmission System Operator (MISO) uses Analytics to Unlock Savings through User Adoption of Inventory Tools
The Problem
During the 1990s, the Federal Energy Regulatory Commission pushed to restructure the U.S. energy market to reduce individual utilities’ market power and to drive more efficiency into the industry by encouraging the formation of Regional Transmission Organizations (RTOs) to assure that power would go to where it needed to go at the lowest possible cost and with highest level of reliability. As one of the nation’s first RTOs, MISO was charged with achieving this national goal of minimizing energy delivery costs in a reliable fashion.
The Analytics Solution
Serving as a de-facto trader in the energy commodities market, MISO applied new, complex analysis and optimization techniques on a broad regional basis to process real-time and day-ahead market bids and offers to and from power plants in its region every five minutes. By doing this, MISO is able to balance the amount of energy needed to meet demands within the physical constraints of the electrical system with the availability from the power plants that are the low-cost producers at any given time.
The Value
By leveraging these valuable analytics, MISO added significant value to the Midwest region of the U.S. through improved reliability and increased efficiencies of the region’s power plants and transmission assets. Based on its annual Value Proposition study, MISO realized between $2.1 and $3.0 billion in cumulative savings from 2007 through 2010. MISO estimates an additional $6.1 to $8.1 billion will be achieved through 2012.
