06-05-2025
How fast-tracking fossil gas could snarl the Midwest grid
Yahoo is using AI to generate takeaways from this article. This means the info may not always match what's in the article. Reporting mistakes helps us improve the experience.
Yahoo is using AI to generate takeaways from this article. This means the info may not always match what's in the article. Reporting mistakes helps us improve the experience.
Yahoo is using AI to generate takeaways from this article. This means the info may not always match what's in the article. Reporting mistakes helps us improve the experience. Generate Key Takeaways
A battle is brewing over who gets to plug into the Midwest's power grid first.
Utilities and state regulators are backing a plan that would fast-track certain new fossil-gas power plants while leaving hundreds of gigawatts of competitively bid solar, wind, and battery projects mired in the boglike interconnection queue. They argue it's an important emergency measure to prevent the risk of major outages on what is the U.S.'s largest transmission grid.
But opponents say letting these gas plants cut in line would worsen grid bottlenecks and undermine cheaper and cleaner energy while failing to protect the grid. They're asking the Federal Energy Regulatory Commission to reject the proposal, dubbed the Expedited Resource Addition Study (ERAS), which was filed by the Midcontinent Independent System Operator in March and is now under FERC review.
ERAS would allow utilities regulated at the state level to obtain a grid connection in 90 days for 'shovel-ready' and 'dispatchable' power plants. It would not extend that same option to third-party developers, raising concerns that the ERAS proposal would undermine energy market competition in the MISO region, which covers about 45 million people spread across 15 U.S. states from Louisiana to North Dakota.
That 90-day pathway is a much faster timeline for grid connection than the average wait time of 3.5 years for projects stuck in MISO's grid interconnection queue. These projects, most of which are clean-energy installations proposed by independent energy developers, total over 300 gigawatts.
MISO isn't the only one exploring emergency measures to solve a mounting grid interconnection problem. Grid operators across the country are struggling to add enough new generation capacity to replace closing coal plants, meet fast-growing demand for electricity, and protect customers from losing power during winter cold snaps and summer heat waves.
But MISO's challenges may be even greater than those of other regions, according to data it has collected and shared with the North American Electric Reliability Corp., which oversees the nation's electric system. MISO was the only grid region in North America to rank as 'high-risk' in NERC's latest reliability assessment, published in December.
Facing such acute risk, MISO has proposed ERAS as an 'urgently needed but temporary stop-gap to address near term resource adequacy and reliability needs,' Andrew Witmeier, MISO's director of resource utilization, said in testimony filed with FERC in March.
Major utilities and most state regulators across the MISO region support the grid operator's plan. Entergy, which operates utilities in MISO's southern region, wrote in comments to FERC that the 'ERAS process is needed to solve an immediate and critical problem in MISO's existing interconnection process: its current interconnection queue backlogs unreasonably impede the ability of new generation to come online and serve growing customer needs.'
But critics ranging from clean energy groups and environmental advocates to eight former FERC commissioners say the ERAS proposal is shot through with flaws, both in its emergency framing and its proposed solution. Setting up the separate fast-track process proposed in ERAS could 'cause significant and lasting damage, injecting massive disruption to MISO's already overburdened queue process,' Carrie Zalewski, vice president of markets and transmission for the American Clean Power Association trade group, said in an April statement.
At the same time, new solar, wind, and battery resources are being interconnected at a faster pace than before — largely due to improvements MISO has instituted over the past few years. Keeping up that good work is the best way to solve MISO's long-term problems, said Greg Wannier, senior attorney with the Sierra Club Environmental Law Program.
'MISO has been talking for years about this emergency,' he said. 'But when you look at the amount of new generation waiting in the interconnection queue to join up, and the projected accreditation value of those resources, the emergency doesn't match up at all.'
Checking in on the 'emergency'
A report from consultancy The Brattle Group, conducted on behalf of energy developer NextEra Energy, supports that perspective, finding that MISO's grid-emergency concerns are 'overstated for two primary reasons': outdated load forecasts and a limited scope of potential new resources in MISO's calculations.
Part of the problem is that MISO is using old data to inform its calculations, said Michael Hagerty, a principal at Brattle. That out-of-date information comes from a survey run by MISO and the Organization of MISO States (OMS), an organization representing state utility regulators. The latest MISO-OMS survey was completed in June 2024 — and since then, a lot of new data has come in that ought to be considered, Hagerty said.
'It's not necessarily a fault of their process' that newer data hasn't come into MISO's plan, he said. 'But it's an implication of how quickly things are charging.'
One big change has to do with MISO's load forecasts, which predict how much more electricity customers will need in future years, Hagerty said. As with much of the country, MISO's load forecasts ballooned in recent years in response to a surge in data-center expansion plans — but now those forecasts are deflating as industry analysts get a better handle on which data centers will actually be built and where.
'Grid operators, MISO included, have become more sophisticated in their projection of data center load growth,' Hagerty said. In December, MISO provided an update to its load-growth data showing a reduction in data center growth expectations, 'as it's become apparent that data centers are seeking multiple places and might not develop them all.'
But MISO's ERAS proposal continues to rely on its earlier, higher forecasts, Hagerty said. The Data Center Coalition, a trade group representing a wide range of tech companies and data center developers, filed comments in April in support of the ERAS proposal, calling it 'an additional tool that MISO can leverage to accommodate new large loads interconnecting in a timely manner.'
Furthermore, in October FERC approved MISO's new 'capacity accreditation' method for determining the value that different forms of energy provide to the grid. While the methodologies in question are complicated in the extreme, Hagerty highlighted a few important high-level changes.
First, MISO reduced the value of thermal generators — gas, coal, and nuclear power plants — largely to reflect their risk of failing to perform during extreme weather events, particularly intense cold. Second, it increased the value of solar, wind, and batteries through the application of a new methodology called direct loss of load.
MISO's June 2024 survey data didn't incorporate these new values. But Brattle's analysis did and found that the increasing amounts of solar, wind, and batteries awaiting interconnection to MISO's grid have greater value than what the ERAS proposal reflects.
The June 2024 MISO-OMS survey also 'relied on historical rates of things coming online,' Hagerty said, including data from 2020 to 2022 — a period that encompasses the Covid pandemic shutdowns and supply chain disruptions.
Brattle took a more up-to-date view of how much proposed solar, wind, and batteries MISO can expect to successfully interconnect in the coming years, he said. That pushed up its expectations for successful generator interconnection agreements, which move projects from the waiting line to the next step of getting connected to the grid.
Hagerty's team also forecast that MISO could expand on its already successful application of 'surplus interconnection service,' which allows companies to add new resources to an existing project with spare grid space, such as tacking battery storage onto a solar farm.
Another bucket of new resources can come from generation replacement service, which uses the grid interconnections of shuttering power plants to connect new resources. Xcel Energy, a Minnesota utility within MISO, has taken advantage of this process, building a large solar-plus-storage project near the site of a retiring coal power plant.
Taken together, these opportunities add up to more than enough new grid capacity to meet the new power demand MISO forecasts into the end of the decade, according to Brattle's report.
'Significant new resources will in fact be necessary,' Hagerty said. 'Thankfully there are a lot of resources that can be developed and are being developed through existing interconnection processes that can serve' MISO's future needs.
Why ERAS could make things worse
Not only is the ERAS proposal unnecessary, Hagerty said, but it won't help MISO achieve its goals. In fact, it's likely to make things worse.
That's because the proposal ignores a key lever for reducing interconnection logjams: Making better use of existing grid capacity.
Grid capacity is scarce in the U.S. Regulators and grid operators are pushing to fix that by building more transmission lines, and MISO specifically is undertaking one of the country's most ambitious transmission buildouts. But new transmission can take up to a decade to build, meaning that for now grid operators and utilities have to make better use of their existing grid capacity.
MISO is also improving its interconnection processes. For example, MISO has been using software tools to streamline complex grid studies — an innovation that has won accolades from FERC. That can help bring more projects online faster within existing capacity limits.
But MISO's ERAS proposal lacks requirements to coordinate the selection of fast-tracked power plants with an analysis of where the MISO grid has extra 'headroom' to accommodate them. That creates the risk that ERAS projects will be able to move ahead even if MISO later determines that they will cause even more grid congestion on an already congested system.
That, in turn, could force MISO to reject grid interconnection requests from projects that have been patiently waiting for years for a shot at being considered — or force them to absorb multi-million-dollar grid-upgrade costs to get online. That 'poses a significant risk of imposing higher interconnection costs and slower interconnection timelines on MISO's existing interconnection customers,' Sierra Club and other environmental groups said in a protest filed with FERC.
Nor does ERAS force projects to be built quickly enough to solve the grid problems it was ostensibly designed to solve, Sierra Club's Wannier said. While the plan does set a three-year deadline to connect to the grid, it also allows utilities to seek a further three-year extension, which means they might not start generating power before 2031 — years after MISO's stated end-of-decade reliability concerns.
And even if utilities wanted to build these power plants ASAP, it's not clear they would be able to. Recent reports indicate that manufacturers of power-plant gas turbines, such as GE Vernova, Siemens, and Mitsubishi, are fully booked through the end of the decade, with no excess production capacity available.
In the meantime, those ERAS projects would be clogging up grid capacity that other resources could use, including solar, wind, and batteries, which can be built much faster.
That could turn ERAS into a 'second, unmanageable queue that would paralyze the MISO interconnection process,' clean energy developers including Clearway Energy Group, EDF Renewables, Enel Green Power North America, and NextEra stated in a protest filed with FERC.
Similar concerns are dogging other proposals to fast-track gas-fired power plants to solve grid challenges in PJM Interconnection, which manages the transmission grid and energy markets for a region including all or part of 13 states and Washington, D.C. But critics of MISO's ERAS proposal say that it's even more problematic than the PJM proposal, which FERC approved in February.
That's because PJM's fast-track regime, dubbed its Reliability Resource Initiative, is a 'one-time deal,' Wannier said, allowing up to 50 projects to seek expedited interconnection in a single window of applications. MISO's ERAS, by contrast, will allow utilities to propose new power plants for the fast-track process four times per year for the next three and a half years, and could be extended past that deadline, he said.
'MISO has limited staff time and engineering capabilities,' he said. 'The more time they commit to the ERAS process, the more time the rest of the projects in the queue will be delayed.'
State regulators must approve any ERAS proposal, which could help prevent crowding the queue with projects that are unlikely to be built in the near term. But as Wannier pointed out, regulators will face pressure to back proposals that let utilities off the hook for the costs of upgrading the grid to support the power plants they're planning. While such lenience could reduce the costs that are passed through to utility customers, that dynamic may clog queues and raise power costs across MISO at large.
'The way that MISO has structured it, utilities are set up to be free riders on the transmission system — which creates an incentive for utilities to put as many projects as they can into this ERAS process,' Wannier said.
Breaking the competitive compact
MISO spokesperson Brandon Morris said that the ERAS process was developed 'collaboratively with state regulators in the MISO footprint' to meet the 'urgent need to move projects through the interconnection queue, including projects needed due to accelerating load growth driven by data centers.'
'We're focused on completing these projects as quickly as possible while continuing to make improvements to interconnection queue processes,' Morris said.
But Morris declined to comment on concerns that eight former FERC commissioners — both Democrats and Republicans — raised in an April letter to the federal agency. They wrote that the ERAS plan 'runs counter to everything FERC has tried to do to preserve open access since the Commission's landmark issuance of Order No. 888.'
Order No. 888 refers to rules FERC created in 1996, which require traditional utilities that own and operate their own power plants and serve customers in their territories to allow non-utility parties to connect new grid resources. That rule was necessary because regulated utilities earn a guaranteed profit on every dollar they spend building new power plants, and thus have a built-in incentive to fight third-party power plants that compete with them.
This incentive lies at the heart of many of the conflicts between state-regulated utilities and independent energy project developers — and it's at the center of the ERAS debate as well. The former FERC commissioners warned that ERAS' preferential treatment for utility power-plant proposals will 'undermine competition in MISO leading to higher costs for customers,' by erecting 'unduly discriminatory barriers' against projects that aren't sponsored by utilities.
While it's theoretically possible for third-party developers to propose ERAS projects, the reality of the situation is Kafkaesque. Developers need to secure customers for their power before getting approval to interconnect. But every independent power project needs an interconnection agreement before it can close power deals, making that option 'unworkable,' the former commissioners wrote.
'It has been nearly 30 years since FERC first planted the flag of open access when the Commission issued Order No. 888,' the commissioners wrote. 'We have come too far to reverse course now.'
