PSC: Transmission Cost Estimation Guide for MTEP24 (20240131)

Please see the attached pdf version for the Feedback from the Mississippi Public Service Commission regarding PSC: Transmission Cost Estimation Guide for MTEP24 (20240131).

WPPI notes that the ongoing evolution of MISO's resource mix will place a premium on transfer capability of new transmission lines.  This highlights the importance of using high-capacity, low-impedance construction for new EHV lines.  Accordingly, we would ask MISO to consider incorporating such construction in future versions of the cost-estimation guide.  We suggest that MISO consider estimating costs for AEP's BOLD double-circuit 345 kV line design.  AEP describes multiple configurations; if MISO chooses to model a single version we would recommend the version employing a bundle of three 954 ACSR subconductors.

ITC submits the following feedback in response to MISO’s Cost Estimation Guide updates presented at the PSC on January 31, 2024.

ITC appreciates MISO’s annual effort to update the Cost Estimation Guide and have reviewed the update in detail.  While there are always differences in opinion about certain items, ITC is concerned with several of the ACCC statements and the comparisons with traditional conductors as they are not comparing like-for-like configurations, generally are misleading, and appear to create favoritism toward a particular vendor’s trademarked high temperature low sag (HTLS) conductor.  Claiming a trapezoidal wire configuration ACCC conductor has significant performance enhancements over ACSR or ACSS conductor without specifying this comparison is against a round-wire configuration is misleading, as a trapezoidal wire configuration is also commercially available for ACSR and ACSS conductors. The trapezoidal wire configuration is largely what provides the power flow performance benefits not solely the conductor core type.

Additionally, the thermal expansion performance improvements of ACCC leading to lower sag in higher temperatures is promoted as a benefit but there is no mention of drawbacks due to mechanical loading performance such as with ice accumulation which causes more sag for this wire type compared to a traditional conductor.  Depending on the geographic location of the facility, these weather-related factors will weigh heavily in the appropriate conductor choice.

Also, Table 2.2-13 does not list operating temperature assumptions for the ampacities, Tables 2.2-11 and 2.2-12 do not list operating temperature assumptions or ampacities for ACSR and ACSS conductors, and installation costs of ACCC that are “based on discussions with ACCC stranders/suppliers” are unsubstantiated and misleading as conventional conductors would not be more expensive to install.

ITC suggests MISO perform one or more of the following:

1. Remove all references to ACCC conductors and the associated Table 2.2-13.
2. If MISO desires to include references to high temperature low sag (HTLS) conductors, do so generically and without reference to a particular vendor’s trademarked product.
3. Refrain from providing guidance on conductor selection and application as these are complex topics that are highly situation specific.

Entergy Feedback on Proposed Updates to the Transmission Cost Estimation Guide for MTEP24

February 29, 2024

DUE TO MISO February 29, 2024

At the January 31, 2024, Planning Subcommittee (PSC) meeting, MISO provided an overview of proposed updates to its Transmission Cost Estimation Guide for MTEP24 and requested Stakeholder feedback on the updates proposed.

Proposed MTEP24 Unit Costs Escalation Rate

At the PSC, MISO explained that while it has historically escalated costs year-over-year at a rate of 2.5%,in 2023 costs were escalated at a rate of 5.0% year-over-year.  Based on higher-than-average inflation rates recently observed, in the draft updates to the Cost Estimation Guide, MISO has applied a 5% year over year escalation rate to increase cost data from 2023 dollars to 2024 dollars.

MISO also indicated its expectation that the 2024 escalation would bring costs current, and thus, its anticipation that it will be returning to the historical 2.5% year-over-year escalation rate in future iterations of its Transmission Cost Estimation Guide. 

MISO intends to use a 2.5% inflation rate to estimate costs over a longer-term horizon for years 2025 and beyond.

Entergy’s Feedback on Unit Costs Escalation Rates:

Entergy supports a 5% escalation rate being applied to 2023-unit costs to estimate 2024-unit costs, as this is generally consistent with our own experiences of the rate of increase in unit costs over the last several years. 

Going forward, Entergy suggests that MISO take a ‘wait-and-see’ approach to determining future escalation rates.  There is currently a lot of uncertainty in the inflation rates for key commodities used in the construction of transmission facilities, and with lead times as long as they are, it is possible that utility commodity escalation could outpace general economic inflation for several years. Ultimately, it is utility commodity and material escalation that is relevant to estimating costs associated with transmission projects, not a more general or societal rate of inflation.  MISO should wait and evaluate the rates of inflation in key commodities and, focusing on those specific inflation rates, establish an inflation rate for the MTEP that aligns therewith rather than determining now what rate will be used in future cycles. To the extent MISO includes inflation factors for years beyond 2024, Entergy suggests a gradual easing of inflation rates over four to five years, rather than an abrupt return to 2.5%.

Xcel Energy appreciates the opportunity to provide feedback on the 2024 Transmission Cost Estimation Guide for MTEP24. Overall, for Transmission it is a good tool but we've found the substations estimates to regularly be 10-20% low.

We feel the entire tool might be improved with a data sample reset (likely for MTEP25) to use current actual cost from projects completed over the last 10 years.

Additional specific feedback:

1. The power transformer unit costs (Table 2.3-7) likely are not very accurate specifically due to the large variability in power transformer pricing as well as the long lead times with the anticipated high volume of need in the industry. Could MISO include a range for Transformers, with a much higher top range? 
2. The control enclosure unit costs seem to use the same size for all voltages.  However with 345kV and higher applications, it is often required to install redundant batteries to accommodate BES reliability. Thus, we anticipate both the battery and charger and the building costs would increase substantially for 345kV and higher substation applications. 
3. In section 3.2 Initial Assumptions for AC substations:
   3a. In Table 3.2-1 bus ratings, we suggest 115kV through 500kV all be rated at 3,000A.  We recommend this because 3,000A loading at 115kV is more likely than 345kV or 500kV applications.
   3b. In Tables 3.2-2 through 3.2-5: Due to the variability for land requirements for transmission line corridors going in and out of the substation, as well as requirements for aesthetics in fences and other screening needed for permitting and to accommodate any retention ponds for stormwater runoff for larger substations, we do not think the land requirements are accurate. Additionally, the price of land in urban areas is substantially larger than in rural areas.
4. The tables in section 3 do not seem to correlate with the associated tables in section 2.  Section 3 relates to quantities of equipment and land, where section 2 relates to estimates for each component of the substation design.
5. We would expect a greater difference in total costs when looking across states - for example, 100 miles of 345kV SC in Texas comes up as $376M, in MN it’s $345M, and in ND it’s $312M. Knowing the terrain in those states, MN should be highest with TX and ND being lower and similar.
6. Given the current build outs across MISO, we suggest expanded information and updates on DC lines and EHV 795kV AC would be of benefit.
7. This is a user experience request: a better dashboard on the estimate data spreadsheet that allows for more granular estimates would be useful.