1. MISO Market Transformation The Intersection Of Renewables, Transmission And Technology Raj Singamsetti Executive Director of Portfolio Strategy, ACES

2. Agenda: Impacts of Emerging Technologies Impacts of New Technologies
Fracking (Market Prices)
Energy Efficiency
Declining Costs of Wind & Solar Generation
Impacts of New Technologies
Clean Line HVDC Transmission
Energy Storage

3. Who Is ACES? Owned By 21 G&Ts and 1 Distribution Co-Op
Provide Services to Additional 40+ Customers
Municipals, Cooperatives, IPPs, Financial Institutions, Joint Action Agencies, Renewable Developers
Individual Portfolio Management; Combined Assets Total:
50,000 MW of Generation From 300 Plants
50,000 MW of Load
3.0 Bcf/Day Peak Natural Gas
4 Regional Trading Centers
Arizona, Indiana, Minnesota, and North Carolina
Approximately 250 Employees

4. ACES Business Model ACES is Active in the National Marketplace
Does Not Trade Its Own Book
ACES Operates Similar to a Fund or Trust Manager
ACES is Owned By Not-For-Profit Entities
Shares Similar Values as Members
ACES Keeps Costs Down
Sharing Costs of Systems and Resources Across Members/Customers
ACES’ Approach to Portfolio Optimization & Risk Management is Participatory & Hands-On

5. Natural Gas Forward Curve

6. Shale Producer Cost Example

7. Forward Gas Prices
10-Year Strip, Consumers and Chicago Citygate: ~$2.85/MMBtu
NE Gas Averages 12% Lower

8. Impacts of Energy Efficiency

9. Energy Efficiency
Savings From Electricity Efficiency Programs in 2015 Totaled Approximately 26.5 Million MWh
Source: ACEEE

10. Reserve Margin Requirement (GW)
MISO Load Decline
Demand Forecast (GW)
Reserve Margin Requirement (GW)
Supply (GW)
Reserves (GW)
2015/16 PY
127.3
145.5
150.3
23.0 (18%)
2016/17 PY
125.9
145.1
148.8
22.9 (18.2%)
2017/18 PY
125.0
144.8
148.5
23.5 (18.8%)
2017/18 Minimum Reserve Requirements:
15.8%

11. Declining Cost of Wind
Decrease of 66%
Source: Lazard

12. U.S Installed Wind
Source: EIA

13. MISO Wind Capacity
Source: MISO

14. Declining Costs of Solar
Source: Lazard

15. Cumulative U.S. Solar PV Installations
Source: NRCO / ACES

16. MISO Solar Capacity
Source: MISO

17. Changes in Locational Marginal Price Shapes
New Products
Morning Ramp
7:00 - 8:00
Duck Belly
9: :00
Evening Ramp
17: :00
CAISO / WECC

18. Low Energy Prices
MISO Minn Hub’s Low Prices Reflect Wind Penetration

19. Clean Line HVDC Projects
Source: cleanlineenergy.com

20. Current Status of Projects
Contingencies
Rock Island
Grain Belt
Plains & Eastern
Project Cost
$2.0 Billion
$2.2 Billion
$2.5 Billion
Project Miles
500
780
700
Project MW
3,500
4,000
Announced PPA MW
200*
100**
FERC Approval?
May 2012
May 2014
DOE
State Permitting
Waiting on Iowa, IL Supreme Court
Waiting on Missouri
Arkansas Contesting
Interconnect Approval Needed
PJM, MISO
SPP, MISO, PJM
SPP, MISO, TVA
*Missouri Joint Municipal Electric Utility Commission
**Tallahassee, FL (50 MW), East Texas Cooperatives (50 MW Option); TVA Has Agreed to Consider Project

21. Who Is Buying ?
Simplify and Standardize Direct Renewable Energy Transactions
Address Unique Renewable Contract Needs of Internet and Data Center Companies

22. Corporate PPA Locations

23. U.S. Storage Projects
Source: UBS

24. Common Theme: Rapid Decline in Costs
So why exactly is the forecast changing so drastically? Battery costs are coming down fast. We're already ahead of lithium-ion battery costs projected For And with 10 battery gigafactories under development around the world, battery costs and prices are expected to further outpace projections.
Wood Mackenzie predicted that the cost of battery storage would decline to $200/KWh by As you can see in the graph, Tesla, with GM and Nissan closely behind, has surpassed that mark.

25. Revenue Streams Energy Arbitrage Regulation Payments
Storing Energy When Market Prices Are Low, Dispatching When Prices Are High
Value is Dependent on Wholesale Power Prices
Regulation Payments
Compensation Varies From Market to Market
PJM Dynamic Regulation Signal (RegD)

26. Deferring Transmission Investment
Provide Local Generation During 20 to 30 Peak Power Demand Days Per Year
One of the First Projects in the Nation to Be Proposed Solely to Cost-Effectively Defer Transmission Investment

27. Market Phases For Technology Adaption in Markets
Phase 1: Market Experiments
Phase 2: Market Integrates
Phase 3: Market Coordinates

28. Questions?