May 11, Ms. Kavita Kale Executive Secretary Michigan Public Service Commission 7109 West Saginaw Highway Post Office Box Lansing, MI 48909

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1 Amy C. Monopoli Counsel Regulatory & Legislative Phone: May 11, 2017 Ms. Kavita Kale Executive Secretary Michigan Public Service Commission 7109 West Saginaw Highway Post Office Box Lansing, MI RE: Case No. U In the matter of the investigation, on the Commission s own motion, into the electric supply reliability plans of Michigan s electric utilities for the years 2017 through 2021 Dear Ms. Kale: As directed by the Commission s January 12, 2017 Order in the above-referenced docket, enclosed for filing are the Comments of International Transmission Company d/b/a ITCTransmission and Michigan Electric Transmission Company, LLC. This is a paperless filing and is, therefore, being filed only in a PDF format. Sincerely, /s/ Amy C. Monopoli Amy C. Monopoli Counsel Regulatory & Legislative ITC Holdings Corp. Enclosures

2 Comments of International Transmission Company d/b/a ITCTransmission and Michigan Electric Transmission Company, LLC May 12, 2017 MPSC Case No. U-18197

3 COMMENTS OF INTERNATIONAL TRANSMISSION COMPANY D/B/A ITCTRANSMISSION AND MICHIGAN ELECTRIC TRANSMISSION COMPANY, LLC I. INTRODUCTION The Michigan Public Service Commission ( Commission ) issued an Order on January 12, 2017, Case No. U-18197, which required Michigan-regulated electric utilities to file, by April 21, 2017, an assessment of the utility s ability to meet its customers expected electrical requirements in the 2017 through 2021 timeframe. Regional transmission organizations and transmission owners, including International Transmission Company d/b/a ITCTransmission ( ITCTransmission ) and Michigan Electric Transmission Company, LLC ( METC ) (collectively, ITC ), were requested to submit comments on the issues that they believe are most relevant to this investigation by May 12, ITC hereby submits these comments in response to the Commission s request. II. TRANSMISSION WILL BE INTEGRAL TO ENSURING RELIABILITY AND CAPACITY AVAILABILITY DURING THE TIME FRAME ITC continually works to develop transmission solutions to ensure that Michigan has a reliable transmission system and that Michigan s transmission system will continue to be able to support Michigan s resource adequacy needs. Each year, ITC performs several system-wide assessments to identify future system needs and develop solutions to maintain ITC s exceptional operational performance and comply with mandatory NERC reliability criteria. The projects identified in these assessments are presented before all stakeholders as part of the Midcontinent Independent System Operator, Inc. s ( MISO s ) open and transparent planning process. During this process, system needs and various system solutions are vetted before interested stakeholders and regulators. Currently, there are uncertainties which present challenges to planning transmission for the long term. For example, the capacity assessments conducted by MISO focus on short-term needs. Longer-term resource adequacy assessments require assumptions on the siting of new generation which may not become available until future years. The uncertainty embedded in these assumptions hinders the development of clear conclusions on future system needs. Because clear conclusions may be difficult to draw on future system needs, there are challenges associated with the development of transmission solutions to address resource adequacy shortfalls in the entire timeframe or beyond. Additionally, system capacity studies have shown that the limits on Michigan s ability to import power often reside outside the state s borders. From a mitigation perspective, this limits ITC s ability to develop system solutions and construct projects to increase the capacity import limit. Increasing the capacity import limit has a direct impact on the Local Clearing Requirement (LCR) in MISO zone 7 and ultimately the price of capacity in the region. As the state moves to strengthen reliability, transmission will be needed not only to interconnect new forms of generation in Michigan but also to serve as bridge in the event generation cannot be built in time to meet the region s resource needs. 1

4 III. ITC CONTINUES TO DEVELOP TRANSMISSION SOLUTIONS TO SUPPORT THE LOAD GROWTH AND GENERATION ADDITIONS OCCURRING IN MICHIGAN IN THE 2017 TO 2021 TIMEFRAME. Michigan has been a focal point for new technology and industry which will be adding significant load on the ITC transmission systems over the next few years. For example, it is anticipated that the following load additions will occur over the next several years: +20 MW for a data center in Dearborn +31 MW for a wind tunnel testing facility in Allen Park + 4 MW for a self-driving vehicle testing center in Ypsilanti +35 MW for a data center in Gaines Township +36 MW for a pork processing facility in Coldwater +94 MW of new and relocated load to better serve the University of Michigan and the City of Ann Arbor These facilities, and all interconnecting customer facilities require a high level of reliability. Loss of power to any of these facilities, even for a short period, would be very costly to the customers. Each interconnecting station listed above will have at least two connecting transmission lines, ensuring no single transmission element outage will interrupt service to the customer. In addition, the Coldwater interconnection will involve a new 13 mile METC 138kV transmission line, which will bring a second source of power to the new load. ITC also continues to connect new sources of energy to the Michigan grid. Wind farm developers are connecting renewable energy in the Thumb, and wind, solar and natural gas facilities are connecting throughout the rest of the ITC systems. Generation facilities with signed interconnection agreements include the following: MTEP Project ID J301: 101 MW wind, Tuscola County MTEP Project ID J308: 301 MW wind, Huron County MTEP Project ID J327: 150 MW wind, Huron County MTEP Project ID J340: 100 MW wind, Huron County MTEP Project ID J419: 100 MW solar, Washtenaw County Other projects in the MISO queue proposing to connect to the ITC transmission systems include wind, solar, natural gas and battery storage. Total generation in the queue for upcoming studies for ITC totals over 6000 MW. ITC is working with the interconnecting customers and other stakeholders to develop appropriate transmission solutions to ensure reliability. 2

5 IV. ITC IS PLANNING TRANSMISSION SOLUTIONS TO ENSURE RELIABILITY AS SIGNIFICANT GENERATION RETIREMENTS OCCUR Generation retirements and suspensions are evaluated through the MISO Attachment Y/Y2 process. There have been a number of retirements announced in the ITCTransmission and METC zones over the last several years. Michigan South Central Power Agency ( MSCPA ) retired its Endicott unit in As a result of the Endicott retirement, ITC accelerated previously planned MISO MTEP projects, including the installation of capacitors at the Coldwater Station to address potential low voltages in the Coldwater area and a sag remediation project on the Verona to Barnum Creek 138kV transmission line to increase the rating of the circuit (the Endicott Projects ). Although ITC accelerated the timelines for completion of the Endicott Projects, the Endicott Projects could not be completed prior to the retirement of the Endicott unit, and short-term operating alternatives were evaluated. After studying various alternatives, ITC reconfigured the circuits connecting to each bus at the Morrow 138kV station to ensure short-term reliability needs pending the completion of the Endicott Projects. Both Endicott Projects are scheduled to be in service by July 2017 but have not been constructed as of the time of the writing of this report. Completion of the Coldwater capacitor project is especially challenging since it involves an extended outage of the Batavia-Coldwater 138kV circuit, which is the key outage that causes the low voltages in the Coldwater area. If ITC is not able to get these projects in service before summer, there could be low voltages in the Coldwater area or overloads on the Verona-Batavia 138kV circuit this summer. No additional retirement or suspension requests for generators in the ITC footprints have been received over the last year. V. ITC IS PLANNING UPGRADES TO ITS TRANSMISSION SYSTEMS FOR THE 2017 TO 2021 TIME FRAME ITC performs annual planning analysis that forecasts two, five, and ten years into the future. System solutions are created to address issues that are found to violate ITC s planning criteria. Issues identified and the solutions to those issues are vetted through the MISO MTEP process. Transmission lines are also evaluated for condition, based on maintenance records, outage history, age, and structure type. These criteria are utilized by a cross departmental team to choose circuits for rebuilding, which are also vetted through the MISO MTEP process. Significant examples of Transmission system upgrade projects currently planned on the ITCT and METC systems are: Whiting Custer Monroe 120kV line rebuild: This is a 13 mile circuit in Monroe County. This circuit is projected to overload with imports across the Ontario-Michigan interface. Rebuilding the circuit will support Michigan s ability to import power. Riggsville to Port Calcite to Rockport 138kV line rebuild: This is a 69 mile circuit in Presque Isle and Cheboygan counties. This 60 year old circuit has had sustained outages, several related to galloping conductors. This is a key circuit in Northern Michigan that supports the ability to transfer power to and from the Upper Peninsula. Rebuilding the circuit will maintain a reliable transmission source to customers in Northern Michigan and the Eastern UP. LOWER MICHIGAN MACKINAC ISLAND 23 Riggsville 75 Lake Huron Port Calcite Rockport 3

6 Meyer 345/138kV switching station: Meyer will be a new extra high voltage transmission source north of Grand Rapids. The Tallmadge station, which is west of Grand Rapids, has three 345/138kV transformers. During peak and shoulder (85%) peak loading conditions, planning studies have shown these transformers may overload. This restricts the ability of METC to perform maintenance shutdowns of these transformers. Constructing the Meyer station, which will be located a few miles north of the Tallmadge station, will alleviate the loading on the transformers and allow METC more opportunity to maintain the equipment. Beecher Samaria 138kV lines rebuild: This is 21 miles of circuit (two separate parallel circuits to be rebuilt onto one set of towers) in Monroe and Lenawee counties. These two 60 year old circuits have experienced numerous outages over the last few years. Beecher-Samaria is also projected to overload in future planning assessments. Rebuilding the two circuits onto one set of double circuit structures will improve the outage performance, reduce the number of structures to maintain, and significantly increase the power carrying capacity of the lines. Adrian Temperance Monroe 75 L A K E E R I E M I C H I G A N O H I O Sylvania Toledo Battle Creek Island Road 138kV line rebuild: This is a 24 mile circuit in Calhoun and Eaton counties. This 60 year old circuit has had increasing maintenance needs and a poor outage history. This is a key circuit serving the Lansing area from the south. Outages to this line impact interconnections to Wolverine Power, Consumers Energy, and potentially Lansing BWL. Rebuilding the circuit will maintain a reliable service to these key customers. Amber Donaldson Creek 138kV line rebuild: This is a 20 mile circuit in Oceana and Mason counties. This circuit is projected to overload when the Ludington generation facility is generating at or near its full output. Rebuilding this circuit will maintain the ability to run the Ludington plant at its full output without causing constraints on the western Michigan transmission system. Alma to Vestaburg 138kV line rebuild: This is a 16 mile circuit in Gratiot County. This 60 year old circuit has had several outages over the last few years, increasing maintenance requirements, and has been a frequent overload constraint in various MISO and internal planning operations assessments. Rebuilding the line will increase reliability and remove a known constraint to economic power flow. These projects, along with the rest of the ITC projects, will ensure the customers in Michigan are served by a reliable transmission grid and are less likely to experience outages or power flow congestion well into the future. VI. CONCLUSION For 2017, ITC is working to meet the transmission needs of its customers and does not foresee any issues in that time frame that will adversely affect reliability. For the entire time frame under examination, transmission will be integral to ensuring reliability in Michigan. ITC remains committed to providing transmission solutions that will help ensure the reliability of the transmission system in Michigan. ITC has planned, and will continue to plan, for future generation retirements and additions, load growth, and other system issues that have an impact on transmission reliability. In addition, ITC will continue to develop projects that enhance the reliability profile of the transmission system in Michigan. ITC is committed to reliability and value for its customers and the residents of Michigan. 4