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Second Quarter Letter to Members

Brad Cox
Generator and/or Power Marketer Sector and MRO Board Chair
Sara Patrick
MRO President and CEO

From the Board Chair and President and CEO

Dear Members and Stakeholders:

Staying ahead of challenges related to the energy transition and responding to risk were key areas of focus for MRO’s Board of Directors at its second quarter meetings last week. Additionally, the board welcomed two new members. Todd Hillman from Sunflower Electric Power Corporation was elected by the members as a regional director, and Eric Miller from Midcontinent Independent System Operator was elected by the Transmission System Operator sector. The board also remembered former board colleague Chris Fleege, who passed away unexpectedly earlier this month.

On Wednesday, the board’s Organizational Group Oversight Committee (OGOC) held a closed risk roundtable on energy reliability planning. The roundtable was attended by members of the board, key staff, and the leadership of MRO’s three advisory councils (Compliance Monitoring and Enforcement Program, Reliability and Security). New methods for assessing energy availability in both short- and long-term planning horizons, along with risks associated with insufficient energy supply, were main points of discussion. There was such good dialogue on the topic that the OGOC will contemplate a follow-up conversation on energy reliability planning during the next risk roundtable.

The board was briefed on risks to the corporation during closed session the next day. MRO established a formal risk management program in 2022 to identify, track, and reduce risk to the organization. Gina March, Director of Finance and Corporate Risk Management, provided a report on the program’s most recent findings. The progress staff has made to enhance risk assessment processes and mature the program is impressive. Since the corporate risk register’s inception, data security and talent management have remained top risks and are areas of focus for the board and MRO’s leadership team.

Relatedly, a presentation was provided to the board on MRO’s employee engagement survey conducted in April. The results indicate that a combined 97 percent of staff are either engaged or highly engaged. Satisfaction scores were also very favorable at 4.17 (out of 5) compared to the national norm of 3.83. High levels of engagement and satisfaction reflect a healthy culture and strong employee commitment to the organization and its important mission. Staff credits the strong scores in part to MRO’s people-first philosophy that was established in response to the COVID-19 pandemic. The philosophy is focused on employee development, health and wellness, diversity and belonging, and other initiatives that make MRO an employer of choice. Low employee turnover during what has proven to be a particularly challenging staffing environment underscores the effectiveness of the people-first initiatives.

The open board meeting was held on Thursday afternoon. Guest speaker Aubrey Johnson, MISO’s Vice President of System Planning, Modeling and Competitive Transmission, provided information on MISO’s strategy for reliably planning and operating the grid of the future. Ambitious decarbonization strategies, rapid evolution of the resource fleet, challenges related to severe weather and weather predictions, and transmission availability are just a few of the complexities MISO is navigating on behalf of its members. Johnson emphasized the need to appreciate the difference between energy provided by generation and the additional attributes needed to maintain reliability, stressing that the pace of change demands that we collectively accelerate our actions to mitigate the growing risks.

Johnson’s remarks were followed by a staff presentation on work the organization is doing to assess reliability performance within the region. Jake Bernhagen, MRO Manager of Reliability Performance, described MRO’s performance analysis program and the data collected from industry that informs both NERC’s and MRO’s reliability assessments and risk-based reports. The data is also used to determine what outreach is needed to raise awareness of risk with industry stakeholders.

Board actions during the meeting included approval of MRO’s proposed 2024 business plan and budget and load-serving entity (LSE) assessments. The $24.9 million budget—an increase of 7.8 percent over the 2023 budget—reflects MRO’s commitment to be good stewards of its funding and enables the organization to continue contributing to reliability of the North American bulk power system as it evolves. LSE assessments also increased by 15 percent to $23.6 million. The assessment increase was offset by $1.3 million in assessment stabilization funds. The board also approved a resolution reappointing the firm Baker Tilly to audit MRO’s 2023 financial statements.

You can read more about the discussions and actions taken at the second quarter board meeting in the full meeting minutes, which will be available on MRO’s website calendar soon.  

We continue to be impressed with the level of engagement at, and meaningful output from, MRO’s quarterly board meetings and encourage MRO members and registered entities to participate.

– Brad Cox, MRO Board Chair, and Sara Patrick, President and CEO