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External audit finds no noncompliance at Marshfield electric operations; plant running more into MISO market
Summary
A third-party compliance review commended Marshfield's electric compliance program and staff reported higher-than-budgeted production costs tied to increased plant operation and natural gas purchases, offset in part by revenue from sales for resale into the MISO market.
Marshfield Utilities told commissioners that an outside consultant found no potential noncompliance in the utility's reliability compliance program and praised the utility's mature compliance posture.
Separately, staff reviewed financial results showing increased revenue from sales for resale at the power plant and higher operating expenses related to increased natural-gas-fired generation.
A utilities staff member reported the annual self-assessment was completed with outside vendor GDS. The presenter said GDS reviewed 123 requirements and found no potential noncompliance findings, commending the program for “proactive planning, robust internal controls and a culture of continuous improvement.” The presentation said the audit focused on substations and the power plant and left no outstanding compliance items.
On financials, staff noted that “sales for resale” revenue is up, which represents revenue from operating the power plant and capacity sales; those dollars reduce the amount that must be recovered from retail customers. At the same time, production operating expenses are running above budget because the plant has been operating more, and the utility paid a substantial natural-gas bill in August.
Staff explained that higher operation is driven in part by favorable dispatch opportunities in the Midcontinent Independent System Operator (MISO) market — the plant is being selected in the dispatch stack more frequently because of price and transmission conditions — and by higher demand during warm weather.
No regulatory actions or corrective measures were proposed; the GDS report was informational and the financial report was approved as part of the month’s financial review.
