2012-11-14T09:20:27-06:00 2011-12-31 ERNST & YOUNG US LLP 111 MONUMENT CIRCLE SUITE 2600 INDIANAPOLIS IN 46204 990 2011-01-01 431827033 Midwest Independent Transmission System Operator Inc % JOSEPHINE BIGGERS MIDW 3172495400 PO BOX 4202 CARMEL IN 46082 JO BIGGERS 9999990099 2012-11-14 3176817000 2011 2016-02-24 21:20:13Z John Bear PO Box 4202 Carmel IN 46082 325498472 false X www.misoenergy.org X 1998 DE Monitor and control electric transmission system to provide non-discriminatory open-access to all customers and ensure safe, reliable, and efficient operation for the benefit of all. 8 7 898 0 0 0 2355959 620467 317363482 304528271 834643 897113 0 16972775 320554084 323018626 0 0 0 0 108008445 109450858 0 0 0 212545639 213567768 320554084 323018626 0 807880110 801357333 807880110 801357333 0 0 X MONITOR AND CONTROL AN ELECTRIC TRANSMISSION SYSTEM THAT PROVIDES ALL CUSTOMERS WITH OPEN ACCESS TO THE SYSTEM WITHOUT DISCRIMINATION AND ENSURE SAFE, RELIABLE, AND EFFICIENT OPERATION FOR THE BENEFIT OF ALL CUSTOMERS. false false 223900331 0 304528271 ON DECEMBER 19, 2001, THE MIDWEST INDEPENDENT TRANSMISSION SYSTEM OPERATOR, INC. (MISO OR THE COMPANY) BECAME THE NATION'S FIRST REGIONAL TRANSMISSION ORGANIZATION (RTO) APPROVED BY THE FEDERAL ENERGY REGULATORY COMMISSION (THE FERC). AS AN RTO, MISO PROVIDES TRANSMISSION SERVICE ON BEHALF OF ITS MEMBERS WHO OWN TRANSMISSION ASSETS. IN ADDITION, MISO IS A NORTH AMERICAN ELECTRIC RELIABILITY CORPORATION (NERC) CERTIFIED RELIABILITY COORDINATOR. IN THAT CAPACITY, MISO MONITORS THE FLOW OF ELECTRICITY OVER THE TRANSMISSION SYSTEMS OF ITS MEMBERS WHO OWN TRANSMISSION ASSETS. MISO WAS INCORPORATED AS A DELAWARE NON-STOCK, NONPROFIT CORPORATION IN MARCH 1998. THE COMPANY IS GOVERNED BY AN INDEPENDENT BOARD OF DIRECTORS. MEMBERSHIP IN MISO IS OPEN TO OWNERS OF ELECTRIC TRANSMISSION FACILITIES AS WELL AS OTHER PARTICIPANTS IN THE ELECTRIC ENERGY MARKET. THIRTY TRANSMISSION OWNERS WITH MORE THAN 49,600 MILES OF TRANSMISSION LINES, 130,000 MEGAWATTS OF ELECTRIC GENERATION, AND APPROXIMATELY $17.8 BILLION IN INSTALLED GROSS TRANSMISSION ASSETS ARE CURRENTLY PARTICIPATING IN MISO. ON DECEMBER 15, 2001, THE COMPANY BEGAN PROVIDING RELIABILITY COORDINATION SERVICES TO THE TRANSMISSION-OWNING MEMBERS OF MISO AND THEIR CUSTOMERS. ON THE SAME DATE, MISO ALSO BEGAN PROVIDING OPERATIONS PLANNING, GENERATION INTERCONNECTION, MAINTENANCE COORDINATION, LONG-TERM REGIONAL PLANNING, MARKET MONITORING, AND DISPUTE RESOLUTION SERVICES. THE COMPANY COMMENCED SUBSTANTIALLY ALL OPERATIONS ON FEBRUARY 1, 2002, THE DATE MISO BEGAN PROVIDING REGIONAL TRANSMISSION SERVICE UNDER ITS FERC-ACCEPTED OPEN ACCESS TRANSMISSION AND ENERGY MARKETS TARIFF (THE TARIFF). ON APRIL 1, 2005, MISO FORMALLY BEGAN OPERATING ITS MARKET-BASED, CONGESTION MANAGEMENT SYSTEM WHICH FEATURES THE FOLLOWING: O DAY-AHEAD ENERGY MARKET O REAL-TIME ENERGY MARKET O FINANCIAL TRANSMISSION RIGHTS (FTR) MARKET THE DAY-AHEAD AND REAL-TIME ENERGY MARKETS ARE DESIGNED TO RELIABLY MAKE THE MOST EFFICIENT USE OF ALL GENERATION AND TRANSMISSION RESOURCES WITHIN THE REGION BASED ON BIDS AND OFFERS SUBMITTED BY MARKET PARTICIPANTS. THE DAY-AHEAD AND REAL-TIME ENERGY MARKETS PRICE TRANSMISSION SYSTEM CONGESTION THROUGH THE USE OF LOCATIONAL MARGINAL PRICING (LMP) ALGORITHMS. FTRS PROVIDE A MEANS OF HEDGING LMP-BASED CONGESTION COSTS. ON JANUARY 6, 2009, MISO BEGAN OPERATING A MARKET FOR ANCILLARY SERVICES. THE ANCILLARY SERVICES MARKET INTEGRATES THE PROCUREMENT AND USE OF REGULATION AND CONTINGENCY RESERVES WITH THE EXISTING REAL-TIME ENERGY MARKET. MISO ALSO BECAME AN NERC-CERTIFIED BALANCING AUTHORITY ON JANUARY 6, 2009. 223900331 false false false false false false false false false true false false true true false true false false false false false false false false false false false false true false false false false false false false false false false false false false false false false false true 162 0 true 898 true false false false false false false X 8 7 false false false false true true false true true false false true true true true true true true true false DC IN X X JOSEPHINE BIGGERS 3172495400 PO BOX 4202 CARMEL IN 46082 Paul J Feldman 6.0 X 132375 0 15000 J Michael Evans 6.0 X 147667 0 15000 Michael J Curran 6.0 X 136000 0 15000 Judy Walsh 6.0 X 131500 0 15000 Baljit Dail 6.0 X 108000 0 15000 Shelley A Longmuir 6.0 X 124500 0 15000 Eugene Zeltman 6.0 X 127500 0 15000 John R Bear 40.0 X X 1250819 0 242150 Josephine A Biggers 40.0 X 376338 0 64944 Richard L Doying 40.0 X 558429 0 106161 Bryan Kearney 40.0 X 454511 0 88806 Stephen G Kozey 40.0 X 682415 0 132572 Clair J Moeller 40.0 X 609770 0 108711 William C Phillips 40.0 X 491796 0 92055 Gregory L Powell 40.0 X 345063 0 84209 Loyd A Warnock BE 40.0 X 364134 0 72534 Robert B Bernsten 40.0 X 203178 0 17597 Michael P Holstein 40.0 X 504890 0 87839 Jennifer Curran 40.0 X 285745 0 37286 Joseph Gardner 40.0 X 315256 0 34169 Todd Hillman 40.0 X 306606 0 38539 Todd Ramey 40.0 X 308632 0 38781 Richard Schug 40.0 X 314707 0 45463 Roger C Harszy 0.0 X 471542 0 28293 8751373 0 1425109 293 true true false POTOMAC ECONOMICS 9990 Fairfax Blvd FAIRFAX VA 22030 MARKET MONITOR SRVCS 3717523 UTILICAST PO Box 38 KIRKLAND WA 98083 PROF CONSULTING 3196499 DUANE MORRIS LLP 30 South 17th Street PHILADELPHIA PA 191034196 LEGAL SERVICES 2985370 OPEN ACCESS 2300 Berkshire Lane North Suite F MINNEAPOLIS MN 55441 IT SERVICES 1770058 ERNST YOUNG LLP 2896 Bank of America CHICAGO IL 60693 AUDIT & PROF SRVCS 1721007 71 620467 620467 Cost Recovery Adder 525990 254540052 254540052 FERC Assessment 525990 38261949 38261949 Other Tariff Services 525990 2138721 2138721 Contract Revenue 525990 2348608 2348608 Engineering Studies 525990 6907575 6907575 331366 331366 304528271 889940 0 0 889940 0 0 2487019 2479846 7173 7173 7173 0 0 0 REGULATORY CREDIT 900099 16972775 16972775 16972775 323018626 321501046 0 897113 0 0 0 0 5473042 2586047 2886995 0 1755709 1755709 80218775 44663230 35555545 6563635 4908640 1654995 9738848 7569051 2169797 5700849 4773205 927644 113788 113788 8953935 1548489 7405446 192531 192531 0 0 0 22401574 16250680 6150894 0 1049934 610311 439623 18705966 18540505 165461 0 9266348 50330 9216018 3677767 1914167 1763600 0 220051 124964 95087 13850868 36160 13814708 0 73764921 63060430 10704491 1818712 74598 1744114 FERC Assessment 38261949 38261949 Property Taxes 1678984 1678984 Telecommunications 5866987 5376145 490842 CDC CASUALTY LOSS 11140238 11140238 2603215 732208 1871007 323018626 223900331 99118295 0 1936186 1070476 573043526 545187679 0 0 25002872 36103760 0 0 0 0 0 0 0 0 9305920 10401810 472143023 378687101 133532410 93455922 0 0 0 0 0 0 0 0 65059196 115137686 807880110 801357333 122516759 120385623 0 0 32035845 76569235 0 0 0 0 0 0 1115891 958521 295240302 263129497 356971313 340314457 807880110 801357333 X 0 0 0 0 0 0 0 0 807880110 801357333 0 0 X false true true X true true 0 2650798 2650798 0 17739254 8888856 8850398 0 23430821 17977785 5453036 0 422410546 347307566 75102980 0 5911604 4512894 1398710 93455922 PROJECT DEVELOPMENT COSTS 82681035 DEFERRED REGULATORY ASSET 32448321 EMPLOYEE RECEIVABLES 8330 115137686 0 RESTRICTED DEPOSITS 280668530 CAPITALIZED LEASE OBLIGATION 10565693 MARKET PARTICIPANT LIABILITY 49080234 340314457 323018626 323018626 323011453 323011453 7173 7173 323018626 323011453 -7173 -7173 323018626 323018626 SUPPLEMENTAL INCOME RECONCILIATON OF REVENUE PER AFS WITH 990 SCHEDULE D, PART XII, LINE 4B GAIN ON DISPOSITION OF PROPERTY $ 7,173 RECONCILIATION OF EXPENSES PER AFS WITH 990 SCHEDULE D, PART XIII, LINE 2D GAIN ON DISPOSITION OF PROPERTY ($ 7,173) X X X X true true X X X X X false true false false false false false false false J Michael Evans 147667 0 0 0 0 0 15000 0 0 0 162667 0 0 0 Michael J Curran 136000 0 0 0 0 0 15000 0 0 0 151000 0 0 0 John R Bear 548874 0 568929 0 133016 0 229145 0 13005 0 1492969 0 94311 0 Josephine A Biggers 226839 0 131385 0 18114 0 51988 0 12956 0 441282 0 4380 0 Richard L Doying 291052 0 212676 0 54701 0 86472 0 19689 0 664590 0 23243 0 Bryan Kearney 274720 0 165886 0 13905 0 68804 0 20002 0 543317 0 0 0 Stephen G Kozey 341334 0 248474 0 92607 0 112660 0 19912 0 814987 0 80251 0 Clair J Moeller 320123 0 224106 0 65541 0 88836 0 19875 0 718481 0 42196 0 William C Phillips 274526 0 167927 0 49343 0 77183 0 14872 0 583851 0 31782 0 Gregory L Powell 227383 0 96763 0 20917 0 64863 0 19346 0 429272 0 0 0 Loyd A Warnock BE 260332 0 90000 0 13802 0 56458 0 16076 0 436668 0 0 0 Robert B Bernsten 68440 0 30000 0 104738 0 11140 0 6457 0 220775 0 0 0 Jennifer Curran 188730 0 96643 0 372 0 18200 0 19086 0 323031 0 0 0 Joseph Gardner 205645 0 108603 0 1008 0 19518 0 14651 0 349425 0 0 0 Todd Hillman 203945 0 102227 0 434 0 19034 0 19505 0 345145 0 0 0 Todd Ramey 203745 0 104230 0 657 0 19262 0 19519 0 347413 0 0 0 Richard Schug 196494 0 117574 0 639 0 26349 0 19114 0 360170 0 0 0 Roger C Harszy 0 0 322515 0 149027 0 28293 0 0 0 499835 0 148947 0 Michael P Holstein 263875 0 215550 0 25465 0 76284 0 11555 0 592729 0 0 0 Supplemental Compensation Information THE MIDWEST ISO PROVIDED CHARTER TRAVEL DURING 2011. A COST-BENEFIT ANALYSIS AS WELL AS NON-QUANTITATIVE FACTORS WERE CONSIDERED EACH INSTANCE CHARTER TRAVEL WAS USED. TRAVEL FOR COMPANIONS WAS PROVIDED FOR BUSINESS PURPOSES. TAXABLE DISCRETIONARY SPENDING ACCOUNTS WERE ALSO PROVIDED TO OFFICERS FOR HOME OFFICE ITEMS, LIFE INSURANCE, UNREIMBURSED MEDICAL EXPENSES AND OTHER ELIGIBLE EXPENSES. REIMBURSEMENT OF TAXABLE RELOCATION EXPENSES THAT ARE NOT DEDUCTIBLE OR EXCLUDABLE ARE GROSSED-UP FOR ALL OFFICERS. MANAGEMENT APPROVAL IS REQUIRED FOR ALL OTHER EMPLOYEES. NON-QUALIFIED DEFERRED COMPENSATION PLAN FORM 990, SCHEDULE J, PART I, LINE 4B PAUL J. FELDMAN $ 15,000 J. MICHAEL EVANS $ 15,000 MICHAEL J. CURRAN $ 15,000 JUDY WALSH $ 15,000 BALJIT DAIL $ 15,000 SHELLEY A. LONGMUIR $ 15,000 EUGENE ZELTMANN $ 15,000 SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN SECTION 457(F) FORM 990, SCHEDULE J, PART I, LINE 4B JOHN R. BEAR $156,630 JOSEPHINE A. BIGGERS $ 29,195 RICHARD L. DOYING $ 49,051 BRYAN KEARNEY $ 40,504 STEPHEN G. KOZEY $ 71,421 CLAIRE J. MOELLER $ 52,920 WILLIAM C. PHILLIPS $ 49,166 GREGORY L. POWELL $ 39,224 LOYD A. WARNOCK $ 39,239 ROBERT B. BERNSTEN $ 5,237 MICHAEL A. HOLSTEIN $ 43,022 SCHEDULE O SUPPLEMENTAL INFORMATION DESCRIPTION OF CLASSES OF MEMBERS OR STOCKHOLDERS FORM 990, PART VI, QUESTION 6 A MEMBER CAN BE A REPRESENTATIVE OF ONE ENTITY OR MAY BE A SINGLE MEMBERSHIP REPRESENTING SEVERAL ENTITIES THAT SHARE A MEMBERSHIP AND HOLD A SINGLE VOTE. APPLICANTS MAY JOIN ONE OF NINE SECTORS: TRANSMISSION OWNER; INDEPENDENT POWER PRODUCERS AND EXEMPT WHOLESALE GENERATORS; POWER MARKETERS AND BROKERS; MUNICIPALS, COOPERATIVES, AND TRANSMISSION DEPENDENT UTILITIES; PUBLIC CONSUMER ADVOCATES; STATE REGULATORY AUTHORITIES; ENVIRONMENTAL/OTHER ADVOCATES; ELIGIBLE END USE CUSTOMERS; OR COORDINATING MEMBERS. DESCRIPTION OF CLASSES OF PERSONS AND THE NATURE OF THEIR RIGHTS FORM 990, PART VI, QUESTION 7A ARTICLE TWO, SECTION V(B)(5) OF THE TRANSMISSION OWNERS AGREEMENT SETS OUT THE VOTING RIGHTS OF ALL MEMBERS OF THE MIDWEST ISO. MEMBERS ARE DEFINED IN THE TRANSMISSION OWNERS AGREEMENT AS A "PERSON OR BUSINESS ENTITY WHICH IS (I) AN ELIGIBLE CUSTOMER, AS DEFINED IN THE TARIFF, OR (II) AN OWNER, AS DEFINED HEREIN, AND WHICH PAYS TO THE MIDWEST ISO, THE NON-REFUNDABLE MEMBERSHIP FEES AS REQUIRED HEREIN. DESCRIBE PROCESS USED BY MANAGEMENT &/OR GOVERNING BODY TO REVIEW 990 FORM 990, PART VI, QUESTION 11B THE VICE PRESIDENT - FINANCE, PRESIDENT & CEO, AND LEGAL DEPARTMENT COMPLETE THE INITIAL REVIEW. THE BOARD OF DIRECTORS IS THEN PRESENTED WITH COPIES AND ARE GIVEN THE OPPORTUNITY TO ASK QUESTIONS AND PROVIDE COMMENTS TO THE EXECUTIVE TEAM. DESCRIPTION OF PROCESS TO MONITOR TRANSACTIONS FOR CONFLICTS OF INTEREST FORM 990, PART VI, QUESTION 12C THIS POLICY IS IN THE EMPLOYEE HANDBOOK. THE HANDBOOK IS REVIEWED AT NEW HIRE ORIENTATION. ALL NEW HIRES SIGN AN EMPLOYEE HANDBOOK RECEIPT THAT THEY HAVE READ AND UNDERSTAND THE HANDBOOK. THE EMPLOYEE HANDBOOK IS ALSO PART OF THE EMPLOYEE ANNUAL RECERTIFICATION. EACH EMPLOYEE MUST CERTIFY THAT HE/SHE HAS REVIEWED AND AGREES TO COMPLY WITH MIDWEST ISO POLICIES. IN ADDITION, EACH EMPLOYEE, OFFICER, AND DIRECTOR ANNUALLY RECERTIFIES THAT THEY ARE COMPLIANT WITH THE EMPLOYEE HANDBOOK AND ITS CONFLICTS OF INTEREST PROVISIONS. EACH YEAR, MISO COMPLETES THE RECERTIFICATION PROCESS WITH A SHORT TEST TO ASSURE EMPLOYEES HAVE READ AND UNDERSTAND THE CONTENT OF THE RECERTIFICATION. OFFICES & POSITIONS FOR WHICH PROCESS WAS USED, & YEAR PROCESS WAS BEGUN FORM 990, PART VI, QUESTION 15A AND 15B THE BOARD RETAINS THE SERVICE OF EXPERT OUTSIDE EXECUTIVE COMPENSATION CONSULTANTS ("THE CONSULTANTS") IN THE REVIEW OF OFFICER COMPENSATION. ANNUALLY, THE CONSULTANTS PERFORM A FULL AND INDEPENDENT STUDY OF ALL OFFICER DIRECT COMPENSATION (BASE PLUS INCENTIVES). THE CONSULTANTS CONSIDER THE LEVEL OF COMPENSATION RELATIVE TO THE DUTIES PERFORMED; THE CURRENT COMPETITIVE MARKET FOR SIMILAR SKILLS, KNOWLEDGE, AND RESPONSIBILITY; AND OTHER STRATEGIC NEEDS IDENTIFIED BY THE BOARD OF DIRECTORS. THE CONSULTANTS PREPARE AND DELIVER A FULL DETAILED REPORT TO THE HUMAN RESOURCES COMMITTEE OF THE BOARD ("HRC") FOR EACH OFFICER POSITION. THIS REPORT INCLUDES RECOMMENDATIONS FOR DIRECT COMPENSATION CHANGES. THE HRC COMBINES THE RECOMMENDATIONS OF THE CONSULTANTS WITH EVALUATIONS OF OFFICER PERFORMANCE TO RECOMMEND APPROPRIATE COMPENSATION LEVELS TO THE BOARD OF DIRECTORS FOR APPROVAL. EVERY TWO YEARS THE CONSULTANT PREPARES A LETTER OF "REASONABLENESS" OF THE TOTAL REMUNERATION PACKAGE FOR OFFICERS OF THE COMPANY. THIS LETTER IS CONSISTENT WITH THE GUIDELINES OF SECTION 4958 OF THE INTERNAL REVENUE CODE. THIS LETTER CERTIFIES THAT IN THE "REASONED OPINION" OF THE CONSULTANT AS AN "INDEPENDENT EVALUATION EXPERT" THE COMPENSATION AND BENEFITS PROVIDED TO THE OFFICERS REPRESENT "REASONABLE COMPENSATION." THE HRC REVIEWS ALL METRICS, RESULTS, AND ACTUAL INCENTIVES FROM MIDWEST ISO ANNUAL AND LONG-TERM INCENTIVE PLANS. NO INCENTIVES ARE PAID UNTIL RECOMMENDED BY THE HRC AND APPROVED BY THE BOARD. THE HRC REVIEWS AND RECOMMENDS ANY NEW OR MODIFIED EMPLOYMENT CONTRACTS WITH THE PRESIDENT, CEO AND OFFICERS, INCLUDING RETENTION AGREEMENTS WHICH THEN MUST BE APPROVED BY THE BOARD. FROM TIME TO TIME, THE HRC WILL RETAIN THE SERVICES OF OUTSIDE EXPERTS TO EVALUATE AND MAKE RECOMMENDATIONS TO THE LEVEL AND TYPE OF SPECIFIC COMPENSATION AND BENEFIT ITEMS. THE HRC ROUTINELY REPORTS TO AND, IF REQUIRED, OBTAINS APPROVAL FROM THE FULL BOARD ON THESE MATTERS. AVAIL OF GOV DOCS, CONFLICT OF INTEREST POLICY, & FIN STMTS TO GEN PUBLIC FORM 990, PART VI, QUESTION 19 THE MIDWEST ISO'S GOVERNING DOCUMENTS CAN BE FOUND ON OUR WEBSITE UNDER "LIBRARY" TAB. THESE DOCUMENTS ARE THE TARIFF AND THE TRANSMISSION OWNERS AGREEMENT WHICH INCLUDES THE COMPANY'S STANDARDS OF CONDUCT (APPENDIX A) AND THE COMPANY'S BYLAWS (APPENDIX F). THESE DOCUMENTS ARE ALSO FILED WITH AND AVAILABLE ON THE FERC'S WEBSITE AT WWW.FERC.GOV IN THE ELIBRARY. THE FINANCIAL STATEMENTS OF THE MIDWEST ISO ARE CONTAINED IN THE COMPANY'S ANNUAL REPORT WHICH IS ALSO LOCATED ON OUR WEBSITE AT WWW.MISOENERGY.ORG.