Whose IRP is it anyway?
Across the country, public utility commissions have been creating dockets and issuing orders that describe, in detail, prescriptive processes for utilities to employ to develop an integrated resource plan (IRP). Coupled with these requirements are the myriad statutory goals enacted by state legislators.
As one resource planning analyst told me, “We’re not really creating an integrated resource plan, per se. Instead, we are being told to document how we are going to meet all the laws and requirements the legislature has passed and the commission has mandated.”
As a result, an IRP developed by following regulator directives strays from its core purpose: to develop short-term and long-term actions for developing a generation portfolio that maintains reliability at a reasonable cost to customers. Enveloped deep in this process is the need to deftly handle increases in distributed energy resources (DERs) actively spurred by net energy metering (NEM) laws, meeting renewable portfolio standards (RPS) targets, and complying with greenhouse gas (GHG) emission reductions.
Few in the electric energy industry doubt the necessity for cleaner generation. The clean generation portfolio mandated by these regulations and statutes, however, seem to have relegated reliability and cost to the back seat. Utilities are all too conscious of the implications of lower reliability and ever increasing costs. A tug of war ensues, manifested by the development of the utility’s IRP.
Many utilities are faced with the conundrum of perhaps abdicating a core responsibility by developing an IRP that strictly adheres to regulatory guidelines—or instead updating their internal process of modeling and analyses to determine a portfolio that best meets these mandates, their strategic goals, and the needs of their customers. For a more detailed look at this issue, read our latest blog post
Regulatory or Strategic IRP: A Pivotal Choice (or companion position paper).
We have been working on IRPs for well over ten years. See how our consulting services can assist you in preparing for and developing your next IRP.
Utilities are beginning to lose control of the power grid’s destiny. Is this the best path for our energy future?
—Rich Maggiani, Resource Planning Consultant