The resources below are offered as part of our Complying with Environmental Regulations Knowledge Management Series. These papers provide perspectives on utility resource planning and ongoing portfolio management.
- Addressing the Effects of Environmental Regulations: Market Factors, Integrated Analyses, and Administrative Processes: In this brief memo, RAP considers the role that utility market factors such as the price of natural gas, can play in the context of emerging environmental regulations and in regulatory compliance strategies. Utilities will consider both regulatory compliance and market fundamentals in their business decisions regarding existing power plants. The comments provided here seek to highlight the positive aspects of looking at resource choices in an integrated manner. States that consider methodologies and approaches that help in understanding the full value of various available resources, thereby ensuring investment in the most suitable resource choice at least-cost to customers and society, could earn dividends on their advanced planning and avoid costly duplication of effort later. Finally, we provide brief descriptions and characterizations of various “process” approaches being employed by several states.
- Balancing Cost and Risk: The Treatment of Renewable Energy in Western Utility Resource Plans: In the Western United States, the most recent resource plans contemplate a significant amount of renewable energy additions. These planned additions – primarily coming from wind power – are motivated by the improved economics of wind power, a growing acceptance of wind by electric utilities, and an increasing recognition of the inherent risks (e.g., natural gas price risk, environmental compliance risk) in fossil-based generation portfolios. This report examines how twelve western utilities treat renewable energy in their recent resource plans. The purpose is twofold: (1) to highlight the growing importance of utility IRP as a current and future driver of renewable energy, and (2) to identify methodological/modeling issues, and suggest possible improvements to methods used to evaluate renewable energy as a resource option.
- Best Practices in Electric Utility Integrated Resource Planning: Integrated resource planning (IRP) has been widely used in the US for over twenty years. Recently amended IRP rules often reflect current concerns in the electric industry, e.g., fuel costs and volatility, the effects of power generation on air and water, issues of national security, electricity market conditions, and climate change, as well as individual state concerns. There are, however, certain subject-matter areas that are essential to resource planning on which state regulations are usually silent. This paper summarizes three recent utility IRPs, to determine both best practices in integrated resource planning and ways in which utilities can improve their planning processes and outcomes. The paper also presents a series of recommendations, developed from these examples, for integrated resource planning and its resulting plans.
- Electric Vehicle Integration in the U.S., Europe, and China: Widespread electrification of the transportation sector holds the promise of greater vehicle efficiency and lower emissions of greenhouse gases (GHGs) and other air pollutants. Many governments around the world have identified electric vehicles (EVs) as a cornerstone of transportation sector emission control strategies. This report examines key drivers of EV adoption in three regions – the United States, the European Union, and China – with an emphasis on vehicle charging scenarios and infrastructure. The authors identify insights about the choice of charging infrastructure in each region that will both maximize benefits to consumers (thus helping to drive EV adoption) and maximize benefits to the grid from greater EV use. Consideration is also given to mitigating potentially negative impacts on the grid. The report examines how the optimal scenarios differ by region, and makes recommendations for policies and electricity regulations that will make realization of grid benefits from EVs more likely.
- Energy Efficiency in Western Utility Resource Plans: Impacts on Regional Resource Assessment and Support for WGA Policies: Over the past decade, Western states have placed increased emphasis on integrated resource planning (IRP), resource adequacy and assessment, and a diversified portfolio of resources to meet the needs of electricity consumers. In some states, high growth in electricity demand, rapid increases in natural gas prices, concerns about the environmental impacts of electricity generation, and the potential to provide utility bill savings for households and businesses have led to renewed state and utility commitments to energy efficiency. This study examines the treatment of electric end-use energy efficiency in recent resource plans issued by fourteen investor-owned utilities (IOUs) in the Western United States and Canada.
- Portfolio Management: Looking After the Interests of Ordinary Customers in an Electric Market That Isn’t Working Very Well: This paper discusses how portfolio management can improve the quality of electric service and reduce costs, without impinging on efforts to build competitive retail markets in those states committed to that goal.
- Portfolio Management: How to Procure Electricity Resources to Provide Reliable, Low-Cost, and Efficient Electricity Services to All Retail Customers: This publication explores the primary objectives of a utility or default service provider in obtaining electricity resources for customers. These include mitigating risk; maintaining customer equity; improving the efficiency of the generation, transmission, and distribution system; improving the efficiency of customer end-use consumption; and reducing environmental impacts. Portfolio management is also important for those utilities that remain vertically integrated.
- Reading the Tea Leaves: How Utilities in the West Are Managing Carbon Regulatory Risk in their Resource Plans: The long economic lifetime and development lead-time of many electric infrastructure investments requires that utility resource planning consider potential costs and risks over a lengthy time horizon. One long-term and potentially far-reaching financial risk currently facing the electricity industry is the uncertain cost of future carbon dioxide (CO2) regulations. Recognizing the potential magnitude of this risk, many utilities – sometimes spurred by state regulatory requirements – are beginning to actively assess carbon regulatory risk within their resource planning processes, and to evaluate options for mitigating that risk. This study examines the treatment of carbon regulatory risk in utility resource planning through a comparison of the most-recent resource plans filed by fifteen investor-owned and publicly-owned utilities in the Western US.