Evolving Paradigms in State-Level Integrated Resource Planning

Abstract

As global energy systems electrify, long-term planning processes are evolving to allow flexible economic analysis and acknowledge rapid financial and operational transformation. State-level integrated resource planning (IRP) processes allow oversight of long-term electric utility resource planning. Yet, outdated rules, procedures, and practices may impede utilities in planning for a new energy future. Is the IRP process constrained by technical modeling decisions, when it ought to serve as a platform for stakeholders to shape optimal and just electricity system outcomes?

This paper assesses the state of integrated resource planning to inform utility planners, commissioners, and their staffs, along with the array of advocates that participate in such proceedings. I employ a case study methodology to assess docket filings and other relevant materials in recent IRP proceedings for four major utilities in Michigan, Georgia, New Mexico, and North Carolina. Section 3 details modeling software selection and use for those four cases. Section 4 uses capacity value assumptions to illuminate the iterative process around establishing model input assumptions. Section 5 takes a broader view of nascent efforts to include equity and justice into IRP processes.

Consistent commission oversight and robust stakeholder processes are integral to ensure that utilities’ integrated resource plans reflect the pace of change in the U.S. energy sector. Policymakers can encourage advanced modeling methodologies (software, settings, and assumptions) through three channels: (1) written IRP rules, (2) commission procedure, and (3) intervention in utility processes. Furthermore, as equity and justice come to the forefront of utility planning, policymakers should consider intervenor compensation programs, energy justice assessments, and forms of public ownership to incorporate energy justice principles into the planning process.