Integrated Resource Planning In Missouri

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Integrated Resource Planning In Missouri

• Pamela Lesh
• Graceful Systems LLC
• On behalf of
• The Natural Resources Defense Council

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Our Interests in the IRP Rules

• Ensure utilities plan for and provide services by
  which Missouris residents and businesses can
  achieve their goals with less energy over time,
  with the efficiency gains achieved at a pace that
  makes sense in light of economic, environmental,
  and social considerations
• Ensure that useful and rewarding participation,
  by NRDC and others, is possible in the planning
  processes utilities run in support of the above
  objective

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Our Agenda Today

• Present our view of the criteria defining a
  meaningful planning process
• Explain a fundamental planning objective that
  NRDC proposes for the Commissions consideration
• Describe a process approach that could guide the
  next round (or two) of utility plans flexibly but
  robustly, without the need for detailed rules at
  this point

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A meaningful planning process . . .

• Makes clear the decision makers assumptions and
  thinking process
• To the decision maker
• To others
• Provides those persons interested in the decision
  an opportunity to influence both
• The assumptions
• The thinking process

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A meaningful planning process . . .

• Considers all important perspectives
• The people who directly or indirectly experience
  the utilitys services
• The people who comprise(employees) and invest in
  (debt and equity) the utility organization
• The policy and strategic choices of the
  community the utility serves, considered from
  all relevant levels (e.g. state , regional,
  federal)

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And with those perspectives in mind . . .

• Articulates where we are now
• How efficiently do Missourians apply energy
  (electricity) in their homes and businesses?
• What are the characteristics of the current
  resources used to supply this electricity?
• How efficient is , and what are the capabilities
  of, the transmission and distribution system used
  to supply this electricity?

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For example . . .

• Missouri uses more energy per of gross state
  product than the US average and spends more on
  that energy than the gross state average the
  same pattern appears for gross commercial product
• Missouri homes use more gas and electricity per
  heating degree day than the US average
• Over the last 25 years, growth in Missouris per
  capita energy consumption has exceeded the US
  average and growth in electricity consumption has
  grown faster than average even though population
  growth was smaller than average
• Missouri has over 20,000 MW of electric
  generating capability, about a third of which was
  added in the last 10 years or so and almost all
  of that is natural gas-fired

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A meaningful planning process also . . .

• States where we are trying to go
• What are the known challenges (e.g. vulnerability
  to carbon regulation) and the known
  opportunities?
• What do we want over the long term?
• If we transcend current beliefs about what is
  economic or technically feasible?
• If we assume that the outcome is win-win for
  people applying and people supplying energy?
• How would we know this place if we arrived there?

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And based on the gap between where we are now and
where we are going . . .

• Examines the options to narrow it, considering
• Pace, as a result of considering
• Economics
• Technology
• Cultural conditions
• And the ability to obtain feedback on the effects
  of the options taken to influence the next round
  of decision-making

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A possible fundamental objective of utility
resource planning. . .

• Electric utilities provide energy services
  designed to enable the recipients of those
  services to safely and efficiently obtain and
  apply energy in their homes and businesses at a
  total cost to themselves and each other that is
  reasonable over the long term.

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Why this objective?

• It is outside-in, customer-to-utility, not
  utility-to-customer it is the characteristics of
  energy services experienced, not offered
• It makes relevant to the planning process (not
  just to cost effectiveness calculations) costs
  customers incur now, and will incur in the
  future, to achieve necessary outcomes with energy
  such as space conditioning, lighting, and motive
  power
• It makes clear that shifting costs to each other
  or to the future is not the objective
• It moves us beyond rates and bills

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Societal/ Environmental view
Rates
Utility-Centric view
Utility Customer- Centric view (increasing scope)
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Sub-objectives

• Useful to add clarity, particularly in a time of
  transition from one objective and set of
  expectations to another
• Our suggestions
• Make explicit that energy services include both
  traditional cost-effective energy efficiency
  programs and fee-for-services that increase the
  efficient use of energy but may accomplish other
  customer objectives as well

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Sub-objectives (2)

• Designate the feedback on energy services as
  increases in the efficiency with which customers
  use electricity (this could be both cost and
  thermal)
• Make explicit that planning encompasses not just
  meeting load growth but also assessing the
  current resource portfolio
• In light of current and expected community
  energy policies and objectives
• Against needs to reduce carbon or other emissions
• Establishes energy efficiency as the preferred
  choice for load growth and realignment of
  existing resources

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Process Context

• The next decades promise high uncertainty around
• The pace of technological change
• The effects of demographic change on
  culture/beliefs and the economy
• The nature of the emerging world economy
• Flexibility is necessary to cope with planning
  for energy services in this context

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A Three-Step Framework

• Plan for the Plan
• Plan
• Close

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Step 1 Plan for the Plan

• In a collaborative process, the utility builds
  (or refreshes a view of where we are now
• Using this, it works with stakeholders to
  identify
• Questions it needs to answer to develop a
  near-term set of resource actions
• The tools it should use to answer those questions
• The information it needs to gather or assumptions
  it needs to develop for use in those planning
  tools
• The perspectives it is critical to have and how
  to get them

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Commission Review of the Plan for the Plan

• Commission dockets a formal (and accelerated)
  process to consider the Plan for the Plan
• Takes written and oral comments
• Interacts with the utility and stakeholders
• Commission issues a short order approving the
  Plan for the Plan with any modifications it deems
  necessary
• Commission sets expectation that parties will
  participate fully and openly in the planning
  process, providing substantive comments and
  suggestions as soon as practicable

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Step 2 Plan

• A simple process might include
• Workshops
• Information and assumptions
• Results of applying the tools
• Various means of gathering perspectives
• Utility preparation of a draft plan
• Comments on the draft
• Utility revisions to the draft, showing how it
  responded to the comments

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Step 3 Closure

• Commission dockets a process to consider whether
  
• The utility and stakeholders followed the Plan
  for the Plan
• The proposed actions will further the fundamental
  objective (and any sub-objectives) of planning
  and include means of obtaining feedback on the
  outcome (e.g. savings goals met gains in overall
  efficiency)
• The plan is a good expression of what the utility
  and stakeholders believed was known or knowable
  at the time of committing to the actions
• Commission issues an order
• Finding the Plan meets these criteria or
• Directing the utility and stakeholders how to
  remedy any deficiencies so the Plan can meet the
  criteria