Cost effective utilities energy plans optimization and management

Abstract

Utilities have to develop and recommend integrated, reliable and cost-effective approaches for meeting the future demand and energy needs of their customers. This plan should be updated biennially to provide management with a current basis for making prudent short-term decisions and to establish long-term direction. Integrated resource planning techniques, consistent with the concepts of least-cost planning, should be used as the basis for developing recommendations for the plan. Changes in the national and local energy economy and business environment present significant uncertainty and challenge. In order to manage effectively in this uncertain environment, utilities should place great emphasis on planning. One of the key planning tools used by utilities to help achieve their strategic goals is the energy plan. Resource plans recommended by the energy plan should be considered in conjunction with the overall capital and operating and maintenance expense requirements of the utilities to ensure the ongoing financial integrity of all utility operations. This information, along with engineering judgements, is used in reaching a decision as to which integrated resource plan should be pursued. The energy planning process, documented in this paper, develops and analyzes options available to different utilities for meeting their energy supply obligations. These options include demand-side and supply-side alternatives which are evaluated on an equal basis. Cost-effective options are integrated into plans that achieve the corporate objective of providing reliable service at the lowest reasonable cost under a range of uncertain future conditions. The energy plan develops plans which recognize the contribution to be expected from new energy use management programs and addresses the need for developing flexible plans which are adaptable to changing conditions and quantify the cost of this flexibility as it relates to different supply-side resource decisions. Finally, this energy plan should recommend options that have the flexibility to adapt to a range of uncertain conditions in a reliable and economical fashion.