Abstract
Resource adequacy (RA) is the ability of an electricity system to reliably satisfy loads using its available resources. Assessing and maintaining RA is becoming more challenging due to increasing coal plant retirements, penetration of wind and solar resources, reliance on bilateral and market transactions, and emerging technologies. RA evaluation and planning have traditionally been conducted by utilities and overseen by their state regulators using integrated resource planning (IRP) processes. However, the Northwest Power Pool (NWPP) is developing a proposal for a regional RA program in the Western U.S. that would set and enforce capacity obligations for member utilities, and achieve RA more cost-effectively by pooling resources and load profiles from across the region. In this paper, we investigate the policy implications of a regional RA program for existing IRP regulations, with the proposed NWPP RA program as our main object of study. We compile the RA assessment practices of Western U.S. utilities, the proposed NWPP RA program design, and lessons from the historical experience of the Southwest Power Pool’s RA program. Our analysis reveals that the IRP components which would be most heavily impacted by the regional program are RA targets, load forecasts, capacity accreditation factors, and transmission upgrades. We conclude by discussing the policy issues that RA program design and state IRP policy would have to address.
Highlights
Resource adequacy (RA) refers to the ability of an electric power system to meet demands for electricity using its supply-side and demand-side resources (NERC, 2011)
Comparing the planning reserve margin (PRM) targets of load serving entities (LSEs) that are not part of the same regional RA program is difficult because the exact meaning of each PRM depends on each LSE’s definitions and assumptions
The insights should help states identify components of their integrated resource planning (IRP) regulations that might conflict with a regional RA program that their regulated utilities could join, and drive deeper analyses of how the two could be better aligned
Summary
Resource adequacy (RA) refers to the ability of an electric power system to meet demands for electricity using its supply-side and demand-side resources (NERC, 2011). Monitoring and maintaining RA is becoming increasingly complex and challenging due to plant re tirements and higher penetration of variable renewable energy re sources that translate to higher uncertainty on the amount of generation that will be available during peak demand periods. This challenge is becoming acute in the Pacific Northwest region (PNW) due to states’ environmental policy objectives and evolving resource eco nomics that are prompting impending retirement of coal plants (NWPCC, 2018). Compared to indi vidual LSEs’ RA assessments, regional RA programs can exploit resource, load, and transmission diversity given their expansive footprints and achieve cost savings by pooling capacity resources. While RTOs and ISOs determine RA targets and monitor member compliance to meet these targets, states retain decision-making power over how to meet those targets (i.e., the future resource mix) and how to allocate costs, among other choices
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