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21st Century Electric Utilities: Integrated Resource Planning and Beyond

Integrated resource planning is essential, but it’s not enough. Grounded in data and analytic models, an IRP process focuses on future energy demand and resources. It cannot and should not try to answer the urgent policy questions facing electric utilities today. More is needed.

This policy brief reviews the 30-year evolution of IRP and lists five factors that are radically altering the US electricity industry. Three of these factors – uncertainties surrounding energy resource costs, electricity demand, and climate change effects – can with difficulty be digested by today’s sophisticated IRP models. But the other two factors cannot. New players, together with new public policies, have been game changers. They have raised fundamental questions such as

  • How should distributed energy developers and users be integrated into the electricity scene?

  • How should the economic burdens of “stranded” utility assets be allocated?

  • Who should ensure grid reliability?

  • Who, if anyone, should make sure that everyone can afford “basic needs” electricity?

To address these and other questions, a companion process is needed. This process should be tailored to the utility, its regulatory setting, and the issues at hand. Most crucially, it should foster open deliberation.

The complete publication can be found here: PolicyBrief-2-15Final

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