Pacific Northwest Gas Utilities Integrated Resource Plan (IRP)

By ghauri on December 8, 2023

Mubashir Ghauri I MEL CEEN 2023 I Dec 14, 2023 I Project Mentors: Diana Aguilar FortisBC & Jesse Scharf FortisBC

Abstract

Integrated Resource Plan (IRP) is a tool used by utilities as a roadmap guiding through the ever-changing energy landscape. Just like planning a road trip, utilities are navigating different routes, considering potential obstacles, and choosing the best path to a sustainable energy future. This capstone project aims to conduct a comprehensive comparative analysis of the IRPs adopted by prominent gas utilities operating in the Pacific Northwest region. The project methodology involves a thorough examination of each utility’s IRP documentation, including planning environment, demand forecasts, climate change readiness, supply-side resource assessments including renewable and low carbon gas, energy efficiency strategies, resiliency, stakeholder engagement, distribution planning and short-term action plan. The resulting comparative metrics helps evaluate the diversity and sustainability of the resource portfolios, cost-effectiveness, and risk management strategies outlined in each plan. The findings aim to inform stakeholders, including utilities, regulators, policymakers, and industry practitioners, about effective practices, and potential areas for improvement in the development and implementation of IRPs within the context of evolving energy landscapes.

Introduction

An Integrated Resource Plan (IRP) comprises of an assessment of the future demand needs and a plan to meet those needs. “Integrated” means that the plan looks at both demand side (conservation, energy efficiency, etc.) load and resources as well as the supply side (generation/power plants, transmission systems, etc.) resources in making its recommendations on how best meet future energy needs. Further, an IRP development is an iterative process comprised of engaging with multiple stakeholders (customers, associations, builders, developers, government agencies, municipalities, and other utilities) and by undertaking in-depth, research-based examination of energy supply conditions, demand projections and resource acquisition alternatives.

Map of Pacific Northwest Gas Utilities

Courtesy: Northwest Gas Association

Objective

The integrated resource planning at Fortis BC is a six step process comprising of examining the planning environment, forecasting energy needs, determining demand side management (DSM) potential, examining options for growth & sustainment, analyzing portfolios to select preferred options and establishing action plan to meet long-term resource needs (refer to figure below).

Therefore, the scope of this Capstone Project is to support the above objectives through a comparative research of IRP’s of major investor owned utilities such as Avista, Northwest Natural and Puget Sound Energy to address the following drivers,

  1. Planning for Climate Change:
    • Incorporating climate change in resource planning and evaluating impact on infrastructure and demand
  2. Building Electrification / Fuel Switching:
    • Account for building electrification
    • Adapt to changing energy consumption patterns
  3. Low Carbon Gas Supply: Renewable Natural Gas (RNG) & Hydrogen:
    • Investigating the approaches taken by gas utilities regarding the acquisition, blending, and supply of RNG and hydrogen
    • Assess integration of low carbon gas supply into distribution system, particularly for industrial use and associated challenges and opportunities
  4. Assumptions and Policy Variations:
    • Identify assumptions made by utilities in their IRPs
    • Evaluating the differentiation in assumptions among utilities and their implications for resource planning and decision-making
  5. Risk Mitigation Strategies:
    • Examining how gas utilities mitigate challenges and risks within their IRPs, such as reliance on the wholesale marketplace and exposure to high/volatile market prices
    • Assessing the risk management strategies employed to ensure the resilience of the gas distribution system
  6. Co-Planning and Collaboration:
    • Investigating strategies employed by utilities, including co-planning between those that own both gas and electric assets
    • Assessing how utilities consider scenario analysis versus optimization routines, resource procurement strategies (build vs. buy or contract), and the role of external consultants in their planning process
  7. Tools and Processes in IRP Orchestration:
    • Examining the tools and processes involved in orchestrating planning and forecasting components into an IRP.
    • Investigating whether utilities develop scenarios and studies in-house or outsource, the utilization of software (e.g., Plexos, Aurora), and differences in the organization of IRPs, including the use of Technical Advisory Committee (TAC) groups.

Data Sources

Integrated resource plans for the following utilities,

  1. FortisBC Energy 2022 LTGRP
  2. Avista 2023 Gas IRP
  3. Puget Sound Energy 2023 Gas IRP
  4. NW Natural 2022 IRP

Methodology

  • Feature analysis
  • Quantitative comparison
  • Qualitative comparison matrix

Comparison Matrix

High Level Takeaways

  • Factors such as policy compliance, social cost, alternate supply side resources leads to increase in cost and hence does not meet least cost and highest reliability criteria.
  • Factoring in impacts of climate change is done in different ways and no standard practice has yet evolved.
  • Changing policy landscape is a key uncertainty in majority of resource plans reviewed.
  • Electrification leads to load reduction with impact varies significantly among the IOU
  • Increasing public participation as they navigate energy transition
  • Equity is required for the end users and providers of utility to keep the utility provision at highest level of reliability and resilience
  • IOUs are investing in clean fuels with varying degree to balance resources and comply with emissions reduction requirement

References

  1. FortisBC (2023). Gas IRP. Retrieved September 22, 2023, from www.fortisbc.com. https://www.fortisbc.com/about-us/projects-planning/natural-gas-projects-planning/natural-gas-resource-planning
  2. Avista (2023). Integrated Resource Planning. Retrieved September 22, 2023, from https://www.myavista.com/about-us/integrated-resource-planning
  3. Puget Sound Energy (2023). 2023-IRP. Retrieved September 22, 2023, from https://www.pse.com/en/IRP/Past-IRPs/2023-IRP
  4. NW Natural (2023). IRP – Strategically planning for use and development of energy resources. Retrieved September 22, 2023, from https://www.nwnatural.com/about-us/rates-and-regulations/resource-planning
  5. Northwest Gas Association (2023). Research and Data 2022 Gas outlook. Retrieved November 27, 2023, from https://www.nwga.org/research-and-data

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