Decarbonization and clean energy commitments are driving ever-increasing complexity in utility infrastructure planning. The proliferation of renewables and distributed energy resources (DER), anticipated wide-spread electrification, and regional gas availability constraints need to be assessed across the value chain. As such, the need for increased coordination between electric generation, transmission, and distribution planning processes, and alignment between electric and gas planning, are becoming acute. If the industry is to meet its reliability, affordability and clean energy objectives, there needs to be a way to optimize investments across assets and priorities.

What is Integrated System Planning?

At its core, integrated system planning increases coordination between processes that have been largely siloed, with a goal of planning infrastructure to meet reliability, affordability and decarbonization objectives. This infrastructure includes electric generation, transmission and distribution assets and may also extend to natural gas (both wholesale and retail) or even thermal networks.

Benefits of Integrated System Planning

The integration of planning functions (whether it be all of electric, electric and gas or some combination) has the ability to deliver numerous benefits to utilities dealing with the growing challenges described above. 

First, considering solutions across traditional silos can help address reliability challenges related to increasing renewable and DER integration. The ability to assess the impact of myriad variables on all the parts of the energy value chain will lead to more effective solutions to mitigate risk. 

Second, identifying solutions across asset classes can help utilities manage costs by optimizing aggregate utility investments at the system level in concert with longer-term carbon reduction targets, reducing the risk of insufficient, underutilized, or stranded assets.

Lastly, coordinating planning functions can help utilities respond to regulatory requirements such as FERC Order 2222, which is aimed at removing barriers to DER deployment and at driving integration of distribution and resource planning. 

The Challenges

Integrating planning functions can be challenging for many reasons and there is little industry alignment on how it’s defined or what “good” looks like.

Utilities have organized planning functions for generation, transmission and distribution based on a variety of market constructs that developed in the late 1990s and early 2000s, in an era that didn’t contemplate decarbonization, electrification or DERs. As such, planning was organized to optimize for different objectives (e.g., access to low-cost generation). Gas planning is and has been completely separate from electric planning.

Many utilities plan their systems in silos with generation, transmission, and distribution planning performed through completely separate processes with disparate timing.  For instance, a utility may participate in an RTO-driven transmission planning process and state-driven integrated distribution planning on completely different time horizons with different objectives. Coordination among these processes may not happen at all.

Recovery of utility costs through different regulatory jurisdictions for transmission (FERC) and distribution (state) can lead to optimization of portfolios of projects without consideration of the best solutions across the T/D boundary. A similar challenge exists with generation. Utility budgets are often similarly separated.

Lastly, the drivers for integration of planning are appearing differently across the country. Some regions or states are heavily focused on integration of large-scale renewables with less emphasis on electrification; others are concentrating on electrification and grappling with electric/gas interdependence issues. As such, what works for one utility or even a region may not work for another.

Taking The First Step

Although there are challenges to integrating planning functions, the potential value of optimizing asset investments is worth the effort. As a first step, utilities should consider starting with a specific use case designed to answer a discrete question. For instance, could DERs in a given distribution network reduce the need for transmission substation investment? If so, under what conditions?

In starting with a single use case that spans silos, the organization has an opportunity to both study a discrete challenge and understand what will be required to expand this coordination to other questions.

A use case could help answer:

• What data and tools are needed to perform the analysis?
• What process challenges show up through attempting to analyze the use case?
• What organizational or governance barriers work against solving this question?
• What budgetary restrictions exist to implementing the solutions identified or even performing this analysis?

The Road Ahead

A limited study will provide valuable insights about the organization, process, and tools required to perform analyses across traditional silos. These should inform a path to further integrating these functions to the benefit of reliability, affordability and clean energy objectives.