Utility System Planning Is More Complex than Ever

Utility system planning has grown increasingly complex with the addition of intermittent renewable energy sources, distributed energy resources (DERs), electrification, and rapid increases in large, new spot loads entering electric systems across the country. All these factors make it more challenging than ever to balance the three utility objectives of providing reliable, affordable, and clean power. Given this complex environment, utilities are exploring integrated system planning (ISP) as a way to manage these challenges and assess tradeoffs across their objectives. 

ISP is the ability to coordinate across different planning domains, such as electric generation, transmission, and distribution, as well as between electric and gas networks, with the goal of balancing the sometimes-competing objectives of reliability, affordability, and decarbonization.

The specific domains included in ISP may differ across utilities, or even within the planning teams of the same utility, based on their unique operating environment, assets, and system planning objectives. However, in all cases, ISP supports the need for more strategic planning across domains to support multiple objectives.

ISP Helps Utilities Better Manage Today’s Planning Complexities

Using ISP to identify solutions across asset classes and siloed planning processes can help utilities optimize investments at the system level in concert with longer-term carbon-reduction targets, reducing the risk of insufficient, underutilized, or stranded assets.

Under traditional planning approaches, identifying the optimal capital investment depends upon the specific objective, or set of objectives, of the planning group evaluating a specific asset class. When tasked with identifying the best solution for a system constraint, different planning groups (e.g., generation, transmission, and distribution) may each arrive at different solutions based on the set of objectives and criteria used for their respective planning functions. However, the most effective and least-cost solution for the system as a whole may be different than any of the solutions identified by the individual planning groups. ISP helps identify these types of solutions.

Signs Your Organization Could Benefit from ISP

If your organization is experiencing one or more of the scenarios below, you may want to consider taking a closer look at ISP and how enhanced planning coordination can help address these challenges.

1. The pace of change is faster than your existing planning processes. System load forecasts are changing faster than your organization is able to make planning decisions, and planning teams struggle with identifying the best investments to meet a range of potential future load scenarios.
2. The system requires more capital investment than can be made without driving unsustainable rate increases. Whether from traditional investment drivers such as performing preventative maintenance and replacing aging infrastructure or from investments driven by decarbonization targets and storm hardening, there are often more capital investment needs than rates can sustain.
3. Your organization is grappling with how to prioritize capital investments across asset types or planning domains. Planners are able to prioritize investments within a single planning domain (e.g., generation, transmission, and distribution), but the organization struggles with assessing the relative importance of investments to the system across asset types.
4. Your organization is challenged with identifying the optimal set of renewable energy investments to make in support of carbon-reduction targets. Planners struggle to evaluate transmission system impacts, and therefore “all-in” costs, of competing potential renewable energy investments. In addition, there is uncertainty around how to account for DERs as inputs to the resource planning process.
5. Your organization is facing, or is concerned about, increasing reliability challenges. Whether from traditional sources such as aging infrastructure or from integrating inverter-based intermittent resources and hardening against increasing severe weather events, planners are facing increasing complexity and interconnectedness of reliability challenges. 
6. Your organization is working on how to design customer programs and incorporate impacts into planning processes. The organization struggles with the best way to tailor customer programs to shape desired load characteristics and how to use the expected load modifications as inputs to existing planning processes.

The case for exploring ISP is only amplified for those organizations facing more than one of these challenges at any given time. Additionally, some utilities may find ISP helpful in responding to regulatory orders or legislation to better coordinate planning processes (e.g., NY PSC Order on Local Transmission and Distribution Planning Process and Washington State House Bill 1589, requiring the combination of electric and natural gas system planning).

Start Small with a Use Case and Build from There

ISP is a powerful approach for helping utilities manage modern planning process complexities. There is no one way to perform ISP, which can be adapted to meet the needs of each utility based on their current objectives, planning approach, and operating environment. Because of this, we recommend utilities interested in ISP consider starting their journeys with specific use cases designed to answer discrete questions.

In starting with a single use case that spans planning 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 limited study will provide valuable insights about the organization, processes, and tools required to perform analyses across traditional silos. These insights should inform a path to further integrating these functions to the benefit of reliability, affordability, and clean energy objectives.