Tuesday, November 18, 2014

What is an Integrated Resource Plan or IRP?

What is an Integrated Resource Plan or IRP?

Everyone and every business needs to plan for the future, and electrical utilities are no different. According to the non-profit Regulatory Assistance Project, "an integrated resource plan is a utility plan for meeting forecasted annual peak and energy demand, plus some established reserve margin, through a combination of supply-side and demand-side resources over a specified future period." These plans are often required by state regulations. The IRP can be a large report, and is somewhat costly. However, the IRP not only provides a valuable planning tool for the utility, but also is an assurance to the utilities residential, commercial, and industrial customers that proper planning for alternative future contingencies have been developed. Few industries would want to locate or expand into a community where future electrical prices, reliability, and availability are excessively uncertain.

The IRP must catalog current resources, and determine goals. The IRP must forecast future load demands, identify resources, estimate needed new sources or load controls, estimate future prices, and explore alternative new investments. These forecasts may involve considering a number of alternative scenarios, with uncertainty, costs, and reliability estimates for each. Utilities should also follow up after their IRP is completed, comparing expectations with experience.

Our own utility, the Lafayette Utilities System (LUS) completed an IRP in 2011. Burns and McDonnell contracted with LUS to provide IRP analysis support. The IRP evaluated the implications of the EPA regulations (CSAPR, MACT, among others) to LUS existing coal and gas-fired fleet. The IRP evaluated new electrical generation facilities against the retrofitting the existing fleet with air quality control equipment or retirement. Additionally, the IRP included a condition assessment of the existing facilities, load and energy forecast development, technology assessment for new facilities and AQCS equipment, and a evaluation of the EPA regulations.

Typically IRPs are revisited every 3 to 5 years. With our IRP now 3 years old, LUS should be considering starting a new plan soon.