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Tools for Resource Planning
In assessing the energy value of a community renewable project or any other energy resource, utilities typically analyze all reasonably available alternatives and select the package of resources and conservation measures that will be the least costly to the utility and its customers over the long run. A few larger publicly owned utilities and all privately owned utilities in Washington and Oregon develop Integrated Resource Plans (IRPs) (also known as Least Cost Plans (LCP)) that are sophisticated analyses of load growth, resource assessment, and public input. Examples of recent IRPs developed in Washington and Oregon:
Other utilities rely on more generic analyses of resource options. In the Pacific Northwest, most publicly owned utilities take all or part of their power from the Bonneville Power Administration. In the past, Bonneville has acquired new resources on behalf of their customers and the customers accordingly rely on Bonneville to perform resource analyses. Bonneville in turn is required by law to acquire resources that are included in the Northwest Electric Power and Conservation Plan (Northwest Plan), which is updated every few years. The Northwest Plan analyzes all reasonable resources and needs for the entire Northwest but does not attempt to determine needs on a utility-by-utility basis, or even allocate a portion of those needs to Bonneville. Both utilities and Bonneville therefore have a fair amount of flexibility in determining consistency with the plan.
Up to the present, the amount Bonneville charges its customers is, generally speaking, based on the total average cost of all its resources rolled in together. Therefore the very inexpensive power generated by Depression-era hydroelectric dams is averaged in with a newer and more expensive resource such as Energy Northwest’s nuclear Columbia Generating Station. This is graphically illustrated by this graph from Snohomish PUD’s IRP (page 31, used by permission).
However, starting in 2011, Bonneville has announced that customers who wish to buy power from Bonneville to serve their load growth will be charged the cost of acquiring new resources, which will in most cases be significantly higher than the cost of older resources. Therefore, publicly owned utilities will be faced, some for the first time, with the task of deciding whether it is cheaper to purchase new power from Bonneville or to independently purchase or develop their own resources.
