Collaborative resource planning by utilities and customers benefits both
The path forward for rapid decarbonization in the United States is complex and varies by region. In each state, utilities, their customers and regulators are considering how new large-scale renewable projects, energy storage, energy efficiency, demand response and customer actions can further drive the transition to a low-carbon grid.
At times, it seems the decarbonization challenge is a massive equation to solve, with each party focused on only one portion of the math problem. As both utilities and their customers set ambitious renewable energy and carbon goals, they should partner to plan for the resources needed to achieve those targets, a process that can result in benefits for both.
A prominent example of this is the recent thought leadership demonstrated by six major utilities and their large corporate customers as part of the World Resources Institute’s Special Clean Power Council, a two-year initiative focused on simplifying access to low-cost, clean energy options that maximize benefits to the grid.
The initiative recently released a new paper, "Pathways to Integrating Customer Clean Energy Demand in Utility Planning" (PDF) describing the benefits of and strategies for joint planning. Corporate customers and utilities often share goals, including a desire to address emissions, an interest in having a local impact, a need to make the transition as smooth as possible and a motivation to share what works (and what doesn’t) to help accelerate action.
As customers’ 100 percent clean energy goals proliferate, states, utilities and customers are coordinating their efforts to ensure that clean energy development is efficient and impactful. More than 190 companies have joined RE100, a global corporate leadership initiative for 100 percent renewable electricity commitments, and more than 200 U.S. cities, townships and counties (PDF) have adopted 100 percent clean energy targets. Stronger alignment can inspire more efficient clean energy procurement and integration, and will help accelerate decarbonization as parties achieve their goals faster, all while fostering stronger relationships between utilities and their customers.
Collaboration also prepares utilities to better anticipate and plan for additional renewable energy demand and helps minimize the actions that corporate or municipal customers independently must take to meet their goals. By finding solutions together, utilities and customers can approach regulators as partners, gaining approvals more easily.
Today, many utilities across the United States manage their long-term strategies through integrated resource planning. Integrated resource plans (IRPs) are developed to set the long-term vision for how a utility will meet future demand in its territory. IRP processes often incorporate feedback from stakeholders such as cities and companies to capture customer input and preferences. Stakeholders also formally can participate in the proceedings that state regulators use to review and accept or deny these plans. By this stage, however, much of the utility planning process is already complete.
Increasing one-on-one, informal collaboration between customers and utilities around resource planning early in the utility planning process could be the key to aligning both parties’ work. But the first step is education.
Customers who understand the resource planning process they’re trying to participate in are better able to assess the impact of the utility’s plans on their goals, enabling them to make more concrete requests of the utility. Utilities that understand the goals and concerns of their customers are more capable of articulating their efforts to address customer concerns and provide important information.
Xcel Energy, for example, has been able to engage earlier with its customers in its utility planning through the Minnesota Sustainable Growth Coalition. It also kicked off an extensive stakeholder engagement process a full year ahead of filing its draft plan with its state regulator.
As part of this process, Xcel Energy engaged with several environmental organizations and labor groups to make decisions on topics ranging from renewable energy capacity to coal power plant shutdowns. Establishing ongoing relationships, giving customers the opportunity to review proposals early and using innovative agreements all can lead to a draft IRP that reflects stakeholder support on key issues ahead of the initial filing.
The future of resource planning should include customer and utility collaboration, early and often. The earlier customer demand and input are integrated in the planning process, the more likely that customer needs will be captured in the draft plan submitted to the regulator. In cases where direct engagement with their utility is not an option, customers can overcome educational and resource barriers by finding forums or joining coalitions with stakeholders who have similar goals. Robust stakeholder processes and transparency within IRP planning also support engagement and help customers understand how their demand is being met.
If customers and utilities can become effective partners in resource planning, they may able to bring even more value to the energy transition by collaborating on renewable integration, storage deployment, demand aggregation and managed charging of electric vehicles. Together, they can address complex questions about the future of clean energy goals, bringing innovation to the IRP process and improving planning for all.