On behalf of our clients, Synapse identifies and investigates resource planning issues likely to have the greatest impact on consumers, electric reliability, the economy, and the environment. We examine the implications of resource planning methods and assumptions, and provide detailed technical analyses to inform policy and planning decisions at the utility, state, regional, and national levels.
Our staff has provided expert assistance to clients in integrated resource planning and pre-approval proceedings in dozens of U.S. states, resulting in improved analysis and resource review; greater reliance on alternative economic resources; increased stakeholder engagement; more rigorous scrutiny of proposed utility investments; and disallowance of recovery for imprudently incurred costs.
Integrated Resource Planning (IRP)
Synapse reviews and critiques electric utility plans in IRP and pre-approval proceedings. We routinely use electricity production-cost and capacity expansion models in these cases to investigate utility assumptions, analyses, and preferred resource options. We also evaluate alternatives that may provide greater benefits at less or equal cost to consumers.
Our IRP-related work includes:
- Reviewing the technical and economic aspects of supply- and demand-side resources
- Examining and critiquing utilities’ demand forecasts
- Evaluating the risk and impact of state and federal regulations, both existing and emerging, on planning assumptions
- Assessing the analytical processes used to evaluate resource choices and plans to increase capacity
- Conducting detailed technical analysis using electricity production-cost and capacity expansion models
- Developing, applying, and critiquing models and their application to particular problems
- Assessing the regulatory policies used to promote and guide IRP
- Guiding IRP processes through stakeholder engagement
Energy Future Scenario Analysis
Complementary to our utility resource planning capabilities, Synapse works with our clients to develop and analyze energy future scenarios for states, regions, and the nation as a whole. We analyze the costs, benefits, rate and bill impacts, employment and economic impacts, emissions, and other factors associated with electric-sector resource scenarios using publicly available data and well-supported assumptions. This work often supports the creation of “clean energy plans” and new or modified energy policies.
Electric System Reliability
Synapse investigates electricity market structures, resource adequacy, and other important factors that can affect the reliability of the generation, transmission, and distribution systems. Our work includes:
- Evaluating whether new electricity market structures are likely to lead to reliability problems, and identifying policies to address such problems
- Determining the levels of system reliability that are adequate for large interconnected utility systems
- Evaluating whether new utility generating and transmission facilities are needed to ensure adequate system reliability
- Analyzing distribution system maintenance and reliability
- Examining the appropriate consideration of reliability in planning and ratemaking for distributed generation
- Evaluating whether there exists excess generating capacity on electric utility systems, from both physical and economic points of view
Synapse quantifies the long-term benefits (avoided costs) that consumers will receive from reducing their use of electricity, natural gas, and other fuels. Major categories of avoided costs include:
- Energy cost savings for those consumers who reduce their energy use,
- Lower energy and capacity prices to all consumers resulting from reductions in energy use, and
- Reductions in carbon dioxide emissions costs resulting from reductions in energy use.
Synapse produced the biennial Avoided Energy Supply Costs in New England study, a key reference used by New England energy efficiency program administrators in the development of energy efficiency plans, in 2007, 2009, 2011, and 2013. Synapse also assesses methodologies used by utilities for estimating avoided costs, evaluates the types of avoided costs used in energy efficiency cost-effectiveness tests, calculates the avoided costs associated with renewable energy generation, and develops projections of long-term avoided costs for individual U.S. states.
Power Plant Costs and Performance
Synapse evaluates power plant construction costs, repowering options, siting decisions, availability and efficiency, emissions characteristics and environmental control options, water usage, and cooling. This work includes examining the impact of power generation on water supply (and water supply on electric system reliability), the costs and risks associated with building large new power plants, and the economic impacts and reasonableness of converting fossil fuel and nuclear plants from once-through to closed-cycle cooling systems.
Synapse evaluates the impact of existing and expected environmental regulations on coal-fired power plants, both at the individual plant and fleet levels. This includes assessing:
- Estimates of capital and operation costs to comply with air, solid waste, and water regulations (e.g., CCR, effluent quality, 316(b), tailoring, and ozone)
- Cost estimates for mitigation equipment
- Consideration of carbon dioxide prices over the long term
- Analysis of forward-going economics
- Consideration of a full range of viable alternatives to the continued operation of aging coal units
Synapse developed the Coal Asset Valuation Tool (CAVT), a spreadsheet-based database and model, to identify and investigate U.S. coal units at risk for retirement. Synapse’s work related to coal power also includes evaluating coal plant emissions, markets for domestic coal, subsidies received by the coal industry, and the lifecycle costs and impacts of coal power compared to other energy sources.
Synapse assesses the costs, risks, reliability impacts, and reasonableness of decisions related to current and planned nuclear power plants. This includes assessing:
- The reasonableness and economics of power uprates and life extensions at current nuclear plants
- The costs and risks of constructing new nuclear power plants compared to the costs and risks of alternatives such as renewable and demand-side resources
- The adequacy of nuclear plant decommissioning trust funds
- Nuclear waste storage
- The reasonableness of nuclear plant maintenance, investments, and expenditures
- The impact of plant retirement on electric system reliability and costs
- The role for nuclear power in efforts to address climate change
Forecasts of electricity demand are essential for analyses of utility regulation and planning. Yet many forecasts used by utilities are declared to be confidential business information. Synapse frequently examines and critiques utilities’ demand forecasts as part of integrated resource planning dockets and other regulatory hearings. Our work also includes:
- Developing forecasts of electricity consumption and peak loads for major customer classes (residential, commercial, and industrial), drawing on publicly available, state-level economic, climate, and energy data
- Creating alternative demand forecasts based on different scenario assumptions
- Examining demand forecast components and methodologies in order to identify areas for improvements
Portfolio Management, Generation Supply Planning, and Procurement
In both vertically integrated and restructured jurisdictions, electric utilities have an obligation to provide reliable service at reasonable rates. One way to achieve this result is to use portfolio management techniques in the design of the generation mix. Various generation procurement processes can be implemented to achieve this mix, including auctions and requests for proposals. On behalf of its clients, Synapse examines utilities’ procurement practices, including the:
- Diversity of generation technologies, generation fuels, and suppliers;
- Timing and duration of contracts;
- Reasonableness of rates; and
- Use of financial hedging instruments.
We also analyze the relationship between gas prices and electricity prices, and quantify the difference in price of short- versus long-term contracts and their respective impacts on customers’ bills.
Gas Supply Planning
Synapse analyzes gas supply planning, contracting, and procurement issues. This includes examining:
- The need for proposed LNG terminals
- Pricing under long-term contracts for gas supply to gas-fired generating units
- Procurement strategies of gas utilities, addressing issues such as load forecasts, reliability criteria, contracting options, price projections, procurement practices, portfolio policy, and risk management
- Policies for gas pipelines proposed by the FERC
- The integrated resource plans and demand-side management programs of gas utilities
We bring a broad perspective and years of experience to our projects, including a comprehensive understanding of the structure and operation of wholesale and retail markets for gas, and extensive experience providing expert testimony on procurement issues in litigated proceedings.