Many electric utilities have used an integrated resource planning (IRP) approach to identify the optimal mix of demand, supply, and transmission resources needed to ensure system resource adequacy and reliability at reasonable cost over a multi-year planning horizon. An IRP is an important input to the determination of whether a utility’s generation mix and associated costs were prudent.

The restructuring of the electric industry that has occurred in many regions of the United States and Canada over the last 10 years has dramatically changed the approaches to and responsibility for long-term resource planning. The creation and evolution of regional transmission organizations (RTOs) and independent system operators (ISOs), along with a shift toward competitive market provision of generation supply has resulted in a dramatic reduction in the use of traditional IRP in jurisdictions where restructuring has occurred.

One part of the response to this new paradigm has been to ensure long-term reliability through the development and operation of resource adequacy or capacity “markets.” However there has been little or no agreement on how to resolve the thorny technical, economic, and jurisdictional issues inherent in these approaches. At best, it is unclear if supposed market efficiencies arising from the paradigm shift have replaced the loss of IRP efficiencies. At a minimum, it is known that the reduction in utility planning efforts has led to foregone efficiencies in least-cost procurement of demand-side resources and has precipitated an overdependence on gas-fired supply resources.

Synapse works to understand the complicated dynamics of the wholesale electrical market and to examine the fundamental principles behind resource adequacy approaches. We also continue to review and critique integrated resource planning activities in those states where electric utilities remain vertically integrated.

Synapse’s work covers a variety of topics on resource planning issues, including:

	Analysis of the PJM RTO’s proposed Reliability Pricing Model (RPM) approach to resource adequacy
	Development of alternatives to the New England ISO’s proposed Locational Installed Capacity (LICAP) approach
	Review and critique of electric utility integrated resource plans, including review of the technical and economic aspects of supply-side and demand-side resources, assessment of the processes used to integrate all types of resources, and the regulatory policies used to promote and guide integrated resource planning
	Conducting detailed technical analysis, using electricity dispatch and market simulation models, of aggressive development of energy efficiency, renewable resources, and distributed generation in regional and multi-state clean energy plans