Integrated resource planning (IRP) as a framework to guide electric utility decision in Michigan
Michigan's existing renewable energy standard will plateau at 10% in 2015. The recent ballot initiative to expand this standard failed and there is currently no mandate to increase it beyond the 2015 target. Utility spending on energy efficiency is similarly capped at 2012 levels. This situation leaves cleaner energy sources at a disadvantage in a market distorted toward fossil-based generation as even as public support for a cleaner energy system increases.
Long-term integrated resource planning (IRP) can give diverse stakeholders a stronger voice in their region's energy future. It has the potential to deliver optimal investment decisions for Michigan's energy system. Except for an untested provision that calls for utility planning under limited conditions, Michigan has no requirement for a comprehensive, statewide energy planning process that fairly considers non-fossil fuel alternatives in major utility investment decisions.
The client (MEC) seeks to engage a team from SNRE to evaluate the current IRP landscape nationwide and recommend changes to state policy that would institute comprehensive, long-term resource planning in Michigan.
The project team consisting of MEC, SNRE students and faculty advisors will jointly develop a final work plan. Major tasks would likely include:
- Review existing IRP requirements across the US and their impact on influencing utility decision-making;
- Develop a planning framework that uses innovative mechanisms to incorporate objectives beyond "least cost planning" (e.g., life cycle impacts, volatility mitigation, pricing in externalities, energy security, local job creation);
- Conduct analysis to demonstrate the performance of viable energy scenarios against the planning framework. To create realistic and plausible scenarios, the team must compile baseline data on the current power system, the potential for renewable development, and the range of costs for technologies and fuels. Findings could inform an active regulatory proceeding in partnership with the client's legal counsel and expert witness;
- Identify policy obstacles and opportunities for the full deployment of efficiency, demand response, and renewable generation in the context of a comprehensive IRP;
- Recommend a viable political strategy for MEC to pursue to achieve the recommended policy changes.
The clients ultimate goals for this project are to advance the concept of comprehensive, long-term IRP as the central feature of Michigan's energy strategy, and to establish a baseline of information on potential power sector futures that could lead to more informed decision making.