Staff White Paper on 

Guidance Principles for Clean Power Plan Modeling

Docket No. AD16-14-000

I. Executive Summary

On August 3, 2015, the U.S. Environmental Protection Agency (EPA) 

issued the Clean Power Plan (CPP)1 under Clean Air Act 111(d). The CPP limits

carbon dioxide emissions from existing fossil fuel-fired electric power plants by 

providing state specific goals for carbon dioxide emissions from affected electric 

generating units. As part of the CPP, EPA considered the potential impacts of the 

CPP on electric system reliability. Specifically, the CPP requires each state to 

demonstrate in its final state plan submittal that it has considered reliability issues

in developing its plan.2 Separately, on August 3, 2015, EPA, the U.S. 

Department of Energy (DOE) and the Commission agreed to coordinate certain 

activities to help ensure continued reliable electricity generation and transmission 

during the implementation of the CPP.3

While the CPP assigns no direct role to the Commission, it is possible that 

the Commission may be called upon, through the EPA-DOE-FERC Coordination 

Document4 or for other reasons, to address concerns about reliability as the CPP is 

implemented. In that case, the use of appropriate modeling tools and techniques 

will be helpful to the Commission in carrying out its responsibilities for 

reliability.

5

This white paper identifies four guiding principles that may assist 

transmission planning entities, which may include regional transmission 

organizations (RTOs), independent system operators (ISOs), electric utilities, or 

 1 See Carbon Pollution Emission Guidelines for Existing Stationary 

Sources: Electric Utility Generating Units, 80 Fed. Reg. 64,662 (2015) (CPP).

2 Id. at 64,671.

3 EPA-DOE-FERC Coordination on Implementation of the Clean Power 

Plan (Aug. 3, 2015), http://www.ferc.gov/media/headlines/2015/CPP-EPA-DOEFERC.pdf.

4 Id.

5 The Commission’s jurisdiction and its expertise with respect to reliability 

is limited to the Bulk Power System.
Docket No. AD16-14-000

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other interested stakeholders, in conducting effective analysis of the CPP and 

associated state plans, federal plans or multi-state plans (compliance plans). The 

North American Electric Reliability Corporation (NERC) and the regional electric 

reliability organizations may also benefit from following these guiding principles 

as they perform CPP-related analyses. These guiding principles address four 

areas: (1) transparency and stakeholder engagement; (2) study methodology and 

interactions between studies; (3) study inputs, sensitivities and probabilistic 

analysis; and (4) tools and techniques.

Incorporating these guiding principles in the modeling of the CPP

compliance plans is one way to promote a robust analysis of the reliability impacts 

of the CPP. The guiding principles discussed herein may form the basis for 

additional action by staff, such as industry outreach or technical conferences, or 

future action by the Commission. 

II. Background

On August 3, 2015, the EPA issued the Clean Power Plan to limit carbon 

dioxide emissions from existing fossil fuel-fired electric power plants. In the final 

rule, EPA provides state specific goals for carbon dioxide emissions from affected 

electric generating units. Each state is required to meet interim emissions goals

from 2022 to 2029 and a final goal starting in 2030.

In formulating the final rule, EPA considered input from many electric 

industry stakeholders, including comments from the technical conferences hosted 

by the Commission in early 2015. As a result of these comments, the final rule

provides ways to assess the potential impacts of the CPP on electric system 

reliability. Specifically, the CPP requires each state to demonstrate in its state 

plan that it has considered reliability issues in developing its plan.6

 EPA states

that one particularly effective way that states could make this demonstration is by 

consulting with the relevant RTO, ISO, or other planning authorities as they 

develop their plans and documenting this consultation process in their state plans.

7

 

If a state chooses to consider reliability through consultation with an ISO/RTO or 

other planning authority, the EPA recommends that the state request that the 

planning authority review the state plan at least once during the plan development 

stage and provide its assessment of any reliability implication of the plan.8

 6 CPP at 64,671.

7 Id.

8 Id.
Docket No. AD16-14-000

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In the CPP, EPA notes that, in June 2015, M.J. Bradley & Associates issued 

a report that enumerated a set of useful guiding principles for studying and 

evaluating the reliability impacts of the final rule.9

 EPA states that the report 

enumerated six principles: (1) a study should be transparent about the assumptions 

and data used; (2) a study should accurately reflect the existing status of the grid in 

its modeling assumptions; (3) a study should clearly identify the base case and not 

confuse what will happen as a result of the final rule with what would have 

happened anyway; (4) where possible, a study should contain sensitivities and 

probabilities as they are looking into the future which is necessarily uncertain; (5) 

a study should reflect the flexibility provided to states to allow them to design 

compliance approaches to maximize reliability; and (6) a study should provide 

realistic and reliability-focused results. EPA stated that these principles are 

helpful to keep in mind when reviewing recent studies on CPP implementation.

III. Purpose of Staff White Paper

Effectively evaluating the potential reliability impacts of the CPP 

associated with the development of compliance plans presents a number of 

challenges for transmission planning entities. Although the CPP allows states 

significant flexibility in determining how to meet state goals and this flexibility 

can be beneficial, it may introduce additional uncertainty and complexity into 

transmission planning studies. Because all states in the continental United States10

are required to comply with the CPP, state-by-state variations in compliance 

approaches may add additional uncertainty and complexity, particularly for 

transmission planning entities that cover multiple states or states with multiple 

transmission planning entities. Further, the use of inconsistent models, or 

inconsistent modeling inputs, may suggest reliability problems where none exist, 

or may mask problems that do exist. If models and modeling inputs are not 

transparent, it will be difficult for stakeholders, state commissions, planning 

authorities or the Commission to identify, understand or address potential 

problems.

Although effectively evaluating the impacts of the CPP may present 

challenges, these challenges may be reduced by using appropriate modeling tools 

and techniques. This white paper identifies four guiding principles that may assist 

transmission planning entities in conducting effective analysis of the CPP and 

 9 CPP at 1132-1133 (citing M.J. Bradley & Associates, Guiding Principles 

for Reliability Assessments Under EPA’s Clean Power Plan (June 3, 2015),

http://www.mjbradley.com/node/295 (Bradley Report)).

10 We note, however, that the EPA has determined that Vermont is not 

required to submit a compliance plan.
Docket No. AD16-14-000

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associated compliance plans. This analysis could occur as part of established 

transmission planning processes or as part of a different process, such as the 

reliability review required as part of state plans. These guiding principles address 

four areas: (1) transparency and stakeholder engagement; (2) study methodology 

and interactions between studies; (3) study inputs, sensitivities and probabilistic 

analysis; and (4) tools and techniques. Implementation of these principles is one 

way to help transmission planning entities conduct robust analysis of the impacts 

of the CPP and associated compliance plans. The principles discussed below may 

form the basis for additional action by staff, such as industry outreach or technical 

conferences, or future action by the Commission. 

IV. Types of Studies

There are a number of different types of studies that could be useful to 

effectively assess the impacts of the CPP and associated compliance plans. Longterm transmission planning processes already involve a number of discrete studies 

that examine a variety of technical and economic factors, which could also be 

applied to analysis under the CPP. These studies can include, but are not limited 

to: resource adequacy, production cost, integrated gas-electric systems 

simulations, powerflow and transient stability analysis, and frequency response.

Resource adequacy planning generally examines the electric system’s 

ability to provide adequate supply of generation to meet demand and maintain 

reserves to support generation outages. Resource adequacy planning studies can 

be used to develop short-term and long-term resource expansion plans. These 

studies allow entities to evaluate options for maintaining reliability while 

accommodating changes in resources and load and complying with state and 

federal policy directives. 

A production cost study is a unit commitment and economic dispatch study 

that takes into account the uncertainties of the availability of generation plants,

transmission facilities, fuel costs, and load forecasts while honoring operating 

reserve, transmission, and generation system requirements and constraints. The 

production cost study is central to the economic and reliability evaluation of 

generation and transmission projects by evaluating differences in production costs, 

potential transmission bottlenecks, and unserved load.

Integrated gas-electric systems simulations use new software models that 

allow transmission planning entities to identify constraints on the natural gas 

system, which could impact the electric transmission system by allowing

simultaneous simulations of flows on both the electric transmission and natural 

gas pipeline systems. This type of study allows transmission planning entities to 

analyze the impact of varying demands of the natural gas electric generation on 
Docket No. AD16-14-000

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the natural gas pipeline system. Efforts are also underway to include gas system 

contingencies as an input to the software models.

11

Powerflow and transient stability simulations are used to assess whether the 

future system can reliably serve expected load and withstand credible 

contingencies as required by the North American Electric Reliability Corporation

(NERC) reliability standards, particularly the TPL (transmission planning)

standards. 

Powerflow and transient stability simulation tools are also used for 

frequency response analysis studies, which are needed to assess whether the 

electric system will remain stable following contingencies. 

To provide appropriate context for the application of the transmission 

planning study principles proposed below, Appendix A provides further 

information on each study type that is used in the transmission planning process. 

V. Study Elements

Transmission planning processes require important decisions about 

different elements of the planning process. These can include software, study 

methodology, data sources, base case development, assumptions, presentation of 

results, and recommendations based on study results. Transmission planning 

entities use a variety of internal and external resources to develop their studies. 

Most of the generation, transmission and load data used as input into 

planning software is provided by industry data collection processes (such as the 

data collection and base case process in the Western Electricity Coordinating 

Council (WECC), the WECC Transmission Expansion Planning Policy 

Committee and Planning Committee, and the Eastern Interconnection Reliability 

Assessment Group) to build interconnection-wide base cases for powerflow and 

stability programs. The transmission planning regions modify this data to study 

the particular details of the region(s) of interest. Transmission planning entities 

also subscribe to services that research publically available data to build base cases 

for other applications. Specific assumptions that are of interest to particular 

stakeholders are submitted and addressed through stakeholder processes or 

through participation in the committees that are in the study processes of each 

transmission planning region. The stakeholders include the participating 

 11 See e.g., MISO Planning Advisory Committee, An Intro to Gas-Electric 

Modeling in MISO’s Clean Power Plan (CPP) Phase III Study (April 2015), 

https://www.misoenergy.org/Library/Repository/Meeting%20Material/Stakeholde

r/PAC/2015/20150415/20150415%20PAC%20Item%2003%20CPP%20Phase%2

0III%20Gas-Electric%20Modeling%20Overview.pdf.
Docket No. AD16-14-000

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transmission owners/operators, generation owners/operators, generation 

developers, state regulators and elected officials, consultants and customer groups. 

Stakeholders also provide input into the study plans so that the studies can 

formulate scenarios that will provide information on the stakeholders’ interests.

Each region’s transmission planning process and/or methodology lists the timing 

and requests for input and comments.

VI. Guiding Principles

The following four guiding principles can help transmission planning 

entities effectively evaluate the impacts of the CPP and associated compliance 

plans.

1. Transparency and Stakeholder Engagement 

Transparency and stakeholder engagement in the development of the 

models, model inputs and study designs can help identify appropriate policy 

alternatives and provide important feedback to evaluate assumptions and other 

inputs. The studies performed as part of the transmission planning process involve 

a number of subjective decisions. For example, there are many ways to determine 

the value of uncertain inputs such as fuel costs or capital costs for new resources

and many inherently subjective decisions in the planning process. A transparent 

process that allows stakeholder input on important aspects of the planning process 

provides the most practical way to assure that reasonable assumptions and inputs

into the study processes are considered. In addition, the modeling entity should

provide sufficient access to information so that stakeholders can replicate the 

results of studies. Using a transparent process that engages stakeholders to review 

and identify study inputs, modeling techniques, base case content, and study 

results can help promote the use of accurate assumptions, the employment of 

rigorous study methods, and the reasonable interpretation of results. 

The Commission recognized the importance of openness and transparency 

in transmission planning by adopting the openness and transparency principles in 

Order No. 890 and Order No. 1000. In Order No. 890, the Commission required

that transmission planning meetings must be open to all affected parties including, 

but not limited to, all transmission and interconnection customers, state 

commissioners, and other stakeholders.12 Additionally, Order 890 required 

 12 Preventing Undue Discrimination and Preference in Transmission 

Service, Order No. 890, FERC Stats. & Regs. ¶ 31,241, at P 460, order on reh’g, 

Order No. 890-A, FERC Stats. & Regs. ¶ 31,261 (2007), order on reh’g, Order 

No. 890-B, 123 FERC ¶ 61,299 (2008), order on reh’g, Order No. 890-C, 126 

FERC ¶ 61,228 (2009), order on clarification, Order No. 890-D, 129 FERC ¶ 

61,126 (2009).
Docket No. AD16-14-000

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transmission providers to disclose to all customers and other stakeholders the basic 

criteria, assumptions, and data that underlie their transmission system plans.13

Transmission providers are required to reduce to writing and make available the 

basic methodology, criteria, and processes they use to develop their transmission 

plans.14 In so doing, stakeholders or an independent third party can replicate the 

results of transmission planning studies to confirm that transmission planning was 

not conducted in an unduly discriminatory fashion. The Commission also noted 

that, since one of the primary objectives of Order No. 890 is to allow customers to 

consider future resource options, it is necessary for market participants to have 

access to basic transmission planning information in order to consider those 

options.15 The openness and transparency principles were also adopted as part of 

the regional transmission planning reforms in Order No. 1000.16

Similar levels of openness and transparency across all transmission 

planning processes can help promote studies that consider the broad range of 

emerging factors such as environmental regulations, gas-electric coordination, and 

generator performance. In its white paper, M.J. Bradley suggests that organized 

and focused stakeholder involvement will help incorporate up-to-date 

assumptions, create consistency across assessments, and ensure that reliability 

assessments are, to the extent possible, based in objective facts and data.17 For 

CPP compliance planning, M.J. Bradley recommends that detailed results and 

assumptions be discussed as part of the technical review process and be released in 

concurrence with each final report.18 Further, M.J. Bradley points to WECC’s 

 13 Order No. 890, FERC Stats. & Regs. ¶ 31,241 at P 471.

14 Order No. 890, FERC Stats. & Regs. ¶ 31,241 at P 471.

15 Order No. 890, FERC Stats. & Regs. ¶ 31,241 at P 476.

16 Transmission Planning and Cost Allocation by Transmission Owning 

and Operating Public Utilities, Order No. 1000, FERC Stats. & Regs. ¶ 31,323, at 

P 151 (2011), order on reh’g, Order No. 1000-A, 139 FERC ¶ 61,132, order on 

reh’g and clarification, Order No. 1000-B, 141 FERC ¶ 61,044 (2012), aff’d sub 

nom. S.C. Pub. Serv. Auth. v. FERC, 762 F.3d 41 (D.C. Cir. 2014). The 

Commission also required public utility transmission providers, either individually 

or through their transmission planning region, to maintain a website or e-mail list 

for the communication of information related to interregional transmission 

coordination procedures. Id. at PP 458, 465-467.

17 Bradley Report at 13.

18 Id.
Docket No. AD16-14-000

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assessment of the proposed CPP as an example of a planning entity that articulated 

the goals of the analysis, technical assumptions and reasoning, and model 

methodologies and limitations, and developed base cases based on stakeholder 

involvement.19

Openness and transparency will not only improve modeling practices 

within the region but also help coordination of modeling efforts across

neighboring planning regions. States developing CPP compliance plans may find 

it useful to incorporate in their models neighboring state’s or region’s inputs and 

assumptions regarding the utilization of existing generation and new energy 

resources. Such transparency will help states and neighboring planning regions 

assess the impact of another state’s compliance plan on the electric system within 

their state or region. It will also help them to evaluate and prepare for changes in 

power flows and transmission system needs that may result when implementing 

CPP compliance plans. 

Open and transparent processes that provide sufficient access to 

information can also recognize that critical energy infrastructure information 

(CEII) and commercially sensitive data may be subject to certain protections. As 

an example of this balance, while also recognizing the importance of openness and 

transparency in Order No. 890, the Commission required transmission providers to 

develop safeguards in their transmission planning processes to ensure that 

confidentiality and CEII concerns are adequately addressed.20

Ultimately, stakeholder engagement in model development can provide an 

opportunity for a more thorough review of study decisions and provide input on 

the various policy alternatives available under the CPP and associated compliance 

plans. As noted in the WECC study, the transmission planning entity benefitted 

from the input of its stakeholders at each phase of its transmission planning 

process to develop base cases and verify assumptions and data.21 A broad range of 

stakeholder input at each step in the process can help transmission planning 

entities improve the quality of the technical work, identify the various compliance 

options, and reasonably evaluate the reliability implications of each approach.

2. Study Methodology and Interactions Between Studies

 19 Id.

20 Order No. 1000, FERC Stats. & Regs. ¶ 31,323 at P 460.

21 WECC 2013 Interconnection-Wide Plan, Summary (Sept. 19, 2013), 

https://www.wecc.biz/Reliability/2013Plan_PlanSummary.pdf.
Docket No. AD16-14-000

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Incorporating changes to current study methodologies can allow 

transmission planning entities to more effectively assess the impact of the CPP and 

associated compliance plans. For example, transmission planning processes could 

be modified to better consider the interactions between interrelated studies. To 

fully assess the impacts of the CPP and associated compliance plans, different 

types of studies may be required to account for the range of compliance options 

and other influences leading to changes to the transmission system and the 

generation fleet. Incorporating the results of one study into a subsequent study can

result in a more robust analysis. For example, the results of a resource adequacy 

analysis can be used to define the assumptions for the composition of the 

generation fleet used in a production cost or natural gas infrastructure study. This 

iterative process can lead to more robust results than using static assumptions.

Software applications and models can be used to assess the range of 

influences on reliability, including the impact of market dynamics, and the impact 

of policy and regulatory requirements, such as how the state plans will affect load 

growth, fuel availability and prices, the generation mix, and generator operation.

Study methodologies can be modified to take advantage of multiple tools to better 

capture the impacts on different aspects of the electric grid. For example, a 

resource adequacy tool could be used to predict potential changes to the 

composition of the generating fleet, while a tool modeling natural gas 

infrastructure could indicate whether sufficient pipeline capacity exists to supply 

the modeled generation mix. 

Incorporating relevant information from one study into subsequent studies, 

to the greatest extent practicable, can help the overall study process better reflect 

the complex interactions between the various decisions. One important benefit of 

this approach is that key variables are based on the outputs of specific studies 

rather than being based on static assumptions. In this way, it is possible to assess a 

variety of future scenarios. This approach can help capture the influence of 

changing conditions and identifies outcomes that may be unexpected or that differ 

from past experience. For example, results from a fuel supply study could be used 

to refine a production cost or resource adequacy study to provide more realistic 

results. 

Other changes to current study methodologies may also help assess the 

impacts of the CPP and associated compliance plans. For example, if a 

transmission planning entity covers multiple states, it may need to reflect varying 

state compliance approaches across its area. To accurately model the impact of 

the CPP in this instance, additional modeling work and preparation may be needed 

to refine study tools and databases in some regions. Working with multiple 

software applications and study tools may also help planners leverage data not 

previously available in some tools. For example, many production cost models 

offer geographic data in addition to transmission topology data, which could be 
Docket No. AD16-14-000

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used to augment load flow models that focus exclusively on regional and public 

utility boundaries. 

In addition, given the long timeframe for phasing in compliance with 

certain state and federal policy directives, such as the CPP, study methodologies 

could consider allowing for an extended assessment period and the ability to adjust 

key variables for different periods. Moreover, given variation in regional 

transmission planning processes, some regions may need to extend the timeframe 

of certain models for longer transmission planning horizons.

Finally, given the potential complexity associated with incorporating the 

results of studies into subsequent studies, outlining the study process in adequate 

detail can help stakeholders understand the inputs to each study and how the 

outputs of each study may be used in subsequent studies. Defining the study 

methodology can reduce uncertainty both for transmission planning entities and 

for stakeholders.

3. Study Inputs, Sensitivities and Probabilistic Analysis

Using study inputs that account for uncertainty and test for sensitivity can 

help effectively assess the impact of the CPP and associated compliance plans. 

Selecting such inputs requires development of base cases that accurately reflect 

the current and future state of the electric grid under business as usual conditions

and, as noted above, can benefit from stakeholder input. After developing base 

cases and policy scenarios, results can be tested for the influence of forecast 

uncertainty and sensitivity to particular variables. These tests using probabilistic 

analysis and sensitivity studies allow uncertainty and potential sources of errors to 

be quantified. 

All studies begin with the development of a base case, which is used for 

comparison with other scenarios. A well-developed base case allows for the 

review of the results of all other cases against a single base case for benchmarking 

final study conclusions. Base case inputs reflect the current and expected future 

state of the electric grid under business as usual conditions. The composition of 

the electric grid is constantly changing; therefore, to accurately model expected 

future conditions, base case inputs should be current and reflect the most up-todate plans for renewable energy development, the expansion of electric and natural 

gas infrastructure, new energy efficiency programs, and other environmental

regulations. By using current data that incorporates the various developments and 

trends in the industry, it is possible to develop a robust base case. This type of 

robust base case allows for an informed analysis of study results and, when 

compared with scenario results, more accurately captures the influence of policy 

changes. 
Docket No. AD16-14-000

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Examining various policy scenarios and sensitivities against the base case 

can provide an effective way to assess the potential impacts of the CPP and 

associated compliance plans. A scenario models additional changes to the base 

case based on policy decisions, such as various approaches to comply with state 

and federal policy directives. Examining multiple scenarios can provide 

stakeholders with a better understanding of the impacts of various policy choices. 

Analyzing multiple scenarios can also help optimize investments in transmission 

and generation resources by highlighting benefits across various possible 

scenarios. 

To address the uncertainty inherent in long-term planning studies, planners 

can also incorporate multiple sensitivities, when possible. Sensitivity cases 

examine how uncertain variables, such as fuel prices, load growth, energy 

efficiency or other factors, affect the results of a policy scenario or base case. 

Sensitivity cases could also include natural gas pipeline contingencies that may 

impact electric generation, for instance loss of a pipeline that is the only source of 

gas to several electric generators. By accounting for the full range of probable 

outcomes, rather than just “best” or “worst” cases, studies are more likely to 

identify effective compliance options or potential reliability concerns.

In addition to using sensitivity cases, the use of probabilistic analysis can

also help stakeholders evaluate uncertain futures and make decisions under various 

potential conditions. In forward-looking studies, there is some degree of 

uncertainty, even in commonly-used forecasts such as for load or fuel prices. 

Probabilistic analysis defines the degree of uncertainty for a given variable by 

testing a range of values, which can improve the chance of identifying reliability 

concerns and their probability of occurring. Similar to sensitivity analysis, 

probabilistic analysis can help transmission planning entities assess a range of 

potential outcomes to inform compliance options or potential reliability concerns. 

4. Tools and Techniques

Adopting new modeling tools and techniques can help transmission 

planning entities better assess the impacts of the CPP and associated compliance 

plans. The electric grid has recently undergone a number of changes, including 

increased renewable penetration, increased reliance on natural gas-fired 

generation, and the implementation of new environmental regulations. Other 

changes are possible given the numerous compliance options under the CPP that 

could affect the generation mix, load, and operational practices. Adopting new 

modeling tools and techniques may help transmission planning entities better 

analyze the complex interactions between these various changes. 

In order to adopt new modeling tools and techniques to thoroughly evaluate 

the complex interactions between various decisions, transmission planning entities 

may need specialized software tools, modeling data and expertise with specialized 
Docket No. AD16-14-000

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studies. For example, with ongoing changes to the fuel mix, including the 

increasing use of natural gas, leading to increased interdependence of the electric 

and natural gas industries, more transmission planning entities may need to 

develop their capabilities to study the interdependency of electric and natural gas 

infrastructure to create the most comprehensive studies possible. Therefore, 

transmission planning entities may want to assess their current capabilities and, if 

necessary, develop new data sources, software tools, and training programs to 

demonstrate that they are able to share results between related analyses and fully 

assess emerging and ongoing trends in the power industry.

VI. Conclusion

Although effectively evaluating the impacts of the CPP may present 

challenges, these challenges can be mitigated by using appropriate modeling tools 

and techniques. This white paper identifies four guiding principles that may assist 

transmission planning entities in conducting effective analysis of the CPP and 

associated compliance plans. First, transparency and stakeholder engagement in 

model development, model inputs and study designs can help identify policy 

alternatives and effectively evaluate assumptions, while also improving 

coordination across transmission planning regions. Second, incorporating changes 

to current study methodologies can allow transmission planning entities to more 

effectively assess the impact of the CPP and associated compliance plans. Third, 

using study inputs that account for uncertainty and test for sensitivity can help 

effectively assess the impact of the CPP and associated compliance plans. Finally, 

adopting new modeling tools and techniques may help transmission planning 

entities better assess the overall impact of the CPP and associated compliance 

plans.
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Appendix A

Description of Study Types

Resource Adequacy

Resource adequacy planning requires complex decisions based on a number 

of important factors. For example, decisions must account for: (1) capital and 

operating costs of resources; (2) availability of generation resources; (3) operating 

characteristics (e.g., base load, peaking, variable, quick start, frequency response 

capable, or able to ramp regularly); (4) timing of planned generation additions, 

generation deactivations, and transmission projects and their potential impacts on 

import or export capability; (5) rate of load growth; (6) future wholesale energy 

prices in other parts of the interconnection (e.g., long-term power purchases); and 

(7) compliance with state and federal policy directives.

Resource adequacy planning studies can be used to predict the optimal

economic generation expansion necessary to meet demand and maintain reserves

to support generation outages over a given time period. These studies may also 

consider how to achieve compliance with state and federal policy directives in an 

economical manner. 

In addition, resource adequacy studies can also focus on more granular 

predictions of loss-of-load probability and planning preserve margins. In some

planning processes, resource adequacy is examined by evaluating planning reserve 

margins. Planning reserve margins are often set so that involuntary load shedding 

due to inadequate supply occurs only one day in 10 years, also known as the 1-in10 Resource Adequacy Standard or 0.1 loss of load expectation (LOLE);22

however, some regions have specialized processes for determining the appropriate 

planning reserve margin.23 By establishing an adequate reserve margin, it is 

implied that there is sufficient capacity to meet the needs of all consumers during 

peak times at a reasonable cost. While resource adequacy studies do not 

necessarily determine what specific resources are eventually constructed or retired, 

they provide valuable information to many stakeholders, including state 

regulators, load serving entities, generation developers and transmission operators. 

 22 Brattle Group, Resource Adequacy Requirements: Reliability and 

Economic Implications (Sept. 2013), https://www.ferc.gov/legal/staffreports/2014/02-07-14-consultant-report.pdf.

23 See, e.g., PJM Manual 20: PJM Resource Adequacy Analysis, at 13 

(Aug. 1, 2015), http://www.pjm.com/~/media/documents/manuals/m20.ashx
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Because resource adequacy considers a large number of dynamic factors, 

resource adequacy planning is an ongoing process. Most regional transmission 

planning entities utilize formal stakeholder processes to shape the inputs and the 

study plans for a resource adequacy study. In addition, stakeholders review the 

results of and provide comments on the resource adequacy study.

To evaluate options for maintaining reliability while accommodating 

changes in resources and load and complying with state and federal policy 

directives, transmission planning entities may perform resource adequacy or 

generation expansion studies. These studies generally attempt to optimize new 

investments in generation resources given expected changes in resources, load, 

and compliance with policy directives. These studies generally consider a number 

of economic factors (such as capital costs, operating costs, maintenance costs, and 

expected price of electricity) to attempt to optimize investments in new resources. 

For example, as part of its long-term transmission expansion study, the 

Midcontinent Independent System Operator, Inc. (MISO) runs the Electric 

Generation Expansion Analysis System (a/k/a EGEAS) to examine the potential 

long-term generation expansion in the MISO footprint.24

Resource adequacy and generation expansion studies are also important 

because changes in resource availability may impact the need for new gas and 

electric transmission facilities. The need for new or modified transmission 

facilities are assessed in different types of transmission studies; however, as 

discussed further below, the results of resource adequacy decisions may have a 

significant impact on the need for new gas and electric transmission facilities.

Production Cost

A production cost study is a unit commitment and economic dispatch study 

that takes into account the uncertainties of the availability of generation plants, 

transmission facilities, fuel costs, and load forecasts while honoring operating 

reserve, transmission, and generation system requirements and constraints.25 A 

production cost study uses statistical optimizing techniques in order to provide 

 24 See MISO MTEP14 Report, Book 1: Transmission Studies, 5.1 

Economic Analysis Introduction, at 83 (2014) Error! Hyperlink reference not 

valid.https://www.misoenergy.org/Library/Repository/Study/MTEP/MTEP14/MT

EP14%20Full%20Report.pdf.

25 Doug Murray, Production Cost Modeling Primer and Selection of 

Modeling Software (Jan. 2011), 

http://www.ercot.com/content/meetings/lts/keydocs/2011/0110/Production_Cost_

Modeling_Presentation_10JAN2011.pdf.
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forecasts of hourly locational marginal prices, emissions, congestion costs, shadow 

prices, LOLE, and other operating variables. Production cost studies can be done 

on the present system and future systems incorporating expected future changes to 

generation, loads and transmission.

The production cost study is central to the economic and reliability 

evaluation of generation and transmission projects. Comparison cases are usually 

set up with and without a proposed project to evaluate the differences in 

production costs of the system or areas of interest and the respective hours of 

unserved load. In addition, the emission calculations from the simulation show the 

environmental impacts of a certain change in the electric system. Transmission 

planning entities can use a production cost study to discover the drivers that can 

influence the outcome, such as how natural gas fuel costs will change electric 

production or how much to alter the dispatch of carbon-emitting sources, or other 

resources, in order to meet proposed emissions goals. Some transmission planning 

entities use the results of the production cost study to evaluate the natural gas 

demand and the capability of the gas system.26

Some transmission planning regions use the production cost study to 

calculate hours of unserved load and maintain the 1-in-10 criterion to limit the 

likelihood of load interruptions caused by resource adequacy issues.27 Generation 

resources, such as wind and other intermittent resources, are evaluated region by 

region to assess their impact on ramping and hours of unserved load so that a 

region can establish and plan for an adequate reserve margin.

Transmission planning entities use production cost studies to evaluate the 

economic benefits of proposed economic transmission projects, such as reduced 

congestion. Most economic transmission planning processes must have evidence 

that a project’s benefit will exceed its cost by a certain threshold before it is 

recommended to the respective boards for approval, funding, and construction. 

For example, CAISO uses production cost analysis to analyze the benefits of 

potential economic transmission projects.28

 26 See, e.g., ISO New England, 2014 Regional System Plan, at 127 (Nov. 6, 

2014), http://www.iso-ne.com/system-planning/system-plans-studies/rsp.

27 See, e.g., PJM Manual 14B: PJM Region Transmission Planning Process, 

at 53 (Feb. 26, 2015), https://pjm.com/~/media/documents/manuals/m14b.ashx

28 See CAISO 2014-2015 Transmission Plan, Executive Summary and 

Chapter 5 (Mar. 27, 2015), http://www.caiso.com/Documents/BoardApproved2014-2015TransmissionPlan.pdf. 
Docket No. AD16-14-000

16

Integrated Gas-Electric Systems Simulations

New software models allow transmission planning entities to identify 

constraints on the natural gas system that could impact the electric transmission 

system. Specifically, new software models allow simultaneous simulations of 

flows on both the electric transmission and natural gas pipeline systems. This new 

modeling capability allows transmission planning entities to analyze the impact of 

varying demands of the natural gas-based electric generation plants on the natural 

gas pipeline system. The natural gas system’s customer loads, pipelines, system 

elements, and gas field sources are modeled. An expansion of the natural gas 

generation fleet will appear as an electric generation resource on the electric 

transmission system and a customer load on the natural gas system. As electric 

generation varies, natural gas demands varies, which changes flows and possibly 

pressures on the natural gas system model. This modeling allows the transmission 

planning entities to identify constraints on the electric transmission and natural gas 

systems.

As the generation fleet moves toward natural gas, the increased demand on 

natural gas pipelines means that transmission planning entities may need to 

consider constraints on the natural gas system and the resulting impact on electric 

generation. For example, during periods of high demand on a natural gas pipeline,

constraints may reduce the fuel available for electric generators. Combined 

simulations of both the natural gas and electric systems potentially reveals the 

interaction between the electric and natural gas systems and permit solutions to be 

developed, planned, and implemented.

Staff’s review of the various transmission planning studies indicates that 

limited natural gas pipeline analyses are being performed. For example, MISO 

has implemented some limited studies of natural gas pipeline constraints.29 Gas 

system contingencies are also under development as part of MISO’s CPP 

analysis.30 In addition, some transmission planning entities in the eastern 

 29 Gregory L. Peters, Phase III Generation Infrastructure Analysis, (Nov. 

2013), 

https://www.misoenergy.org/Library/Repository/Communication%20Material/Ke

y%20Presentations%20and%20Whitepapers/PhaseIIIGasElectricInfrastructureRep

ortSummary.pdf.

30 MISO Planning Advisory Committee, An Intro to Gas-Electric Modeling 

in MISO’s Clean Power Plan (CPP) Phase III Study (April 2015), 

https://www.misoenergy.org/Library/Repository/Meeting%20Material/Stakeholde

r/PAC/2015/20150415/20150415%20PAC%20Item%2003%20CPP%20Phase%2

0III%20Gas-Electric%20Modeling%20Overview.pdf.
Docket No. AD16-14-000

17

interconnection have collaborated with the Eastern Interconnection Planning 

Collaborative (a/k/a EIPC) to evaluate natural gas pipeline issues.31 This 

qualitative analysis is still underway. 

Powerflow and Transient Stability Analysis

Powerflow and transient stability simulations are used to assess whether the 

future system can reliably serve expected load and withstand credible 

contingencies as required by the NERC reliability standards, particularly the TPL

standards. Under this analysis, the future system is modeled to perform with all 

elements in service and following various outages of elements of the transmission 

system. Powerflow and transient stability analysis can identify the potential 

shortcomings of transmission system so that transmission planning entities can 

identify and quantify transmission or generation solutions to meet NERC

reliability standards.

Most transmission planning studies perform powerflow and transient 

stability analysis to assess whether there are system operating limits based on 

transient stability. More complicated powerflow and transient stability limits may 

involve more than two simultaneous variables or loadings on multiple 

transmission paths because the transmission system can be stressed from flows on 

multiple paths.

The current transmission planning studies show that there is significant 

stakeholder input on building the base cases and the development of the study 

methodology and/or plan used to evaluate if the transmission system will meet or 

exceed reliability requirements. Most transmission planning studies concentrate 

on worst case conditions during electric peak load periods in summer or winter. 

Transmission projects are identified in future scenarios to meet the NERC 

reliability standards. Short-term transmission projects are approved by various 

bodies, funded, and set for construction to meet deadlines to ensure the future 

transmission system will meet the NERC reliability standards. 

Frequency Response 

Frequency response and stability analysis studies are needed to assess

whether the electric system will remain stable following contingencies. Following 

 31 Eastern Interconnection Planning Collaborative, Phase 2 Report:

Interregional Transmission Development and Analysis for Three Stakeholder 

Selected Scenarios and Gas-Electric System Interface Study (July 2, 2015), 

http://www.eipconline.com/uploads/Phase_2_Report_Volume_07__Section_9__Fi

nal_7-2-15.pdf.
Docket No. AD16-14-000

18

the contingencies, the response of the system depends on certain electric system 

condition such as heavy and/or light load or heavy transfer periods. Frequency 

response studies assess the electric system’s ability to arrest the changes in 

frequency for generation or load loss events. Without adequate frequency 

response and transient stability, the electric system may experience cascading 

outages due to loss of generation. Inadequate frequency response can also cause 

the system frequency to deviate to levels that will activate under-frequency load 

shed relays or over-frequency protection on generation units, which could result in

an interconnection-wide blackout. Frequency response studies evaluate the 

interconnections performance at various load levels, especially at the minimum net 

load conditions, with the minimum required frequency response.

Frequency response studies are relatively new and not commonly 

performed in the long-term transmission planning processes. One of the 

challenges in this area is building a valid case to perform the assessment. 

Regional transmission planning processes usually focus on a specific region. 

However, in order to adequately perform frequency response studies, the studies 

should be performed on an interconnection-wide basis.