Arkansas Administrative Code › Agency 126 - PUBLIC SERVICE COMMISSION › Division 03 - Utilities Section › Rule 126.03.07-003 - Resource Planning Guidelines for Electric Utilities

Current through Register Vol. 49, No. 6, June, 2024
Section 1
: Purpose of
			 Guidelines
Electric utilities regulated by the Arkansas Public Service
				Commission will use these Guidelines to establish the informational report that
				will meet the planning expectations of the Commission. The general approach of
				the Guidelines will allow utilities to formulate plans that reflect their
				specific circumstances.
Section
			 2
: Resource Planning Defined
Resource planning is a utility planning process which requires
				consideration of all reasonable resources for meeting the demand for a
				utility's product, including those which focus on traditional supply sources
				and those which focus on conservation and the management of demand. The process
				results in the selection of that portfolio of resources which best meets the
				identified objectives while balancing the outcome of expected impacts and risks
				for society over the long run. The resource planning process should define and
				assess costs and benefits as they appear in the market, including known and
				identifiable social and environmental costs. Significant non-monetized social
				and environmental effects should be identified. They need not be monetized as a
				future risk factor, but they may. The resource planning process should be
				associated with efforts to augment traditional regulatory review with both
				regional planning information and cooperative stakeholder consensus building in
				the preparation of utility plans.
Section 3
: Relationship of the
			 Commission and Utilities with Resource Planning
Resource planning under these Guidelines does not change the
				fundamental regulatory relationship between the utilities and the Commission.
				Resource Planning Guidelines do not mandate a specific outcome nor do they
				mandate specific investment decisions. Resource planning should reflect each
				utility's unique circumstances and the judgment of its management, who will
				continue to bear full responsibility for the consequences of their decisions.
				Resource planning will be relevant to future resource investment decisions and
				approval proceedings, as well as revenue requirements and rate design.
				Consistency of a utility's Resource Plan with the Guidelines will be an
				additional factor for the Commission to consider in evaluating the prudence of
				investments, construction and rate applications, as will changed circumstances
				and other evidence.
Section
			 4
: General Guidelines
A Resource Plan must contain certain elements. Sections
				4.1 - 4.8 are the Guidelines the
				Commission will use to review the completeness of the efforts to produce the
				utility Resource Plan. The Resource Plan shall be submitted to the Commission
				for informational purposes.
4.1
Objectives
The utility shall clearly state and support its objectives. The
				objectives of the Resource Plan include, but are not limited to, low cost,
				adequate and reliable energy services; economic efficiency; financial integrity
				of the utility; comparable consideration of demand and supply resources;
				mitigation of risks; consideration of environmental impacts; and consistency
				with governmental regulations and policies. In meeting the objectives, the
				utility should put itself in a position to respond to anticipated economic
				conditions and technological advancements and changes, including environmental
				requirements.
4.2
Development of a Range of Demand Forecasts
A reasonable set of assumptions for econometric and/or end use
				variables should be considered in the development of a range of outcomes that
				complement the long-term forecasts of electricity demand (MW) and energy
				consumption (kWh). A minimum of 10 years should be used as a planning horizon.
				Energy usage by customer class should be separately identified.
4.3
Identifying and
			 Characterizing Supply and Demand Resources
The utility should assess existing resources based on their
				cost effectiveness and considering the utility's planning objectives. For
				incremental capacity needs, all reasonably useful and economic supply and
				demand resources that may be available to a utility or its customers should be
				considered. Utility efforts to encourage energy efficiency, conservation,
				demand-side management, interruptible load, and price responsive demand should
				be identified. Identified resources should be investigated to determine costs,
				effectiveness, and other attributes such as potential future emission control
				or allowance costs to the extent they are monetizable. Non-monetizable costs
				and benefits should be recognized. Cost effective resources that do not meet
				minimum criteria such as risk or environmental or other governmental rules or
				policy should be eliminated from further consideration in this planning
				cycle.
4.4
Development of Multiple Integrated Resource Portfolios
The planning process should identify multiple integrated
				resource portfolios, each of which meets reliability criteria. Utilities will
				identify and take into consideration risk in developing these different
				portfolios, such as different levels of load growth, different fuel cost
				forecasts, or other parameters that are influenced by conditions beyond the
				utility's control. The portfolios should be compared on the present value of
				the cost of each.
4.5
Evaluation and Selection of the Utility's Resource Plan
The utility shall identify a preferred Resource Plan that
				provides a balance of risks of adverse outcomes to its customers and its own
				financial integrity, while providing flexibility to change as future conditions
				warrant. The evaluation should fully describe how the utility's preferred plan
				affects long term utility resource needs and costs.
4.6
The Action Plan
The utility shall submit an action plan consisting of the tasks
				that are necessary to implement the preferred Resource Plan. The action plan
				shall include a description of and timeline associated with the utility's
				competitive bidding process. A self-build option must be compared to market
				opportunities. The process for the acquisition and approval of resources
				described in the action plan is separate from the information provided
				regarding the resource planning process described herein.
4.7
Transmission Plan
The transmission plan necessarily results from a separate
				planning process and is a separate plan; however, it should be integrated into
				the overall resource planning process, such that the analysis of generation
				options and demand response options can be synthesized and optimized.
				Transmission planning will be done by an independent entity and is regional in
				scope.
4.8
Stakeholder process
Each utility will organize and facilitate meetings of a
				Stakeholder Committee for resource planning purposes. The Stakeholder Committee
				should be broadly representative of retail and wholesale customers, independent
				power suppliers, marketers, and other interested entities in the service area.
				The Stakeholders shall develop their own rules and procedures. Stakeholders
				should review utility objectives, assumptions, and estimated needs early in the
				planning cycle. The utility shall make a good faith effort to properly inform
				and respond to the Stakeholder Committee. A Report of the Stakeholder Committee
				should be included with the Resource Plan submittal. Stakeholders and General
				Staff may also submit comments to the Commission on each Resource Plan after it
				has been submitted by the utility. Such comments should be taken into
				consideration by the utility in its preparation efforts and decisions
				concerning subsequent approval applications, as well as in its next planning
				cycle. If comments concerning the process and results warrant, the Commission
				may require the utility to re-evaluate and resubmit its Resource Plan for the
				current planning cycle to address concerns raised in the comments.