Transmission System Integrated Resource Planning: Leveling the Playing Field

Philip H. Mosenthal and Stuart A. Slote, Optimal Energy, Inc.

Keywords

Abstract

The Vermont Electric Power Company (VELCO) is responsible for planning, developing, and maintaining Vermont’s transmission system. Vermont’s growing electric loads, particularly in Northwest Vermont, are straining existing capacity. VELCO has implemented an integrated distributed utility planning (IDUP) project to determine the optimal solution to ensure reliable supply of energy services. A proper IDUP must address traditional transmission capacity, along with distributed generation and energy efficiency. Particular attention to the timing of resource acquisition is critical, to match loads with capability, using a mix of appropriate resources.

VELCO’s analysis raises substantial issues regarding electric system policy, especially related to cost-effectiveness, funding and equity. In VELCO’s case, the most cost-effective societal solution is a mix of energy efficiency plus distributed generation. Energy efficiency, while substantial and important, was not sufficient in capacity and timing without some strategic contribution of distributed generation. While this solution provides the least societal, long-run cost, it is substantially more expensive to Vermont ratepayers than traditional supply. Under current Northeast Independent Systems Operator (ISO-NE) rules, Vermont’s contribution to the transmission system capital cost is only five percent, with southern New England’s greater loads covering the remainder of these costs. Vermonters, however, would likely bear the full cost burden of implementing any energy-efficiency initiatives and distributed generation (DG).

This paper will describe the IDUP process, analysis and results. It will address policy considerations currently under discussion in regulatory hearings. The pending resolution and issues surrounding the use and usefulness of the planning study will also be addressed.