IRP in VermontIRP in Vermont

Docket 7081Docket 7081

Workshop Sept. 13, 2005Workshop Sept. 13, 2005

IRP in VTIRP in VT

• What are IRP’s and How are they developed?What are IRP’s and How are they developed?

• DUP – How does it impact VELCO’s DUP – How does it impact VELCO’s Transmission PlanningTransmission Planning

• How do Distribution Utilities use VELCO How do Distribution Utilities use VELCO Transmission Planning?Transmission Planning?

• Alternatives to Transmission – Analysis and Alternatives to Transmission – Analysis and SelectionSelection

What are IRP’s and How are What are IRP’s and How are they developed?they developed?

• A plan for meeting electric energy needs A plan for meeting electric energy needs over twenty years at lowest cost by over twenty years at lowest cost by combiningcombining– Power supply (central & distributed)Power supply (central & distributed)– Transmission and distributionTransmission and distribution– End-use efficiencyEnd-use efficiency

• IRPs are developed separately by each IRPs are developed separately by each utilityutility– Power supply is company-widePower supply is company-wide– Transmission & distribution is location specificTransmission & distribution is location specific– End-use efficiency affecting each utilityEnd-use efficiency affecting each utility

Legal Basis for IRPLegal Basis for IRP

• Under 30 V.S.A. 218c. an IRP is a plan for meeting Under 30 V.S.A. 218c. an IRP is a plan for meeting the public’s need for energy services, after safety the public’s need for energy services, after safety concerns are addressed, at the lowest present value concerns are addressed, at the lowest present value life cycle cost, including environmental and life cycle cost, including environmental and economic costs, through a strategy combining economic costs, through a strategy combining investments and expenditures on energy supply, investments and expenditures on energy supply, transmission and distribution capacity, transmission transmission and distribution capacity, transmission and distribution efficiency, and comprehensive and distribution efficiency, and comprehensive energy efficiency programs. energy efficiency programs.

Principal Criteria of Principal Criteria of SolutionSolution

• Societal costSocietal cost– FuelFuel– Capital (construction & financing)Capital (construction & financing)– Environmental (Externalities)Environmental (Externalities)

• StabilityStability– Solution must be flexibleSolution must be flexible– Robust across scenariosRobust across scenarios– Avoid rate shocksAvoid rate shocks

• Financial viabilityFinancial viability– Rates must maintain utility’s investment grade Rates must maintain utility’s investment grade

credit rating and access to capital marketscredit rating and access to capital markets

Scenario DevelopmentScenario Development

Portfolio DevelopmentPortfolio Development

Analysis of End-use Efficiency Analysis of End-use Efficiency PotentialPotential

Ranking Portfolio Ranking Portfolio PerformancePerformance

T&D Reliability & EfficiencyT&D Reliability & Efficiency

• Comprehensive multi-year study of T&D system efficienciesComprehensive multi-year study of T&D system efficiencies• Prioritize all right-of-way clearing on areas with greatest needPrioritize all right-of-way clearing on areas with greatest need• Monitor delivery system reliability indicesMonitor delivery system reliability indices• Use line patrols and infrared scans to find and correct problems Use line patrols and infrared scans to find and correct problems

before they cause outagesbefore they cause outages• Address capacity constraints consistent with DUP planning Address capacity constraints consistent with DUP planning

guidelinesguidelines– Consider all feasible alternatives including joint facilities Consider all feasible alternatives including joint facilities

with neighboring utilities, on-site generation and DSMwith neighboring utilities, on-site generation and DSM– Consider environmental impacts, societal costs and other Consider environmental impacts, societal costs and other

public concernspublic concerns• Work with VELCO in support of the Northwest Reliability Work with VELCO in support of the Northwest Reliability

ProjectProject

DUP – How does it impact DUP – How does it impact VELCO’s Transmission VELCO’s Transmission

PlanningPlanning• Southern Loop as an exampleSouthern Loop as an example

– Local reliability issue post contingency with Local reliability issue post contingency with existing loads (CV DUP Docket 6805)existing loads (CV DUP Docket 6805)

– Regional reliability problems S. Vt/SW NHRegional reliability problems S. Vt/SW NH• RTEP S. Loop; Monadnock;post-NRPRTEP S. Loop; Monadnock;post-NRP

– Potential local capacity needs (CV DUP Potential local capacity needs (CV DUP Docket 6805)Docket 6805)

– Future regional/state capacity needs (RTEP)Future regional/state capacity needs (RTEP)– All will be examined in CVPS DUP Docket All will be examined in CVPS DUP Docket

68056805

How do Distribution How do Distribution Utilities use VELCO Utilities use VELCO

Transmission Planning?Transmission Planning?• DU Utility Planners work with VELCO DU Utility Planners work with VELCO

continuously (+ VUPG)continuously (+ VUPG)• VELCO considers DU power supply VELCO considers DU power supply

plansplans– e.g.. 1987 VELCO Plan revised in 1992 e.g.. 1987 VELCO Plan revised in 1992

after Phase I/II multi-terminal and NW after Phase I/II multi-terminal and NW VT cogen plans changedVT cogen plans changed

• Transmission projects and Power Transmission projects and Power Supply interact for least-cost solution, Supply interact for least-cost solution, e.g., Northern Loop/ VJO deliverye.g., Northern Loop/ VJO delivery

Alternatives to Alternatives to Transmission – Analysis and Transmission – Analysis and

SelectionSelection• DUP analysis looks at least-cost societal NPV DUP analysis looks at least-cost societal NPV

to compare solutions – does not differentiate to compare solutions – does not differentiate between public and private benefits/costsbetween public and private benefits/costs

• Risk of complex implementation plans and Risk of complex implementation plans and reliability of long-run performance are reliability of long-run performance are factorsfactors

• ISO-NE adopted transparent planning to ISO-NE adopted transparent planning to allow entry by merchant G/T/DR providersallow entry by merchant G/T/DR providers

• Viable financing plans are critical: Vt may Viable financing plans are critical: Vt may add alternatives without regional cost add alternatives without regional cost supportsupport