How closely should a utility follow a commission-prescribed IRP process?

The utility had a clear problem: how to develop their current integrated resource plan (IRP). The size and scope of the problem seemed to expand daily.
The state’s public service commission had issued an order prescribing in detail the methodology and requirements necessary to be addressed in their IRP. The utility was used to creating their own IRP, with their own methodology, employing a tried-and-true process for attaining the goal of everyone’s IRP: reliable power at the lowest cost.

But this current commission order turned all of that on its head. 

Crossroad. What was being ordered looked more like an IRP that simply ticked off the commission’s boxes, and less like a strategic plan for delivering low-cost, reliable power. In fact, that traditional goal seemed to be secondary to the commission’s goal. Being one of the state’s largest and most visible utilities, its core executives realized that everyone was watching—and closely assessing—how they executed the commission’s directives. Thus, the executives were at a crossroad. They had to decide to develop their IRP by: 

Scrupulously following commission guidelines (which on closer inspection, clearly had process-oriented holes) to satisfy regulatory requirements and other statutory goals.

Diligently relying on their tried-and-true methodology to satisfy their clear mission-oriented need to best serve their wide array of customer needs.

Far-reaching implications. They realized that their decision would have far reaching ramifications, some of which were most likely unknown, but certainly would be unearthed.

These utility executives were not delusional by any stretch. They were fully aware of the transformation that had been occurring in the electric power industry over the past several years. They fully understood that the familiar ground upon which the industry was based for the past one hundred or so years was completely in flux. They clearly understood how the inexorable influx of renewable generation, especially from distributed energy resources (DERs), coupled with drivers to reduce carbon emissions from greenhouse gases (GHGs), fundamentally changed their landscape. 

And they embraced the fact that the planning process for developing their IRP had expanded in scope, incorporating both traditional and emerging factors: increasing numbers of inputs and assumptions; forecasting volatility; wider array of generation options; distribution planning; grid modernization; renewable generation targets (mostly through renewable portfolio standards—RPS—legislation); judicious thermal generation retirements; myriad financial considerations (capital expenditures, operation and maintenance expenses, and rate design being key); transportation electrification; emerging technologies; energy storage systems, both large-scale and distributed; and customer empowerment. 

Even with all these additional consideration, the executives felt certain that their planning methodology could incorporate these factors and create a preferred portfolio of generation and distribution that satisfied their overarching need for reliable power at a low cost while still maintaining a level of adaptability to adjust to future known and unknown circumstances. 

Ultimately, their collective eyes were open.

To come to grips with their basic IRP problem, they assembled a planning committee that included representatives and executives from resource planning, transmission and distribution, finance, operations, legal, regulatory, and corporate communication. 

Paths for an IRP. The planning committee quickly honed in on their purpose: to choose a path that best served their customers. They assimilated all the information they had, considered what other utilities were planning and had actually done, considered their past experiences, considered their apparent place in the state’s utility mix, and projected the implications of their decision, then pinpointed three potential paths:

Adhere to the commission’s prescriptive path to the letter, essentially abdicating their contributions to developing an IRP.

Expand on their tried-and-true process to incorporate evolving changes in the energy landscape (including meeting statutory and regulatory requirements) and thus establish an updated process for developing an IRP.

Duplicate their work by developing two IRPs simultaneously: one that employed the commission’s prescriptive path; and one that traversed their own need for a strategic plan. Left unsolved for the moment, was the decision on which of these two IRPs to file.

Deciding on which path to choose is a question that many utilities are being forced to answer—an answer that has far-reaching and pivotal implications for everyone involved.

—Rich Maggiani, Resource Planning Consultant

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Net energy metering energized rooftop solar installations—and everything changed

Events in Nevada over the past three years shone a bright light on how net energy metering (NEM) has affected the evolution of distributed energy resources (DERs). Or would it be more accurate to call it the DER revolution?

Nevada: an insightful perspective. In December 2015, the Public Utilities Commission of Nevada (PUCN) cut NEM compensation by about one-third and instituted a monthly fixed charge. This new policy applied to both new and existing NEM installations, virtually all of which were rooftop solar photovoltaic (PV) panels.

This decision significantly decreased NEM compensation while it also extended the payback period for a rooftop system. The consequences were quick and monumental. Immediately, the top three solar installers in the state announced their intention of moving to more “business friendly” states. It came as no surprise when rooftop solar installations dropped 92% in first quarter 2016. Nevada, once a darling in the solar sector, became a virtual wasteland.

Until the PUCN reversed itself.

Continue reading NEM Launched the Distributed Energy (R)Evolution

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A grid planning process strengthens Hawai‘i’s lead in developing a renewable energy grid

The Hawaiian Electric Companies have a plan. Their resource plan, filed in December 2016, outlines the near-term actions for attaining 100 percent renewable generation in their service area by the state’s mandated goal of 2045; the most ambitious—and only—such plan in the country.

In July 2017, the Hawai‘i Public Utilities Commission (HPUC) formally accepted this December-filed resource plan—their Power Supply Improvement Plan (PSIP), which was updated from a previous PSIP filed in April 2016.

Broad, inclusive participation. Both PSIPs were created in an open, collaborative process that included multiple participants and intervenors admitted into the docket. These participants were directed to “propose questions and suggest alternative modeling inputs, assumptions, methods, and analytical approaches” that Company planners must consider to incorporate into the resource planning process.

Selecting generation resources. Company planners ran production simulations using optimized candidate resource plans that incorporated distributed energy resources (DER), demand response programs, and other resources; then analyzed system security requirements to ensure system reliability. From the final results, they developed near-term (2017–2021) action plans that encompass renewable acquisitions, grid modernization, DER policies, environmental compliance, and system security improvements.

In the aggregate, these action plans add enough rooftop and feed-in tariff solar generation combined with large-scale solar and wind to attain a 52% RPS by 2021.

Continue reading The Hawaiian Plan: 100% Renewable Energy by 2045

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Achieving a 40% reduction in greenhouse gas emissions by 2030 drives this California initiative

Creating an Integrated Resource Plan is a formidable challenge. I know; I’ve helped create and write several IRPs during the past decade that each followed a process developed 25 years ago. This is why the process currently being proposed by the California Public Utilities Commission (CPUC) staggers me.

Typically, IRPs created by a utility or a load serving entity (LSE) focus on providing reliable, affordable power for their service area and customers. While these IRPs comprise a wide range of generation, costs, transmission and distribution, and service, they are isolated plans.

The CPUC proposes to elevate all that. Its proposal involves an iterative process to compile individual IRPs into one statewide resource plan—in other words, a resource plan using the state as its service area. This process seeks to balance the individual loads, generation resources, planning perspectives, power grids, and other aspects of each LSE—large and small, public and private—into one cohesive direction that focuses energy generation in the state.

Senate Bill 350, which initiated the CPUC proposal, requires an IRP development process that meets California’s greenhouse gas (GHG) emission reduction targets. The upshot, however, requires a modernized grid to transmit increasing amounts of renewable energy. Among many other goals, SB 350 calls for 50% renewable generation by 2030, essentially doubling current output. The pending SB 100 ups the ante by requiring 60% renewable generation by 2030 and a non-mandatory 100% by 2045.

Continue reading A Statewide Approach to Integrated Resource Planning

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I have a social media habit. But it’s not the kind of habit you might think. It doesn’t encompass my every waking hour. I engage once in the morning and then pretty much leave it alone after that. Here’s what I generally do every day.

First, I start with Facebook. I scroll through to find anything interesting, especially posts from my three kids. Then I check out LinkedIn. Who’s invited me to connect? Who’s endorsed me? Who’s looked at my profile? I check out an article or a random post.

social-media-as-chaosI don’t muck much with Twitter except to search on #stcorg and #stc13 . After looking at these two searches, I usually just close it. I might check out Instagram, but usually only because one of my children has posted there. Next, I check out the ST C Board of Directors site to read any new posts. And I check my iPhone to see if there is any pushed content I find interesting.

One morning, though, things were particularly active. I kept getting new posts all over the place. Bing here, ping there, bop over there. (Ok, not audibly; metaphorically, but you get the idea.) I could barely keep up. For some reason that I didn’t totally fathom, I wanted to check them all out. It quickly became took much, moving back and forth, forth and back, that it all became, well … chaotic!

When that thought hit me, it just brought everything to a halt. Is social media just chaos, and we’ve all been sucked in to the flurry? While my computer and smart phone kept pinging and popping, I began to wonder. What if social media is a manifestation of the chaos theory? Well, that just might explain a lot.

Continue reading Social Media as Chaos

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Whether you are growing, changing, or introducing new business technologies, a communication audit is helpful, if not essential

A Communication Audit. This is a comprehensive, systematic evaluation and analysis of your company’s communication. A communication audit unveils what is guava-tree-fieldtruly happening as opposed to what is thought to be happening. It:

  • Encompasses the activities conducted in a communication assessment and its resultant findings (although here it is more robust).
  • Identifies the people who create the messages and information being communicated.
  • Evaluates the clarity and value of the communication.
  • Critically looks at the various methods of communication (such as Web sites, newsletters, emails, blogs, videos, and other publications, as well as interpersonal skills and managerial communication), pinpointing problem areas and identifying successes.

A communication audit must be thoughtfully planned and implemented, and the results carefully assessed to achieve the greatest impact.

The Scope of a Communication Audit. You can focus on a number of communication areas to evaluate and analyze. This focus can be the broad-based communication for the entire company or for an individual division or group. It can be a specific communication method (such as interpersonal communication or your internal Web site) or for a specific vehicle (such as your corporate publications).

Continue reading A Communication Audit Helps You Communicate Better

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Growing, changing companies inevitably experience breakdowns in communication; a well-founded Communication Plan overcomes these impediments

Consider these questions to better determine how well you are communicating.

  • Are your employees at all levels talking to each other?
  • Do your strategic groups know what each other is doing?


  • Is there a breakdown in communication—the information only goes so far, but from that point on, everyone makes it up as they go?
  • Is there animosity over the perception that other groups simply don’t contribute enough to the company’s success?
  • Does your staff know exactly how to proceed, or are there conflicting ideas?
  • Are expectations clear?
  • Are departments duplicating efforts while other tasks are left undone?
  • Was your communication once flawless, but now that you are growing and changing quickly, these communication channels just don’t work anymore or are filled with static?

Communication fails as a company grows and changes. As a company grows—whether through sales or acquisition—communication becomes more of a challenge. What once seemed so intuitive, now seems like such a struggle. The breakdown of communication channels is common. This is not an isolated phenomenon, but rather a pervasive issue with growth and change.

Continue reading Many Reasons for Needing a Communication Plan

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The resulting discussion leads to continuous improvement and innovation

Successful performance means bringing together the best resources for serving future needs with a company’s capabilities, investing in the these resources, then constantly measuring and managing the results. To best bring these resources together, you must communicate effectively. And for that, you need a plan.

A Communication Plan relates the a company’s brand, image, mission, values, and goals to all employees, informing them of what the company does and for whom; the benefits wire-pass-angled-rocksit offers and the problems it solves. It describes communication channels that facilitate the exchange of information and ideas among your board, executives, management, and staff. It is a strategic discussion about the very core of a company: how it operates, what it stands for, what it delivers. This discussion must be robust enough so that everyone related to the company speaks with one voice, one mind, one purpose: a focused, clear, articulate message.

Creating and implementing a Communication Plan. One way to create and implement a Communication Plan on your behalf is by applying four communication principals: Enlighten, Convince, Motivate, and Align. These four-steps provide the framework for creating and implementing company-wide communication where everyone actively participates.

When creating a Communication Plan, address the particular challenges to communicating effectively in your company. To better evaluate poor or nonexistent internal communication, look for ways to change how you talk about problems, to truly assess and analyze these problems in a new light, and to generate new and innovative solutions.

Continue reading The Many Benefits of Effective Communication Plans

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A thoughtful, thorough plan draws a clear map toward a shared destination

A Communication Plan defines a process for communication among all employees at all levels. It is a strategic method of getting everyone involved in the company, its growth and evolution, and ultimately its continued success.

sedona-rocksA Communication Plan is based on strategic goals, aligned and focused, and results in increased revenue and profitability, more robust innovation, and marked organizational stability. It unites everyone—directors, executives, managers, and employees—in your company toward this strategic goal with a shared purpose.

Specifically, a Communication Plan identifies:

  • The types of communication that most benefit your organization.
  • The people involved in sending, receiving, and contributing to this communication.
  • The best channels—written, audio, video, electronic, verbal, interactive, and others—for creating and transmitting this communication, and an action plan for implementing these channels. These channels allow for clear communication up and down the corporate organization chart (from directors and executives, to managers and employees, and back) and among all divisions, groups, and colleagues.
  • A time table for how often information is communicated. Regular communication is one of the many keys to success.

Continue reading A Communication Plan Establishes a Foundation for Success

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Communicating effectively creates a myriad of benefits, especially increased shareholder return and higher market valuation

Effective communication performs a core corporate role, vital to your company’s financial capacity as well as to your overall success.

boundary-treeThis success encompasses many measurable factors:

  • Increased market valuation.
  • Increased shareholder value.
  • Greater connection and commitment from employees.
  • A more robust and inclusive corporate culture.
  • Proactive involvement that drives corporate change and growth.

In essence, effective communication drives business results that lead to success.

Increased market valuation. Effective communication is one of the leading indicators for financial performance. Research shows that, over the first years of this century, companies with the most effective communication attained a 30 percent increase in market valuation. This is almost 20 percent higher than companies that do not communicate effectively.

This holds true for both publicly-traded as well as privately-held companies.

Continue reading The Most Successful Companies Communicate Better

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