807 KAR 5:058. Integrated resource planning by electric utilities

Link to law: http://www.lrc.ky.gov/kar/807/005/058.htm
Published: 2015

      807 KAR 5:058.

Integrated resource planning by electric utilities.

 

      RELATES TO: KRS

Chapter 278

      STATUTORY

AUTHORITY: KRS 278.040(3), 278.230(3)

      NECESSITY,

FUNCTION, AND CONFORMITY: KRS 278.040(3) provides that the commission may adopt

reasonable administrative regulations to implement the provisions of KRS

Chapter 278. This administrative regulation prescribes rules for regular

reporting and commission review of load forecasts and resource plans of the

state's electric utilities to meet future demand with an adequate and reliable

supply of electricity at the lowest possible cost for all customers within

their service areas, and satisfy all related state and federal laws and

regulations.

 

      Section 1.

General Provisions. (1) This administrative regulation shall apply to electric

utilities under commission jurisdiction except a distribution company with less

than $10,000,000 annual revenue or a distribution cooperative organized under

KRS Chapter 279.

      (2) Each

electric utility shall file triennially with the commission an integrated

resource plan. The plan shall include historical and projected demand,

resource, and financial data, and other operating performance and system

information, and shall discuss the facts, assumptions, and conclusions, upon

which the plan is based and the actions it proposes.

      (3) Each

electric utility shall file ten (10) bound copies and one (1) unbound,

reproducible copy of its integrated resource plan with the commission.

 

      Section 2.

Filing Schedule. (1) Each electric utility shall file its integrated resource

plan according to a staggered schedule which provides for the filing of

integrated resource plans one (1) every six (6) months beginning nine (9)

months from the effective date of this administrative regulation.

      (a) The integrated

resource plans shall be filed at the specified times following the effective

date of this administrative regulation:

      1. Kentucky

Utilities Company shall file nine (9) months from the effective date;

      2. Kentucky

Power Company shall file fifteen (15) months from the effective date;

      3. East Kentucky

Power Cooperative, Inc. shall file twenty-one (21) months from the effective

date;

      4. The Union

Light, Heat & Power Company shall file twenty-seven (27) months from the

effective date;

      5. Big Rivers Electric

Corporation shall file thirty-three (33) months from the effective date; and

      6. Louisville

Gas & Electric Company shall file thirty-nine (39) months from the

effective date.

      (b) The schedule

shall provide at such time as all electric utilities have filed integrated

resource plans, the sequence shall repeat.

      (c) The schedule

shall remain in effect until changed by the commission on its own motion or on

motion of one (1) or more electric utilities for good cause shown. Good cause

may include a change in a utility's financial or resource conditions.

      (d) If any

filing date falls on a weekend or holiday, the plan shall be submitted on the

first business day following the scheduled filing date.

      (2) Immediately

upon filing of an integrated resource plan, each utility shall provide notice

to intervenors in its last integrated resource plan review proceeding, that its

plan has been filed and is available from the utility upon request.

      (3) Upon receipt

of a utility's integrated resource plan, the commission shall establish a

review schedule which may include interrogatories, comments, informal

conferences, and staff reports.

 

      Section 3.

Waiver. A utility may file a motion requesting a waiver of specific provisions

of this administrative regulation. Any request shall be made no later than

ninety (90) days prior to the date established for filing the integrated

resource plan. The commission shall rule on the request within thirty (30)

days. The motion shall clearly identify the provision from which the utility

seeks a waiver and provide justification for the requested relief which shall

include an estimate of costs and benefits of compliance with the specific

provision. Notice shall be given in the manner provided in Section 2(2) of this

administrative regulation.

 

      Section 4.

Format. (1) The integrated resource plan shall be clearly and concisely

organized so that it is evident to the commission that the utility has complied

with reporting requirements described in subsequent sections.

      (2) Each plan

filed shall identify the individuals responsible for its preparation, who shall

be available to respond to inquiries during the commission's review of the

plan.

 

      Section 5. Plan

Summary. The plan shall contain a summary which discusses the utility's

projected load growth and the resources planned to meet that growth. The

summary shall include at a minimum:

      (1) Description

of the utility, its customers, service territory, current facilities, and

planning objectives;

      (2) Description

of models, methods, data, and key assumptions used to develop the results

contained in the plan;

      (3) Summary of

forecasts of energy and peak demand, and key economic and demographic

assumptions or projections underlying these forecasts;

      (4) Summary of

the utility's planned resource acquisitions including improvements in operating

efficiency of existing facilities, demand-side programs, nonutility sources of

generation, new power plants, transmission improvements, bulk power purchases

and sales, and interconnections with other utilities;

      (5) Steps to be

taken during the next three (3) years to implement the plan;

      (6) Discussion

of key issues or uncertainties that could affect successful implementation of

the plan.

 

      Section 6.

Significant Changes. All integrated resource plans, shall have a summary of

significant changes since the plan most recently filed. This summary shall

describe, in narrative and tabular form, changes in load forecasts, resource

plans, assumptions, or methodologies from the previous plan. Where appropriate,

the utility may also use graphic displays to illustrate changes.

 

      Section 7. Load

Forecasts. The plan shall include historical and forecasted information

regarding loads.

      (1) The

information shall be provided for the total system and, where available,

disaggregated by the following customer classes:

      (a) Residential

heating;

      (b) Residential

nonheating;

      (c) Total

residential (total of paragraphs (a) and (b) of this subsection);

      (d) Commercial;

      (e) Industrial;

      (f) Sales for

resale;

      (g) Utility use

and other.

      The utility

shall also provide data at any greater level of disaggregation available.

      (2) The utility

shall provide the following historical information for the base year, which

shall be the most recent calendar year for which actual energy sales and system

peak demand data are available, and the four (4) years preceding the base year:

      (a) Average

annual number of customers by class as defined in subsection (1) of this

section;

      (b) Recorded and

weather-normalized annual energy sales and generation for the system, and sales

disaggregated by class as defined in subsection (1) of this section;

      (c) Recorded and

weather-normalized coincident peak demand in summer and winter for the system;

      (d) Total energy

sales and coincident peak demand to retail and wholesale customers for which

the utility has firm, contractual commitments;

      (e) Total energy

sales and coincident peak demand to retail and wholesale customers for which

service is provided under an interruptible or curtailable contract or tariff or

under some other nonfirm basis;

      (f) Annual

energy losses for the system;

      (g)

Identification and description of existing demand-side programs and an estimate

of their impact on utility sales and coincident peak demands including utility

or government sponsored conservation and load management programs;

      (h) Any other

data or exhibits, such as load duration curves or average energy usage per

customer, which illustrate historical changes in load or load characteristics.

      (3) For each of

the fifteen (15) years succeeding the base year, the utility shall provide a

base load forecast it considers most likely to occur and, to the extent

available, alternate forecasts representing lower and upper ranges of expected

future growth of the load on its system. Forecasts shall not include load

impacts of additional, future demand-side programs or customer generation

included as part of planned resource acquisitions estimated separately and

reported in Section 8(4) of this administrative regulation. Forecasts shall

include the utility's estimates of existing and continuing demand-side programs

as described in subsection (5) of this section.

      (4) The

following information shall be filed for each forecast:

      (a) Annual

energy sales and generation for the system and sales disaggregated by class as

defined in subsection (1) of this section;

      (b) Summer and

winter coincident peak demand for the system;

      (c) If available

for the first two (2) years of the forecast, monthly forecasts of energy sales

and generation for the system and disaggregated by class as defined in

subsection (1) of this section and system peak demand;

      (d) The impact

of existing and continuing demand-side programs on both energy sales and system

peak demands, including utility and government sponsored conservation and load

management programs;

      (e) Any other

data or exhibits which illustrate projected changes in load or load

characteristics.

      (5) The

additional following data shall be provided for the integrated system, when the

utility is part of a multistate integrated utility system, and for the selling

company, when the utility purchases fifty (50) percent of its energy from

another company:

      (a) For the base

year and the four (4) years preceding the base year:

      1. Recorded and

weather normalized annual energy sales and generation;

      2. Recorded and

weather-normalized coincident peak demand in summer and winter.

      (b) For each of

the fifteen (15) years succeeding the base year:

      1. Forecasted

annual energy sales and generation;

      2. Forecasted

summer and winter coincident peak demand.

      (6) A utility

shall file all updates of load forecasts with the commission when they are

adopted by the utility.

      (7) The plan

shall include a complete description and discussion of:

      (a) All data

sets used in producing the forecasts;

      (b) Key

assumptions and judgments used in producing forecasts and determining their

reasonableness;

      (c) The general

methodological approach taken to load forecasting (for example, econometric, or

structural) and the model design, model specification, and estimation of key

model parameters (for example, price elasticities of demand or average energy

usage per type of appliance);

      (d) The

utility's treatment and assessment of load forecast uncertainty;

      (e) The extent

to which the utility's load forecasting methods and models explicitly address

and incorporate the following factors:

      1. Changes in

prices of electricity and prices of competing fuels;

      2. Changes in

population and economic conditions in the utility's service territory and

general region;

      3. Development

and potential market penetration of new appliances, equipment, and technologies

that use electricity or competing fuels; and

      4. Continuation

of existing company and government sponsored conservation and load management

or other demand-side programs.

      (f) Research and

development efforts underway or planned to improve performance, efficiency, or

capabilities of the utility's load forecasting methods; and

      (g) Description

of and schedule for efforts underway or planned to develop end-use load and

market data for analyzing demand-side resource options including load research

and market research studies, customer appliance saturation studies, and

conservation and load management program pilot or demonstration projects.

      Technical

discussions, descriptions, and supporting documentation shall be contained in a

technical appendix.

 

      Section 8.

Resource Assessment and Acquisition Plan. (1) The plan shall include the

utility's resource assessment and acquisition plan for providing an adequate

and reliable supply of electricity to meet forecasted electricity requirements

at the lowest possible cost. The plan shall consider the potential impacts of

selected, key uncertainties and shall include assessment of potentially

cost-effective resource options available to the utility.

      (2) The utility

shall describe and discuss all options considered for inclusion in the plan

including:

      (a) Improvements

to and more efficient utilization of existing utility generation, transmission,

and distribution facilities;

      (b) Conservation

and load management or other demand-side programs not already in place;

      (c) Expansion of

generating facilities, including assessment of economic opportunities for

coordination with other utilities in constructing and operating new units; and

      (d) Assessment

of nonutility generation, including generating capacity provided by

cogeneration, technologies relying on renewable resources, and other nonutility

sources.

      (3) The

following information regarding the utility's existing and planned resources

shall be provided. A utility which operates as part of a multistate integrated

system shall submit the following information for its operations within

Kentucky and for the multistate utility system of which it is a part. A utility

which purchases fifty (50) percent or more of its energy needs from another

company shall submit the following information for its operations within

Kentucky and for the company from which it purchases its energy needs.

      (a) A map of

existing and planned generating facilities, transmission facilities with a

voltage rating of sixty-nine (69) kilovolts or greater, indicating their type

and capacity, and locations and capacities of all interconnections with other

utilities. The utility shall discuss any known, significant conditions which

restrict transfer capabilities with other utilities.

      (b) A list of

all existing and planned electric generating facilities which the utility plans

to have in service in the base year or during any of the fifteen (15) years of

the forecast period, including for each facility:

      1. Plant name;

      2. Unit

number(s);

      3. Existing or

proposed location;

      4. Status

(existing, planned, under construction, etc.);

      5. Actual or

projected commercial operation date;

      6. Type of

facility;

      7. Net

dependable capability, summer and winter;

      8. Entitlement

if jointly owned or unit purchase;

      9. Primary and

secondary fuel types, by unit;

      10. Fuel storage

capacity;

      11. Scheduled

upgrades, deratings, and retirement dates;

      12. Actual and

projected cost and operating information for the base year (for existing units)

or first full year of operations (for new units) and the basis for projecting

the information to each of the fifteen (15) forecast years (for example, cost

escalation rates). All cost data shall be expressed in nominal and real base

year dollars.

      a. Capacity and

availability factors;

      b. Anticipated

annual average heat rate;

      c. Costs of

fuel(s) per millions of British thermal units (MMBtu);

      d. Estimate of

capital costs for planned units (total and per kilowatt of rated capacity);

      e. Variable and

fixed operating and maintenance costs;

      f. Capital and

operating and maintenance cost escalation factors;

      g. Projected

average variable and total electricity production costs (in cents per

kilowatt-hour).

      (c) Description

of purchases, sales, or exchanges of electricity during the base year or which

the utility expects to enter during any of the fifteen (15) forecast years of

the plan.

      (d) Description

of existing and projected amounts of electric energy and generating capacity

from cogeneration, self-generation, technologies relying on renewable

resources, and other nonutility sources available for purchase by the utility

during the base year or during any of the fifteen (15) forecast years of the

plan.

      (e) For each

existing and new conservation and load management or other demand-side programs

included in the plan:

      1. Targeted

classes and end-uses;

      2. Expected

duration of the program;

      3. Projected

energy changes by season, and summer and winter peak demand changes;

      4. Projected

cost, including any incentive payments and program administrative costs; and

      5. Projected

cost savings, including savings in utility's generation, transmission and

distribution costs.

      (4) The utility

shall describe and discuss its resource assessment and acquisition plan which

shall consist of resource options which produce adequate and reliable means to

meet annual and seasonal peak demands and total energy requirements identified

in the base load forecast at the lowest possible cost. The utility shall

provide the following information for the base year and for each year covered

by the forecast:

      (a) On total

resource capacity available at the winter and summer peak:

      1. Forecast peak

load;

      2. Capacity from

existing resources before consideration of retirements;

      3. Capacity from

planned utility-owned generating plant capacity additions;

      4. Capacity

available from firm purchases from other utilities;

      5. Capacity

available from firm purchases from nonutility sources of generation;

      6. Reductions or

increases in peak demand from new conservation and load management or other

demand-side programs;

      7. Committed

capacity sales to wholesale customers coincident with peak;

      8. Planned

retirements;

      9. Reserve

requirements;

      10. Capacity

excess or deficit;

      11. Capacity or

reserve margin.

      (b) On planned

annual generation:

      1. Total

forecast firm energy requirements;

      2. Energy from

existing and planned utility generating resources disaggregated by primary fuel

type;

      3. Energy from

firm purchases from other utilities;

      4. Energy from

firm purchases from nonutility sources of generation; and

      5. Reductions or

increases in energy from new conservation and load management or other

demand-side programs;

      (c) For each of

the fifteen (15) years covered by the plan, the utility shall provide estimates

of total energy input in primary fuels by fuel type and total generation by

primary fuel type required to meet load. Primary fuels shall be organized by

standard categories (coal, gas, etc.) and quantified on the basis of physical

units (for example, barrels or tons) as well as in MMBtu.

      (5) The resource

assessment and acquisition plan shall include a description and discussion of:

      (a) General

methodological approach, models, data sets, and information used by the

company;

      (b) Key

assumption and judgments used in the assessment and how uncertainties in those

assumptions and judgments were incorporated into analyses;

      (c) Criteria

(for example, present value of revenue requirements, capital requirements,

environmental impacts, flexibility, diversity) used to screen each resource

alternative including demand-side programs, and criteria used to select the

final mix of resources presented in the acquisition plan;

      (d) Criteria

used in determining the appropriate level of reliability and the required

reserve or capacity margin, and discussion of how these determinations have

influenced selection of options;

      (e) Existing and

projected research efforts and programs which are directed at developing data

for future assessments and refinements of analyses;

      (f) Actions to

be undertaken during the fifteen (15) years covered by the plan to meet the

requirements of the Clean Air Act amendments of 1990, and how these actions

affect the utility's resource assessment; and

      (g) Consideration

given by the utility to market forces and competition in the development of the

plan.

      Technical

discussion, descriptions and supporting documentation shall be contained in a

technical appendix.

 

      Section 9.

Financial Information. The integrated resource plan shall, at a minimum,

include and discuss the following financial information:

      (1) Present

(base year) value of revenue requirements stated in dollar terms;

      (2) Discount

rate used in present value calculations;

      (3) Nominal and

real revenue requirements by year; and

      (4) Average

system rates (revenues per kilowatt hour) by year.

 

      Section 10.

Notice. Each utility which files an integrated resource plan shall publish, in

a form prescribed by the commission, notice of its filing in a newspaper of

general circulation in the utility's service area. The notice shall be

published not more than thirty (30) days after the filing date of the report.

 

      Section 11.

Procedures for Review of the Integrated Resource Plan. (1) Upon receipt of a

utility's integrated resource plan, the commission shall develop a procedural

schedule which allows for submission of written interrogatories to the utility

by staff and intervenors, written comments by staff and intervenors, and

responses to interrogatories and comments by the utility.

      (2) The

commission may convene conferences to discuss the filed plan and all other

matters relative to review of the plan.

      (3) Based upon

its review of a utility's plan and all related information, the commission

staff shall issue a report summarizing its review and offering suggestions and

recommendations to the utility for subsequent filings.

      (4) A utility

shall respond to the staff's comments and recommendations in its next

integrated resource plan filing. (17 Ky.R. 1289; Am. 1720; eff. 12-18-90; 21

Ky.R. 2799; 22 Ky.R. 287; eff. 7-21-95.)
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