The Northwest Power Pool (NWPP) and participating member utilities have released a design of a proposed resource adequacy (RA) program.
The report details elements of the program, including a “forward showing” program and an operational program, as well as a proposed governance framework. The report also provides details on how stakeholders affected by the program can participate.
The release of the report clears the way for the next phase of NWPP’s proposed resource adequacy effort. NWPP is preparing to launch the next phase in which a forward showing program will provide informational, non-binding RA requirements for the winter of 2022. NWPP said it would accept participation agreements for the next stage of the program beginning Aug. 16 and running through Sept. 30, which will serve as a beta test for the proposed program design.
The integrated regional power system is in transition, NWPP said in the report. The impending retirement of several thermal generators within and outside the region, which includes the Western U.S. and Canada, mixed with increasing variable energy resources, has led to questions about whether the region will continue to have an adequate supply of electricity during critical hours, according to the report.
In the past four years, several studies have identified an urgent and immediate challenge to the regional electricity system’s ability to provide reliable electric service during high demand conditions.
“These developments threaten to upset the balance of loads and resources within the region and, if not properly addressed, will increase the risk of supply disruptions during winter and summer, increase financial risk for utility customers, and hinder the ability of the system to meet environmental goals and legal requirements,” the report said.
The resource adequacy effort began early in 2019 when NWPP and a coalition of NWPP members initiated the program. The contemplated resource adequacy program “seeks to enhance and increase reliability for the footprint while maintaining existing responsibilities for reliable operations and observing existing frameworks for planning, purchasing, and delivering energy,” the report said.
“We believe the resource adequacy program will provide multiple benefits to the region as well as participants, including reliability, cost savings and improved visibility and coordination,” Frank Afranji, NWPP president, said in a statement.
There are many forms of resource adequacy – capacity, energy and flexibility – but NWPP’s program focuses on creating a capacity RA program. Additional programs may also be necessary following the implementation of the capacity program, the report said. “If additional programs are desired, a similarly discrete decision and implementation process would need to be undertaken to design and implement such programs,” the report said.
The report also noted that the proposed resource adequacy program does not replace or supplant the resource planning processes used by states or provinces or the regulatory requirements of the Federal Energy Regulatory Commission (FERC), North America Electric Reliability Corporation, or the Western Electricity Coordinating Council, but is designed to supplement and complement those processes and requirements.
The resource adequacy program design and implementation will have two components: a forward showing program and an operational program. The forward showing program is designed to ensure that the NWPP footprint has enough demonstrated capacity, well in advance of required performance, to meet the established reliability metrics. It establishes regional metrics for the NWPP footprint, the qualified capacity contribution and effective load-carrying capability of various resources, as well as deliverability expectations, and determines the periods for demonstrating adequacy.
The operational program seeks to achieve a balance between planning while providing flexibility in order to protect customers from unreasonable costs. It creates a framework to provide participants with pre-arranged access to capacity resources in the program footprint during times when a participant is experiencing an extreme event.
Under the current proposal, NWPP would become a public utility as defined by the Federal Power Act.
NWPP would also need to meet independence requirements established by FERC so that the power pool would have financial independence from individual participants in order to ensure there is no undue discrimination for the NWPP.
NWPP members include a number of public power entities.