Participants in the Western Resource Adequacy Program published a letter on April 22 in which they said they will not elect to move to a binding program in summer 2026. Instead, participants will propose a revised WRAP transition plan with the goal of beginning a binding program in 2027.
The WRAP is a regional reliability planning and compliance program in the history of the West and its members include public power utilities.
“More than five years ago, we came together as a region and as an industry to address the growing concerns of resource adequacy in the West. We partnered with the Western Power Pool to begin work on a program to help ensure reliable energy service for our customers to operate in tandem with our individual resource adequacy efforts and decision-making processes,” the letter noted.
Since then, three things have happened, the WRAP members said in the letter.
First, the WRAP was created. “With input from stakeholders around the region, we developed a forward showing framework to consistently assess the region’s resource needs and available supply, as well as an operational framework to pool resources. The authors of this letter signed on as participants in late 2022 and early 2023. In February 2023, FERC approved the WRAP tariff,” the letter said.
“Second, many of us have pursued the addition of new resources, whether through ownership or power purchase agreements, while also increasing our efforts on transmission development,” the letter said.
“Third, we have encountered significant new headwinds in addressing resource adequacy challenges. Supply chain issues and other challenges have slowed our ability to deliver and interconnect new resources. Regional peak load is now growing faster than previously expected, driven primarily by electrification and data center expansion. Extreme weather events have further challenged our assumptions and expectations of the quantity of resources needed to maintain reliable operations.”
As a result, the WRAP “is more important than ever, but its future value will require a critical mass of participants who are committed to fully binding operations.”
The WRAP “remains a critical regional tool available to address the current challenges together. It has already shown its value by helping quantify where we stand and where we need to go. We plan to continue our best efforts to acquire and interconnect sufficient new resources to meet load growth as we strive to meet WRAP’s regional resource adequacy metrics,” the letter said.
“We have been actively engaged in conversations with each other and Western Power Pool about when a critical mass of participants can enter binding operations of WRAP together.”
Some WRAP participants have expressed concerns about their ability to meet WRAP forward showing requirements in the next few years.
“They are understandably concerned, due to the reasons outlined above, about moving into binding operations given the potential magnitude of deficiency charges currently included in the tariff,” the letter said.
“Together, we have recently concluded that we will not have a critical mass committing to binding operations for Summer 2026.”
The WRAP tariff currently includes a transition plan to phase in deficiency charges. In its approval of the tariff, FERC recognized the importance of such a transition process.
“In the upcoming weeks, we will develop a proposal for a revised transition plan to better address the above challenges that we hope will enable binding operations to begin in 2027. Once the revised transition plan is ready, we will submit the plan for consideration by stakeholders and the WRAP Board of Directors, following the WRAP governance process,” the letter said.
“We remain unwavering in our support for WRAP and achieving the benefits of binding operations as soon as is practical. Our goal now is to work toward having a critical mass of participants elect binding operations in 2027.”
