Council discusses options for Ninth Power Plan’s cost-effective resource strategy, supporting recommendations

Over the course of two meetings in May, Council members and Power Division staff continued discussions on options for the Ninth Power Plan's cost-effective resource strategy. The Council could potentially approve a draft of the Ninth Plan at its July 14-15 meeting in Portland, which would commence a public comment period and hearing process. The goal is to approve the final plan by the end of the year.

At a meeting held in Pendleton, Ore., on May 12-14, staff presented a broad suite of proposed recommendations that will support the Ninth Plan's resource strategy, including recommendations for conservation program elements, demand response, transmission, data centers, among other topics (read presentation | watch video). At a May 27 meeting, held via webinar, staff presented potential options on the supply- and demand-side resources to add to the power system to meet the growing need for energy in the Pacific Northwest in the next six years (read presentation | watch video).

The Council won't reach decisions on the plan's cost-effective resource strategy or any supporting recommendations until it votes on approving the draft Ninth Plan this summer, and ultimately in the final version later this year. Public comment is welcome throughout this process. The Council will also hold public hearings in cities and towns across the Northwest on the draft Ninth Plan, potentially in the late summer and fall.

Using resource optimization modeling insights, advisory committee feedback

To develop the options discussed at the May meetings, staff applied insights from the resource optimization modeling results that were presented at April's Council meeting. Resource modeling analyzed potential buildouts of the regional power system over the next 20 years across 13 sensitivities that explored a range of uncertainty and risk. Nine involved differences in resource and transmission assumptions, while four related to potential changes in Columbia Basin hydrosystem operations. Some key themes emerged from this analysis, including that a portfolio of resources is seen throughout the Ninth Plan's 2027-2046 horizon, and certain resources were seen across all 13 sensitivities: conservation, demand response, wind, solar, battery storage, and natural gas.

For each sensitivity, the model optimized new resource development to meet needs across a range of potential futures that account for different load growth trajectories, hydro and renewable conditions, and gas prices. The collection of these results yielded information that will help develop a resource strategy that's robust across this wide swath of future uncertainties.

Staff has continued to meet with advisory committees and regional partners. Most recently, these meetings have focused on discussing the resource modeling results with representatives from utilities, Bonneville Power Administration, technical experts, regulators, state energy offices, and many others. Feedback from these meetings helped develop the recommendations presented at the May meetings.

Analyzing potential resource strategy options

Under the Northwest Power Act, the Council reviews and updates its power plans on five-year cycles. The Ninth Power Plan's action period will be from 2027-2032; the Council will be developing the next power plan toward the end of this period. On May 27, the Council discussed two options for the resource strategy from 2027-2032 shown in the chart below, as well as additional analysis. Both options are within ranges of planned resource developments documented in regional utilities' integrated resource plans.

The two options align with the need for a cost-effective portfolio approach that was identified in the resource optimization modeling results and rely on the resources that were seen across the 13 modeling sensitivities.

Recommendations to Bonneville Power Administration

Under the Power Act, the Council's power plans also have a specific legal tie to Bonneville's resource acquisition.

Bonneville is to acquire energy conservation and the output of other resources consistent with the Council's plan. All eight of the Council's past power plans have included recommendations that Bonneville will need to acquire energy conservation; this will continue to be the case in the Ninth Plan.

Additionally, for the first time in decades, Bonneville may need to acquire the output of generating resources beyond conservation. While specifics are still being worked out and will likely remain uncertain in the months to come, the Ninth Plan's timing will be helpful to guide any supply-side resource acquisition. As a starting point, staff's proposed recommendation is that Bonneville prioritize adding renewables to its system, as the power marketer has traditionally needed energy and not capacity to meet needs of its customers. Should Bonneville determine a capacity need through its needs assessments or other determination of need, it should assess whether storage (including hybrid resources) or natural gas are more cost-effective to support its needs.

Additional staff-proposed recommendations focused on Bonneville's transmission system, energy conservation program, demand response and voltage regulation, and RFP competitive bidding processes.

Proposed supporting recommendations

On May 12-14, staff and Council members discussed staff's proposed recommendations for energy conservation, demand response, supply-side resource development, data centers, the transmission system, emerging technologies, load forecasting, climate model datasets, markets, as well as other possible needs for future research and development. Read the presentation slides for full details on staff's proposed recommendations.

Energy conservation program elements

One major change for the Ninth Power Plan could entail including two conservation targets for the region, one for Oregon and Washington and a second for Idaho and Montana. This proposed recommendation is based on several factors. In the west side of the region (particularly west of the Cascade Mountains), significant load growth is forecast, yet there's limited potential for renewable energy development and transmission constraints affect the near-term potential to bring energy into the area to serve load. Statewide clean energy policies affect the availability and economics of natural gas. These factors increase the value of conservation in Oregon and Washington as part of a cost-effective portfolio to deliver an adequate power supply.

In Idaho and Montana, load growth is also forecast, but more resource options are available that include greater renewable potential, gas is more available and economical, and greater transmission connectivity with the rest of the Western Interconnection. This means that conservation is cost-effective up to the point of a competing renewable or natural gas resource.

Staff also propose addressing the costs of energy conservation through better understanding barriers to reducing costs and prioritizing technologies that have potential to become more cost-competitive. Other priorities would be researching means of reducing equipment costs and cost-savings opportunities, and analyzing ways to make conservation more affordable for consumers.

While heat pumps have been gaining popularity in the region, studies have found that they have underperformed relative to their technical capabilities, mainly due to installation and commissioning practices. Staff has proposed a suite of recommendations to improve installation and address challenges with existing heat pumps.

Other proposed recommendations focused on commercial building energy use intensity, evaluation, and rates of return on conservation acquisition.

Demand response

Staff's proposed recommendations on demand response focused on managing electrification loads, electric vehicle charging, improving demand response data collection and assumptions, and exploring the potential for a long-duration demand response product that could address seasonal resource adequacy concerns, such as during a heatwave or a winter storm. Another proposed recommendation focused on developing and broadening standards for controls and communications in demand response equipment and technologies, so it can expand program enrollment and deployment at lower costs.

Data center flexibility and efficiency

Staff proposed a recommendation that would develop a conservation standard for new data centers, which would encourage new development to be done so as efficiently as possible. Another proposed recommendation would entail working with data centers on increasing flexibility in energy consumption, ranging from potential demand response-type products to leveraging back-up generation for reserves or emergency resource. Staff identified potential areas for recommendation, including:

• Setting policies to require new large loads to provide flexibility, which could be backup generation or some other type of flexibility
• Improve understanding of what flexibility exists from a demand response perspective
• Improve understanding of the amount and availability of data center backup generation to contribute to system reserves or emergency resources

There are also opportunities to improve the energy performance and efficiency of older, mid-sized data centers. Staff proposed a recommendation that would conduct a stock assessment of the data center industry in the region, to better quantify existing energy consumption, and help reduce the wide range of uncertainty surrounding future energy needs from this sector.