LBNL collaborated with the Western Interstate Energy Board and the University of Texas-Austin to investigate the implications of a regional resource adequacy (RA) program on utility integrated resource planning (IRP). This report is focused on an active policy discussion to develop a novel voluntary program to share capacity resources and improve RA in the Western Interconnection. This report identifies two RA components of IRP that will be highly impacted by a regional RA program: resource capacity accreditation and RA targets. There are at least four resources that will require specific attention for their capacity credit calculations: (1) variable renewable resources, (2) demand-side resources, (3) hydroelectric resources, and (4) power purchase agreements. It will also be necessary to decide on a RA target reliability metric (e.g., a planning reserve margin) that is at least the minimum requirement in IRPs to ensure consistency in RA requirement calculations. The report finds that load forecasting and transmission expansion analyses will be moderately impacted, but that most of IRP components will be not significantly impacted. The report includes a review of traditional resource adequacy practices in IRP; a case study of an existing regional RA program that interacts with IRP (Southwest Power Pool) and it presents the Northwest Power Pool (NWPP) regional resource adequacy proposal that is a focus of this research. This paper addresses three research questions: • How would typical IRP processes change if a utility joined a regional RA program? • Which RA elements would remain local (i.e. within IRP) and which would become regional (i.e. within the RA program)? • How much control would utilities and states retain over their utility resource mixes considering the influence of a regional RA program? This paper is primarily written for state policymakers, public utility commission staff, and resource planners from states in the NWPP footprint that are pondering how their IRP guidelines and regulations may need to adjust to operate jointly with a regional RA program. The content of this paper may also help the NWPP RA program developer as it interacts with potential member states and utilities to understand what aspects of energy policy may be influenced by the program. This work was funded by the Energy Resilience Division of the U.S. Department of Energy’s Office of Electricity under Lawrence Berkeley National Laboratory Contract No. DE-AC02-05CH11231.

Resource adequacy (RA) is the ability of an electricity system to reliably satisfy loads using its available resources. Assessing and maintaining RA is becoming more challenging due to increasing coal plant retirements, penetration of wind and solar resources, reliance on bilateral and market transactions, and emerging technologies. RA evaluation and planning have traditionally been conducted by utilities and overseen by their state regulators using integrated resource planning (IRP) processes. However, the Northwest Power Pool (NWPP) is developing a proposal for a regional RA program in the Western U.S. that would set and enforce capacity obligations for member utilities, and achieve RA more cost-effectively by pooling resources and load profiles from across the region. In this paper, we investigate the policy implications of a regional RA program for existing IRP regulations, with the proposed NWPP RA program as our main object of study. We compile the RA assessment practices of Western U.S. utilities, the proposed NWPP RA program design, and lessons from the historical experience of the Southwest Power Pool's RA program. Our analysis reveals that the IRP components which would be most heavily impacted by the regional program are RA targets, load forecasts, capacity accreditation factors, and transmission upgrades. We conclude by discussing the policy issues that RA program design and state IRP policy would have to address.