Integration of transmission, distribution, and resource planning to increase transparency and optimize solutions; enhancement of tools, financial incentives, and regulatory approaches to adapt to technology change and customer preferences.
Utility companies make money by earning a return on investments in new infrastructure, like power plants, poles, and wires. By pursuing alternatives to utility-owned infrastructure, such as power purchase agreements, reducing customer energy use through efficiency measures, or shifting energy use to times when electricity costs less to produce, there may be cost savings. Financial incentives provide an ability for utilities and customers to share in these savings, while disincentives may be appropriate if utilities are unable to achieve an expected level of performance.
The MPSC and the public expect utility companies to meet certain levels of performance related to service quality, reliability, worker safety, and physical and cyber security. MPSC rules outline these requirements and need to be reviewed and updated to ensure utilities are held to appropriate standards.
Electric distribution system infrastructure is aging, which can lead to frequent and long-lasting power outages, and can cause unsafe conditions for the public. Utility spending on improving the electric grid is growing. As technology improves and costs decline, customers and developers are increasingly interested in connecting their projects to the utility system. Distribution system plans provide stakeholders and the MPSC information about planned utility investments and allow for customer preferences to be considered as investments are made.
Utility companies and stakeholders engage in separate processes to determine what upgrades to make to the electric resource mix, transmission system, and distribution system. Decisions made in each of these processes impact customer costs. Doing a better job of integrating these processes, with the goal of evaluating alternatives that provide the best value, will result in a more efficient system and lower costs for customers.
Electric utilities are required to file plans every five years with the Commission that look at anticipated customer electricity needs over the next 5, 10, and 15 years as well as the appropriate mix of resources to serve those needs, including power plants, renewable energy, energy waste reduction, demand response, and customer-owned resources. The MPSC establishes parameters and filing requirements for utility integrated resource plans and conducts studies on achievable levels of energy waste reduction and demand response.
