Electric-Utility Resource Planning and Decision-Making: The Importance of Uncertainty

Uncertainty is a critical factor that pervades all aspects of electric-utility planning. Uncertainties about future load growth, about the continued performance of existing supply and demand resources, and about the costs, construction times, and operations of new resources greatly complicate utility resource acquisition. This paper discusses the factors that lead to uncertainty, reviews the methods that utilities use in planning and in acquiring resources, and suggests future research to help deal with these uncertainties. This review is based on assessments of the long-term resource plans prepared by 10 utilities and one Public Service Commission, telephone interviews with staff at these 11 organizations and with staff at three consulting firms, and reviews of many other related publications.