Powering Through Uncertainty

Investment Rating - The report does not explicitly provide an investment rating for the industry. Core Insights - The report emphasizes the importance of resource adequacy (RA) in ensuring long-term power supply to meet demand amid increasing uncertainties due to the retirement of fossil fuel plants and rising electricity demand [12][13]. - It identifies four primary drivers of RA risk: load growth uncertainties, extreme weather and climate change, delays in planned resource builds, and slow transmission expansion [14][19]. - The report outlines three key strategies for regulators to mitigate RA uncertainty while transitioning to a low-carbon grid: improving planning practices, broadening the set of technologies and energy solutions, and pursuing utility business model reforms [19][35]. Summary by Sections Executive Summary - Resource adequacy has come under scrutiny as traditional power plants retire and electricity demand is forecasted to grow [12]. - The report aims to assist Western regulators in understanding RA risks and options to navigate these uncertainties [13]. Drivers of Resource Adequacy Uncertainty - Load Growth Uncertainties: Utilities project demand increases driven by electrification and large electric loads, but these forecasts are uncertain [16][41]. - Extreme Weather and Climate Change: Increased frequency of extreme weather events poses challenges for long-term RA planning [17][49]. - Delays in Planned Resource Builds: Over 38 GW of clean power faced project delays in 2023, with significant interconnection backlogs [18][56]. - Slow Transmission Expansion: Current utility plans do not meet the growing regional transmission needs, risking RA benefits [19][60]. Regulatory Strategies - Improve Planning Practices: Regulators should ensure utilities conduct targeted analyses and incorporate stakeholder input into planning [19][36]. - Broaden Technologies and Solutions: Quick-to-deploy demand-side resources and clean repowering should be leveraged to support RA [19][36]. - Pursue Utility Business Model Reforms: Transforming utility incentives and exploring new ratemaking structures can enhance RA investments [19][36].