Natural Gas Term of the Week: Integrated Resource Plan

What it means: A utility planning method whereby alternative resource mixes including demand-side and supply-side options, are evaluated in order to determine which resource plan minimizes the overall cost of service, subject to reliability and various other constraints.

See it in action: The NWGA’s member utilities in the U.S. produce Integrated Resource Plans every 2-5 years depending on their location, in cooperation with regional stakeholders including regulators and consumers. Our lone Canadian utility member, FortisBC, engages in a similar process, developing a “Long Term Resource Plan.

In both countries the end result is a document that explores the wide variety of factors that a utility confronts and controls for in bringing natural gas to your home. The planning and creation of an IRP may takes well over a year as numerous variables are run through simulation programs designed to determine the best options for a utility in a number of planning environments. These simulations may take into account factors such as service disruptions due to maintenance, extremely hot or cold years, differing price levels for commodities or emerging markets such as natural gas vehicle demand. Other factors outlined in the report include forecasts for customer demand, decisions on where to procure natural gas and future infrastructure needs.

The end result is a comprehensive document outlining the utility’s plans for their specified timeframe and providing the sort of sound justification necessary for decision making should any issues arise in the future. To get a feel for what an actual IRP looks like here’s a list of the IRP’s and other publicly available data that goes into our annual Natural Gas Outlook.

A Natural Gas Term of the Week is posted each Monday, check back weekly to boost your natural gas IQ.  Follow the NWGA on Twitter @Ben_at_NWGA