2021 Power Plan Mid-Term Assessment

Summary

Updated May 2024

The Council’s Adequacy Assessment for 2027 (released in January 2023) highlighted that “the region will need to develop resources at least as aggressively as the 2021 Power Plan outlines.” Based on data collected to date, the region is generally on pace to acquire these resources (see links in the side bar for more details).

The Adequacy Assessment for 2027 also notes that adequacy issues increase with significant load growth or retiring resources without replacement generation. The Council recently updated its short-term (5-year look) hourly forecast, which indicates higher loads than anticipated in the early years of the 2021 Power Plan and the 2027 Adequacy Assessment. During a winter cold winter snap that hit the region in January 2024, several energy providers experienced record or near-record peaks in power demand. They also navigated a planned outage on a major regional transmission line along with disruptions in both gas and renewable energy supplies without widespread outages. However, they relied heavily on out-of-region market purchases at higher prices. Extreme events like these are testing resource adequacy, but at the same time, utilities are making resource decisions that will at least partially mitigate the risk from these increased loads. These include decisions to invest in more than the Council’s target amount of energy efficiency and changing decisions around coal retirement timelines. The Council is working on its 2029 Adequacy Assessment and expects to update the region on findings and recommendations based on that analysis.

The region has already developed around 90 percent of the minimum renewable build called for by the power plan and is on pace to achieve the cost-effective efficiency identified in the plan. Bonneville is currently on track with its energy efficiency acquisition, but it will need to increase future savings to stay on target and avoid falling short, which might require an increasing its investments in energy conservation. With extreme weather events placing more pressure on resource adequacy, it’s important that energy providers throughout the region and Bonneville continue to invest in acquiring cost-effective energy efficiency. The 2021 Power Plan called on those jurisdictions pursuing decarbonization to ensure any electrification is done efficiently and recognized that more efficiency would likely be cost-effective in those states. This finding also suggests that other drivers for increased load growth might also warrant higher levels of efficiency. Early data from utilities in Oregon and Washington are demonstrating higher results for energy efficiency, suggesting the region might be on track to exceed the Council’s target.

Utilities in the region are demonstrating, developing, and running demand response programs that meet their local needs. However, the Council continues to see more potential in products that would support the region’s need for flexibility. This resource acquisition should be evaluated in concert with the region’s strategy for operational reserves. While the long-term picture looks promising, with support from the Western Resource Adequacy Program and a potential day-ahead market (or two), the near-term is more uncertain. The Council found that the most cost-effective way to meet reserves requirements was to be more conservative with the existing system, holding back dispatchable resources and ensuring that they are available if needed. Some entities are operating their systems more conservatively, while others are relying more on the market (or a combination of the two). The 2021 Power Plan identified market reliance as an effective, albeit riskier, method for ensuring sufficient reserves.

There are other factors mitigating the near-term risk in reserves. For one, the West-wide development of renewables is happening at a slower pace than assumed in the plan’s analysis, which slightly reduces the reserve need. Second, the Council also found that additional energy efficiency was an effective, albeit more expensive, way of achieving reserves. As discussed above, there are indications that utilities (particularly in Oregon and Washington) are achieving energy efficiency above the Council’s target, which is expected to somewhat mitigate the near-term reserves risk.

The Council’s updated short-term, hourly forecast that projects out to 2029 indicate higher loads than anticipated in the 2021 Power Plan or the 2027 Adequacy Assessment. This is driven, in part, by increased growth expected in the industrial sector with data centers and chip manufacturing. This risk may be mitigated somewhat by utilities delaying planned coal retirements or converting those units to gas. In addition to increased energy efficiency, the 2021 Power Plan recognized that more renewables and the related reserves would be needed in a high-load future.

The Council’s power plans put forth a strategy for cost-effective resource development, which is a key component to ensuring that the Northwest’s power system remains affordable for the residents and businesses that depend on it. The Council continues to monitor whether the current resource investment, combined with delayed retirements and coal-to-gas conversions, are sufficient to mitigate the risk of this potential future load growth. The Council’s will use its multi-metric approach to adequacy in the upcoming assessment to inform on whether there are adequacy challenges anticipated, and if so the nature of those challenges. The Council is also monitoring utility decisions and is aware that utilities throughout the region have recently filed for or been approved for double-digit rate increases. As the Council begins to prepare for its next power plan, it will continue to monitor resource costs and trade-offs. Collectively, this information will allow the Council to put forth recommendations to the region to ensure an adequate, efficient, economical, and reliable power supply.