Planning provides the necessary critical information for making well-informed decisions. It involves comprehensive, comparative and quantitative analysis to identify the optimum mix of base load, intermediate, and peaking resources that minimizes the sum total cost of both the expected fixed costs (i.e., debt service) and the expected variable costs (i.e., fuel cost).
For example, portfolio costs are minimized by appropriately mixing and sizing generation resource types with differing fixed and variable cost characteristics. Baseload resources like coal entail high fixed cost investments but deliver low operating costs. Peaking resources like natural gas require much lower fixed costs but deliver significantly higher and more volatile operating costs.
Planning studies provide:
- Comparisons between build versus buy situations from the spot or bilateral market
- Information about the type and amount of resources to build or procure
- Scenarios for building or procuring a resource and related timing information
- Assessments of whether to procure through ownership or power purchase agreement (PPA)
- Evaluations of plans to retrofit, retire, or replace existing generation resources
CMPAS performs planning studies for each of its members and makes personalized portfolio recommendations. As members of a project-based agency, municipal utilities have the final decision-making authority and can accept, reject, or modify the recommendations. Depending on what each member needs, CMPAS looks for competitive project opportunities to help balance portfolio requirements on an individual basis or as part of an aggregate group.
Value of Coalitions
CMPAS has organized and led several Power Supply Planning Coalitions with other municipals who may have a similar need for a study that evaluates resource alternatives. The coalition process creates a mutually beneficial win-win solution for all participants on a cost-sharing and cost-saving basis as utilities receive an individualized, rigorous, and comprehensive analyses of alternatives.
Power supply planning activities supporting the alternatives and recommendations include:
- Econometric weather normalized long range forecasting
- Long-range gas and market price forecasts
- Economic dispatch analysis/production cost optimization
- Financial analysis
- Sensitivity analysis
- Transmission tariff analysis
- RFP preparation and evaluation
- Ten-year utility wholesale cost projections
The professional staff at CMPAS collects information and performs an initial analysis before soliciting a request for proposals (RFP) and then conducts the majority of the labor evaluating the submissions. Coalition members benefit from this specialized expertise and aggregating through a process that produces more bids, competitive pricing and alternatives.