RD227 - Appalachian Power®, A unit of American Electric Power, Integrated Resource Planning Report – May 1, 2019
This Integrated Resource Plan (IRP or Report) is submitted by Appalachian Power Company (APCo or Company) based upon the best information available at the time of preparation. This Plan is not a commitment to specific resource additions or other courses of action, as the future is highly uncertain. Accordingly, this IRP and the action items described herein are subject to change as new information becomes available or as circumstances warrant.
This IRP addresses the mandates contained in Virginia’s recently enacted Grid Transformation and Security Act, which became effective July 1,2018 (the 2018 Virginia Act), as well as other legal requirements and regulations. The specific locations within this IRP filing, which respond to each requirement of the I.RP, appear in the Appendix as part of APCo’s larger index (Exhibit D).
An IRP explains how a utility company plans to meet the projected capacity (i.e., peak demand) and energy requirements of its customers. APCo is required to provide an IRP that encompasses a 15-year forecast planning period (in this filing, 2019-2033). This IRP has been developed using the Company’s current long-term assumptions for:
• Customer load requirements - peak demand and hourly energy;
• commodity prices - coal, natural gas, on-peak and off-peak power prices, capacity and emission prices;
• supply-side alternative costs-including fossil fuel, renewable generation, and storage resources;
• transmission and distribution planning, including projects that meet the definition of grid transformation projects; and
• demand-side management program costs and impacts.
In addition, APCo considered the effect of environmental rules and guidelines, which have the potential to add significant costs and present significant challenges to operations. This IRP considers the potential cost associated with some form of future regulation of carbon emissions, during the planning period, even though there is considerable uncertainty as to the timing and form future carbon regulation may take.
This 2019 IRP addresses the mandates included in the 2018 Virginia Act:
• The construction or acquisition by APCo of at least 200MW of utility-owned solar located in Virginia prior to 2028;
• In future EE-RAC proceedings, APCo is required to request Commission approval of $140 million in EE programs from July 2018 to July 2027; and
• As part of a five-year battery pilot program deemed to be in the public interest, APCo may invest in up to lOMWs of new battery storage installations.
To meet its customers’ future capacity and energy requirements, APCo will continue the operation of, and ongoing investment in, its existing fleet of generation resources including the base-load coal units at Amos and Mountaineer, the natural gas combined-cycle (Dresden) facility, combustion turbine (Ceredo) units, and its two gas-steam units at Clinch River. The Company will also continue to operate its hydroelectric generators, including Smith Mountain Lake. The Company has a portfolio of 575MW of purchase power agreements consisting offive wind farms and one hydro-electric facility. During the planning period, contracts covering 455MW of that amount will expire. In addition, the Company has contracted for the output ofthe I5MW Depot solar facility in Rustburg, Va., which it expects will be available in 2021. Another consideration in this I RP is the increased adoption of distributed rooftop solar resources by APCo’s customers. While APCo does not have control over where, and to what extent, such resources are deployed, it recognizes that distributed rooftop solar will reduce APCo’s growth in capacity and energy requirements to some degree. From a capacity viewpoint, the 2020/2021 planning year is when PJM’s new Capacity Performance construct will take full effect. (See report for complete Executive Summary)