MOST VALUE PLANNING - ESTIMATING THE NET BENEFITS OF ELECTRIC UTILITYRESOURCE PLANS

Most U.S. utility regulatory commissions require that electric utiliti es minimize cost when comparing supply-side and demand-side resources However, utilities should also consider the effects of resource plans upon the benefits, or ''value,'' that electricity consumers receive. A method for extending the traditional ''least cost'' objective to incl ude value changes in electric utility resource planning is presented T his method uses the concept of consumers surplus to quantify the benef its of electric rate changes, ''take-back'' of energy savings in conse rvation programs, and increases in energy services provided by load bu ilding or valley-filling programs. In general, the method rewards reso urce portfolios that cause rates to move closer to marginal cost or In crease the energy services provided To illustrate its range of applica tion, the ''most value'' objective is applied to screening of demand-s ide programs, evaluation of resource plans, and acid rain compliance p lanning. These examples confirm that optimizing net value can yield di fferent resource portfolios than minimizing cost.