§ 158-778. Same—Development.

(a)

The utility shall develop resource plans to meet the needs identified by each demand forecast scenario described in section 158-772, and to achieve different policy objectives as identified by the collaborative working group (for example, minimizing customer bills, minimizing rates, minimizing customer direct costs, maximizing environmental protection, maximizing penetration of demand-side resources), based on the least-cost combination of the potential demand-side and supply-side resources assessed. The utility shall perform analyses which integrate resources found to be cost beneficial with consideration of:

(1)

Financial planning;

(2)

Regulatory constraints;

(3)

All source bidding;

(4)

Efficiency incentives;

(5)

Other appropriate factors.

(b)

The development of resource plans shall be primarily based on assessing multiple combinations of potential demand-side and supply-side resources on an integrated basis. Each resource plan shall be assessed and compared on at least the following criteria:

(1)

Present value of life cycle net societal benefit, evaluated at the discount rate, to determine the overall value of each alternative to society;

(2)

Net present value of the revenue requirement, including all direct utility costs associated with the resource, evaluated at the discount rate to measure economics of utility service;

(3)

Net present value of the participant's direct costs evaluated at the discount rate;

(4)

Resultant levelized average rate levels;

(5)

Impact on the utility and its customers, including non price criteria such as operating performance of the resource, reliability, and ability to meet energy service needs of customers;

(6)

The qualitative and, to the extent practicable, quantitative impact on the environment and society, including all appropriate external costs associated with the resource;

(7)

Where limited data are available to assess fully any of the above criteria, the utility shall use its best estimate of the data. The utility shall identify and fully describe and justify any methodologies used to evaluate or rank potential resources using the criteria listed above.

(c)

The utility shall conduct an analysis of the sensitivity of all major assumptions and estimates used in its plan. If any resource plan is rejected as a result of the sensitivity analyses, a detailed explanation for the rejection shall be provided by the utility. Those analyses shall at a minimum include:

(1)

Risk and uncertainty. The utility shall consider the risks and uncertainties associated with its resource plans. Items of risk and uncertainty to be considered include:

a.

Forecast of load;

b.

In-service dates of supply-side and demand-side resources;

c.

Unit availability;

d.

Fuel prices;

e.

Diversity of supply;

f.

Schedule and impact of demand-side programs;

g.

Inflation in plant construction costs and costs of capital;

h.

Availability and costs of purchase power.

(2)

Rate impact analysis. The utility shall conduct a rate impact analysis to determine probable rate impacts that would result from the implementation of resource plans. If significant rate impacts for nonparticipating customers are likely to result, the utility may refine the demand-side program designs to mitigate the impact on nonparticipating customers. The utility shall provide thorough and detailed documentation of its analysis.

(Code 1956, § 52-356(b))