IRP Verifies New Generation Needed

As we turn the calendar to a new year, it’s a great time to reflect on achievements and refocus on the most important goals and priorities.

2024 got off to a productive start with the Board of Directors refreshing CIPCO’s strategic plan. The most time sensitive initiative identified in the plan was to complete an Integrated Resource Plan (IRP) to analyze capacity expansion alternatives that best meet our load requirements in a reliable and cost-effective manner. I’m proud to report that we successfully wrapped up this project with board approval in December, and I’d like to take this opportunity to summarize the process and results. 

While CIPCO staff conducts resource planning as an ongoing business practice, to complete this IRP, we turned to a trusted cooperative partner, ACES Power. ACES led us through a detailed process providing expert consultation and modeling. The foundation for the IRP is CIPCO’s long-term member load forecast, and our current resource portfolio of nearly 870 MW of installed capacity across owned and contracted resources. The process began by establishing key assumptions to be used in the modeling. Forward curves for coal power, natural gas, and capacity were created utilizing data from trusted sources. Assumptions were made regarding MISO’s future capacity construct, resource accreditation values, and planning reserve margin. Additional forecasts of market energy prices were developed, along with capital cost projections for generation technologies, and assumptions around the impacts of possible environmental regulations. 

Next, the types of generating technology to be used for modeling were chosen based on factors that align with CIPCO’s goals of resource adequacy, project availability, regulatory impact, and existing technology familiarity. Generating technologies available today such as coal, natural gas, wind, solar, and battery storage were considered, as well as emerging technologies such as nuclear small modular reactors.

CIPCO evaluated eight unique scenarios across a range of price, resource cost, load, reliability and policy conditions. Once the portfolios were finalized, ACES used sophisticated modeling software to forecast each scenario, then compared them on a scorecard based on measurable criteria. Metrics were grouped into the following categories: 

• Affordability
• Reliability
• Energy Supply
• Environmental 

This provided a well-rounded assessment and comparison of each scenario’s relative ability to meet CIPCO’s long-term capacity and energy requirements. 

The IRP results verify an immediate capacity need that is best met with additional natural gas generation. CIPCO is currently short capacity by more than 150 MW, and by 2030, CIPCO will need to procure approximately 200 MW of additional capacity. Every portfolio scenario recommends adding 250 MW of dispatchable capacity by 2030 to achieve the highest assurance of reliability at the lowest cost and risk. Further, in every model except the aggressive environmental regulation scenario, that capacity is entirely natural gas. This is not surprising as natural gas-fired peaking units are proven to generate safe and reliable power in a cost-effective manner. The goal of natural gas peaking generation is not to run all the time, but to be available to run on short notice to provide energy and capacity during periods of critical peak demand in the winter and summer. The technology is not only fuel efficient but also responds quickly to supplement intermittent generation from wind and solar as a necessary component of our “all of the above” strategy. 

We begin 2025 refocused on our top priorities. With the robust IRP process complete, CIPCO will continue to pursue the best long-term interest of the membership and explore constructing new gas-fired generation. We look forward to sharing more information on CIPCO’s IRP and future resource plans at our annual meeting.