WHAT IS AN INTEGRATED RESOURCE PLAN (IRP) AND HOW DID IT ORIGINATE?

In Minnesota, an IRP is a utility’s 15-year business plan for how they will meet their customers needs, that they do every 3 years.

Not every state has a process requiring IRPs from utilities like Minnesota’s does. The history originates during the 1970’s when there was a big fight about utilities in California.

The standard way utilities have made profits (and to a large extent still make profits) is to build a lot of generation and transmission infrastructure for which law and regulation grants them guaranteed profits from (via their ratepayer dollars). From the early to mid-20^th century this set up was a way to incentivize energy utilities to make electricity universally abundant and available.   

In the 1970’s, when energy efficiency first started being emphasized, regulators in California asked pointed question about whether the infrastructure utilities were building was actually needed in the future, upon more energy efficiency. Out of that emerged the IRP Process; The prompting of utilities to show and explain why they think their customer energy demand will grow and what the most cost-effective options are for meeting that demand.

This IRP process does not decide the specific power plans but a more general layout on the expectations over what investments utilities will need to make. An IRP sets the foundations for upcoming the energy regulatory controversies that a utility could expect over the following few years.

Xcel Energy will release an IRP next year which the MN Public Utilities Commission will have to approve. What makes Xcel’s next IRP be considered the “SuperBowl of IRPs” is that power plants representing 65% of Xcel’s generation in Minnesota are scheduled to retire in the 15 years. What resources Xcel replaces this generation capacity with is crucial for Minnesota meeting its Climate and Clean Energy goals.

As a result of these high stakes, Xcel has for the first time come up with a “Stakeholder Engagement” series of meetings in the run up to the release of their IRP.