Salt River Project (SRP) has become one of the first U.S. utilities to shift from an Integrated Resource Plan (IRP) to an Integrated System Plan (ISP), a “holistic roadmap” that takes into account evolving power system needs, energy affordability, and carbon reduction goals.
The pioneering move by the public power entity that provides power and water to more than 1 million people in central Arizona’s Phoenix metropolitan area was formally kicked off as SRP’s District Board of Directors approved power system strategies outlined in the ISP on Oct. 2.
The ISP is a long-term, “data-driven” planning process that covers a period between 2025 and 2035, SRP said. Developed over the past two years, it responds to multiple shifts affecting the power sector related to climate change, technology advancement, customer goals, and regional markets. A primary driver, however, has been to deliver a planning process that jointly prioritizes SRP’s “affordability, reliability, sustainability, and customer focus,” while taking into account its unprecedented urgency to meet a projected spike in demand.
“We are projecting energy demand increases of more than 25% by 2030,” noted Angie Bond-Simpson, SRP senior director of Resource Management, on Monday, including in Maricopa County, a key SRP service area, which leads the nation in population increase. “The [ISP] will strengthen and prepare our grid for a future that’s largely powered by renewable energy without sacrificing the affordability and necessary power reliability to best serve one of the nation’s fastest-growing areas,” she said.
A ‘Holistic’ Power System Planning Model
Compared to the traditional utility IRP process—which entails periodic (every two to five years) and parallel planning for customer programs, transmission and distribution, and new energy resources —the ISP looks at planning holistically, focusing jointly on “affordability, reliability, sustainability, and a customer focus,” SRP said.
“In the past, IRPs guided SRP to plan long-term generation resource decisions by conducting structured analyses assessing risk and uncertainty,” SRP noted when it first introduced the ISP process in 2021. “Given the many ongoing changes in the power sector, we must also adapt these traditional planning methods to optimally develop a safe, reliable, affordable, and environmentally responsible power system. An integrated system planning approach is necessary to meet changing customer needs, such as enabling two-way power flow for rooftop solar additions, managing charging of electric vehicles, and to anticipate the power system transition to a lower carbon, increasingly complex grid.”
An important facet of the ISP is that it integrates stakeholder and customer engagement from the system planning process’s outset. The ISP is informed by perspectives from Arizona universities, businesses, environmental organizations, limited income advocates, nonprofits, and more, SRP said. And while the effort is built on improving “transparency,” it also measures SRP’s success “through the eyes of its customers,” it said.
As significantly, the process also sets out viable pathways to achieve SRP’s 2035 carbon goal to reduce the amount of carbon dioxide emitted by generation (per kWh) by 65% from 2005 levels. Like IRPs, the ISP uses scenario-planning methods to help SRP better understand future uncertainties, costs, risks, and tradeoffs. It has developed four scenarios that define “a plausible future state of the world around us, reflecting societal, technological, economic, environmental, and political trends and conditions. These factors are outside of SRP’s control and reflect the unpredictable nature of the future that needs to be accounted for in SRP’s planning activities,” the utility says.
A Strategic Approach to Address Uncertainty
SRP and its stakeholders explored three strategic “approaches” to analyze the ISP in the spring of 2023, seeking to explore “clearly delineated key decisions that may impact the future power system and to understand how these strategies perform across the scenarios described above.”
The strategies looked at a “Technology Neutral” approach, which sought to develop future system plans on a technology-neutral and least-cost basis; a “No New Fossil” approach, in which no new gas capacity is integrated (though existing gas would still be used); and a “Minimum Coal” approach that seeks to reduce SRP’s coal generation “by testing operational changes to SRP’s coal resources, including seasonal operations and SRP coal exit by the end of the study period in 2035.”
The most critical considerations unveiled by the analysis were that SRP will need “significant investment over the next decade” to strategically locate and build out new grid infrastructure to connect new resources and customers while achieving reliability and sustainability goals. That expansion could require doubling or tripling resource capacity within an unprecedented 10-year timeframe, SRP said. The analysis also emphasized that new renewables and firm capacity, particularly solar and wind, will be essential components of a cost-effective portfolio, even under varying gas prices and technology costs.
According to documents SRP made public on Monday, the ISP prepares to add 6 GW of solar capacity and 1 GW of wind capacity by 2035, alongside 2 GW of new firm natural gas capacity to replace the retirement of 1.3 GW of coal power. It also anticipates adding 1.5 GW of new battery resources and 1 GW of new pumped-hydro capacity, which could provide long-duration energy storage. “This new storage will be in addition to SRP’s existing large investment in storage resources, including more than 1,100 MW of battery projects to be online by the end of 2024,” SRP noted. The ISP’s “strategic resource additions,” meanwhile, “contribute to a 56% overall reduction in SRP’s water used by power generating resources from 2005 levels,” it noted.
SRP notably also anticipates that electrification of end-uses, including transportation and heating demand, will create “new opportunities” to shift energy usage to mid-day hours, helping to integrate more renewables. The ISP analysis showed that “SRP will need to evolve programs and price plans to shift consumer behavior, and further educate customers on when to consume and when to conserve energy.”
The analysis also highlighted SRP’s need to add hundreds of miles of new or upgraded transmission lines and “nearly double the number of 500/230 kV transformers could be needed relative to today.” It underscored that the location of generation facilities will play a crucial role in the expansion of the transmission system. The ISP, SRP said, outlines adding 190 miles of new or upgraded transmission lines.
Standing Challenges: Policy, Regulations
According to the ISP analysis, however, the region will inevitably face uncertainty related to policy and regulatory measures. If, for example, the federal government “enacted a mandate for 85% CO2 reductions by 2035 (Strong Climate Policy), SRP would need to significantly accelerate renewable & storage deployment,” it said.
SRP will also grapple with future uncertainties around development, planning and permitting processes. These “could impact SRP’s ability to grow at the pace needed to meet increasing future load growth,” it noted. “With the amount of future infrastructure and resources needed, internal and external partnerships are going to be essential to build the future system and maintain high customer value. “
The utility on Monday underscored an urgency to ensure changes will be meaningful. This past summer, it marked its highest system peak demand of 8,163 MW on July 18, and on July 19 and 20, peaks reached over 8,000 MW, it noted. During the high-demand period, SRP deployed “all available generation assets including reserve capacity resources, and on certain days also purchased energy from the regional market as backup support,” it said.
The entity’s efforts to ramp up its supply profile, however, has been challenged by citizen group opposition and regulatory wavering. In June, for example, SRP won a hard-fought triumph in its bid to urgently expand its 575-MW Coolidge Station outside Phoenix with 12 fast-ramping single-cycle aeroderivative turbines. The utility now says it expects six of the new units will be online prior to summer 2026 and the remaining six, prior to summer 2027.
Bobby Olsen, SRP’s chief Planning, Strategy and Sustainability executive, on Monday said that SRP will continue to report on its progress carrying out the ISP. It will also “find innovative ways to decarbonize while leading the industry in investments in affordable, reliable and sustainable power generation,” he said.
“With the Valley’s extreme temperatures, customers can’t afford blackouts like some of our neighboring states have experienced,” he noted. “SRP has provided water and power to Arizona homes and businesses for more than 100 years. Our plans for a sustainable future will continue this legacy without compromising reliability and affordability,” he added.