Choosing an integrated resource plan for electric utilities: An analytic hierarchy approach

The objective of this dissertation is to test, validate, and legitimate an Analytic Hierarchy Process (AHP) approach to Integrated Resource Planning (IRP) for electric utilities in developing countries. We demonstrate how the AHP may be used in a multiple criteria framework for an effective group decision process for IRP. We show both theoretically and in practice how the AHP may be used to evaluate the scenario probabilities, criteria weights, and uni-dimensional utility functions. A case study is undertaken at the Barbados Light and Power Company (BL&P) on the island nation of Barbados, where we solicit the judgement trade-offs of a six member group of utility experts. We also elicit feedback from six outside stakeholders comprising of five senior managers at the utility, as well as an environmental consultant. We successfully re-visited the BL&P's 1988 resource expansion decision, and discovered and recorded the probable judgements and trade-offs made by the Company that lead to a robust preference for efficient oil fired plant rather than switching to natural gas or coal. We identified and ranked the corporate performance criteria and planning objectives, as well as a broad spectrum of external and internal business factors that impact on the choice of a resource plan. We also demonstrate how the AHP may be used as an incremental trade-off approach for environmental decision making. Legitimation feedback from group members and stakeholders revealed that our approach was successful in reproducing the 1998 decision in a valid and legitimate process. We also successfully demonstrated how the AHP may be used to manage and structure the IRP process, including conflict resolution and consensus building in an accurate, efficient and timely manner. We demonstrated the AHP as a mechanism via which decision makers can articulate and record their judgements as a means to justify their decisions to others. We also demonstrated an interval approach to managing ambiguity in the judgement rendering process. We conclude this dissertation with a discussion of the limitations of the AHP as an approach, both in general and in relation to IRP in developing countries.