The role of IRP in the natural gas industry: A case study

The natural gas industry has changed radically over the last decade. The Federal Energy Regulatory Commission`s Order 636 completed plans to unbundle interstate pipeline services and create open access for distribution companies and their customers. There has also been increasing competition for local distribution companies (LDCs) from fuel oil, electricity and unregulated energy service companies. Meanwhile, the Energy Policy Act of 1992 includes provisions that encourage energy efficiency and promote reliance on competitive forces. In response to these changes, coupled with growing environmental concerns and the need for increased energy efficiency, a number of state public utility commissions and LDCs took an interest in integrated resource planning (IRP) for gas utilities. Gas IRP was in its formative stages and a variety of regulatory approaches were being considered when this project began. In response, this project originated with the total project scope being to define, implement and institutionalize an IRP process for the Gas Customer Service Business Unit of Niagara Mohawk Power Corporation (NMGas).