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Utility-Scale Social Equity: Electric Utility Planning and Energy Justice
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Abstract
As the world undergoes a pivotal energy transition, the role of electric utilities in shaping a sustainable future is paramount. Despite their critical influence on the energy landscape, there remains a significant gap in understanding how they integrate social equity into their planning processes. This research addresses this gap by scrutinizing U.S. investor-owned electric utilities’ Integrated Resource Plans (IRPs) from an energy justice perspective.
Examining utility planning processes during this era of energy transition is crucial for several compelling reasons. First, social equity has historically been overlooked in utility planning, necessitating a focused effort to integrate it into current and future strategies. Second, the choices utilities make now will define the future energy landscape for generations. Consequently, utilities must tackle climate change while ensuring advanced technology remains accessible and affordable, and stakeholders have a say in these critical decisions. Third, investor-owned utilities (IOUs) provide services to 72% of U.S. customers, making their role in this transition particularly significant. The vast customer base of IOUs underscores the widespread impact their decisions have on the national energy system. Fourth, Integrated Resource Plans (IRPs) are indispensable strategic documents for electric utilities, guiding their evaluation and planning to meet current and future electricity supply and demand, underscoring the importance of incorporating social equity into their frameworks to ensure a just and inclusive energy system.
Despite their importance, the social aspects of IRPs have received limited scrutiny, with the focus often limited to variables such as cost-effectiveness, technological advancements, regulatory compliance, risk assessment, and environmental impact. The specifics of IRPs, including planning horizon, revision cycles, resource portfolio composition, forecasting models, and adherence to state-specific mandates such as renewable portfolio standards (RPS), differ widely across states. While stakeholder involvement is mandated in many jurisdictions, the intricate and technical nature of the energy sector can reduce the effectiveness of this engagement. These varied parameters can influence the attainment of social justice goals in multiple ways, necessitating further investigation.
This research illuminates the extent to which electric utilities incorporate social equity into their planning processes. By purposively sampling IRPs from the largest investor-owned utility (IOU) and a randomly selected IOU in each state, this study offers a comprehensive analysis of 100 IRPs across the United States. Utilizing an energy justice framework for exploratory content analysis and a comparative cross-sectional study reveals insightful patterns and provides a deeper understanding of how social equity considerations are integrated into utility planning.
Preliminary findings reveal a nuanced understanding and implementation of energy justice within IRPs across utilities, although the extent and consistency of these efforts vary widely. Numerous factors influence the integration of energy justice principles, including energy policies, regulatory frameworks, stakeholder engagement practices, governance structures, administrative capacity, and the unique characteristics of individual utilities. Contrary to the conventional expectation that investor-owned utilities (IOUs), driven by profit-maximization motives, would avoid energy justice initiatives, some IOUs demonstrate proactive leadership in this domain. This leadership is driven by progressive corporate governance, effective stakeholder engagement, regulatory incentives, technological adoption, public accountability, inter-organizational collaboration, and increasing consumer demand for equitable energy solutions. This paper further contributes to the limited research on the social equity aspects of electric utilities by proposing a dimensional typology of IOUs based on their potential to incorporate energy justice into their operations. Additionally, it identifies key explanatory variables that facilitate the adoption of social equity measures through Qualitative Comparative Analysis (QCA), laying the groundwork for further quantitative exploration in future studies.
The insights gained from this research underscore the critical importance of integrating social equity into the planning processes of electric utilities. By examining the diverse approaches and varying degrees of commitment to energy justice among investor-owned utilities, this study provides a foundation for future policy development and regulatory reforms aimed at promoting a more inclusive energy transition. This analysis identifies significant gaps that need to be addressed to ensure that all communities benefit equitably from advancements in the energy sector. This research offers a valuable resource for policymakers, regulators, social justice advocates, and utility managers committed to fostering a more equitable energy future.
Description
These are the slides from a presentation given at 2025 ASPA Annual Conference on 03/31/2025.
Date
2025-03-31
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University of Kansas
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Keywords
Regulation, IOUs, Energy justice, Integrated resource planning