“Traditionally, investments in distribution system infrastructure have followed a just-in-time approach, where a decision to invest is responsive to a specific system or customer need, with the expectation that assets deployed will be utilized close to the time they are deployed. Decisions under a just-in-time approach focus on the near future and are generally presented to and approved by regulators in rate case proceedings. This just-in-time approach has been an accepted investment strategy practice in the context of slow or no demand growth […], which supported a more reactive approach to system needs in the past two decades.”

“[…] we define distribution system proactive investments as those that are deployed ahead of certain load growth. These may include investments to serve new loads ahead of the utility receiving a load letter, as well as investments deployed to serve expected load growth that do not target an existing system constraint.167 Proactive investments may also include investments in infrastructure that may not fit existing regulatory practices and planning processes due to their more uncertain forward-looking nature, such as upgrading a feeder or transformer to add capacity beyond near-term needs to be able to accommodate longer-term forecasted load growth from EV fleet adoption.”

“traditional infrastructure investment approaches, which are typically focused on maintaining grid reliability and supporting “established” load growth based on historical patterns or specific requests.“

“Proactive investments, conversely, focus on anticipated changes to past trends and aim to avoid energization delays and promote long-term affordability, such as by conducting larger, less frequent upgrades. Proactive investments cover the same categories as traditional utility investments, and may include items as diverse as asset replacement or upgrading, stockpiling of common equipment types and sizes, real estate or right-of-way acquisition, or deployment of distributed energy resources.”

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“Much of the US transmission grid was constructed more than 50 years ago, and there will be a need for refurbishment in the future. When this need arises, utilities should proactively explore and identify opportunities to (a) upsize existing transmission lines where added transmission capability is needed now (and the upsizing avoids future refurbishment needs); and (b) where the refurbishment of aging lines becomes necessary now and adding transmission capability through upsizing of the lines is expected to be valuable in the future.”

“Generation and transmission planning processes can be enhanced by enacting proactive, scenario-based planning practices that allow for the identification of more flexible, cost-effective generation and transmission solutions. Enhanced proactive planning processes allow planners to plan a comprehensive range of possible futures and to anticipate and address a holistic set of system needs beyond solely reliability requirements. Such planning processes recognize the value of generation and grid solutions that are flexible and robust across all scenarios; they more explicitly recognize future uncertainties in planning in order to develop “least-regrets” solutions that maximize long-term cost savings while minimizing the risks of both over- and underinvesting in the grid.”

“Proactive distribution planning will become increasingly important as projected growth in building and transportation electrification places strain on the distribution system. Scenario-based planning that facilitates the prebuilding of projects in constrained parts of the grid can result in ratepayer savings while still serving growing electricity demand. To facilitate such planning, enhanced load forecasting capabilities with high locational and temporal granularity will be crucial.”

“Utility investments in grid infrastructure have historically been made following a process of forecasting load growth based on historical usage and adjusted for factors, such as economic and weather data and established expansion plans of major commercial and industrial customers. Accommodating forecast growth, which increasingly includes M/HDV electrification load, is done on a sequential basis, where least cost (expenditure) grid upgrades are determined following the customer request. This sequential approach is largely born from concern that anticipatory utility construction might lead to underutilized assets if the expected load does not materialize, yielding increased financial burden on rate payers.”

“Utilities traditionally plan and invest in necessary grid upgrades sequentially, once an electric fleet or charging operator has submitted the site load request or as part of a 5–10-year, trend-based forecast.”

“For the purposes of this study, a proactive approach is defined as investing in grid upgrades that increase capacity beyond the minimum defined under the sequential approach.“

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“proactive electric system actions as grid investments and load management strategies that can accelerate beneficial electrification or address other projected sources of significant load growth rather than waiting to act after the load has materialized or in response to historical load growth patterns. “

“Traditional investments: Their timing, size, and location based on known or well-established trends.”

“Proactive investments: Their timing, size and location are forecasted, in advance of a service request, and actual load requiring service.”

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“[…] investments into grid infrastructure assets that proactively address network development needs beyond the ones corresponding to reinforcements relating to currently existing grid connection requests by generation or demand projects. Anticipatory investments are forward-looking network investments based on identified medium- and long-term network needs, justified in network development plans, based on scenarios that project plausible trajectories of generation and demand capacities […]. Anticipatory investments are not a new investment ‘class’, as they consist of identical network assets as all other types of network investments, such as reactive investments”

“Traditional investment: System study triggered by large customer or short-term forecasts”

“Utility acting on high-confidence information:

-Known load additions
-Known DER interconnections
-Short-term load growth forecast (1–3 years)”

“Traditional approach can limit speed of load/DER growth if system changes are faster than utility can build infrastructure 2–5 year lead times for major upgrades or longer in dense urban area”

“Proactive investment: Long-term forecasting review. Potentially high growth areas identified and studied.”

“Proactive planning considers load/DER capacity further ahead of anticipated growth to enable timely adoption.”

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“Investment to increase the capacity of the network ahead of long-term need, with the objective of bringing forward consumer and system benefits. This is based on forward-looking assumptions about supply and demand.”

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“[…] we have decided to move to a more proactive stance for load related investments. This means that the DNOs [Distribution Network Operators] will need to plan and deliver investments ahead of longer-term network needs.“

“We have also decided that the scope of proactive load investment in ED3 [electricity distribution price control period] will include:

-specific strategic investment projects at extra high voltage and primary network that address strategic investment needs identified in the TRESP [Transitional Regional Energy Strategic Plans];
-programmatic investment to add new capacity on the primary and secondary networks that the DNOs identify using their local network knowledge and network planning processes to prepare the distribution network for the long-term TRESP pathways; and
-programmatic investments to proactively upgrade line services eg unlooping of service cables.”

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“[…] the risk-return balance between proactive build-out of energy infrastructure and reactive energy planning has shifted. Energy planning must work proactively to ensure that adequate, affordable, and reliable supply is available in a timely manner to support economic development projects and secure investments.”

“It also means enhancing the efficiency of planning, permitting and approvals processes […]. Many jurisdictions across North America and the world are currently grappling with the challenges of streamlining and expediting the development and delivery of energy infrastructure.”

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“Proactive Distribution Upgrade: a distribution upgrade made solely based on a forecasted need outside a utility’s traditional planning cycle. In the context of this framework, a Proactive Distribution Upgrade would not be considered under existing distribution planning processes due to the proactive nature of the project.”

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“Proactive investments are made ahead of confirmed loads and aim to enable future growth distinct from historical trends—for example, load from electric vehicles, which has increased substantially in recent years and is expected to continue growing quickly, yet is not well captured in historic trends.” 

“ […] current practices for distribution capacity investments, which are typically driven by relatively certain load growth projections, such as from short-term aggregate customer growth expectations or specific known large load additions.“

“Under current investment practices, distribution capacity investments are typically made in response to confirmed customer load additions or anticipated load growth with “reactive” infrastructure deployment. Investments using this process can, in actuality, have a degree of “proactive” flavor, as they may be justified based on load growth forecasts in the short term (e.g., the next 1-3 years). Cost recovery for such investments is typically straightforward because the investments are tied to reasonably certain load growth from specific customer load additions or high-confidence short-term aggregate customer growth. In contrast, proactive investments are intended to enable future growth by removing barriers to future growth, with specific future needs generally identified using forecasts with longer time horizons.” 

“Proactive investments aim to provide capacity further ahead of time to enable future growth and are largely driven by forecasts over longer time horizons.“

“Proactive investment practices are generally not intended to replace the current investment practices, but rather to supplement them, acting as a tool to achieve specific goals not well served by the existing process. The proactive approach can achieve unique benefits such as improved customer experience, support for state policy goals, or improved long-run investment efficiency, but also comes with additional uncertainty as a result of the increased reliance on forecasted conditions further into the future. This additional uncertainty increases the risk that proactive investments may occur earlier than they are actually needed (resulting in investment inefficiency), but reduces the risks of delayed customer energization and missed policy goals. Enhancements to distribution capacity planning, approval, and recovery processes are therefore needed in order to achieve the benefits of proactive investments while addressing these challenges and risks.”