(1) Before acquiring multi-year electricity supply resources, a utility should evaluate its existing resources and analyze future resource needs in the context of the goals and objectives of these guidelines. A utility should use a planning horizon as defined in these rules.

(2) A utility's resource needs assessment should include:

(a) analyses of customer loads including base load, intermediate load, peak load and ancillary service requirements, seasonal and daily load shapes and variability, the number and type of customers, load growth, trends in customer choice and retail markets, technology that may lead to substitutes for grid-based electricity service, impacts of demand-side management, and price elasticity of demand;

(b) an assessment of the types of resources that are available and could contribute to meeting portfolio needs, including demand-side resources, supply-side resources, distributed resources, and rate design improvements;

(c) an assessment of the types of wholesale electricity products that could effectively and efficiently contribute to meeting portfolio needs including base load, heavy load, peak, dispatchable, curtailable, assignable, firm, full requirements, load following, unit contingent, slice of the system (fixed percentage of hourly system load requirements), and others;

(d) an assessment of resource diversity within the existing portfolio with respect to generation fuel and generation technology (e.g., conventional coal, clean coal, hydro, natural gas combined cycle, natural gas simple cycle, wind, fuel cell, etc.); and

(e) an assessment of the flexibility of the existing portfolio with respect to generation resources, suppliers, demand-side management resources, electricity products, contract lengths, contract terms and conditions, and market conditions.

(3) A utility's resource needs assessment should include analyses of how cost allocation and rate design decisions might impact future loads and resource needs. A utility's cost allocation and rate design practices should support and complement the goals and objectives of these guidelines.