RMR

It's been a while since I have been down the power engineering rabbit hole, but today, I went for it; with the goal of improving my understanding of what, exactly, RMR means. It turns out that it's meaning is subtly different in Canada than USA (or at least, in BC). Here goes. It's super cool!

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RMR stands for 'Reliability Must Run', and broadly speaking, it refers to a situation where an older generation unit must be kept in service despite no longer being economic.

Utilities often choose to have RMR's because of local reliability constraints. Broadly speaking, nobody ever wants to have a single point of failure, so, not only must the system not have enough capacity, every element must be (at least) duplicated. If removing a no longer economic unit would compromise that redundancy, and therefore reliability, then, an RMR is required.

The word "local" here is key. Absent this constraint, BC Hydro could buy all the power it needs, even if it were to lose it's entire generation capacity, from AB or WA. However, the transmission system is not built to support that. So, on a very location-specific basis, some local generation capability is always required.

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In USA, an RMR is, generally, an agreement (contract): as in, "We have an RMR with the dam in Colorado, Even though it is losing money, we have to keep it online because there is only one other generator near Denver."

Crucially, in the US, where generators and distributors are, typically, different companies, RMR implies a departure from market principles. In other words, the local utility has to pay a subsidy to keep that uneconomic unit in operation.

Because this will ultimately result in higher consumer prices, RMR's, in general, require regulatory approval: they want to make sure the RMR is justified, and that there is a plan to replace the lost capacity, and therefore return to pure market rates.

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In the US, besides RMR, there is also MRA: "Must Run Alternative". This is the preferred solution, and when not available, RMR is used. It means the utilty seeks a medium to long term replacement for a station that is no longer economic. As in: "We need an MRA for the dam in Colorado because it is way too costly to keep running. If we don't get any good offers, we'll do an MRA".

MRA is different from routine system upgrades in that it seeks to replace aging equipment, rather than expand capacity. But ultimately it's a process of buying power from third parties because the existing source is no longer the cheapest one.

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In BC, and RMR is generally a generating station: as in, "The dam in Cache Creek is RMR; even though we spend a fortune keeping it safe, we have to until we can replace it, because there is only one other way to get power to Prince George."

BCH probably doesn't need regulatory approval for this, though ultimately, the same non-market risks are at play and presumably (hopefully) regulators would step in if they felt BCH was overcharging for reasons of poor management, etc. But this must apply to many areas.

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And that's RMR !!