20150910AVU to Staff 132.docx

AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMATIONJURISDICTION:IDAHODATE PREPARED:09/08/2015CASE NO.:AVU-E-15-05/AVU-G-15-01WITNESS:Jody MorehouseREQUESTER:IPUCRESPONDER:Tom PardeeTYPE:Production RequestDEPARTMENT:Gas SupplyREQUEST NO.:Staff-132TELEPHONE:[phone]REQUEST:The Company plans to spend $10M on Rathdrum Prairie HP (High Pressure) gas reinforcement upgrades. SeeMorehouse’s exhibit schedule 1, pgs. 134 and 135. Please describe alternatives the Company explored to eliminate or defer the need for upgrades such as this. If no alternatives have been examined, please explain why not? As part of the response, explain whether the Company has encouraged interruptible load or considered utilizing DSM to defer or avoid capacity upgrades. Please provide the financial impacts of alternatives the Company considered. Additionally, please describe whether the value of deferred distribution will be addressed in the Company’s Business Plan due later this year.RESPONSE:
Avista plans to spend $10 million on the Rathdrum Prairie HP reinforcement upgrades during 2016 and 2017 in order to increase flow for current and projected winter load demands in the Post Falls and Coeur d’Alene service areas. The existing high pressure infrastructure is pulling gas from three city gate stations, all operated by Williams, that are at risk of exceeding both physical and contractual flow limits. The proposed reinforcements will ensure that flows do not exceed the physical and contractual limits of each city gate station.
Avista and Williamshad preliminary confidential discussions on a Northwest Pipeline solution that requireda mainline expansion of the CDA lateral from Starr Road east, which included 5.5 miles of 10” pipe through established population centers,at an estimated cost of $11 million total, for the mainline expansion in addition to the gate station rebuilds. The NWP mainline expansion, however, would not provide for additional system growth beyond a ten year Avista forecast, and would only have localized impacts at the Post Falls, CDA-East and CDA-West gate stations, while also requiring gate station upgrades or rebuilds.
Chase Road was an existing project with the facilities designed to reinforce the Rathdrum area and includedthe installation of high pressure piping. Avista Gas Engineering determined that by upsizingthe existing Chase Road project andextending high pressure piping into existing Avista facilities the needed capacity would be available. Chase Road would also provide for more flexibility to address potential resource needs in the CDA service areas well into the future. Also important is by upsizing Chase Road, Avista could utilize existing transportation capacity on Gas Transmission Northwest (GTN) while new capacity on NWP is both more expensive and difficult to obtain.
Avista determined Chase Road provided more benefits (flexibility, existing project, growth, available supply, and existing contracts) over a longer period of time than a mainline expansion on NWP.
The benefit of interrupting large loads and energy conservation is not significant enough to offset the winter demand that is being drawn from the current Williams gate stations.