20210623Avista to Staff 1-8.pdf

AVISTA CORPORATION
RESPONSE TO REQUEST FOR TNFORMATION
IDAHO
AVU-G-21-02
IPUC
Production Request
Staff- 001
: '.'-,_'::ri-,I"-.;'rl :-r'J L.LJ
i;.; ;tj:: E3 Pt{ t+: 36
ruRISDICTION
CASE NO.:
REQUESTER:
TYPE:
REQUEST NO.:
DATE PREPARED: 061231202l ,'.1 ,', _ ,-, .,,i;i!;iOf:WITNESS: Jody Morehouse
RESPONDER: Tom Pardee
DEPARTMENT: Gas Supply
TELEPHONE: [phone]
REQUEST:
The Company states "In terms of North American demand, exportsof LNG could consume
20 Bcf per day by 2030 and more than 30 Bcf per day by 2040." IRP at 11. If this were to occur,
please explain any impacts on the Company and what would be done to minimize impacts on gas
pricing and availability?
RESPONSE:
If LNG exports were to increase to these forecasted amounts, the expected response from
US supply is that supplies are expected to increase along with this new demand. The price of
natural gas at the Henry Hub is expected to increase as well, though not enough to provide a price
shock to consumers.Any impacts to Avista customers are expected to be even less than the
anticipated increase seen around the Gulf of Mexico region. This is primarily due to the large
amount of supply procured from Canada. [n fact, Avista averages roughly 90% of its purchases
from Canada, leaving the remaininglOo/o from the Rockies. With Canadian supplies the likelihood
of impacts to Avista customers overall should be muted. Any expected price impacts could be
addressed in the Company's procurement plan. This includes Dynamic
Window Hedges (DWH) for volumetric load. It is for firm customers and is currently 40o/o of the
average monthly demand. Another progrcm used by Avista to help control price risk is the Risk
Responsive Hedging Tool (RRHT). This program manages financial risk of the entire
portfolio looking out two years and can hedge up to 60% of the entire portfolio
value.Along-termhedge(more than 10 years),renewable natural gas (RNG), Hydrogen
(H2), demand response, or energy efficiency can also help address this potential risk inpricing due
to this large supply dernanded by LNG.
Page I ofl
AVISTA CORPORATION
RESPONSE TO REQITEST FOR INF'ORMATION
ruRISDICTION: IDAHO
CASE NO.: AVU-G-2l-02
REQUESTER: IPUCTYPE: Production Request
REQUEST NO.: Staff- 002
DATE PREPARED: 0612312021WITNESS: N/A
RESPONDER: Ryan Finesilver
DEPARTMENT: Energy Efficiency
TELEPHONE: [phone]
REQUEST:
Are DSM conservation savings in Appendix 3.1 current, with Idaho cumulative savings shown as
21.4 million therms over 20 years? IRP at Table 1.2. Please provide and explain any updates or
changes made in savings forecasts, if applicable.
RESPONSE:
The conservation savings in Appendix 3.1 are current. Table 1.2 of the 2021Natural Gas IRP
contains an error in the DSM portion of the table. The values provided should be adjusted to agree
to table ES-2 as provided in Appendix 3.1.
Page 1 of1
AVISTA CORPORATION
RESPONSE TO REQUEST FOR TNFORMA'TION
ruRISDICTION:
CASE NO.:
REQUESTER:
TYPE:
REQUEST NO.:
IDAHO
AW-G-21-02
IPUC
Production Request
Staff- 003
DATE PREPARED: 0612312021
WITNESS: Jody Morehouse
RESPONDER: Tom Pardee
DEPARTMENT: Energy Efficiency
TELEPHONE: (s09) 495-4873
REQUEST:
The Company's Action Plan includes investigating and integrating new resource plan modeling
software into Avista's system to run in parallel with Sendout. IRP at 12. Please answer the
following.
a. Please explain why the system would be run in parallel with Sendout. Please explain any
benefits.
b. Describe the requirements of the new system and include business atfributes and
compatibility with curre,nt syste,ms, programs, and applications.
c. When is the new system expected to go live?
RESPONSE:
a. Avista's system should be run in parallel to ensure the results in the new
application are similar to the Sendout models. Also, the Sendout model is owned by
Avista, meaning there is no cost to use it. Understanding new functionality in software is
important to leverage the tool as best as possible prior to application. Sendout has been
used by Avista since the early 1990's, so there is a solid understanding of the product and
expected results.
b. The new system, Plexos, will require the same systems and information required to run
the Sendout model. A majority of Avista's information used in the model will be pulled
from Nucleus as it houses contracts, weather, rates and price information. Cognos is also
utilized to help determine customer usage by rate class. lnternal information is then used to
calculate inputs through programs such as Excel or Access. Also, Plexos will provide the
ability for Avista to utilize new features such as carbon intensity and a more robust
Monte Carlo and stochastic functionality.
c. The Plexos software is currently being pre,pared to deploy to the desktops used solely for
the IRP due to their processing power. Avista has also begun to work with the vendor,
Energy Exemplar, to begin to understand the model and required inputs. Once this model
is built, estimated at 10 weeks'time, Avista will begin to utilize the software and monitor
results. The goal is to have Plexos become the primary software used to model the 2023
Natural Gas IRP.
Page 1 ofl
AVISTA CORPORATION
RESPONSE TO REQUEST FOR rNf,'ORMATION
JURISDICTION: IDAHO
CASE NO.: AVU-G-2l-02
REQUESTER: IPUCTYPE: Production Request
REQUEST NO.: Staff- 004
DATE PREPARED: 0612312021WITNESS: Jody Morehouse
RESPONDER: Tom Pardee
DEPARTMENT: Enerry Efficiency
TELEPHoNE: (s09) 49s-4873
REQUEST:
The Company states; "One of the most prominent risks in the IRP involves policies meant to
decrease the use of natural gas as outlined in Chapter 5- Carbon Reduction. However, there is
uncertainty about the timing and size of those policy decisions." IRP at 22.Please explain what is
being done to quantiff the uncertainty and mitigate this risk.
RESPONSE:
Policy decisions in our Oregon and Washington territories continue to evolve the supply side
resources needed to help address climate goals. Avista is working towards projects to help meet
these requirements and offset carbon emissions for these service territories. The uncertainty is
modeled specifically in our Washington electrification scenario to show potential outcomes of
converting natural gas to electricity. Some elements left out of this analysis were transmission
costs, distribution costs and homeowner costs. More work will be done to help address this risk in
future IRP's. The o'Carbon Reduction" scenario is the primary scenario completed to show
potential risks to the natural gas system from Oregon and Washington policy. The risk in prices
was not fully known at the time and electrification was not taken into account so the modeling was
a first attempt to quantiff an outcome and cost. Until programs are fully developed
under Oregon's Executive Order 20-04, it will be hard to quantifr the risk other than
understanding thehigh-levelgoal of reducing emissions to 80% below 1990 emissions by
2050. Compliance mechanisms, offsets and allowances are important in fully understanding the
financial risks to Avista and our customers. Avista has been actively involved in policy activities
specific to natural gas to ensure our customers have representation concerning the
importance of natural gas as an energy choice and all of the advantages it provides including
affordability, reliability, and energy resiliency.
In Washington, the Cap and Invest program passed the202l legislative session and was signed
into law by Governor Inslee. The initial scope and its implications have been modeled to
provide input to law-makers. More work around program structure, compliance measures, offsets,
and allowances need further understanding. Also, bills targeting the fossil fuels industry, such as
potential bans on natural gas, did not make it out of the current session. It is likely such bills will be
brought forward in the future, yet their fate and potential to pass is still unknown. Understanding
the risk to the system is important for all Avista customers. Avista will provide current policy and
implications to the system in the 2023 IRP through new sensitivities and scenarios including a "No
Growth" scenario, and a scenario in around meeting these goals in Oregon and Washington.
For Idaho customers, Avista is not aware of any bills around the reduction of carbon
emissions, and with vast natural gas resource supplies and pipelines feeding into these service
areas, the risk to the Idaho customer base is low.
Page 1 ofl
AVISTA CORPORATION
RESPONSE TO REQIIEST FOR TNFORMATTON
JURISDICTION:
CASE NO.:
REQUESTER:
TYPE:
REQUEST NO.:
IDAHO
AW-G-21-02
IPUC
Production Request
Staff- 005
DATE PREPARED: 0612312021WITNESS: N/A
RESPONDER: Grant D. Forsyth, Ph.D
DEPARTMENT: Financial Planning
TELEPHONE: (s09) 49s-276s
REQUEST:
The Company states; "In comparison to Avista's 2018 IRP, the base forecast for customer growth
decreases by nearly 1,400 new customers." IRP at 27. Please explain why the base forecast
changed.
RESPONSE:
The 1,400 decline in customers largely reflects a forecast-to-forecast decline in customers in
Oregon. Please see table below:
Area Total Change,20l8 IRP to 2021
IRP for the year 2040
WA +1,653
ID -260
OR -2,793
System -1,400
The decline in OR customers reflects lower population forecasts for that jurisdiction. Statistically
speaking, the ID change of -260 amounts to forecast-to-forecast noise. In other words, the ID
forecast is essential unchanged between the 2018 IRP and 2021 IRP.
Page I of I
AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMATION
ruRISDICTION: IDAHO
CASE NO.: AVU-G-ZI-02
REQUESTER: IPUCTYPE: Production Request
REQUEST NO.: Staff - 006
DATE PREPARED: 0612312021WITNESS: Jody Morehouse
RESPONDER: Justine Dorr
DEPARTMENT: Gas Supply
TELEPHONE: (s09) 49s-8494
REQUEST:
Please explain how transport on NWP works for natural gas stored at Jackson Prairie and provide
the rights the Company holds to move gas from the storage facility to the Company's system when
required.
RESPONSE:
A transportation contract is required to move natural gas on any interstate pipeline systern.
Contracts have a designated receipt and delivery location on them that provide firm rights between
those two locations. Firm rights mean when you schedule the nomination to move the gas from
Jackson Prairie to somewhere else, your rights are primary, or of the highest order. Currently the
company has primary rights to deliver from Jackson Prairie to our syston of l67,l30lday.
However, during a cold weather event in the Pacific Northwest the primary flow of gas is South to
North towards the Canadian border along Northwest Pipeline. Portland, Seattle and Vancouver,
BC have a higher dernand for gas than our system does for a cold weather event. Given that, the
company is generally flowing counter to the majority so we can also flow altemate firm gas with a
high degree of accuracy from Jackson Prairie that will reach our system as well.
Page 1 ofl
AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMATTON
ruRISDICTION:
CASE NO.:
REQUESTER:
TYPE:
REQUEST NO.:
IDAHO
AVU-G-2l-02
IPUC
Production Request
Staff- 007
DATE PREPARED: 0612312021WITNESS: Jody Morehouse
RESPONDER: Tom Pardee
DEPARTMENT: Gas Supply
TELEPHONE: [phone]
REQUEST:
The Company states; T.tew legislation allows LDC's to invest in RNG infrastructure projects with
feedstock partners." IRP at 105. Please provide an explanation and a copy of the legislation.
RESPONSE:
New legislation in Washington, Engrossed Third Substitute House Bill 1257, and Oregon,
Enrolled Senate Bill 98, passed in 2019 allow natural gas utilities (LDC's) to invest in prudent
carbon reducing RNG infrastructure projects, and to recover such investment costs. Harvesting
biogas from a variety of potential feedstock sites, including but not limited to, landfills, wastewater
treatment plants, dairy farms, and food waste facilities requires LDC's to collaborate with
feedstock owners to reach commercial terms on the purchase/sale of the biogas, the physical host
site of proposed RNG facilities, and biogas/RNG technical specifications and requirements.
Additional statements made within the IRP on page 105 identiff some key takeaways from our
business development/project development efforts to date.
Included are the following attachments
StaffPR_007 Attachment A - WA House Bill1257
Staff PR 007 Attachment B - OR Senate Bill 98
Page I ofl
AVISTA CORPORATION
RESPONSE TO REQUEST FOR TNFORMATION
ruRISDICTION:
CASE NO.:
REQUESTER:
TYPE:
REQUEST NO.:
IDAHO
AW-G-21-02
IPUC
Production Request
Staff- 008
DATE PREPARED: 0612112021WITNESS: Jody Morehouse
RESPONDER: Terrence Browne
DEPARTMENT: Gas Supply
TELEPHONE: (509) 49s-8s51
REQUEST:
In the 2018 IRP, the Company discussed a number of distribution system enhancement projects.
Please provide the current stafus and cost to date for the following projects.
a. The Coeur d'Alene High Pressure Reinforcement - Post Falls Phase. Construction on the
project started in 2018 and includes installation of approximately 14,600 feet of
high-pressure steel gas main pipe from Rathdrum to Post Falls at an estimated cost of
$4,000,000.b. The Schweitzer Mountain Road High Pressure Reinforcernent. The Schweitzer Mountain
Road project is estimated to cost $1,500,000.c. The Warden High Pressure Reinforcement. The Warden High Pressure Reinforcements
project is estimated to cost $6,000,000.
RESPONSE:
a. The Coeur d'Alene High Pressure Reinforcement-Post Falls Phase was completed and
placed into service on November 30, 2018. The final cost was approximately $2,491,087 .
b. The Schweitzer Mountain High Pressure Reinforcerlent was identified to meet growth and
demand. This project continues to be reassessed annually to determine necessity given the
current state of customer loads and capacity of the distribution system. At this time, Avista
will defer construction of this project as expansion plans from large customers were
cancelled or deferred.
c. The Warden High Pressure Reinforcement is scheduled with a projected spend of
$2,950,000 in year 2022 and $2,950,000 :ra2023. Avista may defer scheduling or modifr
construction should customer loads and capacity of the distribution system change.
Page 1 of1