20101112INT to Staff 1-35.pdf

EXECUTIVE OFFICES
INTERMOUNTAIN GAS COMPANY
fì555 SOUTH COLE ROAD · P.O. BOX 7608. BOISE,IDAHO 83707. [phone] . FAX: [phone]
28m Hal' 12 PH 3= 06
November 12,2010 1, 10)111(1UTILITIES.
Jean Jewell
Commission Secretary
Idaho Public Utilities Commission
472 West Washington St.
P. O. Box 83720
Boise,ID 83720-0074
RE: First Production Request of the Commission Staff to Intermountain Gas Company
Case No. INT-G-10-04
Dear Ms. Jewell:"i~ee
Attached for fiing with the Idaho Public Utilities Commission are the original and~
copies of Intermountain Gas Company's response to the First Production Request of the
Commission Staff, in the above referenced Case.
If there are any questions regarding the attached, please contact me at [phone].
Very truly yours,
Katherine Barnard
Manager
Gas Supply and Regulatory Affairs
KB/mt
Attachments
cc F. Morehouse
1. Clark
S. Madison
REQUEST NO.1: On page 8 of the Integrated Resource Plan (IRP), regarding the
Company's reliance on industrial customer facilties to help meet peak, the Company states
"short duration peak day distribution delivery deficits in the future can be mitigated by working
with these customers to facilitate the use of fuel oil at these customer's facilties." How many
contracts has the Company negotiated to faciltate the use of fuel oil at these customer's
facilities? As part of your response, please include the number of therms offet by relying on
each customer facilty, and the expiration date of each contract.
Responder:Brent Wilde
Ph 377-6053
Katherine Barnard
Intermountain Gas Company
555 S. Cole Rd.
Boise, 10 83709
Ph 208-377-6168
Brent Wilde
Record Holder:
Witness:
Response: As was discussed at the IRP Public Meetings, a few Large Volume customers along
the Idaho Falls Lateral have had the capability to change their boilers over to oil for short periods
of time. Only one of these facilities actually keeps oil onsite and it has the ability to offset
approximately 6,000 therms per day (or 1/3 of its daily needs) for several days. Some of the
other plants could and would gear-up to convert some of their plant to oil given adequate lead
time but because the IRP model selected other alternatives, to date no fuel-switching contracts
have been negotiated. Intermountain continues to track this information as an option for an
emergency situation but no assumption for industrial fuel-switching was used in the total
capacity calculation. More detail can be found on page 61 of the Executive Summary.
REQUEST NO.2: Please provide an executable electronic copy of all analysis used to
evaluate the success of the Company's ongoing advertising promotion of high-effciency new
homes and Energy Star. As part of your response, please include an explanation of how the
advertising promotions have changed as a result of your evaluations.
Responder:Byron Oefenbach
Ph 377-6080
Katherine Barnard
Intermountain Gas Company
555 S. Cole Rd.
Boise, 10 83709
Ph 208-377-6168
Byron Oefenbach
Record Holder:
Witness:
Response: While Intermourtain has been encouraging wise use of all energy, and high-
efficiency gas appliances for some time now, the Company has not performed any detailed or
quantitative analysis of the success of this messaging. Anecdotally, HVAC dealers tell the
Company that more and more of their customers are choosing high-tech fuaces in both new
construction and retrofit applications. IGC's advertising budgets have been drastically reduced
during the past few years, so our main messaging appears in Parade of Homes magazines and
inserts. IGC tries to include the Energy Star logo whenever possible.
Page 1
REQUEST NO.3: In the Company's high growth scenario, it forecasts growth in Idaho's
electronics industry. Specifcally, the Company references "the projected opening of a new
production plant in the Boise MSA." Please provide a detailed explanation about this new
production plant. As part of your answer, please provide the source and perceived accuracy of
this information.
Responder:Brent Wilde
Ph 377-6053
Katherine Barnard
Intermountain Gas Company
555 S. Cole Rd.
Boise, 10 83709
Ph 208-377-6168
Brent Wilde
Record Holder:
Witness:
Response: Please see Exhibit 1, Appendix A in the IRP filing. The Church Economic Forecast
is used by the Company to derive the IRP customer growth forecast in the IRP. The reference to
"the projected opening of a new production plant in the Boise MSA" is taken from the
description of the High Growth scenario in the Church Forecast. While the High Growth
scenario does forecast growth in the Idaho electronics industry, no specific company is identified
as the developer of the new production plant. It could be any of the large players in that industry
in the Treasure Valley.
The Church Forecast is one of the pre-eminent economic forecasts produced in and for the State
of Idaho. As stated in the 2008 IRP Production Request, no other state or regional forecasts have
been as useful and practical as the Church Forecast.
REQUEST NO.4: Within IGC's forecasts, why hasn't a binary variable been tested that
captures holiday consumption, specifcally on the Sun Valley Lateral (SVL) where holiday
occupancy can signifcantly impact peak?
Responder:Lori Blattner
Ph 377-6000
Katherine Barnard
Intermountain Gas Company
555 S. Cole Rd.
Boise, 10 83709
Ph 208-377-6168
Lori Blattner
Record Holder:
Witness:
Response: Intermountain does use a binary variable to captue differences in customer usage on
weekends versus weekdays in the total company equations. However, this binar was not a
statistically significant explanatory variable in the Sun Valley Lateral equations. An additional
binar to capture holiday consumption has been considered in previous IRP work. However, it is
difficult to arive at a useful definition of a holiday. A binary for only December 25th and
January 18t has not been statistically significant. Vacation time that people take around the
holidays varies so much by person and by where the holidays fall that it has been impossible to
construct a variable that captures a significant holiday usage pattern. By using unque equations
Page 2
for each of the winter months, the models are capturing differences in the way customers use
natural gas during the holiday season of December compared with the other months of the year.
REQUEST NO.5: When designing the SVL peak day, has the Company evaluated the
combined impact of large snowfall accumulation (i.e. - snowmelt) surrounding a high HDD?
Responder:Lori Blattner
Ph. 377-6000
Katherine Barnard
Intermountain Gas Company
555 S. Cole Rd.
Boise, 10 83709
Ph 208-377-6168
Lori Blattner
Record Holder:
Witness:
Response: As discussed during the public meetings and as outlined on page 38 of the fied IRP,
Intermountain tested both Daily Snowfall Totals and Daily Snowdepth Totals in the SVL peak
day analysis.
REQUEST NO.6: Please explain how you determined that a "company-wide 50 year
probability event, which is an 81 degree day, would be appropriate to use for the design weather
modeL. "
Responder:Lori Blattner
Ph 377-6000
Katherine Barnard
Intermountain Gas Company
555 S. Cole Rd.
Boise, 10 83709
Ph 208-377-6168
Lori Blattner
Record Holder:
Witness:
Response: Design weather is an important factor in planing for a peak day event. As the fiing
document discusses on page 30, Intermountain engaged the services of Dr. Russell Qualls, Idaho
State Climatologist, to assist in developing a method to calculate the peak day design weather. In
analyzing Dr. Qualls report, the 81 degree day peak day seemed to be an appropriate balance
between carefully planing for an extreme weather event and over-planing for weather events
that had a very small probability of actually occurring. The 81 degree day represents a
temperature that could be expected to occur once every 50 years in Intermountain's service
territory. The actual data underlying the analysis shows that Intermountain did experience this
type of weather system-wide in December of 1990. Since this is weather that has actually
occurred in Intermountain's service territory, it seems reasonable to plan for this level of extreme
weather event.
REQUEST NO.7: Please explain why the Company didn't test more explanatory
independent variables (e.g. - household size, wind speed, and persons per household) to help
explain peak and non peak usage per customer.
Page 3
Responder:Lori Blattner
Ph 377-6000
Katherine Barnard
Intermountain Gas Company
555 S. Cole Rd.
Boise, 10 83709
Ph 208-377-6168
Lori Blattner
Record Holder:
Witness:
Response: Intermountain continually strives to improve the regression models by evaluating and
testing a variety of explanatory variables that seem to have potential in explaining changes in
customer usage. For this IRP, Intermountain did test a comprehensive list of explanatory
variables (as discussed at the public meeting and on pages 34 - 39 ofthe IRP filing) including:
1. Actual sixty-five heating degree-days (65HDD) weighted by customers
2. Intermountain Gas natural gas prices
3. Summer/winter seasonal natual gas prices
4. 2 and 3-year moving average natural gas price
5. Lagged Prices
6. Consumer Price Index
7. Bank Prime Loan Rate
8. 30- Year Conventional Mortgage Rate
9. Gross Domestic Product
10. Idaho Per Capita Personal Income
11. Idaho Housing Starts
12. A weekend binar variable to establish whether or not a relationship exists between
usage levels and the weekend.
13. Daily Snowfall totals
14. Daily Snowdepth totals
As part of its ongoing planning process, Intermountain will continue to evaluate potential
variables that may be helpful in explaining changes in customer usage and the ones that
prove to be statistically significant will be included.
REQUEST NO.8: Why does the Company use two diferent dependent variables to
forecast peak customer usage and non peak customer usage, "daily usage per customer" for
peak, and "monthly usage per customer" for non peak? In your response, please explain how
using diferent dependent variables impacts the results of the final forecast.
Responder:Lori Blattner
Ph 377-6000
Katherine Barnard
Intermountain Gas Company
555 S. Cole Rd.
Boise, 10 83709
Ph 208-377-6168
Lori Blattner
Record Holder:
Witness:
Page 4
Response: As discussed during the IRP public meeting, and as outlined on pages 33 though 35
of the filed IRP, Intermountain uses different dependant vai;iables to forecast peak and non-peak
usage to improve the accuracy of the usage forecasts. Because a very strong link between
weather and usage exists during the winter months, it is possible to develop statistically
significant daily usage per customer equations. The daily usage per customer equations provide
more accurate peak day forecasting than a monthly modeL. As the correlation between weather
and usage weakens in the non-peak months, the monthly usage models provide a more
statistically sound alternative for predicting usage per customer.
REQUEST NO.9: Has the Company notifed city leaders of its IRP filing, specifcally on
the laterals where work wil be completed to eliminate capacity constraints? If so, how was
notice provided? If not, why not?
Responder:
Record Holder:
Oavid Swenson
Ph 377-6118
Katherine Barnard
Intermountain Gas Company
555 S. Cole Rd.
Boise, 10 83709
Ph 208-377-6168
Oavid SwensonWitness:
Response: While city leaders, as such, are not included on the Company's IRP service list,
Intermountain is committed to notifying and including city leaders and the general public when
appropriate to do so. For example, when the Company proposed the Sun Valley Area Hook-up
Fee project, city leaders from affected municipalities were notified and public input was
considered. Also, when the Company built the Rexburg satellite LNG facility a public foru was
held to give customers and other interested paries the opportnity to paricipate in the process.
Intermountain will continue to invite the public to paricipate in its IRP process where
information relating to capacity constraints is discussed. Over the years the Company, like all
infrastructure dependent businesses, has built and/or constructed countless projects, some large
but most small, to improve or maintain service to customers and it is simply not reasonable to
contact the public for every such project. The Company is committed to excellent customer
service and wil continue to notify the public when appropriate situations transpire.
REQUEST NO. 10: The Company describes the "IGC conversion rate" as "the
anticipated percentage of conversion customers relative to new construction customers, " does
the relationship between residential new construction and conversions have a signifcant
correlation? As part of your response, please explain which years were used to determine the
"IGC conversion rate, " and provide an executable electronic copy ilustrating the correlations.
Responder:Byron Oefenbach
Ph 377-6080
Katherine Barnard
Intermountain Gas Company
555 S. Cole Rd.
Boise, 1083709
Record Holder:
Page 5
Witness:
Ph 208-377-6168
Byron Oefenbach
Response: From about 1990 through 2002, conversions generally followed new construction,
generally rising and declining in the same years, with a couple out-of-step shifts. In 2003, while
new construction began its rapid anual increases through 2005, conversions declined each of
those years. While new construction began its dramatic anual declines in 2006, conversions
remained relatively steady through 2008. Both declined significantly in 2009. Some of the
reasons for the decline in conversion numbers are: 1) it is less costly to convert homes with close
proximity to the Company's infrastructure and therefore most of the easily-convertible homes (ie
the "low-hanging fruit") have already been captured. 2) Our price advantage over electric heat
has varied somewhat over the years. The conversion rates used in the IRP for each of the five
years are 10% for the West, 14% for Central, and 11% for the East. The Residential and
Commercial Conversion Percentage data that was considered in determining the IGC Conversion
Rate can be seen on Exhibit No.1, Appendix C, of the Company's 2010 fiing. The Company
gave heavier weight to the last three years of that conversion data.
REQUEST NO. 11: When the Company estimates the number of conversions, does it
diferentiate discretionary vs. mandatory replacements? Ifso, how is this estimated? Ifnot, why
not?
Responder:Byron Oefenbach
Ph 377-6080
Katherine Barnard
Intermountain Gas Company
555 S. Cole Rd.
Boise, 10 83709
Ph 208-377-6168
Byron Oefenbach
Record Holder:
Witness:
Response: No. Intermountain has no way of discerning this information, and while cited in the
IRP write-up as a potential factor in a homeowner's decision to convert to gas heat, the Company
doesn't target either as a specific group. If a homeowner lives along Intermountain's gas lines,
and is not a customer, they are a potential conversion customer.
REQUEST NO. 12: When the Company estimates the number of conversions, does it
estimate the potential impact of the rebate conversion programs it's been evaluating over the last
several IRPs? If so, please provide the estimated annual impact of each potential rebate
conversion program if they were to be implemented. If not, please explain why this hasn't been
part of your evaluation.
Responder:
Record Holder:
Byron Oefenbach
Ph 377-6080
Katherine Barnard
Intermountain Gas Company
555 S. Cole Rd.
Boise, 10 83709
Ph 208-377-6168
Byron OefenbachWitness:
Page 6
Response: No. Intermountain's estimate of future conversions relies on recent conversion
history and our best judgment as to future conversions. The Company's Conversion History can
be seen on Exhibit No.1, Appendix C of the Company's recent filing. Since IGC has not
implemented any rebate conversion programs, they are not a factor in the historical data.
REQUEST NO. 13: Has the Company looked into financing options available for
conversions and upgrades to high effciency equipment? As part of your response, please
include whether the Company has evaluated the reasonableness of the interest rates.
Responder:Byron Oefenbach
Ph 377-6080
Katherine Barnard
Intermountain Gas Company
555 S. Cole Rd.
Boise, 10 83709
Ph 208-377-6168
Byron Oefenbach
Record Holder:
Witness:
Response: No. Intermountain has not looked into financing options for conversions and upgrades
to high-efficiency equipment, and therefore has not evaluated the reasonableness of interest rates.
Please see the answer to Request No. 14, which follows.
REQUEST NO. 14: Has the Company considered reinstituting a gas equipment financing
program, similar to the prior program through Wells Fargo Bank? If there is reservation
because of prior participation, has the Company considered a more targeted marketing effort?
Responder:Byron Oefenbach
Ph 377-6080
Katherine Barnard
Intermountain Gas Company
555 S. Cole Rd.
Boise, 10 83709
Ph 208-377-6168
Byron Oefenbach
Record Holder:
Witness:
Response: No. Intermountain has not considered reinstituting a gas equipment financing
program similar to the Wells Fargo program. As stated in the 2008 IRP Production Request, the
Wells Fargo program did not appear to provide any significant advantage over manufacturer or
dealer financing, and thus, was not significantly utilized. Apparently for that reason, Wells
Fargo decided unilaterally without consulting Intermountain, to eliminate the IGC Finance
Program. The Company has not considered a more targeted marketing effort.
REQUEST NO. 15: The Company describes the "IGC commercial multiplier rate" as
"the anticipated percentage of commercial customers relative to residential new construction
customers, " does the relationship between residential new construction and commercial growth
display a signifcant correlation? As part of your response, please explain which years were
Page 7
used to determine the IGC "commercial multiplier rate, " and provide an executable electronic
copy ilustrating the correlations.
Responder:Byron Oefenbach
Ph 377-6080
Katherine Barnard
Intermountain Gas Company
555 S. Cole Rd.
Boise, 10 83709
Ph 208-377-6168
Byron Oefenbach
Record Holder:
Witness:
Response: The historical relationship between residential new construction and commercial
growth, and the forecast commercial growth in the 2010 IRP do bear a significant and reasonable
correlation. Please see Attchment NO.2 for data relating to the Company's projection of the
multiplier rate. This fie depicts the Residential and Commercial sales history going back to
Fiscal Year 1990, and the percentages of Commercial new construction sales relative to
Residential new construction sales.
In the history, the ranges var across IGC's operating regions. As housing grew during the 90s
and early this centuy, the Commercial percentage declined as the proportion of housing grew.
That would make sense given the speculative housing boom of Fiscal 05 and 06, followed by the
rapid decline in new houses for Fiscal 07. Commercial growth is trailing cyclical household
growth by a year or so.
The 2010 IRP Forecast shows some regional differences in proportion and direction. In all three
of IGC's operating regions, the IRP forecast Commercial percentage of 12% is slightly lower
than that experienced during the three-year average shown (See Attachment No.2), but well
within the three-year historical range shown.
REQUEST NO. 16: Please provide all executable electronic analysis comparing the
Company's last four IRP conversion forecasts to actual. Please include each segment as part of
your response.
Responder:Byron Oefenbach
Ph 377-6080
Katherine Barnard
Intermountain Gas Company
555 S. Cole Rd.
Boise, 10 83709
Ph 208-377-6168
Byron Oefenbach
Record Holder:
Witness:
Response: Please see Attachment NO.1 for a comparison of forecast vs. actual conversions.
REQUEST NO. 17: Please provide all executable electronic analysis comparing the
Company's last four IRP customer forecasts to actual. Please include each segment as part of
your response.
Page 8
Responder:
Record Holder:
Witness:
Oavid Swenson
Ph 377-6118
Katherine Barnard
Intermountain Gas Company
555 S. Cole Rd.
Boise, 10 83709
Ph 208-377-6168
Oavid Swenson
Response: Please see Attachment No. 1 for a comparison of forecast vs. actual sales.
REQUEST NO. 18: Please provide all executable electronic analysis comparing the
Company's last four IRP usage forecasts to actual. Please include each segment as part of your
response.
Responder:
Record Holder:
Witness:
Lori Blattner
Ph 377-6000
Katherine Barnard
Intermountain Gas Company
555 S. Cole Rd.
Boise, 10 83709
Ph 208-377-6168
Lori Blattner
Response: Please see Attachment NO.1 for a comparison of forecast vs. actual usage. Please
note that Intermountain's method of forecasting therms sales results in a single core market
figure for November - February. Consequently, class detail is not available for these months and
only total core market figures are included in Attachment NO.1.
REQUEST NO. 19: Over the last two IRPs, the Company has stated it is evaluating the
rebate options shown below. Please explain why it hasn't implemented the rebates. As part of
your response, please provide a future time line ilustrating milestones for completing the
evaluations:
a) $30 rebate when a homeowner converts to a natural gas water heater from
another energy source, and installs a .64-or-greater energy factor (EF) gas water
heater?
b) $200 rebate when an existing customer replaces a below 90% effciency natural
gas furnace with a 90%-or-greater effciency natural gas furnace?
c) $30 rebate when an existing customer replaces a .59-or-below EF natural gas
water heater with a . 64-or-greater EF natural gas unit?
Responder:
Record Holder:
Witness:
Byron Oefenbach
Ph 377-6080
Katherine Barnard
Intermountain Gas Company
555 S. Cole Rd.
Boise, 10 83709
Ph 208-377-6168
Byron Oefenbach
Page 9
Response: Due to concerns about the impact of federal stimulus fuding on the rebate programs
Intermountain was considering, the Company delayed implementation. However, subsequent to
Commission acknowledgement of this IRP, Intermountain anticipates filing tariffs that would
allow implementation of the program outlined in the IRP as well as an application to defer
associated costs during the 18t Quarer of 2011.
REQUEST NO. 20: Given the tough economic times, has the Company evaluated the
number of existing customers replacing burned out effcient equipment (90%-or-greater furnace,
.64-or-greater water heater) with less effcient equipment? If not, why not?
Responder:Byron Oefenbach
Ph 377-6080
Katherine Barnard
Intermountain Gas Company
555 S. Cole Rd.
Boise, 10 83709
Ph 208-377-6168
Byron Oefenbach
Record Holder:
Witness:
Response: The Company does not have a formal evaluation or analysis. However, IGC's
knowledge of the installation differences between a below-90% fuace, and a +90% fuace
lead the Company to conclude that it would be as expensive to change to the lower-efficiency
furace as it would to replace the 90% furnace with another 90% furace. The customer would
have to completely retrofit the flue venting, and that cost could effectively negate the cost
savings of going to the less-expensive, lower-efficiency furnace. While the tough economic
times might prevent some customers from the initial conversion to the more-expensive 90%
furnace, Intermountain believes that customers who already have the 90% units wil replace them
with the same or higher efficiency.
REQUEST NO. 21: According to the Company's response to a prior IRP production
request, the Company sets its DSM rebate amount no higher than 30% of the incremental cost of
the upgrade. Does the Company stil set its DSM rebate amount no higher than 30% of the
incremental cost of the upgrade? As part of your response, please provide all executable
electronic work papers supporting 30% of the incremental upgrade cost as the appropriate
rebate amount. Also include an explanation of whether this includes installation costs. If
installation costs are included, how often are they evaluated?
Record Holder:
Byron Oefenbach
Ph 377-6080
Katherine Barnard
Intermountain Gas Company
555 S. Cole Rd.
Boise, 1083709
Ph 208-377-6168
Byron Oefenbach
Responder:
Witness:
Page 10
Response: Yes. Since Intermountain has not changed its view of the 30% rebate amount, there
are no work papers relative to this IRP on this topic. Many of the Company's calculations have
not changed since the 2008 IRP. Intermountain's consultant, Navigant, provided IGC with the
incremental cost of a 90% fuace over a less-efficient unit of $600. The 90% fuace saves
13%, or about 80 therms per year, a heating-cost savings of $66.00 per year. With the $200
rebate, the customer has a 6-year payback. Without the rebate, the customer realizes a 9-year
payback. The incremental costs include the cost of installation.
REQUEST NO. 22: When evaluating the 2008 IRP, Staff asked how the Company
determines its avoided cost when evaluating current and future DSM (Production Request No.
24). In response, the Company said "at a minimum, the benchmark for DSM savings would be
based on the then current WACOG of $.63583 per therm." Since storage facilties offet more
expensive winter purchases, and increase the Company's abilty to meet a design day, why
hasn't the Company included the costs of Jackson Prairie, Clay Basin, Plymouth Liquid Storage,
and Nampa LNG storage as part of the avoided cost? If storage costs are included in some tests
but not others, please explain.
Responder:Kathie Barnard
Ph 377-6168
Katherine Barnard
Intermountain Gas Company
555 S. Cole Rd.
Boise, 10 83709
Ph 208-377-6168
Kathie Barnard
Record Holder:
Witness:
Response: The Company's avoided cost calculations include both the commodity costs and
applicable costs associated with pipeline capacity and storage facilities.
REQUEST NO. 23: Why have the forecasted market penetration rates dropped compared
to the 2006 and 2009 IRPs? In your response, please explain how conditions have changed or
why IGC has been too optimistic in the past. Also, how does the Company plan to reevaluate its
initiatives to increase market penetration?
Responder:
Record Holder:
Byron Oefenbach
Ph 377-6080
Katherine Barnard
Intermountain Gas Company
555 S. Cole Rd.
Boise, 10 83709
Ph 208-377-6168
Byron OefenbachWitness:
Response: Penetration rates have dropped because of some renewed interest in ductless electric
heat pumps, and their promotion by dealers. These have shown up in a number of new homes
and some of the relatively few multi-family units constructed. This reduction in optimism
regarding IGC's market penetration rate is also a result of the weak economy. In some cases, it
wil be less expensive for developers to not include IGC's service in areas where the build-out of
Page 11
their development may be slow, or risky, and thus the Company may not get every home in
every subdivision.
REQUEST NO. 24: Has the Company analyzed the penetration rates of gas fireplaces,
stoves, and barbecues? Ifnot, why?
Responder:Byron Oefenbach
Ph 377-6080
Katherine Barnard
Intermountain Gas Company
555 S. Cole Rd.
Boise, 10 83709
Ph 208-377-6168
Byron Oefenbach
Record Holder:
Witness:
Response: No. Intermountain offers no service beyond the meter, and therefore has insufficient
data relating to these appliances.
REQUEST NO. 25: On page 36, regarding the inabilty to forecast GS price elasticity,
the Company states "in reviewing the statistics of the model, it appeared that perhaps something
was infuencing usage that was not being captured by the weather variable alone. The GS
customer class is very diverse, ranging from offce buildings all the way up to small food
processors. The statistical 'noise' created by this diversity may have made it difcult to isolate
the true response to price." Please provide an explanation of how the Company plans to
improve its modeling of the GS customer class price elasticity.
Responder:Lori Blattner
Ph 377-6000
Katherine Barnard
Intermountain Gas Company
555 S. Cole Rd.
Boise, 10 83709
Ph 208-377-6168
Lori Blattner
Record Holder:
Witness:
Response: Intermountain will continue to evaluate all potential factors that could contribute to
changes in usage per customer for all customer classes. The analysis for this IRP showed that
price was not a statistically significant factor in explaining changes in GS usage per customer. In
the short ru, natural gas demand is relatively inelastic. This means that changes in price have a
small effect on the quantity of the good demanded. In many cases, GS demand is much more
inelastic than Residential demand. A GS customer does not have many opportunities to change
consumption based upon price in the short-ru without affecting their businesses.
The Trend variable discussed in the filing was statistically significant in explaining changes in
usage per customer. This variable would have captured variables such as changes in equipment
effciencies, conservation, price, and economic conditions. Intermountain will continue to
evaluate a robust set of explanatory variables, including price, in its analysis of usage per
customer. Those that are statistically significant wil be adopted.
Page 12
REQUEST NO. 26: On pages 37 and 38, regarding the equipment malfunctions on the
SVL and IFL. Please explain why the malfunctions occurred, and why the 2003/2004 SVL and
2005/2006 IFL winter data was lost. As part of your response, please explain whether the
equipment malfunctions had anything to do with the 2005/2006 SVL winter data being too low,
and eventually being removed from the data set.
Responder:Lori Blattner
Ph 377-6000
Katherine Barnard
Intermountain Gas Company
555 S. Cole Rd.
Boise, 10 83709
Ph 208-377-6168
Lori Blattner
Record Holder:
Witness:
Response: The 2003/2004 equipment malfunction on the Sun Valley lateral was due to the
switch on the data collector. The 2005/2006 equipment malfuction on the Idaho Falls lateral
was due to the battery pack on the data collector. Because of the uneliability of the data
collectors, and as the technology became available, Intermountain changed the method of data
collection on both of these laterals. The meters on both the Sun Valley and Idaho Falls laterals
now have telemetry equipment which sends the usage data to Intermountain's Gas Control
Deparment on a daily basis. That information is saved and backed up on Intermountain's
servers.
The 2005/2006 Sun Valley data problem was not related to the earlier switch problem on the Sun
Valley lateral data collector. Since data was collected during the 2005/2006 winter, it was
assumed that the data collector was working correctly. It was impossible to go back after the fact
and discover the source of the problem. The telemetry equipment also reduces the risk of this
type of problem occuring in the futue.
REQUEST NO. 27: On page 63, regarding the biofuel test facilities, the Company states
"Idaho is one of the nation's largest dairy producing states which make it a prime location for
biogas production." It then goes on to say, "These test facilities have proven the abilty to
produce acceptable pure natural gas, but currently do not transftr any product into
Intermountain facilities." Does the Company plan to integrate biofuel facilities into its existing
resource portfolio? Ifso, please explain. Ifnot, why?
Responder:Brent Wilde
Ph 377-6053
Katherine Barnard
Intermountain Gas Company
555 S. Cole Rd.
Boise, 10 83709
Ph 208-377-6168
Brent Wilde
Record Holder:
Witness:
Response: Intermountain had a fully executed contract to purchase all of the biomethane from a
dairy anaerobic-digester in the Magic Valley. However, due in part to the process needed to
Page 13
bring the methane up to pipeline "quality", the producer encountered financial difficulties and
closed operations before IGC was able to accept any gas. Potential operations the Company is
aware of around the state currently use biogas to generate heat and electricity onsite. That biogas
does not go through the "clean-up" process necessary to bring it up to the safety and purity
standards the Company requires so it would not be permitted to enter IGC's system. Although
iac is not aware of any specific projects seeking to sell biogas to Intermountain at this time, the
Company wil continue to work with potential biogas producers and wil look for other
opportties that could benefit our customers and provide an outlet for such "green" gas.
REQUEST NO. 28: On page 70, regarding the Company's encouragement for customers
to consider high effciency equipment replacements, the Company states "IGC customer
communications, mass-media advertising, website, and marketing information all encourage
customers to consider high-effciency equipment when making their equipment purchases or
upgrade decisions." Please describe how the Company estimates the impact of this advertising
(e.g. - hold out sample, customer surveys).
Responder:Byron Oefenbach
Ph 377-6080
Katherine Barnard
Intermountain Gas Company
555 S. Cole Rd.
Boise, 10 83709
Ph 208-377.6168
Byron Oefenbach
Record Holder:
Witness:
Response: Intermountain has not performed any sampling or customer sureys to measure the
impact of its advertising. The Company's hope is that customers are motivated to consider high-
effciency equipment through the messaging. As discussed at the public meeting, the Company
continues to see a decline in per customer usage and therefore believes that the messaging is
having a positive response.
REQUEST NO. 29: On page 70, regarding the hard copy distribution of the Energy
Conservation Brochure, the Company states the "hard copy is also available at all of our
customer contact offces throughout the IGC service territory." Please provide an explanation
of where these customer contact offces are located throughout the service territory and how
often they are utilzed.
Responder:
Record Holder:
Byron Oefenbach
Ph 377-6080
Katherine Barnard
Intermountain Gas Company
555 S. Cole Rd.
Boise, 10 83709
Ph 208-377-6168
Byron OefenbachWitness:
Response: At the time the IRP fiing was initially drafted (Winter 2010), Intermountain did have
customer access at its offces for distribution of a hard-copy of the conservation brochure. Since
Page 14
then, IGC's offices have closed to the public. IGC does stil mail the brochure to every core-
market customer as a bil-stuffer each fall and the information is available on the Company's
web-site.
REQUEST NO. 30: On page 75, regarding the 2007 "Audit Results, " do the table's
blank cells under "Dead Meters" and "Gas loss occurrences due to line damage, " indicate zero
occurrences? If this doesn't indicate zero occurrences, why weren't they available?
Responder:Lori Blattner
Ph 377-6000
Katherine Barnard
Intermountain Gas Company
555 S. Cole Rd.
Boise, 1083709
Ph 208-377-6168
Lori Blattner
Record Holder:
Witness:
Response: On page 75 of the IRP filing, some data for 2007 was inadvertently left out of the
"Audit Results" table. The 2007 number for "Dead Meters" was 513. "Gas loss occurences
due to line damage" was 656 as listed in the "Audit Results" table of the filing. However,
"Pressure Errors" should be 11 rather than the blan listed in the table.
REQUEST NO. 31: On page 76, regarding non-energy benefits in the total resource cost
(TRC) test, the Company states "Non-energy benefits may include, for example, water savings
from low-jow showerheads and higher effciency clothes washers or reductions in maintenance
costs." Has the company evaluated the impact of DSM on decreasing uncollectible expenses?
Responder:Kathie Barnard
Ph 377-6168
Katherine Barnard
Intermountain Gas Company
555 S. Cole Rd.
Boise, 10 83709
Ph 208-377-6168
Kathie Barnard
Record Holder:
Witness:
Response: The Company did consider reduced uncollectible expenses as a non-energy benefit,
however because the Company's write-offs are relatively low, the impact on the overall cost
effectiveness of any measure is quite small.
REQUEST NO. 32: On page 77, regarding core-market DSM, the Company states "the
IPUC ordered IGC not to deploy any Core-market DSM programs." Please provide the Order
number and specifc Order language. If this language is not specifcally used by the IPUC in an
Order, please explain why this is the Company's interpretation.
Responder:Byron Oefenbach
Ph 377-6080
Katherine Barnard
Intermountain Gas Company
Record Holder:
Page 15
Witness:
555 S. Cole Rd.
Boise, 10 83709
Ph 208-377-6168
Byron Oefenbach
Response: The specific reference is found in Case No. INT-G-96-4 (Please see attached Case
exhibit, Commission findings on page 3.)
Specifically, the order states: "It is now apparent that some demand-side management programs
which have or would have been deemed prudent only a short time ago, are, because of these
changes (note: energy effcient practices, technology, and related standards) no longer
supportable. We encourage the Company to review its other DSM programs to determine their
necessity, cost/benefit ratios and effectiveness. "
At that time the Company evaluated its programs and has continued to evaluate potential
programs through its IRP planing process. In light ofthe above referenced Order, the Company
continued to encourage energy efficiency through its customer education efforts, rather than
utility sponsored rebate programs.
REQUEST NO. 33: On page 79, regarding the potential implementation of additional
programs, the Company states "water heater conversions, and the furnace/water heater
upgrades would be deployed in a pilot program on the Idaho Falls lateral in Calendar 2011."
Please explain:
a) How the Company wil encourage pilot program participation and evaluate the
results prior to full implementation (e.g. - target marketing, internal processes).
b) How many customers would be included in the pilot program (e.g. - selected
samples, entire lateral).
c) Whether the Company has considered deploying the pilot across its service
territory or in other areas (e.g. -SVL)
Responder:Byron Oefenbach
Ph 377-6080
Katherine Barnard
Intermountain Gas Company
555 S. Cole Rd.
Boise, 10 83709
Ph 208-377-6168
Byron Oefenbach
Record Holder:
Witness:
Response: a) Intermountain wil inform customers of the pilot program via bill stuffers, and
through the HVAC dealer network on the Idaho Falls LateraL. The Company will monitor the
effectiveness of the program by comparing the actual participation with initial estimates.
Intermountain wil also monitor participant gas consumption.
b) The entire lateral would be included in the pilot program.
c) Yes. The Company is curently evaluating system-wide deployment.
Page 16
REQUEST NO. 34: When the Company evaluates the "Low Usage Reports, " comparing
biled consumption against the same customers' historical usage patterns, what diference
causes the account to be "flagged" and a courtesy phone call made? In your response, please
include an explanation of what historical data is used, and how the Company determined the
diference threshold to initate a courtesy phone call?
Responder:Lori Blattner
Ph 377-6000
Katherine Barnard
Intermountain Gas Company
555 S. Cole Rd.
Boise, 10 83709
Ph 208-377-6168
Lori Blattner
Record Holder:
Witness:
Response: The Company's "Low Usage Reports" show the current year consumption compared
to the same period from the previous year. The reports also show the biled consumption for the
previous 2 months. The percent variance between the two years is listed and sorted from greatest
to least. Accounts with a consumption variance between 80% and 99% less than the previous
year are contacted in an effort to ascertain the reason for the reduced consumption. This
threshold has been established through tracking and monitoring the percent of dead meters found
as a result of using the report. Based on this analysis, the greatest percentage of dead meters
existed within the range now flagged.
REQUEST NO. 35: On page 90, regarding the various agencies the Company continues
to partner with regarding conservation information outreach, please provide the name of these
agencies and the Company's role in the partnership.
Responder:Byron Oefenbach
Ph 377-6080
Katherine Barnard
Intermountain Gas Company
555 Cole Rd.
Boise, 10 83709
Ph 208-377-6168
Byron Oefenbach
Record Holder:
Witness:
Response: Agencies the Company partners with include:
1. Governors' Office of Energy Resources - Working with them on energy consumption
data requests for ARR-funded upgrades for school districts in Idaho, Rebuild Idaho.
2. Integrated Design Lab - Member of ongoing working group.
3. Communty Action Agencies/Low Income Weatherization - Paricipates in outreach and
provider seminars.
4. Energy Star utility parner
Page 17
INTERMOUNTAIN GAS COMPANY
Case No. INT.G.10-4
Responses to Staffs FIRST PRODUCTION REQUEST
Production Request No. 16
Comparison of last four IRP Conversion Forecasts to Actual
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
2004 IRP Forecast 1,724 2,092 2,077 2,364 2,005
RS1 978 1,198 1,185 1,348 1,146
RS2 625 766 757 862 732
GS 121 128 135 154 127
2006 IRP Forecast 1,690 1,595 1,685 1,617 1,623
RS1 1,070 1,004 1,072 1,027 1,035
RS2 503 473 505 483 465
GS 117 118 108 107 123
2008 IRP Forecast 713 705 696 694 695
RS1 542 542 542 543 543
RS2 111 105 97 93 94
GS 60 58 57 58 58
2010 IRP Forecast 586 650 678 742 849
RS1 470 497 523 578 667
RS2 70 94 91 98 111
GS 46 59 64 66 71
Actual conversions 1,461 888 822 875 518
RS1 934 581 552 620 346
RS2 414 231 179 180 107
GS 113 76 91 75 65
Production Request No. 17
Comparison of last four IRP Customer Forecasts (Sales) to Actual
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
2004 IRP Forecast 9,443 10,782 10,307 10,939 8,874
RS1 1,056 1,285 1,253 1,427 1,200
RS2 7,747 8,778 8,293 8,689 6,975
GS 640 719 761 823 699
2006 IRP Forecast 15,495 14,720 13,855 13,331 14,504
RS1 1,102 1,038 1,108 1,061 1,068
RS2 13,298 12,602 11,766 11,289 12,342
GS 1,095 1,080 981 981 1,094
2008 IRP Forecast 10,000 10,000 10,000 10,000 10,000
RS1 542 542 542 543 543
RS2 8,625 8,625 8,625 8,624 8,624
GS 833 833 833 833 833
2010 IRP Forecast 6,100 6,700 7,000 7,700 8,800
RS1 470 497 523 578 667
RS2 5,130 5,563 5,777 6,402 7,363
GS 500 640 700 720 770
Actual sales 16,369 15,377 10,395 5,804 3,689
RS1 1,202 731 853 736 429
RS2 14,140 13,516 8,354 4,259 2,956
GS 1,027 1,130 1,188 809 304
INTERMOUNTAIN GAS COMPANY
Case No. INT.G.10-4
Responses to Staffs FIRST PRODUCTION REQUEST
Production Request No. 18
Comparison of last four IRP Usaqe Forecasts to Actual 1000's of Dkthennsl
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
2004 IRP FORECAST
NormalWx 30,145 31,286 32,505 33,865 34,889
Design Wx 35,873 37,546 39,287 41,207 42,650
2006 IRP FORECAST
Normal Wx 32,853 34,700 36,146 37,668 39,216
Design Wx 39,864 42,122 43,864 45,715 47,591
2008 IRP FORECAST
NormalWx 32,859 33,884 34,904 36,125 36,858
Design Wx 38,594 39,796 40,994 42,352 43,302
2010 IRP FORECAST
Normal Wx 33,521 34,045 34,480 35,182 35,870
Design Wx 39,185 39,823 40,352 41,194 42,007
Actual Usage 26,877 28,939 28,929 32,714 30,456
INTERMOUNTAIN GAS COMPANY
Case No. INT-G-10-4
Responses to StaWs FIRST PRODUCTION REQUEST
RESIDENTIAL AND
COMMERCIAL
WESTERN CENTRAL EASTERN
REGION DIVISION REGION COMM SALES AS A % OF RES SALES
YEAR SALES SALES SALES TOTAL WEST CENTRAL EAST COMPANY
F90 3,604 728 1,027 5,359 8.23%21.54%19.14%1186%
F91 4,202 673 1,334 6,209 6.19%20.83%15,40%9.51%
F92 5,596 765 1,561 7,922 4.79%17.33%13.28%7,49%
F93 7,023 903 1,749 9,675 5.17%14.02%13.50%7.37%
F94 7,844 1,072 1,954 10,870 5.63%15.89%9.96%7.33%
F95 5,639 1,139 1,688 8,466 7.21%18.15%11.57%9,42%
F96 6,703 1,146 2,190 10,039 6.99%16.82%13.83%9,48%
F97 6,700 1,195 2,259 10,154 9.03%14,46%11.72%10.24%
F98 7,576 1,319 2,840 11,735 7.78%12.54%13.06%9.54%
F99 7,790 1,272 3,046 12,108 8.15%18.77%10.92%9.87%
FOO 7,756 1,227 2,542 11,525 8.14%20.29%9.95%9.72%
F01 7,256 1,081 1,836 10,173 6.91%19,45%15.25%9.56%
F02 7,403 1,289 2,274 10,966 6.70%10.36%12.02%8.19%
F03 8,241 1,346 2,800 12,387 5.24%7.17%9.03%6.28%
F04 9,194 1,259 2,914 13,367 5.62%10.54%10.34%7.06%
F05 11,404 1,612 3,353 16,369 5.54%8.77%9.75%6.69%
F06 10,698 1,605 3,074 15,377 7.14%6.50%11.58%7.93%
F07 6,262 1,294 2,839 10,395 13.13%12.03%12.79%12.90%
F08 3,689 885 1,986 6,560 13.68%15.69%16.00%14.65%
F09 2,038 572 1,079 3,689 6.04%15.32%11.58%8.98%
15YR ACTUAL
TOTAL 108,349 18,241 36,720 163,310 7,46%13.12%11.72%9.00%
10YR ACTUAL
TOTAL 73,941 12,170 24,697 110,808 7.28%11.72%11.50%8.67%
3YRACTUAL
TOTAL 11,989 2,751 5,904 20,644 12.03%13.87%13.63%12.72%
RESIDENTIAL AND COMMERCIAL COMMERCIAL NEW CONSTRUCTION
NEW CONSTRUCTION AS A PERCENTAGE OF
RESIDENTIAL NEW CONSTRUCTION
WESTERN CENTRAL EASTERN WESTERN CENTRAL EASTERN
REGION DIVISION REGION REGION DIVISION REGION
YEAR SALES SALES SALES TOTAL YEAR SALES SALES SALES TOTAL
F90 2,385 449 350 3,184 F90 7.53%23.01%25.90%11.29%
F91 2,358 357 471 3,186 F91 5.46%24.39%24.60%9.82%
F92 3,510 423 575 4,508 F92 4.74%22.25%21.05%8.05%
F93 4,854 496 606 5,956 F93 3.92%16,43%21.93%6,47%
F94 5,779 700 811 7,290 F94 5,42%16,47%12.17%7,11%
F95 4,075 736 638 5,449 F95 7.21%20.66%20.38%10.28%
F96 5,171 730 1,065 6,966 F96 7.15%18.31%19.53%9.98%
F97 5,210 759 1,008 6,977 F97 9.20%16.77%18.31%11.22%
F98 6,262 800 1,334 8,396 F98 7.17%15.77%17.64%9,49%
F99 6,572 808 1,638 9,018 F99 8,40%21.14%15.84%10.73%
FOO 6,562 822 1,462 8,846 FOO 7.54%23.05%12.90%9.68%
F01 6,547 801 1,252 8,600 F01 6.87%19.91%18.00%9,48%
F02 6,474 933 1,523 8,930 F02 6.52%10.28%15,47%8.33%
F03 7,357 1,020 2,109 10,486 F03 5.18%6.69%10.02%6.26%
F04 8,562 967 2,472 12,001 F04 5.21%6.73%10.16%6.32%
F05 10,789 1,276 2,846 14,911 F05 5,46%9,43%9,42%6.53%
F06 10,284 1,415 2,790 14,489 F06 7.10%5.99%11.69%7.85%
F07 5,920 1,117 2,536 9,573 F07 13.30%11.59%12.71%12.94%
F08 3,386 688 1,631 5,685 F08 14.06%18.62%17.25%15.50%
F09 1,828 457 886 3,171 F09 5.79%13.12%10.75%8.15%
15YRACTUAL 15YR ACTUAL
TOTAL 94,979 13,329 25,190 133,498 7.35%13.29%13,48%9.03%
10YRACTUAL 10YR ACTUAL
TOTAL 67,689 9,496 19,507 96,692 7.15%11.32%12.26%8.54%
3YR ACTUAL 3YRACTUAL
TOTAL 11,114 2,262 5,053 18,429 12.22%13.95%13.78%12.85%
INTERMOUNTAIN GAS COMPANY
Case No. INT -Q.l0.4
Responses to Staffs FIRST PRODUCTION REQUEST
CONVERSIONS ONLY
RESIDENTIAL COMMERCIAL
WESTERN CENTRAL EASTERN WESTERN CENTRAL EASTERN
REGION DIVISION REGION CO.REGION DIVISION REGION CO.
YEAR SALES SALES SALES TOTAL YEAR SALES SALES SALES TOTAL
F90 1,112 234 584 1,930 F90 107 45 93 245
F91 1,721 270 778 2,769 F91 123 46 85 254
F92 1,989 306 903 3,198 F92 97 36 83 216
F93 2,007 366 1,044 3,417 F93 162 41 99 302
F94 1,944 324 -1,054 3,322 F94 121 48 89 258
F95 1,459 354 983 2,796 F95 105 49 67 221
F96 1,439 364 1,033 2,836 F96 93 52 92 237
F97 1,374 394 1,170 2,938 F97 116 42 81 239
F98 1,186 481 1,378 3,045 F98 128 38 128 294
F99 1,140 404 1,332 2,876 F99 78 60 76 214
FOO 1,070 352 1,017 2,439 FOO 124 53 63 240
FOl 661 237 532 1,430 FOl 48 43 52 143
F02 860 322 711 1,893 F02 69 34 40 143
F03 836 296 651 1,783 F03 48 26 40 114
F04 567 233 397 1,197 F04 65 59 45 169
F05 575 319 454 1,348 F05 40 20 53 113
F06 383 172 257 812 F06 31 18 27 76
F07 310 154 267 731 F07 32 23 36 91
F08 294 185 321 800 F08 29 12 34 75
F09 194 92 167 453 F09 16 23 26 65
15YR ACTUAL 15YRACTUAL
TOTAL 12,348 4,359 10,670 27,377 TOTAL 1,022 552 860 2,434
10YRACTUAL 10YR ACTUAL
TOTAL 5,750 2,362 4,774 12,886 TOTAL 502 311 416 1,229
3YRACTUAL 3YR ACTUAL
TOTAL 798 431 755 1,984 TOTAL 77 58 96 231
RESIDENTIAL AND COMMERCIAL RESIDENTIAL AND COMMERCIAL
CONVERSIONS CONVERSIONS
PERCENT OF TOTAL SALES
WESTERN CENTRAL EASTERN WESTERN CENTRAL EASTERN
REGION DIVISION REGION REGION DIVISION REGION
YEAR SALES SALES SALES TOTAL YEAR SALES SALES SALES TOTAL
F90 1,219 279 677 2,175 F90 33.82%38.32%65.92%40.59%
F91 1,844 316 863 3,023 F91 43.88%46.95%64.69%48.69%
F92 2,086 342 986 3,414 F92 37.28%44.71%6316%43.10%
F93 2,169 407 1,143 3,719 F93 30.88%45.07%65.35%38.44%
F94 2,065 372 1,143 3,580 F94 26.33%34.70%5850%32.93%
F95 1,564 403 1,050 3,017 F95 27.74%35.38%62.20%35.64%
F96 1,532 416 1,125 3,073 F96 22.86%36.30%51.37%30.61%
F97 1,490 436 1,251 3,177 F97 22.24%36.49%55.38%31.29%
F98 1,314 519 1,506 3,339 F98 17.34%39.35%53.03%28.45%
F99 1,218 464 1,408 3,090 F99 15.64%36.48%46.22%25.52%
FOO 1,194 405 1,080 2,679 FOO 15.39%33.01%42.49%23.25%
F01 709 280 584 1,573 F01 9.77%25.90%31.81%15.46%
F02 929 356 751 2,036 F02 12.55%27.62%33.03%18.57%
F03 884 322 691 1,897 F03 10.73%23.92%24.68%15.31%
F04 632 292 442 1,366 F04 6.87%23.19%15.17%10.22%
F05 615 339 507 1,461 F05 5.39%21.03%15.12%8.93%
F06 414 190 284 888 F06 3.87%11.84%9.24%5.77%
F07 342 177 303 822 F07 5.46%13.68%10.67%7.91%
F08 323 197 355 875 F08 8.76%22.26%17.88%13.34%
F09 210 115 193 518 F09 10.30%20.10%17.89%14.04%
15YRACTUAL 15YRAC1UAL
TOTAL 15,225 5,168 12,480 32,873 14.05%28.33%33.99%20.13%
10YR ACTUAL 10YRACTUAL
TOTAL 7,260 3,022 6,405 16,687 9.82%24.83%25.93%15.06%
3YR AC1UAL 3YRACTUAL
TOTAL 875 489 851 2,215 7.30%17.78%14.41%10.73%