20200309INT to Staff Supplemental Responses.pdf

Preston N. Carter, ISB No. 8462
Givens Pursley LLP
601 W. Bannock St.
Boise,Idaho 83702
Telephone: [phone]
Facsimile: [phone]
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Attorneys for lntermountain Gas Company
BEFORE THE IDAIIO PTIBLIC UTILITES COMMISSION
IN TIIE MATTER OF INTERMOUNTAIN
GAS COMPAIIY'S 2019.2023 INTEGRATED
RESOT'RCE PLAII
CASE NO. INT-C,-I9.07
SUPPLEMENTAL RESPONSE OF
INTERMOTINTAIN GAS
COMPAI\Y TO FIRST
PRODUCTION REQUEST OF THE
COMMISSION STAFF
Intermountain Gas Company, in response to informal follow-up questions related to the
First Production Request of the Commission Staff to lntermountain Gas Company dated
January 17,2020, submits the following information:
REQUEST NO.21: Please explain how and when the Company will address envelope
improvements opportunities. Exhibit 4 at22.
REQUEST NO. 23: The CPA report suggests there is greater potential in existing home
upgrades/retrofits than new homes. Please explain how the Company will address existing home
opportunities and determine appropriate funding for both existing and new home measures.
Exhibit 4 at29,30.
SUPPLEMENTAL RESPONSE TO REQUEST NOS.21 AIrtD 23:
Intermountain's CPA stqted that envelope improvements can provide signiJicant savings
opportunities. The top measures identified by the CPA were insulation, new construction and air
SUPPLEMENTAL RESPONSE OF IGC TO FIRST PRODUCTION REQUEST
OF TIIE COMMISSION STAFF - Page I
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sealing. Intermountain's current new construction Wole Home rebate provides an incentive for
builders to upgrade the entire building envelope of a home. The Company plans to continue to
offer a new construction Wole Home rebate. Tofurther capitalize on savings in the nq,y
construction market, Intermountain is considering the addition of a multi-family new
construction rebate.
Intermountain is currently in the process of updating its Avoided Cost calculation, as
well as contractingfor an EM&V study that will include an impact evaluation of the Wole
Home program. Intermountain will waitfor the completion of these two projects before moving
forward with any revisions to its residential program offerings. Once these two projects are
completed, Intermountain will begin to look at existing home envelope measures suggested by
the CPA.
Addressing envelope measures in the existing home market will require additional
research and planning. In discussions with other utilities, Intermountain has been warned about
out of state contractors that may take advantage of a new program and try to scam customers.
Other utilities have shared examples of situations where out-of-state contractors come into a
market because of a new utility program. This seems to be especially true of new insulation
programs. The contractors will sell insulation to the customers, citing the utilily's program, and
sometimes even representing that they are associated with the utility. Wen the utility goes back
to perform quality control on the work, the contractor caused damage to the residence, and/or
didn't install the right insulation, and/or the quality of the work is sub-par. By the time the work
is audited, the disreputable contractor is long gone, leaving the customer and the utility with no
recourse-
SUPPLEMENTAL RESPONSE OF IGC TO FIRST PRODUCTION REQI]EST
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Because of this type of anecdotal evidence, Intermountain believes an additional layer of
overhead will be necessary to administer envelope measuresfor existing homes and to make sure
customers are protected. Because the overhead costs could be significant, Intermountain plans to
attempt to quantifu the additional costs a residential existing home envelope program would
require. These additional costs would be layered on to the program costs for envelope measures
and specific cost ffictiveness tests will be calculatedfor the proposed envelope measure based
on the measure specific program costs.
Following the completion of the Avoided Cost review and the EM&Y study,
Intermountain will discuss plans for all proposed changes to its Residential Energt Efficiency
program, including potential envelope measures, with its Stal(eholder group. After incorporating
suggestions from the group, Intermountain plans tofile a revised program later this year.
Record Holder:Lori Blattner.77-6015
Sponsor/Preparer: KathyWold. 208-377-6128
Location:555 S Cole Rd.TD 83707
SUPPLEMENTAL RESPONSE OF IGC TO FIRST PRODUCTION REQUEST
OF TI{E COMMISSION STAFF - Page 3
REQUEST NO. 27: On pages 129 and,130 of its 2019 IRP, the Company describes a
new compressor station that it proposes in order to increase capacity on the Sun Valley Lateral
Please provide the following workpapers in electronic format with links enabled:
a. Workpapers showing how the Company determined the costs for the proposed
compressor station.
b. Workpapers showing how costs for each of the alternatives studied by the Company
were estimated.
SIIPPLEMENTAL RESPONSE TO REQIIEST NO.27:
a. Theflow capacity of only the new Shoshone Compressor Station, reviewed as an
isolated unit separate from the entire lateral, is currently being designed at
approximately 260,000 to 300,000 therms per day. Thisflow is significantly
higher than the IW stated capacity increase of the SVL after the Shoshone
_ compressor is installed, as stated in original response to request number 27 in
section A. The IkP stated capacity is restricted due to other limitations on the
SYL system, not related to the Shoshone compressor. Thefuture projected
capacity constraint on the SVL is the currently installed Jerome Compressor
Station (JCS), which has limited horsepower to meet afuture peakhourlyflow at
estimated suction and discharge pressures. The JCS was intentionally designed
to be installed in two phases with a second compressor pad and plumbing already
in placefor the second unit. The second phase of the JCS lateral enhancement is
outside the IRP's S-year planning horizon and could change depending onfuture
growth shape and system dynamics.
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The Intermountoin Gas planning processfor AOI's typically begins with a design
limitation that is monitored during growth analysis modeling. Once the
predetermined tigger is metfor that design limitation the AOI is considered to have
reached capacity. At this point engineering analysis of the AOI determines the most
feasible and best cost solution enhancement. Once selected, the enhancement option
is placed into the correctfuture planning and construction budget years.
b. The pipeline loop in the original response to request number 27 in section B was
supposed to state a 7.7 mile, 12" high pressure pipeline. At the same cost per mile
the estimated cost is between $8.5-12.3 million. The calculated capacity increase is
the same.
The tab labeled "NPV" on the Excelfile labeled "PR I 27 SYL NPV Analysis"
included with this filing shows the net present value of both the Shoshone Compressor
Station at $4.4million and the 7.7 mile, 12" high pressure pipeline loop at
$l0.tmiltion. Operation and maintenance estimatesfor both alternatives are listed
on the tabs labeled "Transmission O&M per Mile" and "Compressor O&M Est".
These costs were inflated by 2% each year over the 2)-year life of the analysis. For
the pipeline loop, the Company determined the upfront cost by using the median value
of $1.35 million per mile. Additionally, the Company used the real discount rate of
4.68ok, whichwas calculated in the Company's ovoided cost model presented in
Exhibit No. 5.
Blattner- 208-377-601s
Sponsor/Preparer: RussNishikawa.208-377-6038
Location:555 S Cole Rd.rD 83707
SUPPLEMENTAL RESPONSE OF IGC TO FIRST PRODUCTION REQUEST
OF TIIE COMMISSION STAFF - Page 5
Record
REQUEST NO. 29: In its description of the proposed compressor station for the Sun
Valley Lateral (IRP pages 129-130), the Company describes states that "...long sections of the
pipeline are installed in rock that impose construction obstacles."
a. Please provide more information about these obstacles.
b. Please explain and provide documentation showing why and how they are a
consideration when deciding the best option to increase capacity of the existing Sun
Valley Lateral.
SUPPLEMENTAL RESPONSE TO REQUEST NO.29:
a. The Company is not proposing to install new pipeline loops on sections of the SVL
that carrently run through long sections of rock. Therefore, there is no need to
invest in rock drill studies at this time.
Record I.nri Flleffner )oR-111-6015
Sponsor/Preparer: RussNishikawa.208-377-6038
Location: 555 S Cole Rd-D 83707
SUPPLEMENTAL RESPONSE OF IGC TO FIRST PRODUCTION REQT]EST
OF TIIE COMMISSION STAFF - Page 6
REQUEST NO. 30: ln its description of the proposed compressor station for the Sun
Valley Lateral (IRP pages 129-130), the Company states that the second station will increase
capacitybeyond the remaining five-year growth outlook of this IRP. When does the Company
estimate that this second station will no longer be adequate to serve the needs of its customers on
the Sun Valley Lateral?
SUPPLEMENTAL RESPONSE TO REQUEST NO.30:
a. Theflow capacity of only the new Shoshone Compressor Station, reviewed as an isolated
unit separatefrom the entire lateral, is currently being designed at approximately
260,000 to 300,000 therms per day. Using an unsubstantiated annual load growth of
2.26% into perpetuity, and assuming no change in the location of anyfuture load growth
past the S-year planning horizon, the Shoshone Compressor Station would theoretically
reach capacity near 2037.
Record Holder: Lori BlatErer. 208-377-6015
Sponsor/Preparer: RussNishikawa"208-377-6038
Location:555 S Cole Rd.lD 81707
Dated: March 9,2020
GTVENS PURSLEY LLP
,/ --"-- -. 2-a----
Preston N. Carter
Attorneys for Intermountain Gas Company
SUPPLEMENTAL RESPONSE OF IGC TO FIRST PRODUCTION REQI.]EST
OF TIIE COMMISSION STAFF - PageT
CERTTFICATE OF SERVICE
- I certify that o_n March :L2020, atrue and comect copy of INTERMOLJNTAIN GAScoMPANY's SUPPLEMENTAL RESPoNsE To FIRST prtopucuoN REeuesr or urpCoMMISSION STAFF was served upon all parties of rpcord in this proceeain!iL th. runn .indicated below:
Commf,ssion Staff
Diane Hanian, Commission Secretary
Idaho Public Utilities Commission
I l33l W. Chinden Blvd., Bldg. g, Suire 20t-A
Boise,ID 83714
[e-mail]. gov
John R. Hammond, Jr.
Deputy Attomey General
Idalro Public Utilities Commission
I l33l W. Chinden Blvd., Bldg. g, Suite 201-A
Boise, ID 83714
[e-mail]. gov
Idatro Conservation lrague
Benjamin J. Otto
MattNykiel
7l0N.6n Stcet
Boise, ID 83702
botto@idahoconservati on.ore
mnykiel@ idahoconservation.org
Lori A.
Electronic mail
Electronic Mail
Electronic lVlail
SUPPLEMENTAL RESPONSE OF IGC TO FIRST PRODUCTION REQUESTOF THE COMMISSION STAFF - page 8
lntermountaln Gas Company
Sun Valley lateral
Net PresentValue
Net PrEsentValue Year 0 Year 1 Year 2
Shoshone Compressor Station
7.7 mile Pipeline Loop
(s4,449,698.55) s
(s10,058,148.97) s
(4,ooo,ooo)s (43,s69) s l$,4r'.Ll
(10,395,000) s (8,865)s (9,042)
Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9s (4s,330) ss (9,223) s
(46,236) s
(9,/S08) S
(47,151) s
(9,596) s
(48,104) s
(9,788) s
(49,066) s
(9,983) s
(50,047) s
(10,183) s
(51,0481
(10,387)
Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Year 16s (s2,069) ss (10,s94) s
(s3,111)s (s4,173) ss (11,022) s
(55,256) s
(11,243) s
(56,362) s
(11,468) s
(57,489) s
(11,597) s
(58,639)
(11,931)(10,806)
Year 17 Year 18 Year 19 Year 20
S (s9,811) Ss (12,170) s
(61,008) s (62,228)
112,4L31 s (12,661)
5 163,4721s (12,91s)