20220303INT to Staff 1-11.pdf

RESPONSE OF INTERMOUNTAIN GAS COMPANY TO FIRST
PRODUCTION REQUEST OF THE COMMISSION STAFF – PAGE 1
Preston N. Carter, ISB No. 8462
Givens Pursley LLP
601 W. Bannock St.
Boise, Idaho 83702
Telephone: [phone]
Facsimile: [phone]
[e-mail]
Attorneys for Intermountain Gas Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF INTERMOUNTAIN
GAS COMPANY’S 2021-2026 INTEGRATED
RESOURCE PLAN
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CASE NO. INT-G-21-06

RESPONSE OF INTERMOUNTAIN
GAS COMPANY TO FIRST
PRODUCTION REQUEST OF THE
COMMISSION STAFF
Intermountain Gas Company (“Intermountain”, “Company”), in response to the First
Production Request of the Idaho Public Utilities Commission (“Commission”) Staff to
Intermountain Gas Company dated February 10, 2022, submits the information below. The
requested documents have been provided on the Company’s Sharepoint site under the terms of
the Protective Agreement.
REQUEST NO. 1: Please describe the Company's efforts and results achieved in
seeking diverse stakeholder participation in the Intermountain Gas Resource Advisory
Committee ("IGRAC"). See Order No. 34742.
RESPONSE TO REQUEST NO. 1:
Intermountain sent invitations to participate in the IGRAC to many of the same
stakeholders that previously participated on the advisory committee, including representatives
from the Idaho Office of Energy and Mineral Resources, Northwest Pipeline, Regional
Economic Development for Eastern Idaho, Snake River Economic Development Alliance,
Western Alliance for Economic Development, Southern Idaho Economic Development, City of
Caldwell, City of Nampa, and Pocatello/Chubbuck Chamber of Commerce. To this list of
invitations, Intermountain also invited representatives from the City of Idaho Falls, the City of
Meridian, the Idaho Department of Commerce, Business Plus, and Bannock Development
RECEIVED
2022 MAR 03 AM 10:56
IDAHO PUBLIC
UTILITIES COMMISSION
RESPONSE OF INTERMOUNTAIN GAS COMPANY TO FIRST
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Corporation. Additionally, several staff members from the Idaho Public Utilities Commission
joined the advisory committee. In total, the IGRAC had 27 members during the 2021 IRP
process, an increase of 10 members from the previous IRP. Exhibit No. 1, Section A, page 2,
shows the complete list of members of the IGRAC.
As described in its IRP, Intermountain held three virtual meetings between March and
July of 2021. Intermountain is pleased to report that these meetings were generally well
attended, with 19, 9, and 17 IGRAC members attending the three different meetings. For those
members of the advisory committee that were unable to attend a particular meeting, an email
containing the meeting materials was sent out.
Intermountain believes the IGRAC represents a diverse mix of stakeholders representing
communities across Intermountain’s service territory with varied backgrounds in regulation,
economic development, and business.

Record Holder: Lori Blattner, 208-377-6015
Sponsor/Preparer: Jacob Darrington, 208-377-6041
Location: 555 S Cole Rd, Boise, ID 83707

RESPONSE OF INTERMOUNTAIN GAS COMPANY TO FIRST
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REQUEST NO. 2: Please describe the Company's work to validate the accuracy of peak
estimates from DNV GL's Customer Management Module using the peak consumption
information from the Company's AMI meters. See Order No. 34742.

RESPONSE TO REQUEST NO. 2:
The Company compared DNV GL's Customer Management Module (CMM) predicted
usage for a peak weather event in January 2017 to a sample of Advanced Metering Infrastructure
(AMI) hourly meter data available. To compare the usage predictions between CMM and the
AMI data, the Company determined the heating degree day (HDD) for the peak weather event by
taking an average of the hourly temperature and then entered the HDD into CMM/Synergi to
determine the predicted peak hourly usage and then converted the hourly usage into a daily usage
by using an hourly peaking factor of 0.8 (used 20 hours instead of 24 hours to account for
peaking) to compare the usage prediction from CMM to the daily usage determined by summing
the hourly usage from the AMI meter data. The AMI and CMM data sample compared had both
residential and commercial meter data and the Company found that the AMI meter actual daily
usage and the CMM predicted daily usage were within 12.3% for the sample, which the
Company considered to be reasonable given best practices for model verification. As discussed
on page 79 of the IRP, currently the AMI system is approximately 60% complete and is planned
to reach 90% coverage by the end of 2022. The AMI system currently has limitations on the
application of gas billing factors which makes the data challenging to use on a widescale
application. As AMI becomes fully deployed and processes are developed to apply gas billing
factors to the data, the Company will be able to utilize the gathered data to further refine its
usage per customer validation process.

Record Holder: Lori Blattner, 208-377-6015
Sponsor/Preparer: Kathleen Campbell, 509-734-4541
Location: 555 S Cole Rd, Boise, ID 83707

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REQUEST NO. 3: Please respond to the following regarding the Company's Demand
Side Management("DSM") avoided costs:
a. Please explain how the Company will determine a distribution cost component to be
used in its DSM avoided cost calculation.
b. Please provide workpapers with formulas enabled showing how the effects of the
Company's DSM programs were included in the Company's load growth projections.

RESPONSE TO REQUEST NO. 3:
a. The Company is finalizing its proposal for including distribution costs in the avoided
cost model in preparation for the Avoided Cost Subcommittee meeting scheduled for March 9,
2022. The proposed methodology will be based on results contained within this IRP.
b. The Company’s load growth projections and DSM forecast are on the Company’s
Sharepoint site and can be found in the file “Exhibit 7 – Load Demand Curves”. Projected Daily
DSM load reduction can be found in Sheet1 in the table from cells B23 to I31. These values are
referenced in columns S to X in all six of the Normal and Design scenario tabs to decrement core
customer demand.

Record Holder: Lori Blattner, 208-377-6015
Sponsor/Preparer: Landon Barber, 208-377-6199
Location: 555 S Cole Rd, Boise, ID 83707

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REQUEST NO. 4: On page 103 of the Integrated Resource Plan ("IRP"), the Company
discusses the State Street enhancement selection of the State Street Phase II Uprate alternative to
meet 2026 growth projections. The Company mentions increased Operations & Maintenance
("O&M") costs associated with uprating the 12-inch line. Please provide a detailed description of
the O&M costs the Company expects to increase including supporting workpapers with formulas
enabled.

RESPONSE TO REQUEST NO. 4:
This statement was made based on the assumption that the Transmission Integrity
Management Program (TIMP) Mega Rule requirements issued by the Pipeline and Hazardous
Materials Safety Administration could affect this project. After further evaluating the State Street
Phase II Uprate project scope, the Company does not expect this project to fall under the TIMP
Mega Rule requirements since it will operate under 30% of the specific maximum yield stress
(SMYS). The Company does expect transmission O&M cost to increase in the future due to the
TIMP Mega Rule requirements on pipelines operating over 30% SMYS but at this time has not
determined the cost increases expected. Understanding the long-term O&M cost of this project
further justifies our selection to complete the State Street Phase II uprate.

Record Holder: Lori Blattner, 208-377-6015
Sponsor/Preparer: Kathleen Campbell, 509-734-4541
Location: 555 S Cole Rd, Boise, ID 83707

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REQUEST NO. 5: On page 100 of the IRP, the Company discusses the Ustick Phase III
enhancement selection to meet 2026 growth projections. Please provide a detailed status of the
Ustick Phase II project and updated cost and schedule projections for the Ustick Phase III project
including supporting workpapers with formulas enabled.

RESPONSE TO REQUEST NO. 5:

Ustick Phase II construction was completed and placed in service in December 2021.
Ustick Phase III is still planned for 2022 design work and 2023 construction. The 2022 design
work for Ustick Phase III has not been started. The Company does not have an updated cost for
this project; the estimated net present value cost is still $8,613,402.92.

Record Holder: Lori Blattner, 208-377-6015
Sponsor/Preparer: Kathleen Campbell, 509-734-4541
Location: 555 S Cole Rd, Boise, ID 83707

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REQUEST NO. 6: On pages 114 and 115 of the IRP, the Company discusses the Idaho
Falls lateral. The Company selected compression as the preferred method to meet growth
predictions.
a. Please provide current cost estimates for the Idaho Falls Lateral Compressor Station.
b. In the 2019 IRP, the Company also stated that a second LNG storage tank at the
Rexburg LNG facility would be added in 2022. Please explain if the Company still intends to
add a second storage tank. If not, why not. If so, please provide a detailed description of the LNG
tank addition including need, expected costs, and project timing.
c. Please explain the long-term need and use case for the Rexburg LNG facility.

RESPONSE TO REQUEST NO. 6:

a. IGC does not have an updated cost for this project; the estimated net present value cost
is still $15,807,602.46. The Company plans to start doing design work for this project in late
2022.
b. The Company no longer plans to install a second LNG storage tank at the Rexburg
LNG facility in this IRP evaluation since the Idaho Falls Lateral Compressor station satisfies the
five-year growth predictions assessed in this IRP and was the lowest cost alternative.
c. After the Idaho Falls Lateral Compressor station is operational the Rexburg LNG
facility will be used as an emergency backup source to the Idaho Falls lateral. Having an
emergency backup source on this lateral will allow the Company to have operational flexibility
and additional reliability on the lateral. For example, the Company could use the Rexburg LNG
facility for a compressor outage/repair or isolating sections of the line for repairs and or integrity
management activities. Additionally, the Rexburg LNG facility may be needed as a peak shaving
facility to meet growth needs in the future.

Record Holder: Lori Blattner, 208-377-6015
Sponsor/Preparer: Kathleen Campbell, 509-734-4541
Location: 555 S Cole Rd, Boise, ID 83707

RESPONSE OF INTERMOUNTAIN GAS COMPANY TO FIRST
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REQUEST NO. 7: On page 108 of the IRP, the Company discusses a 12-inch South
Boise Loop project to meet 2026 growth predictions. Please provide a detailed status of the
project and updated cost and schedule projections including workpapers with formulas enabled.

RESPONSE TO REQUEST NO. 7:

The 12-inch South Boise Loop project is currently in design and is planned to be
completed in 2022. We expect to bid this project soon and start construction in late Spring
(May). Currently the Company does not have an updated cost for this project; the estimated net
present value cost of this project is still $10,321,364.12. The Company will not have an updated
cost until contractor bids are received and a contractor is selected for the project.

Record Holder: Lori Blattner, 208-377-6015
Sponsor/Preparer: Kathleen Campbell, 509-734-4541
Location: 555 S Cole Rd, Boise, ID 83707

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REQUEST NO. 8: On page 111 of the IRP, the Company describes selection of the
Shoshone Compressor Station in the 2019 IRP to meet 2026 growth predictions. Please provide a
detailed status of the Shoshone Compressor Station and updated cost and schedule projections
for the project including workpapers with formulas enabled.

RESPONSE TO REQUEST NO. 8:

The Shoshone compressor project is designed and is planned to start construction in July
2022 when the compressor station will be delivered onsite. Intermountain expects to have the
compressor online and operational for winter 2022 demand. Currently the Company does not
have an updated cost for this project; costs to date have come in as expected to the cost estimate.
The estimated net present value cost for this project is still $5,807,602.46.

Record Holder: Lori Blattner, 208-377-6015
Sponsor/Preparer: Kathleen Campbell, 509-734-4541
Location: 555 S Cole Rd, Boise, ID 83707

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REQUEST NO. 9: The Company is using SENDOUT® to develop and analyze a variety
of resource portfolios and to determine the type, size, and timing of resources best matched to
forecast requirements. IRP at 140. Please describe modeling alternatives the Company has
evaluated, if any, to model optimization.

RESPONSE TO REQUEST NO. 9:
SENDOUT® has been the industry standard for natural gas optimization models for
many years. Over the last couple of years, Energy Exemplar, who is the owner of the industry
standard for electric optimization models (ARORA) has begun developing a natural gas model
called PLEXOS. Intermountain is aware of this model and understands it will be used by Avista,
Northwest Natural Gas, and its sister company Cascade Natural Gas in tandem with SENDOUT
in their 2023 IRPs. Intermountain will look at PLEXOS and determine which modeling software
to use in the next IRP process.

Record Holder: Lori Blattner, 208-377-6015
Sponsor/Preparer: Brian Robertson, 509-734-4546
Location: 555 S Cole Rd, Boise, ID 83707

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REQUEST NO. 10: Please provide workpapers with formulas enabled used to generate
the Regional Conversion Rate Table on page 28 of the IRP.

RESPONSE TO REQUEST NO. 10:
The workpaper can be found on the Company’s Sharepoint site in the file “Exhibit 2 –
Residential Conversion Rate”. The 2021 percentages for each region can be found in cells AL60
through AN60. The 2019 percentages can be calculated by taking the averages of 2015-2017 for
each region in columns AL through AN, rows 53 through 55. The Company notes that the
Eastern and Western regions are mislabeled in Table 3 on page 28 of the IRP. The Western
Region should be 5% and 7%, while the Eastern Region should be 15% and 19%.

Record Holder: Lori Blattner, 208-377-6015
Sponsor/Preparer: Brian Robertson, 509-734-4546
Location: 555 S Cole Rd, Boise, ID 83707

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REQUEST NO. 11: Please explain how the Company validates its ARIMA model for
commercial customer projections. Provide any applicable spreadsheets with formulas enabled.

RESPONSE TO REQUEST NO. 11:
The ARIMA models go through vigorous tests to determine the validity of the model.
The first step of the process was to test multiple models while leaving out the most recent two
years of data and then comparing the residuals from the forecast to actuals. Intermountain tested
models using data back to 2007 and 2010 and then developed multiple models using the different
historical data; linear, ARIMA with household data, and ARIMA with employment data. The
model that performed the best was the ARIMA model including employment data and using
historical data back to 2010.
To determine the model that performed the best, the following process was performed if a
Durbin-Watson test showed autocorrelation in the linear model’s residuals: The ARIMA model
used a combination of unit root tests, minimization of the Akaike Information Criterion (AIC)
and Maximum Likelihood Estimation (MLE) to obtain an ARIMA model. The ARIMA model
then determined if the data needed to be differenced through KPSS testing. The Autoregressive,
Moving Average, and differencing terms were chosen by minimizing the AICs through a
stepwise search to traverse the model space to select the best model with smallest AIC.
After the best models were determined, the models were run again including the most
recent two years of data, which resulted in the final forecast used in the IRP. The validation
process of reducing the AIC discussed above is completed within the statistical software called
R. The process is repeated until the best model is found. Since this model is new, the results of
the forecast will be compared to actuals to see how well the model forecasted customer counts.
Adjustments will be made to the model, if needed, for the next IRP.

Record Holder: Lori Blattner, 208-377-6015
Sponsor/Preparer: Brian Robertson, 509-734-4546
Location: 555 S Cole Rd, Boise, ID 83707

RESPONSE OF INTERMOUNTAIN GAS COMPANY TO FIRST
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DATED: March 3, 2022

GIVENS PURSLEY LLP

Preston N. Carter
Attorneys for Intermountain Gas Company
RESPONSE OF INTERMOUNTAIN GAS COMPANY TO FIRST
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CERTIFICATE OF SERVICE
I certify that on March 3, 2022, a true and correct copy of INTERMOUNTAIN GAS
COMPANY’S RESPONSE TO FIRST PRODUCTION REQUEST OF THE COMMISSION
STAFF was served upon all parties of record in this proceeding via electronic mail as indicated
below:

Commission Staff Via Electronic Mail
Jan Noriyuki, Commission Secretary
Idaho Public Utilities Commission
11331 W. Chinden Blvd., Bldg. 8, Suite 201-A
Boise, ID 83714

[e-mail]
Riley Newton
Deputy Attorney General
Idaho Public Utilities Commission
11331 W. Chinden Blvd., Bldg. 8, Suite 201-A
Boise, ID 83714
[e-mail]

Jacob Darrington