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Home My WebLink AboutSection V Natural Gas.pdfIdaho Public Utilities Commission Page 45 NATURAL GAS Consumption decreased and prices remained low in FY20211 In Idaho, natural gas is supplied to customers by Avista Corporation, Dominion Energy, and Intermountain Gas Company. Idaho is fortunate to be located between two large natural gas producing basins: The Rocky Mountain Basin (Rockies) and the Western Canadian Sedimentary Basin (WCSB). These basins are connected through the Williams Northwest Pipeline and TransCanada’s GTN pipelines allowing the natural gas utility companies serving Idaho to take advantage of capacity and of pricing at both basins. Individual Idaho Gas Utility Profiles FY 2021 Statistics Total Residential Commercial Industrial Transportation2 Avista Corporation Customers 89,128 79,740 9,307 73 8 % of Total 100% 89.47% 10.44% .08% .01% Therms (millions) 155.25 56.62 31.64 2.31 64.68 % of Total 100% 36.47% 20.38% 1.49% 41.66% Revenue (millions) $66.10 $45.65 $18.81 $1.04 $0.59 % of Total 100% 69.07% 28.46% 1.57% 0.89% Dominion Questar Gas Customers 2,405 2,142 261 0 2 % of Total 100% 89.06% 10.85% - .08% Therms (millions) 0.27 0.15 0.11 - 0.01 % of Total 100% 56.53% 38.67% - 4.80% Revenue (millions) $2.01 $1.26 $0.71 - $0.04 % of Total 100% 62.82% 35.17% - 2.01% Intermountain Gas Customers 392,399 357,599 34,661 29 110 % of Total 100% 91.13% 8.83% 0.01% 0.03% Therms (millions) 773.18 263.33 129.72 11.27 368.86 % of Total 100% 34.06% 16.78% 1.46% 47.71% Revenue (millions) $248.61 $165.26 $69.93 $3.84 $9.58 % of Total 100% 66.47% 28.13% 1.55% 3.85% 1 The Idaho Public Utilities Commission’s fiscal year is July 1st through June 30th. 2 Transportation is nonutility owned gas transported for another party under contractual agreement. Idaho Public Utilities Commission Page 46 NATURAL GAS Consumption In 2020, overall consumption of natural gas in Idaho decreased approximately 1 percent. Residential customers consumed roughly 3 percent less and commercial customers consumed roughly 7 percent less natural gas than the previous year. Industrial consumption decreased slightly and consumption of gas for electric generation increased over 4 percent. Use of natural gas as a vehicle fuel increased slightly over 10 percent but is less than 1 percent of overall consumption. Idaho Public Utilities Commission Page 47 NATURAL GAS Demand The Northwest Gas Association (NWGA) forecasts demand for natural gas in the Northwest to grow at a rate of approximately 1.0% per year.3 Forecast demand growth in the residential and commercial sectors is slightly less, while industrial demand growth has dropped by half (from 0.5 to 0.2 percent/yr.). Demand for natural gas to generate electricity is forecast to grow slightly, mostly when coal-fired generation plants are retired in the region. Several factors could impact demand for natural gas: • Retirement of coal fired generation and increased use for generating electricity. • LNG and petrochemical production and exports. • Energy policies, regulations, and legislation. Prices Over the last decade, the commodity price of natural gas has continued to decline (see Figure 1). The Northwest Power and Conservation Council (NPCC) forecasts show that commodity prices are expected to remain below $5/Dth through 2050 (see Figure 2) at hubs where the Pacific Northwest sources its gas. FIGURE 1. Idaho Historical Natural Gas Price 3 Northwest Gas Association 2020 Pacific Northwest Gas Market Outlook Idaho Public Utilities Commission Page 48 FIGURE 2. Pacific Northwest Natural Gas Price Forecast Comparisons Production There was approximately 108 Mcf of natural gas produced by the Snake River Oil and Gas Group in Idaho in 2020.4 In years prior to 2019, gas was produced by Alta Mesa/High Mesa. Snake River Oil and Gas Group purchased Alta Mesa/High Mesa wells and production facilities in December 2019. Production in Idaho was shut-in March through December 2020. Snake River Oil and Gas Group operations include: • Processing facility located at Willow Creek near Payette, Idaho. • Six wells producing natural gas, condensate, oil, and other liquids in the Willow Creek drainage. • Six shut-in wells and are no longer producing. 4 Source EIA Natural Gas Summary https://www.eia.gov/dnav/ng/ng_sum_lsum_dcu_SID_a.htm Idaho Public Utilities Commission Page 49 Renewable Natural Gas (RNG) RNG is pipeline-quality biomethane produced from biogas. Biogas is the mixture of gases produced by the breakdown of organic matter in the absence of oxygen (anaerobically), primarily consisting of methane and carbon dioxide. It can be produced from raw materials such as agricultural waste, manure, municipal waste, plant material, sewage, or food waste. It is interchangeable with natural gas and compatible with the U.S. natural gas infrastructure. In the past, RNG projects in the state consumed gas produced in their operations or used the gas to generate electricity. Recently, a number of biomass operations in the state have pursued development of capabilities to produce sufficient volumes of RNG for export onto pipeline infrastructure. On a per therm basis, RNG is more expensive to produce than traditional natural gas. Given current State and Federal Government policies and programs some RNG projects have the potential to achieve profitability. Natural gas utility companies in the state are facilitating the transportation of RNG and the growth of the RNG industry. Producers contract to use the utility’s distribution system to move RNG from the producers to their end use customers. The utilities are monitoring RNG production activity and government policies as they continue to look for opportunities to participate in the development of this resource. Summary Idaho residential, commercial, industrial, and transportation users of natural gas realized benefits from low natural gas prices and plentiful supply, this fiscal year. Lower than average natural gas inventories are contributing to price volatility. It is anticipated that domestic natural gas production will outpace LNG exports in the second calendar quarter of 2022 reducing volatility and putting downward pressure on prices. -by Kevin Keyt, IPUC Staff Analyst Idaho Public Utilities Commission Page 50 NATURAL GAS NATURAL GAS CASES Avista: AVU-G-20-01 IRP Extension AVU-G-20-02 Clearwater Agreement AVU-G-20-03 COVID-19 Accounting AVU-G-20-04 PGA AVU-G-20-05 FCA AVU-G-20-06 Depreciation and Amortization AVU-G-20-07 Federal Income Tax AVU-G-20-08 DSM Prudency AVU-G-21-01 General Rate Case AVU-G-21-02 IRP AVU-G-21-03 EE Ryder Adjustment AVU-G-21-04 PGA AVU-G-21-05 AFUDC AVU-G-21-06 FCA Intermountain Gas: INT-G-20-01 General Service Provisions INT-G-20-02 FERC Form 2 INT-G-20-03 RNG Access INT-G-20-04 Commercial EE Program INT-G-20-05 PGA INT-G-20-06 DSM Prudency INT-G-21-01 Depreciation and Amortization INT-G-21-02 Customer Payments INT-G-21-03 DSM Prudency INT-G-21-04 PGA Dominion: No cases