130719_INTGasIRP.pdf

Idaho Public Utilities Commission
Case No. INT-G-13-03, Order No. 32855
July 19, 2013
Contact: Gene Fadness [phone], 890-2712

Commission accepts gas utility’s long-range plan

State regulators praised southern Idaho’s natural gas utility for finding
nontraditional sources of gas supply to keep price volatility for its customers at a
minimum.

The Idaho Public Utilities Commission has accepted Intermountain Gas Company’s
Integrated Resource Plan (IRP), which must be filed every two years. The plan
outlines future structural improvements that need to be made to get gas to
customers and identifies the sources from which the company anticipates getting its
natural gas supply.

Traditional sources of natural gas for Intermountain Gas are from large gas-
producing regions in Alberta and northeastern British Columbia and from the
Rockies production basins in Wyoming, Colorado and Utah. Intermountain’s
traditional supply forecasts predict growing supplies because of shale gas
production.

However, the utility has also been acquiring natural gas from nontraditional sources
such as fuel oil, coal, wood chips and propane to reduce natural gas use by the its
industrial customers. The company has also been using portable liquefied natural
gas equipment in the Rexburg area to meet growing demand.

Other nontraditional sources of supply include distribution system capacity
upgrades to improve the ability to flow gas during periods of peak demand and
market “hedges,” the practice of buying natural gas on the market when prices are
low and then storing it for later use when prices are higher.

“These activities help guard against rate increases that might otherwise occur
should natural gas prices rise to unusually high levels,” the commission said. “We
appreciate that the company continues to look for opportunities to diversify and
protect its customers from market volatility.”

The commission said Intermountain Gas needs to make greater efforts to get more
input from the public and key stakeholders as it prepares its Integrated Resource
Plan. Intermountain conducted two public meetings in Idaho Falls and Boise. While
mayors, council members and city leaders were invited to the Idaho Falls meetings,
the company did not appear to notify city officials of its Boise meeting. Commission
staff said involving local officials in its western Idaho region is important particularly
because the company plans to add a nearly 8-mile Orchard-Farmway pipeline loop
to its Canyon County lateral.

Except for some regions, Intermountain Gas is experiencing a reduced rate of
growth due to the economic downturn. Because of that, the utility expects to meet
its peak-day loads over the next five years without significant capital additions.

Two years ago, the company’s IRP showed capacity deficits on its Idaho Falls and
Sun Valley laterals. Since then, Intermountain Gas has taken steps to address
those deficits resulting in no projected capacity deficits in its territory even though
it anticipates annual load growth of about 1 percent.

To meet projected deficits along the Idaho Falls lateral, which serves cities from
Pocatello to St. Anthony, the company completed a 16-inch pipeline loop around
Idaho Falls. That project, completed last winter, increased the distribution capacity
from 810,000 therms to 990,000 therms. Seventeen percent of the company’s
customers are served by the approximate 104-mile Idaho Falls Lateral.

The 2010 plan also showed projected deficits on the 70-mile Sun Valley Lateral. In
response, the company installed a compressor station to boost pressure. The
compressor increased the lateral’s capacity from 175,000 therms to 204,000
therms. The Sun Valley Lateral serves 4 percent of Intermountain Gas’ customers.

The two other major laterals that extend from the main Williams Northwest pipeline
that follows the Snake River throughout southern Idaho are the Canyon County and
State Street Laterals. The 16-mile State Street lateral serves customers from
Caldwell along State Street into northwest Boise. Intermountain reports that
demand on the State Street lateral is increasing and will need monitoring but is not
expected to meet capacity in the next five years. Fourteen percent of
Intermountain Gas customers are served by the State Street Lateral.

Intermountain Gas serves about 285,000 residential customers and 30,400
commercial customers in its southern Idaho territory.

A copy of Intermountain Gas’ Integrated Resource Plan and other documents
related to this case are available on the commission’s Web site at
www.puc.idaho.gov. Click on “Open Cases” under the “Natural Gas” heading and
scroll down to Case No. INT-G-13-03.

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