20160928notice_of_filing_order_no_33606.pdf

Office of the Secretary
Service Date
September 28, 2016
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE FILING OF
A VISTA CORPORATION OBA A VISTA
UTILITIES' 2014 NATURAL GAS
INTEGRATED RESOURCE PLAN
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)
) CASE NO. AVU-G-16-03
)
) NOTICE OF FILING
)
) NOTICE OF
) MODIFIED PROCEDURE
)
) ORDER NO. 33606
On August 31, 2016, A vista Corporation dba A vista Utilities filed its 2016 natural gas
Integrated Resource Plan (IRP). The Company files a natural gas IRP every two years to
describe the Company's plans to meet its customers' future natural gas needs. The IRP must
discuss the subjects required by Commission Order Nos. 25342, 27024 and 27098, and Section
303(b )(3) of the Public Utility Regulatory Policies Act (PURPA), 15 U.S.C. § 3202.1 With this
Order, the Commission provides notice of the IRP, sets deadlines by which interested persons
may submit written comments on the IRP, and orders that the case be processed under the
Commission's rules of Modified Procedure.
NOTICE OF IRP FILING
YOU ARE HEREBY NOTIFIED that Avista's natural gas IRP, including appendices, is
about 800 pages long. The IRP contains an Executive Summary, and chapters on Demand
Forecasts; Demand-Side Resources; Supply-Side Resources; Integrated Resource Portfolio;
Alternate Scenarios, Portfolios, and Stochastic Analysis; Distribution Planning; and the
Company's Action Plan. The following information comes from the IRP's Executive Summary.
Further detail may be obtained in the IRP's remaining chapters and appendices.
YOU ARE FURTHER NOTIFIED that Avista says its IRP "identifies a strategic natural
gas resource portfolio to meet customer demand requirements over the next 20 years." IRP at 1.
The IRP takes input from the Company's Technical Advisory Committee (TAC), which includes
Commission Staff, peer utilities, customers, and other stakeholders. Id. For the IRP, the
Company discussed topics with the TAC, including "natural gas demand forecasts, price
forecasts, demand-side management (DSM), supply-side resources, modeling tools, and
1 Per Commission Order No. 32233, Avista must file its IRP by August 31 of every even-numbered year.
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forecasts, demand-side management (DSM), supply-side resources, modeling tools, and
distribution planning." Id. According to the Company, the end result is "a resource portfolio
designed to serve our customers' natural gas needs while balancing cost and risk." Id.
YOU ARE FURTHER NOTIFIED that the Company discusses the IRP planning
environment, noting that -as in its 2014 IRP process -there is "more certainty about the
availability of economically extractable natural gas" compared to past planning cycles. Id.
However, not all future uses of the resource are known, and there remain questions about
liquefied natural gas (LNG) exports, natural gas vehicles, and power generation. Id. In the IRP,
the Company addresses these uncertainties by "evaluating multiple scenarios over a range of
possible outcomes." Id.
YOU ARE FURTHER NOTIFEID that the Company discusses its demand forecasts by
defining eight distinct demand areas in its service territory, then recognizing and accounting for
factors influencing natural gas prices and demand, including "weather, customer growth and use
per customer," as well as "population, employment, age and income demographics, construction
levels, conservation technology, new uses (e.g. natural gas vehicles), and use-per-customer
trends," supply, infrastructure, regulation, and industry innovations. Id. at 1-2. The Company
states it forecasts a 0.5% annual growth rate (net of projected DSM program savings), with
average day, system-wide core demand increasing from an average of 94,164 dekatherms per
day (Dth/day) in 2016 to 102,840 Dth/day in 2035. The Company forecasts that coincidental
peak day, system-wide core demand will increase from a peak of 361,901 Dth/day in 2016 to
387,742 Dth/day in 2035, for a 0.8% average annual growth rate in peak day requirements (net
of projected DSM savings). Id. at 3.
YOU ARE FURTHER NOTIFIED that the Company presents its natural gas pnce
forecasts. The Company states that gas prices are a "significant component of the total cost of a
resource option," thus affecting the "avoided cost threshold for determining cost-effectiveness of
conservation measures" and how customers consume natural gas. Id. at 5. According to the
Company, information about costs and volumes of produced shale gas reflect that "production
costs will remain low for quite some time ... even with increased incremental demand for LNG
exports, transportation fuels, and increased industrial consumption." Id. The Company states
that it developed high and low price forecasts to "represent a reasonable range of pricing
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possibilities" for its IRP analysis, providing variation needed to address the uncertainty of future
prices. Id
YOU ARE FURTHER NOTIFIED that the Company discusses existing and potential
natural gas supply resources. The Company states it has a "diversified portfolio of natural gas
supply resources," including contracts to buy gas from several supply basins, stored gas, and
firm capacity rights on six pipelines. Id at 6. In addition, the Company considers "incremental
pipeline transportation, storage options, distribution enhancements, and various forms of LNG
storage or service" for potential resource additions. Id The Company states that, starting with
its 2018 IRP, it "intends to include conservation as a potential resource addition." Id However,
according to Avista, due to current avoided costs, "a limited number of DSM programs are cost­
effective" in its service territories. Id at 7.
YOU ARE FURTHER NOTIFIED that Avista discusses projected resource needs. The
Company states that average and expected case demand scenarios show it will not be resource
deficient in the 20-year planning horizon. Id The Company anticipates that, "where a resource
deficiency is [ expected to be] nearly present," it will have "time to carefully monitor, plan and
take action on potential resource additions." Id at 8-9.
YOU ARE FURTHER NOTIFIED that the Company states that uncertainty still exists,
even with "the planning, analysis, and conclusions reached in [its) IRP." Id at 12. Thus the
Company states it will diligently monitor issues and challenges, including: (1) demand scenarios
that will "provide[ ] insight into how quickly resource needs can change if demand varies from
the expected case"; (2) price issues arising from increased supply due to the "industrial
renaissance" of shale gas and drilling technology (see id at 1 ); and (3) the effects on demand and
price from LNG exports and the development of new pipeline resources. Id at 13.
YOU ARE FURTHER NOTIFIED that Avista's IRP includes a 2017-2018 Action Plan,
outlining "activities for study, development and preparation for the 2018 IRP." According to the
Company, the purpose of its Action Plan is "to position Avista to provide the best cost/risk
resource portfolio and to support and improve IRP planning." Id Key ongoing components of
the Action Plan include:
• Monitor actual demand for accelerated growth [to] address resource
deficiencies arising from exposure to "flat demand" risk. This will
include providing Commission Staff with IRP demand forecast-to-
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actual variance analysis on customer growth and use per customer at
least bi-annually.
• Continue to monitor supply resource trends including the availability
and price of natural gas to the region, LNG exports, methanol plants,
supply and market dynamics and pipeline and storage infrastructure
availability.
• Monitor availability of resource options and assess new resource lead­
time requirements relative to resource need to preserve flexibility.
• Meet regularly with Commission Staff to provide information on
market activities and significant changes in assumptions and/or status
of A vista activities related to the IRP or natural gas procurement
practices.
• Appropriate management of existing resources including optimizing
underutilized resources to help reduce costs to customers.
Id. at 13-14.
YOU ARE FURTHER NOTIFIED that the Company's IRP and appendices have been
filed with the Commission and are available for public inspection during regular business hours
at the Commission offices. The IRP and appendices are also available on the Commission's
website at w,vw.puc.idaho.gov. Click on the "File Room" tab at the top of the page, then click
on "Natural Gas Cases," and then the case number as shown on the front of this document.
YOU ARE FURTHER NOTIFIED that all proceedings in this case will be held pursuant
to the Commission's jurisdiction under Title 61 of the Idaho Code and specifically Idaho Code
§§ 61-118, 61-119, 61-502, and 61-503. The Commission may enter any final Order consistent
with its authority under Title 61.
YOU ARE FURTHER NOTIFIED that all proceedings in this matter will be conducted
pursuant to the Commission's Rules of Procedure, IDAPA 31.01.01.000 et seq., including the
Modified Procedure rules referenced below.
NOTICE OF MODIFIED PROCEDURE
YOU ARE FURTHER NOTIFIED that the Commission has determined that the public
interest may not require a formal hearing in this matter and will proceed under Modified
Procedure (that is, persons may present their views through written comments) pursuant to Rules
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ORDER NO. 33606 4
201 through 204 of the Idaho Public Utilities Commission's Rules of Procedure, ID APA
31.01.01.201 through .204. The Commission notes that Modified Procedure and written
comments have proven to be an effective means for obtaining public input and participation.
YOU ARE FURTHER NOTIFIED that any person desiring to state a position on this
Application may file a written comment in support or opposition with the Commission no later
than February 2, 2017. The comment must contain a statement of reasons supporting the
comment. In addition, persons desiring a hearing must specifically request a hearing in their
written comments and why they believe that Modified Procedure should not be used to process
this case. Written comments concerning the IRP shall be mailed to the Commission and the
Company at the addresses reflected below:
Commission Secretary
Idaho Public Utilities Commission
PO Box 83720
Boise, ID 83 720-007 4
Street Address for Express Mail:
472 W. Washington Street
Boise, ID 83702-5918
Linda Gervais
Manager, Regulatory Policy
State and Federal Regulation
A vista Corporation
1411 E. Mission A venue
Spokane, WA 99220-3727
E-Mail: linda. gervais<a;avistacorp.com
David J. Meyer
Vice President and Chief Counsel of
Regulatory and Governmental Affairs
A vista Corporation
1411 E. Mission A venue
Spokane, WA 99220-3727
E-Mail: [e-mail]
The comments should contain the case caption and case number shown on the first page of this
document. Persons desiring to submit comments via e-mail may do so by accessing the
Commission's home page located at www.puc.idaho.gov. Click the "Consumers" tab, then click
the "Utility Case Comment or Question Form," and complete the form using the case number as
it appears on the front of this document. These comments must also be sent to the Company at
the e-mail addresses listed above.
YOU ARE FURTHER NOTIFIED that if no written comments or protests are received
within the time limit set, the Commission will consider this matter on its merits and enter its
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ORDER NO. 33606 5
Order without a formal hearing. If written comments are received within the time limit set, the
Commission will consider them and, in its discretion, may set the same for formal hearing.
ORDER
IT IS HEREBY ORDERED that this case be processed by Modified Procedure. Persons
desiring to comment on the Company's natural gas IRP shall file written comments with the
Commission no later than February 2, 2017.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this
day of September 2016.
ATTEST:
1.Tean D. Jewe
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NOTICE OF FILING
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ERIC ANDERSON, COMMISSIONER
ORDER NO. 33606 6