200605192006 IRP.pdf

EXECUTIVE OFFICES
INTERMOUNTAIN GAS COMPANY
555 SOUTH COLE ROAD. P.O. BOX 7608 . BOISE, IDAHO 83707 . [phone] . FAX: [phone]
. ,. ,
May 18 , 2006
Jean Jewell
Commission Secretary
Idaho Public Utilities Commission
472 West Washington St.
P. O. Box 83720
Boise, ID 83720-0074
RE:Intermountain Gas Company s 2006 Integrated Resource Plan
Case No. INT-06-
Dear Ms. Jewell:
Attached for filing with the Idaho Public Utilities Commission are the original and seven
copies of Intermountain Gas Company s 2006 Integrated Resource Plan.
If there are any questions regarding the attached , please contact me at [phone].
very
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Director
Gas Supply and Regulatory Affairs
MPM/bif
Attachments
W. C. Glynn
E. Book
P. Powell
M. Rich
INTERMOUNTAIN GAS COMPANY
INTEGRATED RESOURCE PLAN
2007 - 2011
MAY 2006
INT -06-
Idaho Public Utiliti"", r"---.....""" \.IUIII/ i1ISSJonOffice of the Secretary
RECEIVED
MAY 1- 8 2006
Boise, Idaho
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
Table of Contents
EXECUTIVE SU M MARY.... 0""""""""""""""" 0.......... 0........ 0....... 0........................0....""""'" 0...............0.....
DEMAN D FORECAST OVERVIEW................ 0'" 0"""" 0................ 0.........0............0.0........................... 0...... 0.. 8
RESIDENTIAL AND COMMERCIAL CUSTOMER GROWTH FORECAST ............................................... 9
HEATING DEGREE DAYS AND DESIGN WEATHER
.............................................................................
USAGE PER CUSTOMER UNDER DESIGN DEGREE DAYS.................................................................
IN DUSTRIAL FORECAST................
.................... ....... ................. ............................................
0...... ..... 0...
LOAD DU RATION CU RVES ...................0.0.0............ 0""""'"
............................................................
..... 0..
TRADITIONAL SUPPLY AND DELIVERABILITY RESOURCES
............................................................
NON-TRADITIONAL SUPPLY RESOURCES ........0""""""""""""""'.0""""...........................0........0......
DISTRIBUTION SYSTEM MODELING.................................
..................................................
0.0........." 0....
THE EFFICIENT AND DIRECT USE OF NATURAL GAS.......................................................................o
RESOU RCE OPTIM IZA TION "".0........ 0............. 0.0............. 0.........0"""""",.0,.0....0....0..0.....0........ 0.0... 0" 0......
COM PARA TIVE ANALYSIS..... 0.0......0..", 0"""""""................................0.0..0......................""""""'" 0.......
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
Table of Exhibits
Exhibit No.
Appendix A: John Church Economic Forecast
Appendix B: Intermountain Gas Market Penetration rates
Appendix C: Intermountain Gas Market Conversion Rates
Appendix D: New Customer Forecast, Adjustments & Total Customer Forecast
Exhibit No.
Appendix A:
Appendix B:
Appendix C:
Appendix D:
Appendix E:
Regression Data - Therms and Degree-Days
Regression Statistics
Base Case - LDC Supporting Data
High Growth - LDC Supporting Data
Low Growth - LDC Supporting Data
Exhibit No.
Appendix A: Load Duration Curve Charts
Table 1: Aggregation of Days into Periods
Exhibit No.
Appendix A: Western North America - Natural Gas Basins and Pipelines
Chart 4.1: Historical Index Prices
Chart 4.2: Forecast Index Prices
Exhibit No.
Appendix A:
Appendix B:
Appendix C:
Appendix D:
Appendix E:
Appendix F:
Model Inputs - Peak and Annual Demand by Period by Year
Model Inputs - Supply Resources
Model Inputs - Transport Resources
Model Results - Base Case
Model Results - High Growth
Model Results - Low Growth
Exhibit No.
Public Workshop Announcement
Exhibit No.
Intermountain Gas Company Natural Gas Energy Efficiency DVD
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
EXECUTIVE SUMMARY
Natural gas continues to be the fuel of choice in Idaho. Southern Idaho s manufacturing plants, commercial
businesses, new homes and anticipated new electric power plants, all rely on natural gas to provide an
economic, efficient, environmentally friendly and most comfortable form of heating energy. Intermountain
Gas Company endorses and encourages the wise and efficient use of energy in general and, in particular
natural gas for high efficient uses in Idaho and Intermountain s service area (see page 58).
Forecasting the demand of Intermountain s growing customer base is a regular part of Intermountain
operations , as is determining how to best meet the load requirements due to that demand. Public input is
integral part of this planning process. The customer demand forecast and resource decision making process
is ongoing. This Integrated Resource Plan ("IRP") document represents a snapshot in time similar to a
balance sheet. It is not meant to be a prescription for all future energy resource decisions , as conditions will
change over the planning horizon impacting areas covered by this Plan. Rather, this document is meant to
describe the currently anticipated conditions over the five-year planning horizon, the anticipated resource
selections and the process for making those resource decisions. The planning process described herein is
an integral part of Intermountain s ongoing commitment to make the wise and efficient use of natural gas an
important part of Idaho s energy future.
Backdrop
Intermountain Gas Company ("Intermountain ) is the sole distributor of natural gas in Southern Idaho. Its
service area extends across the entire breadth of Southern Idaho, an area of 50 000 square miles, with a
population of approximately 1 000 000. During the first half of fiscal year 2006 , Intermountain served an
average of 275 800 customers in 74 communities through a system of over 10 000 miles of transmission
distribution and service lines. Over 446 miles of distribution and service lines were added during fiscal 2005
to accommodate new customer additions and maintain service for Intermountain s growing customer base.
The economy of Intermountain s service area is based primarily on agriculture and related industries. Major
crops are potatoes and sugar beets. Major agriculture-related industries include food processing and
production of chemical fertilizers. Other significant industries are electronics, general manufacturing and
services and tourism.
Intermountain provides natural gas sales and services to two major markets: the residential/commercial
market ("core market") and the industrial market. During the first half of fiscal year 2006 , an average of
249 800 residential and 26 000 commercial customers used natural gas primarily for space and water
heating, compared to an average of 237 000 residential and 25 900 commercial customers in the first half of
fiscal year 2005. This equates to an increase in average residential and commercial customers of 5%.
Intermountain s industrial customers transport natural gas through Intermountain s system to be used for
boiler and manufacturing applications, as well as feedstock in the production of chemical fertilizers. Industrial
demand for natural gas is strongly influenced by the agricultural economy and the price of alternative fuels.
Forty-four percent (44%) of the throughput on Intermountain s system during fiscal 2005 was attributable to
industrial sales and transportation.
Intermountain s peak day loads (throughput during the projected coldest winter day) are growing at a
manageable rate. The growth in Intermountain s projected peak day load is attributable to two factors: 1)
growth in Intermountain s customer base , primarily residential and commercial, and 2) production related
growth occurring in Intermountain s industrial firm transportation market which impacts Intermountain
distribution system while not impacting the need for additional interstate pipeline capacity (see Firm
Contract Demand on page 38).
The customer growth forecast 1 was analyzed and forecast not only from a total company perspective but
also by specific geographic regions within Intermountain s service territory. The regions were selected
based upon the anticipated or known need for system upgrades within each specific region. The regions
as more fully delineated later in this document, consist of The Idaho Falls Lateral Region, The Sun Valley
Lateral Region, The Canyon County Region and the "All Other" Region.
Peak day sendout studies and load duration curves were developed under design weather conditions
(see page 26) to determine the magnitude and timing of future deficiencies in firm peak day delivery
capability from both a total company interstate capacity perspective, as well as within each specific
geographic region. Residential , commercial and industrial customer peak day sendout was matched
against available resources to determine which combination of new resources would be needed to meet
Intermountain s future peak day delivery requirements at the best possible cost.
Forecast Peak Day Sendout
Total Company
Residential, commercial and industrial peak day load growth on Intermountain s system under design
conditions is forecast over the five-year period to grow at an average annual rate of 4%. The table below
summarizes the forecast for peak day sendout under the "base case" customer growth assumption.
LOAD DURATION CURVE - TOTAL COMPANY DESIGN BASE CASE
(Volumes in Therms)
NWP Firm Peak Dav Sendout Incremental Peak Dav Sendout
Transport Core Industrial Core Industrial
Capacity Market Firm CD Total Market Firm CD!Total
2007 463 300 964 960 201 500 166 460
2008 463 300 171 120 201 500 372 620 206 160 206 160
2009 463 300 366 300 201 500 567 800 195 180 195 180
FYIO 463 300 551 220 201 500 752 720 184 920 184 920
FYll 463 300 735 870 201 500 937,370 184 650 184 650
I Future growth in transport CD is limited to T-, which does not affect IntenTIountain s interstate pipeline capacity requirements.
The above table highlights the fact that growth in the peak day is commensurate with the growth
projected to occur in Intermountain s residential and small commercial customer markets.
Existing Resources:
Intermountain s existing firm delivery capability on the peak day is made up of the resources shown on
the following page.
1 Multiple residential and commercial customer growth scenarios were developed. Each scenario ("Base
Case
, "
High" and "Low ) was driven by the potential for varying outcomes of Idaho s economy (see page
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
PEAK DAY FIRM DELIVERY CAPABILITY
(Volumes in Therms)
2007
Maximum Daily Storage Withdrawals:
Nampa LNG
Plymouth LS
600 000
720 000
150,000
1,470 000
2.463,300
3 933 300
Jackson Prairie SGS
Total Storage
Maximum Deliverability (NWP)
Total Peak Day Deliverability
2008 - 2009 FY10 - FY11
600 000 600 000
720 000 720 000
225,000 303,370
545 000 623 370
2.463.300 2.463,300
4008300 4 086 670
When forecasted peak day sendout is matched against existing resources , a peak day delivery deficit
occurs during January 2007 and increases at a rate of 38% as depicted on the following table.
FIRM DELIVERY DEFICIT - TOTAL COMPANY DESIGN BASE CASE
(Volumes in Therms)
2007 2008 2009 FY10 FY11
Peak Day Deficit 233 160 364 320 559 500 666,050 850 700
Total Winter Deficit 296,540 549 970 015 330 939 690 128 020
Days Requiring Additional Resources
Peaking storage increases by 75 000 therms per day in 2008 and 78 370 in FY10 which reduces the deficit thereafter.
Equal to the total winter sendout in excess of interstate capacity less total "peaking" storage. Peaking storage does not
require the use of Intermountain s traditional interstate capacity to deliver inventory to the citygate.
FIRM PEAK DAY DELIVERIES
Design Base Case
000
'0 4 000
-g E 3 000CIS ...I/) Q)
5 j!: 2 000
j!: 1 000
FY07 FY08 FY09 FY10 FY11
111 Interstate Capacity. Storage D Deficit
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
As shown in the above table, because Intermountain s storage gas has been dispatched or "rationed"
around the peak day in order to meet the higher demand days first, a deficit of firm capacity begins to
occur "around" the peak day during the "shoulder months" under design conditions beginning in the winter
of 2009.
Firm transportation capacity will be secured by Intermountain during these projected deficit shoulder
periods. Intermountain, together with its gas procurement agent, is performing an extensive evaluation of
the most advantageous way to eliminate this deficit taking into consideration first of all firm delivery
capability to Intermountain s core market together with economic efficiency. The projected deficits in firm
deliverability will be eliminated in a timely manner through one or more means including, but not limited
, 1) long-term firm capacity release and/or segmentation, 2) city gate deliverable gas supply, 3) storage
together with related mainline rights and, 4) call back opportunities.
Regional Studies
As mentioned above, certain geographic regions within Intermountain s service territory were analyzed
based upon the anticipated or known need for distribution system upgrades within each specific region.
Not unlike the total company interstate mainline perspective, the projected peak day sendout for each
region was measured against the known distribution capacity available to serve that region. In addition to
the firm delivery requirements for Intermountain s residential and commercial customers, the needs of
those industrial customers contracting for firm distribution only transportation service (Intermountain s "
4" customers) were also included as part of these regional studies. A wide array of alternatives were
evaluated in determining the potential way to best meet the projected deficits in the various regions within
Intermountain Gas Company (see Non-Traditional Supply Resources on page 54). Additionally, each
region is analyzed within the framework of the Company s Distribution System Model (see page 56).
Idaho Falls Lateral Region
The Idaho Falls Lateral ("IFL") is 104 miles in length and serves a number of cities between Pocatello in
the south to St. Anthony in the north (see map on page 8). The customers served off the IFL represent a
diverse base of residential, commercial and large industrial customers. The residential, commercial and
industrial load served off the IFL represents approximately 15% of the total company customers and 18%
of the company s total winter sendout during December of 2005.
When forecasted peak day sendout on the IFL is matched against the existing peak day distribution
capacity (830 000 therms), a peak day delivery deficit occurs during 2007 and increases at levels shown
on the following tables:
LOAD DURA TON CURVE - IDAHO FALLS DESIGN BASE CASE
(Volumes in Therms)
Existing
Distribution Peak Day Sendout Incremental Peak Day Sendout
Transport Core Industrial Core Industrial
Caoacitv Market Firm CD)Total Market Firm CD2 Total
2007 830 000 637,420 223 030 860 450
2008 830 000 664 620 223 030 887 650 200 200
2009 830 000 693 830 223 030 916 860 210 210
FYIO 830 000 721 430 223 030 944 460 600 600
FYll 830 000 748 050 223 030 971 080 620 620
Existing finn contract demand includes T-, T-2 and T-4 requirements.
Future growth in transport CD is limited to T-4 which only impacts InteTIllountain s distribution capacity requirements-
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
FIRM DELIVERY DEFICIT - IDAHO FALLS DESIGN BASE CASE
(Volumes in Therms)
2007 2008 2009 FYIO FYll
Peak Day Deficit 450 650 860 114 460 141 080
Total Winter Deficit 580 820 143 980 215 780 322 390
Days Requiring Additional Capacity
Equal to the total winter sendout in excess of distribution capacity.
Equal to the total winter sendout in excess of interstate capacity less total "peaking" storage. Peaking storage does not require the use of
Intermountain s traditional interstate capacity to deliver inventory to the citygate.
The industrial customer base on the IFL is unique in that several of these customers have the potential
and ability to mitigate peak day consumption by switching to fuel oil during extreme cold temperatures.
Although these customers prefer using natural gas to any other fuel alternative, Intermountain believes
that small, short duration peak day distribution delivery deficits in the future can be mitigated by working
with these customers to facilitate the use of fuel oil at these customer s facilities. However, the projected
delivery deficits are of such magnitude that "looping " of the existing system is warranted adding the
necessary firm delivery capability to that area.
Sun Valley Lateral Region
The residential, commercial and industrial load served off the Sun Valley Lateral ("SVL") represents
approximately 4% of the total company customers and 4% of the company s total winter sendout during
December of 2005.
When forecasted peak day sendout on the SVL is matched against the existing peak day distribution
capacity (180 000 therms), a peak day delivery deficit occurs during 2009 and increases at the levels
shown on the following tables:
LOAD DURATON CURVE - SUN VALLEY DESIGN BASE CASE
(Volumes in Therms)
Existing
Distribution Peak Day Sendout Incremental Peak Day Sendout
Transport Core Industrial Core Industrial
Capacity Market Firm CD!Total Market Firm CD Total
2007 180 000 154 840 150 162 990
2008 180 000 163 250 150 171 400 8,410 8,410
2009 180 000 172 220 150 180 370 970 970
FYIO 180 000 181 140 150 189 290 920 920
FYll 180 000 190 370 150 198 520 230 230
Existing firm contract demand includes T-, T-2 and T-4 requirements.
Future growth in transport CD is limited to T-4 which only impacts Intermountain s distribution capacity requirements.
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
FIRM DELIVERY DEFICIT - SUN VALLEY DESIGN BASE CASE
(Volumes in Therms)
2007 2008 2009 FYIO FYll
Peak Day Deficit 370 290 520
Total Winter Deficit 370 290 590
Days Requiring Additional Capacity
Equal to the total winter sendout in excess of distribution capacity.
Equal to the total winter sendout in excess of interstate capacity less total "peaking" storage- Peaking storage does not require the use of
Intermountain s traditional interstate capacity to deliver inventory to the citygate.
As can be seen from the above table, growth along the SVL will warrant a future upgrade to the existing
pipeline system. The tourism industry driven industrial load on the SVL is limited in size and does not
currently have the capability to switch to alternative fuels as a means of mitigating peak day sendout.
Again, a wide array of alternatives were evaluated in determining the potential ways to best meet the
projected deficits. Intermountain plans to increase the delivery capability and ultimate capacity on the SVL
using a series of cost effective system upgrades.
Canyon County Region
The residential , commercial and industrial load served off the Canyon County Lateral ("CCL") represented
approximately 14% of the total company customers and 13% of the company s total winter sendout during
December of 2005.
When forecasted peak day sendout on the CCL is matched against the existing peak day distribution
capacity (700 000 therms), a peak day delivery deficit occurs during 2007 and increases at the levels
shown on the following tables:
LOAD DURA TON CURVE - CANYON COUNTY DESIGN BASE CASE
(Volumes in Therms)
Existing
Distribution Peak Dav Sendout Incremental Peak Dav Sendout
Transport Core Industrial Core Industrial
Capacity Market Firm CD!Total Market Firm CD Total
2007 700 000 600 320 103 420 703 740
2008 700 000 646 420 103 420 749 840 100 100
2009 700 000 685 180 103 420 788 600 760 760
FYIO 700 000 720 200 103 420 823 620 020 020
FYll 700 000 755 550 103 420 858 970 350 350
Existing firm contract demand includes T-, T-2 and T-4 requirements.
Future growth in transport CD is limited to T-4 which only impacts Intermountain s distribution capacity requirements.
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
FIRM DELIVERY DEFICIT - CANYON COUNTY DESIGN BASE CASE
(Volumes in Therms)
2007 2008 2009 FYIO FYll
Peak Day Deficie 740 840 600 123 620 158 970
Total Winter Deficit 740 010 147 870 252 890 391 580
Days Requiring Additional Capacity
Equal to the total winter sendout in excess of distribution capacity-
Equal to the total winter sendout in excess of interstate capacity less total "peaking" storage. Peaking storage does not require the use of
Intennountain s traditional interstate capacity to deliver inventory to the citygate.
While diverse in nature, the industrial customer base served by the CCL does not currently have the
capability to switch to alternative fuels as a means of mitigating peak day sendout and Intermountain is
currently exploring optional means of enhancing the distribution capability on this Lateral.
Summary
Residential , commercial and industrial customer growth and its consequent impact on Intermountain
distribution system was analyzed using design weather conditions under various projected outcomes of
Idaho s economy. Peak day sendout under each of these customer growth scenarios were measured
against the available natural gas delivery systems to project the magnitude and timing of delivery deficits
both from a total company perspective as well as a regional perspective. The resources brought to bear
to meet these projected deficits were analyzed within a framework of options, both traditional and non-
traditional , to help determine the most cost-effective means available to manage these deficits. In utilizing
these various options, Intermountain s core market and firm transportation customers will continue to rely
on uninterrupted firm service both now and in the years to come.
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
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Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
DEMAND FORECAST OVERVIEW
Intermountain s commitment to provide reliable , year-round natural gas service to its firm service
customers starts with long-term resource planning. Resource planning matches forecasted customer
demand with supply resources to ensure a consistent supply of natural gas over the planning horizon.
The first step in resource planning is forecasting future load requirements. Three essential components
of the load forecast are projecting the number of customers requiring service, forecasting the customer
response to weather and estimating the weather those customers will experience. Load projections of
non-weather sensitive customers are also included.
Intermountain s long range forecast incorporates all the above factors including an up-to-date customer
forecast scenario, usage per customer forecasts, a specific weather profile and a separate forecast for
the non-weather sensitive industrial market. The forecast not only projects monthly and annual loads but
also predicts daily usage including peaking events. The forecast is further refined by the addition of both
high and low growth scenarios to the base case scenario. This allows Intermountain to evaluate the
adequacy of its supply arrangements under a range of demand scenarios. The next several sections
outline the methodology used to build the demand forecast for this IRP.
RESIDENTIAL AND COMMERCIAL CUSTOMER GROWTH FORECAST
This section of Intermountain s IRP describes and summarizes the residential and small commercial
customer growth forecast for the years 2007 through 2011. Customer growth is a primary driver of the
five-year load forecast contained within this IRP. The customer forecast provides the anticipated
magnitude and direction of Intermountain s residential and small commercial customer growth. The
forecast not only provides total company figures but is also broken out into certain regional segments on
Intermountain s distribution system. The IRP customer forecast uses the FY06 Plan as the starting point
and then adds marketing s monthly customer growth projections to provide a daily forecast through FY11.
The IRP also includes a customer forecast for each of the three capacity constraint segments on the
distribution system. These segments will be further discussed in later sections and are as follows:
The CCL, consisting of the Core Market Customers in Canyon County.
The SVL, consisting of the Core Market Customers in Blaine and Lincoln Counties.
The IFL , consisting of the Core Market Customers in Bingham, Bonneville , Fremont, Jefferson , and
Madison Counties, along with approximately 28% of the Core Market Customers in Pocatello
Bannock County who take service off the IFL.
The All Other Customers Segment, consisting of the Core Market Customers in Bear Lake, Caribou
Cassia, Elmore, Gem, Gooding, Jerome, Minidoka , Owyhee, Payette, Power, Twin Falls, and
Washington Counties. Also included are the remaining 72% of the Core Market Customers in
Pocatello, Bannock County not in IFL above.
Intermountain s customer growth forecast includes three (3) key components:
Residential New Construction customers
Residential Customers who convert to natural gas from an alternative fuel
New Small Commercial customers
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
To calculate the number of customers added each year, the annual change in households for each
county in the Intermountain Service Territory is determined using the Idaho Economics 2005 Economic
Forecast for the State of Idaho by John S. Church (Church Forecast), dated May 2005. Using the
assumption that a new household means a new dwelling is needed , the annual change in households by
county is multiplied by Intermountain s market penetration rate in that region to determine the additional
residential new construction customers. Next, that number is multiplied by the Intermountain conversion
rate, which is the anticipated percentage of conversion customers relative to new construction customers
in those locales. This results in the number of expected residential conversion customers, and when
added to the residential new construction numbers, the total expected additional residential customers
across the periods is derived, by county.
The residential new construction numbers by county are multiplied by the Intermountain commercial rate
which is the anticipated percentage of new commercial customers relative to residential new construction
customers in those locales, to arrive at the number of expected additional small commercial customers.
The residential numbers must be split across our two residential rate classes , RS-1 and RS-, since these
classes have different load patterns. RS-1 is a customer who does not have both a gas furnace and a
gas water heater, regardless of other appliances. RS-2 customers have at least a gas furnace and a gas
water heater. Virtually 100% of Intermountain s residential new construction customers go RS-, while
only regionally varying percentages of Intermountain s residential conversion customers go RS-2. So , the
additional residential conversion customers are split, depending on the region.
The Church Forecast contains three economic scenarios: base case, low growth , and high growth.
Intermountain has incorporated these scenarios into the customer growth model , and has developed
three five-year core market customer growth forecasts. The following graph shows the annual additional
customers for each of the three economic scenarios.
Annual Additional Customers
Residential and Small Commercial
000 -
20,000
000
16,000 8--
000
12,000
10,000
000 -
000
000
FY07
""High Growth
Base Case-A- Low Growth
FY08 FY09 FY10 FY11
The following table shows the results from the 5-year customer growth model for each scenario for the
total customers at each year-end , and the annual additional or incremental, customers:
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
TOTAL CUSTOMERS ANNUAL ADDITIONAL CUSTOMERS
Range as a %Average as a %Range as a %Average as a %
Of Base Case of Base Case Of Base Case of Base Case
Low Growth 90% - 98%93%54% - 65%55%
Baseline 100% - 100%100%100% - 100%100%
Hiqh Growth 101% - 107%105%124% - 135%130%
Range Range
(2007 - 2011)Avera (2007 - 2011)Avera
Low Growth ~93 851 - 323 352 309 087 722 - 10 056 911
Baseline ~04 655 - 361 065 332 977 331 - 15,495 381
Hiqh Growth ~13 097 - 387 107 350 091 205 - 19 797 761
The following sections more fully explore the different components of the customer forecast, including the
Church Forecast, market penetration and conversion rates, and small commercial growth.
Household Projections/Church Forecast
The May 2005 Church Forecast provides county by county projections of output, employment and wage
data for 21 industry categories for the State of Idaho , as well as a population and household forecast.
This simultaneous equation model uses personal income and employment by industry as the main
economic drivers of the forecast. This model uses forecasts of national inputs and demands for those
sectors of the Idaho economy having a national or international exposure. Industries that do not have as
large a national profile, and are thus serving local communities and demands are considered secondary
industries. Local economic factors, rather than the national economy determine demand for these
products.
The Church Forecast uses two methods for population projections: (1) a cohort-component population
model in which annual births and deaths are forecast, and then the net number is either added to or
subtracted from the population, and (2) an econometric model which forecasts population as a function of
economic activity. The two forecasts are then compared and reconciled for each quarter of the forecast.
Migration into or out of the state is arrived at in this reconciliation.
As previously mentioned, the Church Forecast provides three scenarios: (1) baseline, (2) high growth
and (3) low growth. Church's baseline scenario assumes a normal amount of economic fluctuation , a
normal business cycle. This becomes the standard against which changes in customer growth , as
affected by the low and high growth scenarios can be measured.
The summer 2005 Economic Forecast for the State of Idaho and its forty-four counties is for a stronger
economic outlook than that contemplated in the summer 2004 forecast. In 2004, Idaho s economy was
regaining strength after the national economic recession of 2001 wherein the State experienced its first
significant economic downturn since 1986.
During the 2001 recession , the hardest hit sectors of the Idaho economy were the natural resource
industries, the high-tech manufacturing industries , and - because of lower tax revenues during the
economic slowdown - the government sector.
Idaho s manufacturing sector had been the State s engine of growth during the 1990s. Nevertheless, the
manufacturing sector could not withstand the economic forces of the last recession, and manufacturing
employment in Idaho slipped by 2.3 percent, 5.0 percent, and 4.5 percent in 2001 , 2002, and 2003
respectively. In 2004, the rate of manufacturing job losses in the State slowed to -8 percent. At year-
end 2004, Idaho had shed nearly 9 500 manufacturing jobs from its August 2000 pre-recession peak
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
when the manufacturing sector employed nearly 71 100 statewide. Similarly, the natural resource
industries of logging and mining also experienced severe employment cutbacks during the last recession
which, in total, reduced the industry s employment in Idaho by nearly 25 percent during the 2001 to 2004
period.
Along with the national economic slowdown and the slowdown in the Idaho economy, Idaho experienced
a drop in state income and sales tax collections. Faced with the prospect of annual operating budget
deficits, state government found it necessary to not only cut spending but to also curtail employment.
Government employment in Idaho, which , prior to the recession had been increasing at an annual
average pace of nearly 2.5 percent per year slowed to a 1.3 percent pace in 2001 and 2002. During 2003
state government employment declined by nearly 0.7 percent. Total government employment in Idaho
(federal , state , and local) managed to post a modest 0.9 percent gain for 2003.
These events caught the attention of the media and were felt by many citizens. And, while this economic
slowdown has had a significant impact on many of the State s industries, communities , and people, the
bottom line at year-end 2003 was that Idaho s economy did not suffer as much as was initially expected.
In 2003, Idaho s economy experienced a roller coaster ride of economic growth. Strong employment
gains in the first quarter (1.5 percent) gave way to weaker growth in the second through fourth quarters
(0.4 percent overall). Nevertheless, the first quarter of 2004 saw Idaho non-agricultural employment post
a respectable 1.3 percent year-over-year gain. In the second quarter of 2004 non-ag employment in
Idaho surged to a 3.0 percent annual pace and has not slowed since.
Similarly, the Boise MSA, which had captured the lion s share of economic activity throughout the 1990s
came back with vigor in 2004. In total , non-agricultural employment in the Boise MSA posted a 3.
percent gain in 2004, and for the first six months of 2005 has been able to maintain a 3.9 percent annual
rate of employment growth.
The stronger employment gains in Idaho and throughout Southern Idaho in particular are the primary
drivers behind the stronger economic outlook presented in the summer 2005 economic forecast. Idaho
construction and service industries provided much of the state s job growth during 2004 and into the first
half of 2005. Construction employment in Idaho posted a 7.6 percent gain in 2004 and at mid-year 2005
was running at an 11.6 percent pace ahead of 2004 levels creating nearly 4 600 additional jobs statewide.
Residential construction activity remained strong throughout 2004 and into 2005. In the summer 2004
Economic Forecast, it was anticipated that residential housing construction would slow as the FED began
to increase short-term interest rates. The FED increased short-term interest rates as expected, however
those short-term rate gains did not directly translate to increases in long-term home mortgage interest
rates. In addition to a continuation of favorable financing terms for homeownership, an improving overall
economy provided more and more potential new home buyers with a boost in income. The outcome was
the continuation of strong residential housing market and a continuation of the growth of construction
employment in Idaho and the Boise MSA.
The service industry in Idaho has also experienced a notable increase in employment over the past
eighteen months. The professional and business services sector of the Idaho economy has consistently
posted annual employment gains of greater than 5.0 percent in each of the last six calendar quarters. The
bottom line is that the economic recovery that was anticipated in the summer 2004 Economic Forecast
was not as strong as expected during 2004, but much stronger than expected in 2005. Add to that a
further upward revision of the State s historic employment figures for 2003 and 2004 and the result is that
the summer 2005 Economic Forecast project a more optimistic outlook for the Idaho economy over the
forecast period.
In the summer 2005 Economic Forecast, nonagricultural employment in Idaho is projected to be nearly
5 percent higher by the year 2010 than level expected in the summer 2004 Economic Forecast, and by
the year 2030, Idaho non-ag employment in the summer 2005 is projected to surpass the 2004 Forecast's
figure for non-ag employment by nearly 6.4 percent.
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
Manufacturing employment does not fare as well in the latest outlook. The forecasted level of Idaho
manufacturing employment in the summer 2005 outlook is expected to be 3.2 percent below the level
projected in the summer 2004 forecast by the year 2010 and nearly 5.2 percent below the summer 2004
employment projection in the year 2030.
Projections of the future population of Idaho remain strong in the most recent economic outlook. The
summer 2005 Economic Forecast predicts that Idaho s total population will reach nearly 1.55 million by
2010 and exceed 2.11 million by the year 2030. These estimates are 1.4 percent and 4.3 percent
respectively, above the levels anticipated in the summer 2004 Economic Forecast. The number of future
households projected in the state is similarly higher in the summer 2005 Economic Forecast.
A continued in-migration of residents from other states and from overseas have accounted for an
increase of nearly 36 700 additional residents in the state since the 2000 Census. This is an in-migration
that continued even as Idaho s economy slowed to its lowest level of economic growth seen in the past
two decades.
The High and Low Economic Growth Scenarios
The High and Low Growth Scenarios of the Summer 2005 Economic Forecast present alternative views
of the economic future of Idaho and its forty-four counties. The High Growth Scenario of the Economic
Forecast presents a long-term vision of rapidly growing economy in Idaho. For example, the High Growth
Scenario produces a projected statewide population of nearly 2 350 500 in the year 2030 versus a Base
Scenario Idaho population forecast of 2 112 800 in the same year. The high forecast scenario presents
an absolute population gain of nearly 957 000 over Idaho s estimated 2004 population of 1 393 300 and
an annual average compound rate of population growth of 2.2% per year.
Alternatively, the Low Growth Scenario of the summer 2005 Economic Forecast does not present as rosy
an economic outlook for the Idaho economy. In the Low Growth Scenario, Idaho s 2030 population is
projected to reach the much lower level of 1 822 850. The Low Growth Scenario s projected 2030
population is 173 800 above Idaho s mid-year 2004 estimated population of 1 393 300 and represents an
annual average compound growth rate of population growth of 1.1 percent per year.
While the High and Low Growth Scenarios of the Economic Forecast represent two significantly different
views of Idaho s economic future, they are not unprecedented. An examination of historic employment
population, and household growth over the 1970 through 2000 period was performed. This examination
using either 5-year or 10-year moving averages of the growth of 1-digit SIC code employment concepts
population , and households in order to dampen the effects of peak periods of economic growth , revealed
that historic levels have exceeded the projected rates of growth in the High and Low Growth Scenarios of
the Summer 2005 Economic Forecast.
An examination of the possible economic and demographic events that could produce the economic and
population growth projected in the High and Low Growth Scenarios is outlined below.
The High Growth Economic Forecast Scenario
Since the mid-1980s Idaho s engine of growth has been the extraordinary growth that it has experienced
in the manufacturing industries. Today Idaho manufacturing firms are in the midst of an economic
slowdown as are many manufacturing industries nationally and internationally. Nevertheless, the 2001
national recession has , in all likelihood , had a longer-term impact on Idaho s manufacturing industries.
Idaho manufacturing firms express many reasons for the state attractiveness to manufacturing
industries. Idaho has a relatively young and educated labor force. Many express that the cost of doing
business in Idaho is lower than in many other areas of the nation. The facets of these lower costs most
often cited are: lower property taxes, lower rates on workman s compensation and unemployment
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
insurance, a lower level of government regulation, mandates or restrictions that add costs to doing
business , lower land costs, lower energy costs, and lower labor costs.
A few Idaho manufacturing firms that have operations in other areas of the US have indicated that the
lower labor costs available in Idaho have allowed them to maintain a competitive edge in the world
marketplace for their products and have further indirectly cut their labor and training costs and have
enhanced labor productivity. These firms indicate that in order for their product to remain competitive in a
worldwide marketplace , they must keep labor costs to a minimum. However, the cost of labor in other
parts of the US where the cost-of-living is high dictates that they must either pay a high wage rate or
suffer high rates of labor turnover, with the adjunctive expense of higher training costs and lower levels of
labor productivity. In Idaho, these firms have found that they can compensate their labor with a wage that
allows them remain competitive in the marketplace and provide the worker with a reasonable standard of
living. This in turn cuts labor turnover, training expenses, and increases labor productivity.
However, even in the High Growth Scenario not all of the state s existing manufacturing firms will grow in
the future. Idaho s manufacturing industries of Lumber and Wood Products, Food and Kindred Products
and Chemicals and Allied Products industries are likely to face a long-term decline in activity and
employment levels in almost any scenario.
In addition, two other traditional mainstay Idaho industries, Mining and Agriculture, are like to face a long-
term future of no-growth or a slow level of decline in both levels of output and employment. The difference
between the economic outlooks for these industries presented in the High and Low Growth Scenarios of
the summer 2005 Economic Forecast is how rapid that rate of decline will be in the future.
Underpinning the High Growth Scenario is a continuation of stellar growth of Idaho s manufacturing
industries. The pattern of these future manufacturing employment gains are expected to look similar to
the manufacturing growth experienced in Idaho during the 1990s - largely concentrated in the "high-tech"
manufacturing industries of Non-Electrical Machinery, Electrical and Electronic Equipment, and
Instruments. Furthermore, these future manufacturing employment gains are likely to be, as they were in
the 1990s, spatially concentrated in the state. In the 1990s, five of Idaho s forty-four counties, Ada
Canyon, Bannock, Bonneville, and Kootenai, captured nearly ninety percent of the state total
manufacturing employment gains. With the exception of Kootenai County, all of the above counties are
within the Intermountain Gas Company service area.
Idaho remains attractive to the high-tech industries. New firms (to Idaho) continue to make inquiries about
locating within the state. In addition to the probability of manufacturing firms locating operations in Idaho
is the continued development of many "spin-off' manufacturing or service industry firms from the state
existing manufacturing industries. In the Boise MSA alone, these "spin-off' establishments have directly
created nearly 5 000 jobs locally over the past fifteen years.
Specifically, the summer 2005 Economic Forecast High Growth scenario assumes that manufacturing in
Idaho will experience the following:
The Food Processing industry regains strength and increases employment. By the years 2010 and
2020 the High Scenario forecast projects that Foods Processing industry employment will be nearly
375 jobs (2.5%) and 600 jobs (4.0%), respectively, higher than in the Base Scenario forecast.
However, no new food processing plants are expected to be opened in Idaho.
Employment in Idaho s Lumber and Wood Products manufacturing industry remains stable at levels
that are slightly below those that the State experienced in 2000. This represents a High Scenario and
is an improvement in the economic outlook from the Base Case Scenario in which the Lumber
industry employment is projected to decline by nearly 1.0% per year over the 2000 to 2030 forecast
period. No new manufacturing facilities are projected to be opened in the High Scenario forecast.
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
Idaho s Electronics Industry rebounds in the High Case Scenario with the projected expansion of
high-tech employment in the Boise MSA. In the Base Case Scenario it is projected that other
already existing, electronics industry manufacturers in Idaho are expected to add nearly 4 000 jobs
over the 2000 to 2030 forecast period with other new to Idaho manufacturers adding nearly 4,400
new jobs in the 2000 to 2030 forecast period.
Idaho s employment in Stone, Clay, and Glass Products and Fabricated Metal Products
manufacturing are projected to be nearly 5.0% greater in the High Case Scenario than in the Base
Case Scenario by the year 2010 and 15.0% higher than the Base Case by the year 2020. This
assumption is based upon an economic outlook that anticipates a continuation of high levels of
activity in the region s Construction Industry. This assumption adds an additional 550 manufacturing
jobs to the High Case Scenario.
These projected manufacturing employment gains, in turn, spur employment growth in the secondary
industries found in the affected and nearby communities. These secondary industries include employment
in: Transportation , Communications, and Utilities; Construction; Wholesale and Retail Trade; Finance
Insurance and Real Estate; the Service industries; and local serving elements of Government.
In the High Growth Scenario, other basic industry sectors of the Idaho economy would contribute to future
employment gains. A renewed interest in nuclear power as a means of generating electricity would bring
renewed vigor and increased levels of employment to the US Department of Energy s Idaho National
Laboratory (INL). In addition , nuclear waste clean-up activities at INL are scheduled to accelerate in the
next decade, causing a further upswing in INL employment levels. Indirectly, these would boost
secondary industry employment growth in the Eastern Idaho counties of Bannock, Bingham , Bonneville
Jefferson, and Madison - all within the Intermountain Gas Company service area.
The High Growth Scenario also assumes that Mountain Home Air Force Base, located fifty-five miles
southeast of Boise, would experience a modest expansion of assigned personnel. The Gowen Field
Idaho National Guard facility in Boise would also experience a modest expansion in the number of
assigned personnel from its current level of nearly 1 000 to nearly 1 200.
Historically, federal government civilian employment in Idaho has been on a path of slow decline for many
years. Federal government employment in the state has always had a very large proportion dedicated to
the management and maintenance of the federal forests and rangelands. These management functions
have been cut to the barest levels over the past two decades. The High Growth Scenario anticipates that
federal employment associated with the management of federal lands will stabilize in the future.
However, the federal employment in Idaho that is primarily serving the local population (the federal
courts, IRS , EPA, OSHA, EDA, FBI , DEA) will increase in the future as Idaho s population increases. In
addition, the National Interagency Fire Center (an interagency facility in Boise for the purpose of
combating forest and rangeland fires anywhere in the US) is likely to continue to gain employment in the
future.
Many of Idaho s secondary industries , especially those industries that are deemed to be predominantly
local serving, have a significant proportion of employment that could be classified as basic industry jobs.
That is, they are serving a population or market that is much broader (perhaps international, national, or
regional in scale) than just the local economic area. Some examples include: Washington Group
construction, the corporate headquarters functions of Albertson s and Boise Cascade, the Sears Regional
Credit Center, Capital One s Boise Call Center, HewleU-Packard's Boise Call Center, or Direct TV. The
expansion and enhancement of Idaho s telecommunications infrastructure has permitted these firms to
locate these customer service facilities in areas far removed from the nation s large population centers
such as Boise.
It has been estimated that there were nearly 7 000 jobs within the Boise MSA in the year 2000 in these
customer transaction centers. It is not difficult to imagine that ninety percent of those jobs would be
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
classified as basic industry employment, or employment serving a larger regional area than just the Boise
or Idaho economies. The summer 2005 Economic Forecast High Growth Scenario assumes that this
trend will continue in the future. Idaho will capture a greater number of customer transaction facilities.
Most of those new facilities will be located , as they are now, near the state s concentration of population
and labor force, in Southwest Idaho and within the Intermountain Gas Company service area.
Specifically, the summer 2005 Economic Forecast High Growth scenario assumes that that these
secondary industries in Idaho will experience the following
Transportation , Communications, and Utilities employment in the High Case Scenario is projected to
be nearly 7 000 jobs greater by the year 2030 than in the Base Case Scenario. The High Case
Scenario increases in Transportation Industry employment are expected to occur in Idaho s air
transportation sector. It is anticipated in the High Case Scenario that growth in air transportation
employment in Boise will accelerate, and that a long-rumored regional air freight hub will be
established at the Bose Air Terminal. In addition , a new airport for Wood River Valley will be put on a
fast track. This new larger and safer airport facility will attract increased air transportation activity not
only directly to the Wood River Valley but also indirectly with connecting flights to Boise.
Both the Communications and Utilities sectors are expected to see employment in the High Case
Scenario that is nearly 750 and 1 200 jobs greater than levels projected in the Base Case Scenario
by the years 2010 and 2020 , respectively. In both the Communications and Utilities industries, a large
portion of this projected increase in employment is in reaction to faster population and household
growth in the State of Idaho. However, another component of this projected higher level of
Communications and Utilities industry employment is the assumed continuation of the growth in the
Communications industry s "call center" facilities in Idaho (T-Mobile, and others) and the possible
establishment of two or three large independent electric power production facilities, including wind
farms, in Idaho.
Wholesale and Retail Trade industry employment in the High Case Scenario is projected to be nearly
9,400 (5.8%) jobs greater by the year 2010 than in the Base Case Economic Forecast. This trend
continues with the High Case Scenario projected to have nearly 14 000 and 17 600 more Wholesale
and Retail trade jobs than the Base Case forecast by the years 2020 and 2030, respectively. This
difference is largely due to the higher levels of population and households projected in the High Case
Scenario. It is also anticipated that most of this Wholesale and Retail Trade employment would be
physically located on the Snake River plain of Southern Idaho near the population and household
growth.
Service industry employment in the High Case Scenario is projected to be even more robust than in
the already strong outlook found in the Base Case Scenario. In the High Case Scenario the outlook
for employment in the Service industries is projected to be nearly 10 100 jobs (5.0%) greater than the
Base Case outlook by the year 2010, and 40 750 jobs (15.0%) and 53 300 jobs (15.0%) higher than
the Base Case Scenario by the years 2020 and 2030, respectively. Again a large portion of this
difference is due to the higher levels of population and household growth anticipated in the High Case
Scenario. Hotel and motel accommodations and recreational activities are also classified in the
Service industry category. The High Scenario forecast assumes that tourism travel in Idaho increases
and as a result employment in the lodging and recreation sectors also increase.
The Service industry outlook in the High Case Scenario assumes that there is a portion (roughly one-
half) of the projected higher level of service industry employment that is caused by the relocation of
firms new to Idaho.
The Low Growth Economic Forecast Scenario
In the Low Growth Scenario of the summer 2005 Economic Forecast, Idaho s manufacturing industries do
not provide the stimulus to growth as they have in the past. Today, many of Idaho s manufacturing firms
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
are suffering under conditions caused by the current economic slowdown , as are many manufacturing
industries nationally and internationally. Accordingly, the Low Growth Scenario of the 2005 Economic
Forecast assumes that many of today s struggling manufacturing facilities will not survive the current
recession.
In the Low Growth Scenario, the long-term employment decline in Idaho s Lumber and Wood Products
industry accelerates. The state s Paper and Allied products manufacturing industry takes a serious hit to
employment as its three corrugated cardboard box plants in southern Idaho (Boise Cascade - Nampa
and Longview Fiber - Twin Falls and Burley, Idaho) close.
Changes in US international trade policy causes the removal of the US's quotas on imported sugar. With
the removal of these protective trade barriers, the US domestic beet sugar industry is not competitive with
imported sugar in the domestic and international marketplace. Idaho is particularly affected by this
change in policy as the food processing plants involved in producing sugar from sugar beets cease
operation in southern Idaho (at Nampa, Twin Falls, and Paul, Idaho) and eastern Oregon (Nyssa
Oregon). This causes the loss of nearly 3 500 seasonal and 1 200 full-time food processing jobs
southern Idaho. In addition , the transportation industry experiences a loss of another 350 jobs as the
associated transportation services are no longer needed.
In addition , Idaho s Food Processing industry experiences a profound change in the marketplace for its
primary Idaho product - the frozen processed potato in the form of a French fry. The baby-boom
generation, the largest demographic component of the US population is aging, and becoming more health
conscious. Nationwide, demand for frozen French fries declines and productivity gains in the production
of frozen potato products accelerates the rate of job losses in the state s Food Processing industry.
Increased restrictions and/or higher costs associated with the grazing of cattle on federal lands causes a
decline in the number of cattle raised in Idaho and another decline in Idaho s food processing
employment.
Idaho s Mining and Agricultural industries accelerate their rate of decline in terms of output and
employment.
In the Low Growth Scenario Idaho s "high-tech" manufacturing industries of Non-Electrical Machinery,
Electrical and Electronic Equipment, and Instruments are not immune from the slower rates of economic
growth. The current recession permanently cripples some of the state s high-tech firm
Furthermore, Micron Technology changes production practices at its Boise plant. Currently, Micron
Technology produces computer memory chips - needing no further processing - as a final product from
the Boise fabrication plant. However, many other US computer chip makers only manufacture the "wafer
at their US production plants. The "wafer " with its hundreds of computer chips etched and imprinted upon
them , is then shipped to an overseas production facility for testing, final processing, and packaging. They
commonly cite lower labor costs overseas as their primary reason for splitting the production process in
this manner. The summer 2005 Economic Forecast Low Growth Scenario assumes that Micron
Technology changes their Boise operations in order to take advantage of the potential labor cost savings
available overseas. In the Low Growth Scenario, this policy change causes the loss of nearly 5 000
manufacturing jobs in Idaho Electrical and Electronic Equipment Industry.
Specifically, the summer 2005 Economic Forecast Low Growth scenario assumes that manufacturing in
Idaho will experience the following:
The State s loss of jobs in the Food Processing industry accelerates and nearly 2 200 additional jobs
are lost over and above the 2 900 already projected to be lost in the Base Case Scenario. Potato
processing plants would realize most of the job losses with the assumption that the JR Simplot plant
in Caldwell would cut its workforce by nearly half. In addition, it is anticipated in the Low Case
Scenario that the sugar processing plants in Southern Idaho would also feel increased pressure from
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
competition and would find it necessary to close one or both of the plants in Paul or Twin Falls, Idaho.
The dairy industry and its associated food processing plants would reach a point where no further
capacity could be added due to increased population and environmental pressures.
Employment losses in Idaho s Lumber and Wood Products manufacturing industry are assumed to
accelerate in the Low Case Scenario. In this scenario the brunt of these additional losses would be
felt in those portions of the wood products industry that could be increasingly vulnerable to low cost
foreign produced products - the Wood Grain Molding plants in Fruitland and Nampa, Idaho.
Idaho s Electronics Industry continues to add jobs over the 2000 to 2030 period in the Low Case
Scenario but at a pace that is slower than in the Base Case Scenario. The Base Case Scenario
projects that nearly 12 300 jobs will be added in the Machinery and Electronics manufacturing sectors
over the 2000 to 2030 forecast period.
The Low Case Scenario projects that the total number of additional jobs added to statewide
employment in machinery and Electronics manufacturing will be nearly 6 800, nearly 5 500 less than
the Base Case Forecast, over the 2000 to 2030 period. No existing firms are assumed to close in this
scenario; on the contrary, the forecast can accommodate the addition of one or two Electronics
manufacturing plants equivalent to AMI's Pocatello facility.
Idaho employment in Stone, Clay, and Glass Products and Fabricated Metal Products
manufacturing both are projected to be at lower levels in the Low Case Scenario. This projection is
based upon an economic outlook that foresees lower levels of construction activity in the State.
The Low Growth Scenario s projected manufacturing employment losses and accelerated rates of
declining employment, in turn , dampen employment growth in the secondary industries found in the
affected and nearby communities. Again, these secondary industries include employment in:
Transportation , Communications, and Utilities; Construction; Wholesale and Retail Trade; Finance
Insurance and Real Estate; the Service industries; and local serving elements of Government.
Specifically, the summer 2005 Economic Forecast Low Growth scenario assumes that that these
secondary industries in Idaho will experience:
Transportation, Communications , and Utilities employment in the Low Case Scenario is projected to
have nearly 2 800 fewer jobs by the year 2030 than in the Base Case Scenario. Lower overall
economic growth produces lower levels of demand for transportation. A scenario with the closure of
food processing facilities, which require large amounts of truck transportation, and a scenario where
transportation industry job losses is not too far away.
Wholesale and Retail Trade industry employment in the Low Case Scenario is projected to be nearly
030 jobs (2.5%) jobs lower than the Base Case Forecast in the year 2010. This trend continues with
the Low Case Scenario projected to have 6 080 and 7 640 fewer Wholesale and Retail trade jobs in
the years 2020 and 2030 , respectively, than does the Base Case Forecast. The difference is largely
due to the lower levels of population and household growth found in the Low Case Scenario.
Nevertheless, the Wholesale and Retail Trade industry employment growth represented in the Low
Case Scenario averages 1.9% per year over the 2000 to 2030 period.
The forecasted Low Case Scenario employment in the Finance , Insurance, and Real Estate sector
falls 4.9% below the Base Case Forecast by the year 2010 and slips further to 14.4% below the Base
Case by the years 2020 and 2030. Again, the difference is largely due to the lower levels of
population and household growth found in the Low Case Scenario.
The outlook for the Service industry outlook in the Low Case Scenario assumes that employment
growth in the Service sector will slow to a 2.3% pace in the 2005 to 2010 period from the robust 4.
rate that the State experienced between 2000 and 2005. By the end of the forecast period, the year
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
2030, the Low Case Scenario forecast of Service industry employment is nearly 51 300 jobs below
the Base Case Economic Outlook. However, by any standard the 2.6% annual average increase in
Service industry employment over the 2000 to 2030 period that is in the Low Case Scenario remains
respectable.
In the Low Growth Scenario, other industry sectors economy do not provide significant contributions to
future employment gains. Employment at the US Department of Energy s Idaho National Laboratory (INL)
is cut as federal funding is further curtailed.
Mountain Home Air Force Base would experience a slow attrition in its capability and a gradual
contraction in the number of total assigned military personnel in the Low Growth Scenario. The Gowen
Field National Guard facility in Boise would also contract from its current level of nearly 1 000 full-time
assigned military personnel to nearly 800 in the Low Growth Scenario.
Historically, federal government civilian employment in Idaho has been on a path of slow decline for many
years. Federal government employment in the state has always had a very large proportion dedicated to
the management and maintenance of the federal forests and rangelands. These management functions
have been cut to the barest levels over the past two decades. The High Growth Scenario anticipates that
federal employment associated with the management of federal lands will stabilize in the future. However
the rate of growth in Idaho federal government employment that is primarily serving the local population
would decrease as the state s population growth slows.
Future Government employment growth in the Low Case Scenario is projected to be 4.1 % lower than the
Base Case Forecast in the year 2010 and 12.1% below the Base Case scenario in the years 2020 and
2030. Again, the difference is largely due to the lower levels of population and household growth
In the Low Case scenario some of Idaho s corporate headquarters would also experience employment
losses as market forces and financial conditions force them to cut operating expenses. In addition
corporate mergers and/or acquisitions could force the closure of one of the state s larger call center
operations with a resultant loss of nearly 1 000 jobs
By the year 2010 , the summer 2005 Economic Forecast Low Case Scenario forecast of population and
the number of households in Idaho slips 4.5% below the Base Case Forecasted figures. This represents
nearly 70 100 fewer people in the State by the year 2010 and nearly 26,400 fewer households. The
projected gap between the Low Case Scenario and the Base Case Scenarios widens by the years 2020
and 2030.
By the years 2020 and 2030 the population of Idaho in the Low Case Scenario is projected to be nearly
250 100 and 290 000 less, respectively, than that predicted in the Base Case Scenario. Similarly, the
forecasted number of Idaho households in the Low Case Scenario is lower than the Base Case Forecast
by 94 360 in the year 2020 and 109 840 less than the Base Case in the year 2030.
The graphs on the following page illustrate the relationship between the three economic scenarios for the
annual total households forecast and the annual additional households forecast for the Intermountain
Service Territory counties.
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
460,000
450 000 -
440 000
430 000
420 000
410,000 -
400 000
390,000
FY07
14,000
000 -
10,000
000
000
000
000
FY07
ANNUAL ADDITIONAL HOUSEHOLDS FORECAST
FY08 FY09 FY10 FY11
IANNUAL TOTAL HOUSEHOLDS FORECAST I
FY08 FY09 FY10 FY11
-8-HIGH GROWTH
~BASECASE
-A-LOW GROWTH
-8-HIGH GROWTH
BASE CASE
-A- LOW GROWTH
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
Market Share Rates
Intermountain utilizes market penetration rates that vary across the service territory. These regional
penetration rates are applied to the Intermountain service-territory counties within the three specific
regions: west, central , and east. These penetration rates are the ratio of Intermountain s additional
residential new construction customers to the total building permits in those regions. Additional forecast
households multiplied by the regional market penetration rate equals the anticipated residential new
construction customers.
Intermountain derives the regional market penetration rates by dividing the fiscal year regional residential
new construction sales total by the number of regional residential building permits compiled by the Wells
Fargo Bank Construction Report Wells Report"). The Wells Report arranges the data by city, as well as
unincorporated portions of the more populous counties in Idaho. These city/county tallies are reconciled
to Intermountain s residential sales by Intermountain s company town codes for valid comparison and are
then collapsed to the county level.
Intermountain also develops another market penetration rate by way of the county construction reports
which Intermountain marketing and construction personnel use in prospecting for new construction
customers. Again , as above , the residential new construction sales in the specific areas covered by
these reports are divided by the total dwellings listed in these reports, to derive the market penetration
rate. The areas covered here are the major population centers in the Intermountain Service Territory:
Ada/Canyon County, Twin FalisIWood River Valley, Pocatello/Soda Springs , and Idaho Falis/Rexburg.
These market penetration rates are derived month by month and are compared and reconciled to the
market penetration rates derived using the Wells Report.
The market penetration rates used in the customer forecast varied somewhat when looking at future
market share gains in the Central and Eastern regions. Those for the West remained relatively static
throughout the forecast period, since they are already near 100%. The same set of market penetration
rates was used in the baseline, high growth , and low growth scenarios.
Market Penetration Rates
2007 2008 2009 FY10 FY11
Western Region 99%99%99%99%99%
Central Division 95%97%97%97%97%
Eastern Region 95%95%95%95%95%
The charts on the following pages illustrates the relationship between the three economic scenarios for
the annual residential new construction growth forecast for 2007 - 2011
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
ANNUAL RESIDENTIAL NEW CONSTRUCTION GROWTH
000
000
000 -
.....
HIGH GROWTH
.....
BASE CASE
LOW GROWTH
000
000
000
FYO7 FY08 FY09 FY10 FY11
Conversions
The conversion market represents another source of customer growth. Intermountain acquires these
customers when the homeowner replaces an electric, oil, coal, wood, or other alternate fuel source
furnace/water heater with a natural gas unit. Intermountain forecasts these customer additions by
applying regional conversion rates based on historical data and future expectations. During high and low
growth scenarios, the rates are adjusted to maintain reasonable expectations within the context of those
alternative economic climates. The following table shows , by region the assumed conversion rates over
the five-year period. These rates represent the percentage of new construction additions which will be
conversions.
Regional Conversion Rates
2007 2008 2009 FY10 FY11
Western Region
Base Case 10%10%11%11%10%
High Growth 10%10%
Low Growth 10%11%13%14%12%
Central Region
Base Case 24%22%24%24%22%
High Growth 20%20%20%20%20%
Low Growth 26%25%27%29%25%
Eastern Division
Base Case 17%15%20%20%18%
High Growth 15%15%16%15%15%
Low Growth 24%24%28%30%29%
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
The following graph illustrates the relationship between the three economic scenarios for the annual
residential conversion growth forecast for 2007 - 2011:
ANNUAL RESIDENTIAL CONVERSION GROWTH
000
600
800 -
HIGH GROWTH
~BASECASE
-.-
LOW GROWTH
200
400
FY07 FY08 FY09 FY10 FY11
Small Commercial Customers
Small commercial customer growth is forecast as a certain proportion of new construction customer
additions. The logic behind this is that as household growth drives the major proportion of
Intermountain residential customer growth, household growth therefore drives small commercial
customer growth. New households require additional new businesses to serve them. Based on recent
Intermountain sales data , this ratio of small commercial customer growth to new construction residential
varies across the Intermountain system , and thus different regional rates for small commercial customer
growth are used , and are as follows:
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
REGIONAL SMALL COMMERCIAL CUSTOMER TO RESIDENTIAL NEW CONSTRUCTION
CUSTOMER GROWTH RATIOS
2007 2008 2009 FY10 FY11
Western Region
Base Case
High Growth
Low Growth
Central Region
Base Case 14%14%14%14%13%
High Growth 14%14%14%14%13%
Low Growth 14%14%14%14%14%
Eastern Division
Base Case 15%15%15%15%15%
High Growth 15%15%15%15%15%
Low Growth 15%15%15%15%15%
The following graphs show the annual additional, as well as the annual total small commercial customers
for the period 2007 - 2011:
600 -
400
200
000
800
600
400
200 -
FY07
ANNUAL ADDITIONAL SMALL COMMERCIAL CUSTOMERS
... HIGH GROWTH
...
BASE CASE
"'*'" LOW GROWTH
FY08 FY09 FY10 FY11
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
000
000
000 -
000
000
26,000
TOTAL ANNUAL SMALL COMMERCIAL CUSTOMERS
FY07 FY08 FY09 FY10 FY11
"'HIGH GROWTH
.....
BASE CASE
-'-LOW GROWTH
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
HEATING DEGREE DAYS AND DESIGN WEATHER
The next step in building the demand forecast is to create a forecast of the weather the customers will
experience over the planning horizon. This weather will be applied to usage per customer per degree day
forecasts later in the process to arrive at usage per customer forecasts for the residential and small
commercial customers. The IRP demand forecast captures the influence weather has on system loads
by utilizing a concept called a Heating Degree Day (HDD). HDD values are inverse to temperature
meaning that as temperatures decline, HDD's increase. HDD's are a measure of the coldness of the
weather based on the extent to which the daily mean temperature falls below a reference temperature
base. The degree-day therefore provides a means to estimate the heat-sensitive core market customers
response to varying levels of cold weather.
Normal Degree-days
The standard HDD base - and the one Intermountain utilizes in the IRP - is 65OF (also called HDD65). As
an example, if one assumes a day where the mean outdoor temperature is 30o , the resulting HDD65
would be calculated at 35O F (i.e. 65OF base minus the 30o F actual temperature = 35 degree days). A
normal" degree day is a calculated value based on historical data, of the weather that could reasonably
be expected for a given day. The normal degree day that Intermountain utilizes is computed by the
National Oceanographic and Atmospheric Administration (NOAA) using a uniform statistical technique for
data over a thirty year period.
Design Degree-days
A "Design" degree day reflects a measure of the coldest temperatures that can reasonably be expected to
occur for a given day. Intermountain calculates design HDD's by increasing the normal HDD upwards
based on the coldest historical weather patterns. Design degree days are useful in estimating the highest
level of customer demand that may occur particularly during extreme cold or "peak" weather events. For
IRP load forecasting purposes, Intermountain makes use of design weather assumptions. (see Table 1 -
Heating Degree Days - Normal/Actual on page 28). Aggregating daily HDD's over months and/or
seasons allows Intermountain to construct normal and design scenarios.
Design Weather Development
Intermountain s design year is based on the premise that the coldest weather experienced for any month
season or year could actually occur again. The basis of a design year was determined by evaluating the
weather extremes over the last thirty years of heating degree data from NOAA (see Table 2 on page 29).
The review revealed Intermountain s coldest twelve consecutive months to be the fiscal year 1985
(October 1984 through September 1985). This year, with certain modifications discussed below
represents the base for design weather. These degree days reflect a set of temperature extremes that
have actually occurred in Intermountain s service area and would be expected to drive the maximum
customer usage response.
Design Modification
A few of adjustments were made to the base design year. First, since the coldest month for the last thirty
years was December 1985 (1638 HDD's), the weather profile for December 1985 replaced the January
1984 data in the base design year. Then , the coldest day on record - which occurred on December 22
1990 when both Boise and Pocatello experienced an 82 degree day - was used to represent the peak
day. (Because Intermountain s service territory is geographically diverse, the lack of NOAA data specific
to every locale in Intermountain s service territory forced the Company to average the actual HDD data
from the Boise and Pocatello weather stations to represent the total distribution of the system-wide design
degree-days.) That 82-degree day peak was then increased two percent to yield an 84 degree day and
for continuity purposes, was assumed to occur on January 15. The three coldest days from the original
base year were arranged around the 840 peak day to reflect a true peak event. Finally, the degree-days
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
for the remaining winter and shoulder months (excluding January) were increased one percent to assume
the potential for colder weather during these periods.
The weather for May through September was not adjusted as those months generally have few degree
days and thus do not have much impact on usage per customer. The gas requirements for these months
- normally water heating, cooking, and other year-round uses - are often referred to as base load.
After design modification was complete, the total design HDD curve had a peak at mid-January and
totaled 7764 degree days - an increase of 1755 HDD's (29%) over the Normal curve (see Graph 1 on
page 30). This curve provides a robust projection of the extreme temperatures than may occur in
Intermountain s service territory.
As Intermountain s service area is geographically diverse; temperatures in Idaho Falls or Sun Valley can
be significantly different from those experienced in Boise or Pocatello. Intermountain has recognized
these differences and is in the process of creating distinct design degree-day models for the Idaho Falls
and Sun Valley service areas.
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
TABLE
HEATING DEGREE DAYS - NORMAL! ACTUAL FY 85/DESIGN
65 DEGREE BASE
Weighted Actual Design
Month Normal 30 Fiscal 1985 Curve
October 433 605 524
November 811 834 907
December 1107 1350 1334
January 1145 1512 16382
February 875 1196 1210
March 701 1026 963
April 466 435 585
May 257 236 296
June
July
August
September 127 288 176
Total Year 6009 7586 77643
The resultant Degree Day Design compares to: (See graph on page 30)
Weighted 30 year normal ending FY20052 2.0% colder on the peak day than the 85 December peak day3 2.3% colder than the 1984/85 year
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
TABLE 2
YEI\R
HEA'I'T~GjjEQ,R.EE Dl\.Y$' (p",s~6E!;'
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1982'-83
1983"'84-8
1985'-86
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1990...,91
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Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
1800
1600
1400
1200
C!i 1000
II:
(!) 800
GRAPH
DEGREE DAY GRAPH
~.. ~
600
30 YEAR WEIGHTED NORMAL
- -
ACTUAL FY 1985
DESIGN WEATHER
400
200
rij. 10 t/;-I"
" ",
10 ,,~o Q -.-fI :;i5
~ 10
'i:"
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"" 1,
"" &
')'If
~1,cr:-
MONTHS
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
USAGE PER CUSTOMER UNDER DESIGN DEGREE DAYS
This section of the IRP describes and summarizes the therm usage per customer calculation under
design weather conditions. These results, when combined with the design degree days and customer
forecast, are used in the development of the IRP demand forecast. The following flowchart illustrates the
development of daily residential and small commercial market therms.
Peak Month
November - Februarv
Non-Peak Months
March - October
Peak Day Sendout
Regression Equation
Daily therms per
customer per Degree
Day
Daily Baseload therms
per Customer
Total Core Market
Daily Design Therms
The following paragraphs more fully explore the derivation of the usage per customer assumptions for
both peak and non-peak months. They also summarize the respective methods used to calculate usage
per customer per degree day and describe the application of the resulting equations.
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
Customer Usage During Peak Months
Data and Variables. Usage per customer per degree-day under design weather is based upon a
multiple regression equation for each month during the peak heating season of November through
February.
The first step in developing the regression equations was to determine the appropriate time period to
include in the study. A recent study by the American Gas Association found that the average U.S. home
using Natural Gas service is using 22% less Natural Gas today than it did in 1980. Following the national
efficiency trend, we have also noticed a decline in usage per customer in our service territory. Some
possible reasons for the decline in usage per customer include the Idaho Residential Energy Code which
was adopted by many cities beginning in 1991. This new building standard was designed to improve the
energy efficiency of new homes and buildings. About the same time, efficiency standards for furnaces
and water heaters were improved. Additionally, programmable thermostats are now installed routinely in
new construction , and many people have installed them in older homes as a way to reduce their energy
expense (see 'The Efficient & Direct Use of Natural Gas" on page 58).
All of these conservation influences began impacting usage in the early 1990's. Since roughly half of our
customers are new since 1990, the efficiency factors and building codes have had a tremendous
influence on our customer base. Rising energy prices have also heightened the customer s interest in
conservation. The higher energy prices recently experienced have created an economic incentive for
people to use natural gas as efficiently as possible, creating downward pressure on our usage per
customer, and contributing to the structural changes we have seen in the data.
Unfortunately, these structural shifts in the data are challenging to model. Finding appropriate variables
to effectively model these changing usage patterns can be difficult. The approach we followed to deal
with this problem was to use a fifteen year time horizon upon which to calculate the usage per customer
regression equations. We believe the usage per customer reflected in this time period will be more
indicative of the usage per customer we will likely see in the future. The models seem to substantiate
this approach , since the models created using the 1989/90 through 2004/05 data provided a much better
statistical fit than models that were based on the inclusion of older data (see "Regression Stat Output
Exhibit 2, Appendix A).
The dependent variable, usage per customer, is calculated by dividing the total residential and small
commercial market sendout for each day during each of the peak months by total residential and small
commercial customers for each day during each of the peak months. Daily customers are developed by
evenly spreading the difference between the customers at the beginning of the month and the customers
at the end of the month to the days of the month.
Many variables were tested in trying to explain changes in usage per customer, including actual sixty-five
heating degree-days (HDD65) for each day during the peak months, economic indicators, natural gas
prices and a weekend binary variable. The weekend binary variable - one (1) if Saturday or Sunday and
zero (0) if Monday through Friday - helps establish whether or not a relationship exists between usage
and the weekend.
Methodology and Results. A regression equation was developed for each of the peak months. The
independent variables that remained in the models as being statistically significant in explaining changes
in daily usage per customer include, daily actual HDD65 and the weekend binary (see "Regression
Equations " Exhibit 3 , Appendix B). The weekend binary variable was not significant in the February
model , so the HDD65 variable is the only variable remaining in the February model. The models for
November, December and January all include both the HDD65 variable and the weekend binary variable.
Statistical measurements were employed to evaluate the models, including the adjusted R2 and the F-
statistic. The adjusted R2 determines what percent of the variability in usage per customer is explained
by the independent variables. The F-statistic determines whether or not the regression equation as a
whole is significant. A table of the adjusted R2 and the F-statistic follows (see "Regression Stat Output
Exhibit 2 Appendix B).
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
PEAK-DAY USAGE REGRESSION EQUATION RESULTS
MONTH
NOVEMBER
DECEMBER
JANUARY
FEBRUARY
ADJUSTED R
88.
89.4%
87.
63.
STATISTIC
1812.
2080.
1651.
789.
After the regression equations were developed , design degree-days were used in the models in place of
actual HDD65 to calculate the daily usage per customer during the peak months.
Customer Usage During Non-Peak Months
Customer usage during the non-peak heating months of March through October is based upon an
average usage calculation from Intermountain s weather normalization model. First, baseload usage was
removed from the monthly usage per customer. Baseload usage is defined as the usage during July and
August or 22.0 therms per month. The remaining monthly therm usage from the weather normalization
model was then divided by customers and 65HDD to develop daily usage per customer per degree-day.
The following table shows the therms per customer per degree-day for each of the non-peak heating
months.
WEATHER SENSITIVE USAGE PER CUSTOMER
DURING NON-PEAK MONTHS
THERMSICuSTOMERl65HDD
MONTH
MARCH
APRIL
MAY
JUNE
JuLY
AUGUST
SEPTEMBER
OCTOBER
143
124
124
082
000
000
086
089
The daily usage per customer per degree day figure was then multiplied by the design degree days
resulting in weather sensitive usage per customer. Daily baseload usage was added to the weather
sensitive usage per customer to arrive at total usage per customer, under design weather conditions , for
each of the non-peak heating months.
Total Daily Usage
The usage per customer for both peak and non-peak periods was then multiplied by the total residential
and small commercial customers for that day (see Exhibit No., Appendix D). This calculation results in
total usage for each day.
Total daily usage for each month varied depending upon the customer growth assumption that was used
(Le. base case, high growth or low growth).
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
Usage Per Customer By Geographic Area
In a service territory that is as geographically and economically diverse as Intermountain Gas Company
we recognize that there could be significant differences in the way that customers use natural gas based
upon their location. In an attempt to quantify some of these differences, Intermountain has installed
additional meters on targeted areas of its system that measure natural gas throughput in addition to the
existing pressure measurement. We have now collected two years of usage data on the Sun Valley
lateral and one year of usage data on the Idaho Falls lateral. While the relatively small amount of data
collected to date did not allow us to make any statistically significant correlations between consumption
and Heating Degree Days specific to the laterals for this IRP , we are hopeful that as we collect additional
data we will be able to refine the usage forecasts for these laterals based upon their own unique usage
patterns in the future.
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
INDUSTRIAL FORECAST
Introduction
Industrial demand for the IRP is calculated somewhat differently than residential and small commercial
load. Because the industrial customers are fewer in number and are largely non-weather sensitive , it is
possible to estimate their demand individually and then aggregate the results to derive total industrial load
for the IRP forecast. These customers are also more likely to track usage patterns and know of projected
changes in future consumptions. A survey of the industrial customers served by Intermountain Gas
Company was completed in the spring of 2005 to determine each customer s projection of natural gas
usage (see page 40). The survey included a cover letter explaining the intent of the requested
information with the assurance that all responses would remain confidential. The survey form was sent to
the management of each of Intermountain s large volume contract customers and identified their historical
usage on an annual peak month and peak day basis for the past two years ending 2004. This information
helped provide a basis for each customer to determine their future natural gas requirements. Additional
information was requested as to each customer s alternative fuel capabilities and if there was a desire for
additional service options from Intermountain.
The results of this survey were used to forecast three distinct and separate large volume customer
forecasts (High Growth, Base Case, and Low Growth) for a six year period, commencing in 2006. The
projections incorporate information from the customer s management, engineers, and marketing
personnel regarding plant expansion or modification , equipment replacement, and anticipated changes in
product demand. Other forecast data was then utilized to adjust the survey data base for two of the three
forecasts (Base Case and Low Growth). The 111 customers were further refined into six separate sub-
groupings comprised of:
Seventeen potato processors
Forty other food processors including sugar, milk, beef, and seed companies
Three chemical and fertilizer companies
Seventeen light manufacturing companies including electronics , paper, and asphalt companies
Twenty-seven schools and hospitals
Seven other companies
All current customers were assumed to remain on their current tariff, while all new customers (if less than
500 000 therms) were assumed to be LV-1 (bundled sales). Those new customer with over 500 000
annual therms would be T-4 (firm distribution-only transportation).
Base Case Forecast
The Base Case was compiled using the surveys of existing customers as adjusted for known changes.
The projected usage for the Base Case increased 14 200 000 therms, amounting to 6.4% growth over the
five year period. A summary by market segment is shown on the following table:
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
Base Case Forecast by Market Segment
(Thousands of Therms)
Compound
Rate of
FY07 FY08 FY09 FY FY 11 Growth
Potato Processors 000 550 950 250 91,400
Other Food
Processors 330 930 330 61 ,280 61,430
Chemical & Fertilizer 900 750 850 850 850
Manufacturers 500 500 500 500 18,500
Institutions 290 690 895 105 140
Other 370 270 520 920 320
Total Base Case
Forecast Therm
Sales 222 390 230 690 234 045 235 905 236 640
The potato processing group is projected to experience modest growth over the five year period.
Demand for potato products is coming back, but the cost of production is steadily rising. No new
plants are on the drawing boards in the near future. Most of the plants in this group are looking
for ways to conserve resources while still getting the most out of production.
The food processors group is projected to increase approximately 7%, with modest production
increases in several of the plants. The malting plants are moving toward full production capacity
and should grow during this period.
Although there were four plants surveyed in the chemical/fertilizer group, one will be totally
shutting down production in 2006, which was taken into consideration for these projections. The
three remaining plants in this group will continue at current levels with projected growth and
production increases amounting to approximately 4% increase in consumption of natural gas per
year. In their forecasts, the managers of these plants assume imported fertilizers will not further
affect their operations.
The manufacturing group is projected to remain relatively flat with less than 1 % growth over the
period.
The institutional group is projected to grow nearly 2% a year, due mainly to growth of the existing
facilities. Medical facilities as well as private and state schools are planning expansions.
The increase in the other group is projected to increase 13.6% over the period due primarily to
the projection of an electrical generator being added on line in 2008 and the expansion of a major
military facility.
High Demand Forecast
The High Demand - or most optimistic - forecast figures incorporate usage data directly from the survey
with minor adjustments. The increase from the 2007 annual usage of 248 000,000 therms is projected to
increase 18 million therms, or approximately 7.4% over the five year period. The following table
summarizes the changes over this period:
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
High Demand Forecast by Market Segment
(Thousand of Therms)
Compound
Rate of
FY07 FY08 FY09 FY 10 FY Growth
Potato Processors 500 300 200 200 98,700
Other Food
Processors 150 69,250 750 750 850
Chemical & Fertilizer 900 800 200 200 200
Manufacturers 200 200 200 200 200
Institutions 15,400 000 300 500 500
Other 850 750 050 16,450 850 3.2%
Total High Demand
Forecast Therm
Sales 248 000 258 300 262 700 264 300 266 300
Potato production and consumption is down from previous projections, but the future looks very
good for the potato industry, and most firms are projecting slow but steady growth over the next
few years. The past years of drought have affected the industry a great deal , and all are hoping
to return to better crop years. The huge increase in natural gas prices in 2005 has pushed those
who could to burn more heavy oil. These projections assume natural gas prices will moderate
and become more competitive. No new plants are projected.
Other food processors are projected to increase approximately 8% over the period. Only one
additional cheese producer is in the projection starting in 2008, but at least three companies are
looking at locating in Idaho. Those plants dealing with cattle are optimistic for steady increases in
output.
The chemical/fertilizer group is not projected to increase in size; however, all three plants in this
group project steady increases in production and usage.
The manufacturing group is projected to remain steady. The big user in this group is a high tech
memory firm; therefore, if their production or sales should turn around , this projection could be
low.
The institutional group, which is made up mostly of schools and hospitals, is projected by the
survey to increase over 7% during the five year period with growth of existing facilities and the
addition of at least one more institution by 2009. Several firms are growing substantially at their
locations.
The other group is expected to grow over 13% in the high demand case, due mostly to an
expansion of existing facilities at several locations.
Low Growth Scenario
The projected usage for this scenario is based upon the assumption that the agricultural economy will be
weak and experience a drop in sales and production. It is also assumed that natural gas prices will
remain high and less competitive. Even with those assumptions , the only downturn is projected in the
potato processing. Overall growth is projected to be 1 % over the period , as shown below.
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
Low Growth Forecast by Market Segment
(Thousand of Therms)
Compound
Rate of
FY07 FY08 FY09 FY 10 FY 11 Growth
Potato Processors 78,300 800 900 100 300
Other Food
Processors 700 600 800 600 800
Chemical &
Fertilizer 27,400 100 200 200 200
Manufacturers 300 300 200 200 200
Institutions 11 ,450 11 ,850 950 150 250
Other 200 000 300 600 15,000
Total Low Growth
Forecast Therm
Sales 199 350 204 650 207 350 208 850 209 750
The price of natural gas was assumed to continue to be higher than the delivered price of oil
resulting in the lowest gas usage for the potato processing group. Potato consumption is
assumed to make a very modest return to past levels. This group, as a whole , looks at any way
possible to conserve energy and make its plants more efficient.
In the other food processor group, the dairy market is expected to remain strong, even in this low
growth forecast. No new plants are in these projections, but known expansion and growth of
existing facilities remain. Usage in the sugar industry will continue to slip as long as they are
permitted to burn coal.
The projection for the chemical/fertilizer group remains flat with no increase or decrease in usage
or production.
The manufacturing group is also projected to remain flat, assuming that no growth in production
of memory chips occurs and no unforeseen state or federal highway projects begin.
The growth projection for the institutional group in the low growth forecast is attributed to the
known expansion of universities, schools, and hospitals.
Facilities in the other group are projected to increase substantially due to planned expansions in
several firms. This projection assumes, however, that power generation remains flat.
Firm Contract Demand
The survey sent to the industrial customers requested information regarding each customer s future peak
requirements and their forecasted annual usage. Many of the largest customers predict that while their
peak day may not increase , their off-peak day requirements could vary due in part to less week-end
downtime. The individual customer s peak day requirements are used to analyze potential future
upgrades to the existing laterals serving each community. Projected Maximum Daily Firm Quantity
(MDFQ) for each of the Large Volume Firm Services (LV-1), Firm Transportation Service (T-1), and the
Firm Transportation Service with Maximum Daily Demand (T-2) will not be increased over the projected
period because the incremental interstate firm transportation capacity, as contracted with Williams
Northwest Pipeline Company, would create additional cost to all customers. Additionally, each of the
three tariff services listed above is limited to an annual usage of less than 500 000 therms per year. This
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
total is approximately 5 000 therms per day less than two years ago due primarily to loss of production
coupled with vigorous energy conservation. The current peak day firm therm requirements for the large
volume contract customers are as follows:
Tariff
Total Firm Daily
Demand Requirements
(Therms)
Large Volume Firm Sales Services (LV-
Firm Transportation Services (T -1 )
Firm Transportation Service with Maximum Daily Demand (T-
625
130 587
54.290
Total 201.502
Industrial CD in the Demand Forecast
The industrial CD's were used a surrogate for these customer s load profile in the demand forecast. This
was done because the vast majority of industrial load is transport and these customers provide their own
gas supply. Therefore Intermountain is only concerned with the peak transportation capacity required to
serve these customers and their load shape is unnecessary. The industrial CD's are projected
individually but then aggregated from both a company-wide (for interstate capacity) and regional segment
(for distribution capacity) basis. The grand total of the firm LV-, T-1 and T-2 CD figures above (201 502
therms) are used to calculate Intermountain s interstate capacity needs as all these customers utilize
Intermountain s capacity.
The CD's for the four regional distribution segments were constructed in the same manner except that
they include T-4 and T-3 (plant heat only) figures. The resulting totals provide the required distribution
capacity for each segment. Specifically, regional industrial CD requirements were computed and added
to the core demand for IFL, SVL and CCL. The industrial CD for these regions is as follows: IFL (223 934
therms), SVL (8 150 therms), and CCL (103,423 therms).
The Efficient Use of Natural Gas
Plant efficiency and getting the most production out of their plants using the least amount of energy is
foremost on the minds of the owners, operators, and managers of these large volume plants. In order to
assist them with their natural gas evaluation needs, Intermountain Gas Company has developed and is in
the process of giving them access to a website with availability to specific and timely usage reads. The
information on this site is gathered through the company s SCADA system and is transferred to the web-
based site which can be accessed by the appropriate plant personnel from their own location over the
internet. This near "real-time" information has helped managers at many of the plants improve energy
conservation and efficiency.
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
SURVEY COVER LETTER SAMPLE
February 3, 2005
Dear
In order to meet your future natural gas needs, we are requesting a projection of your future incremental
requirements on an annual, monthly, and peak day basis. To assist in your projection, we have included historical
usage information for the prior two calendar years (beginning January 2003) on the enclosed survey form.
The increase in natural gas usage that has taken place in southern Idaho over the past five years as a result of the
growth in the residential and commercial sectors of our business as well as the expanding industrial requirements in
southern Idaho has demanded additional emphasis on forecasting our customers' future needs. An Order from the
Idaho Public Utilities Commission also requires Intermountain Gas Company to document its forecasting efforts as
an added assurance that we are meeting our customers' needs in a prudent manner.
We want to re-emphasize our commitment to continue reliable services to you as a valued customer of
Intermountain Gas Company.
We appreciate your busy schedule and the effort required to complete this survey. However, it is only with your
assistance that we will be able to accurately plan for the future and continue to provide you with the highest quality
service. Please return your completed survey, including any comments you may have by February 18, 2005. After
evaluating the responses, I will contact you concerning our plans for the future.
Should you have any questions, or if I can be of assistance to you, please call me at [phone].
Very truly yours
Daniel A. McAlister
Industrial Services Manager
DAM/els
Enclosures
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LOAD DURATION CURVES
The culmination of the demand forecasting process is aggregating the information discussed in the
previous sections into a forecast of future load requirements. A brief review of the methodology follows.
The IRP customer forecast provides a total company daily projection through FY11 and includes a
forecast for each of the three capacity constrained segments of the distribution system (IFL, SVL and
CCL). Each forecast was developed under each of three different customer growth scenarios - Base
Case, High Growth and Low Growth.
The development of a design weather curve - which reflects the coldest historical weather patterns across
the service area - provides a means to distribute the core market heat sensitive portion of the Company
load on a daily basis. Applying Design Weather to the residential and small commercial usage per
customer forecast creates core market usage-per-customer under design weather conditions. That
combined with the applicable customer forecast yields a daily core market load projection through FY11
for company total as well as for each regional segment. A similar normal weather scenario is also
available, but is not included in the IRP filing.
As discussed in the Industrial Forecast section, the forecast also incorporates the industrial CD from both
a company-wide perspective (interstate capacity) and the regional segments (distribution capacity). When
added to the core market figures, the result is a grand total daily forecast for both gas supply and capacity
requirements including a break-out by regional segment.
Peak day sendout under each of these customer growth scenarios was measured against the currently
available capacity to project the magnitude , frequency and timing of potential delivery deficits, both from a
total company perspective as well as a regional perspective.
Once the demand forecasts were finished and evaluation complete, the data was arranged in a fashion
more conducive to IRP modeling. Specifically, the daily demand data for each individual forecast was
sorted from high-to-Iow to create what is known as a Load Duration Curve (LDC). The LDC incorporates
all the factors that will impact Intermountain s future loads. The LDC is the basic tool used to reflect
demand in the IRP Optimization Model (see page 64).
Design 2007 - FY11 Summary Observations
Idaho Falls Lateral
The Low Growth customer forecast projects an increase in customers of 7 641 through FY11 (Oct 1 , 2005
to Sep 30, 2011) an annualized average growth rate of 2.7%. Base Case customers increase by 12 833
customers (4.4%) and High Growth customers increase by 20 293 customers (6.5%). When comparing
the FY06 Base Case customer starting point (Oct. 1) of the 2004 LDC to the current LDC, there is an
increase of 1 774 Base Case customers (4%). The industrial contract demand load on the lateral of
223 034 therms per day reflects the exclusion of one customer as it has a summer-only load.
The 2004 IRP report indicated the need to enhance the IFL's peak day capacity and , due to system
upgrades which were completed in FY05 the lateral's peak day capacity increased from 690 000 therms
to 830 000 therms. Even with that upgrade, the peak day load for the IFL demand exceeds by a small
amount the lateral capacity of 830 000 therms/per day in 2007 in all scenarios, (Base Case, High Growth
and Low Growth). Without any capacity increase , the deficit would continue to worsen over time.
Sun Valley Lateral
Low Growth customer forecast (2007 - FY11) projects an increase of 2 121 customers (3.1 % annualized
growth rate), Base Case customer forecast increases by 3 938 customers (5.4% annualized growth rate),
and High Growth customer forecast shows an increase of 4 775 customers (6.4% annualized growth
rate).
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
During FY05, system enhancements were completed on the SVL and design peak day capacity was
increased from 144 000 therms to 180 000 therms per day. The peak day sendout for the Sun Valley
lateral exceeds current lateral peak day capacity of 180 000 therms/per day starting in 2009, (Base Case
and High Growth only).
Canyon County Area
The Base Case customer forecast for CCL increases by 18 247 customers (6.5% annualized growth rate)
over the 5-year period. The High Growth customer forecast shows an increase of 19 990 customers
(7.0% annualized growth rate) while the Low Growth customer forecast (2007 - FY11) projects an
increase of 13 347 customers (4.9% annualized growth rate).
The 2004 IRP also indicated system enhancements for the CCL. Pressure upgrades in the Canyon
County area during FY05 , delayed the projected CCL peak day deficit from FY06 (per the 2004 IRP
report) to 2007 (for both Base Case and High Growth). The peak day sendout for the CCL exceeds this
segments' current peak day capacity of 700 000 therms/per day beginning 2008 for all scenarios.
Total Company
Low Growth customer forecast (2007 - FY11) projects an increase of 50 593 customers (2.
annualized growth rate), Base Case customer forecast increases by 88 195 customers (4.8% annualized
growth rate), and High Growth customer forecast shows an increase of 114 211 customers (6.
annualized growth rate).
Intermountain ability to meet system demand is a function of interstate transportation capacity in
conjunction with Intermountain s storage supplies and other winter deliveries (peak day maximum
deliverability). The design peak day under the Low Growth scenario exceeds maximum deliverability in
2007. No shoulder month storage deficits occur during the Low Growth scenario, but Intermountain will
need to begin adding some additional winter resources to adequately meet shoulder month demand in
2009 (Base Case) and in 2008 (High Growth).
Using the LDC analyses , Intermountain will be able to anticipate changes in future demand requirements
and plan for the use of existing resources and the timely acquisition of additional resources.
Base Case
Idaho Falls Lateral Region LDC Report Study. When forecast peak day sendout on the Idaho Falls
lateral is matched against the existing peak day distribution capacity (830 000 therms), a peak day
delivery deficit occurs during FY06 (High Growth only) and increases at levels shown on the following
tables:
Sun Valley Lateral Region LDC Report Study
When forecasted peak day send out on the Sun Valley Lateral is matched against the existing peak day
distribution capacity (180 000 therms), a peak day delivery deficit occurs during 2009 (Base Case and
High Growth only) and increases at the levels shown on the following tables:
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
Canyon County Region LDC Report Study
When forecasted peak day send out on the Canyon County region is matched against the existing peak
day distribution capacity (700 000 therms), a peak day delivery deficit occurs during 2008 (all scenarios)
and increases at the levels shown on the following tables:
Total Company LDC Study
Residential, commercial and industrial peak day load growth on Intermountain s system under design
weather conditions is forecast over the six-year period to grow at an average annual rates of 3% (low
growth), 4% (base case) and 5% (high growth).
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
TRADITIONAL SUPPLY AND DELIVERABILITY RESOURCES
We now move into a discussion of the Supply and Deliverability Resources that are available to meet the
demand that was forecast in the preceding discussion of Load Duration Curves. The main goal of the
IRP planning process is to ensure that Intermountain s deliverability of natural gas will be adequate to
meet the anticipated demand of our customers on the coldest winter days in the years ahead.
Overview
Traditional Supply and Deliverability resources generally include the gas supply and the infrastructure
resources utilized to provide for the delivery of that energy to the Local Distribution Company (LDCo).
Specifically included in this definition are the natural gas molecule or supply (consisting mostly of
methane), interstate pipeline capacity and various types of storage facilities. For a Pacific Northwest
LDCo in today s energy environment, the responsibility to structure the gas supply portfolio with
producers/suppliers , interstate pipelines, and, where applicable, storage operators and efficiently manage
those resources to ensure year round gas supply delivery falls squarely on it shoulders. If the LDCo fails
to properly plan to avoid supply failure, there is typically no other backup supplier and the LDCo s end-use
customers will presumably bear the consequences. The following will outline and discuss the various
available resources and address Intermountain s strategy for employing them.
Background/Historical Perspective
The procurement and distribution of natural gas is in concept a straightforward process. It simply follows
the movement of gas from its original geological source through processing, gathering, and pipeline
systems to end-use facilities where the gas is ultimately ignited and converted into thermal energy.
Intermountain physically receives all gas supply to its distribution system via taps with Williams Northwest
Pipeline (NWP), the only interstate pipeline with interconnects to Intermountain s system. A predecessor
of NWP first brought natural gas service to the Pacific Northwest in the mid 1950's by constructing
pipeline facilities which began in Northwestern New Mexico and Southwestern Colorado and continued
Northward through Utah into Southern Idaho, then across Idaho, Eastern Oregon, and Western
Washington. The pipeline continues Northward up the 1-5 corridor where it interconnects with Duke
Energy Gas Transmission (DEGT), a Canadian pipeline in British Columbia, near Sumas , Washington
(See Exhibit 4, Appendix A). Along its path , NWP also interconnects with Gas Transmission Northwest
(GTN) near Stanfield , Oregon as well as several other interstate and gathering systems in Wyoming,
Utah , Colorado, and New Mexico. From those interconnects, Northwest receives gas supplies from the
gas producing regions in British Columbia, Alberta, and the Rocky Mountain region of the Western U.
for delivery to LDCos (like Intermountain) and other end-use customers located both on and off its
system.
In today s deregulated energy environment, competitive market forces allow the economic principles of
supply and demand to work. Thus, a tight gas supply market as experienced in the past few years led to
higher market prices which in turn resulted in increased finding and drilling investment by the E&P
industry. These activities over time lead to increased production improving the supply/demand balance
which has already begun to stem the steep price increases experienced over the past couple of years.
Though no credible price forecast predicts a return to the price levels experienced during most of the
nineties , most are forecasting some softening in the next several years.
Disproportionate regional prices also encouraged capacity enhancements to the interstate pipeline grid
resulting in a more integrated, efficient delivery system. As new pipeline capacity - or expansion of
existing infrastructure - increased delivery capability out the constrained Rockies region , producers had
access to higher price markets in the Midwest and in California. Consequently, gas supplies once captive
to the Northwest/Midwest region of the continent now have greater access to the national market resulting
in less favorable price differentials for the Pacific Northwest market. Intermountain today operates in a
mega-regional marketplace where market conditions across the continent can and often do affect local
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
supply and pricing dynamics. While natural gas is still plentiful, the Company must now compete with
higher priced markets to obtain gas supply.
While the gas delivery environment has changed, Intermountain s commitment to providing secure
reliable, and price-competitive firm service to its customers has not. Whether the customer desires
burner-tip sales service, transport-only service, or other unbundled service options, Intermountain will
through its long-term planning process continue to identify, evaluate, and utilize best-practice strategies
and implement procedures necessary to provide the value of service that its customers expect. The
following paragraphs will identify and discuss each of the available supply and delivery resources and
describe how each may be in a portfolio approach to gas delivery management.
Gas Supply
General. Recent experience in the natural gas markets has shown historically high gas prices and some
overall concern for the future. From a continental standpoint, evidence indicates a tight supply/demand
balance with several of the historically large production basins in decline. While the unprecedented price
increases during 2000 and 2001 were the result of many factors, overall demand growth has clearly
exceeded supply growth over most of the last decade. Some may wonder if there is any good news
relating to natural gas. The answer is an absolute yes!
Intermountain is well positioned, and has ready access to, a region with a diverse and growing supply
production , including two large and prolific natural gas producing basins: the Western Canadian
Sedimentary Basin (WCSB) in Alberta and British Columbia and the Rocky Mountain region (Rockies) of
Colorado , Utah, and Wyoming. These two producing regions contain approximately 85 Tcf of remaining
proved natural gas reserves. (Proved reserves are those known to exist with a high degree of probability
and can economically produced with today s technology and economic conditions or in other words, it is
essentially working inventory.) Recent private and government studies project upwards of 500 trillion
cubic feet (Tcf) of ultimate resource potential of natural gas that is recoverable from these basins.
From a production standpoint, the Rockies and Western Canadian producing fields continue to provide
ample production and deliverability. With recent successful reserve finds in the Alberta, BC and the
Rockies producing basins, gas supply availability should be adequate throughout the forecast. These two
areas produced 24.2 billion cubic feet (Bcf) per day in 2004 and projections indicate combined production
could approach 28 Bcf/d by 2010. To be fair, a consensus of forecasts would show Canadian supplies to
be flat over through the next decade, but the Rockies basins are the lone bright star among U.
producing regions. Most forecasts predict steady growth into the foreseeable future.
Recent evidence indicates that over the medium term , some producing entities' plans for drilling and
production may not replace natural production declines, particularly in Alberta as the focus there appears
to be turning towards its oil sands reserves. But new gas finds in Northern British Columbia and the
Northwest Territories indicate significant potential supply pools , as does the recent activity in
Northwestern Alberta. Additionally, interest has again peaked in the supply potential from the Arctic
regions of Alaska (ANWR) and Canada (Mackenzie Delta region) although regulatory constraints and a
huge investment in pipeline capacity need to be addressed.
It is clear that the exploration and drilling community (E&P) can bring additional supplies to market
relatively quickly when prices are high enough to encourage adequate investment and when regulatory
constraints are not overly restrictive. No one is suggesting that E&P companies rape and pillage public
land and pollute the air and water, but the industry has shown that natural gas can be discovered and
produced in a responsible and environmentally friendly manner. Intermountain believes that reasonable
access to non-park public lands and rational regulatory policies will allow the industry to provide the
amounts of energy the marketplace demands at price levels conducive to a strong and healthy economy.
As North American demand continues to grow, it is apparent that new sources of supply must be
accessed. One market solution that is growing in interest is the importation of Liquefied Natural Gas
(LNG). While LNG has been imported for decades, its overall share of the North American market has
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
been minimal. But with todays higher price levels imported LNG is now more economically feasible than
ever before and many proposed projects, including one in the Pacific Northwest, are currently being
pursued. Some estimates show imported LNG growing from 1 Tcf in 2004 to 6 Tcf by 2025.
In short, projections indicate that free-market competition continues to spur future exploration and new
technologies for natural gas which should ensure ample gas production well into the future. However, a
significant trend that has occurred for Pacific Northwest markets is a steep increase in prices that are now
closer to those paid by traditionally higher priced markets in the eastern and mid-western US and
California. Forecasts indicate that this price leveling will not reverse largely reflecting new pipeline
capacity in the Western U.S. and Canada which allow more gas supply from the Rockies to flow to the
those historically higher priced markets. While prices are projected to remain robust, availability is not
expected to be an issue. Even during the high prices of 2000 and 2001 , gas was available as long as
markets were willing to pay the market price. Furthermore, the issues relating to gas-fired generation
gas storage, hydro-generation, and the gas-to-electric price spread that plagued the market during the
early part of this decade appear to be less critical as the competitive market adjusts for these factors.
Types and Pricing. During the early years of Open Access, Intermountain determined that a portfolio
heavily based on firm supply contracts with a variety of reputable suppliers would provide the greatest
level of reliability and security for year-round delivery of gas supply. Firm supply (as opposed to best
efforts or interruptible) is sold with a supplier s assurance that, absent a defined force majeure event
100% of the supply will be available for delivery to the market on every day of the contract term. At the
same time, suppliers often require markets take firm supplies with a 100% daily take commitment or
100% load factor. (Load Factor is simply the average daily usage over a period divided by the maximum
available/used during the period.Unlike an LDCo s daily load swings, gas wells normally produce
steady amount of gas from day-to-day.
Because of this , a supplier is typically more willing to offer supply under a high load factor contract
because he knows that absent any force majeure event, the market will take the full volume of gas every
day during the term of the contract. Alternatively, under a less than 100% take commitment, the market
may only take gas during the peak periods and release some or all of the supply to the supplier during
lower usage periods when pricing is usually less advantageous for the seller. Therefore, the supplier
must stand prepared to re-market the unutilized supply when the term market does not require it - often
times at short notice and during periods when spot pricing is lower than the contract price. For this
reason, suppliers usually require a requisite premium when contracting with markets seeking less than a
100% daily take commitment making increasingly more expensive to purchase firm supplies y at anything
other than 100% load factor. This has given greater value to facilities, suppliers or arrangements that
help balance out an LDCo s daily load swings.
The NYMEX natural gas contract with its applicable basis differentials and associated derivative pricing
mechanisms is the industry pricing standard. This has provided pricing transparency that has allowed
Intermountain more flexibility in building its future portfolio. Although the stringent creditworthiness
requirements required by financial institutions can limit hedging activities, it also gives buyers and sellers
confidence in the financial viability of their contractual counterparties. Long-term supply has historically
been priced at a premium to daily spot or monthly index-based supply, so it is imperative that term supply
contracts have competitive and flexible pricing terms (e.g. annual renegotiation of index based provisions)
in order to remain economical.
Spot gas is typically gas that suppliers, for various reasons , do not contract on a term delivery basis. The
term "spot gas" may apply to gas sold under differing terms including firm , interruptible, swing, day gas, or
best efforts and is usually available at almost anytime at varying volumes, prices, and contract terms.
Spot gas may be bought for one or several days a time, for one month , or even for seasonal periods such
as the summer injection periods. During peak usage periods, spot may be difficult to find, be relatively
expensive , unreliable, or may be available only on a day-to-day basis. Of course, in non-peak months
spot is most often readily found and is usually relatively inexpensive compared to firm supply.
Intermountain generally purchases firm spot supplies for a given month and as a rule, targets those
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
suppliers with a reputation for reliability. Intermountain s Administrative Agent provides daily flexibility in
supply takes as weather and other factors often cause significant day-to-day load swings.
Winter peaking supply is typically a baseload volume purchased for the two-to-four winter peak usage
months to augment winter supplies. While these contracts may be structured in any number of ways
they are ordinarily firm in nature, have 100% daily take commitments and usually are priced at levels
exceeding monthly spot supplies. As Intermountain s loads continue to grow, it is apparent that due to
equipment efficiencies and other conservation measures, that core markets peak usage is growing faster
than its annual demand. As this peak-oriented growth continues to make the LDC less horizontal
Intermountain will need to include more winter-type supplies in the portfolio. Capacity Release has led to
suppliers offering "Citygate" delivered gas supply that requires no company-owned transport capacity
enabling the company to maximize the resources already in the portfolio. The company s use of storage
facilities to balance winter loads and also helps to level out summer supply usage (see page 51
, "
Storage
Resources ) increasing overall load factor.
Intermountain will also utilize other types of supply such as daily and/or monthly spot, seasonal supply,
swing, and winter peaking taking advantage of each resource s inherent advantages.
Supply Regions. Intermountain s natural gas supplies are located primarily in three producing regions:
British Columbia (BC), Canada, Alberta, Canada, and the Rocky Mountain (or Domestic) region
consisting of production primarily from the states of Wyoming, Utah , Colorado, and New Mexico (see the
map in Exhibit 4). In general , the proportion of purchases from the various supply basins is very
dependent upon firm receipt capacity on the pipelines ("Transportation
British Columbia. British Columbia has traditionally been a source of inexpensive and abundant gas
supply for the Pacific Northwest as much of the gas produced in the province is exported into the U.S. at
an international interconnect point located near Sumas, WA. Much of that supply had historically been
somewhat captive to the region due to the lack of alternative pipeline options into Eastern Canada or the
Midwest U.S. However, the expansion of TransCanada Pipeline s capacity into Eastern Canada and the
completion of the Alliance pipeline , which delivers supply to the Chicago area, largely eliminated that
bottleneck. While there continues to be an adequate supply from BC over and above provincial demand
new discoveries in Northeast BC and the Northwest Territories are critical to future deliverability to export
markets. Even though these supplies must be transported across long distances in Canada and over an
international border, there have historically been few political or operational constraints to impede delivery
to Intermountain s citygates. As with the other supply regions , Intermountain will continue to have access
to plentiful supplies but will increasing need to compete with higher priced markets in order to secure
those supplies.
As a condition of sales CD conversion , NWP required that shippers continue to source purchases in the
same proportion that the pipeline had sourced its sales portfolio: approximately 58 percent of daily supply
had to be sourced from Sumas to ensure the efficient operations of the pipeline. However, past
experience with NWP system dynamics has shown that any type of disruption due to normal
maintenance, extreme weather conditions, or basin price variations tends to result in pro-rata transport
cuts and Operational Flow requirements. The operational dissonance is particularly onerous and most
often occurs with South-flow supply from Sumas through the 1-5 corridor (although peak flows also affect
North-flow of Rockies supplies). Intermountain actively searched for ways to minimize these problems.
One alternative was to move existing receipt capacity or find new capacity at alternative points.
Intermountain also realized there were certain transportation cost benefits to moving firm receipt capacity
away from Sumas. Consequently, Intermountain elected to "segment " or move just over half of its firm
receipt capacity on Northwest from Sumas to Stanfield (see page 49
, "
Transportation ). This reduced its
reliance on the amount of BC supply purchased, from 58 percent of peak purchases in the late 1980's to
approximately 22 percent today, and added a new level of diversity to the gas supply portfolio.
Recent deliverability studies by Westcoast show robust future production in BC but there are some
capacity issues on the DEGT system which are addressed in Transportation section.
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
Alberta. Production in Alberta has always been abundant, and it is, in fact, believed to have the largest
natural gas reserves in the North American continent as it annually produces 10 times the Pacific
Northwest's yearly consumption. Since a 1993 Gas Transmission Northwest (GTN - formerly PGT)
expansion that increased the delivery of Alberta supply into NWP, Alberta supply has greatly increased in
importance within Intermountain s portfolio. The Stanfield interconnect between NWP and PGT offers
added operational reliability and flexibility over other receipt points both north and south. Other positive
factors influencing the decision to purchase Alberta supplies are vast unrecovered reserves, extensive
pipeline facilities, and access to inexpensive production-based storage (see "Storage Resources" below).
Where these supplies once amounted to a trickle, today s purchases amount to approximately 36 percent
of the company s daily supply.
One area of concern is the rapid production decline of natural gas wells drilled in the past few years. In
response to the price increases in 2000 and 2001 , a record number of rigs were drilling in Alberta. A
large number of these new well completions were in shallow reservoirs which produced huge levels of
natural gas early on but then declined rapidly. Regions that are expected to be the next frontier for future
exploration and production are in basins requiring deeper well depths. These deeper wells generally do
not have the robust early production of the shallower wells but neither do they have the steep production
decline curve, and they therefore produce gas at steadier rates for much longer periods. So while the
short-run supply availability from Alberta may tighten somewhat, longer-term forecasts project ample
production to support market demand. Additionally, the northern-most pipeline facilities in Alberta are
well positioned to receive supply from the Arctic regions should exploration and production commence in
those basins. While the Artic supplies cannot be guaranteed today, most forecaster predict those
supplies will come to market around 2015.
Domestic (Rocky Mountain). Domestic supply has historically been the second largest source of supply
for Intermountain, which is partly due to NWP capacity requirements (see "Transportation ) and because
the supplies have been readily available, relatively inexpensive, and highly reliable. Continued expansion
of take-away capacity to pipelines with off-system pipelines in the mid-west and others taking gas to
California (i.e. Kern River) and the general effect of the deregulated and competitive marketplace has
tended to make supply in this region more price competitive with Midwestern and California markets and
consequently, more expensive than in the past.
One area of concern is the NWP capacity constraint at Kemmerer, Wyoming Oust East of the Idaho
border), which limits the amount of Rockies supply that can flow west into Idaho during peak periods.
Taking advantage of "segmentation" opportunities on NWP, the company increased its allocation of firm
capacity rights from receipt domestic points flowing through the Kemmerer bottleneck into Idaho. This
provided Intermountain with the capacity necessary to transport Clay Basin withdrawals into Idaho during
peak usage periods. Because the cost of physically increasing capacity through the Kemmerer constraint
point would be exorbitant, the company will likely not increase its stake in domestic supply unless
additional released capacity can be obtained through another firm shipper on NWP. Although future
growth in domestic supply is likely to increase, the company will not likely be able to increase the
proportion of firm capacity from the Rockies (see Exhibit No.5, Appendix B for the Supply Resource
Summary.
Transportation
As mentioned earlier, Intermountain s ability to purchase natural gas is highly dependent on the firm
interstate capacity held particularly during peak throughput periods as markets compete for space to
move gas supply for production area to local citygates. This puts a premium on not only arranging for
adequate levels of capacity but also having receipt capacity are points where gas supply is being
purchased
General. In general , firm transportation capacity provides a mechanism whereby a pipeline will , on
behalf of a designated and approved shipper, reserve the right to receive and redeliver a certain amount
of gas supplies on that pipeline system to a specified delivery point. The major pipelines with which NWP
interconnects can be seen on Exhibit 4, Appendix A. Duke Energy Gas Pipeline (DEGT - formerly
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
Westcoast Transmission) in British Columbia interconnects with NWP near Sumas , Washington and
provides for the receipt of supplies produced in BC as well as the Northwest Territories. An interconnect
with GTN (formerly PGT) near Stanfield, Oregon allows for the delivery of gas produced in Alberta into
NWP. Other major interconnects are with Colorado Interstate Gas in Southwestern Wyoming; Questar
Pipeline in Western Colorado and Eastern Utah; and EI Paso Pipeline in Southwestern Colorado and
Northern New Mexico. These pipelines provide outlets for gas produced in locations stretching from
Wyoming to New Mexico. NWP also directly interconnects with producing and/or gathering areas in
Wyoming, Utah , Colorado , and New Mexico.
Regulation. All activity regarding transportation of natural gas supplies through any part of the interstate
pipeline grid continues to be under the review and regulatory oversight of the Federal Energy Regulatory
Commission (FERC). Beginning in the mid-1980', the FERC began the process of leading the natural
gas industry into a more competitive environment by first decontrolling wellhead natural gas prices. From
the earliest days of deregulation, Intermountain fully embraced the idea of the efficiencies of the
competitive marketplace and was consequently the first Pacific Northwest LDCO to convert 100% of its
applicable sales CD to transport capacity. When NWP implemented Order 636 on its system in 1994, the
company had already been transporting 100% of its supply for six years. Intermountain was also the first
LDCo in the Northwest to implement transportation tariffs behind its own citygates in order to allow its
industrial customers to benefit from the advantage of open access transportation.
An important feature of transportation regulations allows firm shippers to "release" un utilized capacity to
others in the marketplace who would willingly pay the market price to lease it for some predetermined
period of time. This allows Intermountain the opportunity to sell off unused capacity in off-peak and also
to obtain additional capacity if the need were to arise potentially increasing annualized load factor on
NWP. On the down side , as shippers use their contracted capacity more operational flexibility will likely
diminish. Also, as shippers look to capacity release to resolve capacity shortages markets will obviously
look at pipelines on a less frequent basis for new capacity.
A valuable offshoot of capacity release is the notion of "segmentation." This is a particular kind of release
wherein the primary path can be divided into two or more separate pieces along the primary
receipt/delivery path where each piece still retains its applicable primary firm rights. Segmented capacity
allows for one or more of the pieces to be released to a replacement shipper. The amount the
replacement shipper pays for the "new" capacity is a cost savings to the releasing, or original , shipper.
Intermountain has completed several long-term segmented releases that enable the company to retain
the same level of overall firm capacity while also obtaining a significant cost saving which can be passed
on to customers.
Intermountain s total system delivery capability including various receipt point capacities and from other
selected sources from NWP can be seen on the Table below:
Analysis of Total System Delivery Capacity (FYO7)
(Volumes in MMBtu)
Sumas
41 ,146
Stanfield
800
Rockies
93,384
City Gate
25,000
Storaae Namp LNG
000 60 000
Total
393 330
Intermountain provides both interstate and distribution transport services to its industrial customers in its
service territory through the use of its pipeline contracts and/or distribution system. For Intermountain
firm LV-1 customers, service is fully bundled to the customer s meter. T-1 and T-2 customers utilize
Intermountain s firm interstate and distribution system to deliver their own gas supplies to their meters.
The Company also transports gas under its T-3 and T-4 tariffs where the customer delivers supply to one
of Intermountain s applicable citygates and that supply is then redelivered to the customer s facilities via
the Company s distribution facilities.
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
Intermountain has actively managed the utilization of its transport capacity through the growth years of
the 1990's because projects to build new capacity have largely been either extremely expensive or
unavailable to this area requiring the company to consider several alternatives. In fact, NWP has no
current plans for facilities expansion that would provide additional rights to Intermountain. One critical
point to be understood is that new capacity usually comes in large "chunks" and is rarely available just
when it is needed. For this reason, Intermountain consistently evaluates its need for future capacity as
identified through the IRP mechanism to identify potential opportunities.
One strategy to forestall the need to purchase new capacity has been to encourage the Company
industrial customers to participate in the open market to procure their own capacity. The Company has
also limited growth in the industrial customers' loads under firm agreements and has required new
transporters to elect T-distribution-only transportation service. These strategies have allowed the
company to continue to serve the growing core market with firm service while minimizing forestalling new
pipeline capacity. Intermountain recognizes that eventually growth will dictate the need for additional
capacity, and projections for adding new capacity needs are addressed in this study.
The company has one main transmission line in Eastern Idaho that serves customers in the
Blackfoot/Idaho Falls/Rexburg region. Due to increased customer load in this area, this line s capacity
has been constrained at times and is one of the resources that the company monitors closely.
Intermountain has also recently identified two other locales that are projected to see capacity constraints
in the coming years - the Sun Valley lateral in Central Idaho and the Canyon County area in Western
Idaho. All three of these constraint areas and solutions to those constraints are addressed in this study.
Storage Resources
General. As previously discussed, gas supply and transport capacity availability are very linear in nature.
Because of the low load factor as reflected in the Company s LDCs , peak demand greatly exceeds
maximum supply deliverability because the cost to obtain such low load factor gas supplies and high
levels of firm transport capacity to make the peak day delivery would be enormous. The use of storage
facilities is a cost efficient way to fill the gap between peak demand and available deliverable supply. Gas
is injected into Intermountain s storage capacity during off-peak periods and it is withdrawn during the
peak load months. The advantage is two-fold: first, the Company can shave the winter peak off the LDC
thus minimizing firm gas supply and transport capacity needs, and secondly, injecting gas in off-peak
months provides a more efficient year-round use of the interstate capacity resource. Additionally, the
marketplace normally prices off-peak supplies at a discount allowing the Company to inject gas into
storage during lower price months resulting in a lower overall WACOG. Storage facilities are normally of
two general types: liquefied storage and underground storage.
Liquefied Storage. Liquefied storage facilities make use of a process that supercools gaseous methane
under pressure until it reaches approximately minus 260oF where it liquefies. Liquefied natural gas
LNG") occupies only one-sixhundredth of the volume of gaseous methane, and it is thus an efficient
method for storing peak requirements. LNG is also non-toxic, non-corrosive, and will only burn when
vaporized to a 5-15% concentration with air. However, because of the liquid nature of the supply, LNG is
normally stored in man-made steel tanks and safety equipment is required.
Liquefying natural gas is a relatively slow and costly procedure and expensive cooling equipment is
required. It typically requires as much as one unit used for liquefaction fuel for every three to four units
liquefied. Furthermore, the liquefaction cycle may take 5 - 6 months to complete. Because of the high
cost and length of time involved in filling a typical LNG facility, it is normally cycled only once per year.
The process of changing the liquid back into the gaseous state is an efficient process called vaporization.
Since the natural state of methane under typical atmospheric and temperature conditions is gaseous and
lighter than air, and because the liquid methane is super-compressed, vaporization requires little energy
and will occur naturally under normal conditions. Vaporization of LNG into a system is usually
accomplished by utilizing the system pressure differentials through the opening and closing of valves.
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
The high pressure LNG is allowed to push itself into the lower pressure distribution system although a
vaporizer unit may be run for larger withdrawals. Potential LNG daily withdrawal rates are normally large
and a typical withdrawal cycle may last less than 10 days at full rate. For these reasons, LNG is typically
used as "needle" peaking supply and is usually located close to the consuming market.
Intermountain utilizes two such facilities: one is NWP's LS facility located near Plymouth, Washington
and the other resides on Intermountain s distribution system near Boise. Neither facility requires the use
of existing transportation capacity as the Plymouth facility has bundled transport capacity for delivery to
Intermountain, and the LNG tank withdrawals go directly into the Company s distribution system. Exhibit
, Table 3, summarizes the capacity and withdrawal statistics for all of the storage facilities utilized by
Intermountain.
Underground Storage. This type of facility is typically found in naturally occurring underground
reservoirs or aquifers (e.g. depleted gas formations, salt domes, etc.) or sometimes in man-made caverns
or mine shafts. These facilities often require little hardware compared to LNG and are usually less
expensive to build per equivalent volume. In addition, commodity costs of injections and withdrawals are
usually minimal by comparison. These lower costs allow the more frequent cycling of inventory; many
such entities are utilized to take arbitrage changing market prices. Of more significance to Intermountain
the minimal commodity costs make underground storage an ideal tool for winter baseload or for daily load
balancing.
Another material difference is the maximum level of injection and withdrawal. Because underground
storage involves far less compression than LNG, daily injection levels are much higher while daily
withdrawal maximums are significantly less. Consequently, a typical withdrawal cycle might last 35 days
or more at maximum withdrawal. For this reason , the company generally utilizes underground storage for
winter base load supply; the withdrawal season typically lasts from November to mid-March. Underground
storage also has a shorter injection season which does provide some ability to cycle gas through such a
facility more than once per year.
Intermountain utilizes three underground storage facilities. The first is Jackson Prairie located near
Chehalis, WA and operated by NWP. Another is Questar s Clay Basin facility Northeastern Utah that has
a direct connection to NWP. Lastly, the company utilizes a facility located in Eastern Alberta called
AECO" operated by the Alberta Energy Company. It is connected to the NOVA system and is located
near the producing fields of Alberta and does not require the use of Intermountain s interstate capacity to
effectuate injections
Delivery Capacity. Both the Plymouth and Jackson Prairie facilities include distinct bundled firm
redelivery transport capacity on NWP equal to the daily the withdrawal rights. This enables Intermountain
to withdraw and redeliver these volumes without using its annualized firm capacity; however, injections do
require the use of interstate capacity. This is advantageous because it allows the company to minimize
its daily transport capacity during the peak season while also providing a mechanism whereby the
Company can use otherwise unutilized capacity during the non-peak season.
AECO and Clay Basin are not bundled with transport redelivery capacity. This requires Intermountain to
use its already existing annualized capacity on NWP to move withdrawals to the company s citygate
locations. As such , these facilities' inventory is generally withdrawn in a winter baseload fashion. Clay
Basin also requires existing capacity for injections, while AECO does not. The LNG facility only requires
capacity for injections since it is located on the company s own system; withdrawals are reserved for the
coldest needle peak periods.
Storage Summary. The company generally utilizes its diverse storage assets to offset winter load
requirements , provide peak load protection , and , to a lesser extent, for system balancing. Intermountain
believes that the geographic and operational diversity of the five facilities utilized offers the company and
its customers a level of efficiency, economics , and security not otherwise achievable. Geographic
diversity provides security in the event pipeline capacity becomes constrained in one particular area. The
lower commodity costs and flexibility of underground storage allows the company flexibility to determine
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
its best use from alternative such as winter baseload , peak protection, price arbitrage, or system
balancing. Because of high levels of daily withdrawal capacity along with relatively high operating costs
the Company has traditionally used the liquefied inventory facilities (LS and LNG) for needle peaking
supply during periods of extreme cold.
Supply Resources Summary
Because of the dynamic environment in which it operates, the Company will continue to evaluate
customer needs in order to provide an efficient mix of the above supply resources to provide reliable
secure, and economic firm service to its customers. Intermountain actively manages its supply and
delivery portfolio and consistently seeks additional resources and techniques to maintain and improve
customer service. The Company actively monitors natural gas pricing and production trends in order to
maintain a secure, reliable, and price competitive portfolio. Intermountain also seeks innovative
techniques to manage its transportation and storage assets in order to provide both economic benefits to
the customers and operational efficiencies to its interstate and distribution assets. This IRP suggests that
Intermountain should be looking for additional winter baseload and peaking resources.
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
NON-TRADITIONAL SUPPLY RESOURCES
Non-traditional resources are defined here as those providing additional deliverability to meet the design
peak day load by decreasing the natural gas load , using alternative fuels or increasing capacity within the
existing distribution system. Five (5) such non-traditional resource alternatives were considered and are
as follows:
Fuel Oil (as an Industrial application)
Coal (as an Industrial application)
Propane
Portable LNG Facilities
Compressor Station
The large volume industrial CD is a major contributor to the needle peak. Large volume industrial
customers typically purchase their own firm gas supply and most also provide their own interstate
capacity to deliver supplies to Intermountain citygate delivery points. They then contract with
Intermountain for transportation capacity on Intermountain s local distribution system for delivery their
individual burnertips. The use of the above alternative energy resources, where applicable, the overall
system demand needle peak may be effectively reduced. Historically, it is the industrial customers
located along the Idaho Falls Lateral that have availability to these non-traditional resources.
Fuel oil, coal, propane, and the LNG facilities were evaluated as alternative fuels used in conjunction with
industrial customers during their peak day demand. This form of Demand Side Management in essence
reduces peak day demand within the distribution system as industrial customers switch to a particular
alternative fuel.
The addition of a compressor station increases the overall capacity of a pipeline system but does not
reduce demand or load during peak usage. Use of portable LNG can provide additional natural gas into a
constrained area.
Fuel Oil
Fuel oil is generally restricted to the industrial customers because of the equipment typically used within
industrial plants. Switching a boiler load over to oil and leaving the direct fire load on natural gas during
peak demand typically reduces the plant load by 10 - 20%. In some situations, some industrial customers
have the ability to switch entirely from natural gas to fuel oil. Burning fuel oil in lieu of natural gas does
require obtaining various permits from the local governing agencies and can be a lengthy process
depending on the specific type of fuel oil.
Capital costs for fuel oil facilities are approximately $150 000 - $250 000 providing 5 000 - 10 000 therms
per peak day for up to seven (7) days. After seven days, the facilities would then have to be refilled with
oil at a cost between $0.50 - $1.00 per gallon depending on contractual obligations and time of year.
(Note: one gallon of fuel oil is typically 138 000 - 155 000 BTUs, depending on grade and blending.
Fixed operation and maintenance (O&M) costs are approximately $60 000 - $120 000 per year.
Coal
Coal use is very limited as a non-traditional resource for industrial customers within Intermountain
service territory. Intermountain currently has one institutional industrial customer capable and willing to
burn coal during a peak day, but this is a very small percentage of the overall industrial load. A natural
gas fired boiler and a coal boiler are not interchangeable; thus , a separate boiler must be installed to
switch to coal. Permitting requirements continue to be a challenge in addition to the availability of railroad
access to deliver the coal to the industrial site.
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
The cost of coal in the northwest ranges from $30.00 - $50.00 per ton , depending on the quality of the
coal. Lower BTU coal would range from 8 000 - 11 000 Btu per pound while higher quality coal would
range from 12 000 - 15 000 Btu per pound. Coal is typically transported by rail due to the volumes
required.
Propane
Since propane is similar to natural gas, the conversion to propane is much easier than a conversion to
fuel oil. Since the equipment - generally orifices and burners - is similar to that burning natural gas, an
entire industrial customer load (boiler and direct fire) may be switched to propane. Therefore, utilizing
propane on peak demand could reduce an industrial customer s natural gas needs by 100%.
Capital costs for propane facilities are considerably higher than that for fuel oil. Typical capital costs for a
peak day send out of 30 000 therms per day and required storage tanks are approximately $600 000 -
$700 000. As with oil , storage facilities could be designed to accommodate delivery of a peak day load
for up to seven (7) days thus requiring the facilities to be refilled with propane at a cost ranging from
$1.00 - $1.50 per gallon. (NOTE: One gallon of propane is approximately 92 000 BTUs.) Fixed O&M
costs are approximately $50 000 - $100 000 per year.
Portable LNG Facilities
Portable LNG facilities such as tanker trucks are available for lease from various companies and could be
used for peak shaving at industrial plants or within a distribution system. Regulatory and environmental
approvals are minimal compared to permanent LNG plants and are dependent upon actual location of the
portable LNG facilities. The available delivery pressure from LNG equipment ranges from 50 psig to 350
psig with a peak day send out of approximately 24 000 therms per day per vaporizer.
Fixed costs with one vaporizer and two days of storage, regardless of any LNG usage, are approximately
$150 000 - $250 000 for a three-month period. The actual cost of LNG is dependent upon usage, natural
gas prices, liquefaction , and transportation costs. The cost of LNG trucked to Idaho during the winter
months is estimated at $1.20 - $2.00 per thermo
Compressor Stations
Compressor stations are typically installed on pipelines or laterals operating at higher pressures with a
fairly significant gas flow. Intermountain currently has only two such pipelines in which the installation of
a compressor station would be practical: the Sun Valley Lateral and the Idaho Falls Lateral. Regulatory
and environmental approvals would be significant while engineering and construction costs for a
compressor station capable of providing a 100 000 - 200 000 therm per day capacity increase is
approximately $2 000 000 - $3 000 000. Fixed O&M costs are approximately $100 000 - $150,000 per
year.
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
DISTRIBUTION SYSTEM MODELING
Gas flow through a pipe falls under the engineering discipline of fluid mechanics. Due to the nature of
fluid flow, there is a finite amount of gas that can flow through a pipe of a certain size and length.
Engineers in the field of gas distribution can use the laws of fluid mechanics to approximate flow
conditions of gas through pipes. Ultimately, it is total throughput or system capacity that is desired to be
known during peak demand.
Gas distribution networks , or systems , rely on pressure differentials to move gas from one place to
another. If the pressure is exactly the same on both ends of a particular system, gas will not flow. When
gas is removed from some point on a system (i.e. regulator station , house meter, industrial customer) to
get to an appliance or boiler, the pressure in the system at that point is then lower than the pressure
upstream in the system. This pressure differential causes gas to move from the higher pressure point to
the point of removal in order to equalize the pressure throughout the system. The same principle keeps
gas moving from the interstate transmission lines to the local distribution company s distribution system to
the residential meters and ultimately to the appliances inside the homes. Therefore, it is important that
gas engineers design a distribution system in which the beginning pressure (from regulator stations)
within the system is high enough that a feasible and practical pressure differential is created when gas
leaves the system.
When the total load exceeds the system capacity, the pressure at the far end of the system falls off, and
the system essentially runs out of pressure. Using the laws of fluid mechanics, engineers determine the
maximum flow of gas through a distribution system of various pipe diameters and lengths that will not
cause significant pressure drops. This process is known as "distribution system modeling.
The modeling process is important because it allows the engineer to determine the capacity of various
distribution systems. For example, if a large usage customer is added to a distribution system, the
engineer must evaluate the existing system and then determine whether or not there is adequate capacity
to maintain the new customer along with the existing customers. Modeling is also important when
planning new distribution systems. The correct size of pipes must be installed to allow for the flow
needed to meet the requirements of current customers and reasonably anticipated future customers.
Furthermore, existing system capacities can be evaluated using the model by gradually increasing the
loads throughout the system until the pressure loss within the system becomes unacceptable.
Modeling by Town
Intermountain utilizes a gas network analysis software program created and supported by Advantica, Inc.
to model all sizes of distribution systems. The software program was chosen for its reliability, versatility,
and power. Using the software, individual models have been created for each of Intermountain s various
distribution systems, including high pressure laterals , intermediate pressure systems, and distribution
system networks.
The model of the various systems is constructed as a group of nodes and elements. A node is defined in
a system as being a point where gas either enters or leaves the system , there change in pipe diameter, or
the connection of pipe. An example of a node in a distribution system might be a number of homes within
a subdivision , a small commercial load , or a large industrial load. An element is defined in a system as
the various sizes of pipe, valves, regulator stations , or compressor stations , which make up a distribution
system. A model for a small town typically consists of approximately 100 - 300 nodes and 250 elements
a medium town typically consists of 500 - 1 500 nodes and 1 200 elements, and a large city or area
typically consists of 4 000 or more nodes and 4 000 or more elements. The Boise/Meridian distribution
model is the largest and involves approximately 20 000 nodes and 20 000 elements.
The software program allows the engineer to input and/or change the gas load at an individual node
some nodes, or all nodes. By using the forecasted loads within this integrated resource plan
Intermountain Gas Company engineers can determine anticipated future constraint areas based on the
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
calculated pressure drops. When constraint areas are found, the engineer determines the most practical
and cost effective method of solving the problem. Sometimes the solution is as simple as increasing
pressure within the system, but in many situations, additional pipe or looping is required. Looping
scenarios can then be modeled to determine the ultimate size and location of pipe in order to maintain
adequate pressures throughout the system.
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
THE EFFICIENT AND DIRECT USE OF NATURAL GAS
Promoting the efficient use of natural gas by Intermountain s customers helps to decrease the demand for
natural gas. This reduction in demand means that supply and deliverability resources will go farther in
meeting the anticipated demand for natural gas by the customers. This section reviews Intermountain
programs that encourage the efficient use of natural gas by the core market customers.
Natural Gas and our National Energy Picture
According to the American Gas Association, natural gas in the United States currently meets 25% of the
nation s energy needs, providing energy to 62% (nearly 63 million) of American homes. The residential
market makes up 24% of total U.S. natural gas consumption. 5 000 000 commercial customers also use
natural gas for their energy needs, consuming 15% of our nation s annual throughput. 215 000 industrial
and manufacturing sector customers use natural gas in their processes, consuming 38% of the U.
annual total. In a fast-rising sector, 2 600 electric-power-generating enterprises consume the remaining
23% of annual U.S. demand.
The reason for the widespread use of this energy source is simply that natural gas is the cleanest and
most efficient fossil fuel. Continued expansion of natural gas usage can help address several
environmental concerns simultaneously, including smog, acid rain , and greenhouse emissions.
Furthermore, 97% of the natural gas used in the United States comes from North America, where
supplies are abundant. The 2.2-million-mile underground natural gas delivery system has an outstanding
safety record and is capable of reliably delivering natural gas , regardless of the weather.
Thus, for all the right reasons, the demand for natural gas has risen, and with that, so has its price.
Wellhead gas prices have risen considerably over the last six years, reaching levels five times greater
than the prices in the late 90s. Natural gas is still very plentiful in North America, with an estimated 60+
years supply at current consumption levels. Furthermore, when new "unconventional" supplies such as
coal bed methane are included in forecasts, U.S. natural gas supplies could be extended several hundred
years. What has happened, though, is that our nation s demand for natural gas has caught up to the
deliverability of the fuel. While there is enough production and delivery capability to meet the demand , it
now takes more drilling and more wells to maintain capacity, and with this tightening of supply vs.
demand , the price of natural gas has risen.
Now, more than ever, it is vital that all natural gas customers use the energy as wisely and as efficiently
as possible.
Natural Gas Equipment Efficiency
Technology has given us many new and more efficient ways to meet our energy needs without sacrificing
the environment. Over the recent years, new natural gas residential and commercial HVAC equipment
and appliances have become more efficient as Federal and State equipment efficiency standards have
taken effect. In the existing customer group, as older, less-efficient equipment wears out, it is replaced
with newer, more efficient units. Thus , the entire natural gas user base grows more efficient each year.
The adoption of more energy efficient building codes and standards - new homes and commercial
structures built to higher standards driven by Federal and State codes - has meant far more efficient use
of natural gas. As with the replacement of older equipment mentioned above, older housing and
commercial units are being upgraded to higher efficiency standards. Most people don t realize it, but the
average household uses 22% less natural gas than it did in 1980, thanks largely to the aforementioned
efficiency improvements. By using energy wisely, consumers will continue to use less, and therefore
help control their energy costs.
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
The Gas Technology Institute continues to perform important ongoing research and development work in
the gas equipment arena, from residential to large industrial. GTI is not just developing new uses for
natural gas, but also improving the efficiency and cleanliness of existing applications. Intermountain has
participated in local GTI research and development projects and will continue that collaboration as
opportunities arise.
Natural gas equipment efficiency makes economic sense in today s new energy era, and Intermountain
will continue to encourage new residential and commercial technologies as they become available.
Natural Gas Conservation Customer Education
On our website, www.intgas.com , residential and small commercial customers can obtain detailed
information regarding energy conservation at home or their business. Large-volume/Industrial customers
have their own website from which they can obtain real-time gas consumption information.
Also on the website, customers can view an Energy Conservation Brochure that was mailed to all of
Intermountain s 265 000+ core-market customers in October 2005. The web version of this brochure
contains a link to the Idaho Department of Water Resources Energy Division. IDWR offers low-interest
loans for energy efficiency upgrades , including space and water heating equipment, insulation, and duct
sealing. The Energy Conservation Brochure in hard copy is also available at all of our customer contact
offices throughout the Intermountain service territory.
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In addition to bill paying and other services, Intermountain customers can also access their individual
billing and gas consumption history on the website. The enrollment process is easy as customers can
enroll online or by phone and be granted immediate access. Intermountain customer communications
mass-media advertising, website, and marketing information all encourage customers to consider high-
efficiency equipment when making an equipment purchase or upgrade decision. Intermountain recently
completed new 30-second TV commercials wherein the company spokesman , Jerry Kramer, offered a
variety of energy saving information , including measures such as added insulation and automatic setback
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
thermostats. 100% of Intermountain s television budget is devoted to airing these energy-efficiency
messages. These commercials also promote the intgas.com website as a source of conservation
information. The aforementioned conservation video messages are also available for viewing on our
website.
Intermountain continues to provide a 10-minute detailed conservation tip video on our website. This
video was produced by the Alliance to Save Energy and our AGA partner, Washington (D.) Gas. It
gives a wide variety of energy saving instruction and advice, including do-it-yourself installation of
insulation, storm windows, and weather-stripping, as well as how-s for natural gas conservation
measures and practices. Customers can view the entire video, or select segments that deal with
particular conservation-minded tasks and instructions. We have also provided DVD copies of the
conservation tips video to community action agencies and others working to counsel homeowners on
wise energy usage. Wherever possible, our communications messages promote the use of our website
for such information.
Intermountain Gas Company s Industrial Website was designed to allow the industrial customer access to
the most up-to-date natural gas usage information on their location. The site is accessible via the internet
using a specific logon name and password, making the information on each customer site-specific. It
contains a great deal of information useful to the large volume customer. They can access information as
to the different services and applicable tariffs.
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There are several tools to review, evaluate , and analyze the natural gas consumption at their specific
facility. The meter reads are taken hourly, and sent via radio communication to our Gas Control Center.
Once this information is in our system , it is available for viewing on the website. This is especially useful
in tracking and evaluating energy saving measures and new production procedures. History may be
downloaded as far back as January 1994 and all information is available on an hourly, weekly, monthly,
and annual basis.
Intermountain strives to keep this site in the most usable format for the customers, so a "feedback" button
is also included on the site to let us know how best to fulfill their needs.
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
Intermountain s customer contact and marketing personnel are equipped to assist current and potential
customers with evaluating the advantages of installing high-efficiency gas equipment where possible.
Intermountain promoted high-efficiency gas furnaces through our involvement in the 2005 Parades of
Homes around our service territory. Sponsorship assistance was only available to those builders whose
Parade homes had a 90% efficient natural gas furnace.
In September 2005, Intermountain was a co-sponsor of the Energy Resource Symposium, a half-day
seminar for energy-assistance providers and advisors. Held at Idaho Power s headquarters, participants
were given information on various developments in energy payment assistance and utility payment plans
and arrangements. Both Intermountain and Idaho Power personnel gave a one-hour talk on inexpensive
practical , do-it-yourself residential energy conservation measures easily accomplished by homeowners
and renters.
Continuing this conservation information outreach , Intermountain personnel visited a number of Senior
Citizens Centers in Ada , Canyon, and Payette counties during the fall 2005. During these visits , the
Intermountain personnel gave a brief outline of the energy pricing situation, offered conservation tips
including the installation of automatic setback thermostats, turning down water heater thermostats, and
the importance of regular furnace filter maintenance. Residents there were also apprised of
Intermountain s payment plans, and of payment assistance programs available to homeowners and
senior citizens. Intermountain hopes to continue this particular activity in the future.
Further community conservation outreach took place at Fort Hall, Idaho in February 2006, where the Sho-
Ban Native American tribe conducted its own energy symposium. Intermountain provided co-sponsorship
of the event, and presented residential energy-conservation information similar to that given at the
aforementioned Senior Citizen Center visits.
Intermountain has a long history of promoting the efficient use of natural gas by our customers. Over the
years , Intermountain has offered rebates and incentives for the installation of energy saving devices such
as pilotless furnace ignition systems , furnace flue dampers , and still to this day, a high-efficiency (90%)
furnace conversion rebate.
Our website also promotes the Intermountain Gas Equipment Finance Program. Wells Fargo Bank
continues as the lender in this program. This program provides current and prospective customers an
equipment-financing avenue that includes competitive rates and an expedited approval process. It's
another financing avenue that enables consumers to replace older equipment with new, higher-efficiency
units, and other energy saving measures , such as energy-efficient windows, and insulation upgrades.
Intermountain remains a partner in the Rebuild Idaho energy efficiency campaign targeted toward our
state, municipal and county entities, our school districts, and our institutions of higher education.
In the summer of 2004, Intermountain granted funds to the Energy Division of the Idaho Department of
Water Resources to assist in educating remodeling contractors in the use of high-efficiency energy
techniques and products, which will serve to improve energy usage efficiency in the older-home market.
This grant was funded in two parts, and Intermountain expects to fund the second part of the contribution
in 2006.
Intermountain also provided a grant to the University of Idaho Integrated Design Lab (IDL). IDL is located
in Boise, and serves as a technical resource for architects and engineers in developing and deploying
new energy-saving technologies and practices in the commercial building market. Intermountain s grant
enabled IDL to purchase equipment used in their R & D efforts.
Intermountain is an active voice in Idaho s legislative process as the lawmakers consider new, higher-
efficiency building and energy codes.
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
Energy Efficiency through the Direct Use of Natural Gas
Another, bigger-picture aspect of efficient natural gas usage is the concept of direct use, whenever
possible. "Direct use" refers to employing natural gas at the user point for space heat, water heating, and
other applications , as opposed to using natural gas to generate electricity to be transmitted to the user
point and then employed for space or water heating.
As hydroelectric generating capacity becomes more constrained in the Pacific Northwest, additional
generating capacity either under construction or those being planned will primarily be natural gas fired.
Direct use will mitigate the need for future generating capacity. If more homes and businesses use
natural gas directly for heating and commercial applications , then fewer new generating plants will be
needed. And at times of excess capacity, water storage normally used for generating power, can be
released for additional irrigating, aquifer recharging, fish migration , and navigation uses.
Natural gas fired combustion turbines are generally 60 - 65% efficient at best. Furthermore, transmission
and distribution losses can total another 5 - 10%. So effectively half of the energy originally contained in
the natural gas has been lost before arriving at the point of use. High-efficiency natural gas furnaces are
rated at up to 96% efficiency. New gas water heater efficiency standards provide for 67% efficiency.
So from a resource and environmental basis, direct use makes the most sense. More energy is delivered
using the same amount of natural gas. Thus, lower cost and lower CO2 emissions spread out over a far
wider airshed. This direct, and therefore , more-efficient natural gas usage will serve to keep natural gas
prices, as well as electricity prices, lower in the future. Our success in marketing to Idaho s residential
new construction market, where we have nearly a 100% penetration rate along our service mains, is a
prime of example the direct use of natural gas, where possible.
To illustrate the significant role that Intermountain plays in southern Idaho total energy picture
Intermountain has over 250 000 residential customers. The average annual therm usage of an
Intermountain space-heating-only customer is 608 therms. That equates to a total residential therm
usage of 152 000 000 therms in a year. If the total was used at the Federal efficiency minimum of 78%,
then 11 856 000 000 000 Btu s (152 000 000 X .78 = 118 560, therms X 100 000 Btu s/therm) were
generated (A therm is 100,000 Btu s of heat.) There are 3,412 Btu s in a kilowatt-hour. At 100%
resistance heat efficiency, this means that the Intermountain residential space-heat customers would use
the equivalent of (11 856,000 000 000 / 3,412) or 3,474 794 841 kilowatt-hours in a year to heat their
homes. This is the same as 3,474 795 megawatt hours of power saved, year in, year out. According to
their website, Idaho Power s total annual residential megawatt hour sales for 2004 were 4 580 000. Were
the aforementioned 250 000 Intermountain residential customers using electric space heat, Idaho
Power s total residential sendout would rise to 8 054,795 mWh , a 76% increase.
In peak terms, if these 250 000 Intermountain customers had electric furnaces with 25kw capacity, and
just 1/3 of them were operating simultaneously during a cold-weather winter peak, there would be an
additional winter peak load of 2 063 megawatts. Again, according to their website, the Idaho Power
Winter 2004 peak load was 2 196 megawatts. Without the direct use of natural gas to heat these 250 000
homes , Idaho Power s winter peak load could reach 4 259 megawatts, a 94% increase! This additional
063 megawatt peak load would be the equivalent of over eight 250 megawatt natural gas-fired electric
generating facilities, such as the impossible-to-site Middleton facility, all running at full throttle.
In terms of currently sited and licensed Idaho Power generating facilities , it would require nearly three 707
megawatt thermal plants like Bridger (and all their resulting coal emissions) to fill this cold-weather gap.
In terms of hydro generation, this same load deficit would require nearly three 728 megawatt Brownlee
facilities, or almost five 450 megawatt Hells Canyon dams to keep the heat on for all those electric-heat
customers. That is , if there s enough water. This situation would probably also require a substantial
increase in transmission facilities to handle peak load such as this , since it would be well above the Idaho
Power Summer 2004 peak of 2 843 megawatts.
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
In terms of recently-shed electric load, just since 1991 , Intermountain has converted 26 700 residential
electric heating customers to natural gas. Using the space heating consumption rates shown above
these gas conversions save about 371 000 megawatt hours of residential sendout per year. In winter
peak terms, using the "1/3 operating simultaneously" example in the paragraph above, 220 megawatts of
peak load is saved. This "year in, year out" electrical conservation is realized at no cost to the electric
customers in Southern Idaho. Intermountain s television advertising and other efforts promote direct use
by actively targeting the conversion market. All of the sendout and peak savings illustrations above
consider only residential space heating. If residential natural gas water heating were included, the annual
sendout figures would rise by at least 25%.
In terms of summer energy consumption, Intermountain residential water heaters also provide some relief
to the ever-growing hot weather electric demand. Intermountain has over 188 000 RS-2 (space and
water heat) customers. If, instead these were 188 000 electric water heaters each rated at 9 000 watts
or 9kW, this would amount to 1 692 megawatts of total load. If this total amount was treated as shifted or
curtailed , per the Utah Power and Light irrigation load control credit rider of a couple years ago, the credit
value would have ranged from $1 624 320 in September to $3 790 080 for July. But the summer water
heating load curtailment and shifting provided by the Intermountain water heater customers has come at
no cost to electric utilities or their customers.
Conclusion
Ever-increasing and more pervasive energy standards and practices will continue to improve the energy
efficiency of Intermountain Gas Company s customers. Intermountain will continue in its active role
promoting the wise and efficient use of natural gas. The efficient, direct use of natural gas wherever
possible in the coming years will help keep overall energy costs down in southern Idaho , and will ensure
ample, affordable supplies of natural gas for its many valuable uses.
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
RESOURCE OPTIMIZATION
Introduction
The IRP model is an optimization model that selects resources over a pre-determined planning horizon to
meet forecasted loads by minimizing the present value of fixed and variable resource costs. The model
evaluates and selects the best mix of supply and transportation resources utilizing a standard
mathematical technique called linear programming.
This summary will first describe the model structure and its assumptions in general. Initial results will then
be discussed.
Components of the Model
The IRP model has three basic components:
Demand forecast (See Exhibit 5, Appendix A)
Supply resources (See Exhibit 5, Appendix B)
Transportation resources (See Exhibit 5, Appendix C)
Underlying these three components is a model structure of supply sources , transport capacity (arcs) and
demand areas (nodes) which mirror how the Intermountain gas delivery system contractually operates
(see below). In any IRP model , there must be a balance between modeling in sufficient detail to capture
all major economic impacts while at the same time, simplifying the system so that the model operates
efficiently and the results are understandable. In Intermountain s model where major supply and
transport additions are being evaluated over a 5 year period, only major elements need to be recognized.
This is in distinction to a dispatch model that needs to balance precisely requiring detail more fully
representative of the system requirements. For this reason , a simplified structure is utilized in this IRP
model.
Model Structure
The following table and graphic presents the demand and supply nodes and transport arcs of the IRP
model.
Area #
Name Sumas Stanfield North South NIT IMG All Canyon Idaho Sun
Green Green Other County Falls Valley
I Stanfield
All Other Sun Valley
I Sumas 1-
Canyon Co. I
I Idaho
Falls
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Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
Demand Areas and Forecast
Four demand areas , or nodes, are designated: Canyon County, Sun Valley, Idaho Falls and All Other.
The Idaho Falls, Canyon County and Sun Valley nodes reflect all loads served off of specific "laterals
and/or gate stations with limited capacity. These are separated in order to facilitate the evaluation of
distribution capacity enhancements for those nodes. All Other represents all loads outside of those
specific demand areas.
The model utilizes a peak-to-Iow load duration curve ("LDC") to represent the demand forecast. The
graphic below depicts the LDC for the total system in 2007. This type of LDC summarizes load
information from highest to lowest daily usage. The LDC approach is utilized for an IRP rather than a
chronological approach to capture the general forecasting problem of planning for peak, shoulder and
base demand in distinction to short term or daily dispatching. Design weather and projected customers
scenarios are used to model forecast load requirements.
To simplify modeling, the LDC is aggregated into periods with similar load characteristics, to represent
load changes over the entire year with a minimum of data points (see Exhibit No., Appendix A). The
bold horizontal lines in the figure below provide an example of the aggregation periods utilized in the
model. The model actually utilizes four separate LDCs so as to separately represent the All Other, Sun
Valley, Canyon County, and Idaho Falls demand characteristics. The model recognizes that
Intermountain must provide gas supply, interstate and distribution transportation for core customers but
only interstate and distribution capacity for T-1 and T-2 customers. The T-4 customers' loads are only
utilized for modeling the distribution system demands. The industrial customer forecast is not load-shaped
but reflects the aggregate firm CD for each day in the LDC.
LDC graph
The following graph depicts the Design Base Case LDC after the data is aggregated into homogenous
groups. Each "level" actually reflects one period in the IRP model however, the model recognizes the
number of days in each period and computes the total flow per period.
450 000
Intermountain Gas Company
2007-111RP - Design Base Case
Load Duration Curve - Period
400 000
350 000
000 -
300 000 -
~ 250 000
~ 200 000
1 50 000
100 000
121 151 181
Days
211 241 271 301 331 361
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
Supply Resources
Resource options for the model are of two types: storage resources and supply contracts; all are utilized
in a similar manner. All resources have beginning and ending years of availability and they also have an
annual flow capability, period of availability and a peak day capability. They can be assigned both
variable and fixed costs. Additionally, information relating to storage resources includes injection period
injection rate, fuel losses and other storage related parameters are included.
Each resource must be designated from a supply area. One advantage of certain storage facilities is that
none of Intermountain s existing interstate transport is required since the resource is either sited within a
demand area node or is bundled with its own redelivery transport capacity. Resources can be delivered
into the system from Sumas, Stanfield, Alberta (Nova Inventory Transfer or "NIT" for delivery into
Stanfield), North of Green River or South of Green River (NWP points), utilizing the appropriate transportarcs. Additionally, the transported storage can be directly applied to any LDC demand node subject to
capacity constraints.
Transport Resources
Transport resources can be contracts for capacity such as those with Northwest Pipeline (NWP), three
separate pipelines that deliver gas supplies to the NWP interconnect called Stanfield (for modeling
purposes these pipelines are treated as one and are called "Upstream" capacity), or for distribution
mainlines such as the Idaho Falls lateral. Transport resources are explicitly associated with arcs in the
model , which represent capacity or contracts between supply and demand nodes. For example, supply
resources to be delivered from Sumas to Idaho Falls, first must use the Sumas to IMG arc and then the
IMG to Idaho Falls arc. IMG is generally a pooling point for gas supply to be delivered to one of the four
system nodes. The system representation generally recognizes NWP's postage stamp pricing and
capacity release.
Transport resources have a peak day capability and are assumed to be available year round unless
otherwise noted. Transport resources can have different cost and capabilities assigned them as well as
different years of availability. For example, different looping options for the Idaho Falls lateral are
available to the model at different periods to facilitate the flexibility of timing decisions.
Model Operation
The selection of a best cost mix of resources , or resource optimization, is based on the cost availability
and capability of the available resources as compared to the projected loads at the nodes. The model
chooses the mix of resources which best meet the optimization goal of minimizing the present value cost
of delivering gas supply to meet customer demand. The model recognizes contractual take commitments
and all resources are evaluated for reasonableness prior to input. Both the fixed and variable costs of
transport, storage and supply are included. The model will exclude resources it deems too expensive
compared to other available alternatives.
The model can treat fixed costs as sunk costs for certain resources. If a fixed cost or annual cost is
entered for a resource, the model will include that cost for the resource in the selection process that will
influence its inclusion vis-a-vis other available resources. If certain resources are committed to and the
associated fixed cost will be paid in any event, only the variable cost of that resource is considered during
the selection process. However, any "new" resources, which would be additional to the resource mix, will
be evaluated using both fixed and variable cost.
The model operates in a PC environment. Inputs and outputs are in a spreadsheet format. The
optimization is performed by PC linear programming software.
Once the model computes the best resource mix , it writes the results to spreadsheet files, which are then
organized by a set of macros in a summary spreadsheet.
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
Special Constraints
As stated earlier, the model minimized cost while satisfying demand and operational constraints. Several
constraints specific to Intermountain s system were modeled in the IRP model.
. LNG storage does not require redelivery transport capacity. Both SGS and LS storage are bundled
with firm delivery capacity; transportation utilization of this capacity must match storage withdrawal
from these facilities.
. The T-1 and T-2 customers' transportation requirements are met utilizing Intermountain s interstate
and distribution capacity but no supply resources are provided.
The T-4 customer transportation requirements utilize only Intermountain s distribution capacity.
Traditional resources destined for a specific lateral node (e.g. Idaho Falls) must be first be
transported to the IMG pool and then from IMG to the lateral node.
Non-traditional resources such as mobile LNG that are designed to serve a specific lateral are
employed only when lateral capacity is fully utilized.
Model Results
The IRP optimization model results for the five-year study, 2007 through FY11 , are presented and
discussed below. The results of the model are summarized, by demand scenario, by four types of tables:
Resource Utilization Table
Transport Utilization Table
Storage Injection Table
Annual Cost Summary
To refer to these tables please see: Base Case (See Exhibit 5, Appendix D); High Growth: (See Exhibit 5
Appendix E); and Low Growth Scenario: (See Exhibit 6 , Appendix F):
Each of these tables will be discussed below for years 1 and 5. The changes in model results between
year 1 and year 5 will be summarized. The results for years 2 through 4 are available for review as part
of the applicable appendix, but discussion for these tables is not presented in this document.
Resource Utilization - General
The Resource Utilization Table (See Exhibit No., Appendix D) provides usage information on supply
and resources available to Intermountain. Column 1 corresponds to the resource number. Column 2
corresponds to a resource acronym , which the model utilizes for printouts. The next column identifies the
arc to which the resources are delivered to NWP (or upstream arc where applicable). For example, the
Sum-A resource is delivered to NWP at Sumas.
The utilization rates are the most important data determined by the model. These rates specify the
percent of capability that the model determines are optimal for resources in each period. The utilization
rate by period for a resource multiplied by the resources capability in MMBtu per day basis adjusted for a
loss factor results in the daily capacity of that resource that is utilized by period , columns 13 through 18.
The total column represents the simple sum of the daily capacities utilized. Note that total gas flow
utilized per period is the capacity utilized per day times the number of days in a period and is contained in
other detail tables.
There are generally three types of supply resources; existing supply contracts, existing storage contracts
and incremental/spot contracts. Transport resources include both NWP and upstream capacities (to bring
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
Alberta supply to NWP at Stanfield) as well as the capacities for the four regional segments on the
Intermountain system. The following sections will summarize the utilization of each type of supply and
transport resource for the model years 1 and 5.
The model selects the best cost portfolio based on relative variable cost pricing. However, it also has
been designed to comply with operational and contractual constraints that exist in the real world (i.e. if the
most inexpensive supply is located as Sumas, the model can only take as much as can be transported
from that point). It should also be noted here that in order for the results to provide a reasonable
representation of actual operations, all existing resources that have committed cost contracts are
assigned as must run resources. Other resources are evaluated only by variable cost. One observation
is that particularly during the early years, the committed must-take supplies exceed demand in the off
peak months. In the real world, these volumes are sold into the market at the then prevailing prices
whereas the model only identifies those volumes and cost thereof.
Another important assumption regarding "Fill" supply is that it is treated as an economic commodity
meaning that its availability is dynamic. The model can select available Fill supply at any node, for any
period and in any volume that it needs up to capacity constraints. To ensure that the model provides
results that mirror reality, these supplies have been aggregated into peak, winter, summer and annual
price periods. Each aggregated group has a different relative price with the peak price the highest and
the summer the lowest. Additionally, since term pricing is now normally based on the monthly spot index
price through the utilization of futures, price swaps or other derivative products , no attempt has been
made to develop fixed pricing for incremental term contracts. The Fill resources provide intelligence as to
where and how much of new resources will be needed.
The transportation utilization table provides the same type of information for transportation resources and
is shown in a similar format as the resource utilization table. Each transportation resource has a resource
number and acronym. In addition , the receipt ("from ) and delivery (") points associated with each
transport arc are listed in columns 3 and 4. Columns 5-10 show the transportation utilization rate output
from the model and represent the percent of total resource available that the model utilizes by period.
These utilization rates multiplied by the transport capability determine the daily transport capacity utilized
by period as shown in columns 13-18.
Again, the incremental transportation "Fill" contracts are being treated as "commodity" resources in that
the model can utilize this capacity in the period it needs it, but in somewhat limited volumes. The current
assumption of on-demand incremental transport is likely not "real-world" since it would generally only be
readily available on demand in the summer. But, selection of this type of resource in a peak or winter
period would generally indicate the need for a term contract of some nature. As most available capacity
found in today s world comes via capacity release, a
Transportation resources fall into four categories: existing, Lateral capacity, storage, and incremental
resources. The existing resources are labeled ES (NWP) or PGT. Lateral expansions demonstrate the
need for their implementation by the change in utilization rates over time.
The storage injection table provides the amount of resources injected into the various storage facilities.
Just as storage may only be withdrawn in the peak and winter periods, injections may only occur in
winter, reflecting the actual withdrawal cycle in the winter and the injection cycle in the summer. The
injection rate multiplied by the injection MMBTU and the loss factor results in the net MMBTU injected by
period.
Summary Results - Base Case - Year
Supply.
The existing supply resources (contracts 1 - 11) have utilization rates of 1.0 (or 100%) for all applicable
periods meaning that these resources are utilized at maximum capacity in all demand periods. This is
due to contractual take obligations and follows real-world logic. Resources 37-41 represent the industrial
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
transportation requirements and included to ensure that interstate transportation capacity is available for
the firm transportation customers. Resources 40 and 41 are delivered at IMG to reflect these customers
deliver gas supply directly to Intermountain. This ensures that the model reserves distribution capacity
without utilizing any interstate capacity. A significant amount of fill-type peak/winter supply is utilized. Of
this, about 25 000 MMBtu of citygate delivery is selected.
Storage facilities are not fully withdrawn over Peak periods. In all instances , annual usage is less than full
annual capability, but annual minimum withdrawals are achieved. Intermountain s LNG facility has zero
withdrawals. There are a number of factors affecting shoulder usage such as cost, withdrawal capability,
and transportation capacity. As loads continue to grow, further utilization of these facilities can be
expected.
The remaining resources are general supply resources with prices tied to the applicable basin index
prices (calculated from Nymex Futures prices plus or minus the appropriate basin differential). These
resources are selected by the model only after existing contract supplies are utilized and are arc specific
meaning that all existing interstate capacity is used before the "purchases" new capacity. Note that all of
the additional supplies are needed during the winter months which may suggest further study into winter-
only deliveries and/or high withdrawal storage capacity.
Storage Injections. All storage except LNG is fully withdrawn during the peak. As described above
injections may only occur in the summer period and after factoring in fuel losses, total injections match
the withdrawals in the other periods for each facility. Although the storage cycle can overlap years (e.
injections could actually occur in a subsequent year) in the real world , the nature of this model has
resulted in a closed system: net injections must equal net withdrawals.
Transportation. All existing NWP firm capacity is fully utilized for the peak period, which implies that
absent any additional storage withdrawal capacity, Intermountain would require incremental fill capacity
immediately. Approximately 25 000 MMBtu of incremental NWP citygate capacity is selected. The minor
capacity shortfalls the Idaho Falls lateral and Canyon county areas are filled with non-traditional
resources.
Annual Cost Summary. Exhibit 5 , Appendix D summarizes the dollar cost of the resources selected by
the model, show the cost of supply resources utilized, reflects the transportation costs as determined by
the model, and lists a grand total of all resource costs and calculates a net present value cost for
comparative purposes.
Summary Results - Year 5
Supply. By the fifth year, the utilization of supply resources has changed somewhat to respond to load
growth. All term supply resources are utilized at full capacity. The peak load requirement met by "Fill"
type supplies has increased to therms to 36 900 000 therms.
Storage. Storage is fully utilized , with the exception of Nampa LNG, both on an annual and peak day
basis. Nampa is fully utilized in peak period 1 and heavily utilized through period 3. Note that SGS
deliveries have increased to a maximum of 30 337. Injections in year 5 are higher than in year 1 due to
the increase change in storage withdrawals and still occur in period 6.
Transportation. As before, all existing NWP contracts are fully utilized in peak periods and most of the
GTN capacity is utilized year around. "Fill" transportation capacity totaling approximately 25 000 MMBtu
has been selected for the peak day on NWP at Sumas, Stanfield and N. Green River. Two lateral
expansions have been previously been selected on the Idaho Falls lateral and the Sun Valley laterals and
the Canyon County area which leaves no constraint are deficits.
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
COMPARATIVE ANALYSIS
2006 IRP vs. 2004 IRP
Residential and Commercial Growth Forecast
The methodology used to calculate residential and commercial customers for the 2006 IRP is consistent
with that used in the 2004 IRP. Customer growth in the 2006 IRP is forecast to remain strong throughout
the IGC service-territory, with no major changes in the underlying data other than 7.5% greater household
growth across the overlapping 2007, 2008, and 2009 Plan years. The current five-year customer growth
is now forecast at an annual rate of 5.7% compared to the previous Plan s 4.6%. In 2007 beginning
customer figure of 289 163 per the 2006 IRP is 10 676 customers higher than the projection of 278,487
found in the 2004 Plan.
Usage per Customer with Design Degree Days
The method of calculating the design degree days in the 2006 IRP is identical to the method used in the
2004 IRP filing. The usage-per-customer calculations for the 2004 IRP were based upon data from 1989
through 2003. The 2006 IRP filing makes use of two additional years of data, and therefore includes data
from 1989 through 2005. As noted in the 2004 filing, Intermountain has now installed new meter index
devices on the Idaho Falls and Sun Valley laterals to enable the Company to correlate usage and
weather for those two unique areas of the service territory. While the relatively small amount of data
collected to date did not allow Intermountain to make any statistically significant correlations between
consumption and weather specific to the laterals in this 2006 IRP, the data will be helpful in allowing for
those correlations in future IRP filings.
Industrial Forecast
In general, there are two opposing factors affecting industrial demand. One is a downward trend reflecting
plant efficiency measures and conservation. In order to stay competitive, these companies must get the
most production from their invested capital and hold the line on prices wherever possible. Many of
Intermountain s customers are using the Intermountain Gas Industrial Website to assist with this effort as
they can immediately know whether a process adjustment or other improvement is actually saving them
energy. One the other hand, the 2006 IRP industrial CD forecast also reflects the Company s belief that
the market factors underlying the industrial demand decline experienced over the past several years have
bottomed-out" and that future economic conditions will now have greater influence on industrial CD
levels. The affect of both factors is included in this forecast accounting for the apparent up-and-down
projections among the segments.
Overall, the 2006 IRP industrial load forecast is not as robust as the 2004 filing in the overlapping 2007-
09 years. However, there is a mixture of forecast increases and decreases across the market segments
(see Attachment No., tables 1.1 and 1.3).
The increase in potato processing reflects renewed demand for processed potato products, as well as
improved prices for the raw potato commodity, which have thereby increased product supply. The
increase in the Chemicals segment is a reversal of the downward trend in the 2004 IRP and largely
reflects increasing world-demand for products, especially fertilizers, and a lessening of the competitive
price advantage held by foreign competitors. Incidentally, while natural gas prices remain at relatively
high levels relative to those experienced prior to 2005, prices of other alternative fuels have also risen
reducing the economic incentive to switch back and forth to take advantage of price differentials as many
of Intermountain s industrials are able to do. This has helped to mitigate some of the price driven
demand-destruction that has occurred among the industrial classes.
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
The decrease in the Other Food Processors group is due mainly to conservation efforts at many plants
and the closure of a large meat processing facility. In the Other category, which makes up most of the
downward shift in the overall industrial usage forecast, a substantial , previously-projected increase in gas-
fired electrical generation has been lowered to levels approximating today s consumption levels.
At the end of the day, the Company will continue to be active in managing this market as in general , a
reduction in industrial CD may forestall the timing of capital enhancements to Intermountain distribution
. system and also may provide the Company with an alternative to purchasing new interstate capacity to
serve the growing core market.
Load Duration Curves
The total company core market peak sendout forecast for 2007-2009 is higher than 2004's IRP by a
range of 3.6 - 6.3%. The overall peak day sendout for the same period is slightly less at a 2.9 - 5.4%
increase reflecting a decline in industrial CD (see Attachment 2 , Table 2.3). Peak day firm deliveries from
NWP are unchanged from the 2004 IRP although storage deliveries are still projected to increase 75,000
therms per day in 2008 (see Attachment No 3. 3, table 3.3). Without additional interstate capacity or some
type of winter-peaking supply, the number of days exceeding peak deliverability increases by 21 days by
2009 under design weather conditions (see Attachment No., table 4.3).
Idaho Falls Lateral.Peak loads increase approximately about 4% each year over the 2004 IRP but would
have averaged about 8% without the decrease in firm industrial CD (see Attachment No., Table 5.3).
Due to capacity additions recommended by the 2004 IRP and subsequently completed in 2005, the peak
day deficit projection has decreased both in magnitude and total occurrences thru 2009 (see Attachment
No., Table 6.3).
Sun Valley Lateral.Peak loads increase by nearly 10% by 2009 over the 2004 IRP. The fact that there is
no growth in industrial CD highlights the rapid core market growth in this region (see Attachment No.
Table 7.3). However, again due to additional capacity added in 2005 per the 2004 IRP , there is no peak
deficit until 2009 (see Attachment No., Table 8.3).
Canyon County. Peak load growth continues in Canyon County as the 2009 customer projection exceeds
2004's by 15%. Several system enhancements such as mainline looping and more available throughput
at the interconnection between Intermountain and NWP account for the increased capacity projections for
2007. Note the growth in industrial CD (10%) is additive to the core market increase (see Attachment No.
, Table 9.3). Absent any additional capacity, minor deficits begin occurring in 2007 but are less than the
deficits projected for in the 2004 IRP (see Attachment No.1 0 , Table 10.3).
Traditional Supply and Delivery Resources
The available supply resources for the 2006 optimization model have been increased from 40 to 70
allowing more alternatives and greater flexibility in meeting system demand. As in the prior filing, these
resources are a mix of term and spot supplies, storage withdrawals, on-system alternatives (e.g. mobile
LNG) and a few resources specific to temporarily reducing industrial demand (see also other Non-
Traditional Resources below). The inputs continue to include third-party interstate "citygate" deliveries
and other winter-only supply. As compared to 2004 , this IRP indicates that Intermountain s peak and
winter loads are growing faster than the average daily usage when compared to current winter delivery
options (see Exhibit No.5) suggesting that further attention to new storage and/or other winter deliveries
is needed in the next several years.
Interstate transport resources have been enhanced in the past two years based on a need as
demonstrated by the 2004 IRP (See Attachment No. 11 , Table 11.3). With these additions, interstate
capacity is forecast to be sufficient though 2009 although some further attention is warranted. Although
Northwest has no plans for any expansion that would benefit Intermountain , the Company is actively
monitoring the capacity release market to find and obtain capacity when it may become available.
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
Non-Traditional Supply Resources
The 2006 IRP includes a similar group of non-traditional resources options as those used in the 2004
filing. These options included portable LNG on the Sun Valley, Idaho Falls and Canyon County regional
segments and industrial sited coal and fuel-oil as well as propane-air alternatives on the Idaho Falls
lateral. These resources are designed to be available when distribution capacity becomes constrained
temporarily forestalling expensive capacity additions.
Distribution System
Intermountain used the same software utilized in 2004 to model the pressure and capability of the
distribution system. This software provides maximum throughput for each regional segment of the
distribution system based on customer loads, temperature, pressure and etc enabling the Company to
estimate where delivery deficits may occur and model appropriate infrastructure alternatives. The model
continues to project that load growth off the Idaho Falls , Sun Valley and Canyon lateral segments will
result in delivery deficits during this five-year projection without further capacity additions.
The Efficient Use of Natural Gas
Intermountain continues to embrace and support the need for efficient use of natural gas, and has
continued its conservation efforts on behalf of its residential, commercial and industrial customers.
By way of example, Intermountain has 1) continued its annual mailing of brochures to all core-market
customers outlining conservation tips and low income assistance, 2) upgraded its website to include more
information on residential and commercial conservation measures, and maintained the ability for
customers to view their historical therm usage anytime on-line, 3) continued to offer the detailed
conservation DVD video by request to conservation and payment-assistance advisors, as well as
maintaining that video s prominence the company s website, 4) held public meetings in conjunction with
the IRP Planning Process meetings that emphasize conservation , 5) continued to produce and air
television messages emphasizing the importance of natural gas conservation , and giving practical , easy-
to-understand conservation tips, 6) continued to deploy and improve and industrial-customer website
designed to provide real-time and historical consumption data to better enable those customers to make
wise energy management decisions.
In support of high efficiency standards, Intermountain has changed its Parade of Homes sponsorship to a
practice wherein the Company will only partner with builders installing high efficiency space and water
heating equipment. Intermountain also continues is assistance with the Idaho Department of Water
Resources to develop a training program to assist those retrofitting older homes to comply with efficiency
standards. Intermountain has also assisted the University of Idaho Integrated Design Lab in Boise in their
efforts to develop and deploy energy conservation measures and building design in the commercial
arena. And of course, Intermountain continues to encourage homeowners to replace older, inefficient
heating equipment through the furnace rebate program and our mass-media advertising.
Resource Optimization
Intermountain utilized the same consultant and software vendor to run the 2006 optimization. The 2006
model was enhanced over the prior program to allow for additional supply and transport resource options
and to better mirror operations between Intermountain and its interstate pipeline and storage partners.
The results of the optimization runs indicate that the Company s current resource portfolio of interstate
transport and storage capacity along with its term and spot gas supplies, are adequate to meet the
natural gas demands of southern Idaho. It does suggest that reliance on spot or index supplies in the
winter may need to be replaced with term gas or peaking storage. Again , when load growth was
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
compared with available distribution system enhancements (e.g. various pipe and compression upgrades)
in concert with minor use of some non-traditional resources, the resultant overall system capacity was
forecast to be adequate to serve all firm loads and eliminate any capacity deficit thru the 5-year horizon.
As well , the optimization model selected all projected distribution system upgrade options and indicates
that for 2007-2011 , sufficient resources exist to meet firm the forecast requirements of Intermountain
customers even under design weather conditions.
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
ATTACHMENT NO.
Table 1.
I 2006 IRP Design Base
Case Industrial Forecast by Market Segment
(Thousands of Therms)
2007 2008 2009
Potato Processors 000 550 950
Other Food Processors 330 930 330
Chemical & Fertilizer 900 750 850
Manufacturers 500 500 500
Institutions 290 690 895
Other 370 270 520
Total Base Case Forecast Therm Sales
222 390 230 690 234 045
Table 1.
I 2004 IRP Design Base
Case Industrial Forecast by Market Segment
(Thousands of Therms)
2007 2008 2009
Potato Processors 957 289 322
Other Food Processors 631 812 67,704
Chemical & Fertilizer 360 960 960
Manufacturers 376 394 19,401
Institutions 12,486 509 573
Other 539 832 946
Total Base Case Forecast Therm Sales
226 349 251 796 252 906
Table 1.
2006 IRP Design Base Case Industrial Forecast by Market Segment
Over/(Under) the 2004 IRP Design Base Case
(Thousands of Therms)
2007 2008 2009
Potato Processors 043 261 628
Other Food Processors 301)882)374)
Chemical & Fertilizer 540 790 890
Manufacturers (876)(894)(901)
Institutions 804 181 322
Other (169)(23 562)(23,426)
Total Base Case Forecast Therm Sales
959)(21 106)(18 861)
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
ATTACHMENT NO.
Table 2.
2006 IRP LOAD DURATION CURVE - TOTAL COMPANY DESIGN BASE CASE
(Volumes in Therms)
NWP Firm Peak Da Sendout
Transport Core Industrial
acit Market Firm CD Total
2007 2,463 300 964 960 201 500 166,460
2008 2,463,300 171 120 201 500 372 620
2009 2,463 300 366 300 201 500 567 800
Future growth in transport CD is limited to T-, which does not affect Intermountain s interstate pipeline capacity requirements.
Table 2.
20041RP LOAD DURATION CURVE - TOTAL COMPANY DESIGN BASE CASE
(Volumes in Therms)
NWP Firm Peak Da Sendout
Transport Core Industrial
acit Market Firm CD Total
2007 2,463,300 825 120 223 890 049 010
2008 2,463,300 968 160 223,890 192 050
2009 2,463 300 108 150 223 890 332 040
Future growth in transport CD is limited to T-, which does not affect Intermountain s interstate pipeline capacity requirements.
Table 2.
2006 IRP LOAD DURATION CURVE - TOTAL COMPANY DESIGN BASE CASE
Over/(Under) 2004 IRP
(Volumes in Therms)
NWP Firm Peak Da Sendout
Transport Core Industrial
acit Market Firm CD Total
2007 139,840 (22 390)117,450
2008 202 960 (22 390)180 570
2009 258 150 (22 390)235 760
Future growth in transport CD is limited to T-, which does not affect Intermountain s interstate pipeline capacity requirements.
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
ATTACHMENT NO.
Table 3.
2006 IRP PEAK DAY FIRM DELIVERY CAPABILITY
(Volumes in Therms)
2007 2008 - 2009
Maximum Daily Storage Withdrawals:
Nampa LNG
Plymouth LS
Jackson Prairie SGS
Total Storage
Maximum Deliverability (NWP)
Total Peak Day Deliverability
600 000
720 000
150.000
1,470 000
2.463.300
3 933 300
600 000
720 000
225.000
1 ,545,000
2.463.300
4 008 300
Table 3.
2004 IRP PEAK DAY FIRM DELIVERY CAPABILITY
(Volumes in Therms)
2007 2008 - 2009
Maximum Daily Storage Withdrawals:
Nampa LNG
Plymouth LS
Jackson Prairie SGS
Total Storage
Maximum Deliverability (NWP)
Total Peak Day Deliverability
600,000
720 000
150.000
1,470 000
2.463.300
3 933 300
600 000
720 000
225.000
545 000
2.463.300
4008300
Table 3.
2006 IRP PEAK DAY FIRM DELIVERY CAPABILITY
Over/(Under) 2004 IRP
(Volumes in Therms)
2007 2008 - 2009
Maximum Daily Storage Withdrawals:
Nampa LNG
Plymouth LS
Jackson Prairie SGS
Total Storage
Maximum Deliverability (NWP)
Total Peak Day Deliverability
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
ATTACHMENT NO.
Table 4.
2006 IRP FIRM DELIVERY DEFICIT - TOTAL COMPANY DESIGN BASE CASE
Peak Day Deficit
Total Winter Deficif
Days Requiring Additional Resources
(Volumes in Therms)
2007
233 160
296,540
2008
364 320
549 970
2009
559 500
931 910
Peaking storage increases by 75 000 therms per day in 2008.
Equal to the total winter sendout in excess of interstate capacity less total "peaking" storage. Peaking storage does not
require the use of Intermountain s traditional interstate capacity to deliver inventory to the citygate.
Table 4.
Peak Day Deficit
Total Winter Deficif
Days Requiring Additional Resources
20041RP FIRM DELIVERY DEFICIT - TOTAL COMPANY DESIGN BASE CASE
(Volumes in Therms)
2007
115 710
115 710
2008
183,750
197 110
2009
323 740
470 990
Peaking storage increases by 75 000 therms per day in 2008.
Equal to the total winter sendout in excess of interstate capacity less total "peaking" storage. Peaking storage does not
require the use of Intermountain s traditional interstate capacity to deliver inventory to the citygate.
Table 4.
Peak Day Deficit
Total Winter Deficif
Days Requiring Additional Resources
2006 IRP FIRM DELIVERY DEFICIT - TOTAL COMPANY DESIGN BASE CASE
(Volumes in Therms)
2007
117,450
180 830
2008
180 570
352 860
2009
235 760
460 920
Peaking storage increases by 75 000 therms per day in 2008.
Equal to the total winter sendout in excess of interstate capacity less total "peaking" storage. Peaking storage does not
require the use of Intermountain s traditional interstate capacity to deliver inventory to the citygate.
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
ATTACHMENT NO.
Table 5.
2006 LOAD DURATION CURVE - IDAHO FALLS DESIGN BASE CASE
(Volumes in Therms)
Existing
Distribution Peak Day Sendout
Transport Core Industrial
acit Market Firm CD Total
2007 830 000 637,420 223 030 860,450
2008 830 000 664 620 223 030 887 650
2009 830 000 693 830 223 030 916 860
Existing firm contract demand includes T -, T -, and T -4 requirements.
Table 5.
2004 LOAD DURATION CURVE - IDAHO FALLS DESIGN BASE CASE
(Volumes in Therms)
Existing
Distribution Peak Day Sendout
Transport Core Industrial
acit Market Firm CD Total
2007 690 000 594 240 243 040 837 280
2008 690 000 614 680 243 040 857 720
2009 690 000 636,460 243,040 879,500
Existing firm contract demand includes T-, T-, and T-4 requirements.
Table 5.
2006 LOAD DURATION CURVE - IDAHO FALLS DESIGN BASE CASE
Over/(Under) 2004 IRP
(Volumes in Therms)
Existing
Distribution Peak Da Sendout
Transport Core Industrial
acit Market Firm CD Total
2007 140 000 43,180 (20 010)23,170
2008 140 000 940 (20,010)930
2009 140 000 370 (20 010)360
Existing firm contract demand includes T-, T-, and T-4 requirements.
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
ATTACHMENT NO.
Table 6.
2006 IRP FIRM DELIVERY DEFICIT - IDAHO FALLS DESIGN BASE CASE
(Volumes in Therms)
2007 2008 2009
Peak Day Deficit 30,450 650 860
Total Winter Deficit 580 820 143 980
Days Requiring Additional Capacity
Equal to the total winter sendout in excess of distribution capacity.
Table 6.
20041RP FIRM DELIVERY DEFICIT -IDAHO FALLS DESIGN BASE CASE
(Volumes in Therms)
2007 2008 2009
Peak Day Deficit 147 280 167 720 189 500
Total Winter Deficit 395 940 479 210 565 670
Days Requiring Additional Capacity
Equal to the total winter sendout in excess of distribution capacity.
Table 6.
20061RP FIRM DELIVERY DEFICIT -IDAHO FALLS DESIGN BASE CASE
Over/(Under) 2004 IRP
(Volumes in Therms)
2007 2008 2009
Peak Day Deficit (116 830)(110 070)(102 640)
Total Winter Deficit (362 360)(392 390)(421 690)
Days Requiring Additional Capacity (2)(2)(4)
Equal to the total winter sendout in excess of distribution capacity.
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
ATTACHMENT NO.
Table 7.
20061RP LOAD DURATION CURVE. SUN VALLEY DESIGN BASE CASE
(Volumes in Therms)
Existing
Distribution Peak Day Sendout
Transport Core Industrial
acit Market Firm CD Total
2007 180 000 154 840 150 162 990
2008 180 000 163 250 150 171,400
2009 180 000 172 220 150 180,370
Existing firm contract demand includes T -, T -, and T -4 requirements.
Table 7.
20041RP LOAD DURATION CURVE - SUN VALLEY DESIGN BASE CASE
(Volumes in Therms)
Existing
Distribution Peak Day Send out
Transport Core Industrial
acit Market Firm CD Total
2007 144 000 147 750 150 155 900
2008 144 000 151 840 150 159 990
2009 144 000 156 350 150 164 500
Existing firm contract demand includes T-, T-, and T-4 requirements.
Table 7.
2006 IRP LOAD DURATION CURVE - SUN VALLEY DESIGN BASE CASE
Over/(Under) 2004 IRP
(Volumes in Therms)
Existing
Distribution Peak Day Sendout
Transport Core Industrial
acit Market Firm CD Total
2007 000 090 090
2008 000 11,410 11,410
2009 36,000 870 15,870
Existing firm contract demand includes T -, T -, and T -4 requirements.
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
ATTACHMENT NO.
Table 8.
20061RP FIRM DELIVERY DEFICIT - SUN VALLEY DESIGN BASE CASE
(Volumes in Therms)
Days Requiring Additional Capacity
2008 2009
370
370
2007
Peak Day Deficit
Total Winter Deficif
Equal to the total winter sendout in excess of distribution capacity.
Table 8.
20041RP FIRM DELIVERY DEFICIT - SUN VALLEY DESIGN BASE CASE
(Volumes in Therms)
Days Requiring Additional Capacity
2008 2009
990 20,500
25,450 280
2007
Peak Day Deficit 900
Total Winter Deficif 17 ,450
Equal to the total winter sendout in excess of distribution capacity.
Table 8.
20061RP FIRM DELIVERY DEFICIT - SUN VALLEY DESIGN BASE CASE
Over/(Under) 2004 IRP
(Volumes in Therms)
2007 2008 2009
Peak Day Deficit (11 900)(15 990)(20 130)
Total Winter Deficif (17,450)(25,450)(33 910)
Days Requiring Additional Capacity (2)(2)(1)
Equal to the total winter sendout in excess of distribution capacity.
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
ATTACHMENT NO.
Table 9.
2006 LOAD DURATION CURVE - CANYON COUNTY DESIGN BASE CASE
(Volumes in Therms)
Existing
Distribution Peak Day Sendout
Transport Core Industrial
acit Market Firm CD Total
2007 700 000 600 320 103,420 703 740
2008 700 000 646,420 103,420 749,840
2009 700,000 685 180 103,420 788 600
Existing firm contract demand includes T-, T-, and T-4 requirements.
Table 9.
2004 LOAD DURATION CURVE -CANYON COUNTY DESIGN BASE CASE
(Volumes in Therms)
Existing
Distribution Peak Day Sendout
Transport Core Industrial
acit Market Firm CD Total
2007 595 000 550 540 140 644 680
2008 595 000 572 580 140 666 720
2009 595 000 589 840 140 683 980
Existing firm contract demand includes T-, T-, and T-4 requirements.
Table 9.
2006 LOAD DURATION CURVE - CANYON COUNTY DESIGN BASE CASE
Over/(Under) 2004 IRP
(Volumes in Therms)
Existing
Distribution Peak Da Sendout
Transport Core Industrial
acit Market Firm CD Total
2007 105 000 49,780 280 060
2008 105 000 840 280 120
2009 105 000 340 280 104 620
Existing firm contract demand includes T-, T-, and T-4 requirements.
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
ATTACHMENT NO. 10
Table 10.
20061RP FIRM DELIVERY DEFICIT. CANYON COUNTY DESIGN BASE CASE
(Volumes in Therms)
Total Winter Deficif 740
2008 2009
840 600
010 147 870
2007
Peak Day Deficit 740
Days Requiring Additional Capacity
Equal to the total winter sendout in excess of distribution capacity.
Table 10.
2004 IRP FIRM DELIVERY DEFICIT - CANYON COUNTY DESIGN BASE CASE
(Volumes in Therms)
Days Requiring Additional Capacity
2008 2009
720 88,980
122 910 164 190
2007
Peak Day Deficit 680
Total Winter Deficif 740
Equal to the total winter sendout in excess of distribution capacity.
Table 10.
2006 IRP FIRM DELIVERY DEFICIT - CANYON COUNTY DESIGN BASE CASE
Over/(Under) 2004 IRP
(Volumes in Therms)
2007 2008 2009
Peak Day Deficit (45 940)(21 880)(380)
Total Winter Deficif (72 000)(50 900)(16 320)
Days Requiring Additional Capacity (1)(1)(2)
Equal to the total winter sendout in excess of distribution capacity.
Intermountain Gas Company
2007 - 2011 Integrated Resource Plan
ATTACHMENT NO.
Table 11.
Intermountain Gas Company
2006 IRP Firm Receipt Point Capacity Through 2009
Volumes in MMBtu
Receipt Point 2007 2008 2009
Sumas 41 ,146 146 146
Stanfield 800 800 800
Rockies 384 93,384 384
Storage 000 500 500
Citygate 25 000 25 000 25.000
Total 333 330 340 830 340 830
Table 11.
Intermountain Gas Company
2006 IRP Firm Receipt Point Capacity Through 2009
Volumes in MMBtu
Receipt Point 2007 2008 2009
Sumas 146 146 146
Stanfield 800 800 66,800
Rockies 384 384 384
Storage 000 102 337 102 337
Citygate
Total 273 330 288 667 288 667
Table 11.
Intermountain Gas Company
2006 IRP Firm Receipt Point Capacity Through 2009
Overt (Under) 2004 IRP
Volumes in MMBtu
Receipt Point 2007 2008 2009
Sumas
Stanfield 000 000 000
Rockies 000 15,000 000
Storage 837)837)
Citygate 000 000 000
Total 000 163 163