HomeMy WebLinkAbout20041209Final Order No 29656.pdfOffice of the Secretary
Service Date
December 9 2004
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF INTERMOUNTAIN
GAS COMPANY'S 2005-2009 INTEGRATED
RESOURCE PLAN (IRP).
ORDER NO. 29656
CASE NO. INT-04-
On April 30, 2004, Intermountain Gas Company (Company) submitted its Integrated
Resource Plan (IRP) for the years of 2005-2009 to the Commission. On October 26, 2004, the
Commission issued a Notice of Application and Modified Procedure, establishing a written
comment deadline. Comments were filed by the Commission Staff on November 16, 2004. In
this Order the Commission acknowledges that the IRP meets the requirements set forth by the
Commission s Orders and accepts the Plan for filing.
BACKGROUND
The Company s filing was made pursuant to the Commission s directive in Order
No. 25342. (PURP A ~ 303(b )(3), Energy Policy Act of 1992). Order No. 25342 initiated
Integrated Resource Plan Requirements for local gas distribution companies (LDC) in
accordance with amended Section 303 of PURPA. That Order lists the elements that the IRP
should contain. The Commission twice modified the requirements for natural gas IRPs: Order
No. 27024 allowed natural gas utilities to shorten the planning horizon to five years to match the
Company s planning horizon and available market products; and Order No. 27098 removed the
requirement that IRPs include a formal evaluation of the costs and benefits of potential Demand
Side Management (DSM) programs, stating that a general explanation of whether there are cost
effective DSM opportunities will be sufficient.
THE INTEGRATED RESOURCE PLAN
According to the Company s IRP Executive Summary, the IRP 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. IRP at 1. Intermountain Gas is
the sole distributor of natural gas in southern Idaho, and during fiscal year 2003 it served about
242 000 customers in 74 communities. Id. Their system contains approximately 9 500 miles of
transmission, distribution, and service lines, with over 350 miles of those lines being added in
ORDER NO. 29656
fiscal year 2003 to accommodate new customer additions and to maintain servIce for the
Company s growing customer base. Id.
Intermountain Gas has two major markets: 1) the residential/commercial market; and
2) the industrial market. The Company s residential and commercial customers increased 5%
during the first quarter of fiscal year 2004. Id. Forty-eight percent (48%) of the throughput on
the Company s system during fiscal year 2003 was attributable to industrial sales and
transportation. Id.
Customer growth forecast in the IRP was analyzed not only from a total company
perspective but also by specific geographic regions within the Company s service territory. Id.
2. Peak day sendout studies and load duration curves were developed under design weather
conditions to determine the magnitude and timing of future deficiencies in firm peak day
delivery capability from both a total company interstate mainline perspective, as well as within
each specific geographic region. Id. 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 the Company s future peak day delivery requirements at the
best possible cost. Id.
Total Companv - Residential, commercial, and industrial peak day load growth on
the Company s system is forecast over the five-year period to grow at an average of 4%. Id.
When matched against existing resources, a peak day delivery deficit occurs starting in January
2007, and increases each year thereafter. Id. at 3. The projected deficits in firm deliverability
will be eliminated through one or more means including: 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. Id. at 4
Idaho Falls Lateral Region - The Idaho Falls Lateral Region serves a number of
cities between Pocatello in the south to St. Anthony in the north. Id. The residential
commercial, and industrial load served off of the Lateral represents approximately 16% of the
total Company customers and 20% of the Company s total winter sendout during the winter of
2003-2004. Id. When forecasted peak day sendout is matched against the existing peak day
distribution capacity, a peak day delivery deficit occurs in 2005 and increases each year
thereafter. Id. at 5. The Company believes that small, short duration peak day distribution
delivery deficits can be eliminated or at least mitigated by working with the regions industrial
ORDER NO. 29656
customers to facilitate the use of fuel oil during extreme cold temperatures. Id. 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. Id.
Sun Vallev Lateral Region - The load served by this region represents approximately
4% of the total Company customers and 4% of the Company s total winter sendout during the
winter of 2003-2004. Id. A peak day delivery deficit under the IRP's forecasted peak day
sendout occurs during 2005 and increases each year thereafter. Id. at 5-6. Growth along the Sun
Valley Lateral warrants an upgrade to the existing pipeline system. Id. at 6. The tourism
industry driven industrial load in this region is limited in size and does not currently have the
capability to switch to alternative fuels as a means of mitigating peak day sendout. Id.
Canvon County Region - The load served off of the Canyon County Lateral
represented approximately 14% of the total Company customers and 17% of the Company s total
winter sendout during the winter of 2003-2004. Id. Forecasted peak day sendout results in a
peak day delivery deficit occurring during 2006 and increasing thereafter. Id. at 6-7. The
industrial customer base served by the Canyon County Lateral does not currently have the
capability to switch to alternative fuels as a means of mitigating peak day sendout and the
Company is currently exploring optional means of enhancing the distribution capability on this
Lateral. I d.
ST AFF COMMENTS
In comments filed on November 16 , 2004, Staff recommends that Intermountain
2004 IRP satisfies the technical requirements of Commission Order No. 25342 as modified by
Order Nos. 27024 and 27098 , and recommends acceptance of the IRP for filing. Staff further
stated that its recommendation should not be interpreted as approval of the plan, or as a judgment
of the prudence of any transactions undertaken as part of the plan.
Staff reviewed the Company s forecasted growth projections and, although stating
that that the conversion rate for customers converting existing structures to gas space or water
heating seemed somewhat optimistic, found the projections to be within a reasonable range.
Staff Comments at 3. Staff stated that the Company has made significant improvements in its
demand side management programs. Id. at 4. The Company promotes the efficient use of
natural gas through mass media advertisement, customer communication, marketing information
and the Company s website. Id. Additionally the Company provides two ongoing equipment
ORDER NO. 29656
financing programs and contributes customer funds to the Gas Technology Institute. Id. The
Company continues to improve its Supervisory Control and Data Acquisition system (SCADA),
and continues to participate in the Rebuild Idaho energy efficiency campaign. Id. The Company
further proposes two new programs to promote high-efficiency gas furnaces. Id.
With regard to the Company s analysis of gas supply options, Staff points out that
pursuant to Case No. INT -03-, the Company must file an enhanced Risk Management Policy
and Procedure for gas purchase strategies by December 20, 2004. Id. at 5. Staff looks forward
to review of that filing and a more formal discussion of the Company s Risk Management
Program in subsequent integrated resource plans. Id. Staff stated that the Company satisfied the
requirement of providing a comparative evaluation of gas purchasing options. Id. The Company
discusses the many options available for supply, transportation, and storage along with the
general decision criteria necessary to meet the supply needs of its customers. Id. The Company
provides quantitative resource utilization analysis through its resource optimization model. Id.
The Company s model includes many alternative resources but, because of existing contract
constraints correctly built into the model, there are very few realistic opportunities for change in
the planning horizon of five years. While Staff believes the resource model can properly
evaluate the presented resources there is room for improvement by including additional market
alternatives. Id.
Staff stated the Company satisfied the requirement of providing a short-term plan for
implementing the IRP, and filed an extensive comparative analysis to its previous IRP. Id. at 6.
Staff stated the Company met the public participation requirement by holding two public
workshops during the development of the IRP: one in Boise; and the other in Pocatello. Id.
DISCUSSION
The Commission has jurisdiction over Intermountain Gas Company, a natural gas
utility, and the issues raised in Case No. INT -04-1 pursuant to the jurisdiction granted under
Title 61 of the Idaho Code and the Commission s Rules of Procedure, IDAPA 31.01.01.000
seq.
Commission Order No. 25342 initiated Integrated Resource Plan Requirements for
local gas distribution companies (LDC) in accordance with amended Section 303 of PURP A.
That Order lists the elements that the IRP should contain. The Commission twice modified the
requirements for natural gas IRPs: Order No. 27024 allowed natural gas utilities to shorten the
ORDER NO. 29656
planning horizon to five years to match the Company s planning horizon and available market
products; and Order No. 27098 removed the requirement that IRPs include a formal evaluation
of the costs and benefits of potential Demand Side Management (DSM) programs, stating that a
general explanation of whether there are cost effective DSM opportunities will be sufficient.
Based upon its review of the Company s filings in this case, as well as the review and
recommendations of the Staff, the Commission finds that Intermountain Gas Company s 2004
Natural Gas IRP satisfies the requirements set forth by Commission Orders. This
acknowledgement and acceptance of the Plan should not be interpreted as approval of the plan
or as a judgment of the prudence of any transactions undertaken as part of the plan.
ORDER
IT IS HEREBY ORDERED that, in consideration of the foregoing and as more
particularly described above, the Commission acknowledges that Intermountain Gas Company
2004 Natural Gas IRP satisfies the requirements set forth by the Commission in Order No.
24342, as modified by Order Nos. 27024 and 27098 , and is therefore accepted for filing.
THIS IS A FINAL ORDER. Any person interested in this Order (or in issues finally
decided by this Order) may petition for reconsideration within twenty-one (21) days of the
service date of this Order. Within seven (7) days after any person has petitioned for
reconsideration, any other person may cross-petition for reconsideration. See Idaho Code ~~ 61-
626 and 62-619.
ORDER NO. 29656
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this 1-11
day of December 2004.
~IDENT --
Out of the Office on this Date
MARSHA H. SMITH, COMMISSIONER
ATTEST:
~(J. Je D. JewellCo ission Secretary
O:INTG0401 dw2
ORDER NO. 29656