20130507notice_of_filing_order_no_32801.pdf

Office of the Secretary
Service Date
May 7,2013
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF INTERMOUNTAIN )
GAS COMPANY’S 2013-2017 INTEGRATED )CASE NO.INT-G-13-03
RESOURCE PLAN )
)NOTICE OF FILING
)
)NOTICE OF
)MODIFIED PROCEDURE
)
________________________________
)ORDER NO.32801
On February 28,2013,Intermountain Gas Company filed its Integrated Resource
Plan (“IRP”)for the years 201 3-2017.The Company provides natural gas service to more than
315,000 customers in southern Idaho.Every two years,the Company files an IRP that describes
the Company’s plans to meet its customers’future natural gas needs.The Commission will
review the IRP to ensure that it represents a diligent effort by the Company to plan for
anticipated supply and demand for natural gas.The IRP must discuss the subj ects required by
Commission Order Nos.25342,27024 and 27098,and amended Section 303(b)(3)of the Public
Utility Regulatory Policies Act of 1978 (“PURPA”).
With this Order,the Commission provides notice of the IRP,sets deadlines by which
interested persons may submit written comments on the IRP,and orders that the case be
processed under the Commission’s rules of Modified Procedure.
BACKGROUND
An IRP is a planning document in which a company analyzes numerous factors and
variables that affect natural gas supply and demand.In Order No.25342,the Commission
adopted IRP requirements for local gas distribution companies in response to amended Section
303 of the Public Utility Regulatory Policies Act of 1978.In Order No.27024,the Commission
shortened the required planning horizon from 20 years to 5 years.In Order No.27098,the
Commission removed any requirement that IRPs formally evaluate potential demand-side
management (“DSM”)programs,and instead directed the companies to explain whether cost
effective DSM opportunities exist.In summary,these three Orders direct gas utilities to file
biennial TRPs that include:
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1.A forecast of future gas demand for each customer class,which includes
the number.type.and efficiency of gas end-users as well as effects from
economic forces on gas consumption:
2.An analysis of gas supply options for each customer class,which includes
a projection of spot market versus long-term purchases for both firm and
interruptible markets,an evaluation of the opportunities for using
company-owned or contracted storage or production,an analysis of
prospects for company participation in a gas futures market,and an
assessment of opportunities for access to multiple pipeline suppliers or
direct purchases from producers;
3.A comparative evaluation of gas purchasing options and improvements in
the efficient use of gas based on a consistent method for calculating cost-
effectiveness,which considers the total costs of each resource including
externalities;
4.An explanation of whether or not there are cost-effective DSM
opportunities;
5.The integration of the demand forecast and resource evaluations into at
least a five-year integrated resource plan describing the strategies designed
to meet current and future needs at the lowest cost to the utility and its
ratepayers;
6.A short-term action plan;
7.A progress report that relates the new plan to the previously filed plan;and
8.Public participation.
NOTICE OF IRP FILING
YOU ARE HEREBY NOTIFIED that the following information is taken from the
Executive Summary in the company’s IRP.
YOU ARE FURTHER NOTIFIED that the Company regularly forecasts the demand
of its growing customer base and determines how to best meet the load requirements brought on
by this demand.The Company’s IRP represents a snapshot in time of the Company’s ongoing
planning process;it describes the currently anticipated conditions over a five-year planning
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horizon,the anticipated resource selections,and the process for making resource decisions.IRP,
p.5.
YOU ARE FURTHER NOTIFIED that Intermountain Gas sells natural gas to two
major markets:the residential/commercial market and the industrial market.In 2012,the
Company served an average of 285,275 residential and 30,428 commercial customers,which is a
1%increase in average residential and commercial customers from 2011.Residential and
commercial customers use natural gas primarily for space and water heating.The Company’s
industrial customers use natural gas for boiler and manufacturing applications.The IRP says the
agricultural economy and the price of alternative fuels strongly influences industrial demand for
natural gas.In 2012,industrial sales and transportation accounted for 49.8%of the throughput
on Intermountain’s system.See IRP at 5.
YOU ARE FURTHER NOTIFIED that the Company’s peak-day loads (throughput
during the projected coldest winter day)are growing at a slower rate than was forecast in the
2010 IRP.The Company says the economic downturn and its negative impact on housing and
business growth resulted in a much reduced customer growth forecast in the years common to
the 2010 and 2012 IRPs.Id.But the IRP does show peak-day load growth,albeit at a slower
rate,over the planning period.The Company attributes this to:(1)growth in Intermountain’s
customer base,primarily residential and commercial,and (2)production-related growth
occurring in the Company’s industrial firm transportation market.Id.at 5-6.
Forecast Peak Day Send-Out
YOU ARE FURTHER NOTIFIED that the IRP says the Company analyzed several
peak day send-out (delivery)studies to determine the magnitude and timing of future
deficiencies in firm peak day delivery capabilities,looking at both a total interstate mainline
perspective as well as geographic region specific perspectives.Id.at 6.Residential,
commercial,and industrial customer peak day load send-out 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 in the most cost-effective manner.Id.The
company estimates that residential,commercial,and industrial peak day load growth over the
five-year period will increase at an average annual rate of 1.03%under a base case scenario.The
IRP indicates that there are no peak day delivery deficits when forecasted peak day send-out is
matched against existing resources.Id.at 7.
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Regional Studies
YOU ARE FURTHER NOTIFIED that the IRP analyzes certain geographic regions
within Intermountain’s service territory based upon the anticipated or known need for
distribution system upgrades within each specific region.The geographic regions are identified
as the Idaho Falls Lateral Region,the Sun Valley Lateral Region,the Canyon County Region,
the State Street Lateral Region and an All Other Region.Id.at 7.
YOU ARE FURTHER NOTIFIED that the Idaho Falls Lateral is 104 miles long and
serves cities between Pocatello and St.Anthony in eastern Idaho.The Idaho Falls Lateral serves
about 17%of the Company’s customers.Id.The 2010 IRP identified the potential for peak day
delivery deficits on the Idaho Falls Lateral.To meet the projected growth requirements,the
Company completed a 16”pipeline loop around the city of Idaho Falls.With the completion of
this project in the winter of 2012,the Idaho Falls Lateral’s distribution system capacity increased
from 810,000 therms to 990,000 therms,which ensures no potential peak day deficits during the
IRP planning horizon.Id.at 8.
YOU ARE FURTHER NOTIFIED that the Sun Valley Lateral serves about 4%of the
Company’s customers.The 2010 IRP revealed potential peak day deficits on the Sun Valley
Lateral beginning as soon as 2011.To ensure adequate capacity on the lateral,the Company
installed a compressor station during the winter of 2010/2011 to boost pressure.The compressor
station increased the Sun Valley Lateral’s capacity from 175,000 therms to 204,000 therms.The
increased capacity ensures there will be no peak day delivery deficits during the IRP planning
horizon.Id.at 9.
YOU ARE FURTHER NOTIFIED that the Canyon County Lateral serves about 15%
of the Company’s customers.The IRP says that a matching of the existing peak day distribution
with anticipated demand shows that there are no peak day delivery deficits during 2013-2017.
Id.at 10.
YOU ARE FURTHER NOTIFIED that the State Street Lateral serves about 14%of
the Company’s customers.There currently are no capacity constraints on the State Street
Lateral,but the Company will continue to monitor the area as demand begins to approach design
capacity.During the 2013-2017 timeframe,there are no capacity constraints for the State Street
Lateral.Id.at 11.
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Assessment of Potential DSM Programs
YOU ARE FURTHER NOTIFIED that the IRP says that besides reviewing
traditional and non-traditional resource alternatives.Intermountain also analyzed potential
demand-side management (“DSM”)measures to mitigate potential constraint areas.Id.The
Company noted that natural gas prices have continued to fall after the 2010 IRP was completed,
and that its core customers have seen a 40%price reduction since 2008.Because of this,DSM
programs that were previously considered for pilot programs no longer provide cost benefits.
Further,the U.S.Department of Energy has set new rules mandating higher,region-based
minimum efficiency standards for gas water heaters beginning in April 2015.The Company
continues to offer a $200 rebate to customers who install a 90%or greater efficiency natural gas
furnace when converting to natural gas.The Company also continues to promote high-efficiency
homes and ENERGY STAR to the new construction market.Id.at 12.
Summary
YOU ARE FURTHER NOTIFIED that,in summary,the IRP analyzed residential,
commercial and industrial customer growth and its impact on Intermountain’s distribution
system using design weather conditions under various scenarios for Idaho’s economy.Peak day
send-out under each of these customer growth scenarios was measured against the available
natural gas delivery systems to project the magnitude and timing of delivery deficits,both from a
total Company perspective and a regional perspective.The Company analyzed the resources
needed to meet the projected deficits within a framework of options to help determine the most
cost-effective means to manage the potential deficits.The Company says that these options
allow its customers to rely on uninterrupted service in the years to come.Id.
NOTICE OF MODIFIED PROCEDURE
YOU ARE FURTHER NOTIFIED that the Commission has determined that the
public interest may not require a formal evidentiary hearing in this matter and will proceed under
Modified Procedure pursuant to the Commission’s Rules of Procedure 201 through 204,IDAPA
31.01.01.201 through .204.The Commission notes that Modified Procedure and written
comments have proven to be an effective means for obtaining public input and participation.
YOU ARE FURTHER NOTIFIED that any person desiring to state a position on
Intermountain’s IRP may file a written comment in support or opposition with the Commission
no later than sixty (60)days from the date of this Order.The comment must contain a statement
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of reasons supporting the comment.Persons desiring a hearing must specifically request a
hearing in their written comments.Written comments concerning Intermountain’s IRP shall be
mailed to the Commission and Intermountain Gas at the addresses reflected below:
Commission Secretary Scott Madison
Idaho Public Utilities Commission Executive Vice President and
P0 Box 83720 General Manager
Boise,ID 83720-0074 Intermountain Gas Company
555 South Cole Road
Street Address for Express Mail:P0 Box 7608
Boise,ID 83707
472 W.Washington Street
Boise,ID 83702-5918
These comments should contain the case caption and case number shown on the first page of this
document.Persons desiring to submit comments via e-mail may do so by accessing the
Commission’s home page located at www.puc.idaho.gov.Click the “Comments and Questions”
icon,and complete the form,using the case number as it appears on the front of this document.
YOU ARE FURTHER NOTIFIED that if no written comments or protests are
received within the time limit set,the Commission may consider the matter on its merits and may
enter its Order without a formal hearing.If written comments or protests are received within the
deadline,the Commission will consider them and,in its discretion,may set the matter for hearing
or may decide the matter and issue its Order based on the written comments before it.IDAPA
31.01.01.204.
YOU ARE FURTHER NOTIFIED that Intermountain’s IRP has been filed with the
Commission and is available for public inspection during regular business hours at the
Commission offices or on the Commission’s website at www.puc.idaho.gov by clicking on “File
Room”and then “Gas Cases.”
YOU ARE FURTHER NOTIFIED that all proceedings in this matter will be held
pursuant to the Commission’s jurisdiction under Title 61 of the Idaho Code.
ORDER
IT IS HEREBY ORDERED that this case be processed under Modified Procedure.
Interested persons may file written comments no later than sixty (60)days from the service date
of this Order.
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ORDERNO.32801 6
DONE by Order of the Idaho Public Utilities Commission at Boise,Idaho this 7
day of May 2013.
ATTEST:
PAULKJ LA ,PRESTDENT
/&
MARSHA H.SMITH,COMMISSIONER
O:INT-G-13-O3kk
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ORDER NO.32801
MACK A.;SIONER
7