20150427ICL Comments.pdf

Benjamin I. Otto (ISB No. 8292)
710 N 6'h Street
Boise,ID 83701
Ph: [phone] xt2
Far [phone]
botto@idahoconservation. org
Attorney for the Idaho Conservation [,eague
IN THE MATTER OF
INTERMOUNTAIN GAS COMPANY'S
2OI 5 -2019 INTEGRATED RESOURCE
PLAN
rNT-G-15-01
ICL Comments
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
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CASE NO. INT-G-I5-01
IDAHO CONSERVATION LEAGUE. COMMENTS
The Idaho Conservation League (ICL) recommends the Commission direct
Intermountain Gas to reassess the Company's Integrated Resource Plan (IRP) for 2015 -2019.
ICL is mindful the Commission's IRP review is limited to the process and not the substance of
the plan. But Intermountain's IRP fails to meet the Commission's standards for both process and
substance. In these Comments, ICL explains why Intermountain Gas's 2015-2019IRP fails to
meet each of the seven criteria contained in Orders Nos. 25342,27024,27098, and 30643.t
1. A forecast of future gas demand for each customer class, which includes the number, type, and
fficiency of gas end-users as well as effeas from economic forces on gas consumption;2
Intermountain does forecast future demand for gas consumption across the system and
for each "Area of Interest".'However, ICL notes this forecast shows increasing growth for 2015 -
2018 and then makes a dramatic decline in 2019.4Intermountain does not explain this forecast
slow down of demand growth. Neither Idaho Power's nor PacifiCorp's IRPs indicate any slow
down of demand growth in 2019 or beyond.s'6 Accurately predicting load growth is a crucial first
step in developing an IRP, mostly to indicate the timing and scale of future resource needs.
Under-forecasting demand growth in the IRP is likely to result in inadequate lead-time to avoid,
' See Staff Comments on Intermountain Gas 2013-2017 Integrated Resource Plan at I - 2.
2 ld.3Intermountain 2015 IRP at 13.
a See Intermountain 2015 IRP at l5 (graph showing annual growth for each Area of Interest).
s Idaho Power presentation of the load forecast for the 2015 IRP to the IRP Advisory Committee of October 2, 2014.
Available at: https://www.idahopower.com/pdfs/AboutUs/PlanningForFuture lirpl2015lpresentationl002l4.pdf
6 eacrfiCorp 2015 IRP atAppendix 2 page 17, table A.13.
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defer, or select additional resources or capacity expansions. Intermountain's anomalous demand
drop off in 2019, and lack of longer-term forecast is a major flaw in the IRP process that
undercuts the validity of the IRP results.
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;'
Intermountain Gas does discuss the various gas markets and resources the Company
plans to rely on to meet demands. As for natural gas supplies, ICL notes that Intermountain
explains the increased pipeline capacity for moving Rockies gas to eastern and California markets
means Idaho and the Pacific Northwest will lose our traditional price advantage.s Intermountain
also points to a pipeline capacity constraint limiting the ability to ship more gas from the Rockies
into Canada.'As a result, Intermountain plans to rely on gas hubs at Stanfield and Sumas for
future incremental gas supplies. ICL submits that Idahoans face rising gas price pressure as we
lose our geographic advantage and nationwide demand for gas continues to increase.
Unfortunately Intermountain's IRP does not address the first step in planning to insulate
customers from fuel price risk-increasing gas efficiency programs to exposure to gas markets.
3. A comparative eyaluation of gas purchasing options and improvements in the fficient use of gas
based on a consistent method for calculating cost-effectiveness, which considers the total costs of each
resource including externalities;lo
Intermountain gas does not use a consistent or complete method for considering the cost
effectiveness of efficiency efforts. The IRP reveals no attempt to value the externalities as called
for by the Commission.t' The IRP does not reveal if Intermountain includes both avoided cost of
gas and avoided capacity expansions when considering the cost-effectiveness of any action. And
the IRP does not indicate the appropriate lifetime over which to consider the cost-effectiveness of
7 See Staff Comments on Intermountain Gas 2013-2017 Integrated Resource Plan at I - 2.
s lntermountain 2015 IRP at 59.
e Id.
'0 See StaffComments on Intermountain Gas 201i-2017 Integrateil Resource Plan at I - 2.
" Intermountain 2015 IRP at 80 and 84-85. (Noting reduced air pollution from gas switching).
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ICL Comments
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an action. Intermountain did not use a consistent or complete method to compare the cost-
effectiveness of resource options. Accordingly, the Commission should not accept this IRP.
4. An explanation of whether or not there are cost-ffictive Demand-Side Management ("DSM")
opportunities;t2
The largest failure of Intermountain's IRP is the inadequate discussion of Demand-Side
Management (DSM) opportunities. This reason alone is sufficient for the Commission to instruct
Intermountain to reassess the entire IRP. Intermountain mentions building codes and appliance
standards have increased gas efficiency and indicates the Company "is an active voice" to
improve building codes and standards applicable to Idaho.t3 Although ICL notes Intermountain's
efforts on these state policies is not apparent to the engaged observer, much less the general
public. At the very least Intermountain can commit to working with Idaho Building Code
Collaborative and Department of Building Safety to encourage Idaho to adopt the latest building
and energy codes in the 2016 legislative session.
Intermountain mentions a website where customers can access information about
consumption and efEciency measures." But the Company does not discuss new methods to push
this information to customers through behavioral science based programs such as OPower's peer
comparison letters. Merely offering information on the web, without any indication of whether
customers access and implement this information, is an inadequate educational program.
Intermountain last assessed the potential for gas efficiency in2Ol2.t5In such a rapidly
evolving and improving marketplace, this assessment is stale and no longer represents the true
technical, economic or achievable potential. Further, Intermountain initially constrained the
potential study to consider only existing DSM programs.'6Instead,Intermountain should take a
fresh look at DSM potential for Idaho, not merely assess what other gas companies provide in
their service territory. fust as a utility must update supply side data for each IRP, utilities must
update demand side data for each IRP cycle.
tz See Staff Comments on Intermountain Gas 201i-2017 Integrated Resource Plan at I - 2.
r3 Intermountain 2015 IRP at 83.
'n Intermountain 2015 IRP at 81 - 82.
rs Intermountain 2015 IRP at 90.tt Intermountain 2010 IRP at 77; Intermountain 2015 IRP at 90.
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Intermountain then explains why they will continue to not offer energy efficiency
programs to customers, except for the self-serving incentive for electric to gas conversions. For
example, Intermountain explains that homebuyers already have an incentive to enhance energy
efficiency in new homes, but Idaho Power knows this incentive is inadequate so they offer the
Energy Star Homes Northwest program. Intermountain claims to participate in marketing and
promotion of energy star homes, but provides no specific examples of these efforts or the results.
More broadly, Intermountain attempts explain that due to falling cost of gas, DSM
programs are not cost effective." But ICL questions Intermountain's assessment, mostly the IRP
does not provide any details of these calculations. What explanation Intermountain provides also
misses a large category of avoided costs - avoided capacity expansions. Meanwhile Intermountain
has included capacity expansions on several lateral lines without clearly and completely
considering how efficiency improvements can defer or avoid these investments. For example,
Intermountain plans to install a new 8" pipe on Cloverdale road in Central Ada Countyts and a
second Liquefied Natural Gas storage tank in 2018 on the Idaho Falls Lateral." While the IRP
does not predict any capacity need along the state street lateral2o ICL noies design base case shows
a 50,000 therms capacity increase available in fiscal year 20l6.2t Meanwhile the IRP explains
Intermountain has invested heavily in the past on the Sun Valley Lateral and while the Company
does not foresee additional needs yet, acquiring land to do so is "very expensive or simply
unobtainable."2'Clearly, Intermountain has definite plans for capacity expansions over the IRP
horizon. But Intermountain does not appear to factor in these avoidable capacity costs when
considering DSM options. Intermountain does not give a reasonable explanation for not offering
DSM programs for customers and thus the Commission should not accept the 2015 IRP.
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;2j
t'Intermountain 2015 IRP at 91.tt Intermountain 2015 IRP at 78.
" Intermountain 2015 IRP at 79.
'o Intermountain 2015 IRP at 78.
" Intermountain 2015 IRP at 9.
" Intermountain 2015 IRP at 79.
23 See StaffComments on lntermountain Gas 2013-2017 Integrated Resource Plan at | -2.
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ICL Comments 4
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As stated above, Intermountain inadequately considered DSM options to compare with
supply side and capacity needs. Without an accurate and robust DSM assessment, the IRP is
incapable of ensuring Intermountain selects the strategies designed to meet future needs at the
lowest cost.
More generally, while Intermountain does assess needs and resources over five years, ICL
submits this time horizon is inadequate to ensure robust long-term planning. The decision to
acquire supply or demand side resources often takes several years. A five-year planning horizon is
inadequate to capture the changing marketplace and customer trends facing Intermountain with
sufficient lead-time to consider a range of options and find the least cost/least risk resource. ICL
submits the Commission should direct Intermountain to consider at least a lO-year time horizon
for planning purposes.
6. A progress report that relates the nw plan to the previously filed plan; anff'
Intermountain appears to have integrated the comparison between the 2010 and 2015
IRP's throughout the document. This is one part of the IRP ICL agrees with as explaining what
the Company planned for in 2010 while discussing each part the 2015 plan provides a timely and
easy comparison.
7. Public p articipation.2s
ICL tried but could not uncover the opportunities afforded for pubic participation in the
IRP process. Notifring the public of the time and place of meetings is the first step in ensuring
meaningful public participation. Intermountain did not satisfr even this first step.
For the foregoing reasons ICL recommends, the Commission not accept Intermountain
Gas Company's 2015IRP.
DATED this 27'h dayofApril2015.
Idaho Conservation League
2a See Staff Comments on Intermountain Gas 201i-2017 Integrated Resource Plan at | - 2.
25 See Staff Comffients on Intermountain Gas 2013-2017 Integrated Resource Plan at L - 2.
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ICL Comments
April27,2015
CERTIFICATE OF SERVICE
I hereby certifr that on this 276 dya of April2Ol5I delivered true and correct copies of the
foregoing COMMENTS to the following persons via the method of service noted:
Hand delivery:
Jean Iewell
Commission Secretary (Original provided)
Idaho Public Utilities Commission
42TW.Washington St.
Boise, ID 83702-5983
US Mail:
Michael P. McGrath
Intermountain Gas Company
555 South Coal Road
Boise,Idaho 83707
INT-G-1s-01
ICL Comments
Apil27,2015