20191018Application Summary.pdf

EXECUTIVE OFFICES
I rureRruou NTAtru Gas CoruPlruv
SS5 SOUTH COLE ROAD . p.O. BOX 7608 . BOISE, IDAHO 83707 . [phone] o FAX: [phone]
REC E IVED
?019 OCT l8 Pl{ lrr l3
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October 18,2019
Ms. Diane Hanian
Commission Secretary
Idaho Public Utilities Commission
P.O. Box 83720
Boise, ID 83720-0074
RE: Case No. INT-G-19-07
Dear Ms. Hanian:
Attached for consideration by this Commission are the original and seven (7) copies of
Intermountain Gas Company' s 20 1 9 Integrated Resource Plan.
If you should have any questions regarding the attached, please don't hesitate to contact me at
(208) 377-60rs.
Very truly yours,
Lori A. Blattner
Director, Regulatory Affairs
Intermountain Gas Company
Enclosure
Mark Chiles
Preston Carter
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lntermountain Gas Company
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lntegrated Resource Plan
20I g -2023
INTERMOUNTAI N'
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lntermountain Gas Company Table of Contents
Table of Contents
Overview..
Executive Summary.
....1
L
About the Company .......
Customer Base................
......1
.,..,.1
,,..,.2
......3
The IRP Process.
lntermountain Gas Resource Advisory Committee ..
Summary...
About the Natura! Gas Industry
Natural Gas and the National Energy Picture............
3
5
5
The Direct Use of Natural Gas.................6
....8
....8
....9
Demond...
Demand Forecast Overuiew.........
Residential & Commercial Customer Growth Forecast......
Household Projections 12
Forecast Households
Market Share Rates..........
....18
....21-
....23
....24
Conversion Rates............
Commercial Customer Forecast.....
Heating Degree Days & Design Weather......26
Normal Degree Days.............,...,,26
......26
......27
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Design Degree Days...........
Peak Heating Degree Day Calculation ...............
Base Year Design Weather....
Area Specific Degree Days...........
Usage Per Customer ...........
29
30
30
Usage per Customer by Geographic Area..
Conclusion
Large Volume Customer Forecast...
...31
...31
...33
...331ntroduction.....................
Method of Forecasting...............
lntegrated Resource Plan 2019 - 2023
34
I
lntermountain Gas Company Table of Contents
Forecast Scenarios.......35
....35
....36
....36
....35
Contract Demand
Load Profile vs MDFQ....
System Reliability..
General Assumptions ....................
Base Case Scenario Summary .......
High Growth Scenario Summary...
Low Growth Scenario Summary...
36
.....38
.....39
Supply & Delivery Resources 43
43
44
44
44
45
47
48
Supply & Delivery Resources Overview
Traditional Supply Resources
Overview...
Background
Gas Supply Resource Options
Shale Gas...
Supply Regions
Export tNG............
Types of Supply....
..50
..51
..52
..53
..57
Pricing .........
Storage Resources
!nterstate Pipeline Transportation Capacity .
Supply Resources Summary...
Capacity Release & Mitigation Process.....
60
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62
63
64
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65
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67
Overview..
Capacity Release Process
Non-Traditional Supply Resources...
Diesel/Fue! Oa| ..............
Wood Chips..........
Propane.....
Biogas Production.
Satellite/Portable LNG Equipment .............
Lost and Unaccounted For Natura! Gas Monitoring
illntegrated Resource Plan 20Lg - 2023
lntermountain Gas Company Table of Contents
Billing and Meter Audits .....................68
Meter Rotation and Testing
Leak Survey
Damage Prevention and Monitoring.......
Advanced Metering lnfrastructure..........
Weather and Temperature Monitoring...
........68
..68
..69
..71.
..71,
Summary....
Core Market Energy Efticiency..
Market Transformation............
Residential Energy Efficiency Program ...
Conservation Potential Assessment.......
...73
,,.73
...75
...77
Large Volume Energy Efficiency.82
Avoided Costs...
Overview...........
...........84
...........84
Cost lncorporated....................... 84
Understanding Each Component '.'.'.'.'.'.'...,.,. 85
Optimization ..............................86
Distribution System Modeling.........
Modeling Methodology
..................... 85
Potential Capacity Enhancements ...........88
Pipeline Loop 88
Pipeline Uprate 88
Compressor Station.....
Load Demand Curves.................
Customer Growth Summary Observations - Design Weather - All Scenarios ..............
Core Customer Distribution Sendout Summary - Design and Normal Weather - All Scenarios
Projected Capacity Deficits - Design Weather - All Scenarios..............
..89
..90
..91,
,,92
..95
..982019 IRP vs.2OtT lRP Common Year Comparisons.......
Resource Optimization ...
1ntroduction......................
........111
,,,,,,,,11,1,
Functional Components of the Mode!..........t1,t
ModelStructure
Demand Area Forecasts
lntegrated Resource Plan 20t9 - 2023
.........115
ilt
lntermountain Gas Company
Supply Resources..
Transport Resources...
ModelOperation
Special Constraints
Model lnputs
Model Results.......
Summary............
Planning Results...............
State Street latera!..........
Central Ada County .........
Canyon County
ldaho Falls Lateral ...
Sun Valley Lateral..........
2019 IRP vs.2OL7 IRP Common Year Comparisons...
Non-Utility LNG Forecast .........,...
lntroduction.................
History.......
Method of Forecasting...............
Benefits to Customers.......................
On-Going Challenges
Safeguards
Future........
Recommendation
I nfrastrua,ure Replocement ....
Rexburg Snake River Crossin9.................
Aldyl-A Pipe Replacement.
Table of Contents
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lntegrated Resource Plan 20L9 - 2023 IV
lntermountain Gas Company
List of Tables
Table l: Forecast New Customers
Table 2: Forecast Total Customers ................
Table 3: Forecast Total Households - IGC Service Area........
Table 4 : Regional Conversion Rate,.,,,.,,,.,.,
Table 5 : Commercial Rate Factor,.............
Table 6: Heating Degree Days by Month............
Table 7: Large Volume Base Case Therms.........
Table 8: Large Volume High Growth Therms ,,.,.
Table 9: Large Volume Low Growth Therms
Table l0: Storage Resources ,.,,
Table I l: Northwest Pipeline Transport Capacity...............
I 2 : 2 0 I 6 - 2 0 I 8 Billing and Meter Audit Results ........
I3: Intermountain Portfolio Cost-Effectiveness Under UCT and TRC Tests
I4: Definition ofArcs & Nodes by Reference Number.
l5: Peiods for Optimization Modeling ......
Table 16: Nampa LNG Inventory Availablefor Non-Utility Sales
List of Figures
Figure 1: Intermountain Gas System Map....
Figure 2: Base Case Forecast Growth by Area oflnterest
Figure 3: Customer Addition Forecast - Residential & Commercial
Figure 4: Annual Additional Customers - Base Case: 2019 IRP vs. 2017 IRP ,.
Figure 5: Annual Households Forecast - Base Case: 2019 IRP vs. 2017 IRP .,.
Figure 6 : Annual Additional H ous e ho lds Forec ast,.,...........
Figure 7: Additional Households Forecast - Base Case: 2019 IkP vs. 2017 IRP
Figure 8: Market Penetration Rate - By District
Figure 9: Residential New Construction Growth
Figure l0: Annual Residential New Construction Growth - Base Case: 2019 IRP vs. 2017 IRP
Figure I 1: Annual Residential Conversion Growth
Figure 12: Annual Residential Conversion Growth- Base Case: 2019 IRP vs. 2017 IRP.......
Figure 13: Additional Commercial Customers
Figure l4: Annual Additional Commercial Customers - Base Case: 2019 IRP vs. 2017 IRP,.
Figure I 5: Heating Degree Days Graph ,
Figure l6: 2017 IRP Large Volume Therm Forecastvs Actual
Figure 17: Large Volume Customer Survey Cover Letter Sample
Figure 18: Large Volume Customer Survey Sample.,.,....
Table of Contents
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Table
Table
Table
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Vlntegrated Resource Plan 2O1,9 2023
lntermountain Gas Company
Figure 20: Natural Gas Consumption by Sector ,.
Figure 2I: Shale Gas Production Trend
Table of Contents
Figure l9: Natural Gas Sources,,,45
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67
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70
7t
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Figure 22: US Lower 48 States Shale P|ays............
Figure 23: Supply Pipeline Map...........
Figure 24: Natural Gas Trade
Figure 25: Intermountain Pice Forecast as of03/12/2019
Fi gure 2 6 : Intermountain Storage Faci \it1es........,..........
Figure 27: Pacific Northwest Pipelines Map
Figure 28: Intermountain LAUF Statistics
Figure 29: Intermountain Damages Rate Per 1,000 Locates - By Region
Figure 30: Intermountain Locate Requests - By Region
Figure 3l: Intermountain Total Damages - By Region - Company ,.,,
Figure 32: Estimated DSM Therm Savings....
Figure 33: Energt Ef/iciency Program Brochure - March 2018........
Figure j4: 2018 Energ Efficiency Customer Bill Insert - October 2018 .
Figure 3 5 : Cate gori es of Potential 9avings,.,.,..,.,..
Figure 36: Natural Gas Savings - Cumulative 2020 - 2039...
Figure 37: Natural Gas Savings Cumulative 2020 - 2024, Base Achievable Scenaio.....
Figure 38: Intermountain's Portfolio Annual Savings Compared to Other Utilities
Figure 39: Large Volume lilebsite Login
Figure 40: Natural Gas Usage History ......,.,.,,.
Figure 42: Natural Gas System Map - Intermountain Gas Company,.,.,.,
Figure 4j: IGC Major Supply and Transport to IMG....
Figure 44: IGC Laterals from IMG ... .. .. ...
Figure 45: Total Company Design Base 2019.............
Figure 46: Supply Resource Data Input Sheet .,..,.,,,,.,.
Figure 47: Lateral Capacity Summary by Year ,.,.,.,L22
Figure 48: Supply Usage Summary ......................L22
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lntegrated Resource Plan 2079 - 2O23 VI
lntermountain Gas Company Overview
Ovenriew
Executive Summary
Natural gas continues to be the fuel of choice in ldaho. Southern ldaho's manufacturing plants,
commercial businesses, new homes and electric power peaking plants, all rely on natural gas
to provide an economic, efficient, environmentally friendly, comfortable form of heating
energy. lntermountain Gas Company (lntermountain, lGC, or Company) endorses and
encourages the wise and efficient use of energy in general and, in particular, natural gas for
high efficient uses in ldaho and lntermountain's service area.
Forecasting the demand of lntermountain's growing customer base is a regular part of
lntermountain's operations, as is determining how to best meet the load requirements
brought on by this demand. Public input is an integral part of this planning process. The
demand forecasting and resource decision making process is ongoing. This lntegrated
Resource Plan (lRP) document represents a snapshot in time similar to a balance sheet. lt 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 resource decisions. The
planning process described herein is an integral part of lntermountain's ongoing commitment
to make the wise and efficient use of natural gas an important part of ldaho's energy future.
About the Company
lntermountain Gas, a subsidiary of MDU Resources Group, lnc., is a natural gas local
distribution company that was founded in 1950. The Company served its first customer in
1956. lntermountain is the sole distributor of natural gas in southern ldaho. lts service area
extends across the entire breadth of southern ldaho, an area of 50,000 square miles, with a
population of roughly 7,344,000. At the end of IOLS,lntermountain served 364,572 customers
in 75 communities through a system of over L2,8OO miles of transmission, distribution and
service lines. ln 2018, over 720 million therms were delivered to customers and over 300 miles
of transmission, distribution and service lines were added to accommodate new customer
additions and maintain service for lntermountain's growing customer base.
Customer Base
The economy of lntermountain's service area is based primarily on agriculture and related
industries. Major crops are potatoes, milk and sugar beets. Major agricultural-related
industries include food processing and production of chemical fertilizers. Other significant
industries are electronics, general manufacturing and services and tourism.
lntermountain provides natural gas sales and service to two major markets: the
residential/commercial market and the large volume market. The Company's residential and
commercial customers use natural gas primarily for space and water heating. lntermountain's
Llntegrated Resource Plan 201,9 - 2023
lntermountain Gas Company Overview
large volume customers transport natural gas through lntermountain's system to be used for
boiler and manufacturing applications. Large volume demand for natural gas is strongly
influenced by the agricultural economy and the price of alternative fuels. During 2OL8,50% of
the throughput on lntermountain's system was attributable to large volume sales and
transportation.
The IRP Process
lntermountain's lntegrated Resource Plan is assembled by a talented cross-functionalteam from
various departments within the Company. This five-year forecast is continually updated within
the Company and filed with the Commission every two years. lt helps to ensure that
lntermountain will be able to continue to provide safe and reliable service while minimizing
energy costs. The IRP considers all available resources to meet the needs of lntermountain's
customers on a consistent and comparable basis. A high-level overview of the process is
described below. Each step in the process will be outlined in greater detail in later sections of this
document.
Demand
As a starting point, lntermountain develops base case, high growth, and low growth scenarios to
project the customer demand on its system.
For the core market, the first step involves forecasting customer growth for both residential and
commercial customers. Next, lntermountain develops design weather. Then the Company
determines the core market usage per customer using historical usage, weather and geographic
data. The usage per customer number is then applied to the customer forecast under design
weather conditions to determine the core market demand.
To forecast both therm usage and contract demand for large volume customers, the Company
analyzes historical usage, economic trends, and direct input from large volume customers. This
approach is appropriate given the small population size of these customer classes. Because large
volume customers typically use natural gas for industrial processes, weather data is not generally
considered.
Both core market and large volume demand forecasts are developed by areas of interest (AOl)
and then aggregated to provide a Total Company perspective. Analyzing demand by AOI allows
the Company to consider factors specifically related to a geographic area when considering
potential capacity enhancements.
Supply & Delivery Resources
After determining customer demand for the five-year period, the Company identifies and reviews
currently available supply and capacity resources. Additionally, the Company includes in its
resource portfolio analysis various non-traditional resources as well as potential savings resulting
from its energy efficiency program.
lntegrated Resource Plan 2019 - 2023 2
lntermountain Gas Company Overview
Optimization
The final step in the development of the IRP is the optimization modeling process which matches
demand against supply and deliverability resources by AOI and for the entire Company to identify
any potential deficits. Potential capacity enhancements are then analyzed to identify the most
cost effective and operationally practical option to address potential deficits. The Planning
Results Section shows how all deficits will be met over the planning horizon of the study.
lntermountain Gas Resource Advisory Committee
To enhance the lntegrated Resource Plan development, the Company established the
lntermountain Gas Resource Advisory Committee (IGRAC). The intent of the committee is to
provide a forum through which public participation can occur as the IRP is developed.
Advisory committee members were solicited from across lntermountain's service territory as
representatives of the communities served by lntermountain. Exhibit 1, Section A, is a sample of
the initial invitation to join the committee. Committee members have varied backgrounds in
regulation, economic development, and business. A full listing of IGRAC members is included in
Exhibit L, Section A.
lntermountain held meetings across its service territory to ensure travel would not impact the
ability of committee members and the public to participate. Three meetings were held during
the IRP process at the following locations: Boise, Twin Falls, and ldaho Falls. lncluded in Exhibit
1-, Section B and C are sample invitations, sign in sheets and agendas from the meetings, along
with copies of the presentations.
After each meeting, for members who were unable to attend, an email containing the materials
covered was sent out. The Company provided a comment period after each meeting to ensure
feedback was timely and could be incorporated into the lRP. lntermountain also established an
email account where feedback and information requests could be managed.
Summary
Through the process explained above, lntermountain analyzed residential, commercial and large
volume demand growth and its consequent impact on lntermountain's distribution system using
design weather conditions under various scenarios. Forecast demand under each of the
customer growth scenarios was measured against the available natural gas delivery systems to
project the magnitude and timing of potential delivery deficits, both from a total Company
perspective as well as an AOI perspective. The resources needed to meet these projected deficits
were analyzed within a framework of traditional, non-traditional and energy efficiency options
to determine the most cost effective and operationally practical means available to manage the
deficits. ln utilizing these options, lntermountain's core market and firm transportation
customers can continue to rely on uninterrupted firm service both now and in the future.
lntegrated Resource Plan 201,9 - 2023 3
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lntermountain Gas Company Overview
About the Natural Gas lndustry
Natural Gas and the National Energy Picture
The blue flame. Curling up next to a natural gas fireplace, starting the morning with a hot shower,
coming home to a warm house. The blue flame of natural gas represents warmth and comfort,
and provides warmth and comfort in the cleanest, safest, most affordable way possible.
Natural gas is the cleanest fossil fuel. Natural gas burns efficiently, producing primarily heat and
water vapor. The Northwest Gas Association has reported that natural gas produces about 45%
less carbon dioxide than burning coal, 30% less than oil and L5% less than wood. ln addition,
according to the American Gas Association, households with natural gas versus all electric
appliances produce 4L% less greenhouse gas emissions.
Natural gas is the safest form of energy. According to the Department of Transportation,
pipelines are the safest form of energy transportation.
Natural gas is affordable. Over the last decade, the price of natural gas fell by about 37% (adjusted
for inflation). According to the Northwest Gas Association, households that use natural gas for
heating, cooking and clothes drying spend an average of 5874 less per year than homes using
electricity for those same applications. The American Gas Association has reported that for
residential customers, the cost of natural gas has been lower than the cost of propane, fuel oil,
or electricity since 2070, and is forecasted to stay low through 2040.
Consumers benefit from the use of natural gas in two ways: directly and indirectly. Using natural
gas to warm your home, heat your water, cook your meal, dry your clothes or fuel your fireplace,
is the direct use of natural gas. The Northwest Gas Association has reported that the direct use
of natural gas is about 92% efficient.
According to the American Gas Association, in the United States natural gas currently meets more
than 25% of the nation's energy needs, providing energy to more than 75 million residential,
commercial and industrial customers. The residential market is comprised of approximately 69
million homes and represents L8% of total U.S. natural gas consumption. Approximately 5.5
million commercial customers make up 73% of total U.S. natural gas consumption. Roughly
1.85,400 industrial and manufacturing sector customers use natural gas in their processes,
consuming 32% of the U.S. annual total.
Consumers also benefit from the use of natural gas in a much less obvious way through the
indirect use of natural gas. The most common application of indirect use is using natural gas for
electric generation. According to the Northwest Gas Association, as much as 35% of the natural
gas end use market is for electric generation. The indirect us of natural gas is less efficient than
direct use as it provides only 32% of the energy as heat by the time it reaches a customer's home
or business. However, the U.S. Energy lnformation Administration (ElA) has reported that natural
gas used for electric generation has allowed U.S. power plants to achieve a 27-year low in
5lntegrated Resource Plan 201,9 - 2023
lntermountain Gas Company Overview
emissions. ln fact, according to the Northwest Gas Association, natural gas emits up to 56% fewer
greenhouse gasses than coal for the same amount of electricity.
Natural gas is now even more plentiful in North America, with an estimated 100 years supply at
current consumption levels. Even with this plentiful supply, and lower, more stable prices, it
remains vital that all natural gas customers use the energy as wisely and as efficiently as possible.
The Direct Use of Natural Gas
The direct use of natural gas refers to employing natural gas at the end-use point for space
heating, water heating, and other applications, as opposed to using natural gas to generate
electricity to be transmitted to the end-use point and then employed for space or water heating.
As discussed earlier, the direct use of natural gas achieves 92% energy efficiency and makes
economic sense in today's energy era.
As electric generating capacity becomes more constrained in the Pacific Northwest, additional
peak generating capacity will primarily be natural gas fired. Direct use will mitigate the need for
future generating capacity. lf more homes and business use natural gas for heating and
commercial applications, then the need for additional generating resources will be reduced. 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.
From a resource and environmental perspective, the direct use of natural gas makes the most
sense. More energy is delivered using the same amount of natural gas, resulting in lower cost
and lower COz emissions. 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.
lntermountain plays a critical role in providing energy throughout southern ldaho. The Company
has approximately 330,000 residential customers which use roughly 165.6 million therms a year
for space heating. lf this demand had to be served by electricity, it would mean that
lntermountain's residential customers would require approximately 3,787,069 megawatt hours
a year to replace the natural gas currently used to heat their homes.
According to its 20L8 Annual Report, ldaho Power's total annual residential megawatt hour sales
for 2018 were 5,135,000. lf the aforementioned 330,000 residential customers used electric
space heat instead of natural gas, ldaho Power's total residential sendout would rise to 8,922,069
mWh, a738% increase, requiring considerable additionalgeneration and transmission facilities.
ln peak terms, if these 330,000 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 2,750 megawatts. According to ldaho Power's Annual Report, it
recently experienced a January 2017 winter peak load of 2,527 megawatts. Without the direct
use of natural gas to heat these 330,000 homes, ldaho Power's winter peak load could reach
5,277 megawatts, a 109% increase! This additional Z,75}-megawatt peak load would be the
6lntegrated Resource Plan 2Ot9 - 2023
lntermountain Gas Company Overview
equivalent of approximately nine 300-megawatt natural gas-fired electric generating facilities,
like Langley Gulch, all running at full capacity. A substantial increase in transmission facilities
would also be required to handle this peak load, since it would be well above the ldaho Power
record Summer peak from July 2017 of 3,422 megawatts.
Ultimately, promoting and using natural gas for direct use in heating applications is the best use
of the resource, and mitigates the need for costly generation and infrastructure expansion across
the U.S. electric grid.
7lntegrated Resource Plan 201,9 - 2O23
lntermountain Gas Company Demand
Demond
Demand Forecast Overview
The first step in resource planning is forecasting future load requirements. Three essential
components of the load forecast include projecting the number of customers requiring service,
forecasting the weather sensitive customers' response to temperatures and estimating the
weather those customers may experience. To complete the demand forecast, contracted
maximum deliveries to industrial customers are also included.
lntermountain's long range demand forecast incorporates various factors including divergent
customer forecasts, statistically based gas usage per customer calculations, varied weather
profiles and banded natural gas price projections; all of which are discussed later in this
document. Using various combinations of these factors results in six separate and diverse
demand forecast scenarios for the weather sensitive core market customers.
Combining those projections with the large volume market forecast provides lntermountain with
six total company demand scenarios that envelop a wide range of potential outcomes. These
forecasts not only project monthly and annual loads but also predict daily usage including peak
demand events. The inclusion of all this detail allows lntermountain to evaluate the adequacy of
its supply arrangements and delivery under a wide range of demand scenarios.
lntermountain's resource planning looks at distinct segments (i.e. AOls) within its current
distribution system. After analyzing resource requirements at the segment level, the data is
aggregated to provide a Total Company perspective. The AOls for planning purposes are as
follows:
The Canyon County Area (CCA), which serves core market customers in Canyon County.
The Sun Valley Lateral (SVL), which serves core market customers in Blaine and Lincoln
cou nties.
The ldaho Falls Lateral (lFL), which serves core market customers in Bingham, Bonneville,
Fremont, Jefferson, and Madison counties.
The Central Ada County (CAC), which serves core market customers in the area of Ada
County between Chinden Boulevard and Victory Road, north to south, and between
Maple Grove Road and Black Cat Road, east to west.
The State Street Lateral (SSL), which serves core market customers in the area of Ada
County north of the Boise River, bound on the west by Kingsbury Road west of Star, and
bound on the east by State Highway 2L.
The All Other segment, which serves core market customers in Ada County not included
in the State Street Lateral and Central Ada Area, as well as customers in Bannock, Bear
Lake, Caribou, Cassia, Elmore, Gem, Gooding, Jerome, Minidoka, Owyhee, Payette,
Power, Twin Falls, and Washington counties.
lntegrated Resource Plan 2OL9 - 2023
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lntermountain Gas Company Demand
Residential & Commercial Customer Growth Forecast
This section of lntermountain's IRP describes and summarizes the residential and commercial
customer growth forecast for the years 2019 through 2023. This forecast provides the
anticipated magnitude and direction of Intermountain's residential and commercial customer
growth by the identified Areas of lnterest for lntermountain's current service territory. Customer
growth is the primary driving factor in IGC's five-year demand forecast contained within this lRP.
IGC's customer growth forecast includes three key components
l. Residential new construction customers,
2. Residential customers who convert to natural gas from an alternative fuel, and
3. Commercial customers
To calculate the number of customers added each year, the annual change in households for each
county in the Company's service territory is determined using the ldaho Economics Summer 2018
Economic Forecast for the State of ldaho by John S. Church ('18 Forecast), dated October 2018
(see Exhibit 2, Section A). Using the assumption that a new household means a new dwelling is
needed, the annual change in households by county is multiplied by lntermountain's market
penetration rate in that region to determine the additional residential new construction
customers. Next, that number is multiplied by the IGC 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, which when added to
the residential new construction numbers, equals the total expected additional residential
customers by county.
To accurately estimate growth for the State Street AOl, which contains a small portion of Canyon
County and a large portion of Ada County, an additional estimate is utilized. The Community
Planning Association of Southwest ldaho (COMPASS) conducts annual forecasts based on defined
'Traffic Analysis Zones' (TAZ) within Ada County. According to COMPASS, the TAZ that coincides
with the State Street AOI boundary is expected to grow 3.L4% per year over the next 5 years.
This annual growth rate is applied to the current customer count within that boundary to derive
the estimated growth of the State Street AOI over the same time period.
The Central Ada AOI sits entirely in Ada County. Using the same methodology as described above,
the Central Ada AOI growth was calculated to be 2.9% per year.
The residential new construction numbers by county are multiplied by the IGC commercial rate,
which is the anticipated percentage of commercial customers relative to residential new
construction customers in those locales, to arrive at the number of expected additional
commercial customers.
With the continued resurgence in the housing market, lntermountain growth projections are up
considerably, when compared to the 2O!7 lRP. The '18 Forecast household numbers are
lntegrated Resource Plan 201,9 - 2023 9
lntermountain Gas Company Demand
employed to determine the relative overall number of customer additions, as well as the
distribution of those customer additions across the Company's service territory.
The following graph depicts the relationship, or shape, of customer additions by AOI:
BASE CASE FORECASTGROWTH BY AREA OF INTEREST
II II
Sun Valley
ruHll
lF Lateral N ofState St
IRP NODES
t2023
Figure 2.' .Ba,re Case.Foreca.vl Growh by,4rea o/lnterest
The'18 Forecast contains three economic scenarios: base case, low growth, and high growth. IGC
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 forecast for each of the three economic scenarios.
lntegrated Resource Plan 201,9 - 2023 10
I
thzo
Eoa
6,000
5,000
4,000
3,000
2,000
1,000
Canyon Cnty Allother
.2A19 e2020 2021
lntermountain Gas Company Demand
CUSTOMER ADDITION FO RECAST
Residentia I & Commercia I
Ftgare 3.' Cuslomer/ddiltbn,Foreca,rl -.Restdenlta/ & Commerct'a/
The following graph shows the difference in base case annual additional customers between the
2017 and 2019 IRP forecast years common to both studies:
.Fryure 4.',4nnua/,4ddhbna/ Castomers -Base Case.' 20,19I?P v,r. 20171t?P
As indicated, the economic recovery and its resulting positive impact on housing and business
growth has resulted in a much increased IGC customer growth forecast in the years common
to the 2077 and 2019 IRP's.
lntegrated Resource Plan 201,9 - 2023 11
z.o
F6o
20,000
18,000
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,AAO
2079 2020
.r.apHigh Growth .#Base Case -FLow GroMh
202t
YEAR
?o22 zo23
AN N UAL ADDITIONAL CUSTOM ERS
Base Case: 2019 IRP vs. 2017 IRP
14,000
72,OOO
IttzoFao
10,000
8,000
6,000
4,000
20t9
.{F2017 IRP
2020 202L
2019 tRP YEARS
lntermountain Gas Company Demand
The following tables show the results from the five-year customer growth model for each
scenario for the annual additional or incremental customers and total customers at each year-
end.
Tab/e 1.' Forecast Ne w Cas tom ers
tOW GROWTH
BASE CASE
HIGHGROWTH
Tab/e 2.',Forecasr 7otu/ Custom et's
tOW GROWTH
BASE CASE
HIGH GROWTH
20L9
7,L97
t2,3U
L6,792
2020
7,555
13,115
L7,722
202L
7,O72
72,733
77,492
2022
6,605
72,490
L7,4L2
2023
6,528
12,642
17,610
20L9
377,582
376,769
387,177
2020
379,237
389,883
398,899
2021
386,309
402,616
4L6,39!
2022
392,914
475,706
433,803
2023
399,M2
427,748
45t,412
The following sections explore, more fully, the different components of the customer forecast,
including the 'L8 Forecast, market penetration and conversion rates, and commercial customer
growth.
Household Projections
The '18 Forecast provides county by county projections of output, employment and wage data
for 2L industry categories for the state of ldaho, as well as population and household forecasts.
This simultaneous equation model uses personal income and employment by industry as the
main economic drivers of the forecast. The model also utilizes forecasts of national inputs and
demand for those sectors of the ldaho economy having a national or international exposure.
lndustries that do not have as large of a national profile and are thus serving local communities
and demand are considered secondary industries. Local economic factors, rather than the
national economy determine demand for these products.
The '18 Forecast uses two methods for population projections: (1) a cohort-component
population model in which annual births and deaths are forecast, the net of which 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 derived as a result of this
reconciliation.
lntegrated Resource Plan 201,9 - 2023 t2
Forecast New Customers
Forecast Total Customers
lntermountain Gas Company Demand
As previously mentioned, the '18 Forecast provides three scenarios: (1) base case, (2) high
growth, and (3) low growth. The base case 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 Base Case Economic Growth Scenario
ln the base case scenario of the Summer 2018 ldaho Economic Forecast it is projected that ldaho
will continue to be an attractive environment for population and household growth. ln the
decade of the 1990s ldaho's population increased at an annual average rate of 2.5 % per year.
The 2008 national recession brought about a significant decline in ldaho's nonagricultural
employment over the 2000 to 2010 period and a slowing of the rate of population growth in the
state-slowing to an annual average rate of 7.9 % per year over the decade. Nevertheless, that
rate of population growth was higher than ldaho's annual average rate of natural population
growth (births minus deaths) of nearly 7.0% per year indicating that ldaho continued to attract
an in-migration of population even during that period of tough economic times.
Recent statistics indicate that ldaho's economy and population growth have again regained
momentum.ln 2076,ldaho was ranked as the third fastest growing state in the nation with an
annual increase of 1.83%. ln 20L7, ldaho's population growth accelerated to an annual gain of
2.2% and was ranked as the fastest growing state in the nation (an absolute gain of nearly 37,000
persons). The population growth has not been equally distributed across the state. Since the 2010
US Census through mid-year 2017, it is estimated that ldaho's population has increased by nearly
L49,40O. Nearly 62.5% of those population gains were posted in the Treasure Valley with Ada
and Canyon counties accounting for 93,200 of the state's population growth. The counties along
the ldaho Falls Lateral in eastern ldaho have posted a population gain of nearly t7,8OO sincethe
2010 Census; 7L.9% of the overall population growth in the state. The Magic Valley counties
posted a gain of 10,300 in population since the last census, and accounted for 63% of the state's
overall population growth.
It is projected that during the 25-year period 2015 to 2040 that ldaho's population will increase
by 906,700 reaching a total population of 2,559,500 by the year 2040-an annual average pace
of 1,.8% per year. The number of households in the state is expected to increase at a slightly faster
pace of 2.7% per year over the 2015 to 2040 period adding nearly 423,400 additional households
statewide. Ada and Canyon counties are projected to capture the majority of the state's future
population and household growth over the 2015 to 2040 period-with a gain of 568,000 persons
and 248,200 households. Ada county is projected to see an absolute population increase of
319,000 (L50,400 households) over the 2015 to 2040 period.
Canyon county will take up second place statewide with a projected absolute population gain of
249,700 (a 97,900 increase in the number of households). ln eastern ldaho, the Bonneville,
Madison, Bannock, and Jefferson counties are expected to see increases in population of 54,800;
34,500; 26,300; and 17,900, respectively, over the 2015 to 2040 forecast period. A totalgrowth
lntegrated Resource Plan 201,9 - 2023 13
lntermountain Gas Company Demand
in population and households of 140,400 persons and 61,600 households in the eight counties
along the ldaho Falls Lateral is forecasted over the 25-year period.
ln the base case scenario of the '18 Forecast, it is assumed that the state of ldaho will continue
to be an attractive environment for the in-migration of new business. ln spite of the employment
losses that the state experienced in the 2008 economic downturn, ldaho's industries have
regained economic traction and have continued their expansion within the state. Another
dynamic that has been examined by the Federal Reserve Bank of San Francisco is an exodus of
population and some businesses from the state of California. While California's population
numbers continue to increase, the annual average rate of population growth in California is less
than the state's natural rate of population growth (births minus deaths). This fact indicates that
California is experiencing an annual net out-migration between 0.2% and 0.3% of its population.
Given California's current population of greater than 39,000,000, an annual out-migration of
0.2% to 0.3% translates to 80,000 to 120,000 persons relocating each year. Driver's license
surrender statistics from the ldaho Department of Transportation indicate that ldaho is capturing
a significant portion of relocating Californians. For many of the businesses relocating from
California, a primary reason behind their exodus is the relatively high cost of doing business and
the burden of business regulation in California. This forecast views this circumstance as an
ongoing phenomenon that is not likely to abate in the near-term and will be a significant factor
contributing to economic and population growth in the western states in proximity to California.
Total non-agricultural employment in ldaho is projected to increase by 336,200 (an annual
average increase of L7% per year) over the 201"5 to 2040 period. Again, Ada and Canyon counties
are projected to capture the majority of those non-agricultural employment gains with a
projected increase of L99,400 non-agricultural jobs, an annual average increase of 2.2% per year.
During those 25 years, Ada and Canyon counties are projected to account for 59.2% of the total
non-agricultural employment gains statewide.
The counties along the ldaho Falls Lateral (Bannock, Bingham, Bonneville, Butte, Fremont,
Jefferson, Madison, and Power) are projected to see an absolute increase in non-agricultural
employmentof nearly58,000,anannual averagerateof 1,.L5% peryear. lnsouthcentral ldaho,
(Blaine, Camas, Cassia, Gooding, Jerome, Lincoln, Minidoka, and Twin Falls counties) total non-
agricultural employment is projected to increase by nearly 27,80Ojobs, an annual average pace
of t.1% per year, over the forecast period.
Similar to the economic outlook in the 20L7 lRP,ldaho's manufacturing sector will not be the
driver of economic growth in the state. Over the 1O-year period 2000 to 2010 manufacturing
employment in the state decreased by L7,2OOjobs. In the five years since 2010 ldaho regained
nearly 8,500 of those lost manufacturing jobs.
ln the longer term, manufacturing employment in the state is projected to only increase by a
modest 5,600 jobs overthe 2015 to 2040 period-an annual average gain of 08% peryear. ln
Ada and Canyon counties manufacturing employment is projected to increase by nearly 4,800
over the forecast period.
lntegrated Resource Plan 2O1,9 - 2023 1.4
lntermountain Gas Company Demand
During the historical period, 1990 to zOtO, food processing employment in Ada and Canyon
counties had been increasing-largely on the strength of job gains in the dairy products
manufacturing sector. ln the current forecast period, it is expected that the dairy products
manufacturing firms will continue to post job gains. At the same time, it is projected that the
vegetable processing firms in Ada and Canyon counties will continue to experience further job
losses over the forecast period. The total effect of these trends in the food processing industry is
that the Company does not project the food processing sector to be a significant contributor to
any gains in manufacturing employment in Ada and Canyon counties. However, in south central
ldaho, the food processing sector is projected to be the driving factor behind forecasted
manufacturing employment gains of nearly 1,100 jobs in the Twin Falls area over the forecast
period.
Employment in ldaho's lumber and wood products manufacturing sector slipped in the last
recession. Future job gains in the lumber and wood products manufacturing sector is projected
to be minimal over the forecast period. Statewide employment in stone, clay, and glass products
and fabricated metal products manufacturing is expected to increase in proportion to population
and household growth in the state. ldaho's electronics and machinery manufacturing sectors are
not expected to regain the jobs lost during the last recession. No new machinery or electronics
manufacturing facilities are anticipated to be located in ldaho during the forecast period.
Statewide employment in the transportation, trade, and utilities industries is projected to
increase by nearly 28,7}Ojobs over the forecast period-an annual average increase of L.O% per
year. ln general, employment in the transportation, trade, and utilities industries is projected to
increase at a pace that is half of the rate of population and household growth statewide. ln Ada
and Canyon counties, employment in the transportation, trade, and utilities industries is
projected to increase by 22,400 over the forecast period-representing 78% of the projected
statewide employment gains in the sector. Counties along the ldaho Falls Lateral are projected
to see transportation, trade, and utilities jobs increase by 4,300 over the 25-year period-
representin g 75% of the sector's projected job gains statewide.
Over the forecast period, employment in ldaho's service industries are projected to be the area
of the greatest future employment growth in the state. Professional and business services
employment statewide is projected to increase by 73,400 over the forecast period-an annual
average increase of 2.5% per year. Employment in education and health services is projected to
add 75,000 jobs statewide during the forecast period while the leisure and hospitality services
sector is projected to add nearly 37,7OO jobs. Ada and Canyon County employment in the
professional and business services sector is projected to increase by 45,600, representing62.L%
of the projected gains statewide. Similarly, projected employment gains in Ada and Canyon
counties in the educational and health services sector, and the leisure and hospitality services
sector are projected to add nearly 46,000 jobs (61.3% of the total statewide gain), and 21,800
jobs (58.8% of the projected total statewide gain), respectively, over the forecast period.
lntegrated Resource Plan 2O1,9 - 2023 15
lntermountain Gas Company Demand
Even with the tight fiscal conditions that came with the 2008 national recession, employment in
ldaho's government sector increased by nearly 9,800 during the 2000 to 2010 period. Between
20L0 and 2O!5, government employment in the state slowed adding only about z,O00jobs in the
five-year period. However, it is projected that government employment in ldaho will regain some
momentum and increase by nearly 18,200 over the 2O2O to 2030 period. ln the long term, the
forecast projects that government employment statewide will increase by 50,800 over the
forecast period-an annual average increase of 1,.3% per year. Generally, the bulk of the increase
on government employment will be in the state and local government area and largely associated
with the need for additional local government employees to provide basic services to a
forecasted ever-growing population in the state. lt is projected that government employment
gains of 26,900 over the forecast period in Ada and Canyon counties will represent nearly 53.0%
of the projected government job gains statewide.
The High and Low Economic Growth Scenarios
The high growth and low growth scenarios of the '18 Forecast present alternative views of the
economic future of ldaho and its 44 counties. The high growth scenario of the '18 Forecast
presents a vision of a more rapidly growing economy in ldaho. For example, the high growth
scenario produces a projected statewide population of 2,050,323 in the year 2023 versus a base
case scenario ldaho population forecast of 1,928,784 in the same year. The high growth scenario
average annual compound rate of population growth from 2010 to 2040 is 2.0% per year.
Alternatively, the low growth Scenario of the '18 Forecast presents a slower economic outlook
for the ldaho economy. ln the low growth scenario, ldaho's 2023 population is projected to reach
the much lower level of L,736,355, exhibiting an annual average compound growth rate of t.2%
per year from 2010 to 2040.
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 are outlined
below:
The High Growth Economic Scenario
By the year 2O4O the high growth scenario forecasts that population and households in ldaho is
projected to be nearly 1-L.t% higher than the forecasted amounts in the base case scenario. This
represents a projected population in the high growth scenario that is nearly 283,900 higher in
the state bythe year2040 with an additional 7L ,LOO households overthe base case scenario.
The projected gap between the high growth and base case scenarios widens in the years 2020-
2030 as the ldaho economy regains some of the economic momentum that it established in the
years 1-990 through 2005. ln the high growth forecast it is expected that stronger employment
gains statewide will be a magnet for a stronger rate of population in-migration to the state.
ln the high growth scenario of the '1"8 Forecast, ldaho is projected to be a modestly more
attractive environment for manufacturing firms. Therefore, in spite of the employment losses
that the state experienced in the 2008 recession, ldaho's manufacturing industries are projected
to gain employment at a faster rate in the 2015 to 2025 period. ln 2025,ldaho's manufacturing
lntegrated Resource Plan 20t9 - 2023 16
lntermountain Gas Company Demand
employment is expected to reach 72,200-2,800 jobs higher than the amount projected in the
base case forecast. Over the longer term, manufacturing employment in the high growth forecast
is projected to exceed the base case scenario by 4.Lyo, or 2,7OOjobs, in the year 2040.
ln the high growth forecast, it is assumed the food processing industry does not shed as many
jobs at vegetable processing facilities across the state, and ldaho will continue to attract new
food processing companies to the state. There are no expectations for the location of a new
electronics manufacturing plant in the state as was the case in the high growth forecasts of prior
lRPs. lt is expected that employment in lumber and wood products manufacturing will continue
to remain weak and not be a significant factor for future employment growth. However, the state
may pick up some additional manufacturing jobs in machinery and equipment and fabricated
metals manufacturing in the high growth scenario. Nevertheless, the prospects for additional
employment in these manufacturing sectors will only offset natural productivity gains, and
subsequent job attrition in the manufacturing sector. Transportation equipment manufacturing
in the state is not expected to benefit from the stronger economic growth forecasted in the high
growth scenario.
The Low Growth Economic Scenario
By the year 2040, the low growth forecast of population and households in ldaho is L2.5% lower
than the forecasted amounts in the base case scenario. This represents a projected difference
of nearly 3l-8,700 fewer people in the state by the year 2040 and nearly L38,800 fewer
households. ln the low growth scenario, overall employment gains are projected to slow
statewide, causing ldaho to be less attractive to a job-seeking population which would otherwise
migrate to ldaho.
ldaho's manufacturing employment in the low growth scenario is not forecasted to significantly
recover from the 2008 national recession.
ln the low growth scenario, the state's loss of jobs in the food processing industry accelerates
and nearly 1,500 additional jobs are lost over the forecast period. The potato processing plants
in southern ldaho would experience the bulk of these job losses. The low growth scenario
assumes that the JR Simplot plant in Caldwell will shed over 1,000 jobs by the year 2020.
Furthermore, the sugar processing plants in southern ldaho are projected to feel increased
pressure from competition and will find it necessary to close one of the sugar processing plants
in either Nampa, Paul, or Twin Falls. The dairy industry and its associated food processing plants
are projected to reach a point where no further capacity can be added due to increased
population and environmental pressures.
Employment losses in ldaho's lumber and wood products manufacturing industry are projected
to accelerate in the low growth scenario. ln this scenario, the brunt of these additional losses will
be felt in those portions of the wood products industry that are increasingly vulnerable to low-
cost foreign produced products (i.e. the woodgrain molding plants in Fruitland and Nampa).
lntegrated Resource Plan 201,9 - 2023 77
lntermountain Gas Company Demand
ldaho's electronics and machinery manufacturing industries are expected to experience further
job losses in the low growth forecast. Additionally, employment in stone, clay, and glass products
and fabricated metal products manufacturing are both projected to be at lower levels of total
employment than in the base case scenario.
ln general, in the low growth scenario, manufacturing industry employment in the year 2040 is
projected to be nearly 6,400 jobs P.a%) lower than in the base case scenario.
Transportation, trade, and utilities employment in the low growth scenario is projected to have
nearly 3,200 fewer jobs (2.0% lower) by the year 2040 than in the base case scenario. Lower
overall economic growth projected in the low growth scenario produces lower levels of demand
for transportation services and fewer buying opportunities of additional retail stores.
Additionally, the low growth scenario projects that there will be closures or downsizing of some
of the state's food processing facilities, which all require significant amounts of truck
transportation.
The low growth forecast of statewide employment in the finance, insurance, and real estate
sector is about 5,700 (14.0%) lower than in the base case scenario by the year 2040. Again, the
difference is largely due to the lower levels of population and household growth projected in the
low growth scenario.
The outlook for service industry employment in the low growth scenario assumes that
employment growth in the service sector will slow, proportionate to the projected slower growth
in population and households statewide. Further, ldaho is projected to be less attractive to those
service industry firms from outside of ldaho that may have considered relocating all or a portion
of their activities to ldaho. Furthermore, the low growth scenario forecasts that ldaho's
competitive position for attracting new business will be degraded and that the nearby states of
Utah, Oregon, and Nevada will capture a larger proportion of firms making relocation and
expansion decisions.
Future government employment in the low growth scenario is projected to be 8.6% (14,800 jobs)
lower than the base case scenario by the year 2040. As previously mentioned for other industries,
the reason for projected lower levels of government employment in the low growth scenario are
the slower rates of population and household growth in the low growth forecast. The low growth
scenario projects that the number of assigned military personnel at Mountain Home Airforce
Base will remain at levels that are similar to those at the present time.
Forecast Households
As previously stated, the basis for the customer growth forecast relies on the annual variance, or
change, in households from year to year, within the counties in which IGC operates. The forecast
number of total households; low growth, base case and high growth scenarios, is shown in Table
3.
lntegrated Resource Plan 2Ot9 - 2023 18
lntermountain Gas Company
Tab/e J.' Forecast 7o ta/ Eouse/t o /ds - lGC,let'vtce,4 rea
2019
LOW GROWTH
BASE CASE
HIGH GROWTH
469,sos
500,551
520,267
2020
477,L47
513,550
537,748
2021
4U,232
526,193
555,&11
2022
490,876
538,618
572,276
2023
497,49
55L,216
589,7N
Demand
The variance between the common years in the 2OL7 and 2019 lRPs for forecast total households
is depicted in the graph below.
AN N UAL HOUSEHOLDS FORECAST
Base Caset 2019lRP vs. 2017 IRP
2020
YEAR
Ftgure 5.' ,4nnua/ t7ouselo/d,r -Forecast - -Rase Case.' 2019 I?P vs. 20.17 I?P
530,000
tn 520.000oJo 510,000TH soo,oool! +so,ooo
Js 480,000ot 470,000
460,000
<-2Ot
2019
7 tRP 2019 IRP
lntegrated Resource Plan 20L9 - 2023
Forecast Total Households
IGC Seruice Area
1.9
20201,
I
lntermountain Gas Company Demand
The graph below provides a visual depiction of the variance in household growth for high growth,
base case and low growth scenarios for the 23 counties which lntermountain Gas Company
SCTVES.
F$ure 6.',,4 nnua/,4 ddttbna/ tTousefio/ds Forecast
A comparison of the base case household growth, between the common years in the 2OL7 and
2019 lRPs, is depicted below.
ADDTIONAL HOUSEHOLDS FORECAST
Base Case: 2Ot9lRP vs. 2017 IRP
Fr?no 7.' ,4ddhbna/ tTou,relo/ds .Foreca,rt - -Ba,re Case.' 2019 I?P vs. 20,/ 7 ,?P
lntegrated Resource Plan 2019 - 2023 20
ANNUAL AD DITI ONAL HOUSEHOLDS FORECAST
oJo-U
lo-
=Uz
20,000
18,000
15,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
2079 2020 202r
YEAR
2022 2023
..a-High Growth -{-Base Gse ..{plow GroMh
I
ctoJoItrJtl:)o-
=ltz
14,000
13,000
12,OOO
L1,000
10,000
9,000
8,000
2079
'&*2017 IRP
2020 202'1,
YEAR.{D2019 IRP
lntermountain Gas Company Demand
Market Share Rates
IGC utilizes market penetration rates that vary across its service territory. These regional
penetration rates are applied to the counties within the Company's service territory within three
specific regions: East, Central, and West. These penetration rates are the ratio of IGC's additional
residential new construction customers to the total building permits in those regions. The
penetration rate is then applied to the forecasted additional households to derive the estimated
residential new construction customers by region.
IGC develops market penetration rates by way of the county construction reports which IGC
Energy Services personnel use in prospecting for new construction customers. To derive the
market penetration rate, the residential new construction customers in the specific areas
covered by these reports are divided by the total dwelling permits listed in these reports. ln
addition, the tracking process includes whether the new home is within reach of existing
mainline; i.e., the home can be readily served within IGC's main and service policy without
financial contribution by the customer for the extension of service. The areas covered are the
jurisdictions/counties within each operation district within the Company's service area which
publish monthly building permits. More generally described/identified as: Nampa, Boise, Twin
Falls, Pocatello, and ldaho Falls. This data is collected and tracked monthly, by jurisdiction. The
cumulative annual penetration rate, by district, is then applied to the household growth forecast
per district, to derive the forecast for new construction growth.
The penetration rates used, based on the methodology described above, are depicted in the chart
below. Variations in penetration rates across the Company's service area is a function of the
variation in population density across the 23 counties which IGC serves in relation to the service
area within those counties.
MARKET PENETRATI ON RATE
By District
4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500 760/0I:r
POCATELLONAMPABOI SE TWIN FALLS
DISTRICTS
IDAHO FATLS
I Permits lssued t Reachable I Sold
Figare 8.' llartet Penelrattbn ,Rale -.8y Drtrrct
96%
thU
o-
=Uz ffi 7ff/o
89%
lntegrated Resource Plan 20t9 - 2023 21.
lntermountain Gas Company Demand
The following graph illustrates the relationship between the three economic scenarios for the
annual residential new construction growth forecast for 2019 -2023:
Ftgure 9.' r?endenlm/.Mew Con rlruclron Growtfi
The following graph shows the difference in base case residential new construction customer
growth between the 2017 and 201-9 IRP forecast years common to both studies:
Ftgure /0.',4znua/,Restdentia/,Uew Conrtruclton Growtl --Ba.re Case.'20.19/t?P v,t. 20./71RP
lntegrated Resource Plan 2O19 - 2O23 22
RESI DENTI AL NEW CONSTRUCTION GROWTH
vlUJ
o-
=t!z
18,000
16,000
14,000
L2,000
10,000
8,000
6,000
4,000
2,000
2019 2020 2027 2022
FORECAST YEAR
*Base Case +High Growth
2023
f ls\iv GroMh
ANNUAL RESIDENTIAL NEW CONSTRUCTION GROWTH
Base Caset 2Ot9 IRP vs. 2017 IRP
.l
t,ttl
or
=UJz
12000
11000
10000
9000
8000
7000
6000
5000
4000
2019 2020
FORECAST YEAR
2021
{82017 IRP 2019 tRP
Regional Conversion Rate
lntermountain Gas Company Demand
Conversion Rates
The conversion market represents another source of customer growth for the Company. IGC
acquires these customers when homeowners replace an electric, oil, coal, wood, or other
alternate fuel source furnace/water heater with a natural gas unit. IGC forecasts these customer
additions by applying regional conversion rates based on historical data and future expectations.
The following table shows, by region, the assumed conversion rates used in the lRP. These rates
represent the percentage of new customer additions which will be conversions. The calculated
conversion forecast is then added to the new construction forecast to derive the total residential
growth forecast.
The table below illustrates the conversion rates used in the 2019 and 2017 lRPs
Tab/e 4.',Regzbna/ Con verstbn -Rate
EASTERN REGION
CENTRAL DIVISION
WESTERN REGION
20t9
7%
20%
790/,
20t7
9%
2t%
23%
The following graph illustrates the relationship between the three economic scenarios for the
annual residential conversion growth forecast for 2019 -2023:
ANN UAL RESI DENTIAL CONVERSION G ROWTH
1,800
1,600
1,400
L,200
1,000
800
2020 2027
FORECAST YEAR
.=ts Base Case +High Growth
2023
Ftgure 1.1.',4nnua/,RestVentia/ Con ver,rtbn Growfi
rrldU
oFU)
=U
202220t9
Growth
lntegrated Resource Plan 2019 - 2023 23
lntermountain Gas Company Demand
The following graph shows the difference in the base case forecast of residential conversion
customer growth between the 2077 and 2019 IRP forecast years common to both studies:
ANNUAL RESI DENTIAL CONVERSION GROWTH
Base Case: 2019 IRP vs. 2017 IRP
Fryure .12.',4nnua/.RestVentta/ Conyerstbn Grodt -.Ra,re Case.' 20,19[r?P vs. 2017I?P
Commercial Customer Forecast
Commercial customer growth is forecast as a certain proportion of new construction customer
additions based on the idea that new households require additional new businesses to serve
them. Based on the most recent three-year sales data, the ratio of commercial customer growth
to residential growth for the west, central, and east regions was 4.80%, 8.12%, and 5.83%,
respectively. Therefore, regional ratios of 5% for the west, and 8%for central, and 6% for the
east are used in the base case, high growth, and low growth scenarios. The table below illustrates
the variation in this variable from the previous lRP.
Tab/e 5.' Commetcta/,Rale -Factor
EASTERN REGION
CENTRAL DIVISION
WESTERN REGION
20L9
5.83o/o
8.L2%
4.8tr/o
20L7
TL,2L%
LO36%
5.06%
Commerical Rate Factor
lntegrated Resource Plan 20L9 - 2023 24
20L9 2020
FORECAST YEAR
202L
2019 rRP
1,,250
1,200
1,1.50
1,100
1,050
1,000
950
UIGt!
oFtttf(J
zo
ttlEtlJ
zo(J
-{F2017 IRP
I
lntermountain Gas Company Demand
The following graph shows the forecast annual additional commercial customers for the low
growth, base case and high growth scenarios from the'18 Forecast.
AD D I TI O NAL CO M M ERCIAL CUSTO M ERS
Ftg'ure,13.',4ddZtbna/ Comn ercta/ Cu,stomerc
The following graph shows the difference in base case commercial customer growth between the
20L7 and 2019 IRP forecast years common to both studies:
Ftgure -14.',4nnua/,4ddt7tbna/ Commerctb/ Cu,rtomer.r -,Ra,se Ca.re.' 2019IW vs. 2017I?P
lntegrated Resource Plan 20t9 - 2023 25
,tlzo
F6o
900
800
700
600
500
400
300
200
20t9 2020 2027 2022 2023
YEAR
<-Low Growth -r-Base Case ..1-High Growth
r AN N UAL ADDITIONAL COM MERCIAL CUSTOMERS
Base Case:20L9 IRP vs. 2017 IRP
t,zotroo
650
600
550
500
450
400
350
300
2079
$**2019 IRP
2020
YEAR
202L
{-2017 IRP
lntermountain Gas Company Demand
Heating Degree Days & Design Weather
lntermountain's demand forecast captures the influence weather has on system loads by using
Heating Degree Days (HDDs) as an input. HDDs 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. HDD values are inversely related to temperature which means that as temperatures
decline, HDDs increase. The standard HDD base, and the one lntermountain utilizes in its lRP, is
65'F (also called HDD65). As an example, if one assumes a day where the mean outdoor
temperature is 30'F, the resulting HDD65 would be 35 (i.e. 65"F base minus the 30"F mean
temperature = 35 Heating Degree Days). Two distinct groups of heating degree days are used in
the development of the IRP: Normal Degree Days and Design Degree Days.
Since lntermountain's service territory is composed of a diverse geographic area with differing
weather patterns and elevations, lntermountain uses weather data from seven NOAA weather
stations located throughout the communities it serves. This weather data is weighted by the
customers in each of the geographic weather districts to arrive at weighted weather for the entire
company. Several AOls are also addressed specifically by this lRP. Those segments are assigned
unique degree days as discussed in further detail below.
Normal Degree Days
A Normal Degree Day is calculated based on historical data, and represents the weather that
could reasonably be expected to occur on a given day. The Normal Degree Day that
lntermountain utilizes in the IRP is computed based on weather data for the 30 years ended
December 2018. The HDD55 for January Lst for each year of the 3O-year period is averaged to
come up with the average HDD65 for the thirty year period for January lst. This method is used
for each day of the year to arrive at a year's worth of Normal Degree Days.
Design Degree Days
Design Degree Days are an estimation of the coldest temperatures that can be expected to occur
for a given day. 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, lntermountain makes use of design weather assumptions.
lntermountain's design year is based on the premise that the coldest weather experienced for
any month, season or year could occur again. The basis of a design year was determined by
evaluating the weather extremes over the period of record from NOAA. That review revealed
lntermountain's coldest 12 consecutive months to be the L98417985 heating season (October
1984 through September 1985). That year, with certain modifications discussed below,
represents the base year for design weather. These degree days reflect a set of temperature
extremes that have actually occurred in lntermountain's service area. These extreme
lntegrated Resource Plan 201,9 - 2023 26
lntermountain Gas Company Demand
temperatures would result in a maximum customer usage response due to the high correlation
between weather and customer usage.
Peak Heating Degree Day Calculation
lntermountain also engaged the services of Dr. Russell Qualls, ldaho State Climatologist, to
perform a review of the methodology used to calculate design weather, and to provide
suggestions to enhance the design weather planning. One crucial area that Dr. Qualls was able
to assist lntermountain in was developing a method to calculate a peak day, as well as in
designing the days surrounding the peak day.
To develop the peak heating degree day, or coldest day of the design year, Dr. Qualls fitted
probability distributions to as much of the entire period of record from seven weather station
locations (Caldwell, Boise, Hailey, Twin Falls, Pocatello, ldaho Falls and Rexburg) as was deemed
reliable. From these distributions he calculated monthly and annual minimum daily average
temperatures for each weather location, corresponding to different values of exceedance
probability. Two probability distributions were fitted, a Normal Distribution, and a Pearson Type
lll (P3) distribution. Dr. Qualls suggested it is more appropriate for lntermountain to use the P3
distribution as it is more conservative from a risk reduction standpoint.
According to Dr. Qualls, "selecting design temperatures from the values generated by these
probability distributions is preferable over using the coldest observed daily average temperature,
because exceedance probabilities corresponding to values obtained from the probability
distributions are known. This enables IGC to choose a design temperature, from among a range
of values, which corresponds to an exceedance probability that IGC considers appropriate for the
intended use".
lntermountain used Dr. Qualls' exceedance probability data to review the data associated with
both the 50 and 100 year probability events. After careful consideration of the data,
lntermountain determined that the company-wide 50 year probability event, which was a 79
degree day, would be appropriate to use for our design weather model. For modeling purposes,
this 79 degree day was assumed to occur on January 15th.
Base Year Design Weather
To create a design weather year from the base year, a few adjustments were made to the base
design year. First, since the coldest month of the last 30 years was December 1985, the weather
profile for December 1985 replaced the January 1985 data in the base design year. For planning
purposes, the aforementioned peak day event was placed on January 15th.
To model the days surrounding the peak event, Dr. Qualls suggested calculating a five-day moving
average of the temperatures for the past 30-year period to select the five coldest consecutive
days from the period. December L990 contained this cold data. The coldest day of the peak
lntegrated Resource Plan 2019 - 2023 27
lntermountain Gas Company Demand
month (December 1985)was replaced with the 79 degree day peak day. Then, the day prior and
three days following the peak day, were replaced with the four cold days surrounding the
December L990 peak day.
While taking a closer look at the heating degree days used for the LDCs, the Company noticed
that the design weather HDDs in some months were lower than the normal weather HDDs. This
occurred generally in the non-winter months, April through July. However, the Total Company
and ldaho Falls Lateral design HDDs had this same occurrence in November, although the
differences were minimal (1 to 3%). This occurred because, while the L985 heating year was the
coldest on record and therefore used as the base year for the design weather, the shoulder
months were, in some cases, warmer than normal. Manipulating the shoulder and summer
month design weather to make it colder would add degree days to the already coldest year on
record, creating an unnecessary layer of added degree days. lntermountain decided not to adjust
the summer and shoulder months of the design year.
After design modifications were completed, the total design HDD curve assumed a bell-shaped
curve with a peak at mid-January (see Figure 15). This curve provides a robust projection of the
extreme temperatures that can occur in lntermountain's service territory.
HEATING DEGREE DAYS
Figure 15: Heating Degree Days Graph
lntegrated Resource Plan 201,9 - 2023 28
1,800
1,600
1,400
7,2OO
1,000
800
500
400
200
0
"att $"- ,"so r"t-
oUUE(,Uo(,ztr
U-
JIFzo
J
FoF
"t'"".""'./ "d "C
de'*
"'-":"-."u-
-Weighted
Normal
-[6lusl
Heating Year 1985
-ps5ign
lgsr
(30 Year Rolling)
lntermountain Gas Company Demand
The resulting Normal, Base Year, and Design Year degree days by month are outlined in Table 6
displayed below:
Table 6: Heating Degree Days by Month
Area Specific Degree Days
As noted earlier in this lRP, lntermountain has identified certain AOls. These are areas
lntermountain carefully manages to ensure adequate delivery capabilities either due to a unique
geographic location, customer growth, or both.
The temperatures in these areas can be quite different from each other and from the Total
Company. For example, the temperatures experienced in ldaho Falls or Sun Valley can be
significantly different from those experienced in Boise or Pocatello. lntermountain continues to
work on improving its capability to uniquely forecast loads for these distinct areas. A key driver
to these area specific load forecasts is area specific heating degree days.
lntermountain has developed Normal and Design Degree Days for each of the areas of interest.
The methods employed to calculate the Normal and Design Degree Days for each AOI mirrors the
methods used to calculate Total Company Normal and Design Degree Days.
Weighted Normal
(30 Year Rolling)
Actual Heating Year
1985 Design Year
October
November
December
January
February
March
April
May
June
July
August
September
Total
466
82s
1,130
1,130
885
706
492
271,
105
28
36
137
6,2L1_
s99
823
1,315
L,433
1,L34
973
425
242
58
0
34
292
7,339
599
823
t,316
1,690
L,134
973
425
242
58
0
34
292
7,596
Monthly Heating Degree Days
lntegrated Resource Plan 20L9 - 2O23 29
lntermountain Gas Company Demand
Usage Per Customer
The IRP planning process utilizes customer usage as an essential calculation to translate current
and future customer counts into estimated demands on the distribution system and total
demand for gas supply and interstate transportation planning. The calculated usage per
customer is dependent upon weather and geographic location.
Methodology
lntermountain Gas utilizes a Customer Management Module (CMM)software product, provided
by DNV GL as part of their Synergi Gas product line, to analyze natural gas usage data and to
predict usage patterns on the individual customer level. DNV GL operates in over 100 countries
and specializes in the maritime, oil, gas and energy industries. lts array of pipeline software has
been a powerful engineering tool within the United States for decades, used by natural gas
companies such as Avista, Pacific Gas and Electric, Dominion, Northwest Natural and Williams.
The CMM product branch is used in correlation with Synergi Gas, a hydraulic modeling software
program discussed in the Distribution System Modeling Section beginning on page 86 of this lRP.
The first step in operating the CMM is extensive data gathering from the Company's Customer
lnformation System (ClS). The CIS houses historical monthly meter read data for each of
lntermountain's customers, along with daily historical weather and the physical location of each
customer. The weather data is associated with each customer based on location, and then
related to each customer's monthly meter read according to the date range of usage.
After the correct weather information has been correlated to each meter read, a base load and
weather dependent load are calculated for each customer through regression analysis over the
historical usage period. DNV GL states that it uses a "standard least-squares-fit on ordered pairs
of usage and degree day" regression. The result is a customer specific base load that is weather
independent, and a heat load that is multiplied by a weather variable, to create a custom
regression equation for each customer.
Should insufficient data exist to adequately predict a customer's usage factors, then CMM will
perform factor substitution. Typically, the average usage of customers in the same geographical
location and in the same customer rate class can be used to substitute load factor data for a
customer which lacks sufficient information for independent analysis.
The first step prior to analyzing data through the CMM was to determine the appropriate time
period to include in the study. A study by the American Gas Association found that average
natural gas usage per customer is on the decline. The average U.S. home using natural gas uses
40% less today than it did four decades ago. Following the national efficiency trend,
lntermountain has also noticed a decline in usage per customer in its service territory. Some
possible reasons for the decline in usage per customer include the ldaho Residential Energy Code
which is a code adopted in ldaho, and many other areas, beginning in 199L. This building
standard was designed to improve the energy efficiency of new homes and commercial buildings.
Around the same time, efficiency standards for furnaces and water heaters improved.
lntegrated Resource Plan 201,9 - 2023 30
lntermountain Gas Company Demand
Additionally, programmable thermostats are now routinely installed in new construction, and
many are installed in older homes as a way to reduce energy expense.
All of these conservation influences began impacting usage per customer in the 1990's. Because
approximately 69% of lntermountain's customers are new since L990, the efficiency factors and
building codes have had a tremendous influence on our customer base. Additionally, rising
energy prices in the early 2000's provided customers an economic incentive to improve the
energy efficiency of their homes. Finally, as the Company's new Energy Efficiency Program
continues to grow, there will be greater downward pressure on lntermountain's actual usage per
customer. All of these are contributing factors to the structural changes shown in the data.
With all the structural shifts in historical data, and the significantly increased quantity of data
utilized for regression, lntermountain has selected a four-year time series ending in May of 20L8
to develop the usage per customer equations within this lRP. The selected time series is aligned
with the recommended time study from DNV GL and contains homogenous data from a single
CIS system.
Usage per Customer by Geographic Area
The Company recognizes that there could be significant differences in the way its customers use
natural gas throughout its geographically and economically diverse service territory. Being
sensitive to areas that may require capital improvements to keep pace with demand growth,
lntermountain separated customers into distinct AOls, and then determined specific usages per
customer for each. The AOls that lntermountain studied for possible usage per customer
refinements included: Canyon County, Central Ada County, State Street Lateral, Sun Valley
Lateral, and ldaho Falls Lateral.
ln order to refine usage per customer to an AOl, customer addresses were used to create groups
by town, and towns were combined with their related AOl. Central Ada and State Street AOI's
share towns in their respective territories, so a combined geographic area was created to
calculate their shared usage per customer. Towns on the Sun Valley Lateral were combined to
calculate a single usage per customer, but for flow analysis purposes it was found that more
granular customer breakdowns are required, and the usage per customer was represented
separately for each town due to the range of usages and geographic sensitivity along the lateral.
The same Sun Valley Lateral methodology was applied to the ldaho Falls Lateral.
Conclusion
The process described above is an effective methodologyfor calculating usage per customer. As
discussed elsewhere in this lRP, the Company is in the process of implementing a fixed-network
metering system. As the fixed-network system becomes fully deployed, the Company will be able
to utilize the gathered data to further refine its usage per customer calculation.
As discussed in the Load Demand Curves Section of this lRP, the usage per customer data
produced from the process described above is a critical component in the development of the
lntegrated Resource Plan 201,9 - 2023 31
lntermountain Gas Company Demand
Company's load demand curves. The usage per customer data is applied to the customer forecast
and design weather to create daily core market load projections for the IRP period.
lntegrated Resource Plan 2019 - 2023 32
lntermountain Gas Company Demand
Large Volume Customer Forecast
lntroduction
The Large Volume (LV) customer group is comprised of approximately 125 of the largest
customers on lntermountain's system from both an annualtherm use and a peak day basis. Only
customers that use at least 200,000 therms per year are eligible for lntermountain's LV tariffs.
The LV tariffs provide two firm delivery services: a bundled sales tariff (LV-1) and a distribution
system only transport tariff (T- ). The Company also offers an interruptible distribution system
only transportation tariff (T-3).
The LV customers are made up of a mix of industrial and commercial loads and, on average, they
account for over 50% of lntermountain's annual throughput and 24% of the projected 2020
design base case peak day. Nearly 98% of 2020 LV throughput reflects distribution system only
transportation tariffs where customer-owned natural gas supplies are delivered to
lntermountain's various citygate stations for ultimate redelivery via the company's distribution
system to the customers' facilities.
Because the LV customers' volumes account for such a large portion of lntermountain's overall
throughput, the method of forecasting these customers' overall usage is an important part of the
lRP. These customers' growth and usage patterns differ significantly from the residential and
commercial customer groups in two ways: first, the LV customers' gas usage pattern as a whole
is not as weather sensitive as the core market customers which means that forecasting LV
volumes using standard regression techniques based on projected weather does not provide
statistically significant results. Secondly, the total LV customer count is so few that it falls below
the number required to provide an adequate sample size.
Therefore, lntermountain has developed and utilizes an alternate, and very accurate method of
forecasting based on historical usage, economic trends and direct input from LV customers. The
graph on the next page compares the total Large Volume sales forecast from the 2017 IRP against
actual therm sales for the years 2OL7 -20L9.
lntegrated Resource Plan 2019 - 2023 33
lntermountain Gas Company Demand
400,000
350,000
300,000
250,000
200,000
150,000
100,000
50,000
_qooo
OJ
(uv)
E
0.)
-c.FE5C
2Ot7 IRP LV Therm Forecast vs Actual
2017 2018
zoLT tRp
-Actual/CE
0
2019
Figure 16: 2017 IRP Large Volume Therm Forecast vs Actual
Method of Forecasting
lntermountain maintains a historical therm usage database containing about 30 years of monthly
therm usage data. The LV forecasting methodology begins by assessing each LV customer's
monthly usage for the most recent three years. Then a representative 12-month period is
selected as the base year. Typically, more weight is applied to the most recent 12-month period
available unless known materialvariations would suggest a different base year.
An important source of forecasting information comes from the customers themselves. Prior to
each IRP cycle, lntermountain sends out a survey to each customer requesting information
relating to changes in usage patterns. Such a survey was sent out in July 2018. The survey form
included a cover letter explaining the need for and the use of the requested information with the
assurance that all responses would remain confidential (see Figure 17). The surveys provided
each customer's historical peak day and monthly usage for the two years ending June 2018 (see
Figure 18).
The historical information was provided to help the LV customer's management, engineers,
and/or operations personnel identify how much and when recent natural gas usage patterns
were likely to change going forward. Specifically, the survey requested projections of changes in
natural gas consumption related to plant expansion, equipment modification or replacement and
anticipated changes in product demand and production cycles through 2023.
Additionally, each customer was provided an opportunity to give recommendations for
additional service options or other feedback. Nearly 40% of customers returned completed
surveys and analysis of the returned surveys was completed by early September 2018. Where
customers predicted material changes in future therm usage, the Company adjusted the annual
2Ot9-23 base year data.
Integrated Resource Plan 20L9 - 2023 34
lntermountain Gas Company Demand
Forecast Scenarios
For the lRP, lntermountain prepared three separate LV monthly gas consumption forecasts (base
case, high growth and low growth). The base case forecast started with the adjusted base year
data as described above. That data was then combined with assumptions based on the most-
expected economic trend to develop the five-year base case forecast. Other available data,
including inquiries from the economic forecast provided by John Church (see Exhibit 2, Section
A), other economic development organizations and alternate economic forecasts/assumptions
were utilized to develop the high growth and low growth scenarios. For ease of analysis, the 125
existing and up to 14 projected new LV customers (per the high growth scenario) were combined
into six homogeneous market segments:
2079 Existing LV Customers by Market Segment:
1) 17 potato processors
2) 38 other food processors including sugar, milk, beef, and seed companies
3) 3 chemical and fertilizer companies
4) 25 light manufacturing companies including electronics, paper, and asphalt companies
5) 34 schools, hospitals and other weather sensitive customers
5) 8 "other" companies including transportation-related businesses
Contract Demand
Every LV customer is required to sign a contract to receive service under any of the LV tariffs. An
important element of the firm LV-1 sales and T-4 transportation contracts is the contract, or
maximum daily firm quantity (MDFq which reflects the agreed upon maximum amount of daily
gas and/or capacity the Company must be prepared to provide that firm LV customer on any
given day including the projected system peak day that would occur during design weather.
T-3 customer contracts include a maximum daily quantity (MDQ) which represents the maximum
amount of gas the Company's service line and meter can flow. Because T-3 service is
interruptible, lntermountain makes no assurances as to the amount of distribution capacity that
will be available on any given day. For peak event modeling purposes, the IRP assumes T-3
customers are reduced to emergency plant-heat only. The IRP will use the term contract demand
(CD) when referencing both MDFQ and MDQ. For this lRP, lntermountain utilized LV customer
CD's as they existed at June L,20!8 for the beginning point of the base case.
While many LV customers predict that their annual usage requirements will likely grow through
2023, their peak day requirements are not projected to grow by a similar rate of increase. This is
for two reasons: first, the increased annual usage is the result of adding additional daily shifts or
adding production in weeks or months not previously utilized at 7OO% load factor (i.e. seasonal
increases), and second, LV customers often take time to "grow" past an existing CD. Therefore, a
certain pattern of therm usage will not necessarily equate with a commensurate level of growth
in CD.
lntegrated Resource Plan 201,9 - 2023 35
lntermountain Gas Company Demand
Load Profile vs MDFQ
Even though a monthly therm usage projection (i.e. load profile) is available for each customer,
the IRP optimization model does not use the load profile for modeling purposes. The model
instead uses the LV CD's because, as explained above, the LV customer group is not significantly
weather sensitive so attempting to estimate daily usage using degree days, as is done for the core
market, does not provide acceptable results. And without weather as the driver, it is difficult to
estimate daily usage patterns. For these reasons it makes sense to use the customer CD as the
daily requirement, as it reflects the known peak day obligation for every individual and each AOl.
Most importantly, since lntermountain does not provide gas supply or interstate pipeline
capacity for any of the transportation customers, the model does not need to project gas supply
requirements for these customers but only the maximum amount of distribution capacity they
will need on any given day.
Once the CD's are final, they are loaded directly into the optimization model by AOI and period.
The optimization model also assumes that transport customers deliver an amount of zero cost
gas supply equal to their aggregated CD for each transport rate class by AOI and period. That
assumption allows the model to recognize that gas supply and/or interstate capacity
requirements for the transport customers need to be delivered each day, but because it is not
provided by lntermountain, there is no need to attempt to calculate an unknown cost that is
meaningless to I ntermountain.
System Reliability
It is important to note that before adding new firm load, engineering tests the system via its
modeling system to determine whether or not the company could serve that load under design
weather peak day loads before proceeding. That analysis is always completed prior to executing
any firm contract for any new customer or an existing customer's expansion. Since the company
knows the various parts of the system that may be at or nearing capacity constraints, those AOI's
are given particular attention under load growth scenarios. This procedure assures current firm
customers that new customers are not negatively affecting peak day deliverability.
General Assumptions
All current customers were assumed to remain on their current tariff and all forecast scenarios
used the 2019 operating budget as a starting point. The IRP also calculated LV therm usage and
MDFQ by AOI so that each geographic area of concern can be accurately modeled.
Base Case Scenario Summary
For the base case scenario, lntermountain assumed that the supply of natural gas remains
plentiful and the price of natural gas stays competitive with other energy sources. The base case
was compiled using historical usage and surveys with adjustments made to reflect known or
probable changes of existing customers. The projected annual usage in the base case scenario
increased by 5.5 million therms (0.5%) over the five-year period as seen in the table on the next
page. The rate of projected annualized growth has slowed significantly from the last IRP largely
lntegrated Resource Plan 20t9 - 2023 36
lntermountain Gas Company Demand
due to slowing or negative growth in the potato processors and other food processors market
segments.
Table 7: Large Volume Base Case Therms
A.The potato processors group is forecast to be relatively flat over the five-year period.
Demand for potato products remains flat but supplies remain plentiful. Some market
participants claim that some former potato acreage is being replaced with hops. No new
plants are assumed in the forecast and most of the plants in this group are looking for
ways to lower the overall cost of production, conserve resources and maximize
efficiencies leading to a slight decline in projected usage. The decrease in usage is due to
the projected closure of one facility in 202!.
B.The other food processing group is projected to see slight growth over the five-year
period. While the huge increase in the sugar and other food processing segment over the
past decade is projected to flatten, lntermountain still forecasts growth for dairy
producers. The base case assumes one new dairy customer.
The three plants in the chemicals/fertilizers group will continue at current levels with
nearly no projected growth in the forecast. The base case assumes no new customers.
The manufacturing group is expected to see strong growth. The growth is largely due to
increases in electronics manufacturing companies and the addition of two new
companies.
The institutional group is projected to grow at7.O% a year, due mainly to new hospitals
that have recently been built or will be built in the coming years.
The usage in the other group is projected to see some reasonably strong growth largely
due to growth in customers using natural gas as a transportation fuel.
lntegrated Resource Plan 2OL9 - 2023 37
c.
D
E
F
Potato (A.)
Other Food, Dairy and Ag
(8.)
Chemical/Fertilizer (C.)
Manufacturing (D.)
lnstitutional (8.)
Other (F.)
Total Base Case
20L9
]-tl,649
2020
1L2,620
202L
708,620
2022
L08,770
2023
108,870
Rate of
Growth
-0.6%
0.7%
0J%
2.6%
L.O%
L5%
0.5%
155,304
29,668
22,463
24,789
L8,173
156,860
29,805
23,174
25,327
18,381
157,541 L59,922 L59,988
29,805 29,805 29,805
23,8L2 24,490 24,928
25,47L 25,6L5 25,820
18,881 19,08L 19,26t
362,046 366,L67 364,130 367,683 368,672
lntermountain Gas Company Demand
High Growth Scenario Summary
The high growth scenario figures incorporate usage data from the base case with adjustments
for additionalgrowth that are assumed to occur if the economy continues to expand at its recent
pace. The LV volume in the high growth scenario is approxim ately 7% above the 2023 base case.
The 32 million therm increase over the 2019 estimate of 362 million therms (2.1%l results from
growth in every market segment. The following table summarizes the changes over this period:
Table 8: Large Volume High Growth Therms
A.Potato production is up from the 2017 IRP projections, and the future shows steady
growth for the potato industry. This scenario shows steady growth largely due to
significant expansions at three existing facilities. Strong potato production assumes
increasing demand, good quality and yield and higher prices. Very competitive natural gas
prices keep these plants on gas rather than oil or alternative fuels. However, no new
customers are assumed.
The other food processors are projected to show strong growth across the reporting
periods. The assumptions include strong growth in the sugar industry, and strong growth
and several plant expansions in the dairy industry. The meat and ag/feed industries
remain relatively flat. Overall this segment assumes four new customers.
The chemical/fertilizer group is projected to increase due to the assumption of one new
plant by 2023. The three existing plants show little growth over the lRP.
The manufacturing group is projected to have a strong increase over the period due to
increases in high-tech manufacturing, plus the addition of one new plant.
The institutional group, which is made up of schools, hospital and tourism-based facilities
is also projected to experience strong growth. This assumption is driven by the
expectation of continuing cooler than normal weather, which affects this weather-
sensitive group, and the addition of two new customers.
lntegrated Resource Plan 2O19 - 2023 38
B
c.
D
E
Potato (A.l
Other Food, Dairy and Ag
(8.)
Chemical/Fertilizer (C.)
Manufacturine (D.)
lnstitutional (E.)
other (F.)
TotalHigh Growth
20L9 2020 202L 2022
Ltt,649 1.L4,420 LL4,920 1,16,070
155,304
29,668
22,463
24,789
78,L73
L66,695
29,805
23,L74
28,080
t9,032
L69,696
29,845
23,812
28,403
19,565
L77,L47
29,go5
24,490
28,397
L9,774
2023
1.L6,170
17L,363
32,305
24,928
28,872
L9,967
Rate of
Growth
L.O%
2s%
2.2%
2.6%
3.9%
2.4%
2.1%352,046 381.,206 386,241 389,683 393 605
20t9
11,1,649
2020
L09,720
2023
LO6,L70
Rate of
Growth202L 2022
LO7,670 107,070Potato (A.)
Other Food, Dairy and Ag
(8.)
Chemical/Fertilizer (C.)
Manufacturing (D.)
!nstitutional (E.l
other (F.)
Total Low Growth
155,304
29,668
22,463
24,789
78,173
L50,695
29,805
23,094
23,0L9
18,079
140,695
29,805
22,694
22,949
18,444
L40,695
29,805
22,494
22,944
L8,444
140,695
29,805
22,494
22,939
18,444
-73%
-2.4%
0.1%
0.0%
-t.9%
0A%
-L5%362 046 354 L2 342,257 34L,452 340,547
F
lntermountain Gas Company Demand
The other group is projected to grow slightly, with some increased usage at a greenhouse,
and the addition of a new user. Usage will be relatively flat across the reporting period in
the high growth scenario.
Low Growth Scenario Summary
The projected usage for the low growth scenario is based upon the assumption that the
agricultural economy will be flat-to-declining with very little growth in sales and production. lt is
also assumed that natural gas prices will be relatively flat and see significant competition from
renewables and other energy sources. With those assumptions, a downturn is projected
beginning in 2020 that continues through 2023. The low growth scenario projections start 2%
below 2019 with overall usage decreasing a projected 1.5%by 2023.
Table 9: Large Volume Low Growth Therms
A.The price of natural gas was assumed to be less competitive against the delivered price
of alternative sources and global potato consumption is assumed to soften significantly.
This segment, as a whole, generally looks at any way possible to conserve energy and
make its plants more efficient. This scenario assumes the loss of one existing plant,
softening at several other plants and no new customers.
The other food processing group is expected to soften significantly with large decreases
in sugar processing, flat usage among the dairy customers and no new customers.
C. The projection for the chemical/fertilizer group remains flat with no new customers.
The manufacturing group is also projected to remain flat with some growth in high-tech
companies that is offset by the loss of several of the smaller customers. Additionally, the
low growth scenario assumes the loss of a few state or federal highway projects which
leads to a contraction in usage among asphalt customers. However, this segment is still
projected to add two smaller customers by 2023.
B.
D
lntegrated Resource Plan 201,9 - 2023 39
lntermountain Gas Company Demand
The projection of a decline for the institutional group is attributed to forecasted warmer
than normal weather affecting universities, schools, and hospitals, as well as little growth
in the tourism industry and the addition of only one small customer.
The other group's usage of natural gas is projected to remain mostly flat as the forecast
assumes no growth in the transportation related customers as well as the loss of one
smaller customer. Most of the loss is offset by the addition of a new customer in 2020.
F
lntegrated Resource Plan 20L9 - 2023 40
E.
lntermountain Gas Company Demand
LARGE VOL(IME CUSTOMER SURVEY _ COVER LETTER
July 16,2018
Dear Intermountain Gas Customer
Intermountain Gas values you as a customq and we are committed to meeting your expectations of
receiving reliable energy services to your facility. We continue to see strong and steady growth in natural
gas usage from all sectors of our business. That growth coupled with the potential for extremely frigid
winter weather underscores the importance of our long-term planning efforts.
The Idaho Public Utilities Commission (IPUC) requires Intermountain to file a bi-annual,long-term
Integrated Resource Plan (IRP) that gives both the Commission and our customers a close-up view of our
planning efforts. The IRP provides an opporrunity for you to participate in the process and to assess our
forecast including its inputs, underlying methodologies and conclusions. The IRP we file with the IPUC
documents the entire process and it provides assurance to our customers that we fiilize detailed,
transparent and indusffy accepted practices as we plan to meet your energy needs in a prudent manner.
We are now beginning to prepare the data inputs for the 2019-2023IRP. Our demand or usage forecast is
the basis for the entire IRP and therefore it is critical that it be as accurate as possible. To this end, I am
writing to request your assistance by providing projections of your facility's natural gas requirements for
the next several years.
I have enclosed a survey form that requests information relative to projected changes in your facility's
annual and peak day natural gas requirements and alternate fuel plans. To provide context, I have
included actual annual and peak day therm use (where available) for the two most recent l2-month
periods ending June 2018 and June 2011 .I recognize the time required to complete this survey but
including your projections in our IRP will improve its accuracy and I assure you that we do use the data
you provide.
Please retum your completed survey, including any comments or questions you may have, by August 17,
2018. To show my appreciation for your participating in our IRP forecast, if you retum the completely
filled-out survey by the August lTth deadline, I will enter your name in a raffle for one of three gifts: an
Intermountain Gas branded Polo shirt, a box of Titleist PRO Vl golf balls or an Intermountain Gas
branded baseball-type hat. Note only one entry per company will be entered into the raffle.
As always, any information you provide will be strictly confidential, will not be shared with any other
entity and will be aggregated with data from other similar situated customers in any public filing. Should
you have any questions or if I can be of assistance to you, please call me at my office (208-377-6118), my
cell phone [phone]) or you can always email me at dave.swenson(@intgas.com.
I thank you in advance for your willingness to help.
David Swenson
Manager, Industrial Services
Intermountain Gas Company
Enclosures
Figure I 7: Large Volume Customer Survey Cover Letter Sample
lntegrated Resource Plan 2OL9 - 2023 41
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lntegrated Resource Plan 20L9
HI
lntermountain Gas Company Supply & Delivery Resources
Supply & Delivery Resources Overview
Once future load requirements have been forecasted, currently available supply and delivery
resources are matched with demand to identify system deficits. Essential components
considered when reviewing supply and delivery resources include identifying currently available
supply resources, delivery capacity, and other resources that can offset demand such as energy
efficiency programs or large volume customers with alternative fuel sources.
Supply and deliverability are considered by AOI to identify system constraints that result from
forecasted demand. By comparing demand versus capacity for each AOl, the Company is better
able to select capacity constraint solutions that consider cost effectiveness, operations and
maintenance impacts, project viability, and future growth.
After analyzing resource requirements for each AOl, the data is aggregated to provide a total
company perspective. Supply and delivery resources that are currently available are compared
to the six total company demand scenarios that were established in the demand forecast. ln the
Load Demand Curves Section, beginning on page 90, demand and capacity are compared to
clearly identify deficits. Alternative solutions for how the deliverability deficits will be resolved
are considered in the Optimization and Planning Results sections of this lntegrated Resource
Plan.
lntegrated Resource Plan 20L9 - 2023 43
Supply & Delivery Resources
lntermountain Gas Company Supply & Delivery Resources
Traditional Supply Resources
Overview
Natural gas is a fundamental fuel for ldaho's economic and environmental future: heating our
homes, powering businesses, moving vehicles and serving as a key component in many of our
most vital industrial processes. The natural gas marketplace continues to change but
lntermountain's commitment to act with integrity to provide secure, reliable and price-
competitive firm natural gas delivery to its customers has not. ln today's energy environment,
lntermountain bears the responsibility to structure and manage a gas supply and delivery
portfolio that will effectively, efficiently, reliably and with best value meet its customers' year-
round energy needs. Through its long-term planning, lntermountain continues to identify,
evaluate and employ best-practice strategies as it builds a portfolio of resources that will provide
the value of service that its customers expect.
The Traditional Supply Resources Section outlines the energy molecule and related infrastructure
resources upstream of lntermountain's distribution system necessary to deliver natural gas to
the Company's distribution system. Specifically included in this discussion is the natural gas
commodity (or the gas molecule), various types of storage facilities and interstate gas
transportation pipeline capacity. This section will identify and discuss the supply, storage and
transportation capacity resources available to lntermountain and how they may be employed in
the Company's portfolio approach to gas delivery management.
Background
The procurement and distribution of natural gas is in concept a straightforward process. lt simply
follows the movement of gas from its source through processing, gathering and pipeline systems
to end-use facilities where the gas is ultimately ignited and converted into thermal energy.
Natural gas is a fossil fuel; a naturally occurring mixture of combustible gases, principally
methane, found in porous geologic formations beneath the surface of the earth. lt is produced
or extracted by drilling into those underground formations or reservoirs and then moving the gas
through gathering systems and pipelines to customers in often far away locations.
lntermountain is fortunate to be located between two prolific gas producing regions in North
America. The first, the Western Canadian Sedimentary Basin (WCSB) in Alberta and British
Columbia supplies approximately 79% of lntermountain's natural gas. The other region, known
as the Rockies, includes many different producing basins in the states of Wyoming, Colorado and
Utah where the remainder of the Company's supplies are sourced. The Company also utilizes
storage facilities to store natural gas supply during the summer when prices are traditionally
lower and save it for use during the winter to offset higher seasonal pricing.
lntermountain's access to the gas produced in these basins is wholly dependent upon the
availability of pipeline transportation capacity to move gas from those supply basins to
lntermountain's distribution system. The Company is fortunate, in that the interstate pipeline
that runs through lntermountain's service territory is a bi-directional pipeline. This means it can
lntegrated Resource Plan 2OL9 - 2023 44
lntermountain Gas Company Supply & Delivery Resources
bring gas from the north or south. Having the bi-directional flow capability allows
Intermountain's customers to benefit from the least cost gas pricing in most situations and ample
capacity to transport natural gas to lntermountain's citygates. A basic discussion of gas supply,
storage and interstate transportation capacity resources follows.
Gas Supply Resource Options
Over the past few years, advances in technology have allowed for the discovery and development
of abundant supplies of natural gas within shale plays across the United States and Canada. This
shale gas revolution has changed the energy landscape in the United States. Natural gas
production levels continue to surpass expectations despite low gas prices and concerns about
shale production techniques (See Figure 19 below).
60
50
4A
30
2A
10
20{ a Jiteferertce
fristGry projectiofis
gt'lt/strale
Jrer
shore4fl]'rore
o20(f0 2a10 202(f 2030 2040 2050
Source: EIA AEO2019
Figure 19: Natural Gas Sources
Projected low prices for natural gas have made it a very attractive fuel for natural gas fired electric
generation as utilities are replacing coal-fired generation. Combine this with the industrial
sector's post-recession recovery as they take advantage of low natural gas prices, and the result
is a significant change in demand loads. See Figure 20 on the next page for consumption by
sector, 2000-2050.
lntegrated Resource Plan 2Ot9 - 2023 45
er
lntermountain Gas Company
Natural gas consumption by s€ctor (Reference case)
trillion cubic feet
40
35
30
25
20
15
10
5
o
2020 2030
Supply & Delivery Resources
history projections
8201
billion cubic feet perday
100
BO
60
40
electric power
ZA residentia!
commercial
G transportation
natural gas
industrial
liquefaction
lease and plant
other
crude oil and
lease condensate
coal
other renewable
energy
nuclear
natural gas plant
liquids
hydro
2010
Source: EIA AEO2019
Figure 20: Natural Gas Consumption by Sector
lmproved technologies for finding and producing nonconventional gas supplies have led to
dramatic increases in gas supplies. Figure 21 below shows that shale gas production is not only
replacing declines in other sources but is projected to increase total annual production levels
through 2050.
2017
2000 2040 2050
45
40
35
30
25
20
15
10
5
o
1 990 2000 2010 2020 2030 zUO 2050
Source: EIA AEO2018
Figure 2l: Shale Gas Production Trend
While natural gas prices continue to exhibit volatility from both national, global and regional
perspectives, the laws of supply and demand clearly govern the availability and pricing of natural
gas. Recent history shows that periods of growing demand tends to drive prices up which in turn
generally results in consumers seeking to lower consumption. At the same time, producers
typically increase investment in activities that will further enhance production. Thus, falling
history projections
lntegrated Resource Plan 201,9 - 202.3 46
lntermountain Gas Company Supply & Delivery Resources
demand coupled with increasing supplies tends to swing prices lower. This in turn leads to falling
supplies and increased demand which begins the cycle anew (see Figure 27 on the previous page
for shifting demand). Finding equilibrium in the market has been challenging for all market
participants but at the end of the day, the competitive market clearly works; the challenge is
avoiding huge swings that result in either demand destruction or financial distress in the
exploration and production business.
Driven by technological breakthroughs in unconventional gas production, major increases in
North American natural gas reserves and production have led to supply growth significantly
outgaining forecasts in recent years. Thus, natural gas producers have sought new and additional
sources of demand for the newfound volumes. The abundant supply of natural gas discussed
above has resulted in the United States becoming a net exporter of liquefied natural gas (LNG)
versus the expectation of it being a net importer several years ago. The currently operational
LNG export facilities in the United States together with additional new facilities on the drawing
board will result in a significant new market for the incremental gas supplies being developed
and produced.
Shale Gas
Shale gas has changed the face of U.S. energy. Today, reserve and production forecasts predict
ample and growing gas supplies through 2050 because of shale gas. The fact that shale gas is
being produced in the mid-section of the U.S has displaced production from more traditional
supply basins in Canada and the Gulf Coast. There have been some perceived environmental
issues relating to shale production, but most studies indicate that if done properly, shale gas can
be produced safely. Customers now enjoy the lowest natural gas prices in years due to the
increased production of shale gas.
Per the ElA, the portion of U.S. energy consumption supplied by domestic production has been
increasing since 2005, when it was at its historical low point (69%). Since 2005, production of
domestic resources, particularly natural gas and crude oil, have been increasing because of shale
gas production. Figure 22 on the next page identifies the shale plays in the lower 48 states.
lntegrated Resource Plan 201,9 - 2023 47
lntermountain Gas Company Supply & Delivery Resources
ILower 48 states shale plays
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v.
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elaSoure: U.S.b&td on dala ltfi vaftrB pub{ahad dudl6-
-j'Updeltd:
Source: Energt Information Administration based on datafrom various published studies.
UpdatedJune 2016.
Figure 22: US Lower 48 States Shale Plays
Supply Regions
As previously stated, lntermountain's natural gas supplies are obtained primarily from the WCSB
and the Rockies. Access to those abundant supplies is completely dependent upon the amount
of firm transportation capacity held on the applicable pipelines for delivering such gas to
lntermountain's service territory. Transportation capacity is so important that a discussion of the
Company's purchases of natural gas cannot be fully explored without also addressing pipeline
capacity. On average, lntermountain currently purchases approximatelyT9% of its gas supplies
from the WCSB and the remainder from the Rockies. However, due to certain flexibility in
lntermountain's firm transportation portfolio, it is afforded the opportunity to procure some
portion of its annual needs from supply basins which may offer lower cost gas supplies in the
future.
lntegrated Resource Plan 201,9 - 2023 48
Ss Juri;Eh,
!
lntermountain Gas Company Supply & Delivery Resources
Alberta
Alberta supplies are delivered to lntermountain via two Canadian pipelines (TransCanada Energy
via Nova, and Foothills pipelines) and two U.S. pipelines (Gas Transmission Northwest (GTN), and
Williams Northwest Pipeline, (NWP)) as seen below in Figure 23.
Figure 23: Supply Pipeline Map
lntermountain will continue to utilize a significant amount of Alberta supplies in its portfolio. The
Stanfield interconnect between NWP and GTN offers operational reliability and flexibility over
other receipts points both north and south. Where these supplies once amounted to a minor
portion of the Company's portfolio, today's purchases amount to over 76% of the Company's
annual purchases.
British Columbia
British Columbia has traditionally been a source of competitively priced and abundant gas
supplies for the Pacific Northwest. Gas supplies produced in the province are transported by
Spectra Energyto an interconnectwith NWP nearSumas, WA. Historically, much of the provincial
supply had been somewhat captive to the region due to the lack of alternative pipeline options
into eastern Canada or the midwestern U.S. However, pipeline expansions into these regions
have eliminated that bottleneck. Although these supplies must be transported long distances in
Canada and over an international border, there have historically been few political or operational
constraints to impede ultimate delivery to lntermountain's citygates. An exception to pipeline
constraints occurred during the winter of 20L8 when Enbridge had a major disruption from a
pipeline rupture that occurred on October 9,20L8. The ensuing winter months saw a reduction
in capacity for British Columbia gas supplies to be delivered at Sumas due to the incident and
pipeline integrity testing required by the National Energy Board in Canada to ensure safe and
lntegrated Resource Plan 2OL9 - 2023 49
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1
lntermountain Gas Company Supply & Delivery Resources
reliable pipeline conditions. Those interruptions along with a cold and long winter had a
significant impact on pricing. However, due to the predominance of lntermountain's supplies
coming from Alberta and delivered via GTN at Stanfield, coupled with lntermountain's ability to
utilize its liquefied natural gas storage contracts on NWP's system, it was able mitigate the impact
to its customers of the dramatic short-term price increases.
Rockies
Rockies supply has been the second largest source of supply for lntermountain because of the
ever-growing reserves and production from the region coupled with firm pipeline capacity
available to lntermountain. Additionally, Rockies supplies have been readily available and highly
reliable. Historically, pipeline capacity to move Rockies supplies out of the region has been
limited, which has forced producers to compete to sell their supplies to markets with firm
pipeline takeaway capacity. Several pipeline expansions out of the Rockies have greatly
minimized or eliminated most of the capacity bottlenecks, so these supplies can now more easily
move to higher priced markets found in the Midwest, East or in California. Consequently, even
though growth in Rockies reserves and production continues at a rapid pace reflecting increased
success in finding tight sand, coal seam and shale gas, the more efficient pipeline system has
largely eliminated the price advantage that Pacific Northwest markets had enjoyed.
While lntermountain's firm transportation portfolio does provide for accessing Rockies gas
supplies, and as discussed above, lntermountain has chosen today and for the foreseeable future
to purchase the predominance of its annual supply needs out of Alberta due to the lower cost
environment from that supply basin. However, due to its close proximity, lntermountain does
purchase the lower cost Rockies gas supplies in the summer for injection into its Clay Basin
storage accounts located in North Eastern Utah.
Export LNG
Growth in North American natural gas supplies (see Shale Gas above) has eliminated discussion
about LNG import facilities. Because LNG is traded on the global market, where prices are
typically tied to oil, U.S. produced LNG is very competitive. LNG exports now play a role in the
overall supply portfolio of U.S. supply, with several new LNG export facilities proposed or in
production. The U.S. is now a net exporter of natural gas in large part due to LNG.
lntegrated Resource Plan 20L9 - 2023 50
lntermountain Gas Company Supply & Delivery Resources
Figure 24 below identifies LNG imports by year going back to 2000. A downward trend since 2007
is apparent. ln 2015 LNG imports were at their lowest levels since 2000 and trending to net
exports. The projection still shows a large growth in the LNG export market.
Naturalgas trade (Reference case)
fiflion cubic feet
10
billion cubic feet per day
28 Iiquefied natural
gas (LNG)
21 exports
pipeline exports to
Mexico
Ganda
pipeline imports
from
Canada
LNG imports
-5
2000 201 0 2030 2040 2050
Figure 24: Natural Gas Trade
Types of Supply
There are essentially two main types of gas supply: firm and interruptible. Firm gas commits the
seller to make the contracted amount of gas available each day during the term of the contract
and commits the buyer to take that gas on each day. The only exception would be force majeure
events where one or both parties cannot control external events that make delivery or receipt
impossible. lnterruptible or best efforts gas supply typically is bought and sold with the
understanding that either party, for various reasons, does not have a firm or binding commitment
to take or deliver the gas.
lntermountain builds its supply portfolio on a base of firm, long-term gas supply contracts but
includes all the types of gas supplies as described below:
L. Long-term: gas that is contracted for a period of over one year.
2. Short-term: gas that is often contracted for one month at a time.
3. Spot: gas that is not under a long-term contracU it is generally purchased in the short-
term on a day ahead basis for day gas and during bid week prior to the beginning of the
month for monthly spot gas.
projections
2018
history
5
0
14
7
0
-7
-14
2020
Source: EIA AEO20[9
lntegrated Resource Plan 2O19 - 2A23 51
lntermountain Gas Company Supply & Delivery Resources
4. Winter Baseload: gas supply that is purchased for a multi-month period most often during
winter or peak load months.
5. Citygate Delivery: natural gas supply that is bundled with interstate transportation
capacity and delivered to the lntermountain citygate meaning that it does not use the
Com pa ny's existing transportation ca pacity.
Pricing
The Company does not currently utilize NYMEX based products to hedge forward prices but buys
a portion of its gas supply portfolio at fixed priced forward physicals. Purchasing fixed price
physicals provides the same price protection without the credit issues that come with financial
instruments. A certain level of fixed price contracts allows lntermountain to participate in the
competitive market while avoiding upside pricing exposure. While the Company does not utilize
a fully mechanistic approach, its Gas Supply Oversight Committee meets frequently to discuss all
gas portfolio issues which helps to provide stable and competitive prices for its customers.
For IRP purposes, the Company develops a base, high, and low natural gas price forecast.
Demand, oil price volatility, the global economy, electric generation, opportunities to take
advantage of new extraction technologies, hurricanes and other weather activity will continue to
impact natural gas prices for the foreseeable future. lntermountain considers price forecasts
from several sources, such as Wood Mackenzie, ElA, S&P Global, NYMEX Henry Hub, Northwest
Power and Conservation Council, as well as lntermountain's own observations of the market to
develop the low, base, and high price forecasts. For optimization purposes, lntermountain uses
pricing forecasts from four sources for the AECO, Rockies and Sumas pricing points along with a
proprietary model based upon those forecasts. The selected forecast includes a monthly base
price projection for each of the three purchase points, as seen in Figure 25.
lntegrated Resource Plan 201,9 - 2023 52
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lntermountain Gas Company Supply & Delivery Resources
Figure 25: Intermountain Price Forecast as of 03/12/2019
Storage Resources
The production of natural gas and the amount of available pipeline capacity are very linear in
nature; changes in temperatures or market demand does not materially affect how much of
either is available daily. As the Resource Optimization Section discusses (see page 1L1), a peak
day only occurs for, at most, a few days out of the year. The demand curve then drops rapidly
back to more normal winter supply levels before dropping off drastically headed into the summer
months. Attempting to serve the entire year at levels required to meet peak demand would be
enormously expensive. So, the ability to store natural gas during periods of non-peak demand for
use during peak periods is a cost-effective way to fill the gap between static levels of supply and
capacity versus the non-linear demand curve.
lntermountain utilizes storage capacity in four different facilities from western Washington to
northeastern Utah. Two are operated by NWP: one is an underground project located near
Jackson Prairie, WA UP) and the other is a liquefied gas (LS) facility located near Plymouth, WA
(See map, Figure 26). lntermountain also leases capacity from Dominion Energy Pipeline's Clay
Basin underground storage field and operates its own LNG facility located in Nampa, lD.
Additionally, lntermountain owns a satellite LNG facility in Rexburg, lD. The Rexburg facility is
supplied with LNG from the Nampa LNG facility.
All storage resources allow lntermountain to inject gas into storage during off-peak periods and
then hold it for withdrawal whenever the need arises. The advantage is three-fold: 1) the
Company can serve the extreme winter peak while minimizing year-round firm gas supplies; 2)
storage allows the Company to minimize the amount of the year-round interstate capacity
resources required and helps it to use existing capacity more efficiently; and 3) storage provides
lntegrated Resource Plan 2OL9 - 2023 53
lntermountain Gas Company Supply & Delivery Resources
a natural price hedge against the typically higher winter gas prices. Thus, storage allows the
Company to meet its winter loads more efficiently and in a cost-effective manner.
Figure 26: Intermountain Storage Facilities
Liquefied Storage
Liquefied storage facilities make use of a process that super cools and liquefies gaseous methane
under pressure untilit reaches approximately minus 260"t. LNG occupies only one-six-hundredth
the volume compared to its gaseous state, so it is an efficient method for storing peak
requirements. LNG is also non-toxic; it is non-corrosive and will only burn when vaporized to a 5-
l-5% concentration with air. Because of the characteristics of liquid, its natural propensity to boil-
off and the enormous amount of energy stored, LNG is normally stored in man-made steel tanks.
Liquefying natural gas is, relatively-speaking, a time-consuming process, the compression and
storage equipment is costly, and liquefaction requires large amounts of added energy. lt typically
requires as much as one unit of natural gas burned as fuelfor every three to four units liquefied.
Also, a full liquefaction cycle may take five to six months to complete. Because of the high cost
and length of time involved in filling a typical LNG facility, they are usually cycled only once per
year and are reserved for peaking purposes. This makes the unit cost of the gas withdrawn
somewhat expensive when compared to other options.
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lntermountain Gas Company Supply & Delivery Resources
Vaporization, or the process of changing the liquid back into the gaseous state, on the other hand,
is a very efficient process. Under typical atmospheric and temperature conditions, the natural
state of methane is gaseous and lighter than air as opposed to the dense state in its liquid form.
Consequently, vaporization requires little energy and can happen very quickly. Vaporization of
LNG is usually accomplished by utilizing pressure differentials by opening and closing valves in
concert with the use of some hot-water bath units. The high-pressure LNG is vaporized as it is
warmed and is then allowed to push itself into the lower pressure distribution system. Potential
LNG daily withdrawal rates are normally large and, as opposed to the long liquefaction cycle, a
typical full withdrawal cycle may last 10 days or less at full rate. Because of the cost and cycle
characteristics, LNG withdrawals are typically reserved for needle peaking during very cold
weather events or for system integrity events.
Neither of the two LNG facilities utilized by lntermountain requires the use of year-round
transportation capacity for delivery of withdrawals to lntermountain's customers. The Plymouth
facility is bundled with redelivery capacity for delivery to lntermountain and the Nampa and
Rexburg LNG tank withdrawals go directly into the Company's distribution system. The IRP
assumes liquid storage will serve as a needle peak supply.
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 typically require less hardware compared to LNG projects and are usually
less expensive to build and operate than liquefaction storage facilities. ln addition, commodity
costs of injections and withdrawals are usually minimal by comparison. The lower costs allow for
the more frequent cycling of inventory and in fact, many such projects are utilized to arbitrage
variations in market prices.
Another material difference is the maximum level of injection and withdrawal. Because
underground storage involves far less compression as compared to LNG, maximum daily injection
levels are much higher, so a typical underground injection season is much shorter, typically
lasting only three to four months. But the lower pressures also mean that maximum withdrawals
are typically much less than liquefied storage at maximum withdrawal. So, it could take 35 days
or more to completely empty an underground facility. The longer withdrawal period and minimal
commodity costs make underground storage an ideal tool for winter baseload or daily load
balancing, and therefore, lntermountain normally uses underground storage before liquid
storage is withdrawn. Underground storage is not ideal for delivering a large amount of gas
quickly, however, so LNG is a better solution for satisfying a peak situation.
lntermountain contracts with two pipelines for underground storage: Dominion Energy for
capacity at its Clay Basin facility in northeastern Utah and NWP for capacity at its Jackson Prairie
facility in Washington. Clay Basin provides the Company with the largest amount of seasonal
storage and daily withdrawal. However, since Clay Basin is not bundled with redelivery capacity,
lntermountain must use its year-round capacity when these volumes are withdrawn. For this
lntegrated Resource Plan 201,9 - 2073 55
lntermountain Gas Company Supply & Delivery Resources
reason, the Company normally uses Clay Basin withdrawals during the November to March
winter period to satisfy baseload needs.
Just like NWP's Plymouth LS facility, NWP's JP storage is bundled with redelivery capacity so
lntermountain typically layers JP withdrawals between Clay Basin and its LNG withdrawals. The
IRP uses Clay Basin as a winter baseload supply and JP is used as the first layer of peak supply.
Table 10 below outlines the Company's storage resources for this lRP.
Facility
Seasonal
Capacity
Daily Withdrawal
o/o ot 2019
Max Vol Peak
Dailv lniection
Max Vol # of Days
Redelivery
Capacity
Nampa
Plymouth
Subtota! Liquid
Jackson Prairie
Clay Basin
Subtota!
Underground
580,000
1.475.135
2,055,135
1,092,099
8.413,500
9,505.599
60,000
155.175
215,175
30,337
70.114
'100,451
140h
36%
50%
7o/o
16%
23o/o
3,500
7,721
11,221
30,337
69,857
1 00,1 94
166
191
36
120
None
rF-2
TF-2
TF-1
Grand Total aL560Jg 315-026 7i% 111'J15
All the storage facilities require the use of lntermountain's every-day, year-round capacity for
injection or liquefaction. Because injections usually occur during the summer months, use of
year-round capacity for injections helps the Company make more efficient use of its every-day
transport capacity and term gas supplies during those off-peak months when the core market
loads are lower.
Nampa LNG Plant
The primary purpose of the Nampa LNG plant is to supplement gas supply onto lntermountain
Gas' distribution system. The Nampa LNG Plant can store up to 600 million cubic feet of natural
gas in liquid form and can re-gasify back into lntermountain's system at a rate of approximately
60 million cubic feet per day.
During a needle peak event the plant is able to supplement supply during gas storage shortages
or transportation restrictions into ldaho, and the plant has the added benefit of supplying natural
gas directly into the connected Canyon County and Ada County distribution systems without use
of interstate pipeline transportation, which eliminates another risk variable typically associated
with gas supply. Compressed natural gas is not a feasible option for gas supply, thus making the
plant a more valuable resource to the company.
lntegrated Resource Plan 20L9 - 2023 55
Table l0: Storage Resources
lntermountain Gas Company Supply & Delivery Resources
The Nampa LNG plant typically performs liquefaction operations during non-peak weather times
of the year, resulting in lower priced naturalgas going into liquid storage, and providing potential
cost savings when re-gasification occurs during peak cold weather events, gas supply shortages
and interstate transportation restrictions.
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. lntermountain
believes that the geographic and operational diversity of the four facilities utilized offers the
Company and its customers a level of efficiency, economics and security not otherwise
achievable. Geographic diversity provides security should pipeline capacity become constrained
in one particular area. The lower commodity costs and flexibility of underground storage allows
the Company flexibility to determine its best use compared to other supply alternatives such as
winter baseload or peak protection gas, price arbitrage or system balancing.
lnterstate Pipeline Transportation Capacity
As discussed earlier, lntermountain is dependent upon firm pipeline transportation capacity to
move natural gas from the areas where it is produced, to end-use customers who consume the
gas. ln general, firm transportation capacity provides a mechanism whereby a pipeline will
reserve the right, on behalf of a designated and approved shipper, to receive a specified amount
of natural gas supply delivered by that shipper, at designated receipt points on its pipeline system
and subsequently redeliver that volume to delivery point(s) as designated by the shipper.
lntermountain holds firm capacity on four different pipeline systems including NWP. NWP is the
only interstate pipeline which interconnects to lntermountain's distribution system, meaning
that lntermountain physically receives all gas supply to its distribution system (other than Nampa
LNG) via citygate taps with NWP. Table Ll- on the next page summarizes the Company's year-
round capacity on NWP (TF-l) and its storage specific redelivery capacity (TF-2). Between the
amount of capacity lntermountain holds on the GTN, Foothills, and Nova pipelines and firm-
purchase contracts at Stanfield, it controls enough capacity to deliver a volume of gas
commensurate with the Company's Stanfield takeaway capacity on NWP. Upstream pipelines
bring natural gas from the production fields in Canada to the interconnect with NWP.
lntermountain has historically contracted a portion of its firm transportation on NWP through
long-term segmented capacity contracts with third parties. As those contracts near their
expiration dates, lntermountain was able to negotiate contracts to replace the expiring capacity
with firm NWP transportation capacity contracted directly between lntermountain and NWP.
Additionally, lntermountain was able to extend its existing NWP transport agreements as well as
its Plymouth storage agreements. Until the existing capacity expires in 2O2O and 2025,
lntermountain will hold some excess capacity. To mitigate this situation, lntermountain was able
negotiate a reduced rate for the new capacity until the existing capacity expires. lntermountain
also plans to release the capacity to willing buyers on a short-term basis. The capacity releases
lntegrated Resource Plan 201,9 - 2023 57
lntermountain Gas Company Supply & Delivery Resources
will generate credits for lntermountain's customers that will help to additionally offset the costs
of the capacity until the existing contracts expire. This capacity restructuring will allow
lntermountain to continue to provide its customers the safe, reliable, and economically priced
service they expect.
Table I l: Northwest Pipeline Transport Capacity
City Gate Delivery Quantity (MMBtu per day)
TF-1 Capacity -
Sumas Base Capacity
Sumas Segmentation and Release
Sumas Winter Only Capacity
Stanfield Base Capacity
Sta nfield Ca pacity Via Segmentation
Rockies
TotalTF-1 Capacity
City Gate Supply
Total City Gate Delivery Before TF-2
TF-2 Capacity -
Plymouth (LS)
iackson Prairie (JP)
TotalTF-2 Capacity
Nampa LNG (does not include Rexburg)
20 9 2020 202L 2022 2023
90,941,
(90,941)
3,000
88,175
90,941-
97,478
90,941_
(90,94L)
3,000
105,624
90,94L
97,478
90,94L
(90,941)
3,000
1,05,624
90,94L
97,478
90,94L
(90,941)
3,000
1,05,624
90,94L
97,478
90,941
(90,941)
3,000
130,624
90,94t
97,478
279,594 297,043 297,043 297,043 297,043
18,056 18,056
297,650 315,099 297,O43 297,043 297,043
L55,175
30,337
155,175
30,337
t55,r75
30,337
r55,175
30,337
155,175
30,337
Total City Gate Delivery
1.85,5L2 1,85,512 L85,5L2 1_85,512 185,5L2
60,000 60,000 60,000 50,000 60,000
543,162 560,611 542,555 542,555 542,555
lntegrated Resource Plan 201,9 - 2023 58
lntermountain Gas Company Supply & Delivery Resources
Northwest Pipeline's facilities essentially run from the Four Corners area north to western
Wyoming, across southern ldaho to western Washington. The pipeline then continues up the l-5
corridor where it interconnects with Spectra Energy, a Canadian pipeline in British Columbia, near
Sumas, Washington. The Sumas interconnect receives natural gas produced in British Columbia.
Gas supplies produced in the province of Alberta are delivered to NWP via Nova, Foothills and
then GTN near Stanfield, Oregon. NWP also connects with other U.S. pipelines and gathering
systems in several western U.S. states (Rockies) where it receives gas produced in basins located
in Wyoming, Utah, Colorado and New Mexico. The major pipelines in the Pacific Northwest,
several of which NWP interconnects with can be seen below (Figure 27).
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Because natural gas must flow along pipelines with finite flow capabilities, demand frequently
cannot be met from a market's preferred basin. Competition among markets for these preferred
gas supplies can cause capacity bottlenecks and these bottlenecks often result in pricing
variations between basins supplying the same market area. ln the short to medium term,
producers in constrained basins invariably must either discount or in some fashion differentiate
their product to compete with other also constrained supplies. ln the longer run however,
disproportionate regional pricing encourages capacity enhancements on the interstate pipeline
grid, from producing areas with excess supply, to markets with constrained delivery capacity.
Such added capacity nearly always results in a more integrated, efficient delivery system that
tends to eliminate or at least minimize such price variances.
Consequently, new pipeline capacity - or expansion of existing infrastructure - in western North
America has increased take-away capacity out of the WCSB and the Rockies, providing producers
with access to higher priced markets in the East, Midwest and in California. Therefore, less-
expensive gas supplies once captive to the northwest region of the continent, now have greater
lntegrated Resource Plan 201,9 - 2023 59
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lntermountain Gas Company Supply & Delivery Resources
access to the national market resulting in less favorable price differentials for the Pacific
Northwest market. Today, wholesale prices at the major trading points supplying the Pacific
Northwest region (other than Alberta supplies) are trending towards equilibrium. At the same
time, new shale gas production in the mid-continent is beginning to displace traditionally higher-
priced supplies from the Gulf coast which, from a national perspective, has been causing an
overall softening trend in natural gas prices with less regional differentials.
Today, lntermountain and the Pacific Northwest are in an increasingly mega-regional
marketplace where market conditions across the continent - including pipeline capacities - can,
and often do, affect regional supply availability and pricing dynamics. Natural gas supplies are
readily available today and pricing dynamics show a continued price softening in the short term
with price stability or minimal price increases in the longer term. Alberta gas supplies continue
to be very price competitive and lntermountain has contracted for its Alberta based supplies for
now five-years into the future.
Supply Resources Summary
Because of the dynamic environment in which it operates, the Company will continue to evaluate
customer demand to provide an efficient mix of supply resources to meet its goal of providing
reliable, secure, and economic firm service to its customers. lntermountain actively manages its
supply and delivery portfolio and consistently seeks additional resources where needed. The
Company actively monitors natural gas pricing and production trends to maintain a secure,
reliable and price competitive portfolio and seeks innovative techniques to manage its
transportation and storage assets to provide both economic benefits to customers and
operational efficiencies to its interstate and distribution assets. The IRP process culminates with
the optimization model that helps to ensure that the Company's strategies to meet its traditional
gas supply goals are based on sound, real-world, economic principles (see the Optimization
Model Section beginning on page 86).
lntegrated Resource Plan 201,9 - 2023 60
lntermountain Gas Company Supply & Delivery Resources
Capacity Release & Mitigation Process
Overview
Capacity release was implemented by FERC to allow markets to more efficiently utilize pipeline
capacity. This mechanism allows a shipper with any unused capacity to auction the excess to
another shipper that offers the highest bid. Thus, capacity that would otherwise sit idle can be
used by a replacement shipper. The result is a more efficient use of capacity as replacement
shippers maximize annualized use of existing capacity. One effect of maximizing the utilization of
existing capacity is that pipelines are less inclined to build new capacity until the market
recognizes that it is really needed and is willing to pay for new infrastructure. However, a more
fully utilized pipeline can also mean existing shippers have less operational flexibility.
lntermountain has and continues to be active in the capacity release market. lntermountain has
obtained significant amounts of unutilized capacity mitigation on NWP and GTN via capacity
releases. The Company frequently releases seasonal and/or daily capacity during periods of
reduced demand. lntermountain also utilizes a specific type of capacity release called
segmentation to convert capacity from Sumas to ldaho into two paths of Sumas to Stanfield and
Stanfield to ldaho. lntermountain uses the Stanfield to ldaho component to take delivery of the
lower cost AECO gas supplies that are delivered by GTN to the interconnect with NWP at
Stanfield. lGl Resources, lnc. (lGl) is then able to market the upper segment of Sumas to Stanfield
to other customers.
Capacity release has also resulted in a bundled service called citygate, in which gas marketers
bundle gas supplies with available capacity to be delivered directly to a market's gate stations.
This grants additional flexibility to customers attempting to procure gas supplies for a specified
period (i.e. during a peak or winter period) by allowing the customer to avoid contracting for
year-round capacity which would not be used during off-peak periods.
Pursuant to the requirements under the Services Agreement between lntermountain and lGl, lGl
is obligated to generate the maximum cost mitigation possible on any unutilized firm
transportation capacity lntermountain has throughout the year. ln performing this obligation,
lGl must also insure that: 1) in no way will there be any degradation of firm service to
lntermountain's residential and commercial customers, and 2) that lntermountain always has
first call rights on any of its firm transportation capacity throughout the year.
With the introduction of natural gas deregulation under FERC Order 436 in 1985 and the
subsequent FERC Orders 636,772,772A and 7L28, the rules and regulations around capacity
release transactions for interstate pipeline capacity were developed. These rules cover such
activity as: 1) shipper must have title; 2) prohibition against tying arrangements and 3) illegal
buy/sell transactions. These rules and regulations are very strict and must always be adhered to
or the shipper is subject to significant fines (up to St million per day per violation) if ever violated.
The FERC jurisdiction interstate pipelines for which lntermountain holds capacity are NWP and
GTN. To facilitate capacity release transactions, all pipelines have developed an Electronic
lntegrated Resource Plan 2019 - 2023 61
lntermountain Gas Company Supply & Delivery Resources
Bulletin Board (EBB) for which such transactions are to be posted. All released transportation
capacity must be posted to the applicable pipeline EBB and in a manner that allows a competing
party to bid on it.
Capacity Release Process
Over the past 10 to L5 years, lGl, because of its significant market presence in the Pacific
Northwest, has been able to generate several millions of dollars per year in released capacity
mitigation dollars on behalf of lntermountain for pass-back to its customers and to reduce the
cost of unutilized firm transportation capacity rights. ln this effort, lGl can determine what the
appetite is in the competitive marketplace for firm transportation releases on NWP and GTN. lt
does this via direct communication with third parties or by market intelligence it receives from
its marketing team as it deals with its customers throughout the region. However, the most
effective way is using the EBB. lcl performs its obligation to lntermountain in one of two ways.
First, if lGl itself is interested in utilizing any of lntermountain's unutilized firm transportation
capacity, it determines what it believes is a market competitive offer for such and that is then
posted to the EBB as a pre-arranged deal. As a pre-arranged deal, the transaction remains on the
EBB for the requisite time and any third party has the opportunity to offer a higher bid. lf this is
done, then lGl can chose to match the higher bid and retain the use of the capacity, or not to
match and the capacity will be awarded to the higher third-party bidder.
Second, if lGl is not interested in securing any unutilized capacity then it will post such capacity
to the EBB as available and subject to open bidding by any third party. As such, the unutilized
capacity will be awarded to the highest bidder. lt should be noted that lGl posts to the EBB, as
available capacity, certain volumes of capacity for certain periods every month during bid week.
This affords the most exposure to parties which may be interested in securing certain capacity
rights. However, to date, third parties have chosen to bid on such available capacity only a
handful of times over all these years.
It should also be noted, that to protect the availability of firm transportation to lntermountain's
residential and commercial customers during the year, all released capacity postings to the EBB,
whether pre-arranged or not, are posted as recallable capacity. This means that lntermountain
can recall the capacity at any time, if necessary, to cover its customer demand.
lntegrated Resource Plan 2019 - 2023 62
lntermountain Gas Company Supply & Delivery Resources
Non-Traditional Supply Resources
Non-traditional supply resources help supplement the traditional supply resources during peak
demand conditions. Non-traditional supply resources consist of energy supplies not received
from an interstate pipeline supplier, producer or interstate storage operator. Six non-traditional
supply resources were considered in this IRP and are as follows:
1. Diesel/Fuel Oil
2. Coal
3. Wood Chips
4. Propane
5. Satellite/Portable LNG Facilities
6. Biogas Production
While a large volume industrial customer's load profile is relatively flat when compared to most
residential and commercial customers, the Company's industrial customers are still a significant
contributor to overall peak demand. However, some industrial customers have the ability to use
alternate fuel sources to temporarily reduce their reliance on natural gas. By using alternative
energy resources such as coal, propane, diesel and wood chips, an industrial customer can lower
its natural gas requirement during peak load periods while continuing to receive the energy
required for their specific process. Although these alternative resources and related equipment
typically are available to operate any time during the year, most are ideally suited to run during
peak demand from a supply resource perspective. However, only the industrial market has the
capability to use any of the aforementioned alternate fuels in large enough volumes to make any
materialdifference in system demand. More specifically, only industrial customers located along
the ldaho Falls Lateral are able to use any of these non-traditional resources to offset firm
demand throughout the Company's system. ln order to rely on these types of peak supplies,
lntermountain would need to engage in negotiations with specific customers to ensure
availability. The overall expense of these kinds of arrangements is difficult to assess.
The remaining non-traditional resources, including satellite/portable LNG facilities and biogas
production, are technically not a form of demand side management. However, satellite/portable
LNG typically has the capability to provide additional natural gas supply at favorable locations
within a potentially constrained distribution system. Satellite/portable LNG can therefore
supplant the normal capacity upgrades performed on a distribution system by creating a new,
portable supply point to maximize capacity possibilities. Biogas production could potentially
supply a distribution system in a similar fashion, however, the location of a biogas facility, which
lntegrated Resource Plan 20L9 - 2023 63
lntermountain Gas Company Supply & Delivery Resources
is determined by the producer, may not align with a constrained location of the distribution
system, thus limiting its potential efficacy as a non-traditional supply resource.
Diesel/FuelOil
There are three large volume industrial customers along the IFL that currently have the potential
to use diesel or fuel oil as a natural gas supplement. These customers are able to utilize onsite
fuel storage tanks along with additional pipelines and equipment to switch their boilers over to
burnoil anddecreaseaportionoftheirgasusage. Burningdieselorfuel oil inlieuofnaturalgas
requires permitting from the local governing agencies, a process which can be lengthy depending
on the specific type of fuel oil used, and also increases the level of emissions from the customer's
plant.
Out of the three industrial customers that currently have equipment to burn fuel oil, only one
customer has the ability to supplement its natural gas usage; the other two customers lack the
ability to switch to diesel or fuel oil due to intentionally not renewing the requisite permits or
choosing not to purchase and store fuel oil at their facility. The estimated capital cost to install
a diesel storage system is approximately 5200,000 - 5500,000 depending on usage requirements
and days of storage. The estimated cost of diesel or fuel oil is between 52.05 - 52.97 per gallon
depending on fuel grade and classification, time of purchase and quantity of purchase. The
conversion cost to natural gas is roughly 51.38 to 52.00 per therm.
Coal
Coal use is very limited as a non-traditional supply resource for firm industrial customers within
lntermountain's service territory. ln order to use coal to offset natural gas demand, an industrial
customer must maintain a separate boiler dedicated to coal in addition to its natural gas boiler.
The customer must also have additional equipment installed at its facility to transport the coal to
the boiler. Regulations and permitting requirements can also be a challenge. Only three firm
industrial customers remain on lntermountain's system that have the ability and requisite
permitting to offset natural gas demand with coal.
The cost of coal in the Northwest is approximately S50 per ton, including transportation and
dependingonthequalityofthecoal. LowerBTUcoalwouldrangefrom8,000-L3,000BTUper
pound while higher quality coal would range from l-2,000 - 15,000 BTU per pound. This translates
into a per therm cost of coal of roughly S0.2t, plus permitting and equipment operation and
maintenance costs.
Wood Chips
Using wood chips as alternative fuel is a practice utilized by one large volume industrial customer
on the lFL. ln orderto accommodate wood burning there must be additional equipment installed,
such as wood fired boilers, wood chip transport and dry storage facilities. The wood is supplied
from various tree clearing and wood mill operations that produce chips within regulatory
lntegrated Resource Plan 2OL9 - 2023 64
lntermountain Gas Company Supply & Delivery Resources
specifications to be used as fuel. The chips are then transported by truck to the location where
the customer will typically utilize them as a fuel source for a few months each year. The wood
fired boilers of this industrial customer are currently operated in conjunction with natural gas
boilers, and technically would not offset natural gas usage. For comparison purposes, the wood
fired boilers, if used to replace natural gas for this specific industrial customer, could offset gas
usage by approximately 7,500 therms per day. Unfortunately, this single customer does not have
the ability to utilize any more wood fuel than it is currently using.
The cost of wood continually changes based on transportation, availability, location and the type
of wood processing plant that is providing the chips. Wood has a typical energy value of 5,000-
6,000 BTU's per pound, which converts into 1.5-20 pounds of wood being burned to produce one
therm of natural gas.
Propane
Since propane is similar to natural gas, the conversion to propane is much easier than a
conversion to most other non-traditional supply resources. With the equipment, orifices and
burners being similar to that of 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%. The use of propane requires onsite storage,
additional gas piping and a reliable supply of propane to maintain adequate storage. Currently
there are no industrial customers on the Company's system that have the ability to use propane
as a feasible alternative to natural gas.
Capital costs for propane facilities can become relatively high due to storage requirements.
Typical capital costs for a peak day send out of 30,000 therms per day, and the storage tanks
required to sustain this load, are approximately 5600,000 - 5700,000. Storage facilities should
be designed to accommodate a peak day delivery load for approximately seven days. The
average cost of propane is roughly 52.50 per gallon, which is a natural gas equivalent to 52.69
per therm. [NOTE: One gallon of propane is approximately 91,600 BTU]. Fixed operation and
maintenance costs are approximately 550,000 - S100,000 per year.
Biogas Production
Biogas can be defined as utilizing any biomass material to produce a renewable fuel gas. Biomass
is any biodegradable organic material that can be derived from plants, animals, animal
byproduct, wastewater,food/production byproduct and municipalsolid waste. After processing
of biogas to industry purity standards the gas can then be used as a renewable supplement to
traditional natural gas within Company facilities.
ldaho is one of the nation's largest dairy producing states which make it a prime location for
biogas production utilizing the abundant supply of animal and farm byproducts. Southern ldaho
currently has multiple interested parties reviewing the prospect of constructing an anaerobic
digester facility and becoming a gas supplier on lntermountain's distribution system. At this time,
lntegrated Resource Plan 2OL9 - 2023 65
lntermountain Gas Company Supply & Delivery Resources
there is one biogas production facility contracted to begin supplying renewable natural gas in
20L9. lntermountain is also in communication with other potential producers within the service
territory.
Satellite/Portable LNG Equipment
Satellite/portable LNG equipment allows natural gas to be transported in tanker trucks in a
cooled liquid form thus allowing larger BTU quantities to be delivered to key supply locations
throughout the distribution system. Liquefied natural gas has a tremendous withdrawal
capability because the natural gas is in a denser state of matter. Portable equipment has the
ability to boil LNG back to a gaseous form and deliver it into the distribution system by heating
the liquid from -260 degrees Fahrenheit to a typical temperature of 50 - 70 degrees Fahrenheit.
This portable equipment is available to lease or purchase from various companies and can be
used for peak shaving at industrial plants or within a distribution system. Regulatory and
environmental approvals are minimal compared to permanent LNG production plants and are
dependent upon the specific location where the portable LNG equipment is to be placed. The
available delivery pressure from LNG equipment ranges from 150 psig to 650 psig with a typical
flow capability of approximately 2,000 - 8,000 therms per hour.
lntermountain Gas currently operates a portable LNG unit on the northern end of the ldaho Falls
Lateral to assist in peak shaving the system. ln addition to the portable equipment,
lntermountain also has a permanent LNG facility on the IFL that is designed to accommodate the
portable equipment, provide an onsite control building and allow onsite LNG storage. The ability
to store LNG onsite allows lntermountain to partially mitigate the risk associated with relying on
truck deliveries during critical flow periods. The LNG delivery risk is also reduced now that
lntermountain has the ability to withdraw LNG from the Nampa LNG storage tank and can
transport this LNG around the state in a timely manner. With Nampa LNG readily available, the
cost and dependence of third-party supply is removed.
The cost of the portable LNG equipment is approximately 51 - S2.5 million with additional cost
to either lease or purchase property to place the equipment and the cost of the optional
permanent LNG facility. The fixed cost to lease the portable equipment is approximately
5250,000 - Sgso,ooo per month plus the cost of LNG.
lntegrated Resource Plan 20L9 - 2023 66
lntermountain Gas Company Supply & Delivery Resources
Lost and Unaccounted For Natural Gas Monitoring
lntermountain Gas Company is pro-active in finding and eliminating sources of Lost and
Unaccounted For (LAUF) natural gas. LAUF is the difference between volumes of natural gas
delivered to lntermountain's distribution system and volumes of natural gas billed to
lntermountain's customers. lntermountain is consistently one of the best performing companies
in the industry with a three-year average LAUF percentage of .LL76% (see Figure 28 below).
Figure 28: Intermountain LAUF Statistics
lntermountain utilizes a system to monitor and maintain a historically low amount of LAUF
natural gas. This system is made up of the following combination of business practices:
o Perform ongoing billing and meter audits
o Routinely rotate and test meters for accuracy
o Conduct leak surveys on one-year and four-year cycles to find leaks on the system
o Natural gas line damage prevention and monitoring
o lmplementing advanced metering infrastructure system to improve meter reading audit
process
o Monitor ten weather location points to ensure the accuracy of temperature related billing
factors
lntegrated Resource Plan 2OL9 - 2O23 67
r
I
0.3000%
o.2soo%
0.2000%
o.1500%
0.1000%
0.0500%
0.0000%
obo(oc
OJI
o)o-
LLf
J
lntermountain LAU F Percentage
20L7
PGA Year
.riar Intermountain Gas Company
201,6 2018
lntermountain Gas Company Supply & Delivery Resources
Utilize hourly temperatures for a 24-hour period, averaged into a daily temperature
average, ensuring accurate temperature averages for billing factors
Billing and Meter Audits
lntermountain conducts billing audits to identify low usage and zero usage with each billing cycle.
lntermountain also works to ensure billing accuracy of newly installed meters. These audits are
performed to ensure that the correct drive rate and billing pressure are programmed for the
meter and billing system to avoid billing errors. Any corrections are made prior to the first bill
going out.
lntermountain also compares on a daily and monthly basis its telemetered usage versus the
metered usage that Northwest Pipeline records. These frequent comparisons enable
lntermountain to find any material measurement variances between lntermountain's
distribution system meters and Northwest Pipeline's meters.
Table l2: 2016 - 2018 Billing and Meter Audit Results
Meter Rotation and Testing
Meter rotations are also an important tool in keeping LAUF levels low. lntermountain regularly
tests samples of its meters for accuracy. Sampled meters are pulled from the field and brought
to the meter shop for testing. The results of tests are evaluated by meter family to determine
the pass/fail of a family based on sampling procedure allowable defects. lf the sample audit
determines that the accuracy of certain batches of purchased meters are in question, additional
targeted samples are pulled and any necessary follow up remedial measures are taken.
ln addition to these regular meter audits, lntermountain also identifies the potential for
incorrectly sized and/or type of meter in use by our larger industrial customers. IGC conducts a
monthly comparison to the billed volumes as determined by the customer's meter. lf a
discrepancy exists between the two measured volumes, remedial action is taken.
Leak Survey
On a regular and programmed basis, lntermountain technicians check lntermountain's entire
distribution system for natural gas leaks using sophisticated equipment that can detect even the
smallest leak. The surveys are done on a one-year cycle in business districts and a four-year cycle
in other areas. This is more frequent than the legal requirement, which mandates leak surveys
lntegrated Resource Plan 20L9 - 2023 68
o
2016 2017 2018
Dead Meters
Drive Rate Errors
Pressure Errors
Totals
413
9
30
452
457
12
7
476
310
4
24
338
Billing and Meter Audit Results
lntermountain Gas Company Supply & Delivery Resources
on one-year and five-year cycles. When such leaks are identified, which is very infrequent,
remedial action is immediately taken. lntermountain will repair found leaks typically within 60
days, which is more aggressive than the industry where lower grade leaks are often monitored
for safety and not repaired immediately.
Damage Prevention and Monitoring
Unfortunately, human error leads to unintentional excavation damage to our distribution system.
When such a gas loss situation occurs, an estimate is made of the escaped gas and that gas then
becomes "found gas" and not "lost gas". To help eliminate instances of gas loss resulting from
excavation damage, lntermountain is in the process of implementing a comprehensive damage
prevention program to reduce the number of gas line damages.
Since the 20L7 IRP was filed, lntermountain has added a full-time person to create and manage
the Company's damage prevention program. The program focuses on education to both business
and agencies that interact with lntermountain and the public. lndustry education and awareness
has centered around trainings with contractors, excavators and first responders. ln 20L8, 18
different trainings were held across lntermountain's service territory.
lntermountain also helped sponsor the development of a "Safe Excavator" app for iPhone and
Android phones. This app provides quick access to vital information regarding Digline, or 811,
processes and procedures. The app allows a contractor or excavator to request a locate ticket
and also shows allthe applicable rules and laws.
To educate the general public on the importance of calling 811 prior to any type of digging,
lntermountain has participated in a variety of informational activities. The Company sponsored
and staffed booths at events such as Buy ldaho, the Pocatello Environmental Fair, the Associated
General Contractors golf tournament, and the Boise Hawks baseball games. lntermountain
placed ads in Chamber of Commerce publications, the Associated General Contractors directory
and city business directories. The Company also ran over 20,000 radio and TV spots in the Boise,
ldaho Falls, and Twin Falls markets promoting the need to call 811 before digging.
The additionalfocus on education and awareness is having an impact. lntermountain has seen a
decrease in incidents that damage facilities, and especially a decrease in incidents that cause gas
loss. There is still work to do, however. There continues to be instances where the contractor or
individual either does not call 81-1 before digging or calls but does not pay attention to the
marking of the utility facilities. Continued focus on damage prevention by lntermountain as well
as the support of the newly created ldaho Damage Prevention Board should help to further
reduce the incidences of excavation damage and related gas loss in the future.
lntegrated Resource Plan 20L9 - 2023 69
I
lntermountain Gas Company
8.43
Supply & Delivery Resources
5.09 5.44
2079
DAMAGES RATE PER 1-,OOO LOCATES - BY REGION
9.26 8.95
7.O3 6.99 7.00
6.23
20L7 2018
I East Region t West Region I Company TotalsI &
Figure 29: Intermountain Damages Rate Per 1,000 Locates - By Region
LOCATE REQUESTS - BY REGION
50,000
57,827
50,000
42,955
40,000
33,467
30,000 27,424
20,000 15,531
10,000
52,914
18,360I 76,544
35,370
201920t72018
r East Region I West Region I Company TotalsI I
Figure 30: Intermountain Locate Requests - By Region
The figures above show the damage rate per 1,000 locates, and total locates for 2017 through
20L9. The Figure 31 on the next page shows total damages by region and year for 2OL7 through
20L9.
lntegrated Resource Plan 20L9 - 2023 70
lntermountain Gas Company
38s
254
20\7
TOTAL DAMAGES - BY REGION
Supply & Delivery Resources
288
185
2019
363
234
2018
r East Region I West Region I Company Totals
1,29
103
I
Figure 3l: Intermountain Total Damages - By Region - Company
Adva nced Meteri ng I nfrastructure
lntermountain is 50% complete with implementing ltron's fixed-network metering infrastructure,
with a plan to complete the project by the end of 2020. This system utilizes a fixed mounted data
collector using two-way communication to endpoints and to the repeater to collect on-demand
reads and issue network commands. This system provides a robust collection of time-
synchronized interval data, and when coupled with a meter data management system, it helps
lntermountain:
o lmprove customer serviceo Refine forecasted consumptiono Man?Be and controltampering and thefto Synchronize endpoint clocks to ensure data collected territory-wide is accurately time-
stampedo Retrieve missing interval data in the event of an outageo Streamline the process to identify billing errors
Weather and Temperature Monitoring
lntermountain increased the number of weather monitoring stations in the early 2000's, from
five to ten weather location points, to ensure the accuracy of temperature related billing factors.
Additionally, lntermountain utilizes hourly temperatures for a 24-hour period, averaged into a
daily temperature average, ensuring accurate temperature averages for billing factors. The
weather and temperature monitoring provide for a better temperature component of the billing
factor used to calculate customer energy consumption.
lntegrated Resource Plan 20Lg - 2023 7L
T-
450
400
3s0
300
250
200
150
100
50
0
131
lntermountain Gas Company Supply & Delivery Resources
Summary
lntermountain continues to monitor LAUF levels and continuously improves business processes
to ensure the company maintains a LAUF rate among the lowest in the natural gas distribution
industry.
lntegrated Resource Plan 20t9 - 2023 72
lntermountain Gas Company Supply & Delivery Resources
Core Market Energy Efficiency
As the cleanest, safest most affordable energy source available, why would we want consumers
to use less natural gas? The wise use of our resources through high efficiency appliances and
home construction helps individual customers save on their energy usage and monthly bill. The
wise use of the commodity itself, and efficient use of the lntermountain Gas distribution system
as a whole, benefits all of the Company's customers. Efficient use delays the need for expensive
system upgrades while still allowing lntermountain to provide safe, reliable, affordable service to
all customers.
From a corporate perspective, "At MDU Resources, we believe we have a responsibility to use
natural resources efficiently and minimize the environmental impact of our activities." This is the
Environmental Policy adopted by the Company on August L,1991., restated in 1998 and August
L7,20L7. As a Company, our environmental goals are:
o To minimize waste and maximize resources
o To be a good steward of the environment while providing high quality and reasonably
priced products and services; and
o To comply with or surpass all applicable environmental laws, regulations and permit
requirements.
Market Transformation
The Gas Technology lnstitute (GTl) is our nation's leader in ongoing natural gas research, as well
as the deployment and commercialization of new natural gas efficiency technologies. The goal of
GTI is to solve important energy challenges while creating value in the marketplace. As part of
this effort, GTI continues to perform important ongoing research and development work in the
natural gas equipment arena through their Utilization Technology Development (UTD) group.
UTD is comprised of 20 member companies that serve more than 47 million natural gas
customers in the Americas and Europe. UTD creates and advances products, systems, and
technologies to save consumers money, save energy, integrate renewable energy with natural
gas, and achieve safe, reliable, resilient end-user operation with superior environmental
performance.
GTI uses funds contributed by member companies to leverage matching grants to make research
dollars go further. Although not all research efforts are successful, lntermountain has
participated in a number of projects that have reached the point of commercial viability. A sample
of those projects includes:
lntegrated Resource Plan 20L9 - 2023 73
lntermountain Gas Company Supply & Delivery Resources
Gas-fired Absorption Heat Pump (GAHP) for Space Heating or Commercial Water
Heating
The GAHP can be used for space or water heating applications and is undergoing a four-unit field
test in Wisconsin and Tennessee with prospective UTD manufacturing partner Trane and support
from the U.S. Department of Energy, UTD and others. The GAHP has field-demonstrated an
Annual Fuel Utilization Efficiency (AFUE) of 740%,with45% gas savings, an estimated financial
payback period of as low as three years, and ultra-low NOx emissions. The GAHP demonstrated
continued operation under extreme cold weather conditions in Wisconsin during the January-
February 20L9 Polar Vortex.
Low NOx Advanced 3D-Printed Nozzle Burner
A novel design for next-generation retention nozzles leverages new additive manufacturing
ca pa bilities a nd eq u ipment. ln 2079, UTD is eva luating technology licensing a pplications in boilers
and air heating. Laboratory tests to date have demonstrated an efficiency increase of 3-6% and
a50%-75% reduction in NOx emissions compared to current burners.
On-Demand Heat and Power System
This technology captures and stores renewable energy (or other resources, including waste heat),
augments it with naturalgas as needed, and delivers heat and power on-demand to commercial,
industrial, and other users. ln 2019, the technology is moving to a pilot field scale-up
demonstration in California.
Self-Powered Tankless Water Heater
Tankless water heaters yield higher levels of efficiency than storage-type water heaters but
require the added expense of an electrical connection and are susceptible to power outages
unless a separate battery back-up system is installed. UTD researchers have assessed leading
thermoelectric generator (TEG) technologies and, in 20L9, are analyzing opportunities to
economically integrate TEG and other technologies into a prototype water heater design.
High Efficiency Commercial Clothes Dryer
An advanced natural gas fired commercial clothes dryer is being created and demonstrated at
laboratory scale that has the potentialto save at least 50% of the energy used in the commercial
clothes drying sector. lt is being developed in partnership with Oak Ridge National Laboratory
and others, with financial support from the U.S. Department of Energy and UTD.
This kind of research and development contributes to continued, market-transforming energy
efficiency in the natural gas industry. lntermountain believes all customers benefit from
investments in improving the efficiency of natural gas applications and technology improvements
that reduce emissions.
lntegrated Resource Plan 201,9 - 2023 74
lntermountain Gas Company Supply & Delivery Resources
Residential Energy Efficiency Program
The goal of lntermountain's Energy Efficiency program is to acquire cost-effective demand side
resources. Unlike supply side resources, which are purchased directly from a supplier, demand
side resources are purchased from individual customers in the form of unused energy as a result
of energy efficiency. The demand side resources acquired through the Company's EE Program
(also referred to as Demand Side Management or DSM) ultimately allow lntermountain to
displace the need to purchase additional gas supplies, delay contracting for incremental pipeline
capacity, and possibly negate or delay the need for reinforcement on the Company's distribution
system. The Company strives to raise awareness about home energy efficiency and inspire
customers to reduce their individual demand for gas through outreach and education.
Collections for funding the EE program began on October 1,,2017. Active promotion and staffing
of the EE program launched in January 2018. During theZOLT-2021 lRP, DSM therm savings were
projected for the first five years of the program, as illustrated in the following chart (Figure 32).
Estimated DSM Therm Savings
70 17 -2071 lntegrated Resource Plan
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350,@
3@O@
2so,o@
EI zoo,oo
F
r50,m
100,ffi
5q,{m
273,857
196979
140,116
65,C@
Yerr 2 Y.u l Yc& 5
Figure 32: Estimated DSM Therm Savings
The initial program was intentionally designed to be a modest offering to allow for proper ramp
up and promotion of the new program. The EE Program focused on two major rebate categories:
appliance rebates for high-efficient natural gas appliances, and residential high-performance new
construction with energy efficient design. Figures 33 and 34 are program brochures provided to
customers though bill inserts in March 201.8 and October 2018.
lntegrated Resource Plan 20L9 - 2023 75
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lntermountain Gas CompanY Supply & Delivery Resources
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Figure 34: 2018 Energt Efficiency Customer Bill Insert - October 2018
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lntermountain has assembled a Stakeholder group to provide input on the EE Program. The group
met in November of ZOLB and again in May of 2019. These meetings provide an opportunity for
lntermountain to receive feedback on the current program's design and delivery. lt also serves
as a forum to discuss future program plans.
The EE Program is currently half-way through Program Year 2, and has invested in a more robust
analysis of DSM resources for future program planning, including a modeling process by which
DSM measures are selected based on cost-effectiveness, an explanation and update of avoided
costs, and an explanation of the impact of DSM on supply and capacity needs.
Conservation Potentia I Assessment
ln order to conduct a more robust analysis of all cost-effective DSM measures, lntermountain
contracted with a third party to perform a Conservation Potential Assessment (CPA). The CPA is
intended to support both short-term energy efficiency planning and long-term resource planning
activities.
As outlined in the CPA report, the intent of the CPA is that it be used for
Resource planning: evaluate the impact of energy efficiency, fuel switching and codes
and standards on long-term energy consumption and demand needs
ldentify opportunities: assess achievable DSM opportunities to improve DSM program
planning and help meet long-term savings objectives, and determine which sectors, end-
uses and measures hold the most potential
Efficiency program planning: inform portfolio and program design considering funding
level, market readiness and other constraints
ln April of 20L8,lGC sent a Request for Proposal (RFP) to 30 companies to conduct a CPA. After
receiving six proposals, and interviewing three companies, Dunsky Energy Consulting (Dunsky)
was retained to perform the assessment. Dunsky utilized the expertise of GTl, the leading natural
gas energy and environmental research, development and training organization, as the primary
research lead for the study. The scope of the study included conservation potential for both the
residential and commercial sectors, over the 2020-2039 time period.
The purpose of the potential assessment was "to provide a realistic, high-level, assessment of the
long-term energy efficiency potential that is technically feasible, cost-effective, and achievable
through efficiency programs." Three categories of potential savings, depicted in Figure 35, were
examined by applying economic considerations such as market barriers and cost tests. The Utility
Cost Test (UCT) was applied to the theoretical maximum savings opportunity, or the technical
savings category, to screen for only the cost-effective measures, resulting in the economic
savings potential. The economic savings potential of cost-effective measures was further
screened by applying market barriers to establish the achievable energy efficiency potential. To
lntegrated Resource Plan 201,9 - 2023 77
a
a
o
lntermountain Gas Company Supply & Delivery Resources
study the impacts on achievable potential savings, three different scenarios were tested: the low
case, the base case and the max case.
Technical: Theoretical maximum savings opportunity,
ignoring constraints such as cost-effectiveness and market
barriers.
Economic: Applies economic considerations to technical
potential, leaving only measures that are cost-effective.
Screened on the Utility Cost Test (UCT).
Achievable: Applies market barriers to economic potential,
resulting in an estimate of savings that can be achieved
through efficiency program. Different scenarios are tested to
examine their impacts on savings.
Figure 35: Categories of Potential Savings
Details of the three scenarios and the key insights to be examined with each scenario were as
such:
Low Case -applies low incentive levels, (35% of incremental measure costs), but with no
budget constraints and over a broad set of cost-effective measures
Key insight: What level of saving can be achieved with o comprehensive offer, with
incentives thot ore in the lower range?
a
a
O
Base Case - incentives increased to 50%, barrier reduction in Program Year 5,
unconstrained budget - standard program approach
Key insight: How much more savings con be expected with increosed incentive
levels?
Maximum Case incentive levels at 65%, barrier-reducing program delivery,
unconstrained budget and measures
Key tnsight: How would improved progrom delivery increose savings (e.9.
consumer educotion, controctor troining ond support, etc.)
The following chart (Figure 36) illustrates the cumulative technical, economic and achievable
energy savings potential for the 2020-2039 period. The low, base, and max scenarios for
achievable potential savings is also shown.
lntegrated Resource Plan 20L9 - 2O23 78
Ach'reYoble
Econon$c
Technicol
lntermountain Gas Company Supply & Delivery Resources
Natural Gas Savings - Cumulative 2020- 2039
400,000
350,000
300,000
250,000
200 000
150,000
100,000
50,000
0
Technical Emnomic Achv. Low
rResidential !Commercial
Achv. Base Achv. Max
Figure 36: Natural Gas Savings - Cumulative 2020 - 2039
Base Scenario cumulative savings are illustrated in Figure 37, with attention on the first five-year
period utilized in the IRP load forecast.
Natural Gas Savings Cumulative 2020- 2024
Base Achievable Scenario
12,OOO
10,000
8,000
6,000
4,000
2,OOO
I
2020 2027
r Total Residential
2023 2024
Figure 37: Natural Gas Savings Cumulative 2020 - 2024, Base Achievable Scenario
The base case scenario of the achievable potential energy savings estimates 47% of savings will
come from HVAC,32% from building envelope measures, and 27% from hot water measures for
the residential sector during 2020-2024 program years. Likewise, the commercial sector is
E
o
f.^
E
o
fo
1...-
o!
L6bqJ-OF_CF
2022
I Total Commercial
lntegrated Resource Plan 20L9 - 2023 79
lntermountain Gas Company Supply & Delivery Resources
estimated to contributeTS% of potential energy savings from HVAC, L2%ofrom kitchen measures,
8%from hot water, and2% from various other commercial applications for the same time period.
For the 2020-2024 program years, the portfolio is projected to be cost-effective based on both
the Utility Cost Test and the Total Resource Cost Test, see Table 13 below.
Table 13: Intermountain Portfolio Cost-Effectiveness Under UCT and TRC Tests
Findings specific to the first-five years of the study will require significant consideration
o
Savings in the low and base scenarios exhibit strong growth in the first five years followed
by modest growth in the subsequent years of the study. Rapid growth in the first time
period is attributed to expansion of residential offerings and introduction of new
initiatives in the commercial sector.
Savings under the base scenario are 40% higher than the low scenario in the first five
years. The base scenario budget is more than double the low scenario budget, as higher
incentive levels increase the costs of all savings. Despite the higher average cost per therm
of savings in the base scenario, under the UCT, all savings are cost-effective.
Efficiency measures provide a stable flow of gas savings. Savings as a percent of
forecasted volumes remain close: 0.5%for the low case and L%for the base case scenario.
Under the base scenario, budgets need to increase significantly. First, as customers
participate in greater numbers, and then as participation further grows due to strategies
to address market barriers and increase participation.
a
a
Residential t.78 t.74 L.46 1.33 1.36 1.31
Commercial 2.40 2.2L 1.81 1.53 L.49 1.38
Total L,97 1..90 1.33 1.40 L.41 1.33
UCT
Base
TRC
Base
Sector
LoW Max LoW Max
lntegrated Resource Plan 201,9 - 2023 80
a
lntermountain Gas Company Supply & Delivery Resources
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Figure 38: Intermountain's Portfolio Annual Savings Compared to Other Utilities
As seen in the chart above, a common metric to benchmark lntermountain's program against
other jurisdictions is conducted by dividing the annual budget by first year savings. This metric
does not consider the total savings for the complete measure lives and should not be compared
with avoided costs, but it does still provide some key comparative insights. Low and base
scenario savings and unit costs would place lntermountain among average utilities with savings
ranging between 0.4 and 0.6%. With investments and sustained growth in the retrofit market,
under the base scenario, lntermountain could evolve into one of the leading utilities, while
maintaining costs at a reasonable level.
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Savings potential from the base scenario were incorporated as a DSM resource in the
Optimization model. Complete CPA results have been provided as Exhibit 4.
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lntegrated Resource Plan 2OL9 - 2023 81
lntermountain Gas Company Supply & Delivery Resources
Large Volume Energy Efficiency
Through discussions with the customers and the information provided via the surveys, it is
apparent that maximizing plant efficiency by optimizing production volumes while using the least
amount of energy is a very high priority for the owners, operators, and managers of these large
volume facilities. Nearly 20 years ago lntermountain developed an informational tool using
SCADA and remote radio telemetry technology to gather, transmit and record the customer's
hourly therm usage data. This data is saved on an internal server and provided to customers and
their marketers/agents via a password protected website.
Usage data is useful in tracking and evaluating energy saving measures, new production
procedures or new equipment. To deploy this tool, lntermountain installs SCADA units on
customers' meters to records the meter volume each hour. That data is then transmitted via
radio/telemetry communication technology to lntermountain's servers so it can be made
available to customers.
For gas erergencies please call 1477-777-7442
A INTERMOUNTAIN'
CAs COMPANY
A Subsidiary of MDU Resources Group, lnc.
Email
Pasrcrd
@ Forgot PassuDrd?
Figure 39: Large Volume Website Login
ln order to provide customers access to this data, lntermountain has designed and hosts a Large
Volume website, which is pictured in the figure above. The website is available on a 24/7 basis
for Large Volume customers to log-in via the internet using a company specific username and
customer managed password. After a successful log-in, the user immediately sees a chart
showing the last 30 days of hourly usage for the applicable meter or meters, but also has the
option to adjust the date range to see just a few hours or up to several years of usage data. An
example of a month's worth of data is provided in the Figure 40. The user can also download the
data in CSV format to review, evaluate, save and analyze natural gas consumption at their specific
facility on an hourly, weekly, monthly, and annual basis as far back as 201-5. Each customer may
elect to have one or multiple employees access the site. Logins can also be created to make this
same data available to a transport customer's natural gas marketer.
Ral6 & Taritrs 'lnternpuntain Gas Company lndustrial Services
lntegrated Resource Plan 2OL9 - 2023 82
lntermountain Gas Company Supply & Delivery Resources
Natural Cas Usage
Th. 9I d.y bcgmr J t 0O All .nd cndr .t , t9 AAl th nrxl d.y
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Figure 40: Natural Gas Usage History
The website also contains a great deal of additional information useful to the Large Volume
customer. Customers can access information such as the different tariff services offered, answers
to frequently asked questions and a potential marketer list for those interested in exploring
transport service. The customer is also provided a "Contact Us" link and, in order to keep this site
in the most usable format for the customer, a website feedback link is provided (see Figure 41).
The site allows the Company to post information regarding things such as system maintenance,
price changes, rate case information and anything else that might assist the customer or its
marketer.
Natural Gas Usage
The gas day begins at 8:o0 AM and ends at 7:59 AM the next day
Figure 4l: Feedback Link
Usage Charl Rates & Tarifis - FAQ Marketer List Contact Us O lS Adnin -
lntegrated Resource Plan 201,9 - 2023 83
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lntermountain Gas Company Supply & Delivery Resources
Avoided Costs
Overview
The avoided cost is the estimated cost to serve the next unit of demand with a supply side
resource option at a point in time. This incremental cost to serve represents the cost that
could be avoided through energy conservation. The avoided cost forecast can be used as a
guideline for comparing energy conservation with the cost of acquiring and transporting
natural gas to meet demand.
This section presents IGC's avoided cost forecast and exphins honr it was derived. While the
IRP is only a five-year plan, avoided costs are forecasted for 45 years to account for the
full measure life of some conservation measures, such as ENERGY STAR certified homes,
which have lives much longer than five years. The avoided cost forecast is based on the
performance of IGC's portfolio under expected conditions.
Cost lncorporated
The components that go into lntermountain's avoided cost calculation are as follows:
ACnominar = TCF + TCV + CC + DSC
Where:
o ACnominol = The nominal avoided cost for a given year
o TCF = Fixed Transportation Costs
c TN = Variable Transportation Costs
o CC = Commodity Costs
o DSC = Distribution SystemCosts
The following parameters are also used inthe calculation of the avoided cost:
o The most recent forecast of commodity prices by gas hub utilized in the 2019 lRP.
o The inflation rate used is tied to the Consumer Price lndex (CPl) and is 2.O%.
o The nominal discount rate of 6.68% is lGCs tax effected cost of capital.
o Northwest Pipeline rates are utilized since these are used for the majority of
lntermountain's transport and are most transparent.
o Standard present value and levelized cost methodologies are utilized to develop a
real and nominal levelized avoided cost by year.
lntegrated Resource Plan 2Ot9 - 2023 84
lntermountain Gas Company Supply & Delivery Resources
Understanding Each Component
Fixed Transportation Costs
Fixed transportation costs are the cost per therm that lntermountain pays for the right to move
gas along an interstate pipeline. As is implied by the name, this cost is incurred whether gas flows
along a pipeline or not. This rate is set by the various pipelines and can be changed if the pipeline
files a rate case. The final rates filed at the conclusion of a rate case (whether reached through
settlement or hearing) must be approved by the Federal Energy Regulatory Commission (FERC).
To model rate increases in its forecast, lntermountain multiplies its transportation costs by the
CPI escalator. For its 20L9 lRP, lntermountain assumes that contracts thru 2025 are already
committed and so not avoidable. Starting in2026, the unit cost of the NWP capacity inflated to
nominal cost by the inflation rate is utilized.
Variable Transportation Costs
Variable transportation costs are the cost per therm that lntermountain pays only if the Company
moves gas along a pipeline. This rate is set by the various pipelines and can be changed if the
pipeline files a rate case. The final rates filed at the conclusion of a rate case (whether reached
through settlement or hearing) must be approved by FERC. The current rates for NWP TF-1
variable costs are utilized and escalated by the inflation rate.
Commodity Costs
Commodity costs are the costs of acquiring one therm of gas. Since lntermountain does not know
where it will purchase the next therm of gas, the max from all three basins from which
lntermountain purchases gas is utilized (AECO, Sumas and Rockies). The price forecast went
through 2036 and then an escalator was applied through the remainder of the forecast period.
Distribution System Costs
Distribution system costs capture the costs of bringing gas from the transportation pipeline's
citygate to lntermountain's customers. Forthis lRPcycle, IGC calculates distribution system
costs as itssystem weighted average of its authorized margins. These costs are inflated by
the CPI escalator everyyear.
lntegrated Resource Plan 2019 - 2023 85
lntermountain Gas Company Optimization
Optimizotion
Distribution System Modeling
A natural gas pipeline is constrained by the laws of fluid mechanics which dictate that a pressure
differential must exist to move gas from a source to any other location on a system. Equal
pressures throughout a closed pipeline system indicate that neither gas flow nor demand exist
within that system. When gas is removed from some point on a pipeline system, typically during
the operation of natural gas equipment, then the pressure in the system at that point becomes
lower than the supply pressure in the system. This pressure differential causes gas to flow from
the supply pressure to the point of gas removal in an attempt to equalize the pressure throughout
the distribution system. The same principle keeps gas moving from interstate pipelines to
lntermountain's distribution systems. lt is important that engineers design a distribution system
in which the beginning pressure sources, which could be from interstate pipelines, compressor
stations or regulator stations, have adequately high pressure, and the transportation pipe
specifications are designed appropriatelyto create a feasible and practical pressure differential
when gas consumption occurs on the system. The goal is to maintain a system design where load
demands do not exceed the system capacity, which is constrained by minimum pressure
allowances at a determined point or points along the distribution system, and maximum flow
velocities at which the gas is allowed to travel through the pipeline and related equipment.
Due to the nature of fluid mechanics there is a finite amount of natural gas that can flow through
a pipe of a certain size and length within specified operating pressures. The laws of fluid
mechanics are used to approximate this gas flow rate under these specific and ever-changing
conditions. This process is known as "pipeline system modeling." Ultimately, gas flow dynamics
on any given pipeline lateral and distribution system can be ascertained for any set of known gas
demand data. The maximum system capacity is determined through the same methodology
while calculating customer usage during a peak heating degree day.
ln order to evaluate intricate pipeline structures a system model is created to assist
lntermountain's engineering team in determining the flow capacity and dynamics of those
pipeline structures. For example, before a large usage customer is incorporated into an existing
distribution system, the engineer must evaluate the existing system and then determine whether
or not there is adequate capacity to maintain that potential new customer along with the existing
customers, or if a capacity enhancement is required to serve the new customer. Modeling is also
important when planning new distribution systems. The correct diameter of pipe must be
designed to meet the requirements of current customers and reasonably anticipated future
customer growth.
lntegrated Resource Plan 2Otg - 2023 86
lntermountain Gas Company Optimization
Modeling Methodology
lntermountain utilizes a hydraulic gas network modeling and analysis software program called
Synergi Gas, distributed and supported by DNV GL, to model all distribution systems and pipeline
flow scenarios. The software program was chosen because it is reliable, versatile, continually
improving and able to simultaneously analyze very large and diverse pipeline networks. Within
the software program individual models have been created for each of lntermountain's various
distribution systems including high pressure laterals, intermediate pressure systems, distribution
system networks and large diameter service connections.
Each system's model is constructed as a group of nodes and facilities. lntermountain defines a
node as a point where gas either enters or leaves the system, a beginning and/or ending location
of pipe and/or non-pipe components, a change in pipe diameter or an interconnection with
another pipe. A facility is defined in the system as a pipe, valve, regulator station, or compressor
station; each with a user-defined set of specifications. The entire pipeline system is broken into
three individual models for ease of use and to reduce the time requirements during a model run
analysis. The largest model in use consists of approximately 71,000 active nodes, 580,000 graphic
nodes and 75,600 facilities which are used along with additional model inputs to solve
simultaneous equations through an iterative process, calculating pressures for over 70,000
unknown locations prior to analysis.
Synergi can analyze a pipeline system at a single point in time or the model can be specifically
designed to simulate the flow of gas over a specified period of time, which more closely simulates
real life operations which utilize gas stored in pipelines as line pack. While modeling over time
an engineer can write operations that will input and/or manipulate the gas loads, time of gas
usage, valve operation and compressor simulations within a model, and by incorporating the
forecasted customer growth and usage provided within this lRP, lntermountain can determine
the most likely points where future constraints may occur. Once these high priority areas are
identified, research and model testing are conducted to determine the most practical and cost-
effective methods of enhancing the constrained location. The feasibility, timeline, cost and
increased capacity for each theoretical system enhancement is determined and then run through
the IRP Optimization Model.
lntegrated Resource Plan 2019 - 2023 87
lntermountain Gas Company Optimization
Potentia! Capacity Enhancements
Capacity enhancements within the Company's distribution system improve the ability to flow gas
during periods of peak demand. Three capacity upgrades were considered in this IRP and are as
follows:
L. Pipeline Loop
2. Pipeline Uprate
3. Compressor Station
The three capacity upgrades discussed below do not reduce demand nor do they create
additional supply points, rather they increase the overall capacity of a pipeline system while
utilizing the existing gate station supply points. When selecting capacity upgrades, a multitude of
factors were considered including cost, maintenance and operation, growth, etc.
Pipeline Loop
Pipeline looping is a traditional method of increasing capacity within an existing distribution
system. The loop refers to the construction of new pipe parallel to an existing pipeline that has,
or may become, a constraint point. The feasibility of looping a pipeline is primarily dependent
upon the location where the pipeline will be constructed. lnstalling gas pipelines through private
easements, residential areas, existing asphalt, or steep and rocky terrain can greatly increase the
cost to unjustifiable amounts when compared with alternative enhancement solutions.
The potential increase in system capacity by constructing a pipeline loop is dependent on the size
and length of new pipe being installed, with typical increases in capacity ranging from 50,000 -
250,000 therms per day on large, high pressure laterals. The cost for a new pipeline installation
of this magnitude is generally in the range of 57 - S20 million.
Pipeline Uprate
A quick and sometimes relatively inexpensive method of increasing capacity in an existing
pipeline is to increase the maximum allowable operating pressure of the line, usually called a
pipeline uprate. Uprates allow a company to maximize the potential of their existing systems
before constructing additionalfacilities and are normally a low-cost option to increase capacity.
However, leaks and damages are sometimes found or incurred during the uprate process creating
costly repairs. There are also safety considerations and pipe regulations that restrict the
feasibility of increasing the pressure in any pipeline, such as the material composition, strength
rating and relative location of the existing pipeline.
lntegrated Resource Plan 20L9 - 2023 88
lntermountain Gas Company Optimization
Compressor Station
Compressor stations are typically installed on pipelines or laterals with significant gas flow and
the ability to operate at higher pressures. lntermountain currently has two such transmission
pipelines for which the installation of a compressor station could be practical: the Sun Valley
Lateral and the ldaho Falls Lateral. Regulatory and environmental approvals to install a
compressor station, along with engineering and construction time, can be a significant deterrent,
but compressors can also be a cost effective, feasible solution to lateral constraint points.
Compressor stations can be broken down into the following two scenarios:
A single, large-volume compressor can be installed on the pipeline when there is a constant, high
flow of gas. The compressor is sized according to the natural gas flow and is placed in an optimal
location along the lateral. This type of compressor will not function properly if the flow in the
pipeline has a tendency to increase or decrease significantly. This type of station can have a price
range of Sa - 56 million plus land, and typical operating and maintenance costs will range
between S100,000 - S200,000 annually.
The second option is the installation of multiple, smaller compressors located in close proximity
or strategically placed in different locations along a lateral. Multiple compressors are very
beneficial as they allow for a large flow range, have some redundancy and use smaller and
typically more reliable drivers and compressors. These smaller compressor stations are well
suited for areas where gas demand is growing at a relatively slow and steady pace so that
purchasing and installing these less expensive compressors can be done over time. This 'Just in
time" approach allows a pipeline to serve growing customer demand for many years into the
future while avoiding the more costly purchase of a single, larger station. However, high land
prices or the unavailability of land may render this option economically or operationally
infeasible. The cost of a smaller compressor station, excluding land, is estimated at S1.5 - 53
million with approximate operating and maintenance costs of 550,000 - S150,000 annually.
lntegrated Resource Plan 20L9 - 2023 89
lntermountain Gas Company Optimization
Load Demand Curves
The culmination of the demand forecasting process is aggregating the information discussed in
the previous sections into a forecast of future load requirements. As the previous sections
illustrate, the customer forecast, design weather, core market usage per customer data, and
large volume usage forecast are all key drivers in the development of the load demand curves.
The IRP customer forecast provides a total Company daily projection through Planning Year (PY)
2023 and includes a forecast for each of the five AOls of the distribution system. Each forecast
was developed under each of three different customer growth scenarios: low growth, base case,
and high growth.
The development of a design weather curve - which reflects the coldest anticipated weather
patterns across the Company's service area - provides a means to distribute the core market's
heat sensitive portion of lntermountain's 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 PY23 for the entire Company, as well
as for each AOl. Similar to the above, normal weather scenario modeling was also completed.
As discussed in the Large Volume Customer Forecast Section, the forecast also incorporates the
large volume CD from both a Company-wide perspective (interstate capacity) as well as from an
AOI perspective (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
AOt.
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 Company perspective and an AOI perspective.
Once the demand forecasts were finished and the 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-low to create what is known as a Load Demand Curve
(LDC). The LDC incorporates all the factors that will impact lntermountain's future loads. The LDC
is the basic tool used to reflect demand in the IRP Optimization Model.
It is important to note that the Load Demand Curves represent existing resources and are
intended to identify potential capacity constraints and to assist in the long term planning process.
Plans to address any identified deficits will be discussed in the Planning Results Section of this
report.
lntegrated Resource Plan 201,9 - 2023 90
lntermountain Gas Company Optimization
Customer Growth Summary Observations - Design Weather - All Scenarios
Idaho Falls Lateral
The ldaho Falls Lateral low growth scenario projects an increase in customers of 3,803 PY19
through PY23 (Jan 1.,20L9 to Dec 31.,2023l.which correspondsto an annualized growth rate of
L.49%. ln the base case scenario customers are forecasted to increase by 7,772 (2.92%
annualized growth rate), while the high growth scenario forecasts an increase of 10,938
customers (3.97% annualized growth rate).
Sun Valley Lateral
The Sun Valley Lateral low growth scenario (PY19 - PY23) projects an increase of 490 customers
(0.89% annualized growth rate). ln the base case scenario customers are projected to increase
by 1,304 (2.26% annualized growth rate), while the high growth scenario shows an increase of
L,994 customers (3.34% annualized growth rate).
Canyon County Area
The low growth customer forecast (PY19 - PY23)for Canyon County Area reflects an increase of
11,395 customers (4.09% annualized growth rate). ln the base case scenario customers are
forecasted to increase by L4,854 (5.75% annualized growth rate), while the high growth scenario
projects an increase of 17,788 customers {5.83% annualized growth rate).
State Street Lateral
The low growth customer forecast (PY19 - PY23)for the State Street Lateral reflects an increase
of 4,3L8 customers (7.7% annualized growth rate). The base case scenario projects an increase
of 7,055 customers (2.69% annualized growth rate), while the high growth scenario forecasts an
increase of L0,273 customers (3.78% annualized growth rate).
Central Ada County
The low growth customer forecast (PY19 - PY23) for the Central Ada County reflects an increase
of 4,397 customers (7.70% annualized growth rate). ln the base case scenario customers are
forecasted to increase by 6,622 (2.49% annualized growth rate), while the high growth scenario
projects an increase of 8,654 customers (3.79% annualized growth rate).
Total Company
The Total Company (TC) low growth customer forecast (PY19 - PY23) projects an increase of
33,445 customers (1,.9L% annualized growth rate). The base case scenario forecasts an increase
of 60,476 customers (330% annualized growth rate), while the high growth scenario projects an
increase of 82,975 customers (4.37% annualized growth rate). Please note that the TC forecasts
include the AOls mentioned above as well as all other customers not located in a particular AOl.
Using the LDC analyses allows lntermountain to anticipate changes in future demand
requirements and plan for the use of existing resources and the timely acquisition of additional
resources.
lntegrated Resource Plan 2OL9 - 2023 91
I ntermountain Gas Company Optimization
Core Customer Distribution Sendout Summary - Design and Normal Weather - All Scenarios
Idaho Falls Lateral
2019 2021 2023Growth Scenario 2020 2022
Low
Base
High
6,497,806
6,510,490
6,520,563
6,851,608
6,955,973
7,038,871
6,922,846
7,125,180
7,285,625
7,021,456
7,326,306
7,568,233
7,116,751
7,528,354
7,855,001
IFL Design Weather - Annual Gore Market Distribution Sendout (Dth)
Growth Scenario 2019 20212020 2022 2023
Low
Base
High
5,885,102
5,896,70'1
5,905,923
6,215,162
6,309,812
6,384,991
6,280,765
6,464,327
6,609,880
6,370,244
6,646,800
6,866,278
6,456,710
6,830,116
7,126,459
IFL Normal Weather - Annual Core Market Distribution Sendout (Dth)
lntegrated Resource Plan 201,9 - 2023 92
Growth Scenario 2019 2020 2021 2022 2023
Low
Base
High
2,134,862 2,180,583
2,138,646 2,212,268
2,141,970 2,240,245
2,190,120
2,251,525
2,305,777
2,208,739
2,300,724
2,380,499
2,225,805
2,349,492
2,455,144
SVL Design Weather - Annual Core Market Distribution Sendout (Dth)
lntermountain Gas Company Optimization
Sun Valley Lateral
Canyon County Area
2019Growth Scenario 20212020 2022 2023
Low
Base
High
1,893,932
1,897,366
1,900,390
1,934,153
1,962,358
1,987,253
1,943,094
1,997 ,676
2,045,901
1,959,620
2,041,332
2,112,194
1,974,756
2,084,585
2,178,425
SVL Normal Weather - Annual Core Market Distribution Sendout (Dth)
Growth Scenario 2019 2020 2021 2022 2023
Low
Base
High
6,644,882
6,654,154
6,659,942
6,937,705
7,022,665
7,075,569
7,206,182
7,375,106
7,479,998
7,503,680
7,762,669
7 ,931,253
7,803,143
8,158,671
8,395,219
GCA Design Weather - Annual Core Market Distribution Sendout (Dth)
Growth Scenario 2019 20212020 2022 2023
Low
Base
High
5,278,733
5,285,939
5,290,441
5,510,136
5,577,258
5,619,033
5,723,042
5,856,822
5,939,853
5,959,382
6,164,654
6,298,263
6,197,250
6,479,190
6,666,752
CCA Normal Weather - Annua! Core Market Distribution Sendout (Dth)
lntegrated Resource Plan 20Lg - 2023 93
Growth Scenario 2019 20212020 2022 2023
Low
Base
High
6,753,345
6,761,487
6,770,632
6,892,311
6,966,876
7,050,715
6,977,131
7,122,647
7,287,748
7,093,800
7,3'13,601
7,565,565
7,212,472
7,509,753
7,853,935
SSL Design Weather - Annual Core Market Distribution Sendout (Dth)
lntermountain Gas Company Optimization
State Street Lateral
Central Ada County
2019 2021GroMh Scenario 2020 2022 2023
Low
Base
High
5,265,382
5,271,666
5,278,722
5,374,278
5,432,231
5,497,403
5,439,666
5,552,883
5,681,410
5,530,627
5,701,794
5,897,994
5,623,132
5,854,714
6,122,796
SSL Normal Weather - Annual Core Market Distribution Sendout (Dth)
Growth Scenario 2019 2020 2021 2022 2023
Low
Base
High
6,746,456
6,753,079
6,758,975
6,868,791
6,929,208
6,982,926
6,955,257
7,073,008
7,178,400
7,073,623
7,251,338
7,411,512
7,193,992
7,434,132
7,652,075
CAC Design Weather - Annual Core Market Distribution Sendout (Dth)
Growth Scenario 2019 2020 2021 2022 2023
Low
Base
High
5,280,688
5,285,795
5,290,343
5,390,970
5,437,905
5,479,616
5,457,339
5,548,906
5,630,846
5,549,527
5,687,765
5,812,362
5,643,238
5,830,103
5,999,681
GAC Normal Weather - Annual Gore Market Distribution Sendout (Dth)
lntegrated Resource Plan 20L9 - 2023 94
lntermountain Gas Company Optimization
Total Company
Projected Capacity Deficits - Design Weather - All Scenarios
Residential, commercial and industrial peak day load growth on lntermountain's system is
forecast over the five-year period to grow at an average annual rate of 7.78% (low growthl,2.O8%
(base casel and 2.80% (high growth), highlighting the need for long-term planning. The next
section illustrates the projected capacity deficits by AOI during the IRP planning horizon.
Idaho Falls Lateral LDC Study
When forecast peak day sendout on the ldaho Falls Lateral is matched against the existing peak
day distribution capacity (88,400), peak day delivery deficit occurs under the base case scenario
during PY23.
2019Growth Scenario 2020 2021 2022 2023
Low
Base
High
46,572,743
46,654,839
46,724,600
47,636,823
48,364,628
48,982,668
48,393,973
49,816,103
51,020,001
49,290,102
51,436,122
53,248,248
50,132,353
53,030,786
55,469,982
TC Design Weather - Annual Core Market Distribution Sendout (Dth)
2019 2021Growth Scenario 2020 2022 2023
Low
Base
High
39,209,059
39,280,756
39,341,707
40,107,255
40,721,672
41,243,397
40,738,558
41,937,376
42,952,207
41,492,753
43,301,002
44,827,883
42,201,795
44,643,466
46,698,192
TC Normal Weather - Annual Core Market Distribution Sendout (Dth)
Growth Scenario 2019 20212020 2022 2023
Low
Base
High
0
0
0
0
0
0
0
0
0
0
I
2901
0
0
148
IFL Design Weather Peak Day Deficit Under Existing Resources (Dth)
lntegrated Resource Plan 2OLg - 2023 95
lntermountain Gas Company Optimization
Sun Valley Lateral LDC Study
When forecasted peak day send out on the Sun Valley Lateral is matched against the existing
peak day distribution capacity (79,878 Dth), peak day delivery deficits occur in PY21-PY23 under
the base case scenario.
Canyon County Area LDC Study
When forecasted peak day send out for the Canyon County Area is matched against the existing
peak day distribution capacity (98,000 Dth), peak day delivery deficits occur in PY22-PY23 under
the base case scenario.
Growth Scenario 2019 202220202021 2023
Low
Base
High
0
0
0
0
0
0
0
221
599
0
631
1,224
0
1,021
1,840
SVL Design Weather Peak Day Deficit Under Existing Resources (Dth)
GroMh Scenario 2019 2020 2021 2022 2023
Low
Base
High
0
0
0
0
0
0
0
0
0
0
1,286
3,120
1,944
5,086
7,567
CCA Design Weather Peak Day Deficit Under Existing Resources (Dth)
lntegrated Resource Plan 20t9 - 2023 96
lntermountain Gas Company Optimization
State Street Lateral LDC Study
When forecasted peak day send out for the State Street Lateral is matched against the existing
peak day distribution capacity (73,000 Dth), a peak day delivery deficit occurs in PY23 under the
base case scenario.
Central Ada County LDC Study
When forecasted peak day send out for the Central Ada County is matched against the existing
peak day distribution capacity (70,000 Dth), peak day delivery deficits occur in PY22-PY23 under
the base case scenario.
Growth Scenario 2019 2023202020212022
Low
Base
High
0
0
0
0
0
0
0
0
0
0
0
555
0
70
3,313
SSL Design Weather Peak Day Deficit Under Existing Resources (Dth)
2019Growth Scenario 2020 2021 2022 2023
Low
Base
High
0
0
0
0
0
0
0
1 ,130
2,638
658
2,931
4,992363
0
0
CAC Design Weather Peak Day Deficit Under Existing Resources (Dth)
lntegrated Resource Plan 2OL9 - 2023 97
lntermountain Gas Company Optimization
Total Company LDC Study
The Total Company perspective differs from the laterals in that it reflects the amount of gas that
can be delivered to lntermountain via the various resources on the interstate system. Hence,
total system deliveries should provide at least the net sum demand - or the total available
distribution capacity where applicable - of all the laterals/AOls on the distribution system. The
following table shows that there are no peak day deficits based on existing resources.
2019 IRP vs.2OL7 IRP Common Year Comparisons
This section compares the Total Company and each AOI during the three common years of the
201-9 and 2017 IRP filings. ln some cases, the distribution transportation capacity is forecast to
be lower in the 20L9 IRP than it was in the 2O!7 lRP. This is the result of differences in, or fine
tuning of, planned capacity upgrades.
Total Company Design Weather/ Base Case Growth Comparison
lntegrated Resource Plan 2OL9 - 2023 98
Growth Scenario 2019 2020 2021 2022 2023
Low
Base
High
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
TC Design Weather Peak Day Surplus (Deficit) (Dth)
Peak Day Sendout
Firm CDI Total
Core
Market
2019 435,879 145,199
2020 450,704 146,407
2021 466,361 146,729
lExisting firm contract demand includes LV-1 and T-4 requirements.
581,078
597,111
613,090
2019 rRP LOAD DEMAND CURVE - TC USAGE DEStcN BASE CASE (Dth)
lntermountain Gas Company Optimization
Peak Day Sendout
Firm CDI Total
Core
Market
2019 415,543 143,335
2020 426,723 145,335
2021 438,049 145,335
lExisting firm contract demand includes LV-1 and T-4 requirements.
558,878
572,058
583,384
2017 rRp LOAD DEMAND CURVE - TC USAGE DESTGN BASE CASE (Dth)
Peak Day Sendout
Firm CDI Total
Core
Market
2019 20,336
2020 23,981
2021 28,312
lExisting firm contract demand includes LV-1 and T-4 requirements.
1,864
1,072
1,394
22,200
25,053
29,706
2019 IRP LOAD DEMAND CURVE - TC USAGE DESIGN BASE CASE
Over/(Und erl 2017 IRP (Dth)
lntegrated Resource Plan 201,9 - 2023 99
Maximum Daily Storage Withdrawals
Nampa LNG
Plymouth LS
Jackson Prairie SGS
Total Storage
Maximum Deliverability (NWP)
Total Peak Day Deliverability
2019 2020 2021
543,162 560,611 542,555
60,000
155,175
30,337
60,000
155,175
30,337
60,000
155,175
30,337
245,512
315,099
245,512
297,043
245,512
297,650
2019 tRP PEAK DAY F|RM DELIVERY CAPABILITY (Dth)
lntermountain Gas Company Optimization
Total Company Peak Day Deliverability Comparison
Maximum Daily Storage Withdrawals:
Nampa LNG
Plymouth LS
Jackson Prairie SGS
Total Storage
Maximum Deliverability (NWP)
Total Peak Day Deliverability
2019 2020 2021
526,857 526,857 526,857
60,000
155,175
30,337
60,000
155,175
30,337
60,000
155,175
30,337
245,512
281,345
245,512
281,345
245,512
281,345
2017 rRP PEAK DAY F|RM DELTVERY CAPABTLITY (Dth)
lntegrated Resource Plan 20L9 - 2023 100
Maximum Daily Storage Withdrawals
Nampa LNG
Plymouth LS
Jackson Prairie SGS
Total Storage
Maximum Deliverability (NWP)
Total Peak Day Deliverability
2019 2020 2021
0
0
0
0
0
0
0
0
0
16,305 33,754 15,698
0
16,305
0
33,754
0
15,698
2019 IRP PEAK DAY FIRM DELTVERY CAPABILITY
Overl(Under) 2017 (Dth)
lntermountain Gas Company
Idaho Falls Lateral Design Weather/Base Case Growth Comparison
Optimization
Peak Day Sendout
Firm CDI Total
Core
Market
Distribution
Transport Capacity
lExisting firm contract demand includes LV-1 and T-4 requirements.
2019
2020
2021
88,400
88,400
88,400
21,011
21,311
21,469
80,697
82,663
84,623
59,686
61,352
63,154
2019 rRp LOAD DEMAND CURVE - IFL USAGE DESIGN BASE CASE (Dth)
lntegrated Resource Plan 2OL9 - 2023 L01
Peak Day Sendout
Firm CDI Total
Distribution
Transport Capacity
Gore
Market
lExisting firm contract demand includes LV-1 and T-4 requirements
2019
2020
2021
19,391
19,391
19,391
79,327
81,210
83,121
59,936
61 ,819
63,730
88,700
88,700
88,700
2017 tRP LOAD DEMAND CURVE - tFL USAGE DEStcN BASE CASE (Dth)
lntermountain Gas Company Optimization
Peak Day Sendout
Firm CDI Total
Distribution
Transport Capacity
Core
Market
lExisting firm contract demand includes LV-1 and T-4 requirements.
2019
2020
2021
(300)
(300)
(soo)
(250)
(467)
(576)
1,370
1,453
1,502
1,620
1,920
2,078
2019 IRP LOAD DEMAND CURVE - IFL USAGE DESIGN BASE CASE
Over/(Und etl 2017 IRP (Dth)
lntegrated Resource Plan 201,9 - 2023 1.0 2
Peak Day Sendout
Firm CDI Total
Distribution
Transport Capacity
Core
Market
lExisting firm contract demand includes LV-1 and T-4 requirements.
2019
2020
2021
19,878
19,878
19,878
17,890
18,287
18,704
'1,335
1,375
1,395
19,225
19,662
20,099
2019 rRP LOAD DEMAND CURVE - SVL USAGE DESTGN BASE CASE (Drh)
lntermountain Gas Company Optimization
Sun Valley Lateral Design Weather/ Base Case Growth Comparison
Peak Day Sendout
Firm CDI Total
Distribution
Transport Capacity
Core
Market
lExisting firm contract demand includes LV-1 and T-4 requirements.
2019
2020
2021
15,656
15,875
16,098
19,950
19,950
19,950
1,335
1,335
1,335
16,991
17,210
17,433
2017 rRP LOAD DEMAND GURVE -SVL USAGE DESTGN BASE CASE (Dth)
lntegrated Resource Plan 2OL9 - 2023 103
Peak Day Sendout
Firm CDl Total
Core
Market
Distribution
Transport Capacity
lExisting firm contract demand includes LV-1 and T-4 requirements.
2019
2020
2021
2,234
2,412
2,606
2,234
2,452
2,666
(72)
(72)
(72)
0
40
60
2019 IRP LOAD DEMAND CURVE -SVL USAGE DESIGN BASE CASE
Over/(Under) 201 7 (Dth)
lntermountain Gas Company Optimization
lntegrated Resource Plan 201,9 - 2023 L04
Peak Day Sendout
Firm CDI Total
Distribution
Transport Capacity
Core
Market
lExisting firm contract demand includes LV-1 and T-4 requirements.
2019
2020
2021
98,000
98,000
98,000
63,269
66,670
70,339
25,395
25,395
25,218
88,664
92,065
95,557
2019 tRP LOAD DEMAND CURVE - CCA USAGE DESTGN BASE CASE (Dth)
lntermountain Gas Company
Canyon County Area Design Weather/ Base Case Growth Comparison
Optimization
Peak Day Sendout
Firm CDI Total
Distribution
Transport Capacity
Core
Market
lExisting firm contract demand includes LV-1 and T-4 requirements
2019
2020
2021
93,000
93,000
93,000
60,921
63,472
65,997
26,320
26,320
26,320
87,241
89,792
92,317
2017 rRp LOAD DEMAND CURVE - CCA USAGE DESTGN BASE CASE (Dth)
lntegrated Resource Plan 2OL9 - 2023 105
Peak Day Sendout
Firm CDI Total
Distribution
Transport Capacity
Core
Market
lExisting firm contract demand includes LV-1 and T-4 requirements.
2019
2020
2021
5,000
5,000
5,000
2,348
3,198
4,342
1,423
2,273
3,240
(e25)
(e25)
(1,102)
2019 IRP LOAD DEMAND CURVE - CCA USAGE DESIGN BASE CASE
Over/(Under) 2017 (Dth)
lntermountain Gas Company Optimization
lntegrated Resource Plan 201,9 - 2023 1.06
Peak Day Sendout
Firm CDI Total
Distribution
Transport Capacity
Core
Market
lExisting firm contract demand includes LV-1 and T-4 requirements.
2019
2020
2021
73,000
73,000
73,000
1,220
1,220
1,220
65,854
67,587
69,366
64,634
66,367
68,1 46
2019 tRP LOAD DEMAND CURVE - SSL USAGE DESTGN BASE CASE (Dth)
lntermountain Gas Company Optimization
State Street Lateral Design Weather/ Base Case Growth Comparison
Peak Day Sendout
Firm CDI Total
Distribution
Transport Capacity
Core
Market
lExisting firm contract demand includes LV-1 and T-4 requirements
2019
2020
2021
67,000
76,500
76,500
62,308
65,613
67,269
2,630
2,630
2,630
64,938
68,243
69,899
2017 rRP LOAD DEMAND CURVE - SSL USAGE DESIGN BASE CASE (Dth)
lntegrated Resource Plan 201,9 - 2A23 L07
Peak Day Sendout
Firm CDl Total
Distribution
Transport Capacity
Core
Market
lExisting firm contract demand includes LV-'l and T-4 requirements.
916
(656)
(533)
2019
2020
2021
2,326
754
877
6,000
(3,500)
(3,500)
(1,410)
(1 ,410)
(1,410)
lntermountain Gas Company Optimization
lntegrated Resource Plan 2Ot9 - 2023 108
2019 IRP LOAD DEMAND CURVE. SSL USAGE DESIGN BASE CASE
Over/(Under) 201 7 (Dth)
Peak Day Sendout
Firm CDl Total
Distribution
Transport Capacity
Core
Market
lExisting firm contract demand includes LV-1 and T-4 requirements.
2019
2020
2021
70,000
70,000
70,000
64,631
66,261
67,932
1,410
1,410
1,448
66,041
67,671
69,380
lntermountain Gas Company Optimization
Central Ada County Design Weather/ Base Case Growth Comparison
Peak Day Sendout
Firm CDI Total
Core
Market
Distribution
Transport Capacity
lExisting firm contract demand includes LV-1 and T-4 requirements.
2019
2020
2021
71,000
71,000
71,000
61,730
62,832
63,980
1,490
1,490
1,490
63,220
64,322
65,470
2017 rRP LOAD DEMAND CURVE - CAC USAGE DESIGN BASE CASE (Dth)
lntegrated Resource Plan 2OL9 - 2023 109
2019 rRp LOAD DEMAND CURVE - CAC USAGE DESTGN BASE CASE (Dth)
Peak Day Sendout
Firm CDI Total
Distribution
Transport Capacity
Core
Market
lExisting firm contract demand includes LV-1 and T-4 requirements.
2017
2018
2019
2,901
3,429
3,952
2,821
3,349
3,910
(1,000)
(1,000)
(1,000)
(80)
(80)
(42)
2019 IRP LOAD DEMAND CURVE. CAC USAGE DESIGN BASE CASE
Over/(Under) 201 7 (Dth)
lntermountain Gas Company Optimization
lntegrated Resource Plan 20Lg - 2023 L10
lntermountain Gas Company Optimization
Resource Optimization
lntroduction
lntermountain's IRP utilizes an optimization model that selects resource amounts over a pre-
determined planning horizon to meet forecasted loads by minimizing the present value of
resource costs. The model evaluates and selects the least cost mix of supply and transportation
resources utilizing a standard mathematical technique called linear programming. Essentially,
the model integrates/coordinates all the individual functional components of the IRP such as
demand, supply, demand side management, transport and supply into a least cost mix of
resources that meet demands over the five-year IRP planning horizon, 2019 to 2023.
This section of the IRP report willfirst describe the functional components of the model, then the
model structure and then its assumptions in general. At the end, model results will be discussed.
Functional Components of the Model
The optimization model has the following functional components:
o Demand Forecast by AOI
o Supply Resources, Storage and Supply, by Area
o Transportation Capacity Resources, Local Laterals and Major Pipelines, Between Areas
o Non-Traditional Resources such as Demand Side Management
Underlying these functional components is a model structure that has gas supply and demand by
area (nodes) with gas transported by major pipelines and local distribution laterals (arcs)
between supply and demand. This model mirrors, in general, how lntermountain's delivery
system contractually and operationally functions. ln 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 and auditable. Since lntermountain's model evaluates gas supply and capacity
additions over a five year period, the model was designed so that only the major elements are
recognized. This is in contrast to a dispatch model which needs to balance every detail precisely
and so requires a level of detail that is fully representative of all daily system requirements. For
this reason, a more simplified structure is utilized in the Company's IRP model.
ModelStructure
ln order to develop a basic understanding of how gas supply flows from the various receipt points
to ultimate delivery to the Company's end-use customers, a graphical representation of IGC is
helpful. Figure 42 is a medium detail map of the IGC system. Generally, gas flows from supply
areas (nodes) such as Canada and the Rockies, and from storage in Washington state and Clay
lntegrated Resource Plan 201,9 - 2023 LLt
lntermountain Gas Company Optimization
Basin in the Rockies region (nodes), across major pipelines (arcs)to southern ldaho. ln southern
ldaho, the gas is transported to demand areas (nodes) by local distribution laterals. The model
utilizes a simplified but generally correct structure of the Figure 42 map.
INTERMOUNTAIN GAS COMPANY
CA].IADIAN GA9
WEISEB
AREA
PAYETTE ANTHONY
PLYMOUTH
EHMETT crY
REXBURG
STAF BNN LXO
CITY SUN VALTEY
ELKHORN
HAILEY IDAHO AMMONBETIEVUE
BASALT
FONT
ABEBDEEN
sHosHo}{E
CONOA
SPFINGS
I
I
GEOBGE
IltoLTP
Figure 42: Natural Gas System Map - Intermountain Gas Company
Figure 43 presents the model of system flows by major pipelines and supply areas. Figure 43
shows four major supply receipt areas including Sumas, Stanfield, AECO and Rockies with
ultimate delivery to lMG, southern ldaho.
ruir
BRUNEAU
ARIMOO
,TA
LEGEND
II{TERIOI,I'TXX G g OO. SEBYEE L TENISa Towu, s€FvEo aY ilTEBrorrr?An oas co.l3 nrrnrounrrr cag co. oFFEEsv
Sc.f!: 25 I0-El
lntegrated Resource Plan 2Ot9 - 2023 LL2
I()..TA|'A
L
'IEI'AI'A
U'AH
r{o wYoitHo
lntermountain Gas Company Optimization
IGC Major Supply & Transport To IMG
1
2
NWP Storage
Arc & Node fs in Black
Clay Basin Storage
Figure 43: IGC Major Supply and Transport to IMG
Supplies from those supply receipt areas(nodes) are then delivered and aggregated at the IMG
pool node where they are allocated to be delivered to the appropriate demand areas (nodes), or
AOls, by local distribution laterals (arcs) as depicted in Figure 44.
3
-
4 r
AECO
2
Sumas
L
Stanfield
3
IMG
5
Rockies
4
lntegrated Resource Plan 2OL9 - 2023 1. 1,3
lntermountain Gas Company Optimization
IGC Laterals from IMG
Node & Arc # in Black
6
5
7)
\8
9
Figure 44: IGC Lateralsfrom IMG
The final demand areas are the following as per Figure 44:
o CentralAda Area
o State Street Lateral
o Canyon County Region
o ldaho Falls Lateral
o Sun Valley Lateral
o All Other
The sum of all six areas is equal to system gas demand. A map of the AOls is included at the end
of the Executive Summary Section.
These map symbols were converted into a mathematical system of reference numbers so that a
system of numbered arcs and nodes reflect physical locations on the map for the model. The
resultant set of numbered arcs and nodes are shown on Table 14.
Canyon zAI!-Other e
IMG s
ldaho
Falls e
Ada rr
State
Street ro
Sun
Valley e
lntegrated Resource Plan 201,9 - 2023 1.14
/
,7
Area/Node From Area/Node To
Name Area #ARC #Name Area #Note
1 Sumas 1 Stanfield 3 Westem Canada Gas
2 AECO 2 Stanfield 3 Albena Gas
3 3 IMG 5 NWP path with NWP StoraseStanfield
4 Rockies 4 IMG 5 Clay Basis & allsouth of IMG
5 5 All-Other 6 IGC Laterals from IMGIMG
6 IMG 5 Canyon 7 IGC Laterals fom IMG
7 IMG 5 ldaho Falls 8 IGC Laterals from IMG
8 IMG 5 Sun Valley I IGC Laterals from IMG
9 IMG 5 IGC Laterals from IMG
10 IMG 5 Ada 11 IGC Laterals from IMG
lntermountain Gas Company Optimization
Table 14: Definition of Arcs & Nodes by Reference Number
Definition of Arcs & Nodes Reference #s
Demand Area Forecasts
As previously discussed in the Load Demand Curves Section beginning on page 90, demands are
forecasted using a unique LDC for each AOl. These LDCs are over a gas supply year for daily gas
usage in MMBTU, nominally 365 days. To simplify the modeling, the LDC was aggregated into 12
homogenous periods with similar load characteristics, and then loads for each of those periods
were averaged. Table 15 defines the periods used. The resultant demand curve represents load
changes over the entire year but with a minimum of data points. Figure 45 depicts an example
LDC aggregated into those homogenous groups. Figure 45 has ordered the demands from high
to low for the full 365 days. Each aggregated level reflects one period modeled in the
optimization model (i.e. the bold horizontal lines). The model recognizes the number of days in
each period and computes the total flow per period.
Table l5: Periodsfor Optimization Modeling
Period
Days in
Period
Cumul.
Days in
Period
1 1 1
2 1 2
3 2 4
4 5 I
5 8 17
6 14 31
7 31 62
8 28 90I61'151
10 61 212
11 61 273
12 92 365
lntegrated Resource Plan 201,9 - 2A23 1"L5
state st 10
Total Company
Design Base 2OL9
MMBTU/day for 355 days
600,000
500,000
400,000
300,000
200,000
100,000
0 Fl sf N O rn l.o Ol N |f) OO -l sf N O cO (O Ol N L @ r'r st N O cO (O O) N lr)rr c! sl |f) (o N or o Fr rn sl tn r\ @ or o N rn st (o N oo o rr N co IJ.} (oFl el rl rl rl rl rl -l N N N N N N N aO Cn Cn fO fO (n
-Daily
Data
-Aggregated
data by period
lntermountain Gas Company Optimization
Figure 45: Total Company Design Base 2019
The model is also programmed to recognize that lntermountain must provide gas supply and
both interstate and distribution transportation for its core market and LV-L customers, but only
firm distribution capacity for T-4 customers. T-3 is interruptible distribution capacity and as such
is not included. Because lntermountain is contractually obligated to provide each day a certain
level of firm transport capacity for its firm transporters, the industrial demand forecast for these
customers is not load-shaped but reflects the aggregate firm industrial CD for each class by
specific node for each period in the LDC.
Scenarios for the load demand curves are by weather and customer growth which are described
elsewhere in this report. The weather scenarios are normal weather and design weather.
Customer growth is separated into low growth, base case and high growth scenarios. This results
in a total of six scenarios. The combination of the design weather and base case scenarios (Design
Base) form the critical planning scenario for the report and will be reported as the main
optimization results. Other scenarios are also available, but all others, except for the combined
scenarios of design weather and high growth, would have sufficient resources as long as the
Design Base does.
lntegrated Resource Plan 2O1,9 - 2023 116
lntermountain Gas Company Optimization
Supply Resources
Resource options for the model are of two types: supply resources and storage contracts, which,
from a modeling standpoint, are utilized in a similar manner. All resources have beginning and
ending years of availability, periods of availability, must take usage, period and annual flow
capability and a peak day capability. Supply resources have price/cost information entered in the
model over all points on the load demand curve for the study period. Additionally, information
relating to storage resources includes injection period, injection rate, fuel losses and other
storage related parameters.
Each resource must be sourced from a specific receipt point or supply area. One advantage of
citygate supplies and certain storage withdrawals is that they do not utilize any of
lntermountain's existing interstate capacity as the resource is either sited within a demand area
node or are bundled with their own specific redelivery capacity. Supply resources from British
Columbia are delivered into the Northwest system at Sumas while Rockies supplies are received
from receipt pools known as North of Green River and South of Green River. Alberta supplies are
delivered to Northwest's Stanfield interconnect utilizing available upstream capacity - the
available quantity at Stanfield is the limiting factor regardless of capacity of any single upstream
pipeline (AECO-Stanfield arc). Each supply resource utilizes transport arc(s) that reach the IMG
node from its supply receipt node.
From a model perspective, the DSM resources are considered a subset of supply resources and
fill demand needs on the applicable node by offsetting other supply resources when the cost of
such is less than other available resources. These DSM resources have costs and resource
capacity that were determined by a separate DSM analysis as detailed in the Core Market Energy
Efficiency Section (starting on page 73).
Transport Resources
Transport resources are explicitly associated with arcs in the model which represent the way
supplies flow from specific receipt areas to lntermountain's ultimate receipt pool identified as
lMG, where all supplies are pooled for ultimate delivery into the Company's various demand
nodes. Transport resources reflect contracts for interstate capacity, primarily on Northwest
Pipeline, but also for the three separate pipelines that deliver gas supplies to Northwest's
Stanfield interconnect from AECO. Because these pipelines operate in a serial fashion and have
nearly identical flow capabilities, for modeling purposes, they are treated as one arc and are
referred to as upstream capacity for gas originating at AECO and ending at Stanfield. There are
also arcs reflecting each of the individual laterals representing the Areas of lnterest. For example,
supply resources to be delivered from Sumas to ldaho Falls, first must use the Sumas to Stanfield
arc, the Stanfield to IMG arc and from there flow from IMG to the ldaho Falls arc. This ensures
that the total supply deliveries cannot exceed total demand including laterals. Supplies such as
the Rexburg LNG are already located on lntermountain's distribution system on a specific
demand lateral and therefore do not require interstate pipeline transportation. The system
representation recognizes Northwest's postage stamp pricing and capacity release.
lntegrated Resource Plan 201,9 - 2A23 L17
lntermountain Gas Company Optimization
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 to them
as well as different years of availability.
ModelOperation
The selection of a least 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 each
of the nodes. The model chooses the mix of resources which 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 can be 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 already under contract. lf a
fixed cost or annual cost is entered for a resource, the model can include that cost for the
resource in the selection process, if directed, which will influence its inclusion vis-i-vis other
available resources. lf certain resources are committed to and the associated fixed cost will be
paid regardless of the level of usage, onlythe variable cost of that resource is considered during
the selection process, but the fixed cost is included in the summary. However, any new
resources, which would be additional to the resource mix, will be evaluated using both fixed and
variable costs. For cost summary purposes, fixed costs were included, whether sunk or included
in the least cost present value optimization, to approximate the expected revenue requirement
for transport and supply.
The model operates in a PC environment. The various inputs are loaded via an Excel spreadsheet
where they are loaded and utilized by PC linear programming software. The model is run by first
launching the optimization software, opening the Excel model containing all the appropriate
scenario of demand, supply, storage and capacity inputs (including all the correct prices) and
calling up the correct constraint model set. The optimization software links the inputs to the
constraint model, optimizes all resources to the period demands. Once the model computes the
least cost resource mix, the results are organized by a set of macros that writes the output back
into the same Excel model which simplifies, and minimizes the time, to audit and evaluate the
model for reasonableness and accuracy.
lntegrated Resource Plan 20t9 - 2023 118
lntermountain Gas Company Optimization
Special Constraints
As stated earlier, the model minimizes cost while satisfying demand and operational constraints
Several constraints specific to lntermountain's system were modeled in the IRP model.
Nampa LNG storage does not require redelivery transport capacity. Both SGS and LS storage
are bundled with firm delivery capacity; transportation utilization of this capacity matches
storage withdrawal from these facilities. SGS, LS and Clay Basin must be injected in the
summer,
a
a
a
o
All core market and LV-L sales loads are completely bundled
T-4 customer transportation requirements utilize only lntermountain's distribution capacity.
The T-4 firm CD is input as a no-cost supply delivered at lMG. T-3 is an interruptible
distribution industrial rate and as such is not included.
o Traditional resources destined for a specific lateral node must be first transported to the IMG
pool and then from IMG to the lateral node.
Model lnputs
The optimization model utilizes these three inputs which do not vary by scenario
o Transport Resources. Supply Resources by Yearo LDC Price Format for Supply Resources by Yearly Periods
These input tables are in Exhibit 7, Model lnput Tables For All Scenarios. The one input table that
does vary is the LDC table, which is the scenario referenced directly in this report. The Design
Weather LDC is in Exhibit 8, Design Weather Load Demand Curve. Snapshots of lnput and Output
Tables where relevant are displayed below with descriptions and without formal numbering so
as not to confuse other labeling.
Each resource, whether supply or transport, is given a resource number, name and an acronym
and appropriate parameters as per Supply Resources by Year input tables in Exhibit 7.Table t4
and Figures 43 & 44 above have a summary of arcs and nodes referenced in these input tables.
For example, in the Supply Resource Year L, resource #1 is Shell Stanfield Winter, ShSta-W, see
Figure 46. The resource is available for periods 1-9, at a max capacity of 10,000 MMBTU/day and
a must use 1,510,000 MMBTU annually. lt is delivered at Stanfield, node 3. Possible utilization
ratescanbesetfromO%toIOO%. Musttakeresourcescanbesetwithutilizationratessetata
lntegrated Resource Plan 2O1,9 - 2O23 119
Non-traditional resources such as mobile LNG that are designed to serve a specific lateral can
only be employed when lateral capacity is otherwise fully utilized.
lntermountain Gas Company Optimization
min/max of !OO% or set an annual rate as ShSta-W was. Period 9 in the example below allows
this period to balance to the annual must take.
Wedrtr O€ign
Growth: BetPriE: Barc
Supply Resource data input sheet by yeari ilinniax Utilzrtion Rate
lntermountain Gas IRP l,lodel
2019-2023 tGC tRP
Yeal Asse
PtriodArcaD.liHGd f
per day/
annual
rmbtuu,
Asmym
12ffi'E bofL,frmT n66(T I 'tu
r.5 fim wBter ms Max 1.0!1.(Il 1.00 't.0!1.Ul 't.0{tuJ 1.U0 1.0
Figure 46: Supply Resource Data Input Sheet
Demand side management resources are labeled by the year they are providing supply across all
programs. For example, DSM20 represents the amount of DSM supplied in 2020. Annual DSM
study amounts were distributed to periods by residential seasonal usage patterns. Note, new
DSM resources start in2O2O.
The model selects the best cost portfolio based on least cost of present value resource costs over
the planning horizon. 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
at Sumas, the model can only take as much as can be transported from that poin| additionally,
it will not take inexpensive spot gas until all constraints related to term gas or storage are
fulfilled). ln orderforthe resultsto provide a reasonable representation of actualoperations, all
existing resources that have committed must-take contracts are assigned as "must run"
resources. The Company's minimal commitment for summer must-take supplies means that
those supplies do not exceed demand. ln the real world, having excess summer supplies results
in selling those volumes into the market at the then prevailing prices whereas the model only
identifies those volumes and related cost. Please note that this level of sales is small relative to
total supply.
Another important assumption relates to the supply fill or balancing options. Supply fill resources
provide intelligence as to where and how much of any deficit in any existing resource exists; the
model treats them as economic commodities, meaning that availability is dynamic up to its
maximum capability. The model can select available fill supply at any node, for any period and
in any volume that it needs to help fill 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
being the highest, and the summer price being the lowest. Additionally, since term pricing is
normally based on the monthly spot index price, no attempt has been made to develop fixed
pricing for fill resources but each such resource includes a reasonable market premium if
applicable.
The storage injection table provides the amount of resources injected into the various storage
facilities for which lntermountain retains direct control. Reflective of real-world cycling
constraints, storage may only be withdrawn in the peak and/or winter periods and injections may
only occur in summer periods.
lntegrated Resource Plan 2079 - 2023 1.2 0
lntermountain Gas Company Optimization
ln the LDC Price input table in Exhibit 7, prices for supply, except DSM, are based on the official
IRP three hub price forecast (AECO, Sumas and Rockies). DSM pricing is based on an avoided cost
study (starting on page 84) that has the hub prices forecast as an input.
All transport resources have specific arc numbers with to and from nodes specified as per the
Transport Resource input table in Exhibit 7. Capability and pricing are included by resource.
Transport resources that are existing pipeline and laterals including transport resources 5
through 8 that are tied to NWP storage resources are labeled as such. Proposed expansions of
these are labeled as such. Transport fill resources represent expensive resources that provide a
gap resource when there are not enough resources available. Three special alternative
resources, 24, 25 and 28 (Canyon, Sun Valley and Ada) represent special resources that were
developed as alternatives to preferred lateral expansions. This is in distinction to supply fill
resources which represent balancing resources that can be acquired quickly.
Model Results
The optimization model results for the design weather, base price and base case scenario for the
years 2019 through 2023 are presented and discussed below. The results of the model are
summarized, for each scenario using the tables described below:
o Lateral Summary All Years
. Supply Summary All Years
o Annual Cost Summary All Years
. Supply Resource Usage Tables (lncludes Flow and Capacity by Year and Period)
o Storage lnjection Usage Tables (lncludes Flow, lnjection and Capacity by Year and
Period)
o Transport Usage Tables (lncludes Both Period and Annual Capacity Used by Year)
Exhibit 9, Design Base Output Tables shows the tables just described for the five periods of the
Design Base case.
Model Output for Design Base Scenario
The following provides a description of the information presented by type of output tables in
Exhibit 9 and the implication for the Design Base scenario.
The Lateral Summary Tables All Years provides a snapshot by year of whether a specific lateral to
an AOI needs an expansion and whether that expansion is a preferred one as opposed to a fill or
an alternative lateral resource. On the next page is the first year of the Lateral Summary Tables
All Years, for the Design Base scenario, Figure 47.
lntegrated Resource Plan 201,9 - 2023 1,2 7
lntermountain Gas Company Optimization
The "Peak Day LDC" column is from the Design Base scenario and represents the load that must
be met by lateral resources. The "Existing Lateral Capacity" column is the current existing
capacity. The "Expansion Lateral Capacity" column represents the preferred planned expansion.
The "Deficit of Existing" column represents the gap between demand and existing resources. lf
this column shows that additional capacity is needed, the model will select from a list of available
enhancements outlined earlier in this report. lf the "Fill/Alt. Lateral Capacity" column is zero,
then there is sufficient planned expansion and existing capacity such that there is no resource
gap. The table for year 1- displays that condition as do all the years for the Design Base scenario
(Exhibit 9) so there is no resource gap. This is accomplished by planned expansions meeting new
load.
Lateral Capacity Summary By Year
2019-2023 lGC IRP / Weather:/ Growth: Base / Price: Base
MMBTU
Figure 47: Lateral Capacity Summary by Year
The Supply Usage Summary, Figure 48, is displayed below for the fifth year of the Design Base
scenario study. All five years are provided in output Exhibit 9. lt provides a general summary by
major area as opposed to individual resources including DSM.
Ye* 5
Lodel Rreult itr ITXBTU llod. DeliYercd Pe.iod
Figure 48: Supply Usage Summary
Year 1 2019
Demand
Node
Peak
Day
LDC
Existing
Lateral
Capacity
Fiil/Alt.
Lateral
Capacity
Expansion
Lateral
Capacity
Existing +
Expansion
Capacity
Deficit
of
Existing
260,597 296,029All-Other 0ol 296,029 0
88,664 98,000Canyon 0ol 98,000 0
80,697 88,400ldaho Falls (W LNG)0ol 88,400 0
Sun Valley 19,225 19,878 00l 19,878 0
State St 65,854 73,000 0ol 73,000 0
Ada 66,041 70,000 0ol 70,000 0
581,078 645,307 0ol 645,307 0
Period Period Peraod Fenod Fenod Penod Penod Period Period Period Period Period
2 3 !7 I 9 r0 12
Supply
Area
0 0Sumas00 c 0 0 t3.u7 2.Ut 0
AECO 112-20{J r r2.200 1't2.200 112.200 112 2C0 112.200 1 r2.200 L 2.200 70.5r7
't85 212Stanfield! 05.5r 2 195.5r 2 .771 77,635 45.771 23,744 28.r r t r7.570 0 0
r 10_l 14 r0r.0g2 95.1 r 6 70.820 110 .r 14 1 10.1 t.l I t0.1 14 t10.tt4 71.551 40.000 4 36.466Rockies
IMG 220_478 217,630 2t7.O30 217.630 165 r 65,686 165.686 't65.6S6 r 65 E86 162.733 630 157.630
6 729 5 lSeAll-Other 7.O27
Canyon
ld.ho Falle
0
0
0-o 0
0
0
0
0
0 0
0
---
0
o
0
o
0
o
0 0 c 0 0
Sl:te St 0 0 0 0 0 0 0 0 0 0 0
Adi 0 0 0 0 o 0 0 0 0 0 0
Totils 6{5.330 633,281 527,t46 59!.05r ca8 4{9 470,Oat 457.EEt 4t5.270 380.3{E 348,093 281 388 265.04E
6{.4t.330 633,281 tt5 270 380.3t8 308,O93 241 {,4:}199.O30u)c
oru
lntegrated Resource Plan 20tg - 2023 L22
lntermountain Gas Company Optimization
The figure on the previous page provides supply by area by LDC period for a specified year. The
LDC demands on the second to last line, LDC is the actual LDC demand by period for the year. The
line above, Totals, is the actual gas supply and will match the LDC demand for periods 1-9. The
supply will exceed the LDC demand for periods IO-LZ representing injections needed for storage,
the over/under line, "O/U" . Sumas is utilized for supply of a portion of this injection gas consistent
with planned operation. DSM will be in the All Other node as indicated above. Small LNG storage,
such as Rexbu rg is treated as a latera I resou rce. For a ll years of the Design Base scena rio, there
are sufficient supply resources with DSM providing a portion of supply at avoided cost.
The Annual Cost Summary All Years table provides supply and transport costs by years that would
very roughly approximate the fixed and variable cost of the revenue requirement. Under the
Design Base scenario, costs are much higher than an actual year, so their level is not itself
meaningful. The present value of these costs is also presented. The model will optimize on the
least cost of the present value of the transport and supply costs designated in the model. The
graph of the supply price hubs forecast is presented since it shows that there was a recent price
spike in 2019 with a decline afterward which flattens out. The supply costs decline accordingly
then rise. Cheaper fixed supply contracts end toward the end of the study period resulting in
higher priced supply. Transport is fairly constant.
Supply Resource Usage output tables and Storage lnjection Usage output tables contain detailed
output data by resource by period by year. The input table discussion above provides a guide to
the organization of the data. The information provided in the discussed Supply Summary output
table provides a much broader overview of the supply situation.
The supply resources in the detailed output tables have the following output parameters
o Utilization Rates by Period by Year
. Capacity Used by Period by Year
o Flow Used by Period by Year
The utilization rate is between 0.0 and 1.0 with 1.0 representing 100% utilization of the capacity
of the resource. This is the easiest output parameter to check for a resource being used properly.
The capacity used per period is simply capacity times the utilization rate. The flow is the volume
as computed by days per period times the capability used.
Supply resources 1-3 represent must-take contracts that have total volumes that meet the
contract amounts as demonstrated by the output related to volumes. The model does some
minor adjustment between periods. Supply resources 4-6 represent balancing resources by
major hub and as demonstrated by the output tables varies as needed to balance the system.
AECO supply resources 7-Ltacl as the must run resources meeting transport constraints in the
output tables. Storage resources 14-L9 have proper summer injection to provide winter peak
resources in the output tables. Resource 13 represents T-4 customers that purchase their own
supply and transport where the model delivers it at IMG for free. Lastly, DSM is utilized as
lntegrated Resource Plan 201,9 - 2023 1,2 3
lntermountain Gas Company Optimization
expected in the output tables. The model chooses DSM as a resource when it is the least cost
option based on its avoided cost.
Transport Usage Tables provide utilization rates and capacity used by transport resource by
period by year. As discussed above, fill and alternative transport resources provide a gap analysis
indication when the system is sized too small. Transport resources 1-9 to 28 represent these fill
and alternative transport resources and none of these resources are utilized for any of the years
for the Design Base scenario output tables. This indicates planned expansions are adequate to
meet Design Base scenario peak needs.
Other Scenarios
Other scenarios with LDC input files and output tables are in Exhibit 10.
Summary
ln summary the optimization model:
o Employs utility standard practice method to optimize the system via linear programming.
o Models DSM and storage.
o Handles storage withdrawal and injection across seasons.
o Provides a gap analysis on the need for lateral expansion not preferred.
r Provides a check on transport and supply capacity.
o Has convenient Excel spreadsheet input/output.
lntegrated Resource Plan 20Lg - 2023 1,2 4
lntermountain Gas Company Optimization
Planning Results
Throughout previous sections of the IRP it has been shown that projected growth throughout
lntermountain's distribution system could possibly create capacity deficits in the future. Through
the use of a gas optimization modeling system that incorporates total customer loads, existing
pipe and system configurations along with current distribution system capacities, each potential
deficit has been defined with respect to timing and magnitude. lf any such deficit occurs, then
an evaluation of system capacity enhancements is performed.
The five identified Areas of lnterest that were analyzed under design conditions are: the State
Street Lateral, Central Ada County, Canyon County, the ldaho Falls Lateral and the Sun Valley
Lateral. Each of these areas are unique in their customer growth and pipeline characteristics,
and the optimization of each requires different enhancement solutions.
After discussing the enhancement solutions for the forecasted capacity deficits, this section will
also compare the peak delivery deficits of the total Company as well as each AOI during the three
common years of the 2019 and 2OL7 IRP filings.
State Street Lateral
The State Street Lateral is a L6-mile stretch of high pressure, large diameter main that begins in
Caldwell and runs east along State Street serving the towns of Star, north Meridian, Eagle and
into northern Boise. The lateral is fed directly from a gate station along with a back feed from
another high-pressure pipeline from the south. Much of the pipeline is closely surrounded by
residential and commercial structures that create a difficult situation for construction and/or
large land acquisition, thus making a compressor station or LNG equipment less favorable. A
complete review of the situation shows it is ideally suited to perform a pipeline retest that will
establish a higher maximum allowable operating pressure and thus allow the Company to
maximize the potential of its existing facilities before investing in new infrastructure. The retest
can be performed in phases over multiple years which will provide increased capacity as actual
growth is experienced, and phasing will minimize the length of pipe that must be taken out of
service at one time.
The State Street retest enhancement is required within this IRP five-year outlook. The first phase
of retesting will be completed in 2019. Phase one of the retest begins at the gate station and
spans a 6.6-mile section downstream, ending near the intersection of State Street and Highway
16. With projected growth on the lateral, the second phase of retesting is required f or the 2022
construction season and is currently planned for a 3-mile section extending east of Highway 16.
Phase two of the State Street retest project will provide capacity beyond the IRP planning
horizon.
The graph below shows no deficit with the proposed capacity under the base case scenario
lntegrated Resource Plan 201,9 - 2023 125
lntermountain Gas Company
2023 Load Demand Curve
Design Base Case
State Street Latenl
Optimization
E
l!
96 dp''l otC !!$l tts $,$ rpt ,$t lr$ tJ,l tsrJf" gtf
Central Ada County
Central Ada County is the newest AOI that consists of high pressure, intermediate pressure and
distribution pressure systems in an area of Ada County that has historically experienced high
levels of growth and development. The system currently has high pressure supplied from
Chinden Boulevard on the north side of the defined area and high pressure supplied from Victory
Road on the south side of the defined area. lnitially the continued growth demands between
these two separate systems taxed the Chinden high pressure pipeline and the branch lines
supplied from Chinden. ln 2016 an eight-inch pipeline was installed on Cloverdale Road that
connected the Victory system to a branch of the Chinden system which alleviated the excess
demand supplied from the Chinden pipeline. The connection between the two systems is an
initial step in the long-term plan, and while the project successfully increased capacity in the area,
the two systems are operating at different pressures and are currently disconnected through
system valving.
With continued updates and monitoring of the Central Ada County AOI since the 2016
enhancement, continued growth has initiated the next planning step within the five-year
outlook. Similar to State Street, the existing, large diameter pipeline on Victory Road has the
potential for a pipeline retest that will increase its operating pressure and resulting flow capacity.
This increase in operating pressure is designed to match the Chinden and Cloverdale operating
pressure, and the retest is an initial step to create a consistent, connected system between the
Pcak Dry 73,070 Dth'r
lntegrated Resource Plan 20L9 - 2023 L26
lntermountain Gas Company Optimization
pipelines. Phase one of the retest is currently scheduled for completion in 2021,. The retest
begins at the Meridian gate station and extends approximately 2.5 miles.
The graph below shows no deficit with the proposed capacity under the base case scenario
80 m0
2023 Load Demand Curve
Design Base Case
Central Ada Area
70,@0
60,m0
50,m0
o 40,m0
30,000
20,m0
10,m0
od tro{ oiC rl$ t99 {,ts$ f9$ {,h{ tt\t }.)l l$6 stt
-Total
Ustribution
-Fim
lndustdal 1,530
-CAda
Capacity 78,000
-CAda
Capacity (old) 70pm
Canyon County
The Canyon County AOI consists of an interconnected system of high-pressure pipelines that
serve communities from Star Road west to Highway 95. The system, originally serving Nampa
and Caldwell, has continually extended west to additional towns and industrial customers. ln
20L3, the Canyon County system was connected to, and back-fed from, a new pipeline installed
to the town of Parma. This Parma Lateral six-inch pipeline project provides a secondary feed to
the Canyon County area. The next large system enhancement occurred in 2018 with the twelve-
inch Ustick Caldwell pipeline project installed on the east side of Caldwell, which was required to
remove pipeline flow restrictions through a bottleneck area.
For the outlook of this lRP, there are three enhancement projects required to meet projected
growth demands throughout Canyon County. First is the 5-inch Orchard Avenue Extension
project, which is planned for completion in 2020 and extends 4.5 miles into a significant growth
area that is not currently supported by a nearby high-pressure pipeline. The Orchard Avenue
Extension is location specific and not a direct benefit to the entire Canyon County AOl. Next is
the second phase of the 12-inch Ustick Caldwell enhancement, extending the existing 2018
Peak Day 72,931 Dth's
lntegrated Resource Plan 20t9 - 2023 L27
lntermountain Gas Company Optimization
pipeline an additional 2 miles to the east. The 12-inch Ustick Caldwell project has a planned
completion date of 2O2Iand is a benefitforthe entire high-pressure system in Canyon County,
continuing to eliminate bottlenecks in the overall system. Last is the 8-inch Happy Valley
enhancement which extends high pressure pipeline 2 miles further into south Nampa. The 8-
inch Happy Valley enhancement is currently planned for construction in 2022. This project is,
again, designed as a location specific enhancement to accommodate specific growth and not
directly related to the overall Canyon County AOI capacity.
The graph below shows no deficit with the proposed capacity under the base case scenario
2023 Load Demand Curve
Design Base Case
Canyon County Area120,Om
110 0@
1@0@
90,mo
80,mo
70,mo
c6 so,oo
50,60
40,mo
30,mo
2o,mo
10,mo
Poak Day 103,086 [),th's
oc1 $o'l otC rf$ tt$ {.ts$
-Total
Distribution
-Fim
hdustrial 25,268
}'?$ 6il( l$$ \$! l$6 s99
-CC
Capacity 106,,0m
-CC
Capacity {otd) 98,m0
ldaho Falls Lateral
The ldaho Falls Lateral began as a 52-mile, ten-inch pipeline that originated just south of Pocatello
and ended at the city of ldaho Falls. The IFL was later expanded farther to the north extending
an additional 52 miles with S-inch pipe to serve the growing towns of Rigby, Lewisville, Rexburg,
Sugar City and Saint Anthony. As demand has continually increased along the lFL, lntermountain
has been completing capacity enhancements for the past 25 years; including, compression (now
retired), a satellite LNG facility, 40 miles of L2-inch pipeline loop, and 34.5 miles of 16-inch
pipeline loop.
ln 2OL2,lntermountain completed the addition of Phase V, a project that extended 15.5 miles of
1.6-inch high pressure pipeline to the north of ldaho Falls and increased the year-round capacity
lntegrated Resource Plan 20t9 - 2023 L28
lntermountain Gas Company Optimization
available on the lateral. With the addition of Phase V, and, utilizing the peak shaving benefits of
the Rexburg LNG Facility, lntermountain has the capacity to serve the IFL for the next five years.
lncluded as an IFL capacity enhancement within this IRP period is the addition of a second LNG
storage tank at the Rexburg LNG Facility in 2022. The second tank will increase total available
storage at the facility, which is desired as potential vaporization flow requirements increase out
of the facility.
The graph below shows no deficit with the proposed capacity under the base case scenario.
2023 Load Demand Curve
Design Base Case
ldaho Falls Latenl
1m,000
Peak Day 88,409 thh's
Eo
8qmo
5q@0
40 m0
2gmo
od .ro{ o(c tl$ t99 {rls ts9t 6d( }$$ \\J! r$6 s99
-Total
Ustribution
-Fimtndustrial
21,681
-tFLPeakCapacitywhhLNG940m -tFtCapacity(old)8&400
Sun Valley Lateral
The Sun Valley Lateral is a 68-mile long, 8-inch high pressure pipeline that has almost its entire
demand at the far end of the lateral away from the source of gas. Obtaining land in close
proximity to this customer load center is either expensive or simply unobtainable. ln addition,
long sections of the pipeline are installed in rock that impose construction obstacles. Throughout
the years lntermountain has uprated and upgraded this existing lateral, and most recently
installed the Jerome Compressor Station towards the south end of the lateral in order to maintain
capacity and increase flow toward the north end of the system. With continued demand growth,
a second compressor station has been selected for enhancement of the SVL further downstream
from the existing ierome Compressor. This second station is scheduled for completion in 2027
and will increase capacity beyond the remaining five-year growth outlook of this lRP.
lntegrated Resource Plan 20L9 - 2023 1.2 9
lntermountain Gas Company Optimization
The graph below shows no deficit with the proposed capacity underthe base case scenario.
2023 Load Demand Curve
Design Base Case
Sun Valley Lateral
25,m0
20,m0
15,000
so
lgooo
5,000
oc1 $o"l Otc rl$ ttg ilrFB l9$ tt'Fl \$$ \$l t$6 st9
-Total
trstribution
-Fim
lndustrial 1,380
-SVLCapacity22,0m -SLVCapacily(old)
19,878
2019 IRP vs.2OL7 IRP Common Year Comparisons
This section compares any firm delivery deficits for Total Company and each AOI during the three
common years of the 2019 and 2017 IRP filings.
Total Company Peak Delivery Deficit Comparison
Peak Dth's
Peak Day Deficit
TotalWinter Deficitl
Days Requiring Additional Resources
lEqual to the total winter sendout in excess of interstate capacity less total "peaking" storage. Peaking storage does not
require the use of lntermountain's traditional interstate capacity to deliver inventory to the citygate.
2019
0
0
0
0
0
0
0
0
0
2020 2021
2019 lRp FIRM DELTVERY DEFIC|T - TC DESIGN BASE CASE (Dth)
lntegrated Resource Plan 20Lg - 2023 1_30
lntermountain Gas Company Optimization
Idaho Falls Lateral Peak Delivery Deficit Comparison
Peak Day Deficit
TotalWinter Deficitl
Days Requiring Additional Resources
lEqual to the total winter sendout in excess of interstate capacity less total "peaking" storage. Peaking storage does not
require the use of lntermountain's traditional interstate capacity to deliver inventory to the citygate.
20212019
0
0
0
0
0
0
0
0
0
2020
2017 rRP FIRM DELIVERY DEFICTT - TC DESTGN BASE CASE (Dth)
Peak Day Deficit
TotalWinter Deficitl
Days Requiring Additional Resources
lEqual to the total winter sendout in excess of interstate capacity less total "peaking" storage. Peaking storage does not
require the use of lntermountain's traditional interstate capacity to deliver inventory to the citygate.
2019 2020
0
0
0
0
0
0
0
0
0
2021
2019IRP FIRM DELIVERY DEFICIT - TC DESIGN BASE CASE
Over/(Und erl 2017 (Dth)
Peak Day Deficit
TotalWinter Deficitl
Days Requiring Additional Resources
lEqual to the total winter sendout in excess of distribution capacity
2019 2021
0
0
0
0
0
0
2020
0
-0
0
2019 rRp FrRM DELTVERY DEFTGTT - rFL DESTGN BASE CASE (Dth)
lntegrated Resource Plan 2OL9 - 2023 131
Peak Day Deficit
TotalWinter Deficitl
Days Requiring Additional Resources
lEqual to the total winter sendout in excess of distribution capacity
2019 2020
0
0
0
0
0
0
0
0
0
2021
2017 rRp F|RM DELIVERY DEFTCTT - tFL DESTGN BASE GASE (Dth)
lntermountain Gas Company Optimization
Sun Valley LateralDelivery Delicit Comparison
Peak Day Deficit
TotalWinter Deficitl
Days Requiring Additional Resources
lEqual to the total winter sendout in excess of distribution capacity
2019 2021
0
0
0
0
0
0
0
0
0
2020
2019 lRP FIRM DELIVERY DEFIGIT - IFL DESIGN BASE CASE
Over/(Und erl 2017 (Dth)
Peak Day Deficit
TotalWinter Deficitl
Days Requiring Additional Resources
lEqual to the total winter sendout in excess of distribution capacity
2019
0
0
0
0
0
0
0
0
0
2020 2021
2019 rRp F|RM DELTVERY DEFTCTT - SVL DESTGN BASE CASE (Dth)
lntegrated Resource Plan 201,9 - 2023 132
Peak Day Deficit
TotalWinter Deficitl
Days Requiring Additional Resources
lEqual to the total winter sendout in excess of distribution capacity
20212019
0
0
0
0
0
0
0
0
0
2020
2017 rRP F|RM DELTVERY DEFTCTT - SVL DESTGN BASE CASE (Dth)
lntermountain Gas Company Optimization
Canyon County Area Delivery Deficit Comparison
Peak Day Deficit
TotalWinter Deficitl
Days Requiring Additional Resources
20'19
0
0
0
0
0
0
0
0
0
lEqual to the total winter sendout in excess of distribution capacity
2020 2021
2019IRP FIRM DELIVERY DEFICIT - SVL DESIGN BASE CASE
Over/(Und etl 2017 (Dth)
Peak Day Deficit
TotalWinter Deficitl
Days Requiring Additional Resources
lEqual to the total winter sendout in excess of distribution capacity
20212019
0
0
0
0
0
0
0
0
0
2020
2019 tRP FIRM DELIVERY DEFICIT - CCA DESTGN BASE CASE (Dth)
lntegrated Resource Plan 2OL9 - 2023 133
Peak Day Deficit
TotalWinter Deficitl
Days Requiring Additional Resources
lEqual to the total winter sendout in excess of distribution capacity
2019 2021
0
0
0
0
0
0
0
0
0
2020
2017 tRp FIRM DELTVERY DEFTCTT - CCA DESIGN BASE CASE (Dth)
lntermountain Gas Company Optimization
State Street Lateral Firm Delivery Deficit Comparison
Peak Day Deficit
TotalWinter Deficitl
Days Requiring Additional Resources
lEqual to the total winter sendout in excess of distribution capacity
2019 2021
0
0
0
0
0
0
0
0
0
2020
2019IRP FIRM DELIVERY DEFICIT - CCA DESIGN BASE CASE
Over/(Und etl 2017 (Dth)
Peak Day Deficit
TotalWinter Deficitl
Days Requiring Additional Resources
lEqual to the total winter sendout in excess of distribution capacity
2019 2021
0
0
0
0
0
0
0
0
0
2020
2019 rRP FIRM DELTVERY DEFTCTT - SSL DESIGN BASE CASE (Dth)
lntegrated Resource Plan 20t9 - 2023 1.3 4
Peak Day Deficit
TotalWinter Deficitl
Days Requiring Additional Resources
lEqual to the total winter sendoul in excess of distribution capacity
2019
0
0
0
0
0
0
0
0
0
2020 2021
2017 IRP FIRM DELIVERY DEFICTT - SSL DESIGN BASE CASE (Dth)
lntermountain Gas Company
Central Ada County Firm Delivery Deficit Comparison
Peak Day Deficit
TotalWinter Deficitl
Days Requiring Additional Resources
lEqual to the total winter sendout in excess of distribution capacity
2019 2021
0
0
0
0
0
0
0
0
0
2020
2019IRP FIRM DELIVERY DEFICIT - SSL DESIGN BASE CASE
Over/(Und erl 2017 (Dth)
Peak Day Deficit
TotalWinter Deficitl
Days Requiring Additional Resources
lEqual to the total winter sendout in excess of distribution capacity
2019
0
0
0
0
0
0
0
0
0
2020 2021
2019 tRP FIRM DELIVERY DEFICIT - CAG DESTGN BASE CASE (Dth)
lntegrated Resource Plan 201,9 - 2023 13s
Optimization
Peak Day Deficit
TotalWinter Deficitl
Days Requiring Additional Resources
20'19 2021
0
0
0
0
0
0
0
0
0
lEqual to the total winter sendout in excess of distribution capacity
2020
2017 tRP F|RM DELTVERY DEFIGTT - CAC DESTGN BASE CASE (Dth)
lntermountain Gas Company Optimization
Peak Day Deficit
Total Winter Deficitl
Days Requiring Additional Resources
2019 2021
0
0
0
0
0
0
0
0
0
lEqual to the total winter sendout in excess of distribution capacity
2020
2019IRP FIRM DELIVERY DEFICIT - CAC DESIGN BASE CASE
Over/(Under) 201 7 (Dth)
lntegrated Resource Plan 20L9 - 2023 1,3 6
lntermountain Gas Company Non-Utility LNG Forecast
Non-Ut ility LNG Forecost
lntroduction
Since 1974, lntermountain has operated its Nampa Liquid Natural Gas (LNG) facility as a winter
peaking supply source. The plant is designed to liquefy natural gas into LNG, store it in an onsite
tank and vaporize it for injection into the Company's distribution system. The plant design
includes a 50,000 gallon per day liquefaction train, a seven million-gallon storage tank and two
water-bath vaporization units. The Nampa facility is utilized as the top of the Company's supply
stack, or in other words, the last supply source that is used in the event of very cold weather or
extraordina ry system constra ints.
ln2OL2lntermountain began an efficiency reviewthatfocused on how it might better utilize its
Nampa asset. Utilizing the then current IRP forecast, lntermountain determined how many
gallons were projected to be withdrawn each winter season. That analysis showed that even
under design weather assumptions, an excess of LNG supply would likely be available in each
winter season.
Concurrent with the efficiency study, lntermountain began a study to determine the status of the
regional LNG supply market relative to providing LNG to the Company's remote LNG facility near
Rexburg, ldaho. lntermountain contacted several producing and marketing entities in the area
who were then engaged in the non-utility LNG business to gauge future supply as well as the
potential to enter the market as a supplier of LNG. lt was discovered that due to already existing
firm commitment during the heating season, it would be difficult to guarantee that an LNG supply
would be available to lntermountain's Rexburg facility during the peak winter months.
History
LNG is a clean burning fuel that has the advantages of easy storage and transport under the right
conditions. The two biggest markets for regional LNG are trucking fleets and remote-site heat
and/or power applications. Though in relative infancy in the United States - particularly in the
Pacific Northwest - LNG from a global perspective has a longer track record and continues to be
in high demand in energy import areas like Asia.
As a direct result of the LNG supply study, lntermountain received an emergency supply request
in late January 2013 to supply LNG to a small LNG-based distribution utility located in
southwestern Wyoming that temporarily had lost its supply of LNG. The ldaho Public Utilities
Commission (Commission) immediately granted emergency authority for lntermountain to
supply the needed LNG pursuant to Case No. INT-G-13-01. Based on the efficiency review, the
market study and the experience gained from supplying the emergency LNG, the Company filed
Case No. INT-G-13-02 to request on-going authority from the Commission to sell "excess" LNG to
non-uti I ity customers.
lntegrated Resource Plan 201,9 - 2023 1.3 7
2019 2020Gallons 2021 2022 2023
Projected Withdrawa! (High Growth)
Maximum Day Withdrawal
Annual Boil-off
Permanent lnventory
Nampa & Rexburg Requirements
Net Utility Requirement
Available for Non-utility Sales
0
0
1,200,000
500,000
300,000
2,000,000
5,000,000
0
0
1,200,000
500,000
300,000
2,000,000
5,000,000
21,417
17,216
1,200,000
500,000
300,000
2,021,417
4,978,583
101,928
40,498
1,200,000
500,000
300,000
2,101,928
4,898,072
195,055
64,534
1,200,000
500,000
300,000
2,'195,055
4,804,945
Nampa LNG lnventory Available for Non-Utility Sales
lntermountain Gas Company Non-Utility LNG Forecast
Method of Forecasting
lntermountain utilized the results of the supply study (see Load Demand Curves starting on page
90) in this IRP to determine how much Nampa LNG would be needed forthe core market during
each year under the design weather/high growth scenario. To determine the annual amount of
"excess" LNG, lntermountain adds to that annual core market withdrawal volume 1.2 million
gallons of annual boiloff gas (which naturally occurs with the warming of LNG), 300,000 gallons
to maintain operational and training requirements at the Nampa and Rexburg LNG facilities, and
500,000 gallons of "permanent" inventory to ensure that all LNG does not boiloff. After summing
those potential needs for each year, the remaining capacity is assumed to be available for non-
utility LNG sales customers. The table below shows the annual amount of Nampa LNG assumed
to be available for non-utility sales over the lRP. For planning purposes, lntermountain will not
allow the tank inventory level to drop below the Net Utility Requirements shown below at any
time during December - February of any year since this is the peak demand season for the
Company's distribution system. Further, should the need arise, all volumes are always available
to serve the core market. lt should be noted that the amount shown as "Available for Non-utility
Sales" is a point-in-time figure.
Table l6: Nampa LNG Inventory Availablefor Non-Utility Sales
Benefits to Customers
lntermountain's customers benefit from lntermountain's LNG sales activities in several different
ways. First, lntermountain continues to defer 2.5C per gallon sold into a capital account and
utilizes that balance as it identifies capital costs that were accelerated due to increased use of
the Nampa LNG facility. That procedure directly reduces both rate base and depreciation
expense. lntermountain also continues to pass back to customers in its annual Purchased Gas
Adjustment filing (PCA) a credit of 2.5C per gallon sold as an offset to increased operating and
maintenance costs as a result of non-utility sales. Finally, lntermountain's customers also benefit
lntegrated Resource Plan 2019 - 2023 138
lntermountain Gas Company Non-Utility LNG Forecast
from the current 50/50 margin sharing mechanism which offsets gas purchase costs in the
Company's annual PGA.
Since April 2OT3,lntermountain has sold nearly 20 million gallons of non-utility LNG. These sales
have provided nearly 5500,000 to offset increased capital costs. Additionally, the Company has
passed back through its PGA approximately 5500,000 to offset increased O&M costs as well as
over S2.5 million from the margin sharing mechanism. The PGA passback has reduced
lntermountain's gas costs every year since October 2073.
Another benefit comes from the fact that the Company has been selling much of its LNG to
markets which utilize it in ldaho. Much of the market relates to trucks that formerly burned diesel
as a fuel. LNG sales have increased economic growth in the state and have also provided cleaner
air benefits. The markets lntermountain sells LNG to have expressed appreciation for a local,
reliable, competitively priced fuel. ln fact, they have gone so far as to suggest that if the Nampa
facility was no longer able to supply non-utility LNG, it would leave a hole in the fuel market that
would be difficult, if not impossible, to fill. Further, many of the truck drivers have expressed a
preference to load at Nampa as the design and operations allow for more convenient and quicker
trailer fills.
On-Going Challenges
Since one of the biggest potential target markets for lntermountain is "big rig" diesel fuel
replacement, the relatively low retail diesel prices over the past several years has stunted the
growth in the LNG trucking market. Low diesel prices tighten the cost differential between diesel
and LNG and consequently the Company has had little ability to increase sales prices.
A further challenge has been the lack of available large displacement LNG engines. Because of
the frequency and magnitude of roadway inclines, the mountain west trucking industry prefers
to rely on l5-liter engines. However, manufacturers do not produce a 15-liter LNG engine,
resulting in a challenge to utilize natural gas-powered engines to haul the heaviest loads. Thus,
lower diesel prices combined with the lack of a L5-liter, LNG-powered engine has hampered
growth in LNG sales demand. These challenges have limited revenue growth in lntermountain's
non-utility LNG sales.
The good news is that continuing efforts to work with existing LNG markets while also marketing
to new entities has resulted in lntermountain growing its sales every year since 2013. Further,
lntermountain continues to improve its management of LNG inventory cost which has helped to
support average sales margins.
Safeguards
As described above, lntermountain takes steps to ensure that it maintains enough LNG in the
tank to provide for all projected customer withdrawal needs. This insulates the core market from
lntegrated Resource Plan 20L9 - 2023 139
lntermountain Gas Company Non-Utility LNG Forecast
the risk of having no LNG should the need for needle peak withdrawals arise. lntermountain has
also committed to the Commission that all volumes in the tank, regardless of the intended
market, would always be available to serve the core market should the need arise. Additionally,
while the Company shares LNG margins with its customers through the PGA, it also insulates its
end-use customers from any risk of loss due to non-utility sales.
Future
lntermountain continues to see growth in non-utility LNG sales and may even reach a point where
annual liquefaction levels are maximized. As the market continues to look for ways to satisfy ever
more stringent emissions standards, it is believed that LNG will generate more interest. Looking
to the future, most forecasts predict a continuation of low oil and natural gas prices leading the
Company to expect somewhat flat sales margins but steady growth in LNG sales.
One advantage the Company has is the ability to store large amounts of LNG which would last for
an extended period of time for vaporization purposes. Because of its storage capability, some
markets look to Nampa as a backstop supplier when other facilities might experience outages or
planned downtime. Should the non-utility sales market continue to show strong growth, the
Company would likely not need more storage capacity, but could address the need for more day-
to-day sales volumes by adding to or upgrading its liquefaction train in order to increase the daily
production of LNG.
The biggest disadvantage of the Nampa plant relates to the cost of liquefaction. Stand-alone
commercial LNG production facilities do not need large storage tanks, vaporizers or other
equipment designed to support peak shaving withdrawals and can therefore operate at a lower
cost. ln addition, newer facilities utilize more recent technology that can simply liquefy more
efficiently than older facilities. A potential risk to lntermountain's LNG sales would be the
construction of new commercial LNG facilities in the region that would have lower operating
costs which could result in the loss of customers currently served by the Nampa facility or lower
sales margins.
Recommendation
Challenges relating to growth in sales volumes and a market facing flat margins growth remain.
A longer-term increase in diesel prices would provide more opportunity to grow both non-utility
LNG sales and margins. lntermountain's Nampa LNG facility is located in an area without direct
competitors and the Company continues to build brand loyalty. Based on the benefits to
lntermountain and its utility customers, the lack of risk to its customers and the ability to make
more efficient use of the Nampa LNG assets, lntermountain recommends that the Commission
continue to allow lntermountain to sell excess LNG to non-utility customers.
lntegrated Resource Plan 2Ot9 - 2023 t40
lntermountain Gas Company I nfrastructure Replacement
I nfrostru ctu re Reploce m e nt
lntermountain Gas Company is committed to providing safe and reliable natural gas service to its
customers. As part of this commitment, lntermountain proactively monitors its pipeline system
utilizing risk management tools and engineering analysis. Additionally, the Company adheres to
federal, state and local requirements to replace or improve pipelines and infrastructure as
required. lnfrastructure that is identified as a potential risk is reviewed and prioritized for
replacement or risk mitigation.
As part of the IRP process, lntermountain will address two significant infrastructure replacement
projects scheduled to occur within the IRP outlook. These replacement projects are not growth
driven.
Rexburg Snake River Crossing
The Rexburg Snake River crossing is an eight-inch steel transmission pipeline installed under the
Snake River southwest of Rexburg, lD which has been identified as an infrastructure replacement
project, tentatively scheduled for planning year 2021.. The pipeline was identified for
replacement due to risks related to the Snake River and surrounding flood plain. The location of
the pipeline under the Snake River and perpendicular to the river along its east bank leave the
pipeline susceptible to loss of adequate cover should the river's rate of flow increase to the point
of spilling over the existing bank and/or scouring the existing river bottom.
The Rexburg Snake River crossing has been monitored and has required occasional attention.
The riverbank has been rebuilt and reinforced by lntermountain to prevent undermining of the
bank and reduce the potential to flood, and the Company has installed engineered scour
protection measures over the top of the pipeline to prevent cover loss within the river. These
efforts have been successful to date; although, due to the ongoing monitor and mitigation
efforts, along with the ever-present risks associated with this scenario, the Company plans to
replace the existing pipeline.
lntermountain's selected replacement method for this existing river crossing is to utilize
horizontal directional drilling technology to install a new pipeline much further below the river
bottom and surrounding flood area. Horizontal directional drilling will allow the pipeline to be
installed much deeper in the ground than conventional installation practices and will avoid any
disturbance to the Snake River and the sensitive land surrounding the river. The significant
increase in pipeline depth will mitigate the existing risk.
Aldyl-A Pipe Replacement
lntermountain has created an lntegrity Management Program to proactively identify, analyze and
monitor any risk related to the pipeline system, and to create programs that will reduce or
remove those risks. ln order to identify risks on the system, the Company utilizes a risk model to
manage and assess the risk of infrastructure based on age, material, operating pressure and
lntegrated Resource Plan 2A19 - 2023 1.4 L
lntermountain Gas Company I nfrastructure Replacement
damage history, as well as other considerations. The model is then used to prioritize mitigation
efforts, and infrastructure replacement projects are created as a result. Aldyl-A pipe replacement
was identified as a priority from the risk model and has become a substantial, ongoing project.
Aldyl-A is a polyethylene material created by DuPont and used in the manufacturing of pipe and
fittings. Aldyl-A pipe manufactured prior to 1984 is now known in the gas industry as being
susceptible to loss of flexibility which can allow cracking under certain circumstances. Since 20L3,
lntermountain has actively replaced Aldyl-A plastic pipe within the distribution system and
continues to replace approximately five miles of pipeline each year; prioritized by risk metrics
that are renewed annually. The Aldyl-A replacement plan will continue through the duration of
the lRP.
lntegrated Resource Plan 201,9 - 2023 142
lntermountain Gas Company Glossary
Glossory
Agent (Marketer)
A legal representative of buyers, sellers or shippers of natural gas in negotiation or operations of
contractua I agreements.
All Other Customers Segment (All Other)
All other segments of the Company's distribution system serving core market customers in Ada
County not included in the State Street Lateral or Central Ada County, as well as customers in
Bannock, Bear Lake, Caribou, Cassia, Elmore, Gem, Gooding, Jerome, Minidoka, Owyhee,
Payette, Power, Twin Falls, and Washington counties; an Area of lnterest for lntermountain.
Area of lnterest (AOl)
Distinct segments within lntermountain's current distribution system
British Thermal Unit (BTU)
The amount of heat that is necessary to raise the temperature of one pound of water by 1 degree
Fahrenheit
Bundled Service
Gas sales service and transportation service packaged together in a single transaction in which
the utility, on behalf of the customer, buys gas from producers and then transports and delivers
it to the customer.
Canyon County Area (CCA)
A distinct segment of lntermountain's distribution system which serves core market customers
in Canyon County; an Area of lnterest for lntermountain.
Central Ada County (CAC)
Multiple high-pressure pipeline systems which serve core market customers in Ada County
between Chinden Boulevard and Victory Road, north to south, and between Maple Grove Road
and Black Cat Road, east to wesU an Area of lnterest for lntermountain.
Citygate
The points of delivery between the interstate pipelines providing service to the utility or the
location(s) at which custody of gas passes from the pipeline to the utility.
Commercial
A customer that is neither a residential nor a contract/large volume customer whose
requirements for natural gas service do not exceed 2,OOO therms per day. These customers are
typically commercial businesses or small manufacturing facilities.
lntegrated Resource Plan 20L9 - 2023 143
lntermountain Gas Company Glossary
Contract Demand (CD)
The maximum peak day amount of distribution capacity that lntermountain guarantees to
reserve for a firm customer each day. The amount is specified in the customer contract. Also see
MDFQ.
Core Market
All residentialand commercial customers of lntermountain Gas Company. lncludes all customers
receiving service under the RS and GS tariffs.
Customer Management Module (CMM)
A software product, provided by DNV GL as part of their Synergi Gas product line, to analyze
natural gas usage data and predict usage patterns on an individual customer level.
Delivery (Receipt Point)
Designated points where natural gas is transferred from one party to another. Receipt points are
those locations where a local distribution company delivers, and an interstate pipeline receives,
gas supplies for re-delivery to the local distribution company's city gates.
Design Year
An estimate of the highest level of annual customer demand that may occur, incorporating
extreme cold or peak weather events; a measure used for planning capacity requirements.
Design Weather
Heating degree days that represent the coldest temperatures that may occur in the IGC service
territory.
Direct Use
The use of natural gas atthe point offinal heating energy use, such as natural gas space heating,
water heating, cooking, and other heating uses, as opposed to burning natural gas in a power
plant to generate electricity to be used at the point(s) of use to for site space heat, water heat,
cooking heat and other heat applications. Direct use is a much more efficient use of natural gas.
Demand Side Management (DSM)
Programs implemented by the Company and utilized by its customers to influence the amount
and timing of natural gas consumption.
Electronic Bulletin Board (EBB)
A generic name for the system of electronic posting of pipeline transmission information as
mandated by FERC.
lntegrated Resource Plan 201,9 - 2023 144
lntermountain Gas Company Glossary
FERC - Federal Energy Regulatory Commission
The federal agency that regulates interstate gas pipelines and interstate gas sales under the
Natural Gas Act. Successor to the Federal Power Commission, the FERC is considered an
independent regulatory agency responsible primarily to Congress, but it is housed in the
Department of Energy.
Firm Customer
A customer receiving service under rate schedules or contracts designed to provide the
customer's gas supply and distribution needs on a continuous basis, even on a peak day.
Firm Service
A service offered to customers under schedules or contracts which anticipate no interruptions.
Fixed Physical
A fixed forward (also known as a fixed price physical contract) is an agreement between two
parties to buy or sell a specified amount of natural gas at a certain future time, at a specific price,
which is agreed upon at the time the deal is executed. lt operates much like the price swap
without the margin call risk.
Formation
A formation refers to either a certain layer of the earth's crust, or a certain area of a layer. lt often
refers to the area of rock where a petroleum or other hydrocarbon reservoir is located. Other
related terms are basin or play.
Gas Transmission Northwest (GTN)
A U.S. pipeline which begins at the U.S.-Canadian border near Kingsgate, British Columbia and
interconnects with Williams Northwest Pipeline at the Stanfield receipt point in Oregon.
Heating Degree Day (HDD)
An industry-wide standard, measuring how cold the weather is based on the extent to which the
daily mean temperature falls below a reference temperature base, which for lGC, is 55 degrees
Fahrenheit.
Horizontal Directional Drilling
Heralded as causing the greatest change in the industry since the invention of the rotary bit,
horizontal drilling utilizes special equipment that allows well drillers to extend horizontal shafts
from one vertical shaft into areas that could not otherwise be reached. This technique is
especially useful in offshore drilling, where one platform may service many horizontal shafts, thus
increasing efficiency. Horizontal wells can be extended from as short as 20-40ft from vertical to
as long as 1,000-4,500f1from the vertical radius.
lntegrated Resource Plan 20L9 - 2023 L45
lntermountain Gas Company Glossary
tdaho Falls Lateral (!Ft)
A distinct segment of lntermountain's distribution system which serves core market customers
in Bingham, Bonneville, Fremont, Jefferson, and Madison counties; an Area of lnterest for
lntermountain.
lndustrial Customer
For purposes of categorizing large volume customers, any customer utilizing natural gas for
vegetable, feedstock or chemical production, equipment fabrication and/or manufacturing or
heating load for production purposes.
lnstitutional Customer
For purposes of categorizing large volume customers, this would include business such as
hospitals, schools, and other weather sensitive customers.
lnterruptible Customer
A customer receiving service under rate schedules or contracts which permit interruption of
service on short notice due to insufficient gas supply or capacity.
lnterruptible Service
Lower-priority service offered to customers under schedules or contracts which anticipate and
permit interruption on short notice, generally in peak-load seasons, by reason of the higher
priority claim of firm service customers and other higher priority users. Service is available at any
time of the year if distribution capacity and/or pressure is sufficient.
Large Volume Customer
Any customer receiving service under one of the Company's large volume tariffs including LV-1,
T-3, and T-4. Such service requires the customer to sign a minimum one-year contract and use at
least 200,000 therms per contract year.
Liquefied Natural Gas (LNG)
Natural gas which has been liquefied by reducing its temperature to minus 260 degrees
Fahrenheit at atmospheric pressure. ln volume, it occupies one-six-hundredth of that of the
vapor at standard conditions.
Load Demand Curve (LDC)
A forecast of daily gas demand using design or normal temperatures, and predetermined usage
per customer.
Local Distribution Company
A retail gas distribution company, utility, that delivers retail natural gas to end users.
lntegrated Resource Plan 201,9 - 2023 L46
lntermountain Gas Company Glossary
Lost and Unaccounted for Natural Gas (LAUF)
The difference between volumes of natural gas delivered to lntermountain's distribution system
and volumes of natural gas billed to lntermountain's customers.
Maximum Daily Firm Quantity (MDFQ)
The contractual amount that lntermountain guarantees to deliver to the customer each day. Also
see Contract Demand.
Methane
Methane is commonly known as natural gas (or CH+) and is the most common of the hydrocarbon
gases. lt is colorless and naturally odorless and burns efficiently without many by products.
Natural gas only has an odor when it enters a customer's home because the local distributor adds
it as a safety measure.
NormalWeather
Normal weather is comprised of HDD's that represent the average mean temperature for each
day of the year. lntermountain's Normal Weather is a 3O-year rolling average of NOAA's daily
mean temperature.
Northwest Pipeline (Williams Northwest Pipeline, Northwest, NWP)
A 3,900-mile, bi-directional transmission pipeline crossing the states of Washington, Oregon,
ldaho, Wyoming, Utah and Colorado and the only interstate pipeline which interconnects to
lntermountain's distribution system; all gas supply received by the Company is transported by
this pipeline.
NYMEX Futures
New York Mercantile Exchange is the world's largest physical commodity futures exchange.
Futures are financial contracts obligating the buyer to purchase an asset (or the seller to sell an
asset), such as a physical commodity, at a predetermined future date and price. Futures
contracts detail the quality and quantity of the underlying asset; they are standardized to
facilitate trading on a futures exchange. Some futures contracts may callfor physical delivery of
the asset, while others are settled in cash.
Peak Shaving
Using sources of energy, such as natural gas from storage, to supplement the normal amounts
delivered to customers during peak-use periods. Using these supplemental sources prevents
pipelines from having to expand their delivery facilities just to accommodate short periods of
extremely high demand.
Peak Day
lntegrated Resource Plan 201,9 - 2023 1-47
lntermountain Gas Company Glossary
The coldest day of the design year; a measure used for planning system capacity requirements.
For lntermountain, that day is currently January 15 of the design year.
PSIG (Pounds per Square lnch Gauge)
Pressure measured with respect to that of the atmosphere. This is a pressure gauge reading in
which the gauge is adjusted to read zero at the surrounding atmospheric pressure. lt is
commonly called gauge pressure.
Producer
A natural gas producer is generally involved in exploration, drilling, and refinement of natural
gas. There are independent producers, as well as integrated producers, which are generally
larger companies that produce, transport and distribute natural gas.
Purchased Gas Adjustment or PGA
lntermountain's annual price change to adjust the cost of gas service to its customers, based on
deferrals from the prior year and forward-looking cost forecasts.
Residential Customer
Any customer receiving service under the Company's RS Rate Schedule.
SCADA (Supervisory Control and Data Acquisition)
Remote controlled equipment used by pipelines and utilities to operate their gas systems. These
computerized networks can acquire immediate data concerning flow, pressure or volumes of gas,
as well as control different aspects of gas transmission throughout a pipeline system.
State Street Lateral (SSL)
A distinct segment of lntermountain's distribution system which serves core market customers
in Ada County north of the Boise River, bound on the west by Kingsbury Road west of Star, and
bound on the east by State Highway 2L; an Area of lnterest for lntermountain.
Sun Valley Lateral (SVL)
A distinct segment of lntermountain's distribution system that serves customers in Blaine and
Lincoln counties; an Area of lnterest for lntermountain.
Therm
A unit of heat energy equal to l-00,000 British thermal units (BTU). lt is approximately the energy
equivalent of burning 100 cubic feet (1 CCF) of natural gas.
Traffic Analysis Zones (TAZ)
An analysis of traffic patterns in certain high traffic areas.
lntegrated Resource Plan 2019 - 2023 1,48
lntermountain Gas Company Glossary
Transportation Tariff
Tariffs that provide for the redelivery of a shipper's natural gas received into an interstate
pipeline or lntermountain's distribution system. A transportation customer is responsible for
procuring its own supply of natural gas and transporting it on the interstate pipeline system for
delivery to lntermountain at one of its citygate locations.
WCSB (Western Canadian Sedimentary Basin)
A vast sedimentary basin underlying 1,400,000 square kilometers (540,000 sq mi) of Western
Canada including southwestern Manitoba, southern Saskatchewan, Alberta, northeastern British
Columbia and the southwest corner of the Northwest Territories. lt consists of a massive wedge
of sedimentary rock extending from the Rocky Mountains in the west to the Canadian Shield in
the east. The WCSB contains one of the world's largest reserves of petroleum and natural gas
and supplies producing more than 16,000,000,000 cubic feet (450,000,000 m3) per day of gas in
2000.
lntegrated Resource Plan 20L9 - 2023 L49