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HomeMy WebLinkAbout960216.docxDECISION MEMORANDUM TO:COMMISSIONER NELSON COMMISSIONER SMITH COMMISSIONER HANSEN MYRNA WALTERS TONYA CLARK DON HOWELL STEPHANIE MILLER DAVID SCHUNKE WAYNE HART LYNN ANDERSON GARY RICHARDSON WORKING FILE FROM:SCOTT WOODBURY DATE:FEBRUARY 16, 1996 RE:CASE NO. INT-G-96-1 IGC 1996 NATURAL GAS INTEGRATED RESOURCE PLAN Intermountain Gas Company (Intermountain Gas; Company; IGC) on January 30, 1996 filed its 1996 Natural Gas Integrated Resource Plan (IRP) with the Idaho Public Utilities Commission (Commission).  The Company’s filing complies with the Commission’s direction in Order No. 24342, Case No. GNR-G-93-2 (Reference PURPA § 303(b)(3), Energy Policy Act of 1992).   In its prior Order in Case No. GNR-G-93-2, the Commission adopted the following statement of Commission policy regarding PURPA § 303(b)(3) and integrated resource planning for gas utilities:  POLICIES ADDRESSING INTEGRATED RESOURCE PLANNING. 01.  Purpose and Process.  Each gas utility regulated by the Idaho Public Utilities Commission with retail sales of more than 10,000,000,000 cubic feet in a calendar year (except gas utilities doing business in Idaho that are regulated by contract with a regulatory commission of another State) has the responsibility to meet system demand at least cost to the utility and its ratepayers.  Therefore, an “integrated resource plan” shall be developed by each gas utility subject to this rule. 02.  Definition.  Integrated resource planning.  “Integrated resource planning” means planning by the use of any standard, regulation, practice, or policy to undertake a systematic comparison between demand-side management measures and the supply of gas by a gas utility to minimize life-cycle costs of adequate and reliable utility services to gas customers.  Integrated resource planning shall take into account necessary features for system operation such as diversity, reliability, dispatchability, and other factors of risk and shall treat demand and supply to gas consumers on a consistent and integrated basis. 03.  Elements of Plan.  Each gas utility shall submit to the Commission on a biennial basis an integrated resource plan that shall include: a.  A range of forecasts of future gas demand in firm and interruptible markets for each customer class for one, five, and twenty years using methods that examine the effect of economic forces on the consumption of gas and that address changes in the number, type and e­fficiency of gas end-uses. b.  An assessment for each customer class of the technically feasible improvements in the efficient use of gas, including load management, as well as the policies and programs needed to obtain the efficiency improvements. c.  An analysis for each customer class of gas supply options, including:  (1)  a projection of spot market versus long-term purchases for both firm and interruptible markets; (2)  an evaluation of the opportun­ities for using company-owned or contracted storage or pr­oduction; (3)  an analysis of prospects for company participation in a gas futures market; and (4)  an assessment of opportunities for access to multiple pipeline suppliers or direct purchases from producers. d.  A comparative evaluation of gas purchasing options and improvements in the efficient use of gas based on a consistent method for calculating cost-effectiveness. e.  The integration of the demand forecast and resource evaluations into a long-range (e.g., twenty-year) integrated resource plan describing the strategies designed to meet current and future needs at the lowest cost to the utility and its ratepayers. f.  A short-term (e.g., two-year) plan outlining the specific actions to be taken by the utility in implementing the integrated resource plan. 04.  Relationship Between Plans.  All plans following the initial integrated resource plan shall include a progress report that relates the new plan to the previously filed plan. 05.  Plans to Be Considered in Rate Cases.  The integrated resource plan will be considered with other available information to evaluate the performance of the utility in rate proceedings before the Commission. 06.  Public Participation.  In formulating its plan, the gas utility must provide an opportunity for public partic­ipation and comment and must provide methods that will be available to the public of validating predicted performance. 07.  Legal Effect of Plan.  The plan constitutes the base line against which the utility's performance will ordinarily be measured.  The requirement for implementation of a plan does not mean that the plan must be followed without deviation.  The requirement of implementation of a plan means that a gas utility, having made an integrated resource plan to provide adequate and reliable service to its gas customers at the lowest system cost, may and should deviate from that plan when presented with responsible, reliable opportunities to further lower its planned system cost not anticipated or identified in existing or earlier plans and not undermining the utility's reliability.  In order to encou­rage prudent planning and prudent deviation from past pla­nning when presented with opportunities for improving upon a plan, a gas utility's plan must be on file with the Commission and available for public inspection.  But the filing of a plan does not constitute approval or disapproval of the plan having the force and effect of law, and deviation from the plan would not constitute violation of the Commission's Orders or rules.  The prudence of a utility's plan and the utility's prudence in following or not following a plan are matters that may be considered in a general rate proceeding or other proce­edings in which those issues have been noticed. Order No. 24342 Staff recommends that the IRP filing of Intermountain Gas be noticed and that the Application be processed under Modified Procedure, i.e., by written submission rather than by hearing.  Reference Commission Rules of Procedure IDAPA 31.01.01.201-204.  Pursuant to conversations with Intermountain Gas it is recommended that the comment period be 60 days. COMMISSION DECISION Should a notice of filing be issued? Does the Commission find modified procedure to be appropriate in Case No.  INT-G-96-1? Is 60 days a reasonable amount period? If not, what is the Commission’s preference?                                                                                      Scott D. Woodbury bls/M-intg961.sw