Panel OKs Avista natural gas plan

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The Idaho Public Utilities Commission has accepted a plan by Avista Utilities to meet customer demand for natural gas over the next 20 years.

The company's Integrated Resource Plan (IRP) is updated every two years.

However, the commission said neither Avista's IRP nor its 2015 Business Plan mention at what time it would be cost-effective for Avista to resume offering incentives to customers to reduce natural gas consumption.

Avista suspended its demand-side management (DSM) programs for natural gas customers in 2012 after natural gas prices dropped to the point that the DSM programs were no longer cost-effective.

Still, Avista's 2014 IRP indicates a Conservation Potential Assessment (CPA) for 228,000 therms of natural gas savings in 2015, increasing to 3.6 million therms by 2034.

Avista maintains its CPA uses "high-level assumptions" that may be overly optimistic and that the issue should be further explored in the company's 2015 Business Plan rather than in the context of its IRP. The commission directed Avista to file an addendum to its business plan within 60 days that analyzes the CPA results and addresses whether it might be cost-effective to resume DSM programs.

The commission commended the company for its efforts to make its IRP process more transparent and available to Avista's North Idaho natural gas customers. The Technical Advisory Committee - which includes commission staff, peer utilities, customers and other stakeholders - conducted meetings in a number of locations more convenient for Idaho stakeholders. Avista also recorded a meeting and made it electronically available to customers.

Customer demand remains low, thus Avista does not anticipate a need to acquire additional natural gas resources beyond what it already provides. Demand has decreased partly because of the recession, while the availability of natural gas increases because of the abundant supply of shale gas. The company anticipates growth in customer demand of only 0.7 percent annually.

However, due to enough uncertainties regarding future natural gas supply and price, Avista's plan outlines a number of scenarios and how it would respond to each one. The uncertainties that could affect demand for natural gas include: the amount of liquefied natural gas (LNG) exports, the market for natural gas vehicles and the amount of increased natural gas that may be needed for electric generation.

Existing and new LNG facilities may export low-cost North American gas to higher-priced Asian and European markets, the Avista IRP states. In Canada, 16 LNG export projects are in various stages of permitting and there are two proposed terminals in Oregon.

Avista claims it has a diversified portfolio of gas supply resources, including contracts to buy gas from several supply basins, stored gas and firm capacity rights on six pipelines.

The commission's acceptance of the plan should not be interpreted as an endorsement of all parts of the plan, but only as an acknowledgement that Avista has met the requirements to file the document and that it includes the necessary information required by previous commission orders, an IPUC press release states.

The commission's final order, copies of Avista's IRP and other documents related to this case are available at www.puc.idaho.gov. Click on "Open Cases" under the "Natural Gas" heading and scroll down to Case No. AVU-G-14-03.

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