Case No. INT-G-06-03, Order No. 30159

November 2, 2006

Contact: Gene Fadness (208) 334-0339




PUC accepts Intermountain plan, but wants more data in the future


The Idaho Public Utilities Commission is accepting a five-year growth plan submitted by Intermountain Gas Co., but is asking the company to provide more information in future documents.


Regulated gas and electric utilities are required to file Integrated Resource Plans or IRPs, to keep the public and the commission apprised of utilities’ plans to meet the demands of growth. The plans, however, are only a guideline. Acceptance of the plans does not necessarily mean the commission will approve all the plan’s projects when they come before the commission for ratemaking treatment.


Intermountain Gas serves about 275,800 customers in southern Idaho. The Boise-based distributor has customers in 74 communities. Its system includes more than 10,000 miles of transmission, distribution and service lines. In fiscal year 2005, more than 446 miles of distribution and service lines were added to accommodate growth. The plan, which anticipates demand for 2007-11, anticipates a 4 percent customer growth rate in its southern Idaho territory during that period.


Commissioners said the company did not provide enough information regarding the relationship between its demand forecast and the cost-effectiveness of its conservation programs.


The commission said that IRPs filed by utilities are “not meant to be merely an academic or regulatory exercise, but a showing to the public that the company has prepared for, and has considered, a multitude of scenarios. We expect each company submitting an IRP to vigorously test each assumption used in its plan to ensure that the results of the IRP reflect the changing markets and demand, and Intermountain is no exception.”


The commission said Intermountain Gas fulfilled most of the IRP requirements and “we appreciate the company’s attention to and efforts regarding those requirements. For certain requirements, however, we find that the company did not apply the same rigor.”


Future IRPs should include more details about the models used by the company to forecast demand, including more details about economic factors, customer classes, customer use over seasons rather than only annual use, and a range of natural gas price forecasts using more than one credible source.


Further, the company should summarize the cost-effectiveness of its conservation, or demand-side management (DSM) programs, including those not selected for implementation.


“The commission’s philosophy regarding DSM has been clearly stated in its orders – it strongly supports the development and implementation of DSM measures and wants natural gas utilities in Idaho to investigate and implement cost-effective measures that improve energy efficiency,” the commission said.


Many of the company’s customers are served directly off the Williams Northwest Gas Pipeline that comes into southeastern Idaho from Wyoming and generally follows the Snake River in southern Idaho. However, Intermountain owns several laterals that come off the main Williams pipeline. The three largest are the Idaho Falls, Sun Valley and Canyon County laterals.


The Idaho Falls Lateral , which serves many cities between Pocatello north to St. Anthony, will reach a peak day delivery deficit during 2007 and will increase thereafter if adjustments aren’t made such as “looping,” which is increasing capacity by adding a parallel pipe alongside existing pipelines. The company also plans to ask its industrial customers that have the potential to cut their peak consumption by switching to fuel oil to do so during extreme cold temperatures. The Idaho Falls lateral serves 15 percent of the company’s customers and represents 18 percent of the company’s total winter delivery.


The company anticipates peak day delivery deficits by 2009 in the Sun Valley Lateral where there are 4 percent of the customers and 4 percent of winter send-out. Unlike the Idaho Falls Lateral, the industrial load, mainly related to tourism, does not permit switching to alternative fuels. Therefore, the company believes that future upgrades will be needed to the existing pipeline system.


The Canyon County Lateral, which represents 14 percent of the company’s customers and 13 percent of winter sendout, will experience delivery deficits beginning in 2007 under current conditions. The industrial base there also does not permit fuel switching. Intermountain Gas is exploring optional means of enhancing distribution capability in that region.


The commission commended Intermountain Gas for revising its IRP to refine its plans to mitigate or eliminate projected capital improvements needed to meet projected distribution deficits. The commission said it welcomed the fact that Intermountain “had conducted some early research that shows that new technology may allow the company to delay certain expensive pipeline upgrades in areas of the system.”


A full copy of the commission’s order and other documents related to this case is available on the commission Web site at   Click on “File Room,” then “Gas Cases,” and scroll down to INT-G-06-03.