The Idaho Public Utilities Commission (PUC) has accepted Avista Utilities’ long-term integrated resource plan (IRP) in which shale gas-driven low prices and abundant supplies dominant the next 20 years. Customer demand is projected to grow at slightly more than 1% during the period.
“Regulators have accepted an Avista long-term natural gas planning document, but not without recommending some changes in future plans,” said a Boise-based PUC spokesperson, noting the regulators called for “an easily identifiable progress report” comparing the old plan with the draft IRP update. The PUC staff had recommended this addition.
In addition, the PUC recommended that in the future at least one of Avista’s IRP updating workshops be held with an IRP technical advisory committee that includes PUC staff members.
“Avista does not anticipate any resource shortages during the next 20 years due to increased production from shale and lower customer demand,” said the PUC spokesperson, emphasizing that the plan covers both retail residential and business natural gas customers in the northern panhandle of the state.
Avista’s long-term plan estimates that gas demand will grow “only slightly more than 1%” during the next 20 years (see Daily GPI, Nov. 20). Natural gas prices will remain low during the next several years due primarily to the continued development of shale gas, the combination utility told the PUC.
Last September, Avista said its long-term gas demand forecasts have declined and shorter-term price declines have been even greater (see Daily GPI, Sept. 14). Avista called demand “a key risk” that will have to be monitored. Nevertheless, while the utility earlier in the fall put into play a 5% decrease in rates due to lower wholesale gas costs, longer term it has sought a 7.3% increase in natural gas utility base rates covering fixed costs aside from commodity fuel prices.
In the IRP Avista said it also is prepared for a higher growth scenario, or lower supply situation. In accepting the plan with its two recommendations, the PUC noted that Avista holds a diversified portfolio, including contracts to buy gas from several supply basins, stored gas, and firm capacity rights on six interstate pipelines.
Nevertheless, despite the low prices and ample supplies assumed in the IRP, Avista “continues to plan for a broad range of possibilities because of uncertainties [that include] economic conditions, increasing liquefied natural gas exports that can alter [U.S.] prices and flows of gas nationwide,” the PUC said.
In the end, the PUC repeated Avista’s quote in the executive summary of its IRP stating that “shale gas has changed the landscape for North American supply and turned the price of natural gas on its head.”
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