Idaho regulators last Friday asked for stakeholder and general public comments on a long-term planning document by Spokane, WA-based Avista Utilities that forecasts 20 years of low gas prices and demand by its retail residential and business natural gas customers in the northern panhandle of the state.
Avista’s long-term plan filed earlier this year with the Idaho Public Utilities Commission (PUC) projects gas demand will grow “only slightly more than 1%” during the next 20 years. Natural gas prices will remain low during the next several years due primarily to the continued development of shale gas nationally, the combination utility told the PUC.
In September Avista said that 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.
The PUC said it is taking comments on the long-term gas plan through Dec. 3.
“Avista does not anticipate any resource shortages during the next 20 years due to increased production of shale and lower customer demand,” a PUC spokesperson said.
In Idaho, electric and gas utilities are required to file updated integrated resource plans (IRP) with the PUC every two years, spelling out how they intend to meet customer demand under various scenarios. Avista’s latest IRP assured state regulators that 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 different supply pipelines.
“Shale gas has changed the landscape for North American supply and turned the price of natural gas on its head,” Avista said in its updated plan’s executive summary. “While shale is not new, the technological improvements for extraction, the value of natural gas liquids and the amount of gas associated with oil extraction have significantly impacted the volume and cost of the supply mix.” The combination utility also cited declining use of gas per customer and “stagnant” customer growth due to the prolonged effects of national and regional recessions.
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