The near-term energy supply picture in the Pacific Northwest is adequate and wholesale power prices are moderated by a combination of factors including abundant natural gas supplies, according to a revised draft Integrated Resources Plan (IRP) released by Puget Sound Energy (PSE).

One of the plan’s subplots is the prospect of increased development of natural gas-fired peaking generation plants to back up added wind generation. And that subplot begets a second one: the need for added gas storage, either underground or in the form of liquefied natural gas (LNG).

PSE released the draft IRP for stakeholder comments prior to filing a revised plan with the Washington Utilities and Transportation Commission on May 31. Revised every two years, the IRP is supposed to provide an energy resource blueprint for the next 20 years for the utility to follow.

Added pipeline and storage capacity may be needed by PSE to keep up with growth in natural gas demand for both domestic space and water heating and added gas-fired electric generation, the draft plan showed.

IRP estimates that PSE gas customer demand will increase 23% in the next 10 years and 46% over the next two decades. “The utility energy efficiency programs can fulfill more than one-fifth (86 million therms) over the 20-year period,” the report noted, citing average residential gas use at 68 th/month.

“Obtaining additional natural gas supply — both to serve customers’ rising demand and potentially to fuel more gas-fired power generation — may require PSE to acquire additional capacity on the West Coast’s pipeline transmission grid. The operational requirements of expanded gas-fired power generation also could drive the need for more local storage capacity in coming years, including storage for LNG.

“Natural gas has become an increasingly important resource for PSE. Not only do we supply it for end use to more than 750,000 gas sales customers, we also use it as fuel to generate electricity.”

An analysis is under way to determine whether existing underground storage or newly developed above-ground LNG is the best option for assuring power system reliability in the region.

Both alternatives are included in different scenarios and sensitivity test results being looked at by Bellevue, WA-based Puget Sound Energy (PSE) as part of the combination utility’s latest revision to its draft 20-year IRP. While the forecasts for annual natural gas customer growth in the region vary between lows of 1.75% and 2.54%, the PSE draft plan envisions no new gas infrastructure needs before 2015-2016.

“No firm gas pipeline capacity is needed in any of the electric scenarios [in the IRP],” PSE’s draft plan said. “Some additional pipeline capacity may be necessary in later years depending on gas and electric market conditions. All new gas-fired generating plants in the electric portfolio developed in this IRP analysis are peakers with oil backup.”

In this context, the IRP calls for an investigation of the “relative merits” of a regional LNG storage facility compared to PSE leasing added storage from an expanded Mist underground facility in northwest Oregon. The assumption is that there will be continued need to expand the PSE gas-fired generation resources, making added storage a necessity.

“The two types of storage have different advantages,” PSE said. “LNG has more flexibility as to location and provides high withdrawal rates, but few days of storage and very low liquefaction (injection) rates. Underground storage offers much higher injection rates, more days of storage, etc., but requires longer-haul pipeline capacity.”

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