Idaho OKs Plan Less Reliant on Natural Gas

Like the California commission, the Idaho Public Utilities Commission also has examined new integrated resource planning platforms, deeming reasonable and acceptable a long-range planning document proffered by an electric utility in which the company, Avista Utilities, outlined its strategy for meeting customer demand for electricity over the next 20 years. The commission related that Avista’s Integrated Resource Plan (IRP) indicates that the utility expects to be able to meet its customers’ energy needs through 2026 with company-owned or contractually controlled generation resources, conservation, and market purchases. For the longer term, however, the company said it intends to focus on plant upgrades, energy-efficiency measures, solar resources, demand response, energy storage, and natural gas-fired generation.

The commission noted that this is the first time the utility has included energy storage in an IRP. The commission said that the plan highlights a project already under way whereby the company is building two energy storage facilities designed to provide a total of 2.5 megawatt-hours of storage.

Although approving the plan as tendered, the commission acknowledged that its staff had expressed reservations about the price assumptions used by Avista in weighing the costs of continued reliance on coalfired generation from the Colstrip plant as well as the costs of several existing natural gas-fueled units. Commission staff had cautioned that basing the IRP on current, extremely low gas prices inappropriately assumed a “best case” scenario rather than robust planning criteria designed to limit disproportionate price risk. Commission staff also had expressed concern that the company had failed to provide evidence supporting its claim that coal price risk is not a significant factor in predicting future costs of operating the Colstrip generating facility, which represents a significant part of the company’s baseload resources.

In looking at the utility’s generation portfolio, the commission observed that the thermal components consist of five natural gas plants, a biomass facility, and a 222-megawatt (MW) share of the output from the Montana-located Colstrip coal plant. The Colstrip facilities are comprised of four units, with Avista possessing a 15% ownership interest in Units 3 and 4. The utility averred in its IRP that maintaining its ownership interest in the Colstrip station will remain cost-effective through the end of the planning period in 2037.

While natural gas still plays a primary role in Avista’s latest IRP, the commission observed that the plan nevertheless anticipates less reliance on natural gas-fired peaker plants compared to the company’s 2015 IRP. More particularly, the most recent plan calls for a delay in adding any capacity from 2020 until 2026. Thereafter, however, the IRP contemplates a need for the construction of three new natural gas-fired plants, adding a combined capacity of 353 MW. That still marks a reduction from the 2015 IRP, which had indicated a need for 557 MW of new natural gas-fired generation, with the first of that additional capacity in service by year-end 2020.

The commission explained that the differences between the 2017 IRP and the 2015 IRP are due not only to a projected slowdown in load growth, but also as a consequence of recently signed contracts for hydropower. The commission stated that the rollout of additional energy-efficiency measures and new programs that temporarily reduce the demand for energy also contributed to the changes in the IRP.

The commission drew special attention to those provisions in the latest IRP announcing the utility’s plans to construct a 15-MW solar facility for its commercial and industrial customers. Indeed, the commission remarked, the company had placed solar at the top of its list for its preferred resource strategy in its updated IRP. The solar installation is scheduled for completion by the end of 2018.

Finally, the commission reported that the IRP envisions that conservation will remain a key element of the company’s operations throughout the 20-year planning horizon used by Avista. The utility said that in the course of developing the IRP, it had analyzed more than 8,700 options for reducing energy use, with the final plan calling for conservation measures to offset 53.3% of the projected growth through 2037. Plus, the company’s plan was premised on growth slowing from the 0.6% annual rate that had been projected in the 2015 IRP. Re Avista Corp., Case No. AVUE- 17-08, Order No. 33971, Jan. 31, 2018 (Idaho P.U.C.).