Website: www.puc.idaho.gov
Avista counts on natural gas, not coal, to meet future
resource needs
The Idaho Public Utilities Commission has accepted a
long-range plan for Avista Utilities that depends more on natural gas for its
future energy resources, rather than coal.
The Integrated Resource Plan (IRP) outlines how Avista
intends to meet the demands of its growing customer base over the next decade.
Avista, which serves about 115,000 customers in northern Idaho, says it will
need 350 megawatts from natural gas sources to meet customer demand. It plans
on getting most of that – 275 MW – from the Lancaster Generation Facility near
Rathdrum. Avista also plans on adding 300 megawatts from wind sources, 35 MW
from other renewable resources and 87 MW from energy savings due to
conservation measures.
Without the additional generation, the company states it
would face generation shortfalls of about 83 average-megawatts in 2011 and 272
aMW by 2017.
Avista decided to drop plans outlined in an earlier 2005
IRP for coal-fired generation for several reasons including legislation in
Washington state where the utility has most of its customers. Washington
enacted a greenhouse gas emissions standard that precludes Avista from
acquiring a new pulverized coal plant or entering into a long-term contract
with an existing plant.
Several utilities have dropped coal sources from their
long-range planning due to new emissions standards and higher costs associated
with the potential for carbon taxes, making coal less competitive with other
generation alternatives.
Avista’s 2007 plan also includes fewer renewables – from
500 megawatts to 350 MW – than it had hoped for in its 2005 plan. Avista said
the cost of wind resources has increased by more than 100 percent over the last
six years. Legislation in Oregon, Washington and other states that mandates a
certain percentage of generation from renewable sources has increased the
demand for wind turbines. That demand reduces their availability and increases
their price.
“Ironically, Idaho presently has neither carbon emission
standards nor renewable portfolio standards, yet the new legislation in other
states has effectively limited the new generation choices for serving Idaho
loads,” commission staff said. Utilities in Idaho that serve several states
must meet the requirements in all the states they serve. It is “impractical to
develop new generation projects devoted solely to serve Idaho loads,”
commission staff said.
Avista moved away from natural gas-fired sources in 2005
because of the price volatility in natural gas markets that drastically
increased prices between 2003 and 2005. But with the elimination of coal-fired
generation and the higher cost of renewables, the utility returns to natural
gas to meet some of its future demand.
Commission staff urged Avista to develop new and
innovative methods to counteract natural gas price volatility and to maximize
the use of cost-effective load control programs. Further, staff said utilities
should “dutifully consider the potential for integrating nuclear energy into
their long-term resource planning.”
Avista is planning an additional 87 MW from conservation
measures, an 85 percent increase in conservation since Avista’s 2003 IRP and a
25 percent increase over the 2005 IRP.
Acceptance of Avista’s IRP does not mean the commission
endorses all the anticipated projects in the plan. It means only that the
utility has complied with a requirement to file an IRP every two years. The
commission recognizes that assumptions and projections can change over time.
“It is the ongoing planning process that we acknowledge, not the conclusion or
results,” the commission said.
A copy of Avista’s plan, along with other documents related to this case, is available on the commission’s Web site at www.puc.idaho.gov. Click on “File Room” and then on “Electric Cases” and scroll down to Case Number AVU-E-07-08.