Slide 1: 2025 Natural Gas IRP TAC Meeting No. 5 Agenda
2025 Natural Gas Integrated Resource Plan Technical Advisory Committee Meeting No. 5 Agenda Wednesday, June 26, 2024 Virtual Meeting Topic Time (PTZ) Staff Feedback from prior TAC 10:30 All Current Avista Resources 10:40 Justin Dorr Greenhouse Gas Emissions & Pricing 11:15 Tom Pardee TAC feedback 11
Slide 2: Supply Side Resources
Supply Side Resources Justin Dorr Manager of Natural Gas Resources
Slide 3: Interstate Pipeline Resources
Interstate Pipeline Resources • The Integrated Resource Plan (IRP) brings together the various components necessary to ensure proper resource planning for reliable service to utility customers. • One of the key components for natural gas service is interstate pipeline transportation. Low prices, fir
Slide 4: Pipeline Contracting
Pipeline Contracting Simply stated: The right to move (transport) a specified amount of gas from Point A to Point B A B 3
Slide 5: Contract Types
Contract Types • Firm transport • Point A to Point B • Kingsgate to Malin • Alternate firm • Point C to Point D • Kingsgate to Stanfield • Seasonal firm • Point A to Point B but only in winter • Interruptible • Maybe it flows, maybe it doesn’t 4
Slide 6: Pipeline Rate Design
Pipeline Rate Design • Mileage Rate (GTN) • Distance between receipt and delivery determines price • Plus variable charges (variable, fuel, commodity) • Postage Stamp (NWP) • 1 mile from receipt to deliver same price as 1000 miles • Plus variable charges (variable, fuel, commodity) 5
Slide 7: Pipeline Overview
Pipeline Overview NW Dom SJ Basin AIVISTA
Slide 8: Avista's Transportation Contract Portfolio
Avista's Transportation Contract Portfolio Avista holds firm transportation capacity on 6 interstate pipelines: Pipeline Expirations Base Capacity Dth Current Rate Williams NWP 2025-2042 285,000 $0.3725/MMBtu Westcoast 2026 10,000 $0.5770/ GJ (Spectra) TC- NGTL 2025-2046 146,500 $0.1994/ GJ TC- Foot
Slide 9: Williams Northwest Pipeline
Willian a ~ Low-cost, primary service provider in the Pacific Northwest + 3,900-mile system with 3.8 Bcf/d peak design capacity ~120 Bcf of access to storage along pipeline, with high injection and deliverability capability in market area rectional design Provides flexibility (Rockies to market and
Slide 10: GTN Overview
GTN Overview • Transports WCSB* and Rox natural gas to ID, WA, OR, and CA • Approximately 1,377 miles of pipe • Kingsgate best efforts receipt capability of approx. 2.87 Bcfd and throughput capacity of approx. 2 Bcfd through Station 14. *WCSB – Western Canadian Sedimentary Basin
Slide 11: WCSB gas is competitive in key markets
WCSB gas is competitive in key markets WCSB (78% TC Energy) 18 Bcf/d supply 8 Bcf/d intra basin load 10 Bcf/d export 2 Bcf/d LNG projected by 2026 4 Bcf/d LNG projected post 2030 U.S. Northeast 7 Bcf/d market 0.7 Bcf/d via TC Pacific 9 Bcf/d market 2.5 Bcf/d via TC Eastern Canada 4.4 Bcf/d market 2.
Slide 12: Storage – A Valuable Asset
Storage – A Valuable Asset • Peaking resource • Improves reliability • Enables capture of price spreads between time periods • Enables efficient counter cyclical utilization of transportation (i.e., summer injections) • May require transportation to service territory • In-service territory storage o
Slide 13: Avista's Storage Resources
Avista's Storage Resources Washington and Idaho Owned Jackson Prairie • 7.7 Million Dth of Capacity with approximately 346,000 Dth/d of deliverability Oregon Owned Jackson Prairie • 823,000 Dth of Capacity with approximately 52,000 Dth/d of deliverability Leased Jackson Prairie • 95,565 Dth of Capac
Slide 14: The Facility
The Facility • Jackson Prairie is a series of deep, underground reservoirs – basically thick, porous sandstone deposits. • The sand layers lie approximately 1,000 to 3,000 feet below the ground surface. • Large compressors and pipelines are employed to both inject and withdraw natural gas at 54 well
Slide 15: Jackson Prairie Energy Comparisons
Jackson Prairie Energy Comparisons 14
Slide 16: Greenhouse Gas Assumptions and Climate Pricing
Green House Gas Assumptions and Climate Pricing 2025 Avista Gas IRP June 26, 2024
Slide 17: Greenhouse Gas Assumptions
Greenhouse Gas Assumptions 2
Slide 18: CH4 Emissions for Natural Gas Systems
3 Millions of Dth per Day - 20 40 60 80 100 120 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 and Source, for All Years 2003 2004 2005 2006 2007 2008 2009 2010 2011 Production 2012 2013 2014 2015 2016 2017 2018 2019 Daily Production - Dth 2020 2021 CO2e per Dth produced - (CH4 x 3
Slide 19: Total Emissions for natural gas (combustion, upstream and LDC)
Total Emissions for natural gas (combustion, upstream and LDC) Fuel Emission Rates in lbs GHG per unit of natural gas combusted lb GHG/mmbtu lb CO2e/mmbtu in lbs & CO 2e lbs - 100 year GWP Combustion CO2 116.88 116.88 CH4 0.0022 0.0748 N2O 0.0022 0.6556 Total Combustion 118 Upstream CH4 0.422 14.35
Slide 20: Use of Upstream Emissions in 2025 IRP
Use of Upstream Emissions in 2025 IRP 1 2 3 Evaluation of SCC scenario in all CCA and CPP do energy efficiency in jurisdictions not account for OR and WA upstream emissions in program requirements 5
Slide 21: Annual Cap reduction
6 Annual Cap reduction 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 2026 2027 7.0% 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 1.8% 2039 2040 2041 2042 2043 Cap Reduction 2044 2.6% 2045 10% 30% 40% 60% 70% 20% 50% 80% 0% 2026 2027 2028 2029 Climate Commitment Act (CCA) Cap 2030 2031 2032
Slide 22: Climate Protection Plan (CPP) Cap
Climate Protection Plan (CPP) Cap *RAC Draft Rules – June ‘24 – Tables 2 & 4 *RAC Draft Rules – June ‘24 – Table 4 7
Slide 23: Climate Pricing
Climate Pricing AIVISTA
Slide 24: Social Cost of Carbon (SCC) at 2.5%
Social Cost of Carbon (SCC) at 2.5% $250 SCGHG (2007$) SCGHG (2022$) SCGHG Nominal $ • SCC @ 2.5% will be used for $200 Energy Efficiency CPA in OR and $ per Metric Ton WA $150 • SCC scenario will utilize SCC @ $100 2.5% as a resource selection criteria and is added to the price of $50 emissions to
Slide 25: Allowance Prices
Allowance Prices CCA California - Québec $100 USD per Allowance (MTCO2e) $90 $80 $70 $60 * $50 $40 $29.92 $30 $20 $10 floor settle ceiling $- Feb-23 May-23 Aug-23 Dec-23 Mar-24 Jun-24 Auction 1 Auction 2 Auction 3 Auction 4 Auction 5 Auction 6 *Nov. 3rd Announcement to pursue linkage to CA Cap and T
Slide 26: Allowance Price Estimate
Allowance Price Estimate Nominal Price per MTCO2e $400 $350 $300 $250 $200 $150 $100 $50 $- 2040 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2041 2042 2043 2044 2045 Min Percentile: 25% Mean Median Percentile: 95% Max 11 *300 stochastic 20-year draws
Slide 27: Community Climate Investments (CPP)
Community Climate Investments (CPP) 12 RAC draft rules 6/18/2024
Slide 28: Use of Pricing in 2025 Gas IRP
Use of Pricing in 2025 Gas IRP • SCC @ 2.5% will be used for Energy Efficiency CPA in OR and WA • SCC scenario will utilize SCC @ 2.5% as a resource selection criteria and is added to the price of emissions to each Dth of natural gas • CCA pricing for the allowance market will be used to evaluate pr
Slide 29: CCA Summary
CCA Summary 800,000 Nominal Price per MTCO2e Allowances - For Compliance $350 700,000 Allowances - To Auction Avista Estimated CCA Cap - $300 600,000 $250 500,000 MTCO2e $200 400,000 $150 300,000 $100 200,000 $50 100,000 $- - 2043 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039
Slide 30: CPP Summary
CPP Summary* *2025 IRP values will be updated based on RAC process and changes 15