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2000 DRAFT INTEGRATED RESOURCE PLAN

2000 DRAFT INTEGRATED RESOURCE PLAN. NW NATURAL November 13, 2000. About NW NATURAL. A Brief History of Our Company. Our Approach to Integrated Resource Planning. Required Plan Elements. Opportunities for Participation and Comment. 2000 Budget Volumes - By Customer Class.

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2000 DRAFT INTEGRATED RESOURCE PLAN

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  1. 2000 DRAFT INTEGRATED RESOURCE PLAN NW NATURAL November 13, 2000

  2. About NW NATURAL

  3. A Brief History of Our Company

  4. Our Approach to Integrated Resource Planning

  5. Required Plan Elements

  6. Opportunities for Participation and Comment

  7. 2000 Budget Volumes - By Customer Class

  8. Meeting Peak Day and Seasonal Gas Requirements Our #1 Commitment: • To provide reliable service to our firm customers under anticipated severe cold weather conditions We Plan for Firm Customer Needs in Advance: • Secure delivery capacity* - Ensure gas can be delivered • Purchase commodity gas - Ensure gas is available * We do not plan capacity additions to meet the needs of our interruptible customers during severe weather

  9. 30-Year Peak Requirements Forecast Comparisons Plan Date

  10. Peak Weather Degree Day Distribution

  11. Incremental Supply-Side Resource Stack • Pipeline Capacity: • “Open seasons” for capacity on the Williams Gas Pipeline occur over time with approximate 5-year intervals between open seasons. • Pipeline capacity choices require both enabling pipeline capacity (Canadian pipelines) and local infrastructure investments. • Underground storage development: • Reservoirs, injection/withdrawal wells, observation wells, injection of cushion gas and working gas inventory. • Gathering systems, gas treatment (water removal), compressors, control systems, and feeder pipelines to move gas to demand centers. • Propane / LNG (Liquefied Natural Gas) systems: • Smaller storage vessels located closer to demand centers. • LNG stored at minus 260 Fahrenheit; approximate 50,000 therms limit • Propane tank farms can be larger. Such facilities can serve a bridging role to delay the need for reinforcement of the distribution system.

  12. Illustration: Oregon Rate Components

  13. What does a Linear Programming Model Do? • Minimizes Net Present Value of gas supply cost subject to the constraint that all firm gas demands are met. • No curtailment or gas outages are allowed due to inadequate gas supply • Views conservation and supply-side resources as interchangeable over a 30-year time horizon • It finds the least cost solution by systematically comparing every possible solution • The LP model does not consider rate design, retail pricing strategies, and switching loads to interruptible service

  14. BASE-CASE LEAST COST LP SOLUTION: Peak Day Requirements

  15. Base-Case Least Cost LP Solution:Annual, Design Winter (1978-79 / 1985-86)

  16. Glossary of Linear Programming Model Resource Options

  17. Glossary of Linear Programming Model Resource Options (continued)

  18. Demand-Side Management & Conservation

  19. Load Duration Curves - Firm

  20. Principal Linear Programming Model Findings • The South Mist Pipeline Extension (SMPE) is least cost and needed as soon as possible • South Mist Pipeline Extension Supports System Flexibility • Cost-effective DSM is a small resource • Storage gas inventory requirements are now becoming a binding constraint • Interruptible curtailment may become more common

  21. What if the South Mist Pipeline Extension is Not Built?

  22. System Benefits of South Mist Pipeline Extension -- Displacement of Pipeline Deliveries • Direct service to growth in Southwest Portland • Flexibility for increased Williams Pipeline deliveries North of Molalla to Washington • Augment gas flowing South on Williams Pipeline from Molalla -- to Eugene • Augment gas flowing to the east toward Estacada

  23. Alternatives to Pipeline & Storage Development are Inadequate

  24. Conclusions • Underground storage best meets peak-day requirements and annual working gas requirements • South Mist Pipeline Extension is needed and is clearly the least-cost resource to serve Oregon and Washington Customers • Current Interstate Pipeline capacity may be adequate but opportunities for strategic acquisitions will be evaluated • NWN does not plan to launch any new major DSM initiatives but will continue to support energy efficiency • There are no effective alternatives to additional supply capability

  25. Conclusions (continued)

  26. COMMENTS -- 2000 IRP

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