Avista Utilities projects it will need to spend $1.7 billion over the next 20 years to add or improve efficiency of power-generation capacity to meet a projected 1.6 percent annual increase in electric power demand.

The vast majority of that investment - $1.4 billion - is expected to go toward energy-conservation efforts and programs.

The Spokane-based utility lays out the basis for those estimates in the 2011 Electric Integrated Resources Plan it completed last month, which outlines its goals to meet the anticipated rise in power demand through 2031.

The utility estimates that over the next 20 years it will add about 100,000 new retail customers to its base of about 356,600 residential and commercial customers as of the end of last year. Avista also provides natural gas service to more than 316,000 customers.

The main difference between Avista's latest resource plan and one it released in 2009 - it updates its forecast every other year - is a reduced amount of planned new wind generation and an increase in natural gas generation facilities.

Clint Kalich, manager of resource planning and analysis for Avista Utilities, says that conservation measures Avista has taken over the last several years also have resulted in a lower projected load growth, which means that fewer resources are needed. That slowed growth also is due partially to the recession, which has led to a decrease in retail loads, he adds.

The IRP identifies energy savings as a result of some planned efficiency upgrades at Avista's hydropower plants and its natural-gas fired generation facilities. Those improvements and other energy-conservation efforts are expected to save a cumulative total of 310 megawatts (MW) during those 20 years and also are expected to reduce Avista's projected load growth by 48 percent.

In addition, the utility says it expects to acquire 756 MW of power from clean-burning natural gas-fired generation facilities between 2018 and 2031.

Efficiency upgrades

Kalich says Avista has been working on installing new turbines at its Noxon Rapids Dam on the Clark Fork River in western Montana over the last couple years, and will have completed that project early next year, adding a total of about 9 MW of new power there.

"We are getting more energy with the same environmental impact and the same amount of water, and we have quite a bit of additional capacity and energy out of those projects," he says of the Noxon Rapids upgrades.

One megawatt of power can supply the electrical needs of about 750 homes.

The next hydropower upgrade projects detailed in the 2011 IRP are expected to take place at some of Avista's six dams on the Spokane River, starting with upgrades at Nine Mile Dam and Little Falls Dam over a four-year period.

Nine Mile could receive a new powerhouse or a replacement of current power-generating units, and Little Falls is planned to receive upgrades to its turbines, generators, and other equipment that would be made to increase its generating capacity.

Avista's IRP also says that it will consider potential hydroelectric upgrades at Long Lake, Cabinet Gorge, Post Falls, and the Monroe Street dams, although those projects would require additional study if they were to move forward. The combined total of those potential upgrades, if completed, could be as much as 47 MW.

A potential upgrade at Long Lake dam to add a second powerhouse could add between 18 and 20 MW of power, while a second powerhouse at Cabinet Gorge, on the Clark Fork, could add around 7 MW of new power. Additionally, the IRP mentions the possibility of adding a second powerhouse at the Monroe Street dam, which could add up to 16 MW of power, and a new powerhouse to replace the one at Post Falls dam could add 4 MW of power, the IRP estimates.

Those larger-scale upgrades could help Avista meet Washington state's required renewable energy goals under the clean-energy Initiative 937, passed in 2006, that requires electric utilities that serve more than 25,000 customers to obtain 15 percent of their energy from renewable resources by 2020. The upgrades also could benefit from federal tax incentives and help mitigate dissolved gasses in the river, the IRP says.

About 50 percent of Avista's overall power mix now comes from hydropower, including some long-term contracts with facilities it doesn't own, as well as power that's generated from its eight dams on the Spokane and Clark Fork rivers.

Meanwhile, about 35 percent of Avista's energy supply comes from natural gas-fired generation facilities across the Inland Northwest, and the 2011 IRP identifies various potential efficiency upgrades to meet a power demand increase at two of those facilities.

The utility's two largest natural gas generation facilities are its Rathdrum and Coyote Springs 2 projects, the latter of which is located in Boardman, Ore.

The Rathdrum facility currently has a generation capacity of 149 MW and is only used in peak load conditions, Kalich says. Avista is considering converting the facility to a base load resource, which means the utility would use power that's generated there on a regular basis and not just during peak operating hours. That option, however, would be costly - right now it's estimated to cost upwards of $81 million - and also would require Avista to acquire water rights so it would have water needed to cool the plant. Noise would be another issue, the IRP says.

At Coyote Springs, the utility is considering four potential multimillion dollar upgrades to increase the plant's capacity, which could add anywhere between 2.6 MW and 30 MW of generating capacity, depending on the type of upgrade selected.

Kalich says, however, that because the cost to make some of those upgrades outweighs the expected value, some of them might not take place in this IRP's time frame. The plan does include other less expensive upgrades to the gas-fired plants that are expected to add 4 MW of generation capacity, he says.

"The IRP helps us identify the value with those upgrades so we know what we can afford to pay for it to be cost effective," he says.

Kalich adds that Avista is evaluating a vendor that could provide the equipment needed to make some upgrades at one of those facilities, although he can't disclose any details.

New energy resources

Aside from the recently signed contract to obtain wind energy from the 100 megawatt Palouse Wind project in Whitman County that is to provide Avista with an average of 40 MW of wind power annually, the utility also still is considering developing its own wind facility near Reardan, Wash.

That project is mentioned in the 2011 IRP and Kalich says that the fully-permitted site continues to be studied for potential development in the future.

The IRP says the site is ready for construction, and Kalich says that the Reardan facility is a leading contender for a resource that Avista would need to move forward with to meet the state's 15 percent renewable resource requirement due in 2020. The Reardan project is anticipated to supply between 50 MW and 100 MW of wind generation.

"It stands ready if we want to move forward," Kalich says.

Avista's plans to acquire new natural gas-generated power is expected to come from both energy efficiency upgrades planned at the Rathdrum and Coyote Springs 2 project, as well as power purchase agreements from other producers and the development of planned new facilities, Kalich says.

He adds that the 2011 IRP looks at adding two 270 MW gas-fired combined-cycle combustion facilities in 2023 and in 2026 to meet projected capacity deficits. Those deficits would be created by the expiration of a power purchase agreement that allows Avista to operate a 24 MW gas-generation facility in Spokane Valley called Boulder Park.

Other factors addressed in the 2011 IRP include transmission line upgrades to Avista's 30,000 miles of transmission and distribution lines to ensure the system is up to speed and reliable, Kalich says.