20241029Decision Memo.pdf

DECISION MEMORANDUM
TO: COMMISSIONER ANDERSON
COMMISSIONER HAMMOND
COMMISSIONER LODGE
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL
FROM: SHUBHRA DEB PAUL
DAYN HARDIE,DEPUTY ATTORNEY GENERAL
DATE: OCTOBER 29, 2024
SUBJECT: IN THE MATTER OF INTERMOUNTAIN GAS COMPANY'S TARIFF
ADVICE REGARDING REVISIONS TO SECTION C OF GENERAL
SERVICE PROVISIONS; TARIFF ADVICE NO. INT-TAG-24-02.
BACKGROUND
On September 30, 2024, Intermountain Gas Company filed Tariff Advice No. INT-
TAG-24-02 ("Tariff Advice") requesting to revise Section C of its General Service Provisions,
Installation and Extension of Natural Gas Mains and Services for Residential and Commercial
Customers. The Company's Tariff Advice proposes to update the Allowable Investment Factors
("AIF"), the Service Line Cost per Foot("SLCPF"), and the construction overhead charges in
accordance with Commission Order No. 34735. The Company requests these revisions be
approved by November 1, 2024, and to become effective on December 1, 2024.
STAFF ANALYSIS
Staff reviewed the proposed updates in the Tariff Advice and believes the methods used
to update Section C are consistent with the methods approved in Commission Order No. 34735
and that inputs driving the updated amounts are reasonable. Staff recommends the Commission
approve the revised tariff sheet reflecting updates to the AIF, SLCPF, and the construction
overhead charges with an effective date of December 1, 2024.
The Company is required by Commission Order No. 34735 to file an annual tariff advice
to update the Allowable Investment Factors, the Service Line Cost per Foot, and the construction
DECISION MEMORANDUM - 1 - OCTOBER 29, 2024

overhead charge by October 1. Staff reviewed the Company's workpapers and examined the
method and the changes in inputs driving the change in the amounts for the three factors. The
Company's methods for updating AIF, SLCPF, and the construction overhead charge in this
tariff advice are consistent with the methods approved in Commission Order No. 34735.
According to Staff analysis, the Company's proposed AIF increases by 3.1% for both
Residential and Commercial service line extensions. Similarly, for main line extensions, the AIF
increased by 3.1% and 3.2% for Residential and Commercial customers, respectively. The
proposed SLCPF increased by 14.2% in comparison to the current rate. The major inputs driving
the increase in the AIF and SLCPF factors were related to continuing inflation and increases in
contract service/consulting and engineering and supervisions costs associated with capital
additions due to growth. The inputs used to determine the construction overhead charge resulted
in 0.5% lower overhead charges (proposed amount of 10.91%) compared to last year's annual
update. Staff believes the inputs used to determine all three factors are reasonable and conform
with Commission Order No. 34735. Staff analyses are summarized in Table Nos. 1 and 2.
Table No. 1: Allowable Investment Factor comparison.
Allowable investment factors ($/therm)
Customer type Service Main Combined
Current Proposed Change Current Proposed Change Current Proposed Change
Residential 0.654 0.674 3.1% 0.797 0.822 3.1% 1.451 1.496 3.1%
Commercial 0.486 0.501 3.1% 0.593 0.612 3.2% 1.079 1.113 3.2%
Table No. 2: Service line costs and construction overhead charges comparison.
Current Proposed Change
Service Line Cost per Foot($) 15.18 17.33 14.2%
Construction Overhead Charges (%) 10.97 10.91 -0.5%
DECISION MEMORANDUM - 2 - OCTOBER 29, 2024

RECOMMENDATION
Staff recommends the Commission approve the Company's proposed revised Section C
reflecting updates to the AIF, SLCPF, and the construction overhead charge with an effective
date of December 1, 2024.
COMMISSION DECISION
Does the Commission wish to authorize the Company's proposed revisions and the
submitted revised Section C tariff sheet with an effective date of December 1, 2024?
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Shubhra Deb Paul
I:\Utility\UDMEMOS\INT-TAG-24-02 Decision Memo.docx
DECISION MEMORANDUM - 3 - OCTOBER 29, 2024