20250530Direct Park.pdf

RECEIVED
May 30, 2025
IDAHO PUBLIC
Preston N. Carter, ISB No. 8462 UTILITIES COMMISSION
Megann E. Meier, ISB No. 11948
GIVENS PURSLEY LLP
601 West Bannock Street
P.O. Box 2720
Boise, Idaho 83701-2720
Office: [phone]
Fax: [phone]
[e-mail]
[e-mail]
Attorneys for Intermountain Gas Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION Case No. INT-G-25-02
OF INTERMOUNTAIN GAS COMPANY
FOR THE AUTHORITY TO INCREASE
ITS RATES AND CHARGES FOR
NATURAL GAS SERVICE IN THE STATE
OF IDAHO
DIRECT TESTIMONY OF MIN PARK
INTERMOUNTAIN GAS COMPANY
MAY 30,2025

INTRODUCTION
1 Q. Please state your name and business address.
2 A. My name is Min Park and my business address is 555 South Cole Road, Boise, ID 83707.
3 Q. What is your occupation?
4 A. I am a Regulatory Analyst for Intermountain Gas Company.
STATEMENT OF QUALIFICATIONS
5 Q. Please describe your educational background and other qualifications.
6 A. I graduated from the University of Idaho in 2022 with a Bachelor of Science degree in
7 Economics.
8 Q. Please describe your work experience.
9 A. I joined Intermountain in 2022 as a Regulatory Analyst. In my role, I split my time
10 working with both the regulatory department as well as the energy efficiency department. I
11 work on various projects including Weather Normalization, Avoided Cost calculations, the
12 Integrated Resource Plan, Conservation Potential Assessments, and Evaluation,
13 Measurement and Verification.
PURPOSE OF TESTIMONY
14 Q. Please summarize your testimony.
15 A. I will be discussing the collaboration between the Company and Staff on the Company's
16 weather normalization methodology as well as discuss the final models and resulting
17 adjustment used in this case.
18 Q. Are you sponsoring any exhibits to your direct testimony?
19 A. Yes, I am sponsoring the following exhibits:
20 Exhibit 27 RS GS Models
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INTERMOUNTAIN GAS COMPANY

I Exhibit 28 Weather Normalization Adjustment.
2 Q. Please outline the agreements the Company made related to weather normalization in
3 the Settlement in its last general rate case.
4 A. In the Stipulation and Settlement approved in Order No. 35836, Case No. INT-G-22-07,
5 the Company agreed that prior to filing the Company's next general rate case the Company
6 and Staff would hold a workshop to discuss methodology for weather normalization.'The
7 Company and Staff met on several occasions to discuss weather normalization as agreed
8 prior to filing this case. As discussed in greater detail in the testimony that follows, the
9 final models that resulted from that collaborative process are included as Exhibit 27.
10 Q. What is weather normalization?
11 A. Weather normalization adjusts test year natural gas consumption to the level that would
12 have been consumed if the test year were a normal weather year. Temperature is the
13 primary driver of variances in natural gas consumption. Because a portion of the
14 Company's rates are based on consumption, variations in weather will affect the amount of
15 revenue received by the Company. For example, a year with lower consumption due to
16 warmer than normal temperatures will result in lower revenues for the Company.
17 Conversely, higher consumption due to colder than normal temperatures will result in
18 higher revenues for the Company. Normalized natural gas consumption is used in
19 developing the RS and GS-1 sales revenues that can be expected in a normal weather year,
20 and upon which the revenue requirement in this case is based. Normalized natural gas
21 usage also contributes to the development of the billing determinants used in this case.
'INT-G-22-07,Stipulation and Settlement,p. 5
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INTERMOUNTAIN GAS COMPANY

I Q. Explain the underlying data as well as the data collection and storage process.
2 A. In this case, the Company continues to use the general structure established prior to the
3 2022 case, modified as suggested by staff during pre-filing discussions. The system is
4 based on individual premise level billing detail that includes data on all premises that
5 received a customer charge for the month. The system collects and stores data at this
6 individual premise level of detail from 2007 to the present. Because the data is stored at
7 such a granular,premise level of detail, the system will be able to integrate seamlessly with
8 other customer information systems that may be implemented in the future with no issues
9 regarding data continuity.
10 Q. What billing data is collected and stored?
11 A. Intermountain collects the following billing data for its residential and commercial
12 customers and stores it in a table in its data warehouse:
13 1) Accounting Year and Month
14 2) Billed Therm Usage
15 3) Start and end date of billing range
16 4) Premise ID
17 The following information is then calculated from the data stored in the data
18 warehouse:
19 1) Customer Count representing the total number of unique premises that
20 received a bill in a given accounting month.
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1 2) Usage Per Customer which is calculated by summing the total therm usage
2 for a customer class in a given accounting month divided by the Customer
3 Count in that month.
4 3) Rate Study Division which represents the code of the closest weather station
5 to the billed premise, based on the premise's town code.
6 Q. What weather data is collected and stored?
7 A. The Company collects and stores daily high, low and HDD65 weather data from seven
8 representative National Oceanic and Atmospheric Administration("NOAA") weather sites
9 across its service territory.
10 Q. What are HDD's?
11 A. HDD's, or heating degree days, are units used to relate a day's temperature to the energy
12 demands of temperature sensitive load, primarily for space heating. HDD's are calculated
13 by subtracting a day's average temperature from a reference temperature, in this case 65'
14 Fahrenheit.
15 Q. What is the weather weighting process and why is it important?
16 A. Customers across Intermountain's service territory experience weather that can be
17 dramatically different based on their location. It is important to match the weather
18 customer's experience with the total usage, and thus total revenues, of the Company. To
19 enable this appropriate matching, the system uses the Rate Study Division to find the
20 nearest weather station to the customer. The daily HDD records are then summed across
21 the billing period. The customer billing data as well as the summed HDD for the billing
22 period becomes one record in the weather normalization database. To calculate a Total
23 Company HDD for each month that accurately represents the weather that contributed to
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I the usage for the month, each customer's HDD sum for the accounting month is multiplied
2 by 1/Customer Count for the accounting month. The results for each customer are summed
3 to create the Total Company HDD for the accounting month. The data collection, storage
4 and weather weighting processes all rely on billing system data.
5 Q. How does the Company define normal weather?
6 A. The Company's normal weather is based on an industry standard practice of using an
7 average of the temperatures experienced during the most recent 30-year period.
8 Intermountain's service territory contains regions with diverse weather patterns. To
9 incorporate the influences of varying temperatures on Company usage, daily weather data
10 for the past 30 years was collected and stored as outlined above. A 30-year average of
11 HDD's for each day of the year was calculated for each weather station.
12 Q. How are the weather normalization models used to adjust test year usage?
13 A. The weather normalization models are used to calculate an adjustment that is applied to
14 actual usage to generate the test year volumes. The selected weather normalization model
15 may vary,but it will always fall under the following form:
16 Consumptiont = y(Wt,Ct)
17 Where Consumptiont is Usage per Customer in month t,y() is the selected
18 predictive model, Wt is the weather input (or set of weather inputs) in month t, and Ct
19 represents the set of other non-weather covariates in the predictive model.
20 The adjustment can be computed as follows:
21 Adjustmentt = Y(WNORM,t,Ct) — Y(WACT,t,CD
22 Where WNORM,t is the weather that customers would experience in period t under
23 normal conditions, defined as a 30-year rolling average. WACT,t is the actual weather that
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I customers experienced in period t of the test year. Note that since the covariates captured
2 in Ct are the same under normal or actual weather conditions, they will directly cancel out
3 of the resulting adjustment. Thus, the adjustment can be simplified in terms of the
4 difference between normal weather and actual weather as follows:
5 Adjustmentt = flt x KNORm,t - WACT,t)
6 Where flt is the coefficient within model y() estimating the usage per customer per
7 degree day relevant to the month t.
8 Under the test year adjustment method, the total normalized consumption in each
9 month is equal to:
10 Normalized Consumption = (Actual +Adjustment) x CustomerCount
11 Where Actual is the observed usage per customer in the month and CustomerCount
12 is the number of unique premises to have received a bill in the period.
13 This agreed upon method is reflected in the weather normalization adjustment
14 shown on Exhibit No. 2.
15 Q. Is the structure of the models identical to those used in the Company's last general
16 rate case?
17 A. No. Both Residential and Commercial models initially proposed by the Company had the
18 same structure as those used in the last case. During the collaborative process leading up to
19 this filing, Staff proposed that the Company include a year term as well as a year^2 term.
20 Along with this, Staff proposed that the log(price)variable be removed. These changes
21 have been incorporated into the models included in this case. The full models are provided
22 in Exhibit 1.
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INTERMOUNTAIN GAS COMPANY

CONCLUDING REMARKS
1 Q. Does this conclude your testimony?
2 A. Yes.
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INTERMOUNTAIN GAS COMPANY