20251021Decision Memo.pdf

DECISION MEMORANDUM
TO: COMMISSIONER LODGE
COMMISSIONER HAMMOND
COMMISSIONER HARDIE
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL
FROM: MICHAEL ELDRED, COMMISSION STAFF
JEFFREY LOLL, DEPUTY ATTORNEY GENERAL
DATE: OCTOBER 21, 2025
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-25-03.
BACKGROUND
On September 30, 2025, Intermountain Gas Company filed Tariff Advice No. INT-TAG-
25-03 ("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, 2025, and to become effective on December 1, 2025.
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, 2025.
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
overhead charge by October 1, beginning in 2021. Staff reviewed the Company's workpapers
DECISION MEMORANDUM - 1 - OCTOBER 21, 2025

and examined the method and the changes in inputs driving the change in the amounts for the
three different 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.
Staff summarized the percentage change for the AIF and SLCPF and the construction
overhead charge in Table Nos. 1 and 2, below.
When compared to current authorized rates, the Company's proposed AIF increased by
3.0% for both Residential and Commercial service line extension. For main line extensions, the
AIF increased by 2.9% for Residential customers and 2.8% for Commercial customers. These
rates are based on the service line extension and main line extension costs embedded in base
rates that were authorized in the last general rate case through Order No. 35836. From the
baseline, the rates are inflated each subsequent year through the annual update using the
consumer price index published by United States Bureau of Labor Statistics.
The proposed SLCPF is based on actual costs incurred over three years and increased by
14.0% compared to the current SLCPF. Staff believes the major inputs driving the increase in
the SLCPF were related to increases in inflation, contract service/consulting, and engineering
and supervision costs associated with capital additions due to growth. The proposed construction
overhead charges are based on actual costs incurred over the past year. The inputs used to
determine the construction overhead charge resulted in 6.6%higher overhead charges (proposed
amount of 11.63%) 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.
Table No. 1: Allowable Investment Factor Comparison
Allowable investment factors ($/therm)
Customer type Service Main Combined
Current Proposed Change Current Proposed Change Current Proposed Change
Residential 0.674 0.694 3.0% 0.822 0.846 2.9% 1.496 1.54 2.9%
Commercial 0.501 0.516 3.0% 0.612 0.629 2.8% 1.113 1.145 2.9%
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Table No. 2: Service line Costs and Construction Overhead Charges Comparison
Current Proposed Change
Service Line Cost per Foot($) 17.33 19.75 14.0%
Construction Overhead Charges (%) 10.91 11.63 6.6%
RECOMMENDATION
Staff recommends the Commission approve the revised tariff sheet reflecting updates to
the AIF, SLCPF, and the construction overhead charge with an effective date of December 1,
2025.
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, 2025?
04C
Michael Eldred
Commission Staff
I:\Utility\UDMEMOS\INT-TAG-25-03 Decision Memo.docx
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