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Home My WebLink About20260807Staff Comments.pdf RECEIVED August 07, 2026 KELSEA E. ROSS IDAHO PUBLIC DEPUTY ATTORNEY GENERAL UTILITIES COMMISSION IDAHO PUBLIC UTILITIES COMMISSION PO BOX 83720 BOISE, IDAHO 83702 (208) 334-0318 IDAHO STATE BAR NO. 12050 Attorney for the Commission Staff BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION IN THE MATTER OF INTERMOUNTAIN ) GAS COMPANY'S APPLICATION FOR ) CASE NO. INT-G-26-01 APPROVAL TO PLACE INTO EFFECT A ) CHANGE IN ITS DEPRECIATION AND ) AMORTIZATION RATES ) COMMENTS OF THE COMMISSION STAFF COMMISSION STAFF ("STAFF") OF the Idaho Public Utilities Commission ("Commission"),by and through its attorney of record,Kelsea E. Ross, Deputy Attorney General, submits the following comments. BACKGROUND On January 14, 2026, Intermountain Gas Company ("Company") applied to the Commission requesting authority to increase its depreciation and amortization rates from a combined 2.4% to 2.49%. On February 4, 2026, the Commission issued a Notice of Application and Notice of Intervention Deadline setting a deadline for interested parties to file a petition to intervene. Order No. 36926. No petitions to intervene were filed. On March 16, 2026, the Commission issued a Notice of Modified Procedure establishing written comment deadlines. Order No. 36966. On June 8, 2026,the Commission issued an Order Vacating Comment Deadlines. Order No. 37062. Subsequently, Staff and the Company("Parties")entered into settlement negotiations. The Parties attended a settlement conference that resulted in a proposed settlement. On July 13, 2026, the Company filed a stipulation and proposed settlement("Proposed Settlement") and a stipulated STAFF COMMENTS 1 DUE AUGUST 20, 2026 motion to approve the Proposed Settlement requesting Commission approval of the Proposed Settlement. STAFF ANALYSIS Staff recommends the Commission approve the filed Proposed Settlement. Staff fully reviewed the Company's request to change its depreciation and amortization rates prior to conducting negotiations with the Company in a settlement conference held on June 26, 2026. Through Staff's negotiations with the Company, the Parties each discussed their rationale for their initial positions and reached a Proposed Settlement that Staff believes reflects the estimated average service lives, projected retirement patterns, and net salvage percentages for the accounts identified in Table No. 1 below. The Proposed Settlement reduces the Company's annual depreciation and amortization expense by approximately $666,770 compared to the amount included in its Application, based on plant in service balances as of December 31, 2024. The resulting combined depreciation and amortization rate of 2.42% is two basis points above the current rate and seven basis points below the Company's proposed rate of 2.49%. See Proposed Settlement at 2-3. Table No. 1 below provides the stipulated changes to the Company's Application. H H STAFF COMMENTS 2 DUE AUGUST 20, 2026 Table No. 1 ACCOUNT DESCRIPTION ORIGINAL COMPANY SETTLMENT NET NUMBER COST IOWA IOWA CURVE SALVAGE CURVE PERCENTAGE 361.00 STRUCTURES& 9,568,070 38-S 5.0 41-S 5.0 -8% IMPROVEMENTS - NAMPA 361.10 STRUTURES & 1,967,519 25-R 3.0 25-R 3.0 -12% IMPROVEMENTS - REXBURG 362.00 GAS HOLDERS NAMPA 10,132,429 40-R 4.0 40-R 4.0 -14% 363.00 MEASUREMENT&REG 270,146 47-S 4.0 45-R 2.5 -6% EQUIPMENT-NAMPA 376.00 DISTRIBUTION MAINS 331,142,799 70-R 3.5 71-R 4.0 -50% 380.00 SERVICES 256,371,253 58-R 3.0 60-R 3.0 -75% 385.00 INDUSTRIAL MEASURES 12,763,496 40-R 1.0 42-R 1.5 -12% &REG. STATION EQUIPMENT 392.10 TRANSPORTATION 13,719,078 10-L 2.0 10-L 2.0 19% EQUIPMENT 396.00 POWER OPERATED 3,779,184 10-L 0.0 10-L 0.0 50% EQUIPMENT Estimated Service Life Analysis Staff s analysis focused on the Concentric Energy Advisors ("Concentric") study on the estimated service lives for eight of the Company's largest asset accounts using historical plant data. Staff s analysis identified differences between Concentrics's study and Staff s estimates of the accounts' average service lives and projected retirement patterns. For depreciation purposes, these characteristics are represented through a system of survivor curves known as Iowa curves, which account for retirement patterns of utility or industrial assets of differing ages or vintages. Each Iowa curve provides a visual representation of the percent of assets (in terms of dollar amount) surviving throughout the service life of a specific asset group. The Proposed Settlement reflects adjustments to the average service lives and retirement patterns for five of the eight Company asset accounts reviewed by Staff. STAFF COMMENTS 3 DUE AUGUST 20, 2026 Net Salvage Value Analysis Staff also reviewed the historical net salvage percentages for nine of the Company's asset accounts to determine reasonable net salvage values until the Company's next depreciation case. Staff believes the Proposed Settlement reflects the agreed-upon net salvage percentages, with six of the nine Company asset accounts reviewed by Staff being changed. To analyze net salvage values, Staff reviewed the tested accounts using both the five-year and historical net salvage approaches. Staff considered the five-year approach to best represent recent account trends while incorporating a longer period of experience than the three-year approach. Staff also considered the historical approach because it uses the broadest available dataset and helps smooth abnormal fluctuations in individual years. Staff presented these methodologies and its recommended net salvage values during settlement discussions. Effective Date Staff reviewed the Company's proposed effective date. Staff agrees with the Company's proposal and recommends that the new rates take effect on the first day of the month following issuance of the Commission's final order in this case. STAFF RECOMMENDATION Staff recommends the Commission accept the filed Proposed Settlement with an effective date of the first of the month following the Commission Order in this case. Respectfully submitted this 7th day of August 2026. Kelsea E. Ross Deputy Attorney General Technical Staff. Ty Johnson, Steven Verdieck, Shubhra Deb Paul I:\Utility\UMISC\COMMENTS\INT-G-26-01 Comments.docx STAFF COMMENTS 4 DUE AUGUST 20, 2026 CERTIFICATE OF SERVICE I HEREBY CERTIFY THAT I HAVE THIS 7TH DAY OF AUGUST 2026, SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF , IN CASE NO. INT-G-26-01, BY E-MAILING A COPY THEREOF, TO THE FOLLOWING: MICHAEL PARVINEN PRESTON N. CARTER DIR—REGULATORY AFFAIRS MEGANN E. MEIER INTERMOUNTAIN GAS CO GIVENS PURSLEY LLP PO BOX 7608 601 W BANNOCK ST BOISE ID 83707 BOISE ID 83702 E-MAIL: michael.parvinen(a),cn cg com E-MAIL: prestoncarter@jzivenspursle, igcre ug latogAint a� mem(&givenMursley.com stephaniew@jzivenspursley.com PATRICIA JORDAN, ECRETARY CERTIFICATE OF SERVICE