INT Lebens Direct.pdf

BEFRE TI IDAO PUBLIC LIILITIES CCMSSION
IN'UNAIN GA COMAN )
)CAE NO. U-1034-88
Prepared Direct Testimony
of
JEFFR K. LEBENS
Q. Please state your nam, business address and position with Intermuntain.
A. My nam is Jeffrey K. Lebens. My business address is 555 South
Cole Road, Boise, Idao. I am the Controller of Intermuntain
Gas Company.
Q. Briefly describe your educational and work background.
A. I graduated from the University of Washington in June of 1972 with a
Bachelor of Arts degree in Business Admistration with a major
emphasis in accounting. I began work with Arthur Andersen & Co.
in December of 1971 as a staff accountant in Seattle, Washington.
I was licensed as a Certified Public Accountant in March of 1973.
My work with Arthur Andersen & Co. was principally involved with
audit and published financial statements covering a wide range
of industries, but with some specialization in public utility audits.
In December of 1976 I began my employment with Intermuntain Gas
Company as Maager of Accounting Services and was elected Controller
in July of 1979.
Q. Please describe your responsibilities as Controller.
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A. As Controller, I have the overall responsibility for the supervision,
direction and control of general accounting, cutomer accounting,
financial reporting, corporate taxtion and dataprocessìng.
Q. What is the purpose of your testimny in this Case?
A. Mr. Warren Robinson has previously testified in this Case that
the per-household consumtion of natural gas has decreased in the
Intermuntain Gas Company servce terri tory due primarily to price
elasticity. He has proposed that the weather adjusted test year
consumtion be decreased by a 6~% factor in order to properly
determne consumtion during the period for which rates are being
determned. The purpose of my testimony is to propose an accotmting
mechanism that will protect the ratepaying consumers from over-
collected revenue and protect the Company from undercollections
resulting from deviations from the projection of Mr. Robinson.
Q. Why do you believe there is a possibility of over or under collection
due to the adoption of Mr. Robinson's projection?
A. Mr. Robinson's testimony is based upon a study performd using
soud methodology. However, as is true with any such study, certain
underlying assumtions mut be made and a small degree of statistical
error must be allowed.
Q. What accounting mechanism do you propose to protect the ratepayer
from overpayment and the Company from undercollection.
A. I propose that the actual consumtion be computed on a monthly basis
and compared with Mr. Robinson's calculations, which are shown on
Exhibit No. 106, Schedule 2. The difference in thenn mltiplied
by the gross margin for each residential rate schedule would then
be deferred and accumlated in Account Numer 186 for refund or
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will be greater than Nt/Ct, and a positive numer results if the
actual per household consumtion decrease exceeds 6~%.
The deviation from proj ected per household consumtion in
total therm, (E), is then. determed by nn tiplying the average
consumtion difference by test year customers.
Q. Please explain the section of Schedule 1 captioned "Computation
of Deferral Amunt."
A. This equation simply computes the amount of over or under collected
gross margin, and derives the total deferral by mltiplying the
total therm deviation from proj ected per household consumtion
by the difference between the allowed rate for gas sale and the
rolled - in cost of the gas.
Q. Why have your calculations all used weather adjusted data?
A. Weather factors could severely distort the calculation and,
al though colder or warmer weather may well cause a shift in consum-
tion, its impact should be regarded as norml business risk.
Q. Does that complete your direct testimony?
A. Yes it does.