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BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
INTERMOUNTAIN GAS COMPANY )
)
Case No. U-I034-88
PREPARED DIRECT TESTIMONY OF REED PENNING
Q. Please state your name; business address and position with
Intermountain.
A. My name is Reed Penning. My business address is 555 South
Cole Road, Boise, Idaho. I am a Vice President of
Intermountain Gas Company.
Q. What has been your experience in the natural gas industry?
A. I joined Fish Service & Management Corporation in 1956 as a
Cathodic Protection Inspector. In 1957, I joined
Intermountain Gas Company as a Warehouseman in Twin Falls
and was transferred later to Pocatello and the Idaho Falls
area. With both Fish and Intermountain I was involved in
the design, installation and inspection of the Company's
transmission and distribution systems. I transferred to
the Gas Measurement Department in Boise as Chief Clerk in
1961. In 1964 I moved to Pocatello as a Meter Inspector
for the Pocatello-Idaho Falls area. In this capacity I was
responsible for the design, installation, inspection and
maintenance of the measurement and large regulator stations
in the eastern system. I returned to Boise in 1966 as
Chief Meter Inspector for the Company. I was appointed
Superintendent of Gas Measurement and Supply in 1968. In
1971 I was appointed Manager of Gas Control and Manager of
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Gas Supply in 1973. In October 1974 I was elected a Vice
President. I have attended Washington State University,
Boise State University and Idaho State University. I have
testified before this Commission and the Federal Power
Commiss ion.
Q. Have you attended any management or utility courses?
A. Yes. I have attended the University of Wisconsin A. G.A.
Rate Course and am a graduate of the Stanford Executive
Program.
Q. What is the purpose of your testimony in this proceeding?
A. The purpose of my testimony is to present the cost to serve
each customer class based on the total cost of service pre-
sented by Mr. Worthan in Exhibit No. 102.
Q. How did you establisp the total cost of service for each
revenue class?
A. The cost of service analysis was the same as that used by
Intermountain, and approved by the Commission, in Case No.
U-I034-75. This procedure is outlined on Exhibit 107,
Schedule 1, entitled "Procedure for Preparing Cost of
Service." The cost of service presentation required three
basic steps: (1) classify cost by type; (2) determine
allocation factors relating cost incurrence to customer
usage characteristics; and, (3) allocate the costs as
classified to each customer class. This exhibit describes
the first step under paragraph A, the second step under
paragraphg B and the third step under paragraph C.
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Q. How have you deviated from the cost of service study which
was presented in Case No. U-I034-75 and approved on August,
1979 in Order No. 14859?
A. I have split the residential class into two separate
classes as approved by the Commission in that proceeding.
Q. Will you please explain Schedule 2 of Exhibit No. 107?
A. Yes, Schedule 2 is entitled "Cost of Service Classified by
Type of Cost." This schedule displays in summary form the
various types of costs making up the total cost of service
by major function.
Q. Will you please explain Schedule 3 of Exhibit No. 107?
A. Schedule 3 is entitled "Cost Responsibility Allocation
Factors by Rate Schedule." This schedule shows the percent-
age of each type of. cost set forth on Schedule Z in columns
b through i that is allocated to each of Intermountain i s
rate classes. The percentage shown on Schedule 3 is then
taken times the costs shown on Schedule 2 in order to
determine components of the revenue deficiency by class of
customer shown on Schedule 4.
Q. Please explain Schedule 4 of Exhibit No. 107.
A. Schedule 4 shows the calculation of Intermountain i s revenue
deficiency by customer class at current rates (columns b
through i at line 16) as well as the total revenue defi-
ciency of $5,662,079 (column j at line 16). Percentage
deficiencies by customer class are shown on line 17 of the
Schedule.
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Does this complete your direct testimony?
Yes, it does.
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