HomeMy WebLinkAbout20030604Idaho Falls Public Hearing.pdf
1 IDAHO FALLS, IDAHO, WEDNESDAY, JUNE 4, 2003, 7:00 P. M.
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4 THE HEARING EXAMINER: All right, good
5 evening, ladies and gentlemen. This is the time and
6 place set for the Public Utilities Commission's public
7 hearing in Case No. INT-G-03-1. My name is Don
8 Howell. I am the Commission's Hearing Examiner for
9 tonight's hearing while they are otherwise involved in
10 a lengthy hearing in Boise on another matter.
11 As those of you know who attended the
12 public workshop earlier this evening, this case is to
13 review the Company's annual power cost, gas cost,
14 adjustment in which the Company seeks approximately
15 $61 million or 37.7 percentage increase in revenues.
16 This is an annual adjustment that the Company
17 undergoes primarily based upon its cost of supplying
18 the gas.
19 The purpose of tonight's hearing is to
20 take public testimony from members of the public who
21 wish to have their comments recorded for the
22 Commission's review. As you may notice, we have a
23 court reporter sitting over against the wall and what
24 we will do is those people wanting to provide public
25 testimony, I will swear them in and then they can give
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1 their public testimony.
2 By way of introductions, on my right is
3 the Staff of the Idaho Public Utilities Commission,
4 your left, and on my left is representatives of the
5 Intermountain Gas Company, and probably we are ready
6 to undertake, so why don't I take the appearance of
7 the parties. For the Public Utilities Commission
8 Staff.
9 MR. HAMMOND: Thank you, Mr. Hearing
10 Examiner. My name is John Hammond. I'm a Deputy
11 Attorney General. I represent the Commission Staff in
12 this matter and with me here at the table are Alden
13 Holm, the auditor on this case, an accountant, and
14 Michael Fuss, the Staff engineer.
15 THE HEARING EXAMINER: All right, and
16 for the Company.
17 MR. HUNTINGTON: Mr. Hearing Examiner,
18 my name is Mike Huntington. I'm the vice president of
19 marketing and external affairs for Intermountain Gas
20 Company and with me is Mike McGrath who is director of
21 our regulatory services.
22 THE HEARING EXAMINER: Thank you,
23 Mr. Huntington. In addition, the Commission has also,
24 I believe, granted intervention to one other party, a
25 Jeffrey C. Brooks, doing business as Advanced Energy
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1 Strategies. Is Mr. Brooks with us tonight? All
2 right, for the record, then, we'll show Mr. Brooks is
3 not present for tonight's public hearing.
4 Again, what we will do is call people to
5 the rostrum, see if there any public testimonies to be
6 given and we'll see if any of the parties have
7 questions. Are there any preliminary matters that
8 need to be handled before we take public testimony?
9 Mr. Hammond.
10 MR. HAMMOND: None from the Staff.
11 THE HEARING EXAMINER: Mr. Huntington.
12 MR. HUNTINGTON: Mr. Examiner, if it's
13 appropriate, I would like to read some summary
14 comments at this point regarding the application.
15 THE HEARING EXAMINER: Sure.
16 MR. HUNTINGTON: On May 7th of this
17 year, Intermountain Gas Company filed a request before
18 the Idaho Public Utilities Commission for authority to
19 increase its prices effective July 1st, 2003. The
20 mechanism used to request this increase was the
21 Company's purchased gas cost adjustment tariff or
22 PGA. The PGA tariff ensures that Intermountain's
23 customers will pay no more for natural gas than that
24 amount incurred by the Company for that same natural
25 gas.
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1 Intermountain's current prices are not
2 indicative of today's market conditions. Natural gas
3 prices charged by Canadian and domestic producers and
4 suppliers have risen considerably across the nation
5 over the past several months. With the recent rise in
6 wellhead prices, the number of drilling rigs has
7 increased. Therefore, the Company believes that the
8 wellhead price for natural gas will ultimately decline
9 as a result of recent increases in drilling and
10 production. However, that will likely be several
11 months away and today's higher market prices
12 necessitate the Company's proposed increase at this
13 time.
14 Under the current prices, customers
15 heating their homes and water with natural gas are not
16 being sent a correct price signal indicative of
17 today's market conditions. Commodity futures prices
18 as of May 5th, 2003 dictate the use of a $.50305
19 weighted average cost of gas or WACOG. Without an
20 adjustment at this time, our customers will be
21 required to pay these costs later when they cannot
22 change their consumption behavior adequately to help
23 mitigate the effect of these higher prices.
24 The Company is sensitive to the impact
25 that these higher prices will have on its customers.
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1 We continue to be vigilant in monitoring wholesale
2 natural gas prices. Should these forward prices
3 materially change from the proposed WACOG prior to
4 this winter's heating season, the Company is committed
5 to come before the Idaho Public Utilities Commission
6 to amend the proposed prices.
7 Conservation measures are being stressed
8 and communicated to each and every residential and
9 commercial customer. The Company's customer service
10 representatives stand ready to encourage customers who
11 are unable to pay higher energy costs to actively seek
12 assistance through various state and local agencies.
13 Various payment options such as level pay can also be
14 utilized to help mitigate the impact that higher
15 energy costs have on the customer's energy budget.
16 The Company earnings will not be
17 increased as a result of the proposed increase in
18 prices and the Company respectfully requests the
19 Commission's consideration in this matter.
20 THE HEARING EXAMINER: Does that
21 complete your statement?
22 MR. HUNTINGTON: That concludes my
23 statement, Mr. Examiner.
24 MR. HAMMOND: Mr. Hearing Examiner, if I
25 may, I have a question of Mr. Huntington to ask about
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1 his prepared statement.
2 THE HEARING EXAMINER: Well, I will
3 allow a single question. Mr. Huntington was not put
4 under oath, so if it's a point of clarification, why
5 don't you ask it.
6 MR. HAMMOND: In your statement and in
7 your application, you had stated the Company would be
8 committed to coming in before the winter heating
9 season should the prices materially change and amend
10 the prices going forward, is it the Company's
11 intention to do that if the prices go up or down?
12 MR. HUNTINGTON: Mr. Examiner,
13 Mr. Hammond, that's exactly the case. If the forward
14 prices materially change in either direction, the
15 Company intends to come back before the Commission to
16 amend those prices.
17 MR. HAMMOND: Thank you.
18 THE HEARING EXAMINER: All right, and if
19 that does happen, then the Commission would, of
20 course, institute or the Company would file another
21 application and the Commission would institute another
22 proceeding.
23 All right, with those preliminaries
24 underway, I have at least one name on our public
25 witness list who would like to give public testimony.
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1 Mr. Shurtz, sir, if you could please step to the
2 podium.
3
4 TIMOTHY SHURTZ,
5 appearing as a public witness, having been first duly
6 sworn, testified as follows:
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8 THE HEARING EXAMINER: So we can put you
9 on the record, we'll have Mr. Hammond ask you a couple
10 of questions.
11
12 EXAMINATION
13
14 BY MR. HAMMOND:
15 Q Sir, could you state your name and spell
16 your last name for the record?
17 A Timothy Shurtz, S-h-u-r-t-z.
18 Q And, sir, could you tell us where you
19 reside?
20 A I reside at 411 South Main, Firth,
21 Idaho.
22 Q And, Mr. Shurtz, are you an
23 Intermountain Gas customer?
24 A Yes, I am.
25 Q Mr. Shurtz, you may make your
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1 statement. Thank you.
2 A As a city councilman, I'm here
3 representing not the city of Firth but myself. I feel
4 that we've seen some pretty massive increases in the
5 price of gas over the last two years, but at the same
6 time, Intermountain Gas is the deliverer, not the
7 instigator of this, so I feel that at the same point
8 it's important that we have a stable market, a good
9 company to maintain delivery.
10 When I turn on my furnace, I want gas
11 there, so I don't really have a big bone to pick with
12 Intermountain Gas, but I would ask that if -- I
13 commend Intermountain Gas for being willing to come
14 back to the Commission before the winter heating
15 season starts. I would be more than thrilled if in
16 fact that could be brought down. I also favor some
17 stability. I remember last year Intermountain Gas
18 proposed a little smaller decrease versus for a little
19 more stability, that was my understanding.
20 I'm thinking I'm seeing their point of
21 view at this time, but right now the economic
22 conditions out there, I would encourage Intermountain
23 Gas and the Commission to do everything we can to
24 limit the economic impact that we're having with this
25 gas situation. Businesses out there and people on
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1 fixed income are hurting and, again, I applaud
2 Intermountain Gas' community efforts to try to negate
3 those with a fixed income.
4 I would encourage them to be more active
5 or as active as they can be to get the word out to
6 their customers to hook people up with the proper
7 agencies. As you know, the state is very low on money
8 at this time, so a lot of their advertising is not --
9 it may be the gas company and the other utilities who
10 we may depend on to get that information from.
11 I feel that we need to look for
12 stability in the long term. Also, we need to pay up
13 front. Intermountain Gas is a more of a smaller
14 Company, a local Company, they don't have the
15 resources, so we need to as much as possible keep them
16 stable. At the same time, we need to protect the
17 consumer as much as possible and that being the
18 Commission's job.
19 There's not much more I can really say,
20 but I commend the Commission for being here and I'm
21 thankful for the Company coming here today to
22 represent their point of view and I would apologize
23 for most of the people in eastern Idaho. You guys
24 have taken the time to be here, I think that a few
25 more leaders and a few more people should come and ask
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1 questions.
2 I said earlier in an interview that
3 things aren't done in secret here, they're done in
4 apathy and I think, again, I commend the Commission
5 and the Company for giving me the time to just come
6 and represent my views. Thank you.
7 THE HEARING EXAMINER: Mr. Shurtz, thank
8 you very much for your comment. Let's see if any of
9 the parties have any questions.
10 Mr. Hammond?
11 MR. HAMMOND: Actually, just one,
12 Mr. Shurtz.
13
14 CROSS-EXAMINATION
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16 BY MR. HAMMOND:
17 Q You had talked about stability, would
18 you favor price stability in your rates over possible
19 lower prices in terms of maybe the Commission ordering
20 a lower increase than is proposed by the Company
21 versus maybe putting it where the Company says and
22 maybe providing more stability?
23 A I think if we could possibly, if there
24 was room for a lowering, I would be all for it, but if
25 we have to rob Peter to pay Paul and come back again,
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Wilder, Idaho 83676 Public
1 I would favor a long-term stability of a year so that,
2 again, we can make choices. I found that there's some
3 ways I can heat my home at this point cheaper than
4 maybe using the gas furnace all the time and so I
5 favor -- one, I favor a good strong company to deliver
6 to us, but I also favor a just and equitable price.
7 I might also suggest that we've been 18
8 years without a, what's the word, without a rate
9 case. It might be time to look at it because on
10 either side, you know, I heard something about gas and
11 tires, gas and tires have come up a little bit in the
12 last 18 years and vehicles and things, so maybe it
13 might be time to look at that.
14 Also, profit margins, Intermountain Gas
15 is guaranteed a certain profit or below in that
16 range. Where we're getting two, three percent on our
17 CDs and things at this time, there might be room for
18 changes there, and as was mentioned in the other
19 thing, there might be an opportunity to maybe give
20 Intermountain Gas incentive to go out and look for the
21 best price, give them some strength to look.
22 Q One further question, if I may. When
23 you say giving them an incentive, should the Company
24 also if for some reason make a poor decision
25 purchasing, not hit a target, should the Company
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Wilder, Idaho 83676 Public
1 likewise be penalized? Should the gate swing both
2 ways, I guess, would be my question?
3 A That's the American way, that's business
4 and, yeah, it should swing both ways, but, again, as a
5 regulated company, they've got to do what's best for
6 one, their stockholders and two, they're under law to
7 deliver us the gas, so I'd like to jump all over this
8 as I have in other cases and say, you know, this is
9 unfair, but I've looked at the futures out there and
10 looked at the pricing and Intermountain Gas has a gun
11 to their head, they don't have a choice. They have to
12 buy the gas to supply, under law they have to do that,
13 and I understand this. You know, again, I'm not happy
14 about the price increase, but I realize that we have
15 to have a gas company to deliver to us.
16 THE HEARING EXAMINER: Mr. Huntington.
17 MR. HUNTINGTON: Mr. Examiner, just a
18 comment to thank Mr. Shurtz for coming out tonight
19 from Firth and to let Mr. Shurtz know that Terri Shoen
20 is in the audience with information about the energy
21 assistance programs that are available to all of our
22 customers if there are questions later on.
23 THE HEARING EXAMINER: All right, thank
24 you, Mr. Huntington, and on behalf of the Commission,
25 thank you, Mr. Shurtz, we appreciate your testimony.
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1 THE WITNESS: Thank you again for
2 coming. I appreciate you guys coming all the way over
3 here.
4 THE HEARING EXAMINER: It's a beautiful
5 day.
6 (The witness left the stand.)
7 THE HEARING EXAMINER: All right, is
8 there anyone else desiring to give public testimony in
9 this matter? I'll call one more time. Any other
10 public testimony to be offered to the Commission? All
11 right, then, ladies and gentlemen, it looks like we
12 have concluded our public hearing here in Idaho
13 Falls. We have one more public hearing tomorrow
14 scheduled in Twin Falls Council Chambers to begin with
15 a workshop at 6:00 p.m. and the public hearing at
16 7:00.
17 Once again, thank you all for attending
18 and we will be at recess.
19 (The Hearing recessed at 7:20 p.m.)
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1 AUTHENTICATION
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3
4 This is to certify that the foregoing
5 proceedings held in the matter of the application for
6 Intermountain Gas Company for authority to increase
7 its rates for service, commencing at 7:00 p.m., on
8 Wednesday, June 4, 2003, at the Idaho Falls Council
9 Chambers, 140 Capital, Idaho Falls, Idaho, is a true
10 and correct transcript of said proceedings and the
11 original thereof for the file of the Commission.
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CONSTANCE S. BUCY
16 Certified Shorthand Reporter #187
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