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HomeMy WebLinkAbout20090318Stipulation.pdfRECEI rit.. Morgan W. Richards, Jr. ISB#1913 804 East Pennsylvania Lane Boise, Idaho 83706 Telephone (208) 345-8371 2089 HAR 18 PM I: fI Attorney for Intermountain Gas Company BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION IN THE MATTER OF THE APPLICATION ) OF INTERMOUNTAIN GAS COMPANY ) FOR APPROVAL TO PLACE INTO ) EFFECT A CHANGE IN ITS COMPOSITE )DEPRECIATION RATE ) CASE NO. INT-G-08-05 STIPULATION This Stipulation ("Stipulation") is entered into by and among Intermountain Gas Company ("Company" or "Intermountain") and the Staff of the Idaho Public Utilities Commission ("Staff') also known collectively as the "Parties." i. Background 1. On November 21,2008, Intermountain Gas Company filed an Application as part of Case No. INT-G-08-05 requesting approval to change its composite depreciation rate. Intermountain's currently effective depreciation rate of 3.35% (3.34% when the accrual rates per Order 29975 are weighted by 09/30/07 assets) was approved by the Commission in February 2006. The Commission directed the Company to update its depreciation study and submit it to the Commission for review no later than three years from entry of the February 2006 Order. Intermountain subsequently retained a consultant to update its 2005 Depreciation Study. The consultant's study indicated a decrease in the composite rate from 3.34% to 2.96% is appropriate. The effect of the lower rate would be a decrease in the Company's annual depreciation accrual by $1,462,205. The Company asked that its new composite depreciation rate be effective January 1, 2009. Stipulation - 1 2. Subsequent to the Company's initial filing in Case No. INT-G-08-05 the Commission, by way of Order No. 30695, established an intervention deadline of December 17, 2008. There were no interventions filed in this Case. The same Order No. 30695 directed the Staff and Company, following the intervention deadline, to "convene informal workshops to attempt to resolve Intermountain's request by agreement." 3. On March 4, 2009, the Staff and the Company convened an informal workshop to resolve any outstanding issues in the Case and stipulated to the following Agreements. II. AGREEMENTS 4. The Parties agree for the purposes of this Stipulation to exclude from consideration in Case No. INT-G-08-05 the 2007 removal activity included as part of account 376 (Mains). The agreed upon net salvage based on the exclusion of 2007 removals is negative 55%. The resulting depreciation accrual rate for account 376 is 2.69%. 5. The Parties further agree that an explanation of the account activity that made up the removals during 2007 for account 376 has been provided to the Staff. 6. The Parties further agree that the 2007 removal activity for account 376 wil again be considered for inclusion at such time the Company files subsequent or follow-on depreciation studies. The parties agree the next study wil be conducted on the three-year cycle or as may be required by the Commission. 7. The Parties agree that, prior to the Company's next Application to modify its depreciation rates, the Company will provide to the Staff the sub-accounts that make up account 363 (LNG Plant). At such time this information is made known to the Staff, the Parties will evaluate the appropriate listing of LNG Plant related accounts for future separate and unique depreciation treatment. 8. The Parties further agree that, pursuant to the changes made as part of the above sub-paragraph 4, a decrease in the composite rate from 3.34% to 2.90% is appropriate. The effect of the lower rate would be a decrease in the Company's annual Stipulation - 2 depreciation accrual by $1,683,747 (an additional decrease of $221,542 as compared to the Company's original Application in Case No. INT-G-08-05). The applicable information by account supporting this adjustment are shown in Attachment No. 1 9. The Parties agree that, subject to the Commission's final approval in the matter, the Company should be authorized to record the decrease in the annual depreciation on an account-by-account basis effective January 1, 2009 as shown on Attachment NO.1. Dated this i~itday of March 2009. Intermountain Gas Company Idaho Public Utilties Commission Staff By ¿.~ W , J4 ByA~ Morgan W. Richards Jr. Attorney for Intermountain Gas Company Weldon B. Stutzman Deputy Attorney General Stipulation - 3 ATTACHMENT NO.1 CASE NO. 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