20130906INTG to Staff 7-12.pdf

EXECUTIVE OFFICES
INTERMOUNTAIN GAS COMPANY
555 SOUTH COLE ROAD •P.O.BOX 7608 •BOISE,IDAHO 83707 •[phone] •FAX:[phone] -.p;3:3I
-
September 6,2013 :‘TL1Ti
Jean Jewel!
Idaho Public Utilities Commission
472 West Washington St.
P.0.Box $3720
Boise,ID 83 720-0074
RE:Second Production Request of the Commission Staff to Intermountain Gas Company
Case No.INT-G-13-05
Dear Jean:
Enclosed for filing with this Commission are an original and seven (7)copies of Intermountain Gas
Company’s responses to the Second Production Request of the Commission Staff,in the above
referenced Case.
If you have any questions or require additional information regarding the attached,please contact me
at 377-6168.
Sincerely,
Michael P.McGrath
Director -Regulatory Affairs
Intermountain Gas Company
Enclosure
cc Scott Madison
Morgan W.Richards
REQUEST NO.6:
Question -Please provide the percentage of estimated annual load comprised of index purchases,fixed-
price hedgesfor a term of one year or less,andfixed-price hedges from previous multi-year contracts.In
your response,please include the estimated or actual weighted average prices for each type of
procurement contract.
Answer —Answer provided under separate cover.
Person Preparing Answer:Michael P.McGrath,Director —Regulatory Affairs,Ph 377-6168
Record Holder:Michael P.McGrath,Director —Regulatory Affairs,Ph 377-6168
REQUEST NO.7:
Question -Please provide the Gas Loss Reports from each line break that occurred during this FGA
year.As part ofyour response,please explain how the reports are used to estimate the quantity of lost
gasfrom each line break.
Answer —Gas Loss Reports are used for known gas loss events (i.e.line breaks).The Gas Loss is
calculated based on size of opening and duration of release.The form itself has space for the inputs used
in the calculation.The calculation provides total therms lost.Attached herewith are the 2013 Division
Gas Loss Reports (Gas Loss Report)through June 2013.
Person Preparing Answer:Hart Gilchrist,Director,Operations Services,Ph 377-6086
Record Holder:Michael P.McGrath,Director —Regulatory Affairs,Ph 377-6168
REQUEST NO.8:
Question -Workpaper No.8 shows annual statistics on lost and unaccountedfor gas.Using the same
format,please provide the following information:
a)the nunther ofmeter audits associated with drive rate errors andpressure errors;
b,)gas loss due to customers having the incorrect meter size installed,
c)gas loss from measurement errors related to translating metered consumption to billed consumption;
and
d)gas loss from measurement differences between Intermountain ‘s distribution system meters and
Northwest Pipeline ‘s meters.
Answer -
a)Number of meter audits associated with drive rate errors and pressure errors (Jan.—June 2013):
1,612
b)Gas loss due to customers having incorrect meter size installed:None
c)Gas loss from measurement errors related to translating metered consumption to billed
consumption:None
d)Gas loss from measurement differences between Intermountain’s distribution system and
Northwest Pipeline’s meters:
Intermountain Gas Company performs a daily and monthly NWP v.IGC telemetry comparison.The
daily comparison examines the larger and strategic gates,while the monthly comparison examines all the
gates shared with NWP metering.In either comparison,if the variance is greater than -/+2%,an
informational call is placed to NWP Gas Control and/or Measurement to verify there have been no
activities that would cause mis-measurement.A secondary call is made to an IGC Technical Specialist
for on-site investigation.Issues are typically resolved by IGC Technical Specialists within one business
day.
Person Preparing Answer:Hart Gilchrist,Director,Operations Services,Ph 377-6086
Record Holder:Michael P.McGrath,Director —Regulatory Affairs,Ph 377-6168
REQUEST NO.9:
Question -It is known in the industry that Aldyl-A pipe manufactured prior to 1984 is susceptible to
cracking under certain circumstances,with pre 1973 Aldyl-A being the most susceptible.Please provide
the quantity oflost gas likely due to defects in the pre 1984 Aldyl-A pipe.
Answer -The quantity of lost gas due to defects in Aldyl-A pipe cannot be quantified because the
company cannot identify the duration or volume of a leak once it is found.We can only determine that it
is leaking.Once we find the leak through routine leak survey or from a customer call-in,we know that
our system is leaking but we have no way of going back and identifying when the leak may have started
and how much was leaking and if the volume of leak increased from inception until identification.
As we have discussed with the pipeline safety staff at the IPUC,we are replacing this pipe as part of a
federal (Pipeline Safety and Hazardous Materials Administration —PNMSA)regulatory code called
Distribution Integrity Management Program (DIMP).DIMP requires operators to evaluate our
distribution system based on risk and take accelerated action on elevated risk pipe.Aldyl-A pipe is a
known higher risk pipe in the industry based on its susceptibility to brittle like cracking.Therefore,
through evaluation of our distribution system,we have identified this pipe in our system and have
developed a pro-active program to replace this pipe in the coming years.
While we have had success with this pipe in our distribution system,we are pro-actively replacing the
pipe to comply with the federal regulation.This does not mean that all of this pipe in our distribution
system is currently leaking or has a history of leaking more than other pipe types.It is a response to the
federal regulation.
Person Preparing Answer:Hart Gilchrist,Director,Operations Services,Ph 377-6086
Record Holder:Michael P.McGrath,Director —Regulatory Affairs,Ph 377-6168
REQUEST NO.10:
Question -On page 3 of Confidential Workpaper No.10,please explain why the cost ofgas managed by
the first referenced gas marketer is consistently more per dekatherm than the gas managed by the second
referenced gas marketer.If the difference is because the two companies manage different types of
contracts,please explain why customers benefitfrom having one company manage the fixed or locked-in
prices (physical and option pricing mechanisms,),and another manage the first-of-the-month index prices.
Answer —Answer provided under separate cover.
Person Preparing Answer:Michael P.McGrath,Director —Regulatory Affairs,Ph 377-6168
Record Holder:Michael P.McGrath,Director —Regulatory Affairs,Ph 377-6168
REQUEST NO.11:
Question -Please explain how the Company estimated the costs ofits indexpurchases.
Answer -Any unhedged tiatural gas purchase volumes are assumed to be purchased at the applicable
monthly index for the pricing point associated with the gas origin.These assumed spot purchases are then
priced based on the futures price curve at the point in time that the model is run.Embedded within this
futures price curve are two data points,first is the Nymex Henry Hub price for each applicable month
which comes from a Nymex reporting service called MarketView.Then added to or subtracted from the
Nymex price is the estimated future “Basis”price curve associated with the pricing point of the gas
origin.This Basis curve comes from BP’s internal structured products and trading group in Houston or
Calgary and is proprietaty information.
Person Preparing Answer:Michael P.McGrath,Director —Regulatory Affairs,Ph 377-6168
Record Holder:Michael P.McGrath,Director —Regulatory Affairs,Ph 377-6168
REQUEST NO.12:
Question -for this PGA year,please provide a schedule of the Company ‘s expenses at its Nampa LNG
facility.As part of the response,please explain how the funds collectedfrom the sale of LNG were used
in accordance with Order No.32793 (i.e.-Operations and Maintenance of the LNG facility,or LNG
facility capital improvements).
Answer —Please see attached 2013 year-to-date schedules with actuals through June for O&M expenses
at the Nampa LNG facility.At the time this schedule was prepared,none of the O&M expenses were
directly related to non-utility LNG sales.The non-utility activities have not been in effect long enough to
cause O&M related expenses but Intermountain will continue to track these expenses so that it will be in a
position to provide any relevant data in future audits or proceedings.
Person Preparing Answer:R.David Swenson,Manager —Industrial Services,Ph 377-6118
Record Holder:Michael P.McGrath,Director —Regulatory Affairs,Ph 377-6168