20161019INT to Staff 65-102.pdf

WILLIAMS · BRADBURY
October 19, 2016
Jean D. Jewell
Commission Secretary
ATTORNEYS AT LAW
Idaho Public Utilities Commission
472 W. Washington Street
Boise, ID 83 702
RE: IGC Response to Staffs Fourth Request for Production
Case No. INT-G-16-02
Dear Ms. Jewell:
RECEIVED
2016 OC1 19 PM 12: 46
Enclosed for filing with the Commission are one original and two conformed copies of
Intermountain Gas Company's Response to Staffs Fourth Request for Production, and one
CD-ROM that contains the answers and attachments.
By separate confidential CD, please find the responses to Staffs Request No. 66, Request No.
70, and Request No. 71.
Please direct any questions related to the transmittal of this filing to Mike McGrath at
208-377-6168.
Sincerely,
Ronald L. Williams
Attorney at Law
RLW
1015 W. Hays Street -Boise, ID 83702
Phone: [phone] -www.williamsbradbury.com
Ronald L. Williams, ISB No. 3034
Williams Bradbury, P.C.
1015 W. Hays St.
Boise, ID 83702
Telephone: [phone]
Email: [e-mail]
Attorneys for Intermountain Gas Company
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BEFORE THE IDAHO PUBLIC UTILITES COMMISSION
IN THE MATTER OF INTERMOUNTAIN GAS )
COMPANY'S APPLICATION TO CHANGE )
ITS RA TES AND CHARGES FOR NATURAL )
GAS SERVICE )
)
) _________________ )
Case No. INT-G-16-02
RESPONSE OF INTERMOUNTAIN
GAS COMPANY TO FOURTH
PRODUCTION REQUEST OF THE
COMMISSION STAFF
COMES NOW, Intermountain Gas Company, and in response to the Fourth Production
Request of the Commission Staff to Intermountain Gas Company dated September 28, 2016,
herewith submits the following information:
REQUEST NO. 65: For each retirement plan available to employees and officers of
Intermountain Gas, please provide:
a) The Summary Plan Description;
b) Amounts included for recovery in the current rate case;
c) All reports provided by third party administrators and/or actuaries for 2014-2016;
d) How 2015 expenses were booked.
RESPONSE TO REQUEST NO. 65:
a) 401(k) plan descriptions attached; see file labeled-"K-Plan 2015 SPD-JGC" and "K-Plan
2016 SMM-IGC "
b) The Company contributes to non-union employee 401 (k) plans only. The contributions
include 5% of eligible employee income; employee match of 50% of employee contribution
up to first 6% (3% max employer match); 1% Retirement Profit Sharing if 100% of Target
Profitability is met. The amount of 401 (k) expense included in the current rate case was
$1,258,439.
RESPONSE OF IGC TO FOURTH PRODUCTION REQUEST OF COMMISSION STAFF, Page 1
c) Union employees participate in a multi-employee pension plan through the United
Association of Journeymen and Apprentices of the Plumbing and Pipe Fitting Industry of the
United States and Canada (Locals 296 and 648). Here is an excerpt from the most recent
bargaining agreement. For contribution samples for 2015 & YTD 2016, please see file folder
names "2015 Pension " and "2016 Pension ".
Article 29. PENSION BENEFITS
SECTION 1. The Company agrees to contribute $4. 02, effective October 1, 2013, amount is
agreed upon by the Bargaining Unit members per hour paid per employee to the Idaho Plumbers and
Pipefitters Pension Plan now in effect; $3.22 goes towards benefit accruals and $.80 is the
supplemental contribution agreed to in 2009 which goes towards funding previous earned benefits
and is not applied to current benefit accrual. This particular Pension Plan shall be made part of this
Agreement, per provisions written in the Pension Agreement & Declaration of Trust made and
entered into on the first day of June, 1963, between the employers and the Idaho Plumbers and
Pipefitters Pension Fund.
SECTION 2. The Company agrees to recognize for Company Pension Plan calculations all
compensation paid for a regular employee of the Company during which no contribution was made
on his/her behalf to the Idaho Plumbers and Pipefitters Pension Plan identified in Section 1."
There is also a Memo of Understanding in place in the contract that states the following:
"The purpose of this memo of understanding is to establish a mutual agreement between
Intermountain Gas Company and the Union Locals 648 & 296 regarding Article 29 of the
Employment Contract that begins on October 1, 2013 and expires on September 30, 2016.
During the month of August, within any contract year, Article 29 Pension Benefits Section 1
will be opened for review and proposed changes. This Article will remain open through September 1
of the contract year.
All changes shall be mutually agreed to by the Company and the Union. "
d) With regard to 401 (k) expenses, the employer 401 k contributions are posted bi-weekly during the
payroll run. The employer contribution amounts follow employee labor distributions.
Record Holder: Mike McGrath, 208-377-6000
Location: 555 S Cole Rd, Boise, ID 83707
Sponsor/Preparer: Linda Murray, 208-377-6000
REQUEST NO. 66: Please provide copies of all salary and benefit studies performed for
Intermountain Gas/MDU for the years 2012-2016.
RESPONSE OF IGC TO FOURTH PRODUCTION REQUEST OF COMMISSION STAFF, Page 2
RESPONSE TO REQUEST NO. 66:
Please see CD file labeled P R#66-Confidential. lntermountain Gas Company's philosophy
is to set base pay using national general industry data and provide base pay opportunities that are
aligned with the market average for similar positions. Periodically the Company contracts with an
outside independent consultant to review compensation programs and practices. In 2013, the
Company contracted with Aon Hewitt to provide a third party review of base compensation and
incentive compensation..
The review indicated that lntermountain 's compensation programs are well designed and
utilize high quality and established external survey sources to ensure the programs align well with
other utilities and industries that compete for the same types of employees. Recommendations for
improvement were primarily minor enhancements to employee pay opportunities because of
lntermountain 's conservative approach to total compensation. For example, Aon Hewitt suggested
that in order to keep the Company from falling below market competitive base pay levels, salary
structures should be increased more aggressively than they have been in the past.
In addition to periodic third party reviews, Human Resources reviews standard benchmark
jobs in the corporation annually, including job families such as engineers, construction supervisors
and system analysts. The Company 's total compensation package for the benchmark jobs are
compared to market compensation for comparable positions to ensure that the Company is
compensating employees at the appropriate pay grade and range. Human Resources also reviews
positions on an "as needed" basis throughout the year to ensure it is competitively compensating
within the established pay ranges. The Company uses many reputable industry surveys when
determining base pay levels, including the American Gas Association, Salary. com data, Mercer
Benchmark, Milliman, Towers Watson and World at Work, among others.
Human Resources reviews standard benchmark data regarding salary structures as well as
salary increase budgets to determine any changes to the compensation structure. The Company
uses many reputable industry surveys when determining both compensation structure and salary
increase budgets, including the American Gas Association, Salary.com data, Mercer Benchmark,
Milliman, Towers Watson and World at Work, among others.
Record Holder: Mike McGrath, 208-377-6000
Location: 555 S Cole Rd, Boise, ID 83707
Sponsor/Preparer: Linda Murray, 208-377-6000
RESPONSE OF IGC TO FOURTH PRODUCTION REQUEST OF COMMISSION STAFF, Page 3
REQUEST NO. 67: Please summarize all of the Company's environmental cleanup costs
during 2015. Please show all account numbers and the amount booked to each sub account.
RESPONSE TO REQUEST NO. 67:
Intermountain Gas Co. had no environmental clean up costs in 2015.
Record Holder:
Location:
Sponsor/Preparer:
Mike McGrath, 208-377-6000
555 S Cole Rd, Boise, ID 83707
Ted Dedden, 208-377-6000
REQUEST NO. 68: Please provide copies of all employee newsletters issued since 2014.
RESPONSE TO REQUEST NO. 68:
The Company eliminated the publication of its magazine as a cost cutting measure infall of
2015. The last issue of the "Resource " magazine was Winter-2015. Newslettersfrom 2014-2015
are included, please see file labeled "P R#68. "
Record Holder:
Location:
Sponsor/Preparer:
Mike McGrath, 208-377-6000
555 S Cole Rd, Boise, ID 83707
Linda Murray, 208-377-6000
REQUEST NO. 69: Please list all cost-cutting measures undertaken by the Company
during 2014-2016, explain those measures in detail, and quantify the results of those measures.
RESPONSE TO REQUEST NO. 69:
Between 2014 and 2016, there were no specific cost-cutting measures undertaken by the
Company. The majority of the Company 's costs are related to employee salaries and Intermountain
has always maintained one of the lowest employee to customer ratios for natural gas utilities in the
US. However, between 2014 and 2016 the company went from a headcount of 219 to 238 in
response to a growing customer base, increased pipeline safety regulations, and increased training
needs.
Since the last general rate case in 1985 the Company reduced employee headcount from
approximately 425 to 340 at the time of the purchase by MDU Resources in October 2008. During
this same timeframe the Company also went from serving less than 100,000 customers to serving
approximately 300,000 customers. Today Intermountain has 238 employees plus shared services
employees (primarily in the Information Technology and Customer Service areas) serving 340,000
customers.
RESPONSE OF JGC TO FOURTH PRODUCTION REQUEST OF COMMISSION STAFF, Page 4
While the Company has fewer employees today compared to 1985, in recent years the
Company has seen continued customer growth and a continuous increase in regulations and
training requirements creating the need for additional employees. lntermountain continues to
leverage technology to help offset the cost impact of the new regulations and training requirements
and customer growth.
Record Holder:
Location:
Sponsor/Preparer:
Mike McGrath, 208-377-6000
555 S Cole Rd, Boise, ID 83707
Scott Madison, 208-377-6000
REQUEST NO. 70: Please provide all expense reports for management personnel for 2015
to 2016 to date. Please show how all expenses were booked.
RESPONSE TO REQUEST NO. 70:
Please see confidential CD file folder labeled "P R#70 "for management's monthly expense
reports and related account treatment.
Record Holder:
Location:
Sponsor/Preparer:
Mike McGrath, 208-377-6000
555 S Cole Rd, Boise, ID 83707
Ted Dedden, 208-377-6000
REQUEST NO. 71: Please provide the amounts the Company spent for injuries and
damages for the years 2010-2016 to date. Please include within your response the description of
each item, the amount for each item, and the account charged.
RESPONSE TO REQUEST NO. 71:
Please see the confidential CD file "PR #71 Injuries Damages " for worksheet by year.
Record Holder: Mike McGrath, 208-377-6000
Location: 555 S Cole Rd, Boise, ID 83707
Sponsor/Preparer: Ted Dedden, 208-377-6000
REQUEST NO. 72: Please provide detail of all advertising expenses recorded above the
line including account and subaccounts where posted, dates posted, vendor names, explanations,
and amounts posted during 2015 and 2016 to date.
RESPONSE TO REQUEST NO. 72:
RESPONSE OF IGC TO FOURTH PRODUCTION REQUEST OF COMMISSION STAFF, Page 5
Please see file labeled "PR #72 Adv Exp 205-2016" for the worksheets listing detailed
advertising expenses 2015 -2016 to date (through 9/28/2016). Note column "V" describes the
customer benefit; and column "S" titled ''Attachment Reference" indicates the scanned image.
Record Holder:
Location:
Sponsor/Preparer:
Mike McGrath, 208-377-6000
555 S Cole Rd, Boise, ID 83707
Ted Dedden, 208-377-6000
REQUEST NO. 73: Please provide copies of the ads used during 2015 and 2016 and
correlate the ad copy with the specific detail provided in the Company's response to Request
No. 72.
RESPONSE TO REQUEST NO. 73:
Please see the CD file labeled "P R#7 3" which includes ads from 2015-2016 and correlate
in the chart from P R#72 under column "S" titled ''Attachment Reference" indicating the scanned
image file name.
Record Holder:
Location:
Sponsor/Preparer:
Mike McGrath, 208-377-6000
555 S Cole Rd, Boise, ID 83707
Cheryl Imlach, 208-377-6000
REQUEST NO. 74: Please provide copies of all billing inserts for 2015 . Please also
provide a schedule showing the amount and account numbers charges for all costs to produce, print,
and distribute inserts.
RESPONSE TO REQUEST NO. 74:
Please see file labeled "PR-74 Bill Inserts "for summary of schedule and amounts, as well
as actual inserts.
Record Holder:
Location:
Sponsor/Preparer:
Mike McGrath, 208-377-6000
555 S Cole Rd, Boise, ID 83707
Mark Chiles, 208-377-6000
REQUEST NO. 75: Please provide a list of all leased items in 2015 and 2016 to date.
Please separate capital leases from operating leases and show the dates, terms, amounts, and
accounts used for each lease.
RESPONSE TO REQUEST NO. 75:
JGC currently has no capital leases. Please see CD file labeled" PR #75 Lease" for a list of
operating leases.
RESPONSE OF JGC TO FOURTH PRODUCTION REQUEST OF COMMISSION STAFF, Page 6
Record Holder:
Location:
Sponsor/Preparer:
Mike McGrath, 208-377-6000
555 S Cole Rd, Boise, ID 83707
Ted Dedden, 208-377-6000
REQUEST NO. 76: Please provide an Excel file showing all capital projects completed or
due to be complete by year from January 1, 2010 through December 31, 2016. For each project,
please include the following: project name, project number or identifier, cost of service
classification, description of the project, rationale for the project, target start date, actual start date,
target completion date, actual completion date, estimated cost, and actual cost associated with each
project.
RESPONSE TO REQUEST NO. 76:
PENDING; Extended through 10/26/16.
Record Holder: Mike McGrath, 208-377-6000
Location: 555 S Cole Rd, Boise, ID 83707
Sponsor/Preparer: Ted Dedden, 208-377-6000
REQUEST NO. 77: In Mike McGrath's testimony, he describes the Fixed Cost Collection
Mechanism as reconciling the difference between the Company's actual Fixed Cost Collection
Margin (i.e. -distribution margin) per customer, and the Company's Allowed Fixed Cost Collection
Margin per customer (McGrath's Di, p.2). Please provide an estimate that shows total Allowed
Fixed Cost Collection Margin will not be sufficient to cover the Company's anticipated distribution
costs.
RESPONSE TO REQUEST NO. 77:
At the conclusion of the Company's General Rate Case, Allowed Fixed Cost Collection
Margins would be sufficient to cover those costs approved for recovery by the Idaho Public Utilities
Commission. However, with the advent of Demand Side Management programs by the Company,
usage per customer (margin per customer) would continue to decline over time. Over time,
therefore, Actual Fixed Cost Collection Margins would not be sufficient to cover the Company 's
allowed costs. As stated in Mr. McGrath 's testimony, "The Company is proposing to implement a
Fixed Cost Collection Mechanism that will break the link between Intermountain 's (a) margin from
its residential and commercial customers and, (b) the natural gas deliveries to those same core
market customers ".
RESPONSE OF IGC TO FOURTH PRODUCTION REQUEST OF COMMISSION STAFF, Page 7
Record Holder: Mike McGrath, 208-377-6000
Location: 555 S Cole Rd, Boise, ID 83707
Sponsor/Preparer: Mike McGrath, 208-377-6000
REQUEST NO. 78: Hart Gilchrist references the Company's pipeline integrity
management program in testimony. Please provide the risk model along with a detailed description
of the program (Gilchrist Di, p. 14).
RESPONSE TO REQUEST NO. 78:
The Company's integrity management program operates under two separate subprograms,
the Transmission Integrity Management Program (TIMP) and the Distribution Integrity
Management Program (DIMP). The TIMP written plan outlines the requirements and related
activities to meet CFR 192, Subpart O while the DIMP written plan outlines requirements and
activities to meet Subpart P. Due to the nuances of federal code requirements within Subpart O and
P, both programs are managed separate from one another. The overall purpose of both programs
is to ensure integrity of natural gas distribution and transmission related facilities owned and
operated by the Company and prevent failures or incidents that could affect public or employee
safety.
Both TIMP and DIMP utilize relative risk models to manage and assess risk of potential
facility failures where risk is the product of Likelihood of Failure and Consequence factors. Both
models calculate risk for the same primary threat of failure categories; Corrosion, Equipment
Failure, Excavation Damage, Natural Forces, Other Outside Force Damage, Material/Weld/Joint
and Other. The TIMP model is specific to relative risk at High Consequence Areas (HCA) on the
Company 's transmission pipe and aids in prioritizing required pipeline integrity assessments.
TIMP risk is calculated using data specific to each HCA and algorithms within a macro based
spreadsheet developed for JGC by a third party (Structural Integrity Associates). The DIMP model
calculates distribution facility risk using JGC 's ESRI GIS system with likelihood and consequence
factors derived from a combination of facility, geospatial and outside source data.
Both TIMP and DIMP written plans as well as the corresponding risk models have been
audited and accepted by the IPUC's Pipeline Safety Department. Further details of the risk models
are described within the written plans, both of which are on file with the IP UC Pipeline Safety
Department. The risk models themselves reside on IGC's server and are not easily configured/or
distribution; however, an overview of both models could be provided at the JGC General Office.
RESPONSE OF IGC TO FOURTH PRODUCTION REQUEST OF COMMISSION STAFF, Page 8
Record Holder:
Location:
Sponsor/Preparer:
Mike McGrath, 208-377-6000
555 S Cole Rd, Boise, ID 83707
Hart Gilchrist, 208-377-6000
REQUEST NO. 79: Hart Gilchrist states in his testimony "In 2015 under the company's
DIMP, approximately 30,000 feet of plastic pipe was removed and replaced. The Company plans to
remove another 22,000 in 2016 and 25,000 in 2017." Aside from the DIMP, how much additional
plastic pipe requires replacement? When does the Company expect to replace the additional plastic
pipe and at what cost? (Gilchrist Di, p.14).
RESPONSE TO REQUEST NO. 79:
There is currently no plastic pipe outside of DIMP scheduled for replacement. Plastic pipe
may be replaced due to normal operational activities such as relocation and/or jurisdictional road
projects; however, the pipe replacement under those circumstances falls outside of DIMP and is not
considered to be required replacement.
Plastic pipe replacement under DIMP is prioritized through risk calculations derived.from
DIMP 's relative risk model; reference the response to Request No. 78 for a description of DIMP.
Current plastic pipe replacement projects at the Company target higher calculated risk Aldyl-A
plastic main installed prior to 1985. As of October 2016, the Company has approximately 600
miles of this particular vintage of plastic main in service. Based on prior project replacement costs,
this equates to a total estimated replacement cost of $158,400,000, not including annual price
escalation. Through JGC 's current plastic pipe replacement program, approximately four to five
miles of plastic main are considered for replacement each year on an ongoing basis.
Record Holder:
Location:
Sponsor/Preparer:
Mike McGrath, 208-377-6000
555 S Cole Rd, Boise, ID 83707
Hart Gilchrist, 208-377-6000
REQUEST NO. 80: Referencing Exhibit No. 8, please provide a schedule breaking out
each of the revenue and expense categories by FERC Account for each month from January 2013 to
present. Please consider this a continuing request and update as months are finalized.
RESPONSE TO REQUEST NO. 80:
Please see CD file labeled "PR#80 Exh 9 FERC Detail."
Record Holder: Mike McGrath, 208-377-6000
Location: 555 S Cole Rd, Boise, ID 83707
Sponsor/Preparer: Ted Dedden, 208-377-6000
RESPONSE OF JGC TO FOURTH PRODUCTION REQUEST OF COMMISSION STAFF, Page 9
REQUEST NO. 81: Please provide the general ledger entries for the years 2015 to present
that support the schedule requested in Request No. 80 in an electronic format only. (Excel, comma
separated values, etc.) Please include enough detail on each general ledger to identify individual
transactions. (i.e., invoice number, date, amount, etc.)
RESPONSE TO REQUEST NO. 81:
Please see CD for file labeled "PR #81 Exh 8 Inc Stmt detail."
Record Holder:
Location:
Sponsor/Preparer:
Mike McGrath, 208-377-6000
555 S Cole Rd, Boise, ID 83707
Ted Dedden, 208-377-6000
REQUEST NO. 82: Please provide the reasoning and all related documentation (including
origination and determination of the amount) associated with the $3 million "Mandatory Spending
Reduction" in the 2015 Cap Ex budget to actual comparison.
RESPONSE TO REQUEST NO. 82:
Please see CD file labeled "PR 82-2015 Cap Ex Reduction ", which is an e-mail from N.
Kivisto dated 5/29/2015.
Record Holder:
Location:
Sponsor/Preparer:
Mike McGrath, 208-377-6000
555 S Cole Rd, Boise, ID 83707
Ted Dedden, 208-377-6000
REQUEST NO. 83: Please provide an update as of September 30, 2016, to the 2016
CapEx Budget to Actual comparison.
RESPONSE TO REQUEST NO. 83:
Approved Mandated Revised
Spending
Budget Spending Reduction Level Actual Variance
2010 $ 21,933 $ 21,933 $18,791 $(3,142)
2011 19,680 19,680 15,339 (4,341)
2012 35,662 35,662 39,633 3,971
2013 35,501 35,501 29,122 (6,379)
2014 39,585 39,585 37,443 (2,142)
2015 46,625 $ (3,000) 43,625 41,649 (1,976)
2016
(1) 43,490 43,490 41,537 (1,953)
RESPONSE OF IGC TO FOURTH PRODUCTION REQUEST OF COMMISSION STAFF, Page 10
(1) 2016 Actual = 9 months Actuals & 3 months forecast.
Please see CD file name "P R#83 CapEx Update" for additional details.
Record Holder:
Location:
Sponsor/Preparer:
Mike McGrath, 208-377-6000
555 S Cole Rd, Boise, ID 83707
Ted Dedden, 208-377-6000
REQUEST NO. 84: Please provide an Excel file of the 2017 capital expenditure budget by
category (services, revenue mains and the like).
RESPONSE TO REQUEST NO. 84:
There is no approved capital budget at this time and one will be provided as an addendum
to this Production Request as soon as it becomes available.
Record Holder:
Location:
Sponsor/Preparer:
Mike McGrath, 208-377-6000
555 S Cole Rd, Boise, ID 83707
Ted Dedden, 208-377-6000
REQUEST NO. 85: Please provide a detailed Excel file of the 2017 capital expenditure
budget including project names, project numbers or identifiers, cost of service classification,
description, reason, location, target start date, actual start date (if project began before 2017), target
completion date, dollar amounts for each project.
RESPONSE TO REQUEST NO. 85:
There is no approved capital budget at this time and one will be provided as an addendum
to this Production Request as soon as it becomes available.
Record Holder:
Location:
Sponsor/Preparer:
Mike McGrath, 208-377-6000
555 S Cole Rd, Boise, ID 83707
Ted Dedden, 208-377-6000
REQUEST NO. 86: Please provide accounting and underlying supporting documentation
for the $12 million adjustments that increased Gas Distribution -Services (380) during 2015
according to the 2015 plant schedule. Please include within your response the underlying reason for
the adjustments, accounting entries, dates, amounts and any other accounts affected.
RESPONSE TO REQUEST NO. 86:
The adjustments to Gas Distribution -Services (380) of $12M, were the result of recording
the Asset Retirement Obligation (ARO). See CD file labeled "PR #86,87,88 Gas Dist ARO "
RESPONSE OF IGC TO FOURTH PRODUCTION REQUEST OF COMMISSION STAFF, Page 11
Record Holder: Mike McGrath, 208-377-6000
Location: 555 S Cole Rd, Boise, ID 83707
Sponsor/Preparer: Ted Dedden, 208-377-6000
REQUEST NO. 87: Please provide accounting and underlying supporting documentation
for the $5 million adjustments that increased Gas Distribution -Mains (376) during 2015 according
to the 2015 plant schedule. Please include within your response the underlying reason for the
adjustments, accounting entries, dates, amounts and any other accounts affected.
RESPONSE TO REQUEST NO. 87:
The adjustments to Gas Distribution -Mains (376) of$5M, were the result of recording the
Asset Retirement Obligation (ARO). See CD file labeled "PR #86,87,88 Gas Dist ARO "
Record Holder: Mike McGrath, 208-377-6000
Location: 555 S Cole Rd, Boise, ID 83707
Sponsor/Preparer: Ted Dedden, 208-377-6000
REQUEST NO. 88: Please provide accounting and underlying supporting documentation for the
$661 ,000 adjustments that increased Gas Transmission -Mains (367) during 2015 according to the
2015 plant schedule. Please include within your response the underlying reason for the
adjustments, accounting entries, dates, amounts and any other accounts affected.
RESPONSE TO REQUEST NO. 88:
The adjustments to Gas Transmission -Mains (367) $661 K were the result of recording the
Asset Retirement Obligation (ARO). See CD file labeled "PR #86,87,88 Gas Dist ARO "
Record Holder: Mike McGrath, 208-377-6000
Location: 555 S Cole Rd, Boise, ID 83707
Sponsor/Preparer: Ted Dedden, 208-377-6000
REQUEST NO. 89: Please provide a schedule for depreciation expense during 2015 that
includes plant in service to which the depreciation rates are applied, the depreciation rates that are
applied, any other related information affecting depreciation expense and the resulting depreciation
expense.
RESPONSE TO REQUEST NO. 89:
Please see CD file labeled PR #89 Depr Exp. The worksheet provides a summary and
reconciliation to the PDF report "Depr-1039" and ties to account 403 and 405 in the income
statement.
RESPONSE OF JGC TO FOURTH PRODUCTION REQUEST OF COMMISSION STAFF, Page 12
Record Holder:
Location:
Sponsor/Preparer:
Mike McGrath, 208-377-6000
555 S Cole Rd, Boise, ID 83707
Ted Dedden, 208-377-6000
REQUEST NO. 90: Please provide a reconciliation/proof between depreciation expense
and accumulated depreciation during 2015. If the depreciation expense entries do not match the
entries to accumulated depreciation, please specifically identify the reasons for the differences,
including the related accounting entries.
RESPONSE TO REQUEST NO. 90:
Please see CD file labeled "PR #90 Reconciliation ".
Record Holder:
Location:
Sponsor/Preparer:
Mike McGrath, 208-377-6000
555 S Cole Rd, Boise, ID 83707
Ted Dedden, 208-377-6000
REQUEST NO. 91: Please provide a schedule with the monthly balances for materials and
supplies by subaccounts for 2014, 2015 and 2016 to date.
RESPONSE TO REQUEST NO. 91:
Please see CD file labeled "PR #91 Materials" for monthly balances of materials and
supplies by subaccount.
Record Holder:
Location:
Sponsor/Preparer:
Mike McGrath, 208-377-6000
555 S Cole Rd, Boise, ID 83707
Ted Dedden, 208-377-6000
REQUEST NO. 92: Please provide detail documentation including accounting entries and
retirement documents for the almost $10 million in meter ( account 3 81) retirements and $1. 5
million in meter installations (account 382) during 2015 according to the 2015 plant schedule.
Please include within your response any plant in service added as a result of the retirements. Please
include within your response any related plant in service added that resulted in the retirements. If
none, please so state.
RESPONSE TO REQUEST NO. 92:
The principal retirement activity in account 381 and 382 was for the Company's 4 year plan
to retire and replace Encoder Receiver Transmitters (ERTs). $8.9 million was retired in account
381 and $1 .5 million in account 382. The Company replaced the ERTs with $5.3 million in account
RESPONSE OF JGC TO FOURTH PRODUCTION REQUEST OF COMMISSION STAFF, Page 13
381 and $1.8 million in account 382. See CD file labeled "PR#92 Meter Rets ", and note that there
were no January or July retirements.
Record Holder:
Location:
Sponsor/Preparer:
Mike McGrath, 208-377-6000
555 S Cole Rd, Boise, ID 83707
Ted Dedden, 208-377-6000
REQUEST NO. 93: Please provide detail documentation including accounting entries and
retirement documents for the almost $1.8 million in office furniture and equipment (account 391G)
retirements during 2015 according to the 2015 plant schedule. Please include within your response
any related plant in service added that resulted in the retirements. If none, please so state.
RESPONSE TO REQUEST NO. 93:
Please see attached file name "PR #93 Ofc Furn " for a listing of the retirements of Acct No.
391. Pursuant to Case No. NT-G-99-2, Order No. 28331, the Company changed the depreciation
methodology for six identified general plant accounts, which included Acct. No. 391, from a
depreciation method to an amortization method. In so doing, office furniture and equipment is
amortized over an approved useful life which eliminates (simplifies) the accounting requirement to
account for individual Acct. No. 391 asset retirements.
Record Holder:
Location:
Sponsor/Preparer:
Mike McGrath, 208-377-6000
555 S Cole Rd, Boise, ID 83707
Ted Dedden, 208-377-6000
REQUEST NO. 94: Please provide detail documentation including accounting entries and
retirement documents for the almost $1 million in power operated equipment (account 396G)
retirements during 2014 and $0.5 million retirements according to the 2014 and 2015 plant
schedules, respectively. Please include within your response any related plant in service added that
resulted in the retirements. If none, please so state.
RESPONSE TO REQUEST NO. 94:
Power operated equipment (account 396) for 2014 consisted of 10 backhoes that were
retired and replaced. Retirements in 2015 were for 8 backhoes, 2 welders and 1 compressor. Please
see CD file labeled "PR #94 AC 396 Ret" for details.
Record Holder: Mike McGrath, 208-377-6000
Location: 555 S Cole Rd, Boise, ID 83707
Sponsor/Preparer: Ted Dedden, 208-377-6000
RESPONSE OF IGC TO FOURTH PRODUCTION REQUEST OF COMMISSION STAFF, Page 14
REQUEST NO. 95: Please provide documentation including accounting entries and
underlying reasoning for the $1 million negative amount in additions in Mains (account 367) during
2015 according to the 2015 plant schedule.
RESPONSE TO REQUEST NO. 95:
PENDING; Extended through 10/26/16.
Record Holder: Mike McGrath, 208-377-6000
Location: 555 S Cole Rd, Boise, ID 83707
Sponsor/Preparer: Ted Dedden, 208-377-6000
REQUEST NO. 96: Please identify all overhead loadings that are capitalized and/or
expensed and their composition. Please include within your response how these overheads are
calculated and applied. Please include within your response the percentages applied by month
during 2014, 2015 and 2016 to date.
RESPONSE TO REQUEST NO. 96:
The overhead loadings that are capitalized and/or expensed are materials loading,
Engineering & Supervision (ES) and General & Administration (GA) and AFUDC.
Materials overhead loading rates are based on the amount of expense recorded in FERC
Account 163. Non-inventoried items such as unidentified freight, invoice price variance, inventory
adjustments, and small non-coded items are recorded in 163; the total in account 163 is
systematically applied to an expense account or capital project. The rate is established by
monitoring the 163 account and bringing it to zero through overhead application to expense
accounts and capital projects. Amounts are applied to eligible capital projects based on the current
rate. Amounts are applied to materials expense based on the current rate.
The Engineering & Supervision (ES) overhead loading rate is based on the amount of
construction support costs recorded in Workorder (WO) 480991. There are multiple ways costs are
accumulated in the workorder, but in general it is construction related non-directly allocable costs
such as (but not limited to) equipment rent, labor, tools, uniforms and construction employee
expenses. The loading rate is determined by the amount of costs that are accumulated in the
workorder and the collective sum of eligible capital projects. The overhead loading rate is applied
to eligible projects in PowerPlan.
General & Administrative (GA) costs are from construction related labor distribution of the
Plant Accountant and Purchasing Manager. The costs are applied to eligible projects in
Power Plan.
RESPONSE OF IGC TO FOURTH PRODUCTION REQUEST OF COMMISSION STAFF, Page 15
AFUDC is calculated based on the FERC formula and cost elements. The overhead is
applied to qualified capital projects for equity and borrowed funds and credited to Allowance for
Other Funds Used During Construction (FERC account 419) and Allowance for Borrowed Funds
Used During Construction (FERC account 432) respectively.
TABLE PR#96-Monthly Rates
2014
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
2015
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
2016
Jan
Feb
Mar
Apr
ES
17.00%
20.00%
20.00%
20.00%
20.00%
20.00%
20.00%
20.00%
20.00%
50.00%
29.00%
29.00%
ES
15.00%
15.00%
15.00%
15.00%
15.00%
15.00%
15.00%
15.00%
24.00%
24.00%
50.00%
25.00%
ES
19.00%
19.00%
19.00%
19.00%
GA Materials
0.25% 42.00%
0.25% 42.00%
0.25% 42.00%
0.25% 42.00%
0.25% 42.00%
0.25% 42.00%
0.25% 43.00%
0.25% 43.00%
0.25% 43.00%
0.25% 43.00%
0.25% 43.00%
0.25% (A)
GA Materials
0.25% 33.86%
0.25% 33.86%
0.25% 33.86%
0.25% 34.00%
0.25% 34.00%
0.25% 34.00%
0.25% 34.00%
0.25% 34.00%
0.25% 34.00%
0.25% 34.00%
0.25% 50.00%
0.25% (A)
GA Materials
0.25% 35.00%
0.25% 35.00%
0.25% 35.00%
0.25% 35.00%
AFUDC
Debt
2.54%
2.54%
2.54%
2.63%
2.63%
2.63%
2.68%
2.68%
2.68%
2.52%
2.52%
2.52%
AFUDC
Debt
3.27%
3.27%
3.27%
3.64%
3.64%
3.64%
3.41%
3.41%
3.41%
3.23%
3.23%
3.23%
AFUDC
Debt
9.37%
9.37%
9.37%
8.50%
AFUDC
Equity
6.36%
6.36%
6.36%
6.04%
6.04%
6.04%
5.65%
5.65%
5.65%
6.08%
6.08%
6.08%
AFUDC
Equity
2.48%
2.48%
2.48%
0.74%
0.74%
0.74%
0.14%
0.14%
0.14%
0.56%
0.56%
0.56%
AFUDC
Equity
0.00%
0.00%
0.00%
0.00%
RESPONSE OF JGC TO FOURTH PRODUCTION REQUEST OF COMMISSION STAFF, Page 16
May
Jun
Jul
Aug
Sep
19.00%
19.00%
19.00%
19.00%
19.00%
0.25%
0.25%
0.25%
0.25%
0.25%
35.00% 8.50% 0.00%
35.00% 8.50% 0.00%
31.00% 7.30% 0.00%
31.00% 7.30% 0.00%
31.00% 7.30% 0.00%
(A) At year end the inventory accounts (sum of 163) must zero. The year end entry is not
based on a rate, but based on the residual amount that has not cleared throughout the year using
the material clearing rate.
Record Holder:
Location:
Sponsor/Preparer:
Mike McGrath, 208-377-6000
555 S Cole Rd, Boise, ID 83707
Ted Dedden, 208-377-6000
REQUEST NO. 97: Please provide workpapers showing how peak day allocators were
determined in the Company's Cost of Service Model.
RESPONSE TO REQUEST NO. 97:
Please see the file "PR 36 FINAL Peak Day Study" that accompanied the responses to the 3rd
Production Request.
Record Holder:
Location:
Sponsor/Preparer:
Mike McGrath, 208-377-6000
555 S Cole Rd, Boise, ID 83707
Lori Blattner, 208-377-6000
REQUEST NO. 98: Please provide the workpapers used to determine Demand, Customer,
and Commodity allocators used in the Company's Cost of Service Models.
RESPONSE TO REQUEST NO. 98:
Please see the response to Production Request 36, as well as the file "PR 36 External Tab
Analysis".
Record Holder:
Location:
Sponsor/Preparer:
Mike McGrath, 208-377-6000
555 S Cole Rd, Boise, ID 83707
Lori Blattner, 208-377-6000
REQUEST NO. 99: In the Company's Mains Study worksheet "mains-steel (eq data)",
what criteria were used to exclude data from the model?
RESPONSE TO REQUEST NO. 99:
Intermountain used the following criteria to exclude data from the steel mains equation included in
the Mains Study.
RESPONSE OF IGC TO FOURTH PRODUCTION REQUEST OF COMMISSION STAFF, Page 17
1. Since large pipe sizes (10, 12 and 16 inch diameter) are generally transmission mains and
transmission mains are allocated based on a peak day allocator, those large pipe sizes were
removed from the equation data.
2. Data for a particular pipe diameter was removed for years that showed very low footage
installed with an accompanying high cost. This outlier data was deemed to not be
representative of normal operations.
3. Early in the Company's history, some 3. 5 inch diameter steel pipe was installed. It has not
been installed since, so that data was also removed from the model.
Record Holder:
Location:
Sponsor/Preparer:
Mike McGrath, 208-377-6000
555 S Cole Rd, Boise, ID 83707
Lori Blattner, 208-377-6000
REQUEST NO. 100: Please provide the following data for work orders that were used in
the Mains Study:
a. Work Order Number;
b. Year;
c. Pipe type (plastic/steel);
d. Pipe Length;
e. Total Cost.
RESPONSE TO REQUEST NO. 100:
The requested data is not available by project in the Company 's records until the conversion
to Power Plan in May of 2013. The CD file labeled "PR JOO JGC 367 and 376.xlsx " provides the
data that is available for 2013 through 2015. The projects listed in 2013 that do not have footage
included are for those work orders converted from JD Edwards when the Company began using
Power Plan.
Record Holder:
Location:
Sponsor/Preparer:
Mike McGrath, 208-377-6000
555 S Cole Rd, Boise, ID 83707
Lori Blattner, 208-377-6000
REQUEST NO. 101: Currently, the Company's line and mains extension charges (Tariff
Section C) are computed using a 12.5% Rate of Return. Please provide updated tariff sheets that
reflect the Company's proposed Rate of Return. Please provide work papers supporting these
changes.
RESPONSE TO REQUEST NO. 101:
RESPONSE OF IGC TO FOURTH PRODUCTION REQUEST OF COMMISSION STAFF, Page 18
The Company plans to work with the !PUC Staff to address lntermountain 's Main & Service
Extension tariffs after the completion of the Company 's General Rate Case. These updated tariffs
will reflect not only a change in the Company 's approved Cost of Capital but also changes to the
many other metrics that determine allowed footages and required customer contributions.
Record Holder:
Location:
Sponsor/Preparer:
Mike McGrath, 208-377-6000
555 S Cole Rd, Boise, ID 83707
Mike McGrath, 208-377-6000
REQUEST NO. 102: Please provide any workpapers showing the Company's cost
allocation methodology for its interruptible snow melt schedules, IS-Rand IS-C.
RESPONSE TO REQUEST NO. 102:
The snow melt schedules provide an operational tool for lntermountain to maximize its
system efficiency and to keep costs low for all customers. Snow melt customers have a very low
load factor and tend to use gas during peak usage periods. The snow melt tariffs have allowed
customers to continue to add this equipment without necessitating the investment in millions of
dollars of capacity upgrades to serve the snow melt load under peak day conditions. When the
tariffs were established, the IS-R (Residential) customers were priced the same as RS-2 customers,
and IS-C (Commercial) customers were priced the same as GS-1 customers. Since no incremental
infrastructure has been added to serve these customers on a peak day, lntermountain believes it is
still appropriate to price their usage based on the new RS (Residential) or GS-1 (Commercial)
rates. Therefore, the JS-R customers and usage have been included with RS and the IS-C customers
and usage have been included with GS-1 for cost allocation purposes.
Record Holder:
Location:
Sponsor/Preparer:
Mike McGrath, 208-377-6000
555 S Cole Rd, Boise, ID 83707
Lori Blattner, 208-377-6000
t\--.
DATED at Boise, Idaho, this J tf day of October, 2016.
Ronald L. Williams
Williams Bradbury, P.C.
Attorneys for Intermountain Gas Company
RESPONSE OF IGC TO FOURTH PRODUCTION REQUEST OF COMMISSION STAFF, Page 19
CERTIFICATE OF DELIVERY
I HEREBY CERTIFY that on this 19th day of October, 2016, I caused to be served a true
and correct copy of the Response of Intermountain Gas Company to Fourth Production Request
of the Commission Staff upon the following individuals in the manner indicated below:
Hand Delivery: (original and 2 copies)
Jean Jewell
Commission Secretary
Idaho Public Utilities Commission
472 W. Washington Street
Boise, ID 83 720
Michael P. McGrath
Intermountain Gas Company
555 S. Cole Road
Boise, ID 83 707
E-Mail: [e-mail]
Brad M. Purdy
2019 N. 17th Street
Boise, ID 83 702
E-Mail: [e-mail]
Attorney for Community Action
Partnership Association of Idaho (CAP AI)
Benjamin J. Otto
Idaho Conservation League
710 N. 6th Street
Boise, ID 83 702
E-Mail: [e-mail]
F. Diego Rivas
NW Energy Coalition
1101 8th Avenue
Helena, MT 59601
E-Mail: [e-mail]
Edward A. Finklea
Northwest Industrial Gas Users (NWIGU)
545 Grandview Drive
Ashland, OR 97520
E-Mail: [e-mail]
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Chad M. Stokes
Tommy A. Brooks
Cable Huston LLP
1001 SW Fifth Avenue, Ste. 2000
Portland, OR 97204-1136
E-Mail: [e-mail]
[e-mail]
Attorneys for NWIGU
Electronic service only:
Michael C. Creamer
Givens Pursley LLP
E-Mail: [e-mail]
Attorneys for NWIGU
Scott Dale Blickenstaff
The Amalgamated Sugar Company LLC
1951 S. Saturn Way, Ste. 100
Boise, ID 83 702
E-Mail: [e-mail]
Peter Richardson
Gregory M . Adams
Richardson Adams, PLLC
515 N. 27th Street
Boise, ID 83 702
E-Mail: [e-mail]
[e-mail]
Attorneys for The Amalgamated Sugar
CompanyLLC
Ken Miller
Snake River Alliance
223 N. 6th St., Ste. 317
P.O. Box 1731
Boise, ID 83701
E-Mail: [e-mail]
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Andrew J. Unsicker
Lanny L. Zieman
Natalie A. Cepak
Thomas A. Jernigan
Ebony M. Payton
AFLOA/JA-ULFSC
139 Barnes Drive, Suite 1
Tyndall AFB, FL 32403
E-Mail: [e-mail]
Lanny .zieman. [e-mail]
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[e-mail]
[e-mail]
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Ronald L. Williams