20170120Sugar to INT 1-13.pdf

RECE IVED Peter Richardson ISB #3195
Gregory M. Adams ISB #7454
RICHARDSON ADAMS, PLLC 2il 1 Jf1H l 9 PM 3: 39
515 N. 2ih Street
Boise, Idaho 83 702
Telephone: [phone]
[e-mail]
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[e-mail]
Attorneys for the Amalgamated Sugar Company
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF INTERMOUNT AIN )
GAS COMPANY'S APPLICATION TO )
CHANGE ITS RA TES AND CHARGES FOR )
NATURAL GAS SERVICE IN THE STATE OF)
IDAHO )
)
)
)
)
CASE NO. INT-G-16-02
AMALGAMATED SUGAR
COMPANY LLC RESPONSE TO
INTERMOUNTAIN GAS
COMPANY'S FIRST PRODUCTION
REQUEST
COMES NOW, The Amalgamated Sugar Company, LLC, and hereby provides the
following responses to the First Production Request of Intermountain Gas Company (the "Gas
Company"). Dr. Reading is the witness who can sponsor these responses at hearing.
REQUEST NO. 1. Please identify all gas distribution companies, including Intermountain
Gas Company, that provide service to Amalgamated processing facilities, and the location of
each Amalgamated Sugar Company sugarbeet processing facility.
RESPONSE TO REQUEST NO. 1.
Intermountain Gas Company is the sole gas distribution company that provides said
service to Amalgamated Sugar Company LLC's processing facilities. The Gas Company is
a state sanctioned monopoly and as such has an exclusive franchise to provide gas
distribution services in the area in which the Amalgamated Sugar Company LLC's
processing facilities are located.
The location of each Amalgamated Sugar Company LLC processing facility is
described in Dr. Reading's testimony at page 1.
Amalgamated Sugar
Response to IGC DR # I -INT-G-1 6-02 2
REQUEST NO. 2. For gas distribution companies listed above other than Intermountain,
please provide copies of the currently effective tariffs and rates that those gas distribution
companies charge to Amalgamated for service at each of the Amalgamated' s sugarbeet
processing, (sic] and the length of time (approximate) since each of these distribution companies'
most recent rate case.
RESPONSE TO REQUEST NO. 2:
See Response to Request No. 1.
Amalgamated Sugar
Response to IGC DR # I -lNT-G-16-02 3
REQUEST NO. 3. Regarding Dr. Don Reading's testimony page 3 "On the other hand,
customers have built usage patterns, and even investment in plant, based on thirty years of
experience/expectations with the existing rate design. If over those thirty years rate design
changes were called for, the customers of the Gas Company were not made aware of those
pending changes and as a result have not been able to plan for or budget capital expenditures to
accommodate those pending rate design changes":
(a) If the Commission accepted the rate design changes proposed by the Company in this
case, please describe and explain the capital expenditures and operational practices
Amalgamated would make, or is or would consider making, in order to adjust to the rate
design changes proposed;
(b) With respect to (a) above, please identify the specific change in Intermountain's rate
design or cost of service proposal that will be accommodated by each potential Amalgamated
Sugar Company capital expenditure or operational change.
RESPONSE TO REQUEST NO. 3.
(a) The Amalgamated Sugar Company LLC has not recommended that the
Commission adopt the Gas Company's rate design changes in this docket.
Furthermore, Dr. Reading's testimony provides that, "If over those thirty years rate
design changes were called for, the customers of the Gas Company were not made
aware of those pending changes and as a result have not been able to plan for or budget
capital expenditures to accommodate those pending rate design changes." His answer
has not changed since his testimony was prefiled in this matter. If the Commission
approves a rate design change for T-4 customers Amalgamated then will asses what
Amalgamated Sugar
Response to IGC DR # I -INT-G-1 6-02 4
investments (if any) might be cost effective while at the same time preserving the
integrity of the production process.
(b) See response to Request No. 3(a).
Amalgamated Sugar
Response to IGC DR #I -INT-G-16-02 5
REQUEST NO. 4. Regarding Dr. Don Reading's testimony, page 13 line 5 -page 14 line 2,
Please describe and explain the basis for the recommendation that the results of this cost of
service study, if adopted, should be implemented over the next five Intermountain Gas Company
general rate cases.
RESPONSE TO REQUEST NO. 4:
The basis for Dr. Reading's recommendation that the results of this cost of service
study be phased in over the next five Gas Company general rate cases is described at page
11 of his prefiled testimony beginning on line 11.
Amalgamated Sugar
Response to JGC DR# I -INT-G-16-02 6
REQUEST NO. 5. Does Dr. Reading agree or disagree that the principals of promoting rate
stability and mitigating rate shock would be equally or even better served by a known phase in
period of a set number of years, as opposed to a set number of next general rate cases?
RESPONSE TO REQUEST NO. 5.
Disagree.
Amalgamated Sugar
Response to JGC DR # I -INT-G-1 6-02 7
REQUEST NO. 6. Please provide all research and analysis referred to by Dr. Reading or
relied on in making the recommendation that the phase in period should be the Company's next
five rate cases. Please provide all testimony that you have prepared or sponsored in any other
proceeding in which you recommended a multi-year or multi rate case period to phase in cost of
service study studies and / or rate design recommendations. In addition to copies of your
testimony, please provide copies of the final regulatory commission order in each proceeding.
RESPONSE TO REQUEST NO. 6:
Dr. Reading agrees with Company witness Blattner to the effect that "Rate continuity
requires that changes to rate structure should be gradual allowing customers to modify
their usage patterns over time." [Reading, Di. page 8, line 2] The meaning of the word
"gradual" is self evident.
Dr. Reading does not have prior testimony that meets the criteria of the question.
This is the first case, however, in which he has testified in over thirty-five years of
regulatory work where the impact on individual customers (up to a 190% increase) has
been so dramatic. Therefore mitigation due to rate shock is obviously necessary.
Amalgamated Sugar
Response to IGC DR #I -!NT-G-16-02 8
REQUEST NO. 7. What is the annual load factor at each of Amalgamated three plants? At
what cost and under what conditions could Amalgamated shift some of the winter production to
shoulder months?
RESPONSE TO REQUEST NO 7:
Without a specific definition, the term "annual load factor" is vague, and Amalgamated
Sugar Company LLC objects to this question on that basis. Without waiving said
objection, and assuming "annual load factor" is a simple percentage representing annual
consumption of therms divided by the peak day usage, the annual load factors for the three
plants are:
Twin Falls: December 2015 to November 2016, twelve month therm consumption
15,358,933 divided by 365 to arrive at an average daily therms of 42,059, MDFQ 75,000
therms. Therefore 42,059/75,000=56.1 % load factor.
Nampa: December 2015 to November 2016, twelve month therm consumption
34,195,377 divided by 365 to arrive at an average daily therms of 93,686, MDFQ 155,000
therms. Therefore 93,686/155,000=60.4% load factor.
Paul: December 2015 to November 2016, twelve month therm consumption 34,723,819
divided by 365 to arrive at an average daily therms of 95,134, MDFQ 160,000 therms.
Therefore 95,134/160,000=59.6% load factor.
These figures will vary depending on whether the divisor is the most current nominated
MDFQ, the historic MDFQ or the interim MDFQ.
The response to the second part of Request No. 7 is the same as the Response to
Request No. 3(b).
Amalgamated Sugar
Response to IGC DR # I -INT-G-16-02 9
REQUEST NO. 8. Does Amalgamated require firm capacity at its three plants served by the
Company during the months of November through March? If so, how much?
RESPONSE TO REQUEST NO. 8:
Processing perishable food products requires a dependable supply of energy input.
Amalgamated Sugar Company LLC's firm capacity requirements have already been
provided to the Gas Company in the form of its MDFQ nominations.
Amalgamated Sugar
Response to IGC DR # I -INT-G-16-02 10
REQUEST NO. 9. Does Amalgamated require firm service for its entire load or could it load
shift or take interruptible service for some of that load?
RESPONSE TO REQUEST NO. 9:
See Response to Request No. 3(b) and 8.
Amalgamated Sugar
Response to JGC DR # I -INT-G-1 6-02 11
REQUEST NO. 10. What percent of the Amalgamated's total annual natural gas bill is
compromised by Intermountain's T-4 billing charges?
RESPONSE TO REQUEST NO. 10:
For the months of January through August of 2016 JGC bills were 7.9% of
Amalgamated's total natural gas bill for the three plants of Nampa, Paul and Twin Falls.
Amalgamated Sugar
Response to JGC DR #I -INT-G-16-02 12
REQUEST NO. 11. Can Amalgamated burn coal instead of natural gas at any or all of
its three plants served by the Company? If so, how much and under what conditions and/or
constraints?
RESPONSE TO REQUEST N0.11:
Yes, some of Amalgamated's equipment can burn coal.
It is speculative to guess as to the volumes/constrains/conditions under which
Amalgamated Sugar LLC could burn coal.
Amalgamated Sugar
Response to IGC DR #I -INT-G-16-02 13
REQUEST NO. 12. Please identify all northwest gas distribution companies that do
not impose a demand charge on large volume customers for firm sales or transport service.
Please produce all workpapers and documents reviewed by Amalgamated in evaluating the
existence of and the level of demand charge imposed by local gas distribution companies other
than lntermountain.
RESPONSE TO REQUEST NO. 12:
Amalgamated has not conducted a study of the rate design offerings of all northwest
natural gas distribution companies.
No such workpapers exist.
Amalgamated Sugar
Response to IGC DR # I -INT-G-16-02 14
REQUEST NO. 13. Please explain further why Amalgamated appears to believe that
seasonal transportation rates would be advantageous to a customer, such as Amalgamated, that
uses most of its natural gas in the winter months?
RESPONSE TO REQUEST NO. 13:
It is speculative to respond to a question premised on the non-specific 'appearance of a
belief."
Dr. Reading's prefiled testimony asserts that "a variety of rate structures [including
seasonal rates] should be explored going forward that would meet the needs of both the
Gas Company and its customers." He also stated that, "Another rate design structure that
should be considered is to offer transportation customers a seasonal rate option." (Reading,
Di, page 12, lines 3 -9.]
Dr. Reading's testimony does not appear to assert a belief as to whether seasonal rates
would be advantageous or disadvantageous or neutral. He does, however, appear to assert
a belief that such rates should be explored.
DATED this {q th day of January, 2017.
Amalgamated Sugar
Response to !GC DR #I -!NT-G-16-02 15
.£:~} Peter J. Richardson
RICHARDSON ADAMS, PLLC
Attorneys for the Amalgamated Sugar
Company
CERTIFICATE OF SERVICE
. tiJ *' I HEREBY CERTIFY that on the_/_ clay of January, 2017, a true and correct copy of the
within and foregoing RESPONSE OF THE AMALGAMATED SUGAR COMPANY, LLC TO
THE FIRST PRODUCTION REQUEST OF THE INTERMOUNTAIN GAS COMPANY was
served by Electronic and U.S. Mail:
Michael P. McGrath
Director, Regulatory Affairs
Intermountain Gas Company
555 S. Cole Road
PO Box 7608
Boise, ID 83 707
[e-mail]
Chad M. Stokes
Tommy A. Brooks
Cable Huston LLP
1001 SW Fifth Ave., Suite 2000
Portland, OR 97204-1 136
[e-mail]
[e-mail]
By:-=--------------­
Kandi Walters, Administrative Assistant
Richardson Adams, PLLC
Amalgamated Sugar
Response to IGC DR # I -INT-G-16-02 16
Ronald L. Williams
Attorney for Intermountain Gas Company
1015 West Hays Street
Boise, Idaho 83 702
[e-mail]
Michael C. Creamer
Givens Pursley, LLP
601 West Bannock Street
Boise, Idaho 83 702
[e-mail]
Brad M. Purdy
2019 N. 17th Street
Boise, Idaho 83702
[e-mail]