20170222Staff to NWIGU 1-8.pdf

KARL T. KLEIN
SEAN COSTELLO
DEPUTY ATTORNEYS GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
(208) 3 34-0320t334-03 12
IDAHO BAR NOS, 5156187 43
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Street Address for Express Mail:
472W, WASHINGTON
BOISE, IDAHO 83702-59T8
Attomeys for the Commission Staff
BEFORE THE IDAHO PUBLIC UTTLITIES COMMISSION
IN THE MATTER OF INTERMOUNTAIN
GAS COMPANY'S APPLICATION TO
CHANGE ITS RATES AIID CHARGES FOR
NATURAL GAS SERVICE.
CASE NO.INT.G.I,6.O2
COMMISSION STAFF'S
RESPONSE TO THE FIRST
PRODUCTION REQUEST OF
NORTHWEST INDUSTRIAL GAS
USERS
The Staff of the Idaho Public Utilities Commission, by and through its attorney of record,
Sean Costello, Deputy Attorney General, responds as follows to Northwest Industrial Gas Users'
First Production Request to Commission Staff.
STAFF'S RESPONSE TO THE FIRST
PRODUCTION REQUEST OF
NWIGU
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I FEBRUARY 22,2017
STAFF WITNESS MICHAEL MORRISON WILL BE ABLE TO ANSWER
QUESTIONS ABOUT OR SPONSOR THE ANSWERS TO REQUEST NOS. 1-6,
BELOW.
REQUEST NO. 1: At page 2, lines 20-21of Mr. Morrison's testimony, he states that the
Company, "...is proposing cost allocators that are both novel and inappropriate." Please
specifically identiff the Company's allocators that Mr. Morrison has deemed "novel and
inappropriate," and describe the basis for this statement.
STAFF RESPONSE NO. 1: Mr. Morrison has identified and explained this statement
on pages 7-11 of his direct testimony.
REQUEST NO. 2: At page 6, Mr. Morrison states that, o'When usage is mixed in large
portions of the distribution system, it may also be appropriate to use a peak and average allocator.
Such an allocator is particularly appropriate for large distribution mains, which often serve
diverse needs." With respect to his statement:
a. Please explain how the classes' usage impacts the Company's design of system capacity
to meet its system peak day demand.
b. Does Mr. Morrison believe there is a distinction between firm and intemrptible delivery
service?
c. If the answer to subpart b. above is yes, how does firm versus interruptible service
impact: (i) usage and (ii) capacity on the delivery system?
STAFF RESPONSE NO. 2: a. Each component of the Company's plant must be
designed to meet the coincident peak demand placed on that component; b. Yes; c. The ability
to curtail the consumption of intemrptible service customers during times of peak demand allows
the Company to design smaller, and less costly systems. Often intemrptible service customers
take their gas at off peak times, so the reduction in average system usage is not necessarily
commensurate with the reduction in peak.
STAFF'S RESPONSE TO THE FIRST
PRODUCTION REQUEST OF
NWIGU 2 FEBRUARY 22,201,7
REQUEST NO. 3: Please indicate whether or not Mr. Morrison, or other Commission Staff
members, performed any analyses to support the conclusionthat the Company's peak day allocators
would unfairly allocate costs, as discussed on page 7, lines l-25, and page 8, lines l-2 of Mr.
Morrison's testimony. If such analyses have been performed, please provide them on an electronic
spreadsheet with all formulas intact.
STAFF RESPONSE NO. 3: Mr. Morrison provided illustrative examples on page 7-8
of his testimony of how use of the Company's "peak day allocators" might lead to skewed
results, which, depending on the specific outcome and the affected customer class, might unfairly
allocate costs. In order to conclude-to accurately and fully assess-that use of the Company's
peak day allocators are unfair, the Company would have needed to provide the results of a load
study to allow Staff to undertake the requisite analysis. However, as stated on page T,lines 22-
25 of Mr. Morrison's testimony, the Company did not perform a load study, and so Staff was
unable to conduct this analysis.
REQUEST NO. 4: Mr. Morrison takes issue with the Company's use of January 1,2016
as its system peak day. Does Mr. Morrison have a specific recommendation of an alternative
system peak date? If so, please identiff it and explain why it is appropriate.
STAFF RESPONSE NO. 4: The determination of proper allocators requires a load
study. As stated in Staff Response No. 3, this information was not available to Staff.
STAFF'S RESPONSE TO THE FIRST
PRODUCTION REQUEST OF
NWTGU J FEBRUARY 22,2017
REQUEST NO. 5: At page 12, lines 10-12 of his testimony, Mr. Morrison takes issue with
the Company's proposal to classiff a portion of distribution mains plant as customer-related. Please
respond to the following:
d. Has Mr. Morrison reviewed any documents pertaining to the planning and design of the
Company's distribution system to meet the peak load of its firm service customers? If so,
please provide copies of such documents.
Does Mr. Morrison agree that the Company's distribution mains must be sized to
accommodate the total demand of its firm service customers at the time of the system
peak?
f. Consider an example where the Company has 2 customers with the same peak day
demand connected to a distribution loop. If these customers are 2 miles apart from
each other, then the Company would need to install 2 miles of distribution main with
adequate capacity to meet the peak day demands of both customers. If the customers
were 10 miles apart, then the Company would need to install l0 miles of distribution
main to serve them. Would Mr. Morrison agree that the length of distribution main
needed to connect customers to the system is driven by the geographic location of
customers? If the response is anything other than an unqualified "yes," please
explain.
STAFF RESPONSE NO. 5: d. No; e. Yes; f. Staff objects that this question is
ambiguous, confusing and requires a speculative response because it is difficult to understand
how this scenario is related to the subsequent question, and it is not entirely clear how a "loop"
connecting two customers separatedby 2 miles would only require 2 miles of distribution mains,
or how two "looped" customers separated by 10 miles would only require 10 miles of distribution
mains. Subject to these objections and qualifications, Mr. Morrison generally believes that the
geographical locations of customers and Company distribution plant are key factors in
determining the length of distribution main needed to connect customers to the system.
STAFF'S RESPONSE TO THE FIRST
PRODUCTION REQUEST OF
NWIGU FEBRUARY 22,20T7
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REQUEST NO. 6: At page 13 of his testimony, Mr. Morrison takes issue with the
Company's use of the Minimum Intercept method of determining the customer- and demand-
related portions of distribution mains plant investment.
g. Has Mr. Morrison recalculated the customer and demand components of distribution
mains plant investment? If so, please provide the results of such calculations on an
electronic spreadsheet with all formulas intact.
h. Does Mr. Morrison agree that connecting customers to the system is an issue rn
designing the delivery distribution capacity and that there are factors other than peak
demand and usage that drive a utility's cost of delivery?
STAFF RESPONSE NO. 6: g. No. As explained in Staff Response Nos. 3 and 4, the
load information required for these calculations was not provided by the Company; h. Yes.
STAFF'S RESPONSE TO THE FIRST
PRODUCTION REQUEST OF
NWIGU 5 FEBRUARY 22,2017
STAFF WITNESS BENTLEY ERDWURM WILL BE ABLE TO ANSWER
QUESTIONS ABOUT OR SPONSOR THE ANSWERS TO REQUEST NOS. 7-8,
BELOW.
REQUEST NO. 7: At page 19, lines 9-11, Mr. Erdwurm recommends that the
Company's proposed MDFQ charge of $0.30 per therm be reduced to $0.20 per therm of MDFQ
for Large Volume and Transportation customers. Please explain how the recommended $0.20
per therm MDFQ charge was derived. Please provide all supporting calculations on an electronic
spreadsheet with formulas intact.
STAFF RESPONSE NO. 7: Mr. Erdwurm considered the percentage of large volume
and transportation revenue recovered through MDFQ charges. The implementation of a $0.20
MDFQ charge results in2\o/o of revenue being collected through demand charges under Staff s
rate design. If the MDFQ charge is $0.30, 42o/o of revenue would be collected through demand
charges given Staff s proposed revenue requirement. Electronic file: Excel file PR #62-67.xls,
sheet: I l6 Rev Proof, cells: M51-P57. This file was provided in response to Intermountain Gas
Company's First Production Request, Request No. 62.
REQUEST NO. 8: Has Mr. Erdwurm considered the demand charges of other gas
delivery utilities in developing his recommendation of the $0.20 per therm MDFQ charge? If so,
please identiff the gas utilities and specific large volume and transportation tariffs that were
considered
STAFF RESPONSE NO. 8: No specific utilities were considered.
STAFF'S RESPONSE TO THE FIRST
PRODUCTION REQUEST OF
NWIGU 6 FEBRUARY 22,2017
DATED at Boise, Idaho, this
Technical Staff: Michael Monison/l-6
Bentley Erdwurm/7-8
i:umisc/intg16.2 Staff l't Response to NWIGU
STAFF'S RESPONSE TO THE FIRST
PRODUCTION REQUEST OF
NWIGU
t.t ezlZl day of Febru ary 2017 .
Sean Costello
Deputy Attorney General
7 FEBRUARY 22,2017
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 22ND DAY OF FEBRUARY 2017,
SERVED THE FOREGOING COMMISSION STAFF'S RESPONSE TO THE FIRST
PRODUCTION REQUEST OF NORTHWEST INDUSTRIAL GAS USERS, IN CASE
NO. INT-G-16-02, BY MAILING A COPY THEREOF, POSTAGE PREPAID, TO THE
FOLLOWING:
MICHAEL P McGRATH
DIR _ REGULATORY AFFAIRS
INTERMOUNTAIN GAS CO
PO BOX 7608
BOISE ID 83707
E-MAIL: mike.mcsrath@,intgas.com
BRAD M PURDY
ATTORNEY AT LAW
2019 N ITTH STREET
BOISE ID 83702
E-MAIL: [e-mail]
CHAD M STOKES
TOMMY A BROOKS
CABLE HUSTON LLP
1OO1 SW 5TH AVE STE 2OOO
PORTLAND OR 97204-1136
E-MAIL: cstokes@,cablehuston.com
tbrooks@cablehuston. com
BENJAMIN J OTTO
ID CONSERVATION LEAGUE
7IO N 6TH STREET
BOISE TD 83702
E-MAIL: [e-mail]
RONALD L WILLIAMS
WILLIAMS BRADBURY
IOI5 W HAYS ST
BOISE TD 83702
E-MAIL : ron(@williamsbradbury. com
EDWARD A FINKLEA
EXECUTIVE DIRECTOR
NW INDUSTRIAL GAS USERS
545 GRANDVIEW DR
ASHLAND OR 87520
E-MAIL: [e-mail]
ELECTRONIC ONLY
MICHAEL C CREAMER
GIVENS PURSLEY LLP
E-MAIL : [e-mail]
F DIEGO RIVAS
NW ENERGY COALITION
I IOI 8TH AVENUE
HELENA MT 59601
E-MAIL: [e-mail]
CERTIFICATE OF SERVICE
PETER zuCHARDSON
GREGORY M ADAMS
RICHARDSON ADAMS PLLC
515 N 27TH STREET
BOISE TD 83702
E-MAIL : peter@.richardsonadams.com
gre g@richardsonadams. com
KEN MILLER
SNAKE RIVER ALLIANCE
PO BOX 1731
BOISE ID 8370I
E-MAIL: [e-mail]
LANNY L ZIEMAN
NATALIE A CEPAK
THOMAS A JERNIGAN
EBONY M PAYTON
AFLOA/JA-ULFSC
139 BARNES DR STE 1
TYNDALL AFB FL 32403
E-MAIL: lannv.zieman. 1 @us.af.mil
Natalie.cepak. [e-mail]
Thomas j emiean. 3 @us.af.mil
Ebony. payton. [e-mail]. mil
SCOTT DALE BLICKENSTAFF
AMALGAMATED SUGAR CO LLC
I95I S SATURN WAY
STE IOO
BOISE ID 83709
E-MAIL: [e-mail]
ANDREW J UNSICKER MAJ USAF
AFLOA/JACE-ULFSC
I39 BARNES DR STE I
TYNDALL AFB FL 32403
E-MAIL : Andrew.unsicker@us. af.mil
SECRETARY
CERTIFICATE OF SERVICE