950515.docx

SCOTT WOODBURY
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
472 WEST WASHINGTON STREET
PO BOX 83720
BOISE,  IDAHO  83720-0074
[phone]
Street Address for Express Mail:
472 W WASHINGTON
BOISE ID  83702-5983
Attorney for the Commission Staff
BEFORE  THE  IDAHO  PUBLIC  UTILITIES  COMMISSION

IN THE MATTER OF THE APPLICATION)
OF INTERMOUNTAIN GAS COMPANY)CASE  NO.  INT-G-95-1
FOR AUTHORITY TO UPDATE ITS)
PURCHASED GAS COST ADJUSTMENT)
TARIFF.)
 )COMMENTS OF
)THE COMMISSION
______________________________________)STAFF
COMES  NOW  the Staff of the Idaho Public Utilities Commission, by and through its Attorney of record, Scott Woodbury, Deputy Attorney General, and submits the following  comments for the Commission’s consideration in Case No. INT-G-95-1.
Staff has reviewed the Intermountain Gas Company (IGC; Company) Application and Exhibits, in Case No. INT-G-95-1.  The proposed changes in the PGA tariff are in part a response to Staff's continued concern with the practice of using historical therms (that have been outdated due to record growth) for allocating current fixed and variable costs.  Staff has had several meetings with the Company to identify the problem and to work out a solution.  Staff recommends approval of the changes Intermountain Gas Company has proposed.
In assessing the reasonableness of the proposed changes in the Company’s PGA methodology, Staff examined the Company’s 1994 PGA filing, Case No. INT-G-94-3, and related data.  Staff conducted an analysis of transportation costs (reference Staff Exhibit No. 1, attached) by taking the total annual fixed transportation costs allocated to ratepayer classes and dividing this amount by the historical therms, as has been done in the Company’s past PGA filings, to arrive at a cost per therm for each ratepayer class for fixed transportation.  This cost per therm was then multiplied by the projected therm usage to arrive at a projected revenue collection to cover the fixed cost.  Staff then added fixed transportation costs not in the original filing and therefore not officially collected by the Company (Staff believes this cost has been covered by overcollection of existing fixed costs).  This analysis on line 26 shows that Intermountain Gas Company under the existing PGA methodology would have been overcollecting fixed costs.  The Company agrees that it is in the best interest of the ratepayers and the Company to use current normalized gas usage in calculating changes in the cost of gas .  This change in PGA methodology will correct the problem on a going-forward basis.  To correct prior period problems the Company has also agreed to Staff's suggestion of tracking over/under collection of fixed costs to insure the ratepayers and the Company are whole.
Staff would like to thank the Company for helping to identify and correct problems in the PGA methodology.
DATED  at Boise, Idaho, this            day of May 1994.
__________________________________________
Scott Woodbury
__________________________________________
Madonna Faunce
mfaunce\intg951/comments/umisc