20080527_2255.pdf

DECISION MEMORANDUM
TO:CO MMISSI 0 NER RED FO RD
CO MMISSI 0 NER SMITH
COMMISSIONER KEMPTON
COMMISSION SECRETARY
COMMISSION STAFF
FROM:KRISTINE SASSER
DEPUTY ATTORNEY GENERAL
DATE:MAY 22, 2008
SUBJECT:APPLICATION OF INTERMOUNTAIN GAS FOR AUTHORITY TO
CANCEL ITS EXISTING T-AND T-2 TRANSPORTATION TARIFFS
AND IMPLEMENT A T-S TARIFF, CASE NO. INT-08-
On May 7, 2008, Intermountain Gas Company filed an Application with the
Commission seeking authority to cancel its existing T-l and T-2 Transportation Tariffs and place
into effect an Industrial Transportation Tariff (T-5 Tariff). The Company requests that the
Application be processed by Modified Procedure and that the tariff changes become effective
July 1 , 2008.
THE APPLICATION
The Company asserts that it is necessary to cancel the T-l and T-2 tariffs in order to
ensure continued compliance with the applicable rules and regulations pertaining to Northwest
Pipeline s interstate pipeline system. Northwest's FERC Gas Tariff requires that a shipper have
sole title to the natural gas transported on Northwest's system. The shipper must have
concurrent title to both the gas molecule as well as the interstate transportation transporting that
same gas molecule. Intermountain Gas maintains that there are two fundamental attributes of its
l and T-2 tariffs at odds with Northwest's regulation requirement: (1) the Company s T-l and
2 tariffs are "bundled" transportation services to include the use, and compensation for, the
Company s firm capacity on Northwest's system; and (2) the tariffs require that customers
procure their own supply of natural gas from a third-party marketer.
Concurrent with the elimination of its T -1 and T -2 tariffs, Intermountain Gas intends
to offer each T-l and T-2 customer the opportunity to choose from the menu of remaining
unbundled industrial transportation services; specifically those services as offered under the
DECISION MEMORANDUM
Company s T-3 and T4 tariffs, and, if approved by the Commission, the proposed T-5 tariff. In
order to help facilitate a customer s option to elect the T-4 tariff, the Company seeks
Commission approval to waive the T-4 tariffs Exit Fee provision.
According to its Application, T -1 customers have had the option of selecting an
unbundled version the T -1 tariff - it is the T -4 tariff. T -2 tariff customers have had no equivalent
unbundled tariff option. Therefore, the proposed T-5 Rate Schedule is an unbundled version of
the Company s T-2 tariff. Intermountain Gas asserts that the T-5 customer s burner-tip price
should be economically equivalent" to that provided under the bundled T-2 service.
ST AFF RECOMMENDATION
Staff has reviewed the Application and recommends that the case proceed by
Modified Procedure. Although the Company does not anticipate resistance, the Application may
elicit responses from the affected parties. Consequently, Staff recommends the Commission
suspend the schedule changes to be effective July 1 2008, issue a Notice of Application, and set
a deadline for intervention. Once the parties are determined, they can discuss processing the
case via Modified Procedure.
CO MMISSI ON D ECISI 0 N
1. Does the Commission find that the public interest may not require a hearing to
consider the issues presented, and that this proceeding may be processed under Modified
Procedure?
2. Does the Commission wish to issue a Notice of Application including a deadline
for intervention?
3. Does the Commission wish to suspend the Company s proposed effective date of
July 1 , 2008, pursuant to Idaho Code ~ 61-622, to allow adequate time for intervention and
comment? If yes, what period of suspension is appropriate?
4. Is there anything else that the Commission wishes to consider regarding this
Application?
~;t,~ 0 (1. ~L)
Kri ine A. Sasser
Deputy Attorney General
M:INT-O8-01 ks
DECISION MEMORANDUM