HomeMy WebLinkAbout20111107_3511.pdfDECISION MEMORANDUM 1
DECISION MEMORANDUM
TO: COMMISSIONER KJELLANDER
COMMISSIONER REDFORD
COMMISSIONER SMITH
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL
FROM: KARL KLEIN
DEPUTY ATTORNEY GENERAL
DATE: NOVEMBER 1, 2011
SUBJECT: INTERMOUNTAIN GAS COMPANY’S APPLICATION TO CHANGE ITS
COMPOSITE DEPRECIATION RATE, CASE NO. INT-G-11-02
On October 12, 2011, Intermountain Gas Company applied to the Commission for an
Order authorizing the Company to increase its composite depreciation rate from 2.96% to 3.07%,
effective January 1, 2012. The Company asks the Commission to allow the rates to take effect
on an interim basis on January 1, 2012, if the Commission is unable to enter a final Order
approving the rates by that date. The Company asks the Commission to process this matter
under Modified Procedure.
THE APPLICATION
The Company recounts that the Commission approved the Company’s current
composite depreciation rate (2.96%) in March 2009. That rate is based on a 2008 depreciation
study. The Company says it reviews and asks the Commission to update its depreciation rate
every three years and that, in this case, it has retained a consultant to update the Company’s 2008
depreciation study. According to the Company, the consultant’s study indicates that the
Company should increase its composite depreciation rate from 2.96% (2.98% when the accrual
rates per Order No. 29975 are weighted by December 30, 2010 assets) to 3.07%. The Company
says the higher rate would increase the Company’s annual depreciation accrual by $375,337.
The Company states that the depreciation rate increase would not increase the Company’s prices.
STAFF RECOMMENDATION
Staff believes Modified Procedure may be appropriate, but it recommends that the
Commission initially issue only a Notice of Application and Notice of Intervention Deadline.
DECISION MEMORANDUM 2
Following the intervention period, Staff and the Company and any other parties will convene
informal workshops to attempt to resolve Intermountain’s request by agreement. Modified
Procedure can commence after the workshops conclude.
COMMISSION DECISION
Should the Commission issue a Notice of Application and Notice of Intervention
Deadline?
M:INT-G-11-02_kk