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IDAHO PUBLIC UTILITIES COMMISSION Page 282001
ANNUAL REPORT
Idaho Gas Prices
Have Increased
Following
National Trends.
Sales Continue
To Increase.
The Idaho Public Utilities Commission regulates two natural gas utilities
- Intermountain Gas Company and Avista Utilities. Questar Gas provides
service to a small number of customers in southeast Idaho, but is regulated by
the Utah commission.
Intermountain Gas supplies natural gas to southern Idaho, serving more
than 210,000 customers. Avista has gas operations in eastern Washington and
northern Idaho, serving more than 55,000 customers in northern Idaho.
In June 1990, Questar Gas - then known as Mountain Fuel Supply Co.
- of Salt Lake City, Utah, applied to the commission for authority to serve
Idaho customers in the Preston area. Together, the commission and the Idaho
Legislature amended Idaho Code 61-505, clarifying the commission’s ability to
contract with neighboring state regulators to regulate rates in Idaho border
communities served by the neighboring state’s utilities. The amendment encour-
ages such utilities to extend service into Idaho without incurring undue regula-
tory expense.
When natural gas reached Idaho communities in the 1950s, local
distribution companies’ supply came from the Northwest Pipeline Corporation
of Salt Lake City. The pipeline serves much of the Pacific Northwest, connect-
ing the Four Corners fields of the southwest with Canadian supply.
Customers of Intermountain Gas and Avista faced significant increases
in their rates during the summer season, a period when rates are historically
low.
An increased demand for gas during the “off season,” and the opening
of the Alliance Pipeline, which has allowed low-cost Canadian gas to be
transported to markets in the Midwest where gas prices are generally much
higher, are cited as reasons for the increase in price. Additionally, there has
been an increase in the number of natural gas fired turbines for electric power
generation which has increased competition for gas supply during the summer
months, a period which historically has been used by gas companies to pur-
chase and store gas at low prices for use during the winter months when
demand and prices are generally higher.
Intermountain Avista Questar Total
No. of Customers 210,687 55,543 1,536 267,766
% of Total Custs.78.68%20.74%0.57%100.00%
Therms (millions)496.1 151.8 1.6 649.5
% of Total Therms 76.38%23.38%0.24%100.00%
Revenue ($millions) $133.60 $43.33 $1.12 $178.05
% of Total Rev. 75.03%24.34%0.63% 100.00%
Idaho Natural Gas Utilities
2001
ANNUAL REPORTPage 29 IDAHO PUBLIC UTILITIES COMMISSION
INTERMOUNTAIN GAS COMPANY
Residential Commercial Industrial Transportation Total
No. Customers 187,329 22,924 12 105 210,687
% of Total Custs.89.06%10.88%0.01%0.05%100%
Therms (millions)138.7 82.2 4.4 270.8 496.1
%of Total Therms 27.96%16.57%0.89%54.59%100%
Revenue (millions)$79.10 $41.90 $1.30 $11.30 $133.60
% of Total Rev.59.21%31.36%0.97%8.46%100%
AVISTA UTILITIES
Idaho services only
Residential Commercial Industrial Transportation Total
No. Customers 47,797 6,630 108 8 55,543
% of Total Custs.87.85%11.94%0.19%0.01%100%
Therms (millions)43.3 29.5 4.7 74.4 151.8
%of Total Therms 28.49%19.44%3.07%49%100%
Revenue (millions)$25.65 $14.93 $2.02 $0.73 $43.33
% of Total Rev.59.20%34.46%4.65%1.68%100%
QUESTAR GAS COMPANY
Residential Commercial Industrial Transportation Total
No. Customers 1,535 1 0 0 1,536
% of Total Custs.99.93%0.07%0.00%0.00%100%
Therms (millions)1.5 0.1 0.0 0.0 1.6
%of Total Therms 94.61%5.39%0.00%0.00%100%
Revenue (millions)$1.08 $0.04 $0.00 $0.00 $1.12
% of Total Rev.96.26%3.74%0.00%0.00%100%
Natural Gas Utilities, continued
IDAHO PUBLIC UTILITIES COMMISSION Page 302001
ANNUAL REPORT
Intermountain
Gas Company
555 S. Cole Road
P O Box 7608
Boise, ID 83707
208-377-6840
(Boise)
208-365-3004
(Emmett)
208-788-3488
(Hailey)
208-522-6095
(Idaho Falls)
208-467-7491
(Nampa)
Residential Rates
(RS2, customers using
gas for both space and
water heating)
Summer
$2.50/month
$0.65004/therm
Winter
$6.50/mo
$0.61641/therm
Gas Utility Case Reviews
Dec. 15, 2000
IPUC REDUCES, EXTENDS START DATE OF GAS INCREASE
Case No. INT-G-00-2, Order No. 28578
BOISE – A rate increase of approximately 20 percent — which is less
than what Intermountain Gas Co. had sought to help pay for its increased costs
in natural gas purchases — has been approved by the Idaho Public Utilities
Commission.
The utility had requested an approximate 27 percent increase to reflect
its increased natural gas purchase costs. The commission said that the 7 percent
difference will be deferred to a future date.
The commission noted that many of those providing testimony or
comments at the five public hearings across southern Idaho asked the commis-
sion to reduce or delay the increase. Commissioners said this deferral should
provide some additional relief to minimize the impact on consumers this winter.
The decision will allow an opportunity for market conditions to improve and for
natural gas prices to stabilize before the remaining part of the increase must be
addressed, commissioners said.
The increase will not go into effect until Jan. 15, 2001 rather than Dec.
1, 2000 as requested by the utility. “It is the commission’s hope that this delay
will minimize rate shock, as well as afford ratepayers an opportunity to meet
other year-end obligations prior to implementing this rate increase,” the order
said.
In addition, the commission order implemented an “anniversary-based”
level-pay plan. This payment plan would allow customers to begin level pay at
any time. “For some, this would defer their current winter natural gas bill as they
pay a level amount calculated to cover the winter heating season over the next
12-month period,” the order said.
2001
ANNUAL REPORTPage 31 IDAHO PUBLIC UTILITIES COMMISSION
July 13, 2001
INTERMOUNTAIN GAS GRANTED 2.74 PERCENT INCREASE
Case No. INT-G-01-3, Order No. 28783
BOISE –Intermountain Gas Company will be allowed to recover from
its customers about $5.9 million of the $9.4 million revenue increase it has
requested, according to an order issued by the Idaho Public Utilities Commis-
sion.
For a homeowner who uses gas for space heating the increase will be
about 11 cents a month. Homeowners who use gas for space and water heating
will pay about $2.23 more per month. Commercial customers will see an
approximate $6.04 per month increase.
The company originally sought to recover $27.1 million, a 12.9 percent
increase. But a softening in wholesale prices and an increase in natural gas
drilling led to a proposal from the company earlier this month to decrease its
original request to a 4.5 percent increase. The commission’s order results in an
average per therm increase of 2.74 percent.
The revenue increase is needed, the company said, to recover costs it
has already paid to buy gas on the wholesale market. It will not increase the
company’s profit.
The company is required to undergo a “purchase gas cost adjustment”
annually with the commission. If the company has spent more to purchase gas
than has been included in customer rates, it can seek an increase. If wholesale
prices drop and the company spends less to buy gas than it collects from
customers, it must decrease rates.
Commissioners agreed with commission staff that about $3.5 million of
Intermountain Gas’ total $9.5 million request should be deferred until more
documentation can be provided of gas purchases made during the past year.
Intermountain Gas uses IGI Resources as its agent to purchase gas on the
wholesale market for Intermountain to sell to its customers. IGI Resources’
invoices of spot market purchases no longer show the original purchase price or
the identity of the seller for purchases made on Intermountain’s behalf.
The company is in the process of providing more documentation and
revising its invoices, but commissioners still want to defer recovery of the $3.5
million until more documentation can be provided. It could be recovered in next
year’s gas cost adjustment if sufficient documentation is provided.
This is the company’s third increase since just more than a year ago. The
company received a 27 percent increase on July 1, 2000, and another 20
percent on Jan. 15, 2001.
In its order, the commission also directed commission staff and Inter-
mountain Gas to begin discussions on how to modify the purchase gas cost
method to provide more incentives for the company to aggressively seek out
natural gas at the lowest possible market prices.
Gas Utility Case Reviews, continued
IDAHO PUBLIC UTILITIES COMMISSION Page 322001
ANNUAL REPORT
Questar Gas
Company
180 E. First South
Salt Lake City,
UT 84139
801-324-51120
Residential Rates
Summer
$5.00/mo
$0.433548/therm
$0.330883/therm over
45 therms
Winter
$5.00/mo
$0.518495/therm
$0.405118/therm over
45 therms
Avista Utilities
P O Box 3727
Spokane, WA 99220
509-489-0500
(Spokane)
208-664-0421
(Coeur d’Alene)
208-743-5541
(Lewiston)
208-882-7511
(Moscow)
Residential Rates
Basic Charge $3.28
$0.47011/therm
Aug. 29, 2001
AVISTA GAS GRANTED 11.5 PERCENT INCREASE
Case No. AVU-G-01-2, Order No. 28827
BOISE – The Idaho Public Utilities Commission has granted Avista
Utilities’ request for an 11.5 percent revenue increase to pay for purchases the
company made on the wholesale gas market from September 1999 through
March of 2001.
To lessen the severity of the rate increase on customers, the company
will recover about $6.9 million of the total $22.3 million the company spent on
gas purchases. The remaining amount will be recovered over the next two-and-
half year period. However, the commission has reserved the right to review the
remaining recovery during the company’s next purchase gas adjustment in one
year to verify that recovery is still warranted.
For a residential customer, the average monthly increase will be $6.91,
or about 10.65 percent. For large general service customers the monthly
increase is $167.66 or about 11 percent.
The amount the company seeks recovery for now is related exclusively
to the unprecedented cost of wholesale gas that the company experienced not
to any other expenses such as the salary of a former executive.
To this point, Avista has not recovered any portion of its $22.3 million
deferral. The commission is concerned that without recovery now, the adverse
impacts of continued deferral would create an additional financial burden for
customers in the future.
Aug. 20, 2001, was the effective date of the increase.
Gas Utility Case Reviews, continued