130925_INTPGA.pdf

Idaho Public Utilities Commission
Case No. INT-G-13-05, Order No. 32897
September 25, 2013
Contact: Gene Fadness [phone], 890-2712
Website: www.puc.idaho.gov

Intermountain Gas increase is first in five years

For the first time in five years, customers of Intermountain Gas Company will be
receiving an increase in the variable portion of rates they pay for natural gas.

The annual Purchased Gas Cost Adjustment (PGA) mechanism adjusts rates up or down
to account for the always changing costs of natural gas supply, transportation and
storage.

The Idaho Public Utilities Commission approved the company’s application to increase
rates an average 4.15 percent effective Oct. 1. For a customer who uses natural gas for
space and water heating the increase is about $1.85 per month and for customers who
use natural gas for space heating only the average monthly increase is 68 cents. For
commercial customers, the increase is about $14.18 per month. The money
Intermountain Gas collects for the surcharge can go only toward meeting gas supply and
related expense. The surcharge does not increase company earnings.

It’s the first time since 2008 the PGA has been an increase. In 2012, the decrease was
7.1 percent; in 2011, 5.3 percent; in 2010, 1.6 percent and in 2009, 22.2 percent. The
PGA surcharge or credit lasts one year and is updated typically Oct. 1. There can by
other adjustments during the year if costs change significantly.

The increase this year is primarily due to an increase in transportation costs billed the
company by the Northwest Pipeline and an increase in the weighted average cost of gas.
Recent improvements in the economy and increased use of natural gas-fired electric
generation have increased demand and driven up costs for natural gas, despite
increased production from shale gas reserves. Even with the increase, the PGA portion
of gas rates are still 49 percent lower than in 2005.

About half of a customer’s monthly bill is the variable, PGA portion of rates that change
due to wholesale market, transportation and storage costs. With the increase effective
Oct. 1, customers who use natural gas for both space and water heating will pay 73
cents per therm in April through November and 69.8 cents from December through
March. Of that amount, 37.3 cents is the variable portion, or weighted average cost of
gas.

Intermountain Gas serves about 320,000 customers in 74 communities throughout
southern Idaho.