2000110928561mod.doc

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF THE APPLICATION OF
INTERMOUNTAIN GAS COMPANY FOR AUTHORITY TO INCREASE ITS RATES FOR SERVICE

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CASE NO. INT-G-00-2

NOTICE OF APPLICATION

NOTICE OF PUBLIC
WORKSHOPS AND
HEARINGS

NOTICE OF MODIFIED PROCEDURE

ORDER NO. 28561

On October 27, 2000, Intermountain Gas Company (Company) filed an Application with the Idaho Public Utilities Commission for authority to place into effect new rate schedules that would result in an overall increase of approximately $35.8 million (27%) in revenues. Intermountain Gas supplies natural gas to approximately 200,000 customers in southern Idaho. The Company has requested an effective date of December 1, 2000. In this Order the Commission schedules public workshops and hearings. In addition, the requested effective date is suspended to allow the Commission to examine the proposal and conduct public hearings.
THE APPLICATION
YOU ARE HEREBY NOTIFIED that the Company alleges that the proposed increase is caused by several factors, including costs billed by Williams Gas Pipelines-West and other transportation companies, an increase in the weighted average cost of natural gas (WACOG), a temporary surcharge relating to the Company’s deferred gas cost account (PGA Account 186), and additional gas-related costs allocated to customers.
YOU ARE FURTHER NOTIFIED that Intermountain Gas proposes to allocate deferred gas costs from its Purchased Gas Cost Adjustment (“PGA”) balance (Account No. 186) to its customers through a temporary price adjustment effective during the seven month period beginning December 1, 2000 and ending June 30, 2001. The PGA Account is a deferral mechanism for over- and under-collections and for realized savings on spot market gas purchases. Intermountain Gas has deferred variable gas costs of approximately $9,300,000 thus far in its PGA Account. The Company proposes to collect this amount via a per therm surcharge of $0.04811.
YOU ARE FURTHER NOTIFIED that the Company proposes to implement the following permanent change and temporary surcharge to its tariff rates for natural gas service and sales:

Permanent Adjustment:
 Cost of Gas Supply $26,469,671.73
Temporary Surcharges or Credits:
Deferred Gas Costs (Intermountain Gas PGA Account 186)
 Uncollected Gas Costs $ 9,348,974.48

As computed by the Company, the total requested increase in annual revenue is $35,818,646 or 26.84%. Intermountain Gas proposes to allocate the change in rates to each of its customer classes in accordance with its Purchased Gas Cost Adjustment tariff and approved cost-of-service methodology. See Case Nos. INT-G-95-1, INT-G-88-2, U-1034-137.
YOU ARE FURHTER NOTIFIED that the Company proposes to uniformly raise customer rates by $.18434 per therm. Intermountain Gas recommended the following annualized change in rates per customer class:

Customer Class
Revenue Proposed Avg Increase
$ /Therm Proposed
Avg Increase
% Change Proposed Average Price
$/Therm
RS-1 Residential
$5,815,945
$ 0.18434
22.61%
$0.99968
RS-2 Residential
$16,678,713
$ 0.18434
26.97%
$0.86775
GS-1 General Service
$12,842,089
$ 0.18434
28.61%
$0.82876
LV-1 Large Vol. *
* T-1 tariff price plus the Weighted Average Cost of Gas (WACOG), $0.42296
(Compare WACOG INT-G-00-01: $0.28673)

WACOG = total commodity cost of gas ( total purchase therms YOU ARE FURTHER NOTIFIED that the average monthly increase in rates for this winter will be approximately $9.60 for residential customers (RS-1) using natural gas for space heating only. Residential customers (RS-2) using natural gas for both space and water heating could experience an average winter month increase of $14.21. Commercial customers (GS-1) could experience an average winter month increase of $59.79.
YOU ARE FURTHER NOTIFIED that the Company’s Application to increase its rates is merely a proposal subject to public review and Commission approval.
BACKGROUND
Energy prices for natural gas have risen dramatically over the last ten (10) months, resulting in higher natural gas costs nationally and in Idaho. Prior to the summer of 2000, the price per them of natural gas was generally flat and ranged between $0.63 per therm and $0.66 per therm. Given the increased commodity prices that Intermountain Gas had to pay its suppliers during the first half of this year, the Commission approved a 28% rate increase that became effective July 1, 2000 in Order No. 28426.
The Company maintains that since July 2000, natural gas costs have continued to rise substantially. The Company now seeks to increase its natural gas rates by $0.18434 per therm to compensate for gas commodity prices that have continued to rise since the new rates took effect in July. Intermountain Gas states that the revenues generated by the July rate increase and the proposed rate increase will pay for increased gas commodity prices from their supplier - not add to the Company’s profits.
NOTICE OF PUBLIC WORKSHOPS AND HEARINGS
YOU ARE HEREBY NOTIFIED that the Commission has scheduled five public workshops and hearings in this matter in:
Boise on Monday, November 20, 2000 at the Idaho Public Utilities Commission Hearing Room located at 472 West Washington Street. The public workshop will begin at 7 p.m. and the public hearing will begin at 8 p.m.

Caldwell on Tuesday, November 21, 2000 at the Canyon County Courthouse Public Meeting Room located at 1115 Albany Street. The public workshop will begin at 7 p.m. and the public hearing will begin at 8 p.m.

Twin Falls on Tuesday, November 28, 2000 at the Best Western Cavanaugh Hotel located at 1357 Blue Lakes Blvd. North. The public workshop will begin at 7 p.m. and the public hearing will begin at 8 p.m.

Rexburg on Monday, December 4, 2000 at the VFW Hall located at 495 West 2nd North. The public workshop will begin at 12:30 p.m. and the public hearing will begin at 1:30 p.m.

Pocatello on Monday, December 4, 2000 at the Cavanaugh Hotel (formerly the Quality Inn) located at 1555 Pocatello Creek Rd. The public workshop will begin at 7 p.m. and the public hearing will begin at 8 p.m.

The public workshops will offer the public an opportunity to meet with the Commission Staff and Intermountain Gas Company representatives and ask questions and receive information. Following each workshop, the Commission will hold a formal hearing to obtain public testimony as to whether approval of Intermountain Gas’s 27% rate increase request would be adverse to Idaho’s public interest. The Company, customers, local government leaders, and other interested persons are encouraged to testify.
YOU ARE FURTHER NOTIFIED that the Commission has jurisdiction over this matter and Intermountain Gas Company, a gas utility, pursuant to the authority and power granted under Title 61 of the Idaho Code and the Commission’s Rules of Procedure, IDAPA 31.01.01.000 et seq.
YOU ARE FURTHER NOTIFIED that all hearings will be conducted pursuant to the Rules of Procedure adopted by the Idaho Public Utilities Commission. IDAPA 31.01.01.000 et seq.
YOU ARE FURTHER NOTIFIED that all hearings and prehearing conferences in this matter will be held in facilities meeting the accessibility requirements of the Americans with Disabilities Act. In order to participate, understand testimony and argument at a public hearing, persons needing the help of a sign language interpreter or other assistance may ask the Commission to provide a sign language interpreter or other assistance as required under the Americans with Disabilities Act. The request for assistance must be received at least five (5) working days before the hearing by contacting the Commission Secretary at:
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, ID 83720-0074
[phone] (TELEPHONE)
[phone] (TEXT TELEPHONE)
[phone] (FAX)

APPLICATION SUSPENDED
YOU ARE FURTHER NOTIFIED that given the workshop/hearing schedule above, the Commission finds that this Application should be suspended for a period of fifteen (15) days from the proposed effective date of the December 1, 2000. Idaho Code § 61-622. This will allow sufficient time for the Commission to complete its hearings and consider the public comments in this case.
DEADLINE FOR INTERVENTION
YOU ARE FURTHER NOTIFIED that persons desiring to intervene in this matter for the purpose of presenting evidence or cross-examining witnesses at hearing must file a Petition to Intervene with the commission pursuant to this Commission’s Rules of Procedure 72 and 73, IDAPA 31.01.01.072 and -.073. Persons intending to participate at the hearing must file a Petition to Intervene on or before November 15, 2000. Persons desiring to present their views without parties’ rights of participation and cross-examination are not required to intervene and may present their comments without prior notification to the Commission or the parties.
NOTICE OF MODIFIED PROCEDURE
In addition to the public workshops and hearings, the Commission solicits written comments regarding the requested rate increase. Any person desiring to state a position on Intermountain Gas’s proposed rate increase may file a written comment with the Commission no later than Wednesday, December 6, 2000. The Commission has extended the comment period beyond the standard 21 days to give the public additional time to provide written comment regarding the Company’s Application and the proposed increase. Reference IDAPA 31.01.01.202.02.
YOU ARE FURTHER NOTIFIED that written comments concerning this Application must be mailed to the Idaho Public Utilities Commission and the Intermountain Gas Company at the following addresses:
COMMISSION SECRETARY
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074

Street Address for Express Mail:
472 W WASHINGTON ST
BOISE, ID 83702-5983 MICHAEL E. HUNTINGTON
VICE PRESIDENT
MARKETING AND EXTERNAL AFFAIRS
INTERMOUNTAIN GAS COMPANY
PO BOX 7608
BOISE, ID 83707

MORGAN W. RICHARDS, JR., ESQ.
Moffatt, Thomas, Barrett, Rock & Fields, Chartered
PO BOX 829
BOISE, ID 83701
All comments should contain the case caption and case number shown on the first page of this document.
YOU ARE FURTHER NOTIFIED that the Application in Case No. INT-G-00-2 together with accompanying exhibits and workpapers can be reviewed at the Commission’s office and at the principal office of Intermountain Gas Company during regular business hours. Intermountain Gas Company is located at 555 South Cole Road in Boise, Idaho (377-6000).
O R D E R
IT IS HEREBY ORDERED that Intermountain Gas Company’s Application to increase its rates is suspended for a period of fifteen (15) days from the effective date of December 1, 2000 or until such time as the Commission may issue an Order accepting, rejecting, or modifying the requested rate increase.
IT IS FURTHER ORDERED that the Commission does hereby solicit public, Company and Commission Staff oral and written comment on the Company’s Application as more particularly described above, and in accordance with the foregoing schedule.

DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this
day of November 2000.

DENNIS S. HANSEN, PRESIDENT

MARSHA H. SMITH, COMMISSIONER

PAUL KJELLANDER, COMMISSIONER

ATTEST:

Jean D. Jewell
Commission Secretary

O:INT-G-00-2_ln

NOTICE OF APPLICATION
NOTICE OF PUBLIC WORKSHOPS
AND HEARINGS
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 28561 1

Office of the Secretary
Service Date
November 9, 2000