20040614NWIGU Comments.pdf

R iERE~ffiD S T gJ DFiLED
2004 JUr4 J4 AM 8: 5&P2\
EXECUTiVE D!iZi'CTUR
June 1 L 20ffiI:\HO i'UBLIC
UTILrrJES COr1HJSSION
Via Facsimile 208.334-3762 and First Class Mail
TEL [phone]S80
FAX SO363GC7(n
EMAIL ppyrcn(,:i)!w.,igL:org
Ms. Jean D. Jewell
Commission Secretary
Idaho Public Utilities Commission
o. Box 83720
Boise, Idaho 83720-0074
Re: Application of Intermountain Gas Company for Authority to Increase its Rates
for Service, Case No. INT-04-, Comments of Northwest Industrial Gas Users
Dear Ms. Jewell:
In response to the Notice of Application, Modified Procedure and Comment Deadline
issued by the Idaho Public Utilities Commission ("Commission ) on May 12 2004
for the May 5 2004 Purchased Gas Adjustment ("PGA") filing of Intermountain Gas
Company ("Intermountain ), the Northwest Industrial Gas Users ("NWIGU"
respectfully submits the following comments for the Commission s consideration.
NWIGU is a non-profit trade association comprised of thirty-two end-users of natural
gas with major facilities in the States of Oregon, Washington, and Idaho. NWIGU
members include diverse industrial interests, including food processing, pulp and
paper, wood products, electric generation, aluminum, steel, chemicals, electronics
and aerospace. The association provides an informational service to its members and
participates in various regulatory matters that affect member interests. NWIGU
member companies purchase transportation services from Williams Gas Pipeline
West, also known as Northwest Pipeline Corporation, and from Gas Transmission
Northwest Corporation, and purchase sales and transportation services from local
distribution companies ("LDCs ), such as Intermountain, that acquire service from
these interstate pipelines.
In its May 12, 2004 Notice of Application, the Commission specifically requested
comments on whether Intermountain s PGA applications in this and future cases
should be processed and approved closer to the winter heating season
g.,
October
NWIGU supports retention of the current annual filing structure with rates effective
July 1. NWIGU does not perceive any customer benefit from a change in the
effective date of Intermountain s PGAs for either the current filing or in the near
future.
NWIGU members are concerned with the significant cost increases reflected in the
current Intermountain filing, in particular for T -1 and T -2 firm transportation services
4113 WOLF BERRY COURT + L;\KE OSWEGO, OREGON 97035-1827 ,~; WVJw,nv/1gu.org
IPUC Docket No. INT -04-
Comments ofNWIGU Page 2 of
(with respectively 16% and 24 % proposed increases). These firm transportation
services include firm transportation upstream of Intermountain s local distribution
system and therefore reliance and access to all Intermountain s upstream
transportation contracts. Those upstream contracts other than those on Northwest
Pipeline reflect major cost increases in this PGA for Intermountain s bundled
transportation customers. Changing the effective date of this filing will only increase
the magnitude of the costs to be collected, however, if 15m.onths of costs (12 months
plus three months delay) are then collected on a 12-month amortization schedule. If
the Commission does change the effective date of the current Intermountain PGA
NWIGU respectfully requests that the costs be amortized over a longer period of time
so that the rate impact of date shifting is mitigated to the T -1 and T -2 customers.
Although there may be appropriate circumstances in which the Commission should
act to delay the effective date of a PGA filing, for example to capture a known
significant cost reduction event or otherwise mitigate customer impact, NWIGU does
not see any customer benefit to altering the filing schedule this year or in the near
term.
Intermountain should instead be held to a prudent standard in managing its natural
gas commodity and pipeline capacity portfolio year round on behalf of its customers
both those buying commodity through the utility and those buying local distribution
service which has been bundled with upstream transportation service.
All natural gas customers, including industrial customers, are most concerned about
high prices, but moving the effective date of the PGA into the fall will not and should
not impact Intermountain s gas management practices. The only result will be less
notice to customers who buy their commodity from the LDC of price changes before
the winter heating season and a potentially even larger increase to those industrial
customers buying bundled transportation services on T -1 and T -2 (which are at such
proposed price increase levels to be considered rate shock already with this PGA
filing). While there may be unusual circumstances in which the Commission may
find in its discretion that a delayed implementation is warranted for a particular PGA
filing, such is not the case with this filing or with Intermountain s subsequent filings
unless there is change in the marketplace structure that would provide demonstrated
customer benefit with a fall PGA filing.
IPU C Docket No. INT -04- 2
Comments ofNWIGU Page 3 of
NWIGU appreciates this opportunity to provide comments on this issue. If you have
any questions with regard to this comment filing, please contact me at 503.636-2580.
Respectfully submitted
/)0vJ----
Paula E. Pyron
Executive Director
Northwest Industrial Gas Users
Cc Michael Huntington
Michael McGrath
Morgan Richards, Jr.
Edward A. Finklea