20080926Reply Comments.pdf

EXECUTIVE OFFICES
September 26, 2008
RECEI
2008 SEP 26 PH 3: 38
IDAHO PUBLIC
UTILITIES COMMISSION
INTERMOUNTAIN GAS COMPANY
555 SOUTH COLE ROAD. P.O. BOX 7608. BOISE, IDAHO 83707. [phone]. FAX: [phone]
Jean Jewell
Commission Secretary
Idaho Public Utilities Commission
472 W. Washington
Boise, il 83702-5983
RE: INT -G-08-03
Reply Comments of Intermountain Gas Company
Dear Mrs. Jewell,
In response to the Comments of the Commission Staff fied in regards to the above
referenced Case, Intermountain Gas Company hereby respectfully submits for consideration
by the Commission the following remarks.
In addition to the Staffs recommendation to accept Intermountain's Application and filed
tariffs, the Staff also recommended the adoption of several criteria pertaining to the
Company's Lost and Unaccounted for ("L&U") gas as well as measures targeted towards the
Company's low income customers. The below remarks are focused towards these two areas
of concern by the Staff.
The Company's continued efforts to manage and improve its distrbution system and mitigate
the overall level of L&U has led to realized levels of Lost and Unaccounted for gas that are
enviable within the natural gas distribution industry. Whle the L&U industry average
remains close to the 2% (oftotal system throughput) level, Intermountain's L&U for its fiscal
year 2007 was less than 1%, or 0.94%. As par of the Company's PGA Application, the
Company has requested recovery for the expected level of L&U for its fiscal year 2008 of
0.86% - an improvement over FY07 of 8.5%.* As par of its fied Comments in Case No.
INT-G-07-03, the Northwest Industral Gas Users acknowledged the efficiency with which
Intermountain maintains its operating system and believed an appropriate cap on the
Company's L&U would be 2%. The Commission has also recognized and acknowledged
Intermountain's efforts and track record on L&U and, as part of Order No. 301443, declined
to impose a 2% cap on the recovery of L&U
Also in regards to Lost and Unaccounted for gas, the Staff raised its concerns regarding
certain measurement, or metering, inaccuracies. The Company would like to point out that in
addition to the regular field audits performed on the Company's metering devices, the
Company has also instituted additional audit measures to include a "double check", within 1 0
days, of all the metrcs (programing and otherwise) associated with any
*When comparing the overall levels of L&U between FY07 and FY08, one must also incorporate the fact that the FY07
weather was 5.2% warer than normal while the FY08 weather was i 0.4% colder than normaL.
newly installed, or change in customer, metering device. The Commission is aware of the
Company's history to not "true-up" or seek recovery on a customer's bill for inaccurately
billed/metered volumes that occurred beyond a six (6) month period. The Commission,
however, may not be aware that any under billed volumes pertaining to meter errors
beyond this six month period are not included as part of the Company's L&U recovery but
are instead ''written-off' by the Company.
The Staff, as part of their Comments, also recommends instituting additional reporting
requirements on the Company pertaining to L&U. In lieu of these reports, the Company
hereby invites the Staff to visit with the Company to witness first hand and gain fuher
insight as to the myrad of factors involved in the management and mitigation of the
Company's L&U efforts.
The Staff has also requested that the Company be ordered to paricipate in the upcoming
Energy Affordability Workshops. The Company would like to remind the Commission of a
recent Decision Meeting held in September whereby Ms. Beverly Barker acknowledged to
the Commissioners Intermountain's willngness to paricipate in these workshops.
In regards to the Staff Comments pertaining to the creation of a low income weatherization
program, Intermountain would like to point out the following: the Staff correctly states that
"Monies from Idaho Power and Rocky Mountain Power canot be used to weatherize
homes that are heated by natural gas." This is unfortunate as 93% of Intermountain's
customers are served by either Idaho Power or Rocky Mountain Power. That said, there
remains substantial "fuel blind" weatherization dollars available to Intermountain's
customers through either the DOE or LIHEAP. The DOE weatherization dollars budgeted
for Idaho for FY09 are $1.8 millon. In addition to these DOE dollars, 15% ofLIHEAP's
dollars are earmarked for fuel blind weatherization programs (or approximately $1.7
millon durng FY08). Also, and as directed by this Commission as par of Intermountain's
ongoing Integrated Resource Planing efforts, all demand side management efforts must
first be viewed and analyzed within the context of the Company's supply and demand
requirements along with an associated cost benefit analysis.
In light of the above, Intermountain Gas Company respectfully requests that: 1) in
recognition of the Company's ongoing efforts with L&U that the Commission continue to
not impose a cap on the recovery of Intermountain's Lost and Unaccounted for gas, 2) that
the quarerly reports requested by the Staff be supplanted by on-sight observations by the
Staff as to the Company's efforts to manage and control its L&U and, 3) that the merits of
the Staff proposed weatherization program remain outside the context of the Company's
PGA Application.
Resp"'t~. II ,
íf.V!Y¿¡Michael ¿c'6ath
Director
Gas Supply and Regulatory Affairs