20090325final_order_no_30756.pdf

Office ofthe Secretary
Service Date
March 25, 2009
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF INTERMOUNTAIN
GAS COMPANY'S APPLICATION FOR
APPROVAL OF CHANGES TO ITS
COMPOSITE DEPRECIATION RATE ORDER NO. 30756
CASE NO. INT-08-
On November 21 2008, Intermountain Gas Company filed an Application requesting
approval to change its composite depreciation rate. Intermountain current effective
depreciation rate of 3.35% was approved by the Commission in February 2006.The
Commission directed the Company to update its depreciation study and submit it to the
Commission for review no later than three years from entry of the February 2006 Order.
Intermountain subsequently retained a consultant to update its 2005 Depreciation Study. The
consultant's study indicated that a decrease in the composite rate from 3.35% to 2.96% is
appropriate. The effect of the lower rate would be a decrease in the Company s annual
depreciation accrual by $1 462 205. The Company asked that its new composite depreciation
rate be effective January 2009.
Intermountain Gas requested that its Application be processed by Modified
Procedure. The Commission determined to initially issue only a Notice of Application and
Notice of Intervention Deadline. Order No. 30695. No petitions to intervene were filed.
Following the intervention period, Staff and the Company convened informal workshops as
directed by the Commission "to attempt to resolve Intermountain s request by agreement."
Order No. 30695, p. 1. On March 18, 2009, Intermountain Gas and Staff filed a Stipulation
resolving the issues and proposing new depreciation rates for Intermountain Gas.
The Stipulation provides that the 2007 removal activity in Account 376 (Mains) will
be excluded from the determination of depreciation rates in this case. Intermountain Gas
provided an explanation to Staff of account activity for the removals during 2007 for Account
376. The 2007 removal activity for Account 376 will be considered for inclusion in the
Company s next depreciation study. Stipulation,-r,-r 4-6. The Stipulation further states that a
decrease in Intermountain Gas s composite depreciation rate, from 3.34% (weighted by
September 30, 2007, assets) to 2.90%, is appropriate. The effect of the lower rate is a decrease
in the Company s annual depreciation accrual by $1 683 747, or an additional decrease of
ORDER NO. 30756
$221 542 as requested in the Company s Application. Stipulation,-r 8. Finally, the Stipulation
states that the depreciation rates should be effective as of January 1 , 2009. The account-by-
account depreciation rates are shown in Attachment 1 to this Order.
After reviewing the depreciation application and the Stipulation, the Commission
finds it reasonable to approve the Stipulation. We find the depreciation rates contained in the
Stipulation to be fair, just and reasonable. Consistent with our procedural Rule 274, it is
appropriate for the Commission to summarily accept the settlement of these depreciation rates.
IDAP A 31.01.01.274. Accordingly, we find that an evidentiary hearing in this matter is not
necessary. Finally, the Commission directs that the new depreciation rates contained in the
Stipulation shall be effective as of January 1 2009.
ORDER
IT IS HEREBY ORDERED that the Stipulation dated March 18, 2009, between
Intermountain Gas Company and Staff is approved. Intermountain Gas s depreciation rates for
its gas properties on an account-by-account basis as set out in the parties ' Stipulation and
Attachment 1 to this Order are approved.
IT IS FURTHER ORDERED that the stipulated depreciation rates shall be effective
as of January 1 2009.
THIS IS A FINAL ORDER. Any person interested in this Order may petition for
reconsideration within twenty-one (21) days of the service date of this Order. Within seven (7)
days after any person has petitioned for reconsideration, any other person may cross-petition for
reconsideration. See Idaho Code ~ 61-626.
ORDER NO. 30756
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this :l5rk
day of March 2009.
~B, ~::f
iJ~
MARSHA H. SMITH, COMMISSIONER
JI . E PTON',COM ISSIONER
ATTEST:
i3tJJe n D. Jewell
Co mission Secretary
bls/O:INT -08-05 - ws2
ORDER NO. 30756
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