20090811notice_of_modified_procedure_order_no_30876.pdf

Office of the Secretary
Service Date
August 11 2009
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF INTERMOUNTAIN
GAS COMPANY'S REQUEST FOR
AUTHORITY TO ESTABLISH A HOOKUP
FEE ALONG ITS SUN VALLEY LATERAL
NOTICE OF
MODIFIED PROCEDURE
CASE NO. INT -09-
ORDER NO. 30876
On June 15 , 2009, Intennountain Gas Company filed an Application with the
Commission seeking authority to establish a hookup fee along its Sun Valley Lateral. The
Company requests that the Application be processed by Modified Procedure and that the hookup
fee be implemented as of July 15 , 2009. On July 10, 2009, the Commission issued a Notice of
Application, set a deadline for intervention, and suspended the Company s request for a July 15
2009, effective date. Order No. 30857. No parties petitioned to intervene.
THE APPLICATION
The Sun Valley Lateral is currently operating near system capacity. The Company
maintains that it has made and continues to make substantial capital upgrades to its Sun Valley
Lateral in order to serve the daily natural gas needs of all its Sun Valley Lateral customers. The
next planned distribution system upgrade off the main Sun Valley Lateral is the "Ketchum
Uprate'" planned to be completed in 2009. This upgrade will provide 16 000 thenns per day of
incremental distribution capacity to new Ketchum and Sun Valley, Idaho customers at an
estimated cost of $640 000.
Intennountain Gas proposes a new rate schedule that will require new customers to
pay a fee for the disproportionate amount of incremental distribution system plant investment
that these new customers create. The fee will apply to new customers whose estimated peak
usage on the Company s Sun Valley Lateral exceeds the average peak-day usage on the Lateral.
Customers who will be subject to the proposed hookup fee will be the same new customers
causing the need for, and who directly benefit from, additional Sun Valley Lateral distribution
system capital upgrades.
The Company reports that the average peak-day usage per customer along the Sun
Valley Lateral is presently 15.5 thenns per day.
1 The "up rate" of a natural gas pipeline is the process required to increase the allowable operating pressure of apipeline segment.
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 30876
Intennountain Gas proposes that the hookup fee initially be set based on the
estimated cost of construction of the Ketchum Uprate Project - $640 000. The Company intends
to file a revised rate schedule with the Commission reflecting the actual costs of the Ketchum
Project when they become known. If actual costs of the Project result in a lower hookup fee than
that which is initially approved and charged to customers, the Company will issue a refund to
customers who paid the excess fee. If actual costs result in a higher hookup fee, the Company
does not intend to seek the difference from customers who paid the lower fee prior to knowledge
of the actual costs.
Intennountain Gas insists that its earnings will not change as a result of the proposed
new rate schedule. Any collected hookup fee will be applied as a reduction to the distribution
system plant investment (rate base) provided to serve the incremental Ketchum/Sun Valley area
customers, thereby avoiding any cross-subsidies that would otherwise occur to pay for any above
average customer usage.
The Company believes that failure to approve a hookup fee will cause undue
subsidization and upward price pressure on customers who are not directly benefitted from the
Ketchum/Sun Valley area distribution system upgrades.
NOTICE OF MODIFIED PROCEDURE
YOU ARE HEREBY NOTIFIED that the Commission has detennined that the
public interest may not require a fonnal hearing in this matter and will proceed under Modified
Procedure pursuant to Rules 201 through 204 of the Idaho Public Utilities Commission s Rules
of Procedure IDAPA 31.01.01.201 through .204.The Commission notes that Modified
Procedure and written comments have proven to be an effective means for obtaining public input
and participation.
YOU ARE FURTHER NOTIFIED that any person desiring to state a position on this
Application may file a written comment in support or opposition with the Commission within
twenty-one (21) days from the service date of this Notice. The comment must contain a
statement of reasons supporting the comment. Persons desiring a hearing must specifically
request a hearing in their written comments. Written comments concerning this Application
shall be mailed to the Commission and the Applicant at the addresses reflected below:
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 30876
Commission Secretary
Idaho Public Utilities Commission
PO Box 83720
Boise, ID 83720-0074
Street Address for Express Mail:
472 W. Washington Street
Boise, ID 83702-5918
Michael P. McGrath
Director - Gas Supply & Regulatory Affairs
Intennountain Gas Company
PO Box 7608
Boise, ID 83707
E-mail: mmcgrathC0intgas.com
Morgan W. Richards, Jr.
Richards Law Office
804 East Pennsylvania Lane
Boise, ID 83706
Email: mwrlawC0cableone.net
document.
These comments should contain the case caption and case number shown on the first page of this
Persons desiring to submit comments via e-mail may do so by accessing the
Commission s home page located at www.puc.idaho.gov. Click the "Comments and Questions
icon and complete the comment fonn using the case number as it appears on the front of this
document. These comments must also be sent to the Applicant at the e-mail addresses listed
above.
YOU ARE FURTHER NOTIFIED that if no written comments or protests are
received within the time limit set, the Commission will consider this matter on its merits and
enter its Order without a fonnal hearing. If written comments are received within the time limit
set, the Commission will consider them and, in its discretion, may set the same for fonnal
hearing.
YOU ARE FURTHER NOTIFIED that the Application, supporting workpapers and
exhibits have been filed with the Commission and are available for public inspection during
regular business hours at the Commission offices. The Application and other workpapers are
also available on the Commission s Website at www.puc.idaho.gov under the "File Room" and
then "Gas Cases.
YOU ARE FURTHER NOTIFIED that all proceedings in this case will be held
pursuant to the Commission s jurisdiction under Title 61 of the Idaho Code and specifically
Idaho Code 99 61-117, 61-129, and 61-502. The Commission may enter any final Order
consistent with its authority under Title 61.
YOU ARE FURTHER NOTIFIED that all proceedings in this matter will be
conducted pursuant to the Commission s Rules of Procedure, IDAPA 31.01.01.000 et seq.
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 30876
ORDER
IT IS HEREBY ORDERED that this case be processed under Modified Procedure.
Interested persons and the parties may file written comments no later than 21 days from the date
of this Order.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this / j-i-A
day of August 2009.
KEMPToN, P IDENT
MARSHA H. SMITH, COMMISSIONER
ATTEST:
Co mISSIOn Secretary
O:INT-O9-0J ks2
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 30876