20090826notice_of_application_order_no_30886.pdf

Office of the Secretary
Service Date
August 26, 2009
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF INTERMOUNTAIN GAS COMPANY
FOR AUTHORITY TO CHANGE ITS
PRICES (2009 PURCHASED GAS COST
ADJUSTMENT).
NOTICE OF APPLICATION
CASE NO. INT -09-
NOTICE OF
MODIFIED PROCEDURE
ORDER NO. 30886
On August 19, 2009, Intermountain Gas Company ("Intermountain ) filed its annual
Purchased Gas Cost Adjustment (PGA) Application requesting authority to decrease its
annualized revenues by $72.4 million. Application at 2. The PGA mechanism is used to adjust
rates to reflect annual changes in Intermountain s costs for the purchase of natural gas from
suppliers - including transportation, storage, and other related costs. See Order No. 26019.
Intermountain s earnings will not be decreased as a result of the proposed changes in prices and
revenues. The Company requests that its Application be processed by Modified Procedure and
that its rates become effective on October 1 , 2009.
NOTICE OF APPLICATION
YOU ARE HEREBY NOTIFIED that Intermountain Gas seeks to pass-through to
each of its customer classes a change in gas-related costs resulting from: (1) an increase in costs
billed Intermountain due to higher prices charged by Northwest Pipeline GP ("Northwest" or
Northwest Pipeline ) offset by a small decline in contract volumes on Northwest; (2) an
increase in costs from Intermountain s "upstream" Canadian pipeline suppliers; (3) a decrease in
the Company s projected costs relating to its storage contracts; (4) a decrease in Intermountain
Weighted Average Cost of Gas, or "W ACOG"; (5) an updated customer allocation of gas-related
costs pursuant to the Company s Purchased Gas Cost Adjustment provision; (6) the inclusion of
temporary surcharges and credits for one year relating to gas and interstate transportation costs
from Intermountain s deferred gas cost accounts; and (7) benefits included in Intermountain
firm transportation and storage costs resulting from Intermountain s management of its storage
and firm capacity rights on pipeline systems. Application at 3-
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 30886
YOU ARE FURTHER NOTIFIED that Intermountain also seeks with this
Application to eliminate the temporary surcharges and credits included in its current prices
during the past 12 months, pursuant to Order Nos. 30649 and 30676. The aforementioned
changes would result in an overall price decrease to Intermountain s customers.
YOU ARE FURTHER NOTIFIED that Intermountain Gas proposes decreasing the
W ACOG from the currently approved $0.67482 per therm to $0.49600 per thermo The
Application maintains that weather adjusted demand for natural gas has diminished, driven by
the downturn in our regional and national economy. At the same time, natural gas supplies are
plentiful. This current imbalance between supply and demand has driven down the near term
prices for natural gas. Application at 6.
YOU ARE FURTHER NOTIFIED that the Company asserts that the proposed
W ACOG includes the benefits resulting from Intermountain s storage of significant amounts of
natural gas procured during the summer season for use during the winter when market prices are
normally higher. Additionally, and in an effort to further stabilize prices paid by customers
during the upcoming winter period, Intermountain has entered into various hedging agreements
to lock in the price for significant portions of its underground storage and other winter flowing
supplies. Application at 6.
YOU ARE FURTHER NOTIFIED that although current commodity futures prices
dictate the use of a $0.49600 per therm W ACOG, the Company continues to remain vigilant in
monitoring natural gas prices. If forward prices for natural gas materially deviate from $0.49600
per therm, the Company is committed to return to the Commission prior to this winter s heating
season to amend these proposed rates.
YOU ARE FURTHER NOTIFIED that pursuant to Order No. 30649, Intermountain
included temporary surcharges and credits in its October 2008 and November 15 , 2008, prices
for the principal reason of collecting or passing back to its customers deferred gas cost charges
and benefits. Exhibit No., Line 26 reflects the elimination of these temporary surcharges and
credits.
YOU ARE FURTHER NOTIFIED that the Company proposes to allocate deferred
gas costs from its Account No. 186 balance to its customers through temporary price adjustments
to be effective during the 12-month period ending September 30 2010, as follows: (1) fixed gas
costs credit of $741 556 attributable to the collection of interstate pipeline capacity costs, the
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 30886
true-up of expense issues previously ruled on by the Commission, and mitigating capacity
release credits generated from the release of Intermountain s pipeline capacity; (2) deferred gas
cost amounts of $12.7 million attributable to variable gas costs since October 1 , 2008; and (3)
deferred gas costs related to Lost and Unaccounted For Gas which results in a net per therm
decrease to both sales and transportation customers. Application at 8.
YOU ARE FURTHER NOTIFIED that Intermountain states that a straight cents-per-
therm price decrease was not utilized for the LV -1 tariff. The proposed decrease is fixed-cost
related and, because there are no fixed costs recovered in the tail block of the LV -1 tariff, a cent
per therm increase relating to fixed costs was made only to the first two blocks of the LV -1 tariff.
Each block of the proposed T-3 and T-4 tariffs include a uniform cents-per-therm decrease for
unaccounted gas recovery.
YOU ARE FURTHER NOTIFIED that Intermountain asserts that customers have
been notified regarding Intermountain s Application through a customer notice and press release.
Id Intermountain states that the proposed overall price changes reflect a just, fair, and equitable
pass-through of changes in gas-related costs to Intermountain s customers. Finally, the
Company requests that this matter be handled under Modified Procedure pursuant to Rules 201-
204 of the Commission s Rules of Procedure and that its rates become effective on October 1
2009.
NOTICE OF MODIFIED PROCEDURE
YOU ARE FURTHER NOTIFIED that the Commission has determined that the
public interest may not require a formal 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
fourteen (14) 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 APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 30886
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
Intermountain Gas Company
PO Box 7608
Boise, ID 83707
Mail: mmcgrath~intgas.com
Morgan W. Richards, Jr.
Richards Law Office
804 East Pennsylvania Lane
Boise, ID 83706
Email: mwrlaw(illcableone.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 form using the case number as it appears on the front of this
document. These comments must also be sent to Intermountain Gas 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 formal 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 formal
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 web site at www.puc.idaho.gov by clicking on "File Room
and then "Gas Cases.
YOU ARE FURTHER NOTIFIED that all proceedings in this matter will be held
pursuant to the Commission s jurisdiction under Title 61 of the Idaho Code, and specifically
Idaho Code ~~ 61-307, 61-313 , 61-503 and 61-622. 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, IDAP A 31.01.01.000 et seq.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 30886
ORDER
IT IS HEREBY ORDERED that this case be processed under Modified Procedure.
Interested persons and parties may file written comments no later than fourteen (14) days from
the service date of this Notice.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this ;2t/-"
day of August 2009.
-'? L~SI
MARSHA H. SMITH, COMMISSIONER
ATTEST:
Je . Jewell
Co mission Secretary
O:INT-09-02 ks
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 30886