20091105Application.pdf

EXECUTIVE OFFICES
INTERMOUNTAIN GAS COMPANY
555 SOUTH COLE ROAD · P.O. BOX 7608. BOISE, IDAHO 83707. [phone]. FAX: [phone]
CE1Vi-,..RE . li C.!)
2009 NOV -5 PH 4: '8
November 5, 2009 IDAHO Pq8,L':\r~C! ~d
UTiUTIES COMrviiv..!iO"
Ms. Jean Jewell
Commission Secretary
Idaho Public Utilities Commission
472 W. Washington St.
P.O. Box 83720
Boise, i D 83720-0074
RE: Intermountain Gas Company
Case No. INT-G-09-03
Dear Ms. Jewell:
Enclosed for filing with this Commission are a signed original and seven copies of
Intermountain Gas Company's Application for Authority to Establish Interruptible Snowmelt
Tariffs.
Should the Commission approve the attached Rate Schedules as filed, also attached herein
are clean copies for stamped approval by the Commission.
Please acknowledge receipt of this filing by time stamping and returning a photocopy of this
Application cover letter to us.
If you have any questions or require additional information regarding this Application,
please contact me at [phone].
MPM/sc
Enclosures
cc: D. Haider
F. Morehouse
E. N. Book
S. Madison
RECE r¡
iOO9 NOV -5 PH 4: '8
IDAHO PUBUG ..",\ ¡
INTERMOUNTAIN GAS COMP ANytTIUTIES COMi,AISSI0¡,¡
CASE NO. INT -G-09-03
APPLICATION
AND
EXHIBIT
In the Matter of the Application of INTERMOUNTAIN GAS COMPAN
for Authority to Establish Interruptible Snowmelt Tariffs
Morgan W. Richards, Jr., ISB NO.1913
RICHARS LAW OFFICE
804 East Pennsylvania Lane
Boise, Idaho 83706
Telephone: [phone]
Attorney for Intermountain Gas Company
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200' NOV -5 PH 4: 18
IDAHO PUBU~. ."
UTtUTiES COMMk,SION
BEFORE THE IDAHO PUBLIC UTILITIES COMMSSION
In the Matter of the Application of
INTERMOUNTAI GAS COMPAN
for Authority to Establish Interrptible
Snowmelt Tarffs
Case No. !N -G-09-03
APPLICATION
Intermountain Gas Company ("Intermountain" or "Company"), a subsidiar of MDU
Resources Group, Inc. with general offces located at 555 South Cole Road, Boise, Idaho, hereby
requests authority, pursuant to Idaho Code Sections 61-307 and 61-622, to place into effect
December 15, 2009 new Rate Schedules. The proposed Rate Schedules would require any new
residential or small commercial customer installing new natual gas equipment, or any existing
residential or small commercial customer performing remodeling work that includes modification
of equipment and piping, for the purose of melting snow on sidewalks, drveways or other similar
appurenances ("Snowmelt"), to receive interrptible service for such Snowmelt either under the
Company's proposed Rate Schedule IS-R or Rate Schedule IS-C. Intermountain's earngs wil not
change as a result of the proposed new Rate Schedules. Intermountain's proposed Rate Schedules
are attached hereto as Exhibit No. 1 and are incorporated herein by reference.
Communications in reference to this Application should be addressed to:
Michael P. McGrath
Director - Gas Supply & Regulatory Affairs
Intermountain Gas Company
Post Office Box 7608, Boise, ID 83707
and
Morgan W. Richards, Jf.
Richards Law Office
804 East Pennsylvana Lane
Boise, ID 83706
APPLICATION - 2
In support of this Application, Intermountain does allege and state as follows:
I.
Intermountain is a gas utility, subject to the jursdiction of the Idaho Public Utilities
Commission, engaged in the sale of and distrbution of natual gas within the State of Idaho under
authority of Commission Certificate No. 219 issued December 2, 1955, as amended and
supplemented by Order No. 6564, dated October 3, 1962.
Intermountain provides natural gas service to the following Idaho communties and counties
and adjoining areas:
Ada County - Boise, Eagle, Garden City, Kuna, Meridian, and Star;
Bannock County - Chubbuck, Inom, Lava Hot Springs, McCammon, and Pocatello;
Bear Lake County - Georgetown, and Montpelier;
Bingham County - Aberdeen, Basalt, Blackfoot, Firth, Fort Hall, Moreland/verside, and Shelley;
Blaine County - Bellevue, Hailey, Ketchum, and Sun Valley;
Bonneville County - Ammon, Idaho Falls, Iona, and Ucon;
Canyon County - Caldwell, Greenleaf, Middleton, Nampa, Parma, and Wilder;
Caribou County - Bancroft, Conda, Grace, and Soda Springs;
Cassia County - Burley, Declo, Malta, and Raft River;
Elmore County - Glenns Ferr, Hammett, and Mountain Home;
Fremont County - Parker, and St. Anthony;
Gem County - Emmett;
Gooding County - Gooding, and Wendell;
Jefferson County - Lewisville, Menan, Rigby, and Ririe;
Jerome County - Jerome;
Lincoln County - Shoshone;
Madison County - Rexburg, and Sugar City;
Minidoka County - Heyburn, Paul, and Rupert;
Owyhee County - Brueau, Homedale;
Payette County - Fruitland, New Plymouth, and Payette;
Power County - American Falls;
Twin Falls County - Buhl, Filer, Hansen, Kimberly, Murtugh, and Twin Falls;
Washington County - Weisef.
Intermountain's properties in these locations consist of transmission pipelines, a liquefied
natual gas storage facility, distribution mains, services, meters and regulators, and general plant
and equipment.
II.
The concept and application of interrptible service is not new to Intermountain or this
Commission. Interrptible service has offered many benefits to the Company's customers in the
APPLICATION - 3
past. An important benefit of interrptible service is a reduction in costs for all customers as
compared to what would be required to provide firm service for those same interrptible customers.
Intermountain has designed and constrcted its distrbution facilities to serve the needs of its
firm service customers as provided for in its General Service Provisions. The Company continually
evaluates its system deliverability and regularly makes substantial capital upgrades in order to
ensure peak-day deliverability for its growing firm loads. The Company also serves other lower
priority customers, including those receiving wholly interrptible service, which rely on capacity
that is only available when firm sale and transportation customers are not utilizing their peak-day
throughput needs. However, durig periods of peak-day thoughput, interrptible customers can be
required to cease using natual gas to help ensure the needs of firm sales and transportation
customers are met.
III.
Market innovations allow natual gas to be used in environmentally frendly and economical
ways aside from the traditional space and water heating applications. A service that has increased in
popularty over the past decade is the use of natual gas-fired Snowmelt equipment.
Snowmelt usage can be viewed as beneficial in off-peak periods as it may help to more
effciently use otherwise unused distrbution capacity. However, it can also negatively affect system
pressures when firm sales and transportation customers require peak-day deliveries. Furher, most
Snowmelt equipment uses an inordinate amount of natual gas when compared to a standard space
or water heating application. Durg periods of peak-day throughput, Snowmelt usage competes
with firm customers for the finite amount of available natual gas that can flow through the
Company's distrbution system, potentially degrading service to those firm customers.
Intermountain therefore asserts that Snowmelt use must be considered an interrptible
servce and through this filing, seeks to implement new Interrptible Snowmelt Rate Schedules to
govern the use of all new incremental Snowmelt load.
IV.
From a cost recovery standpoint, Snowmelt applications tend to have a very low load factor
meanng that they use large amounts of natural gas for perhaps only a few days or weeks durg the
winter with no other usage for the rest of the year. This is an inefficient use of the Company's
distrbution system. Allowing Snowmelt to operate unnterrpted, durng periods of peak-day
APPLICATION - 4
throughput, causes Intermountain to add incremental capacity in order to ensure adequate peak-day
firm deliveries of natual gas. Additionally, the low load factor usage pattern of Snowmelt
customers contrbutes little cost recovery as compared to year-round firm sales customers. Year-
round firm customers therefore end up subsidizing Snowmelt applications.
v.
Intermountain will, upon the approval of this filing, require that all new Snowmelt
applications have indîvidual metering facilities, separate and distinct from any metering providing
any other natural gas service. Intermountain will also require each new or incremental Snowmelt
application to adhere to the Service Provisions of the proposed Rate Schedules as delineated on
Exhibit NO.1.
From a practical standpoint, Intermountain wil, at its sole discretion, manually or remotely,
tum-off all Snowmelt meters in affected regions of its system when system integrty is at issue.
Intermountain will then tum those Snowmelt meters and associated equipment back on when
conditions warant. The Company believes that such interrptions wil be of short duration; from a
few hours to a few days depending upon weather and snowfall conditions.
The Company has already negotiated voluntar agreements with existing Large Volume
Snowmelt users that provides for similar cessation of Snowmelt upon notice by the Company.
Intermountain wil also allow any existing Snowmelt user, at the election of the customer, to
convert existing Snowmelt applications to operate under the terms and conditions of the proposed
Rate Schedules.
VI.
The proposed Rate Schedules include a Facility Reimbursement Charge to recover the
capital investment required to provide Snowmelt service to a new customer.
Curently, there are no affordable solutions available within the natual gas industr to
effectively automate a remote off/on cycling of a Snowmelt system. Intermountain is committed to
keeping abreast of these types of automated systems as they become available in the marketplace.
At such time a workable and affordable automated solution becomes available, the Company will
come before this Commission to re-evaluate the appropriateness of including such an automated
system within the proposed Facility Reimbursement Charge.
APPLICATION - 5
VII.
Intermountain proposes to price Rate Schedule IS-R, or Residential Interrptible Snowmelt
Service, similar to its existing residential Rate Schedule RS-2. The proposed Rate Schedule IS-R
includes seasonal demand charges and a single commodity charge equal to the residential RS-2
Winter Commodity Charge.
Existing residential Snowmelt customers will have the elective option to migrate their
Snowmelt service to the proposed Rate Schedule IS-R. Since a portion of a residential customer's
Snowmelt usage can occur durng the April through November time period, allowing residential
Snowmelt consumption to be priced at the lower RS-2 Winter (December through March)
commodity price may serve as an inducement for existing Snowmelt customers to elect the
Company's proposed Rate Schedule IS-R. Additionally, the proposed Rate Schedule IS-R includes
a provision whereby existing residential Snowmelt users would be exempt from payig the one-
time Facility Reimbursement Charge thereby adding fuer inducement for existing residential
Snowmelt customers to elect this new service.
Intermountain proposes to price Rate Schedule IS-C, or Small Commercial Interrptible
Snowmelt Service, similar to its existing Small Commercial Rate Schedule GS-1. The proposed
Rate Schedule IS-C includes a seasonal demand charges and a tiered commodity charge equal to the
Rate Schedule GS-1 Winter Commodity Charges.
Existing small commercial Snowmelt customers will have the elective option to migrate
their Snowmelt service to the proposed Rate Schedule is-C. Since a portion of a small commercial
customer's Snowmelt usage can occur durg the April through November time period, allowing
small commercial Snowmelt consumption to be priced at the lower GS-1 Winter (December
through March) commodity price may serve as an inducement for existing small commercial
Snowmelt customers to elect the Company's proposed Rate Schedule is-C. Additionally, the
proposed Rate Schedule IS-C includes a provision whereby existing residential Snowmelt users
would be exempt from paying the one-time Facility Reimbursement Charge thereby adding fuhur
inducement for existing small commercial Snowmelt customers to elect this new service.
APPLICATION - 6
VIII.
The Company proposes to administer these Snowmelt Rate Schedules beginnng at the
proposed effective of December 15,2009.
ix.
The proposed Rate Schedules requested herein are just, fair, and equitable. Allowing
Snowmelt users to operate uninterrpted during peak throughput periods would cause undue
subsidization and upward price pressure on the Company's firm sales and transportation
customers.
x.
This Application is filed pursuant to the applicable statutes and the Rules and Regulations
of the Commission. This Application has been brought to the attention of Intermountain's
customers through a News Release sent to daily and weekly newspapers in Intermountain's service
area where customers would be impacted by the proposed Rate Schedule. The News Release is
attached hereto and incorporated herein by reference. Copies of this Application and Exhbit have
been provided to those governental bodies whose jursdictional area would be more directly
impacted by the proposed Rate Schedules.
XI.
Intermountain requests that this matter be handled under modified procedure pursuant to
Rules 201-204 ofthe Commission's Rules of Procedure. Intermountain stands ready for immediate
consideration of ths matter.
APPLICATION - 7
WHEREFORE, Intermountain respectfully petitions the Idaho Public Utilities Commission
as follows:
a. That the proposed Rate Schedules herewith submitted as Exhibit No. 1 be approved
without suspension and made effective as of December 15,2009 in the maner shown on Exhibit
NO.1.
b. That this Application be heard and acted upon without hearg under modified procedure,
and
c. For such other relief as this Commission may determine proper herein.
DATED at Boise, Idaho, this 5th day of November, 2009.
INTERMOUNTAIN GAS COMPANY Morgan W. Richards, Jr.
By iA~-j. ~Jf(
Morgan w:hards, Jf.
Attorney for Intermountain Gas Company
th
upply & Regulatory Affairs
APPLICATION - 8
CERTIFICATE OF MAING
I HEREBY CERTIFY that on ths 5th day of November, 2009, I served a copy of
the foregoing Case No. INT -G-09-03 upon:
Mayor Randy Hall
Box 2315
Ketchum, Idaho 83340
Mayor Wayne Wilich
Box 416
Sun Valley, Idaho 83353
Senator Clint Stennett
Distrct 25
P.O. Box 475
Ketchum, ID 83340
Representative Wendy Jaquet
Distrct 25
P.O. Box 783
Ketchum, ID 83340
Senator Jon Thorson
P.O. Box 2210
Sun Valley, ID 83353
Representative Donna Pence
Distrct 25
1960 U.S. Highway 26
Gooding, 83330
by depositing tre copies thereof in the United States Mail, postage prepaid, in envelopes addressed
to said persons at the above addresses.
APPLICATION - 9