20100819notice_of_application_order_no_32051.pdf

Office of the Secretary
Service Date
August 19 2010
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF INTERMOUNTAIN GAS COMPANY
FOR AUTHORITY TO CHANGE ITS
PRICES (2010 PURCHASED GAS COST
ADJUSTMENT).
NOTICE OF APPLICATION
CASE NO. INT-10-
NOTICE OF
MODIFIED PROCEDURE
ORDER NO. 32051
On August 11 , 2010, Intennountain Gas Company filed its annual Purchased Gas
Cost Adjustment (PGA) Application requesting authority to decrease its annualized revenues by
$2.2 million. Application at 2. The PGA mechanism is used to adjust rates to reflect annual
changes in Intennountain s costs for the purchase of natural gas from suppliers - including
transportation, storage, and other related costs. See Order No. 26019. Intennountain 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 2010.
NOTICE OF APPLICATION
YOU ARE HEREBY NOTIFIED that, with this Application, Intennountain Gas
seeks to pass-through to each of its customer classes a change in gas-related costs resulting from:
(1) a decrease in costs billed to Intennountain by Northwest Pipeline GP ("Northwest" or
Northwest Pipeline ); (2) an increase in costs from Intennountain s "upstream" pipeline
suppliers; (3) a decrease in Intennountain s Weighted Average Cost of Gas, or "W ACOG"; (4)
an updated customer allocation of gas-related costs pursuant to the Company s Purchased Gas
Cost Adjustment provision; (5) the inclusion of temporary surcharges and credits for one year
relating to gas and interstate transportation costs from Intennountain s deferred gas cost
accounts; and (6) benefits included in Intennountain s finn transportation and storage costs
resulting from Intennountain s management of its storage and finn capacity rights on pipeline
systems. Application at 3-
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 32051
YOU ARE FURTHER NOTIFIED that Intennountain Gas proposes decreasing the
W ACOG from the currently approved $0.49600 per thenn to $0.49211 per thenn. 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-tenn
prices for natural gas. Application at 5.
YOU ARE FURTHER NOTIFIED that, pursuant to Order No. 30913, Intennountain
included temporary surcharges and credits in its October 1 , 2009, prices for the principal reason
of collecting or passing back to its customers deferred gas cost charges and benefits.
Intennountain 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. Exhibit No., line 26, reflects the elimination of these temporary surcharges and credits.
The proposed changes would result in a price decrease to Intennountain's RS-, GS-l and LV-
customers and a slight increase to Intennountain s RS-l customers. Transportation customers
would also experience a small rate increase resulting from the reversal of the prior year
amortization rates. Application at 4.
YOU ARE FURTHER NOTIFIED that the Company asserts that the proposed
W ACOG includes the benefits resulting from Intennountain s storage of significant amounts of
natural gas procured during the summer season for use during the winter when market prices are
nonnally higher. Additionally, and in an effort to further stabilize prices paid by customers
during the coming winter period, Intennountain 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 5. Although current commodity futures prices dictate the use of a
$0.49211 per thenn W ACOG, the Company continues to remain vigilant in monitoring natural
gas prices. If forward prices for natural gas materially deviate from $0.49211 per thenn, the
Company is committed to return to the Commission to amend these proposed rates.
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 2011 , as follows: (1) fixed gas
costs credit of $2 079 148 attributable to the collection of interstate pipeline capacity costs, the
true-up of expense issues previously ruled on by the Commission, and mitigating capacity
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 32051
release credits generated from the release of Intermountain s pipeline capacity; (2) deferred gas
cost amounts of $15.6 million attributable to variable gas costs since October I, 2009; 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 7.
YOU ARE FURTHER NOTIFIED that Intermountain states that a straight cents-per-
therm price decrease was not utilized for the LV -1 tariff. There are no fixed costs recovered in
the tail block of the LV -1 tariff. The proposed changes in the W ACOG, and variable deferred
credits (outlined in Exhibit 9) are applied to all three blocks of the LV -1 tariff, but adjustments
relating to fixed costs are applied only to the first two blocks of the LV -1 tariff. Id. Each block
of the proposed LV-, T-, T-4 and T-5 tariffs include a uniform cents-per-therm decrease to
adjust for Lost and Unaccounted for Gas. Id.
YOU ARE FURTHER NOTIFIED that Intermountain asserts that customers have
been notified regarding Intermountain s Application through a customer notice and press release.
Application at 8. 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 2010.
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 IDAP A 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 no later
than September 22, 2010. 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. 32051
Commission Secretary
Idaho Public Utilities Commission
PO Box 83720
Boise, ID 83720-0074
Street Address for Express Mail:
Katherine Barnard
Manager - Gas Supply & Regulatory Affairs
Intermountain Gas Company/
Cascade Natural Gas Corporation
222 Fairview Avenue North
Seattle, W A 98109-5312
E-mail: kathie.barnard~cngc.com
472 W. Washington Street
Boise, ID 83702-5918 Stephen R. Thomas
Moffatt Thomas Barrett Rock & Fields, Chtd.
101 S. Capitol Boulevard, Suite 1000
Boise, ID 83702
E-mail: srt~moffatt.com
These comments should contain the case caption and case number shown on the first page of this
document.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
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 32051
Idaho Code 99 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, IDAPA 31.01.01.000 et seq.
ORDER
IT IS HEREBY ORDERED that this case be processed under Modified Procedure.
Interested persons and parties may file written comments no later than September 22, 2010.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this /9
ri..
day of August 2010.
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MARSHA H. SMITH, COMMISSIONER
~~MISSIONER
ATTEST:
Je D. Jewell
Commission Secretary
O:INT-IO-O3 ks
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 32051