20110818notice_of_application_order_no_32329.pdf

Office of the Secretary
Service Date
August 18,2011
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION )
OF INTERMOUNTAIN GAS COMPANY )CASE NO.INT-G-11-01
FOR AUTHORITY TO CHANGE ITS )
PRICES (2011 PURCHASED GAS COST )NOTICE OF APPLICATION
ADJUSTMENT).)
)NOTICE OF
)MODIFIED PROCEDURE
)
_________________________________
)ORDER NO.32329
On August 11,2011,Intermountain Gas Company filed its annual Purchased Gas
Cost Adjustment (PGA)Application requesting authority to decrease its annualized revenues by
$14.4 million,or an overall decrease of about 5.3%.Application at 2.1 The Company contends
the proposed changes will decrease its customer rates while not affecting the Company’s
earnings.Id.at 2 and 4.The Company asks that the Commission process the Application by
Modified Procedure,and that the new rates take effect October 1,2011.Id.at 9.
NOTICE OF APPLICATION
YOUR ARE HEREBY NOTIFIED that Intermountain Gas seeks to pass-through to
each of its customer classes a net change in gas-related costs resulting from:(1)an increase in
costs billed to Intermountain by Northwest Pipeline GP (“Northwest”or “Northwest Pipeline”);
(2)a decrease in costs from Intermountain’s “upstream”pipeline suppliers and its storage
facilities;(3)a decrease in Intermountain’s weighted average cost of gas (“WACOG”);(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 natural gas purchases and interstate transportation costs from Intermountain’s deferred gas
cost accounts;and (6)benefits included in Intermountain’s firm transportation and storage costs
resulting from Intermountain’s management of its storage and firm capacity rights on various
pipeline systems.Application at 3-4.
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.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO.32329 1
YOU ARE FURTHER NOTIFIED that Intermountain Gas proposes decreasing the
WACOG from the currently approved $04921 I per therm to $0.45342 per therm.The
Application maintains that [c]ontinued weakness in the regional and national economies has put
downward pressure on new customer growth and weather adjusted demand for natural gas.At
the same time,natural gas supplies are ample and U.S.dry gas production is at an all time high.
Robust supply coupled with flat demand has kept the near term prices for natural gas relatively
low.”Id.at 5.
YOU ARE FURTHER NOTIFIED that,pursuant to Order No.32077,Intermountain
included temporary surcharges and credits in its October 1,2010 prices for the principal reason
of collecting or passing back to its customers deferred gas cost charges and benefits.
Intermountain seeks with this Application to eliminate the temporary surcharges and credits
included in its current prices during the past 12 months.Exhibit No.4,line 26 reflects the
elimination of these temporary surcharges and credits.The proposed changes would result in an
overall price decrease to Intermountain’s customers.Application at 4 and 6.
YOU ARE FURTHER NOTIFIED that the Company asserts that the proposed
WACOG includes the benefits resulting from Intermountain’s storage of significant amounts of
natural gas “procured during the summer season when prices are typically lower than during the
winter,[making]the cost of Intermountain’s storage gas normally less than what could be
obtained on the open market in winter months.”Additionally,and in an effort to further stabilize
prices paid by customers during the upcoming winter period,Intermountain has entered into
various fixed price agreements to lock-in the price for significant portions of its underground
storage and other winter “flowing”supplies.Id.at 5.
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 30,2012,as follows:(1)fixed gas
costs credit of $5.9 million attributable to the collection of interstate pipeline capacity costs,the
true-up of expense issues previously ruled on by the Commission,and mitigating capacity
release credits generated from the incremental release of Intermountain’s pipeline capacity;(2)
deferred gas cost amounts of $12.2 million attributable to variable gas costs since October 1,
2010;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.Id.at 6-7.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO.32329 2
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-I tariff.The proposed changes in the WACOG,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.Each block of
the proposed LV-l,T-3,T-4 and T-5 tariffs include a uniform cents-per-therm decrease to adjust
for lost and unaccounted-for gas.Id.at 7.
YOU ARE FURTHER NOTIFIED that Intermountain asserts that customers have
been notified regarding Intermountain’s Application through a customer notice and press release.
Id.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.Id.Finally,
the Company requests that this matter be handled under Modified Procedure pursuant to Rules
20 1-204 of the Commission’s Rules of Procedure and that its rates become effective on October
1,2011.Id.at9.
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 3 1.01.01.201 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 21,2011.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 Intermountain Gas Company at the addresses reflected below:
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO.32329 3
Commission Secretary Scott Madison
Idaho Public Utilities Commission Vice President &Chief Accounting Officer
P0 Box 83720 Intermountain Gas Company
Boise,ID 83720-0074 P0 Box 7608
Boise,ID 83707
Street Address for Express Mail:
Stephen R.Thomas
472 W.Washington Street Moffatt Thomas Barrett Rock &Fields,Chtd.
Boise,ID 83702-5918 101 S.Capitol Boulevard,Suite 1000
Boise,ID 83702
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.
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 §S 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.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO.32329 4
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 21,2011.
DONE by Order of the Idaho Public Utilities Commission at Boise,Idaho this /
dayofAugust2Oll.
ATTEST:
Jâ”afl D,Jewell(J
Cd’mmission Secretary
O:INT-G-1 1-Olkk
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO.32329
L
MARSHA H.SMITH,COMMISSIONER
\__-_
MACK A.REDFORD,COMMISSIONER
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