20170215Chiles Rebuttal.pdf

WILLIAMS BRADBI]RY
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February 15,2017
Ms. Diane Hanian
Idaho Public Utilities Commission
472 West Washington
Post Office Box 83720
Boise, Idaho 83720-0074
Intermountain Gas Company
Case No. INT-G-16-02
Dear Ms. Hanian:
Enclosed for filing with the Commission is an original and nine copies of Intermountain Gas
Company's rebuttal testimony and exhibits in the above reference case. Computer-readable
copies of the testimony and exhibits are also include on the attached compact disc, as required
under Rule 23.1.05.
Please direct any questions related to this filing to Mike McGrath at208.377.6168, or to me at
208.344.6633.
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Ronald L. Williams
Williams Bradbury, P.C.
Attorney for Intermountain Gas Company
Michael P. McGrath
Director, Regulatory Affairs
lntermountain Gas Company
1015 \V. Hays Street - Boise, ID 83702
Phone: [phone] - uww.williamsbradbury.com
Ronald L. Williams,ISB No. 3034
Williams Bradbury, P.C.
1015 W. Hays St.
Boise,ID 83702
Telephone: [phone]
Email: [e-mail]
Attorneys for Intermountain Gas Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF
INTERMOUNTAIN GAS COMPANY FOR
THE AUTHORITY TO CHANGE ITS RATES
AND CHARGES FOR NATURAL GAS
SERVICE TO NATURAL GAS CUSTOMERS
IN THE STATE OF IDAHO
CaseNo. INT-G-16-02
REBUTTAL TESTIMONY OF MARK CHILES
FOR INTERMOI.INTAIN GAS COMPANY
February 15,2017
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a. Please state your name, position and business address.
A. My name is Mark A. Chiles. I am the Vice President of Regulatory Affairs for
Intermountain Gas Company (IGC, Intermountain, or Company) and Cascade
Natural Gas Corporation and the Vice President of Customer Service for the
MDU Utilities Group (MDUG). My business address is 555 South Cole Road,
Boise, lD 83707.
a. Are you the same Mark Chiles that pre-filed direct testimony in this case on
behalf of the Company?
A. Yes
a. What is the purpose of your rebuttal testimony?
A. The purpose of my rebuttal testimony is to address recorlmendations made by
IPUC Staffwitress Daniel Klein regarding the elimination of convenience fees
and pay station fees for residential customers. I will also respond to StafPs
recommendation that Intermountain file monthly reports with the IPUC regarding
credit and collection activity.
a. Staff witness Klein recommended that the Company eliminate the
convenience fee charged to a residential customer for paying by credit or
debit cards, or through authorized withdrawals from a checking or savings
account. Do you agree with this recommendation?
A. I do agree with allowing our customers the option of choosing from a menu of
convenient payment options to include a "no cost option" for the customer.
Today, the Company provides alternative methods for the customer to pay their
gas bill running the spectrum from free, less expensive to more expensive. A goal
Chiles, Reb. I
Intermountain Gas Company
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of the Company has been to reduce our payment transaction costs by inviting
customers to use the least expensive means of payment processing, which is
allowing the Company to electronically withdraw the payment from the
customer's bank account as approved by the customer. There is no fee charged to
the customer for this payment service. Other electronic means of payment are the
credit/debit card payments. Customers using these methods pay a $1.99
convenience fee. The concern of Intermountain is that if it begins paying the
convenience fee on behalf of its customers, then many customers will switch from
less expensive payment method to a credit card payment method in order to
capitalize on credit card reward plans. This would allow individual benefits to the
detriment of other customers and the Company.
Does the Company have any other concerns regarding the elimination of the
convenience fees?
Yes, the Company would want to insure that if the convenience fee were
eliminated as a direct customer charge that these costs of doing business would
still be recovered in order to make the Company whole. Commission Staff
includes in their recommendation a comparison of transaction cost data to the
Avista case AVE-E-16-l OrderNo. 33494. While Intermountain strives to keep
costs as low as possible, there is no guarantee that Intermountain would be able to
attainthe same rate as Avista for credit/debit card payment processing. Also, Staff
testimony references the current level of credit/debit card payments as a reference
for future expense. The Company anticipates that participation could increase
once the Company is paying the transaction fee and would request recognition
Chiles, Reb. 2
Intermountain Gas Company
that the overall cost for credit/debit transactions could materially vary according
to transaction fee cost and volume.
a. Does the Company accept that recovery through a deferral mechanism is an
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acceptable method of cost recovery?
Yes, the Company would accept cost recovery through a deferral mechanism in
order to provide dollar for dollar recovery of the additional cost incurred by the
Company to eliminate the convenience fee currently paid directly by the
customer.
Staff witness Klein also recommends the elimination of the Western Union
fee for pay station payments. Do you agree with this recommendation?
Not entirely. Within the recommendation for the elimination of the convenience
fee, the Staff has proposed payment processing transaction costs and transaction
levels that might either be unachievable or materially different than those
predicted by Staff. The Company requests that the costs incurred for pay station
payments be recovered through a deferral mechanism on an annual basis to insure
dollar for dollar recovery of the additional costs incurred by the Company.
Staffwitness Klein is requesting that Intermountain file monthly credit and
collection reports with the IPUC. Does the Company have any concerns with
this request?
Yes. lntermountain would request that the reports be submitted on a quarterly
basis and that the information be treated as confidential.
Does this conclude your testimony?
Yes, it does.
Chiles, Reb. 3
Intermountain Gas Company
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