20171004Decision Memo.pdf

RE:
DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER SMITH
COMMISSIONER RAPER
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM: STACEY DONOHUE
DATB: OCTOBER 4,2017
INTERMOUNTAIN GAS COMPANY - COMPLIANCE FILINGS:l) INT-G-16-02: APPLICATION FoR APPROVAL TO CHANGE RATES
AND CHARGES;
2) INT-C-17-03: APPLICATION FOR AUTHOzuTY TO IMPLEMENT DSM
PROGRAM FUNDING MECHANISM; and
3) INT-G-17-05: PGA APPLICATION
BACKGROUND
On September 25, 2017, Intermountain Gas Company submitted to the Commission tariff
sheets for filing in compliance with Commission Order Nos. 33879, 33888, and 33887 in Case Nos.
INT-G-l 6-02, INT-G-17-03 and INT-G-l 7-05,
The Company filed the following sheets:
Thi(eenth Revised Sheet No. 5, Page I
Sixty-Fourth Revised Sheet No. 7, Page I
Fifteenth Revised Sheet No. 8, Page I
Fourteenth Revised Sheet No. 9, Page I
Third Revised Sheet No. 14
Original Sheet No. l6 (EE), Pages l-2
Original Sheet No. l7 (EEC)
Second Revised Sheet No. C Cancelling First Revised Sheet No. C
Second Revised Sheet No. I Cancelling First Sheet No. I
Fifty-Sixth Revised SheetNo.3, Pages l-2 Cancelling Fifty-Fifth Revised Sheet No. 3, Pages I -2
Thirteenth Revised Sheet No. 4, Page I Cancelling Twelfth Revised Sheet No. 4, Page I
Cancelling Twelfth Revised Sheet No. 5, Page I
Cancelling Sixty- Ihird Revised Sheet No. 7, Page I
Cancelling Fourteenth Revised Sheet No. 8, Page I
Cancelling Thirteenth Revised Sheet No. 9, Page I
Deleted
DECISION MEMORANDUM OCTOBER 4,2017
STAFF ANALYSIS
(l) INT-G-16-02I APPLICATION FOR APPROVAL TO CHANGE RATES AND
CHARGES
The Company filed its general rate case, Case No. [NT-G-15-02, on August 12, 2016. The
Commission held a public workshop, a public hearing, a technical hearing, and issued Order No.
33757 on April 28,2017, granting Intermountain a $4.12 million (1.58%) revenue increase.
Subsequently, on May 18, 2017, the Company petitiorred the Commission to reconsider the Final
Order regarding: (l) the data used in StafPs weather normalization model; (2) the Commission's
preference for Staff s weather normalization model over the Company's model; (3) the
disallowance of certain afliliated operations and maintenance (O&M) expenses; and (4) the
disallowance of incentive compensation.
On June 15, 201 7, the Commission granted the Petition and agreed to the "limited
reconsideration" of "the four narrow issues raised in the Petition." The Commission directed the
Company, Staff, and other interested parties to meet to narrow disputed facts and issues and explore
settlement. The Company submitted additional written comments and exhibits regarding affiliated
charges and incentive compensation expenses. The Company and the Northwest Industrial Gas
Users (NWIGU) engaged in settlemenl negotiations on these issues. The Company, Staff and
Amalgamated Sugar also continued to meet to discuss the weather normalization issues.
On August 16, 2017, Staff, the Company, and the NWICU signed a Stipulation and
Settlement (the "Settlement") resolving all four issues. The Company filed a joint Motion with
Staffto approve the Settlement with accompanying testimony and Staff filed supporting comments.
No party opposed the Settlement. Parties to the Settlement agreed that effective October 1,2017,
the Company would implement revised tariff schedules designed to recover $ I ,2 I 9,206 (l .36%)
more in annual revenue than the amounts approved in Order No. 33757. Parties also agreed that
new rates would take effect October l, 2017. The Settlement also addressed issues related to billing
determinants, consumption and weather-related adjustments, gas consumption normalization,
weather data, future weather modeling methodology, affrliated expenses and incentive
cornpensation, and rate spread.
The Commission approved the Settlement in Order No. 33879 on September 15, 2017, and
the Company filed compliance tariffs on September 25,2017. Staff reviewed the tariffsheets,
determined that they were consistent with the Order, and they were stamped to take effect October
l, 2017, as contemplated by the Commission.
DECISION MEMORANDUM OCTOBER 4,2017
(2) INT-G-17-03: APPLICATION tr'OR AUTHORITY TO IMPLEMENT DSM
PROGRAM FUNDING MECHANISM
On July 27,2017, the Company filed an application asking the Commission for authority to
implement a DSM Program Funding Mechanism with an October 1,2017 efTective date. Staff
reviewed the Company's Application and exhibits and conferrcd with the Company about its
proposed accounting treatment and reporting requirements.
Staffcomments reflected the agreement between Staff and lhe Company to revise Rate
Schedules EE, EEC, and RS and the $0.00357 per therm charge. However, Staffalso recommended
consolidating the Company's proposed two-tier incentive structure into a single tier.
On September 25, 2017, the Commission issued Order No. 33888, which approved the
$0.00367 per therm charge and the revisions to Rate Schedules EE, EEC, and RS, including Staffls
proposalto consolidate the incentive tiers, with an October 1,2017 effective date. The Company
filed compliance tariffs the same day. Staffrcviewed the tariff sheets, determined that they were
consistent with the Order, and they were stamped to take effect October l, 2017, as conlemplated by
the Commission.
(3) INT-G-17-05: PGA APPLICATION
On August 14.2017, the Company filed an application with the Commission for authority to
change its rates to reflect changes in gas-related costs and requested an October l, 2017 effective
date. Staffreviewed the Company's Application, workpapers, and exhibits, and verified that the
PCA proposal "would not impact the Company's earnings, that the Company's defened costs are
prudent and properly calculated, and that the Company's WACOG request is reasonable."
However, Staffalso recommended that the Company resume filing quarterly Summary of Deferred
Gas Cost Balances and WACOG reports and recommended only partial recovery of the Company's
requested rate case expcnses.
In Order No. 33887, the Commission approved the Company's request for a WACOG of
$0.26020. The Commission also authorized the Company to include $378,614 in external rate cases
expenses over five years in this PGA (575,723 per year). Further, the Commission ordered that the
Company resume filing quarterly Summary of Deferred Gas Cost Balances reports and WACOG
calculations. The Commission ordered the Company to file new compliance tariff sheets to be
effective October l,2Al7 .
DECISION MEMORANDUM ocToBER 4,2417
The Company filed compliance tariffs on September 25,2017. Staff reviewed the tariff
sheets, determined that they were consistent with Order No. 33887, and they were stamped to take
effect October 1,2017, as contemplated by the Commission.
COMMISSION DECISION
Does the Commission wish the minutes to reflect the Commission's approval of the tariffs
filed in compliance with Commission Order Nos. 33879, 33888 and 33887 with an effective date of
October 1,2017?
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DECISION MEMORANDUM OCTOBER 4,2017