20180108notice_of_application_order_no_33959.pdf

Office of the Secretary
Service Date
January 8,2018
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION )CASE NO.INT-G-17-07
OF INTERMOUNTAIN GAS COMPANY )
FOR AUTHORITY TO IMPLEMENT AN )NOTICE OF APPLICATION
INFRASTRUCTURE INTEGRITY )
MANAGEMENT MECHANISM )NOTICE OF
)INTERVENTION DEADLINE
)ORDER NO.33959
On December 18,2017,Intermountain Gas Company applied for authorityto implement
an Infrastructure Integrity Management Mechanism (IIMM).The Application included the
Company's proposed rate schedule and asked that the Commission process the case by Modified
Procedure.The Commission now issues Notice of the Application and sets a deadlinefor Petitions
to Intervene.
NOTICE OF APPLICATION
YOU ARE HEREBY NOTIFIED that the Company asserts the IIMM is a cost recovery
mechanism designed to allow the Company to accelerate the replacement of aging infrastructure,
to mitigate the increasing impact of regulation on the Company's capital and operations and
maintenance (O&M)budgets,and to more proactively address safety issues on its system.
Application at 3.The Company believes the IIMM is "an integral part of its mission to provide
safe and reliable natural gas service."Id
YOU ARE FURTHER NOTIFIED that according to the Company,state utility
commissions across the country have granted approval to "gas utility companies to implement
some form of integrity management and infrastructure replacement programs,"the common
feature of which is safe and reliable service.Id at 4.Likewise,the Company is committed to safe
and reliable service,and works to proactively identify and remove risks to its system.Id
YOU ARE FURTHER NOTIFIED that the Company describes its programs to proactively
remove and replace pipe that has a risk of failure.Id The Company uses relative risk models to
manage and assess the risk of failures based on age,material,operating pressure,damage history,
and other considerations,and based on the outputs,the Company prioritizes infrastructure
replacement projects within its total capital investment demands.Id.The Company states it would
like to accelerate replacement projects,but budget limitations "often only allow the Company to
NOTICE OF APPLICATION
NOTICE OF INTERVENTION DEADLINE
ORDER NO.33959 1
maintain a more modest replacement schedule."The Company anticipates the proposed IIMM
will enable it to accelerate the replacement programs and "stay ahead of schedule."Id
YOU ARE FURTHER NOTIFIED that the Company explains it must make certain capital
investments to satisfy federal,state,and local requirements,and sometimes must increase O&M
spending and add personnel for safety initiatives.Id at 5.The Company asserts this capital and
O&M spending can "challenge [its]financial situation as [it does]not provide the necessary
supporting revenues."Id The Company provides examples of projects that "contribute to
budgetary constraints and compete with other necessary capital investment projects."Id The
Company states that includingthese capital projects in the IIMM would "give the Company more
flexibility to concurrently pursue these pipeline related capital investments while also
implementing other necessary capital expenditures."Id
YOU ARE FURTHER NOTIFIED that the Company explainsthe IIMM would not include
capital investment associated with incremental growth on the Company's system,and the rate base
and expenses embedded in the Commission-approved IIMM charge would switch from the IIMM
to general base rates through future general rate cases.Id at 6.
YOU ARE FURTHER NOTIFIED that the Company explains how the proposed IIMM
would work.Specifically,the Company would consult the Commission's Pipeline Safety Division
about the projects and expenses the Company seeks to recover through the IIMM.Id at 7-8.The
Company would then propose an IIMM Revenue Requirement for allocation to each rate class
based on the allocation of base rate revenues from the Company's most recent general rate case.
Id The IIMM Charge would equal the allocated IIMM Revenue Requirement divided by
normalized volumes from the Company's Purchased Gas Adjustment.Id Each year in May,the
Company would ask the Commission to update the IIMM Charge,with the new prices to take
effect October 1.Id The Company provides examples of how it would calculate the above
components.See id Exhibit 2.
YOU ARE FURTHER NOTIFIED that the Application and its exhibits have been filed
with the Commission and are available for public inspection during regular business hours at the
Commission offices.These documents are also available on the Commission's web site at
www.puc.idaho.cov.Click on the "File Room"tab at the top of the page,scroll down to "Natural
Gas Cases"and click on the case number as shown on the front of this document.
NOTICE OF APPLICATION
NOTICE OF INTERVENTION DEADLINE
ORDER NO.33959 2
YOU ARE FURTHER NOTIFIED that all proceedings in this case will be held pursuant
to the Commission's jurisdiction under Title 61 of the Idaho Code.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 31.01.01.000et seq.
NOTICE OF INTERVENTION DEADLINE
YOU ARE FURTHER NOTIFIED that persons who wish to intervene in this matter to
obtain the rights of party (e.g.,to file formal discovery,or present evidence or cross-examine
witnesses at a hearing)must file a Petition to Intervene with the Commission under the
Commission's Rules of Procedure 72 and 73,IDAPA 31.01.01.072 and .073.Persons who wish
to intervene as a party must file a Petition to Intervene no later than 21 days from the service
date of this Order.Such persons shall also provide the Commission Secretary with their
electronic mail address to facilitate further communications.After the intervention deadlineruns,
the Commission Secretary shall issue a Notice of Parties that identifies the parties and assigns
exhibit numbers to each party.Once the Notice of Parties has issued,Commission Staff shall
informallyconfer with the Company and any intervening parties about how to further process this
case,and shall then report back to the Commission on a proposed case schedule.
YOU ARE FURTHER NOTIFIED that persons who would like to present their views
without parties'rights of participation and cross-examination are not required to intervenebut may
present their views by submitting written comments to the Commission.
YOU ARE FURTHER NOTIFIED that the followingpersons are designated as the
Company's representatives in this matter:
Michael P.McGrath Ronald L.Williams
Director-Regulatory Affairs Williams Bradbury PC
Intermountain Gas Company P.O.Box 388,Boise,ID,83701
P.O.Box 7608 802 W.Bannock,Suite 900
Boise,ID 83707 Boise,ID 83702
ORDER
IT IS HEREBY ORDERED that persons desiring to intervene in this matter shall file a
Petition to Intervene no later than 21 days from the service date of this Order.Once the deadline
for intervention has passed,the Commission Secretary shall prepare and issue a Notice of Parties.
NOTICE OF APPLICATION
NOTICE OF INTERVENTION DEADLINE
ORDER NO.33959 3
IT IS FURTHER ORDERED that,after the Notice of Parties has issued,Commission Staff
shall confer with the parties regarding a procedural schedule for this matter.
DONE by Order of the Idaho Public Utilities Commission at Boise,Idaho this
day of January 2018.
PAUL KJELI ANI ER,PRESIDENT
KRI TINE RAPER,C MISSIONER
ERIC ANDERSON,COMMISSIONER
ATTEST:
Diane M.Hanian
Commission Secretary
I:\Legal\LORDERSìINTGl707cel nteofapp.docx
NOTICE OF APPLICATION
NOTICE OF INTERVENTION DEADLINE
ORDER NO.33959 4